MODULE 10 (PERFORMANCE MANAGEMENT AND APPRAISAL)

- Performance management
- Performance appraisal
- Performance management vs performance appraisal

What Is Performance Management?

A performance management process involves a supervisor and employee
communicating continuously throughout the year, with the aim of meeting the
organization’s strategic objectives.
Performance management is a continuous process that focuses on aspects like
planning, monitoring, and evaluating employee objectives in an attempt to enhance
employee performance. This helps employees to put in their best efforts to achieve
company goals.
Performance management does not aim at enhancing every skill. Good performance
management only intends to improve the specific skill sets that align with the company’s
interests and goals. It evaluates the overall contribution of an employee towards the
organization to enhance the productivity and effectiveness of the employee. Crucial
career aspects like bonuses, promotions, dismissals are closely related to this process.
Performance management is a corporate management tool. It allows managers to
scrutinize and assess their employees’ work. It helps create an environment wherein
employees can perform to the best of their abilities and present the highest-quality work
efficiently and effectively.
It allows viewing individuals in the context of the broader workplace system while
focusing on accountability and transparency. It fosters a clearer understanding of
expectations.

Objectives of Performance Management

The major objectives of performance management are as follows:

• Defining the company’s goals.

• Setting realistic expectations for managers and employees.
• Establishing clear communication between individuals and teams.
• Defining a performance plan by setting performance benchmarks.
• Shape individual training and performance plans.
• Approaches for Conducting Performance Management

Understanding Performance Management

Formal performance management programs enable both managers and employees to
see expectations, career progress, and goals while analyzing how an employee’s work
aligns with the company’s vision.
Performance management uses traditional tools like constructing and measuring goals
and milestones. They define effective performance and develop procedures to measure
the same. Unlike the traditional paradigm of annual reviews, performance management
makes every interaction a part of the learning process.
Managers use performance management tools to recommend new courses, adjust
workflow, and make decisions to help employees attain their objectives and ultimately
help the company perform optimally.
For instance, generally, a manager gives the staff target revenue volumes they must
reach within a period. But in a performance management system, he would also offer
guidance on how to attain those numbers.
A consistent focus on accountability promotes a healthier and more transparent work
environment. Performance management puts forth concrete rules, clearer expectations,
and lesser workplace stress.

Performance-Management Programs
Several performance-management software options are available, but template
customization makes them all the more effective. The universal elements of effective
performance-management programs are as follows:

• Aligning every individual’s activities with the organization’s goals. It helps employees
comprehend how their objectives contribute to the organization’s achievements.
• Devising specific job-performance results. An individual can easily find answers to
questions like— What effect should my role have on the company? What should be the
interaction level amongst clients, peers, and supervisors?
• Concocting measurable performance-based expectations. It is a must to give
employees a complete idea of how success is measured. Enlisting expectations for
results, actions, and demeanor or values help improve both the quality and quantity of
work.
• Describing job-development plans while involving supervisors and employees.
Employees must have a say in what things they wish to learn and how their knowledge
can benefit the company.
• Regular meetings for discussions rather than awaiting annual appraisal.

The two approaches used for conducting performance management are:

Behavioral approach- This approach is best suited for situations where individual results
are difficult to measure. The behavioral approach identifies and measures behaviors to
evaluate employees. This approach is mainly used for assessing individuals working in
a team, support staff, HR professionals.
Result-oriented approach- This approach is used when the outcome is more important
than the execution. The employees are evaluated based on objective criteria. A result-
oriented approach is used for evaluating sales professionals, call center employees, etc.

Example of Performance Management

The performance management process of Facebook strongly stresses on peer to peer
feedback. This feedback is used in semi-annual reviews to evaluate the functioning of
teams. Facebook also has internal software that provides real-time feedback ensuring
that issues are solved before they turn into problems.

_________

What Is Performance Appraisal?

A performance appraisal consist of an evaluation of an individual's performance and

contribution to the organization. Companies use employee performance appraisals to
identify the best performers, review progress, and reward top performers. 

