Second Year ELECTIVE COURSE Semester-III

C: HUMAN RESOURCE MANAGEMENT

II - PERFORMANCE MANAGEMENT

Code: (Theory) Credit: 3

UNIT - I PERFORMANCE MANAGEMENT – INTRODUCTION & HISTORICAL

OVERVIEW:

Definition, characteristics, developments, and guiding principles.

DEFINITION

Performance management is a periodic, systematic, and objective process of developing an

employee to perform their job to the best of their ability.

CHARACTERISTICS

1. Clear Goal Alignment

A hallmark of a successful performance management system is its ability to align individual goals
with broader organizational objectives. This ensures that every employee’s efforts directly
contribute to the company’s mission, fostering a sense of purpose and direction.

2. Continuous Feedback Loop

Gone are the days of annual reviews. An effective performance management system provides
ongoing feedback that facilitates open communication between employees and managers. This
approach promotes growth and enables prompt course correction, leading to improved work
performance.

3. Performance Metrics and KPIs

An efficient performance management system thrives on data. It integrates measurable

performance metrics and Key Performance Indicators (KPIs), offering insights into employee
progress and enabling evidence-based decision-making.

4. Development Opportunities
Supporting employees’ professional growth is crucial. An ideal system identifies skill gaps and
offers targeted training, mentoring, and development opportunities that empower employees to
advance in their careers.

5. Fair and Transparent Evaluation

Transparency is key to building trust. A good performance management system ensures

evaluations are fair, unbiased, and clearly communicated, fostering a sense of equity and
motivation among employees.

6. Recognition and Rewards

Acknowledging employee contributions boosts morale. A robust system incorporates mechanisms

for recognizing and rewarding exceptional performance, reinforcing the value of dedication and
hard work.

7. Employee-Centric Approach

An effective performance management system is designed with employees in mind. It considers

their aspirations, strengths, and areas of improvement, leading to a more engaged and motivated
workforce.

8. Regular Performance Check-Ins

Scheduled check-ins provide a platform for continuous dialogue between employees and
managers. These conversations allow for goal updates, feedback discussions, and mutual
understanding, enhancing overall performance.

9. Performance Analytics

Data-driven insights are a cornerstone of effective decision-making. A performance management

system equipped with analytical tools helps HR professionals identify trends, patterns, and areas
that require attention.

10. Adaptability and Evolution

Business landscapes change, and so do organizational goals. A dynamic system can evolve to
accommodate shifting priorities, ensuring it remains relevant and aligned with the company’s
strategic direction.
DEVELOPMENTS OF PERFORMANCE MANAGEMENT

Evaluate your current performance appraisal process.

Look at what type of feedback you are providing to your employees. Also, look at how frequently
you are providing feedback. Determine if there is anything you need to change or add to the
evaluation itself. You may decide to build on what you already have or to develop a new system
altogether

2 Identify organizational goals.

Performance management systems help rally staff members around your organization's goals
because they help staff know how they are to be involved in reaching that goal.

 Identify processes or procedures that could be simplified or done more effectively.

 Declare your sales goals for the next year or new products you would like to develop.
 Share your hope for better communication between departments and staff members.

3.Set performance expectations.

 As you sit down with each employee, clearly lay out your expectations for them. Identify
specific things you would like them to accomplish over the next year, or whatever time
frame works best for you. Prioritize these so the staff member knows which is most
important and make sure to give them a deadline for each task.
 Acknowledge what they are already doing well. Use this to encourage them.
 Share some weaknesses that you have observed in them and in their work habits, and how
overcoming those would help their performance in the company.

4. Monitor and develop their performance throughout the year.

One-on-one feedback is a great way to do this. As employees begin to work on their performance,
keep an eye on how they are doing. Give praise where performance is strong. If they appear to be
struggling to meet performance expectations, talk with them and see if you can offer any support
or coaching.
5. Evaluate their performance.

 At each performance review, let the employee know how they are doing. It is often helpful
to assign a numeric value on a scale, rating the employee from "not meeting expectations"
to "meets expectations" to "exceeds expectations."
 Provide feedback on their performance. Be as specific as possible, noting key examples of
when they demonstrated a certain quality.
 Talk about the consequences or rewards of their performance. Let them know if they are
on probation, are getting a raise in pay, changes in vacation days, or any other relevant
action.
 Discuss any problems they may be having. Listen to their concerns or worries as you talk
through potential solutions.
 Align feedback with feedback given throughout the year in their one-on-ones.

6.Set new performance expectations for the next year.

Some items may be the same. However, since these are also based on organizational goals, you
will need to re-examine your goals for the upcoming year

GUIDING PRINCIPLES OF PERFORMANCE MANAGEMENT

Performance Analysis

In performance management, the reviewer measures the frequency of behavior of the employee
and the outputs he/she gives prior to any kind of management changes. Through this analysis, the
management measures the current performance, establishes standards, specifies the deficiencies,
calculates the value of improvement. The aim of this analysis is to achieve these identifications of
potentially high-payoff behaviors and also the outputs that can be improved.

Transparency

It is critical to maintain openness to ensure employees feel comfortable and involved. Ambiguity
in any program breeds distrust and uncertainty. Transparency enables individuals and teams to
easily understand how their objectives correspond with the company's goals. When employees are
left alone with limited information, they are more likely to feel under control and pressed.
Set Right Goals

Employee performance should be improved to meet a corporate goal. It is critical to choose the
one that inspires and is easily quantifiable. When the objectives seem impossible compared to the
current state, this functions as a demotivator. In this manner, performance may be controlled
optimally.

Be Specific

Managers should grasp how the company's aims and objectives relate to individual targets. Any
doubt should be avoided when communicating expectations and goals. Keep it concise and easy
to comprehend. This encourages employees to focus their efforts on improving their performance
by following established standards and enhancing productivity.

Effective Measure

The criteria must be quantifiable for a performance management program to be effective. An

employee should be able to understand his/her performance aligning to the program aimed at
specific targets.

Proper Communication

A well-designed communication system may significantly improve efficiency and accelerate the
whole process. When vital information is provided to individuals, they feel valued.
Communication is also critical during times of crisis to maintain staff performance.

Motivation and Feedback

Performance management is a continual activity, just as inspiration must be. Every person needs
some motivation. Develop some techniques to encourage them consistently to be driven to meet
objectives and strive for greater performance.

Appropriate Tools and Training

The employees should be supplied with the necessary tools and technology necessary to do their
assigned tasks more efficiently and effectively.

Appropriate training that enables the desired output is also critical. They should be capable of
doing the assigned tasks while also overcoming everyday obstacles.
 UNIT – II

PERFORMANCE MANAGEMENT PROCESS:

PERFORMANCE PLANNING

Performance planning is a systematic and structured approach to successfully achieve the desired
goals of an individual or team throughout the assessment year. A plan is chalked out for the team
or an individual(s) keeping in mind the broader objectives of the organisation.

PERFORMANCE MANAGEMENT PLANNING PROCESS

1. Set SMART Goals

“Employers need to set clear expectations for performance reviews. Well in advance of the
evaluation process, make sure that employees understand how their performance will be evaluated.
This includes categories of evaluation and metrics for goals. Mini check-ins throughout the year
should help employees feel less stressed, better prepared, and able to grow more from the process.”
- Niki Jorgensen, Insperity via Forbes

Specific

Measurable

Achievable

Relevant

Timely

2. Develop a Performance Plan

After SMART goals are set, managers and employees work together to create a performance plan
that outlines the actions, resources, and timelines needed for employees to achieve those goals.

3. Monitor and Evaluate Progress

Goal tracking and performance check-ins help employees stay on track with their goals and keep
managers in the loop about how they’re doing. They also tell managers if goals need to be adjusted
or if their direct reports need additional support.

4. Provide Feedback and Coaching

Continuous feedback and coaching prevent a situation where employees work toward their goals
without guidance or assistance. Coaching doesn’t just help employees achieve their goals — it also
helps them improve their performance and grow their skills as they go and gives managers the
chance to share their expertise and recognize employees’ strengths.

5. Review Performance and Adjust the Plan

Performance reviews are an integral part of performance plans. Regular reviews allow
organizations to see if goals are regularly being met or if employees tend to fall short. On an
individual level, reviews establish employees’ performance history, including their goal
achievement records. Regular reviews can show whether or not performance management plans
helped the employee achieve their goals.

BENEFITS OF PERFORMANCE PLANNING

 Improved performance and productivity

 Alignment with organizational goals
 Employee engagement and motivation
 Clear communication and expectations
 Identification of strengths and areas for improvement
 Employee development and career advancement

STEPS TOWARDS GOOD PERFORMANCE PLANNING

1. Smart and Achievable Goal Setting

 Smart-goal-setting
 Let’s get one thing straight.
 To achieve anything in the long run, you need to have a vision and a goal. And to
successfully fulfill your goals, you must have a good plan.
  Good goal setting will provide a roadmap of the path you need to follow. It will-
 Pinpoint the areas which you need to cover.
 Measure the personal aspirations of employees and provide the necessary opportunities.
 Help you become more specific regarding your efforts.
 Make sure that the goals are realistic and achievable. Set the goals and objectives in such
a way that everyone in the company understands them. More obtainable goals will make
the employees engaged, productive and improve their performance.

2. Proper Job Responsibilities

 Proper-Job-Responsibilites
 If your employees are not put in the right job role, their performance will suffer. It is
necessary that you provide them with the correct job description.
 Its absence creates a significant roadblock in your performance planning process. To avoid
it, you need to be sure about the roles you have to offer to your employees.
 To assign an employee their necessary responsibilities, you need to-
 Assess their strengths and weaknesses
 Understand their skills and competencies
 Be aware of their core interests

3. Focus on Employee Development

 Employee-Development
 Did you know that nearly 59% of employees had no training, and they self-taught the
necessary skills?
 That’s a high number of employees who didn’t receive basic or formal training during their
onboarding. To address such discrepancies, you must keep a close watch on employee
development.
 To make sure that the employees do not miss out on development opportunities, you need
to-
 Have a proper program that teaches the basic skills
 Assess the need for upskilling periodically
 Encourage employees to invest their time in their choice of extracurricular activities
  Design a good and future proof career development plan
 Make sure to conduct periodic performance reviews

4. Provide the necessary tools and resources

 Necessary-tools-and-resources
 Without the help of the necessary resources and tools, accomplishing a task is difficult.
 For instance, to complete a website-related task, you need a good internet connection and
a computer. In that same way, while planning, you need to include the workforce’s
necessary tools and resources to do their daily tasks.
 It is an essential part of any organization. And as a leader, you must emphasize on finding
the right tool that suits your needs.
 To figure out what the employees need, you have to-
 Conduct spot based surveys
 Hold one-on-one conversations with the employees regarding their problems
 Understand their perspective on how work needs to be done
 This will create a sense of value in your employees. In return, employees will become more
loyal and dedicated to their work.

5. Facilitate Mentorship

 Mentorship
 To enhance the performance of your employees, they need proper guidance and
mentorship. Therefore, it is one of the critical steps in your planning process.

CORPORATE STRATEGY AND ITS LINKAGE, KEY RESULT AREAS (KRA) AND
KEY PERFORMANCE INDICATORS (KPI),
AGREEMENT ON PERFORMANCE EXPECTATION AND GOAL SETTING,

AGREEMENT PERFORMANCE

An arrangement between an employer and an employee, or a business and a contractor, which

outlines the terms, expectations, goals, and standards of performance for each party.

What are goals and expectations?

Performance goals/expectations describe specific and measurable outcomes that are necessary for
success within the current job. Documented at the beginning of the performance year, or upon hire,
goals and expectations reflect an employee's key responsibilities and clarify the most important
results that are to be accomplished in a given year.
PERFORMANCE GOALS AND EXPECTATIONS

What should a goal or expectation include?

Goals/expectations should describe what you are setting out to accomplish, what success looks
like, specific actions that will be taken, and how success is measured. Well-written goals meet the
SMART criteria, are achievable within the performance year, and should support the goals of the
team and Faculty/Unit.

Commit Goals

These are also known as expectations, define key responsibilities of the job that are critical for
individual success and have the greatest impact to individual and team achievements. Commit
goals may describe the core work of the role, along with specific actions and measures of success.

Stretch Goals

Go above the basic expectations of the job. Stretch goals can be incremental and continuous
improvements to existing processes, projects, different types of work, or opportunities that are
otherwise undefined in the job profile. Stretch goals can be linked to a development goal if there
is an element of growth/learning involved.

MANAGING PERFORMANCE THROUGHOUT THE YEAR,

REVIEWING PERFORMANCE

Performance reviews are a foundational way to leverage talent, understand needs and
opportunities, and gather intelligence for making connections with employees and larger
organizational strategies. They also play a central role in empowering employees by helping reach
their fullest potential.

Types of performance reviews

Multi-rater performance reviews

360 reviews have been around for quite some time. Today, they are still an integral part of a modern
approach of reviewing performance. Why? 360s include multiple voices and perspectives as most
work is done and evaluated via matrixed teams.

360 performance review

At the heart of a 360 performance review is evaluative feedback. Yet 360 reviews are the most
effective when they are built on a broader foundation of trust. Employees should leave with clear,
actionable forward steps for what to continue and what to improve for future impact.

 Diversifying performance data and measurement

 Providing unique vantage points and perspectives
 Showing leaders where they can improve

Self-assessment

The purpose of a self-assessment is to improve shared accountability, buy-in, and alignment

between manager and employee. The manager receives insight for how to better coach and guide
the employee and the employee can discuss their performance with the perception of their
manager.

Peer review

Managers can’t be everywhere, all the time (nor should they). Successful organizations position
managers as coaches or facilitators. When teams are strong peer feedback improves. Peer feedback
is important because:
  Peers have a unique vantage point to share insights and ideas
 Recognition means more when it comes from peers
 Peers can often be trusted confidants or mentors
 Peers may know how to identify and share feedback so it’s well-received

Upward feedback

When employees and leaders approach feedback with a healthy mindset, upward feedback can
help both parties realize they are in this together and help each other improve. This helps build a
more trusting relationship between individuals where employees feel comfortable discussing
what's going well and what's not.

Team performance review

Team performance conversations help managers evaluate and coach to performance in the context
of a team. A clear picture can be realized to help identify strengths, development opportunities,
goal adjustments, and further potential.

Team performance reviews can help you:

 Understand what’s important to the team

 Set goals that align with individual needs and business needs
 Promote shared ownership and accountability of priorities and performance
 Demonstrate support to improve overall team performance and dynamics

IDENTIFYING PERFORMANCE GAPS

Meaning

The performance gap is one of the simplest but most overlooked business concepts out there. Miss
it, and you could be putting the very survival of your company at risk.

STEPS TO IDENTIFYING GAPS

1. Clarify learning objectives and outcomes

Your organization must clearly define its learning objectives and desired outcomes in order to
focus on the appropriate performance behaviors. For example, you might want to improve your
customer satisfaction scores or reduce your product return rates. As a result, you should
concentrate on the training areas that pertain to these particular goals.