Performance appraisal is conducted in a systematic procedure involving the following

steps:

 The remuneration of an employee is measured and compared with the

company’s targets and plans.
  The factors responsible for the performance of an employee are assessed and
evaluated.

 The employees are guided by the employers to enhance their performances.

Objectives of Performance Appraisal

The major objectives of performance appraisal are as follows:

 Keeping records to decide stipend structure, bonuses, etc.

 Assigning the right tasks to the right employees after evaluating their strengths
and weaknesses.

 Identifying and evaluating the potential of an employee for further growth and
development.

 Providing feedback and positively impacting the working habits of employees.

Benefits of Performance Appraisal

Undertaking a proper performance appraisal plan can help a company/organization in

the following ways:

 Deciding upon the promotion or dismissal of the employees.

 Deciding upon the salary/stipend structure of the employees.

 Boosting employee development.

 Establishing clear and effective communication between employers and

employees.

 Motivating employees.
Example of Performance Appraisal

Here is an example of the performance appraisal of an employee:

ABC company has done significantly well in the last few months. There has been a
considerable reduction in overhead costs and the production has improved by 39%.
Undoubtedly, it is because of the employees who managed to achieve their goals.
Based on the feedback we have received so far, it is evident that our employee Samaira
Chaudhuri has made notable contributions to this project. 

Employee name - Samaira Chaudhuri

Position - Marketing Manager

Employer name - Nishant Ray

Department - Marketing

Review period - January 8, 2021 - April 7, 2021

Samaira has shown clear communication in expressing her expectations and ideas. She
efficiently organizes meetings and seminars, and effectively conveys her messages to
the clients. 

Samaira has shown commendable levels of dedication and perseverance in achieving

company goals. She has improved her productivity by 79%.

How Do Performance Appraisals Work?

Designed by human resources (HR) departments, performance appraisals help
employees advance their careers by providing feedback on their job performance. They
ensure that the employees manage and meet the expected goals and give them proper
assistance by guiding them on how to reach the target if they fall short.
Given the limited funds to award incentives, companies can easily determine how to
allocate those funds by checking out the top performers through performance
appraisals. They help understand which employees have been major contributors to the
company’s growth and are the most deserving.
Performance appraisals assist employees and managers in creating a plan for
employee development via additional training while identifying ways of improvement.
It is important to note that performance appraisal isn’t the only time when employees
and managers discuss the employee’s contributions. Frequent conversations help keep
all team members on the same page, strengthen relationships between managers and
employees, and reduce the stress of annual reviews.

Types of Performance Appraisals

Usually, performance appraisals involve supervisors evaluating their staff. However, the
term performance appraisal covers the following types as well:

 Self-assessment: An individual rates their behavior and performance. 

 Peer assessment: An individual's coworkers rate their performance.

 360-degree feedback assessment: Performance review is collected from an

individual, peers, and supervisor. 

 Negotiated appraisal: It is a relatively new approach wherein a mediator is

involved. It attempts to moderate the negativity that can be a part of the
performance evaluations by allowing the subject to present first.

Criticism of Performance Appraisals

Although performance appraisals are developed to encourage employees towards their

goals, they often come with a lot of criticism.

Differentiating individual and organizational performance gets difficult, and many

employees report general dissatisfaction with the performance appraisal processes. 
Some other issues with performance appraisals are as follows:

 A feeling of distrust that causes issues between subordinates and supervisors.

 Employees tend to tailor their input so as to please their employer.

 It can lead to unfair evaluations when employees are judged by their likability. 

 It can lead to unreasonable goals that demoralize employees and push them
toward unethical practices.

 It can also lead to lower use of merit-based compensation.

 Performance appraisal can also cause managers to evaluate underperforming

staff well to avoid souring their relationships.

 Unreliable raters can introduce several biases.  

What Are Performance Appraisals Used for?

A performance appraisal examines an employee's job performance over a while. The

final review highlights both weaknesses and strengths to encourage future performance.

When Should a Performance Appraisal Take Place?

Performance appraisals are usually done to give employees big-picture feedback on

their work. It turns into increases, bonuses, or termination decisions. They can take
place any time but are usually annual, semi-annual, or quarterly.