2. Determine the necessary skills and knowledge

The next step is to align your outcomes and learning objectives with employee skills and
knowledge. This involves a detailed breakdown of the tasks involved, as well as the talents and
skills employees require to complete these tasks. Even the smallest businesses have specific skills
and knowledge their employees need to obtain through proper training.

3. Identify performance pain points

Now that you know what your organization needs, you must get to the root of the problem. This
involves identifying performance trouble spots that hinder overall productivity. Here are a few of
the ways that you can conduct a training needs analysis to diagnose the problem:

4. Prioritize performance issues based on organizational goals

There are only so many online training resources and training hours that you can devote to
performance management. As such, you need to prioritize the gaps based on the organizational
goals you’ve set.

5. Evaluate current online training resources

You may already have online training materials that are ideally suited for your training strategy.
They just need to be delivered to the right employees. In other words, you need to match employees
with specific skill or performance gaps with the relevant online training activities.

DEVELOPING PERFORMANCE
1. Planning

Goal planning and setting is an integral stage of your performance management cycle. It is where
employee, team, and business goals are aligned and set.

To ensure small-scale goals are tied to organizational goals, leaders need to outline company
objectives before individual goals are set. When company goals are clear, managers and employees
can create strategic plans to achieve individual performance goals.
2. Monitoring

The monitoring stage is where goal progress is tracked. This step is critical to help employees
achieve the goals set in the planning stage.

To monitor employee goals, plan regular check-ins and 1-on-1s to address any roadblocks
preventing employee productivity. These conversations should be on-going to stay up to date with
goal progress and needed adjustments.

Provide resources, discuss performance, and oversee goals with effective monitoring. As these
steps are leveraged, employees grow and adapt to produce optimal results.

3. Reviewing

A comprehensive evaluation of employees’ final results occurs in the reviewing stage. This is
where a performance review is implemented to assess employee success or possible shortcomings.

4. Rewarding

The last step in an effective performance management cycle is rewarding. This is where leaders
provide rewards and recognition for employees’ efforts and success.

TIPS FOR DEVELOPING A PERFORMANCE MANAGEMENT CYCLE

Make goal-planning a collaborative process.

When planning a goal strategy, involve your employees. Employee buy-in is necessary for top
performance, so creating goals collaboratively is best. Help employees understand the importance
of their initiatives to better drive motivation and success.

Leverage continuous communication and give frequent feedback.

Prioritize consistent communication throughout your performance management cycle. Check in

with employees to ensure progress is being made, ask questions, and provide feedback. This helps
to ensure employee goals are achieved.
Provide resources and support

Employees often need assistance to accomplish their goals. Ensure your monitoring strategy is
effective to stay aware of employees’ needs. When employees feel equipped to accomplish goals
and are supported throughout roadblocks, productivity levels surge.

Don’t hesitate to assess and adjust goals.

Throughout your performance management cycle, constant monitoring should occur to make
adjustments when needed. Business metrics are often unpredictable—adjust to make goals
attainable and relevant when objectives change.

Focus on whether the goal is achieved, not how it is achieved.

To avoid micromanagement, focus on outcomes rather than output. Give employees space to
accomplish their goals, their own way. Direct your focus on results—process correction should
only be leveraged when employees struggle or fall short.

Give rewards based on merit.

Rewards are most effective when they are based on the outcomes an employee produces.
Employees can identify others lacking in effort. When average performers are rewarded the same
as top performers, motivation can suffer. Ensure your rewards are merit-based to safeguard
productivity and engagement.

BENEFITS OF A PERFORMANCE MANAGEMENT CYCLE

Clear and aligned goals

A great performance management platform makes goal setting and tracking efficient. The right
software elevates employee, team, and business goals to the entire organization, and in real-time.
With an effective tool, you can celebrate increased goal alignment and accountability throughout
your workforce.

Engaging recognition

Rewarding is an integral step in your performance management cycle, and recognition is a

motivating reward. A beneficial performance management platform supports public and peer-to-
peer recognition to make employees feel valued for their contributions.
Effective feedback frameworks

Continuous feedback should occur throughout your performance management cycle to safeguard
high performance. Drive individual, team, and organizational growth with a two-way feedback
tool.

Insightful talent reviews

Reviewing your employee’s outcomes can be tough. But with a robust talent review tool, you can
identify top performers and talent risk throughout your workforce. Uncover ongoing perceptions
of employee growth and performance to create strategies for success.

REWARDING AND RECOGNITION OF PERFORMANCE.

Rewards and recognition are important tools that can be used to motivate employees and improve
their performance. Rewards can include things such as bonuses, raises, or special privileges, while
recognition can come in the form of words of appreciation or awards.

UNIT – III PERFORMANCE MANAGEMENT ADMINISTRATION:

ADMINISTRATION OF PERFORMANCE MANAGEMENT PROCESS,

1. Planning

The first step of the performance management process is Planning.

1.1 The defining stage

 The performance management process begins with the planning stage.

 HR and management need to define the job itself, including a comprehensive description,
long and short-term goals, identify key objectives and develop a clear metric for how those
objectives and goals will be assessed.
 Goals should be clear, done in the SMART format (specific, measurable, attainable,
relevant, time-based) and clear performance standards should be set.
1.2 The feedback stage

Once management has completed the defining stage, employees should have the opportunity to
give input on this material. They are the one doing their job and will have a key insight into what
skills, competencies and goals will best assist the company to achieve organizational goals.

1.3 The approval stage

Management and employees both agree to the definition of the role, goals and objectives.

By making this first step of the performance management process collaborative, management sets
the stage for the process as a whole to be collaborative, and the employee feels that they are
involved in goal setting – an important thing, as evidenced by the Gallup study.

2. Coaching

2.1 Organize meetings on a timely, regular basis

Once the parameters of the job and objectives for the future have been set, the next step of the
performance management process begins.

The coaching process is extremely important and must be done on a regular basis. Meetings should
be at least quarterly, although monthly meetings are the ideal.

2.2 Provide necessary training, coaching and solutions

These meetings should focus on solutions and coaching opportunities, rather than punitive
measures for lackluster performance.

If accountability is made into a negative, then employees will avoid it rather than being honest
about where they are struggling.

In some cases, management training in this area can be very helpful to an organization.

2.3 Solicit feedback on both sides

Management should be able to give – and receive – honest feedback and work with employees
rather than adopting a combative stance. The ability to give actionable feedback is important here.

2.4 Revisit objectives as necessary

As the performance management process continues, management should revisit objectives to see
if adjustments should be made, as well as pay attention to career development opportunities for
their employees.

This step involves reviewing the overall performance of the employee, how well the process itself
worked, and it also includes the reward – which is an extremely important part of the overall
process.

3. Reviewing

3.1 Reviewing employee performance

At the end of the yearly performance management cycle, there should be an employee review,
which is sometimes also called a performance appraisal. Typically, these are held once a year, to
look at how well the employee performed over that span of time.

There should be a clear record from previous check-ins to show the employee’s progress
throughout the year. The monthly check-ins are to help the employee with problem-solving,
adjusting goals and other future-looking tasks. This performance review is the only step that looks
backward, to assess the behavior of the past year.

3.2 Reviewing the performance management process

At this stage, it is important for both management and employees to look over the previous year
and see how well the performance management process worked.

3.3 Reviewing overall goal completion

Of course, one of the main questions to answer is ‘did the employee reach their goals?’ How well
did the employee succeed at the tasks given to them throughout the year?

It is important to look at both smaller and larger goals, as this can give an indication to problem
areas where training or interventions can be applied.

3.4 Giving actionable feedback

A key part of the review is to give and receive feedback.

Management should give actionable feedback for the employee so that they know areas where they
can improve future performance.

The employee should also be invited to give feedback on the process, and how management can
do better on their end.