Contrastingly, performance management is an ongoing process that continues

throughout the year to motivate employees to establish goals, regulate progress, and
achieve more than the set target. 
What Is a 360-Degree Appraisal?

Standard performance feedback involves an employee and their supervisor.

Contrastingly, a 360-degree appraisal is a complete version as it solicits input from the
employee's coworkers, the employee, and their supervisor/manager.

________

Performance Management Vs. Performance Appraisal

Performance appraisals evaluate the employee’s performance in light of his previous
performance. In performance management, an employee’s performance is proactively
managed in order to ensure their accomplishment of all the company’s goals, visions,
missions, and core values.
Performance management and performance appraisal are distinct terms. A blend of
both performance management and performance appraisal works best for a company’s
interests.

REVIEW QUESTIONS
1.) What is Performance Management and Performance Appraisal?
2.) What are the two approaches used for conducting performance management?
3.) What are the types of performance appraisal?

POST-TEST, QUESTIONS AND ANSWERS

1.) It refers to the performance management process involves a supervisor and
employee communicating continuously throughout the year, with the aim of meeting the
organization’s strategic objectives.
a.) Performance
b.) Management
c.) Performance Management
d.) Performance Appraisal
2.) This approach is best suited for situations where individual results are difficult to
measure.
a.) Behavioral approach
b.) Managerial approach
c.) Result-oriented approach
d.) None of the above

3.) It consists of an evaluation of an individual's performance and contribution to the

organization.
a.) Appraisal
b.) Performance management
c.) Performance
d.) Performance appraisal

4.) These are the benefits of performance appraisal. Except?

a.) Deciding upon the promotion or dismissal of the employees.
b.) Deciding upon the salary/stipend structure of the employees.
c.) Boosting employee development.
d.) All of the above

5.) It is the type of performance appraisal which an individual rates their behavior and
performance. 
a.) Peer
b.) Self-assessment
c.) Assessment
d.) None of the above

6.) _______ use performance management tools to recommend new courses, adjust
workflow, and make decisions to help employees attain their objectives and ultimately
help the company perform optimally.
a.) Managers
b.) Servers
c.) Employees
d.) CEOs

7.) This approach for conducting performance management is used when the outcome
is more important than the execution. The employees are evaluated based on objective
criteria. This approach is used for evaluating sales professionals, call center employees,
etc.
a.) Self-Oriented Approach
b.) Behavioral Approach

c.) Result-Oriented Approach

d.) Psychological Approach

8.) This approach for conducting performance management This approach is best
suited for situations where individual results are difficult to measure. This approach
identifies and measures behaviors to evaluate employees. This approach is mainly used
for assessing individuals working in a team, support staff, HR professionals.
a.) Self-Oriented Approach
b.) Behavioral Approach
c.) Result-Oriented Approach
d.) Psychological Approach

9.) It is a complete version as it solicits input from the employee's coworkers, the
employee, and their supervisor/manager.
a.) Degree Appraisal
b.) 360 Degree Appraisal
c.) 180 Degree Appraisal
d.) 90 Degree Appraisal
10.) It is a relatively new approach wherein a mediator is involved. It attempts to
moderate the negativity that can be a part of the performance evaluations by allowing
the subject to present first.
a.) Peer Assessment
b.) 360 Degree Feedback Assessment
c.) Self Assessment
d.) Negotiated Appraisal

RECOMMENDED FOLLOW-UP
Write an essay that tackles the importance of performance management and how
performance appraisal works. The essay must consist of at least 500 words only. Be
concise!
CRITERIA DEVELOPING STANDARD EXEMPLARY
(1 - 8 pts.) (9 – 17 pts.) (18 - 25 pts.)
Content, Composed of There is a clear There is a clear

organization, and vague statements. statement or idea idea and uses some

clarity Ideas are not based on the examples to

organized question(s). express the

Statement/phrases thought.

are written

systematically.
Grammar, Grammar is not Grammatically Grammatically

vocabulary appropriate. correct but correct and rich

There is no vocabularies are vocabulary words

vocabulary being limited. are used.

used.