4. Action

The last step in performance management process is Action.

4.1 Reward and recognition

The last step of the performance management process is the reward and recognition.

This step is absolutely key – employees will not stay motivated if they are given no reason to. This
does not necessarily have to be monetary, although it likely will include monetary compensation.
Other rewards could be new projects, company-wide recognition, time off, or leadership
opportunities.

DEVELOPING FORMATS AND TOOLS,

1) 9 Box Grid

The performance management tool for improved succession planning and identifying the future
leaders within the workforce. A 9 box grid distinguishes the employees’ performance according
to their skills and accomplishments. Furthermore, it assesses the potential growth of each
individual.

9 box grid is an influential performance management tool that segregates the workforce into nine
groups according to their current performance and future potential.

The performance management tool that streamlines talent management allocates the employees of
an organization into nine groups. Furthermore, measures and monitors their potential, and builds
a culture of leadership among the workforce.

2) 360 Degree Feedback

A 360 feedback performance tool accelerates the performance capabilities of all employees by 3x
with multidirectional reviews and comments.
Organizations use 360 degree performance software to provide quality feedback. Employees
receive the same from not just their managers but from everyone around them. From colleagues to
customers, they get a complete 360 degree insight into the employee and their performance.

3) Continuous Feedback

A performance management metric that encourages employee growth in real-time with day-in-
day-out feedback. A culture of continuous feedback implements a culture of performance
suggestions in parallel. The entire process focuses on fairness and makes the feedback process a
cakewalk.

4) 1:1

1:1 (One on One) as a performance management tool strengthens the relationship within the teams
and enhances overall employee competency.

1:1 helps acquire uninterrupted sessions with employees to review performance, eliminate barriers,
talk plans, and much more. This performance management tool creates the opportunity for
employers to get to know their employees on a personal level and make them feel valued.

With one on one in your performance management process, develop team loyalty, and create a
sense of security. Enhance the morale and productivity levels and harbor a structured management
and smoother communication.

5) S.M.A.R.T Goals

As a performance management tool, SMART goals set an individual up for success by making
goals specific, measurable, achievable, realistic, and timely (SMART). This performance
management metric develops a sense of encouragement, creates a pathway toward success, and
assists in setting and achieving goals.

6) 5As Test

Some believe that ‘SMART’ only tells a part of a sto­ry in mod­ern day, rapid­ly evolv­ing
organizational culture. In light of that, a new concept called the 5A test was introduced. Future-
driven organizations are believed to set objec-tives that are assess-able, aspi-ra-tional, aligned,
account-able and agile:
The 5As:

Assessable

The objec-tive should be clear and concise when being understood by the individual so they can
move toward goal attainment quickly.

Aspirational

The objec-tive should be authentic and legitimate, bringing tangible results that would drive high
performance.

Aligned

The sole purpose of every objective should be aligned with organizational goals at the end of the
day, which should lead to organizational achievement.

Accountable

The owner of the objective should be responsible for it. Clarity on accountability, whether
individual or shared, should be maintained.

Agile

The set objectives should be achievable in the short term, and the objective’s measuring and
monitoring should be frequent.

7) PDP (Personal Development Plans)

A performance development plan as a management tool for augmenting employee performance

goes a long way. The PDP tool assists people in identifying areas for improvement, setting goals
by measuring progress, and outlining a strategy to achieve the set objectives.

8) Pulse Surveys

Pulse surveys are a brief and regular set of digital questions sent to employees as engagement
surveys. They depict matters related to job roles, communication, relationships within the
workforce, the working environment and culture, etc. The term pulse is used to signify the
continuity of these surveys to gain employee insights.
9) Performance Review

Performance evaluations in performance management tools analyze the entire workforce and
prioritize people and skills accordingly. Employees get to know about their strengths and
weaknesses and can work on them accordingly.

10) Performance Appraisal

Performance appraisal is an indispensable performance management tool that every organization

has to bring into practice at some time or another. When it comes to performance appraisal as a
metric to evaluate employee performance, these three functions are consistently implemented;

(1) Providing adequate and quality feedback to employees in accordance with their skills and
performance

(2) To serve as a performance changer to develop effective working habits

(3) To provide data to managers through which they can evaluate future work assignments

BENEFITS OF PERFORMANCE MANAGEMENT TOOLS

1. Provides Clarity

Performance Management provides a clarity to the employees related to their performance. It helps
them to understand their goals achieved, targets that are yet to be achieved etc. It helps them to
make necessary strategy to achieve their goals on time.

2. Improves employee efficiency

Employees are provided with appraisals and promotion based on their performance scale. If they
are performing well they are likely to get a salary hike or promotion. It motivates employees to
improve their performance so that they can get appraisals.

3. Enhances job satisfaction

As soon as employees get clarity of their job role and targets they are more satisfied with their job
role. It also creates opportunities for self improvement, defined career path etc. This autonomy
turns employees towards their growth which ultimately results in job satisfaction.

4. Increases employee motivation

PMS tools shows the top performers of the month which in turn motivates the employees to provide
their best so that they can grow in their career.

Companies can choose to provide appreciation or monetary benefits to those employees who
outperform during a particular period.

5. Enables decision making power of employees

Timely performance management of employees enhances the decision making power of

employees as it guides them what is good for them in order to achieve their targets on time.
Enhanced decision making skills helps employees to achieve their targets on time.

PERFORMANCE MANAGEMENT CYCLE

Planning

This is the foundational stage where the groundwork for the entire cycle is laid. Managers and
employees collaborate to set achievable yet challenging goal. At this initial stage, the focus is on
setting clear, measurable objectives that align with the organization’s broader goals.

Monitoring and developing

This stage is all about tracking progress and making adjustments as necessary. It’s a dynamic phase
that involves ongoing communication between the manager and the employee. This is an ongoing
stage that requires regular check-ins and adjustments.

Reviewing and rating

This is the evaluative stage where the focus is on assessing performance against the goals set during
the planning phase. The aim is to provide a comprehensive evaluation of the employee’s
performance.

Rewarding

This final stage is about recognizing and rewarding achievements, thereby closing the loop and
setting the stage for the next cycle.
COMMUNICATION OF PROCESS AND FOLLOW UPS

Effective communication ensures that the message is not only sent but also understood by the
receiver, enabling quick responses, crucial for large organizations spread across different locations
and time zones.

COMPONENTS OF THE COMMUNICATION PROCESS

Sender: This is where the communication process is initiated. The person or group who initiates
the communication.

Receiver: The person or group who receives the communication.

Message: The information that is being communicated.

Channel: The medium through which the message is sent.

Encoding: The process of converting the message into a form that can be understood by the
receiver.

Decoding: The process of interpreting the message and understanding the sender's meaning.

Feedback: The receiver's response to the message.

What is a Follow-Up?

A follow-up refers to the communication or actions taken after an initial interaction, such as a sales
call, email, meeting, or event. These actions aim to maintain or enhance relationships, address
queries, or move forward with a business process. In sales and marketing contexts, following up
is crucial to ensure leads and customers feel valued and to push them further down the sales funnel.

PERFORMANCE DEVELOPMENT INTERVENTIONS

Meaning

An intervention is a strategy that improves the performance of an individual, team, or organization.

To be effective, you choose an intervention that counteracts the root cause of a performance
problem.
TYPES OF PERFORMANCE DEVELOPMENT INTERVENTIONS

Diagnostic interventions

Team interventions

Structural interventions

Techno-structural interventions

Human resource interventions

Diagnostic interventions

An OD intervention starts with a diagnostic intervention. It involves collecting data points and
information about your organization through. This is done through things like a SWOT analysis,
operations records, surveys, feedback, and more. Every process should help to diagnose
organizational issues. Once you identify a problem area you can move forward with a more specific
intervention.

Team interventions

An OD team intervention can support teams and groups in your organization to become more
effective. You might try team-building activities, new conflict-resolution techniques, and
leadership development programs.

The type of intervention you choose should depend on the specific needs of your organization. For
example, teams that have trouble working together may find benefits in conflict resolution. Driven
teams may find benefits in leadership development programs.

Structural interventions

Structural interventions aim for the actual structure of your organization. You might redesign job
descriptions and shuffle responsibilities to ensure the right people are on task. Or, you might
improve a certain process to optimize workflow between employees.

Techno-structural interventions

Technology is changing all the time. That’s why many organizations conduct techno-structural
interventions. You might use a new technology or try automating certain tasks to make your team
more efficient. You might tackle workflow optimization with administrative tasks that drive
organizational change.

Human resource interventions

Human resource interventions can help make sure your employees are at the top of their game, and
they can make it easier to provide support if they aren’t.

ROLE OF HR DEPARTMENT

Talent Management

The talent management team in the HR department covers a lot of ground. What used to be distinct
areas of the department have been rolled up under one umbrella. The talent management team is
responsible for recruiting, hiring, developing, and retaining employees.

Compensation and Benefits

In smaller companies the compensation and benefits roles can often be overseen by one or two
human resources professionals, but companies with a larger workforce will typically split up the
duties. HR functions in compensation include evaluating the pay practices of competitors and
establishing the compensation structure. The compensation department is also responsible for
creating job descriptions in tandem with department managers, as well as working with talent
management on succession planning.

Training and Development

Every company wants to see its employees thrive, which means providing them with all the tools
they need to succeed. These tools aren’t necessarily physical such as laptops, job-related software,
or tools for a particular trade; they can include new employee orientation, leadership training
programs, personal and professional development, and managerial training. Training and
development (sometimes called learning and development) is an integral part of the HR team.
Depending on the type of employee role played at the company, the training team might be
responsible for building out instructional programs that have a direct effect on the success of the
business. Today, many colleges and universities offer degrees in training and development; an
instructional design degree would also be helpful in this role.
HR Compliance

Legal and regulatory compliance is a critical component of any HR department. Employment and
labor laws are highly complex, and having a team devoted to monitoring this ever-changing
landscape is essential to keeping companies out of trouble with federal, state, and local
governments’ laws. When a business is out of compliance, it can result in applicants or employees
filing claims based on discriminatory hiring and employment practices or hazardous working
conditions.

Workplace Safety

Of course, every company wants to provide a safe place to work for its employees, and the
Occupational Safety and Health Act of 1970 (OSHA) actually mandates that employers provide a
safe working environment for their workers. A large focus area for HR is developing and
supporting safety training and maintaining federally mandated logs in the event injuries or fatalities
happen at work. In addition, this department often works hand-in-hand with benefits specialists to
manage the company’s Workers’ Compensation filings

LINE MANAGERS EMPLOYEES AND THE TOP MANAGEMENT

Meaning

A line manager is an employee who directly manages other employees and processes while
accountable to a senior manager. Related job titles normally used are supervisor, section leader,
and team leader. They are assigned with meeting business goals in a specific functional area or
line of business. The line manager is responsible for managing employees to ensure successful
execution of organizational goals and strategies.

ROLE OF LINE MANAGER

Leadership and Interpersonal Roles

Which type of manager spends more time in leadership activities? The short answer is all effective
managers display leadership characteristics. Leadership is the ability to communicate a vision and
inspire people to embrace that vision.
Top managers are often required to fulfill what Mintzberg described as figurehead activities. They
are the public face of the management team and represent the business in legal, economic, and
social forums.[2] Middle managers are also leaders, although their focus may be more on
interpersonal skills, such as motivating employees, negotiating salaries, and encouraging
innovation and creativity. First-line managers lead both by example when they actively participate
in the tasks assigned to their workers and by modeling the policies and work ethics of the
organization.

Informational Roles

Informational roles involve the receiving and sending of information—whether as a spokesperson,

a mentor, a trainer, or an administrator. A top manager is a voice of the organization and has to be
aware that even personal opinions will reflect (for better or worse) on the business. With the free
flow of information on the Internet, it is very difficult for top managers to separate their personal
identities from their corporate positions. For example, there was a consumer backlash in 2017
when Uber CEO Travis Kalanick accepted a seat on President Trump’s economic advisory council.
Kalanick initially said that he was “going to use [his] position on the council to stand up for what’s
right.” He resigned a few days later in response to the protest.[3]

Middle managers must skillfully determine what information from top management should be
shared with others, how it should be interpreted, and how it should be presented. Similarly, they
must weigh the value of information they receive from first-line managers and employees in order
to decide what to forward to top management. If transmitted information tends to be untrue or
trivial, then the manager will be viewed as a nonreliable source and his or her opinions discounted.

Decision Making Roles

All managers are required to make decisions, but managers at different levels make different kinds
of decisions. According to Mintzberg, there are four primary types of management decision roles.
These include the following:

Entrepreneur. The entrepreneurs in a firm are usually top-level managers. They identify
economic opportunities, lead the initiative for change, and make product decisions.
Disturbance handler. Top and middle managers will react to disturbances (unexpected events) in
the organization—whether internal or external. They will decide what corrective actions should be
taken to resolve the problems.

Resource allocator. All levels of management will make resource allocation decisions, depending
upon whether the decision affects the entire organization, a single department, or a particular task
or activity.

Negotiator. Depending on the effect on the organization, most negotiation is done by top and
middle-level managers. Top managers will handle negotiations that affect the entire organization,
such as union contracts or trade agreements. Middle-level managers negotiate most salary and
hiring decisions.

UNIT - IV

PERFORMANCE APPRAISAL:

Performance Appraisal is the systematic evaluation of the performance of employees and to

understand the abilities of a person for further growth and development.

OBJECTIVES OF PERFORMANCE APPRAISAL

Performance Appraisal can be done with following objectives in mind:

 To maintain records in order to determine compensation packages, wage structure, salaries

raises, etc.
 To identify the strengths and weaknesses of employees to place right men on right job.
 To maintain and assess the potential in a person for growth and development.
 To provide a feedback to employees regarding their performance and related status.
 It serves as a basis for influencing working habits of the employees.
 To review and retain the promotional and other training programme
 Types of Performance Appraisals

Self-assessment: Individuals rate their job performance and behavior.

Peer assessment: An individual’s work group or co-workers rate their performance.

360-degree feedback assessment: Includes input from an individual, supervisor, and peers.

Negotiated appraisal: This newer trend utilizes a mediator and attempts to moderate the
adversarial nature of performance evaluations by allowing the subject to present first. It also
focuses on what the individual is doing right before any criticism is given. This structure tends
to be useful during conflicts between subordinates and supervisors

WHAT SHOULD BE EVALUATED/ A RESULT OR THE MEANS OR BOTH?

1. Set Performance Standards

It’s important to set clear performance standards that outline what an employee in a specific role
is expected to accomplish and how the work should be done. The same standards must apply to an
employee’s performance for every employee in the same position. All standards should be
achievable and relate directly to the person’s job description.

2. Set Specific Goals

You should also set specific goals for each employee, unlike performance standards, which can
apply to multiple workers. Goals are particular to the strengths and weaknesses of the individual
employee and can help them improve their skills or learn new ones.

3. Take Notes Throughout the Year

Track the performance of your employees and create a performance file for each worker. Keep
records of notable accomplishments or incidents, whether positive or negative. Remember that you
can give immediate feedback to employees when something stands out as well, you don’t have to
wait until the year-end performance review process to give praise or constructive criticism.
4. Be Prepared

When it comes time to give an employee evaluation, it’s best to prepare for the meeting
beforehand. Review your documentation for the employee before the meeting and note what you
want to discuss with the employee.

5. Be Honest and Specific with Criticism

When you do need to give criticism in an evaluation, be honest and straightforward when giving
feedback. Don’t try to sugarcoat or downplay the situation, which can confuse the employee. Give
clear examples and then provide helpful, specific advice on how the employee can grow and
improve employee performance in the future.

6. Don’t Compare Employees

The purpose of an employee evaluation is to review the performance of each staff member against
a set of standard performance metrics. It’s not helpful to compare one employee’s performance to
another employee’s performance, and doing so can lead to unhealthy competition and resentment.
Always circle back to your evaluation framework to evaluate one employee’s performance, not
the performance of other workers.

7. Evaluate the Performance, Not the Personality

Your evaluation should focus on how well the employee performs their job rather than their
personality traits. When you judge the employee’s personality, they can feel attacked, and the
conversation can turn hostile.

8. Have a Conversation

An employee evaluation shouldn’t be a one-way street where the manager gives constructive
feedback and the employee listens without responding. Instead, a productive employee evaluation
should be a conversation between the two of you. Listen to your employees’ concerns and how
they’d like their careers to grow. Find out how you and the larger team can help employees meet
their career goals.
BENCH MARKING AND SETTING PERFORMANCE STANDARD

Performance benchmarking is the process of measuring and analyzing an organization's

performance of products, services, operations, and other business processes against other
companies, competitors, or industry leaders. It helps businesses identify and understand areas for
improvement.

PREPARATION FOR PERFORMANCE APPRAISAL INTERVIEW

Meaning

A performance appraisal interview is the first stage of the performance appraisal process and
involves the employee and his or her manager sitting face to face to discuss threadbare all aspects
of the employee’s performance and thrash out any differences in perception or evaluation.

The Right and Wrong Way to Approach a Performance Appraisal Interview

 The performance appraisal interview must be taken seriously and both the employee and
the manager must set aside time to go through the process. The manager cannot arbitrarily
change the time or the venue and must not approach the interview in a haphazard manner.
 Despite all these injunctions, it is often the case that the manager has to be reminded about
the interview and then he or she hurriedly arranges the meeting. This is definitely the wrong
way to approach the interview.
 Further, the manager must make the time to go through the employees’ self evaluation and
rate the same objectively.
 Though there is no right way to conduct the performance appraisal interview, it is
incumbent upon the manager to avoid the pitfalls described above.
 A rule of thumb would be set aside a few days to conduct all the interviews with members
of his or her team and ensure follow-ups to the process.
 The follow-up is needed when the employee is not satisfied with the interview discussion
and hence requests for additional time to debate the rating.
 In some cases, the HR manager may need to step in to ensure that the process is concluded
to the satisfaction of the employee and the manager.
DOS AND DON’TS OF PERFORMANCE APPRAISAL

1. Do stick to a consistent schedule

Performance reviews are crucial for a business as they help all staff members to maximize their
own performance. In order to get the most out of reviews, it's important to ensure that you don't
go too long in between them, and the best way to do that is to have a set period after which a new
round of reviews occurs. The traditional approach is annual reviews, however, some businesses
opt for a quarterly schedule. A hybrid approach involves smaller reviews quarterly with a larger
annual assessment every fourth review.

2. Do check in with staff between performance reviews

Whether you're running annual reviews or quarterly, it's important to stay on top of staff
performance in the periods between reviews, too. While you don't need to rely on formal sessions
or write-ups, take time to speak with management and staff throughout the year, and monitor
performance numbers.

3. Do gather data before meetings

While any successful business will have no shortage of intangibles that help to set it apart, the raw
performance numbers are still ultimately how success is measured more often than not. By
gathering performance data on your staff you will not only have an easier time identifying strong
and weak performances, but you also have concrete numbers to point to when demonstrating what
is and is not working. This data is also helpful for setting goals moving forward between this
performance review and the next one.

4. Do consult with others

One of the best ways to get an accurate assessment of an employee is to speak with others they
most frequently interact with. If you are an upper-level manager, speaking with the employee's
direct supervisor will give you a closer look at their performance. Another great resource is fellow
team members or other staff members who work with the employee regularly. While it's important
to remember coworkers may be biased, both positively and negatively, by speaking to a broad
range of staff members you develop a fuller understanding of the staff member's work.

5. Do enter each performance review with set goals

Targets to aspire for are a crucial tool that each staff member should leave your performance
reviews with, but you should also be entering into each with goals as well. For an employee who
is struggling, for example, your focus may be on identifying ways to improve their performance,
while a leading staff member's meeting may be geared toward establishing a long-term role at the
company that gets the most out of their talents. The better you understand your goal for the meeting
the better positioned you are to strive toward that target during the review.

6. Do provide ample notification

To get the most out of giving a performance review you need both parties to be prepared prior to
the meeting. Define the regular schedule and then provide staff with a heads-up in the weeks prior
to the reviews. This provides staff with the time they need to prepare for the meeting, including
gathering their own information and preparing any comments or questions they have. When both
parties come into the meeting prepared you can maximize the time you have for the review.

7. Do practice with human resources

If you're unsure how to do a performance review for a staff member then your HR department is a
great outlet for assistance. As professionals who specialize in staff management, they can offer
advice and tips. Another effective way to prepare with the help of HR is to run through some
practice employee reviews where you can simulate a performance review to critique your approach
and find the best way to handle your review.

8. Do meet face to face

When planning how to review employee performance, always aim for a setting where you can
make eye contact, as opposed to a phone call or written-only review. With remote work on the
rise, in-person performance reviews may not be an option for all employees, however, a video
conference call can help to provide a more personal interaction even when you and your employee
are physically separated.

9. Do offer an appraisal

Another excellent way to help your staff prepare for your performance reviews is to provide them
with preliminary appraisals prior to your meetings. By providing the preliminary appraisal on the
day of your meeting you provide them with the opportunity to review it. In addition to allowing
for an initial emotional response to occur in private, avoiding the risk of it affecting the tone of
their performance review, it also provides them with an opportunity to better prepare for any
compliments and criticism which allows for a more accurate and effective conversation during the
review.

10. Do ask questions

The most successful companies are ones where dialog is openly exchanged and the best ideas are
carried out, regardless of who proposed them. When planning out how to do an employee
evaluation, make sure that you are listening as well as talking. Ask the employee what they think
is and is not working, both in their own performance and the company as a whole. Performance
reviews provide a valuable opportunity to get a stronger understanding of how your staff is feeling
and how your company is operating and allows you to respond in kind and make improvements
on overall performance.

11. Do be specific and give actionable assessments

The goal when giving a performance review is for your staff member to leave the meeting with
the capability to improve their performance moving forward, both for their own benefit and the
benefit of the business. Being direct and specific during all employee reviews is the best way to
reduce any confusion and provide your staff with clear road maps to follow in the future. If the
employee is doing something negative that needs to change, or something positive that you'd like
to see more of, note it directly and explain in certain terms why you feel how you do.

12. Do provide a written assessment after

At the end of every staff member's performance review, have a copy of the employee's assessment
provided to them. You can do so at the review if it is ready, or wait and have copies sent out in the
days that follow if you need additional time to make amendments following the in-person
meetings. Providing a written copy for employees makes it so that they don't need to rely on their
memory for key takeaways, and have something they can consult with in the future. It also serves
as a useful assessment aide at future reviews.
1. Don't be too informal

Casual dress codes and relaxed settings are becoming more popular in offices and can have
excellent results for overall performance, however, you should maintain a formal approach when
planning how to do performance reviews for your staff. Because reviews can play such a crucial
part in establishing the next year at your company, a formal approach avoids the risk of
misunderstandings that can occur in a more free-wheeling approach to reviews. Both parties
benefit from this more structured method.

2. Don't be distracted

Some offices opt to make employee reviews more relaxed by performing them in a non-standard
setting, such as a lunch meeting or while going for a walk around campus. Although such meetings
have benefits, for staff reviews it is is often not the ideal approach. A sit-down interview removes
any unwanted distractions and allows you and your employee to maintain full focus on discussing
their performance and the ways to help them raise it or maintain high levels in the future.

3. Don't soften hard information

Delivering bad news can be challenging and there is a natural inclination to attempt to soften the
blow. When learning how to do an employee evaluation, delivering bad news without eroding the
point of the message is one of the most important skills to master. Although it can be hard, you
and your employee are better served by a straight approach to criticism so that they know exactly
what they need to work on in order to improve their standing.

WHO SHOULD DO PERFORMANCE APPRAISAL?

Generally the employee's supervisor leads the appraisal process. Other people — the human
resources manager, coworkers, customers — may also be involved. A growing number of
companies invite workers to review their supervisors to increase input and validity of appraisal
results.
IMMEDIATE SUPERVISOR AND IMMEDIATE SUPERVISOR’S SUPERVISOR;

The immediate supervisor is responsible for each classified employee's performance appraisal. The
official position description designates the immediate supervisor. The employee and the supervisor
should agree on the position's major duties and responsibilities.

PEER & SUBORDINATE

Some peers help as friends when they are somewhere else and when they meet up after a long
time. Some subordinates always remember our contribution to their growth and show their respect,
if they are in a position or we need any help in future.

RATING COMMITTEE

Rating Committee means a committee constituted by a credit rating agency to assign rating to an
obligation or entity based on analyses of relevant information presented to it by rating analysts.

SELF (EMPLOYEE)

Meaning

A self-employed person does not work for a specific employer who pays them a consistent salary
or wage. Self-employed individuals, or independent contractors, earn income by contracting with
a trade or business directly.

360-DEGREE FEEDBACK SYSTEM

Meaning

360 degree feedback, also known as multi-rater feedback, is a system in which anonymous
feedback is gathered about a member of staff from various people they have working relationships
with.

This is usually their managers, peers, direct reports, subordinates - hence the name "360 degree".
It's designed so a range of people can share their opinion to provide a well-rounded view on the
individual.
THE 360 FEEDBACK SYSTEM PROCESS

Administering the survey:

Around 6-10 respondents complete an anonymous online feedback form.

Respondents are arranged into groups depending on the relationship with the subject, such as,
manager, peers etc. If it's appropriate, feedback can also be gathered from external sources, such
as clients or customers.

Post-survey completion:

 Individual answers cannot be identified as the feedback is provided as averages from the
different rating groups.
 Feedback is provided in a report usually created by a trusted third party and crucial areas
for development are highlighted.
 The information helps to create a development plan.
 Those who give the feedback to the subject should be well-trained and they should provide
the information objectively and constructively.
 Support should be offered to help achieve the goals set, including follow-ups.

360 degree feedback strengths

If a 360 feedback system is implemented well, it can have a number of benefits for the individual,
their team and the organisation:

Valuable development tool: The 360 feedback system shows the subject the differences between
how they see themselves and how others see them. This increases their self-awareness which
means that the subject is more conscious of their personality, strengths, weakness, beliefs,
motivations etc. With this information they can adjust their behaviour and identify their training
needs. Consequently, the subject can become more effective in their role and for the role they may
be aiming for.

Multiple sources: A variety of people have contributed to the feedback, so the information is
thought to be more valid and objective than feedback from, for example, just one manager. Also,
the feedback is more likely to be accepted if multiple individuals "agreed" on the answers.
Motivation: Knowing multiple individuals gave the same feedback provides the subject with the
drive to develop.

Company competencies: The company's fundamental competencies will be reinforced, not only
for the subject, but also for the respondents. During the survey the respondents will be answering
questions which remind them of what behaviours and values are important to the company.

Customer service: Customer service can improve if customers and clients have completed the
survey.

Method over outcomes: The 360 feedback system assesses the method rather than the outcome.
It's more important to do something the right way even if it doesn't produce the correct outcome -
nothing is ever certain so by focusing on the method you give yourself the best chances of
producing the preferred outcome. For example, a tight deadline is coming up, but a manager tells
his staff that they can only work a maximum of one hour overtime a day and no work is allowed
on the weekends. The manager has made this decision because he believes that stress and over-
working can increase the chances of mistakes being made and of producing poorer outcomes.

Large teams or autonomous workers: This type of feedback is significant in organisations where
the subject works independently or with several teams because their manager will be unable to
observe everything.

Safe environment: Answers are safely given as the system is confidential. A lot of the feedback
would be too uncomfortable for colleagues to share and it would probably never be given if the
system was not anonymous.

Improves communication: Communication increases between the team because the subject
understands how others perceive them which in turn assists with teamwork.

360 degree feedback weaknesses

If a 360 degree feedback system is implemented poorly, this can create distrust, conflict and low
motivation amongst the team:

Conflicting feedback: Feedback can be conflicting and there is no way to be sure which feedback
is more accurate.
Concentrating on negatives: Organisations sometimes make the mistake of discounting strengths
and focusing completely on weaknesses. If all of the negatives were listed one after the other, it
would be discouraging for the employee - they may either shut off or not trust the feedback. Staff
should be working on their weaknesses and continuing to play to their strengths.

Importance of the leader: If the organisation's leader believes that this feedback is not important
or they do not contribute then it's unlikely that other organisation members will treat it seriously.
When the leader thinks it's important, and that this will benefit the organisation, these beliefs will
work down the hierarchy to persuade everyone else.

Smaller organisations: 360 degree feedback can be less effective in small organisations as there
are fewer sources and reduced objectivity.

Vague questions: Vague questions should be avoided because it's difficult to convert the answers
into measurable behaviour. Questions that will give the subject actionable information should be
used.

Lack of customisation: If the survey is not tailored to the needs of the organisation, it may not be
useful.

Accuracy: The amount of time an individual has known the subject affects the accuracy of the
feedback given. Eichinger (2004) found that staff who had been at an organisation long enough to
get past first impressions (known the subject for 1-3 years), but not long enough to lose their
objectivity (known the subject for more than 3 years), gave the most accurate ratings. Individuals
who knew the subject for less than 1 year provided the second most accurate ratings.

Personal feedback: Respondents may provide personal rather than constructive feedback which
can upset the subject and not have much value. It must be clear to staff why they're doing the
survey - that it must be constructive and not personal.
 UNIT – V

PERFORMANCE APPRAISAL:

What is a Performance Appraisal?

A performance appraisal is a systematic and periodic process of measuring an individual’s work

performance against the established requirements of the job. It’s a subjective evaluation of the
employee’s strengths and weaknesses, relative worth to the organization, and future development
potential.

Methods of Performance Appraisals

1. 720-Degree Feedback

You could say that this method doubles what you would get from the 360-degree feedback! The
720-degree feedback method collects information not only from within the organization but also
from the outside, from customers, investors, suppliers, and other financial-related groups.

2. The Assessment Center Method

This method consists of exercises conducted at the company's designated assessment center,
including computer simulations, discussions, role-playing, and other methods. Employees are
evaluated based on communication skills, confidence, emotional intelligence, mental alertness,
and administrative abilities. The rater observes the proceedings and then evaluates the employee's
performance at the end.

3. Behaviorally Anchored Rating Scale (BARS)

This appraisal measures the employee’s performance by comparing it with specific established
behavior examples. Each example has a rating to help collect the data.

4. Checklist Method

This simple method consists of a checklist with a series of questions that have yes/no answers for
different traits.

5. Critical Incidents Method

Critical incidents could be good or bad. In either case, the supervisor takes the employee’s critical
behavior into account.

6. Customer/Client Reviews

This method fits best for employees who offer goods and services to customers. The manager asks
clients and customers for feedback, especially how they perceive the employee and, by extension,
the business.

7. Field Review Method

An HR department or corporate office representative conducts the employee's performance

evaluation.

8. Forced Choice Method

This method is usually a series of prepared True/False questions.

9. General Performance Appraisal

This method involves continuous interaction between the manager and the employee, including
setting goals and seeing how they are met.

10. Human Resource Accounting Method

Alternately called the “accounting method” or “cost accounting method,” this method looks at the
monetary value the employee brings to the company. It also includes the company’s cost to retain
the employee.

11. Management By Objective (MBO)

This process involves the employee and manager working as a team to identify goals for the former
to work on. Once the goals are established, both parties discuss the progress the employee is
making to meet those goals. This process concludes with the manager evaluating whether the
employee achieved the goal.

12. Performance Tests and Observations

This method consists of an oral test that measures employees' skills and knowledge in their
respective fields. Sometimes, the tester poses a challenge to the employee and has them
demonstrate their skills in solving the problem.

13. Project Evaluation Review

This method involves appraising team members at the end of every project, not the end of the
business year.

14. Rating Scales

These ratings measure dependability, initiative, attitude, etc., ranging from Excellent to Poor or
some similar scale. These results are used to calculate the employee's overall performance.

GRAPHIC RATING SCALE;

Meaning

A graphic rating scale (sometimes called a Likert scale) is a performance appraisal method that
lists desired traits and behaviors for each role, then rates workers on each of those on a numbered
scale. The attributes might include punctuality, quality of work, job knowledge, teamwork,
accountability, responsibility, etc.

Advantages of the graphic rating scale method

Easy to understand and use

The graphic rating scale method is straightforward and easy to understand. Most people have likely
filled out a similar questionnaire in the past; therefore, it requires minimal extra training to
implement and can be grasped by both managers and employees. That’s why it’s a popular choice
for performance rating.

Quantifying behaviors makes the appraisal system easier

This method quantifies behavioral traits, making it far easier to analyze the feedback and spot
trends, patterns, and developments. Areas for improvement can be easily identified and actioned,
and progress can be tracked. This streamlines the entire appraisal system.
Inexpensive to develop

A graphic rating scale can be developed quickly, while many questions will overlap across roles
in the organization, which means they can be used again. This makes it an affordable employee
performance method for almost all organizations.

Limitations of the graphic rating scale method

Subjectivity of different evaluators

Although everyone in the organization may be using the same numerical scale, this doesn’t
guarantee that the way managers rate employees will be uniform across the board. Each person
will have a different perception of the scale and what each rating means. What one manager sees
as “excellent”, another one might take for granted and rate it as “good”.

Different types of biases

One of the most common biases of this method is the “halo effect,” which can skew the evaluation
results. This happens when employees have a handful of exceptional strengths which overshadow
any glaring weaknesses that need addressing. The reverse is also a possibility—one significant
weakness can bring down an overall score and detract from an employee’s many strengths. There’s
also the recency effect – the tendency to remember the most recent events best.

Difficult to understand employees’ strengths

The scores are added at the end of the questionnaire, and each employee is given an average final
score. However, as mentioned above, this may not accurately represent an employee’s total
performance, which can be considered a disadvantage of this type of s

ALTERNATE RANKING METHOD

Meaning

The alternation ranking method is a method used to appraise and rank employees from worst to
best. Employees are scored individually based on an isolated trait or criterion and ranked amongst
each other.
PAIRED COMPARISON

Meaning

In a paired comparison system, the manager must compare every employee with every other
employee within the department or work group. Each employee is compared with another, and out
of the two, the higher performer is given a score of 1. Once all the pairs are compared, the scores
are added.

FORCE DISTRIBUTION METHOD CRITICAL INCIDENT METHOD

Forced distribution is a performance appraisal rating method requiring the rater to force employee
ratings into a bell-shaped curve.

Example of Forced Distribution Method

For example, a manager of XYZ corporation evaluating 30 employees can be instructed to put 5
employees each in the ‘outstanding’ and the ‘poor’ category, whereas 20 will fall in the range of
average performers. In this manner, the ratee (manager) has forced the distribution of level of
performance of each of the 30 employees into one of the three categories.
BEHAVIORALLY ANCHORED RATING SCALE (BARS)

Meaning

A behaviorally anchored rating scale (BARS) is a system for measuring staffs' performance. It
measures them according to defined behavioral patterns. It offers both qualitative and quantitative
data for your appraisal process. BARS includes the combination of quantified ratings, incidents,
and narratives.

MANAGEMENT BY OBJECTIVE

Meaning

Management by objectives (MBO) is a strategic management model that aims to improve the
performance of an organization by clearly defining objectives that are agreed to by both
management and employees. According to the theory, having a say in goal setting and action plans
encourages participation and commitment among employees, as well as aligning objectives across
the organization.

Management by Objectives (MBO) in 5 Steps

 Either determine or revise organizational objectives for the entire company. This broad
overview should be derived from the firm’s mission and vision.
 Translate the organizational objectives to employees. In 1981, George T. Doran used the
acronym SMART (specific, measurable, acceptable, realistic, time-bound) to express the
concept.
 Stimulate the participation of employees in setting individual objectives. After the
organization’s objectives are shared with employees from the top to the bottom, employees
should be encouraged to help set their own objectives to achieve these larger organizational
objectives. This gives employees greater motivation since they have greater empowerment.
 Monitor the progress of employees. In step two, a key component of the objectives was
that they are measurable for employees and managers to determine how well they are met.
 Evaluate and reward employee progress. This step includes honest feedback on what was
achieved and not achieved for each employee.

Advantages and Disadvantages of Management by Objectives (MBO)

Advantages

 Employees take pride in their work and are assigned goals they know they can achieve that
match their strengths, skills, and educational experiences.
 Assigning tailored goals brings a sense of importance to employees, boosting their output
and loyalty to the company.
 Communication between management and employees is increased.
 Management can create goals that lead to the success of the company.

Disadvantages

 As MBO is focused on goals and targets, it often ignores other parts of a company, such as
the culture of conduct, a healthy work ethos, and areas for involvement and contribution.
  Strain is increased on employees to meet the goals in a specified time frame.
 Employees are encouraged to meet targets by any means necessary, meaning that shortcuts
could be taken and the quality of work compromised.
 If management solely relies on MBO for all management responsibilities, it can be
problematic for areas that don’t fit under MBO.

360 DEGREE APPRAISAL AND CUSTOMER FEEDBACK SYSTEM.

Meaning

Customer feedback is information provided by customers about their experience with a product or
service. The goal is to understand their level of satisfaction and to help product, customer success,
and marketing teams identify areas of opportunity.

5 Benefits of Customer Feedback

1. Provide a better user experience

Today’s marketing is heavily based on a user’s experiences with products, services, and brands
overall. By focusing on providing the best customer experience at every touchpoint, clients will
stay loyal to your brand. And the most effective way to give them an amazing experience is to ask
them what they like about your service and what should be improved.

2. Improve products and services

Customer feedback provides insight into what’s working well about your product or service and
what should be done to improve the experience. You might have the best expertise in your market
or industry, but your professional knowledge will never be more valuable to business performance
than customer insights.

3. Measure customer satisfaction

Customer satisfaction and loyalty are crucial factors determining a company’s success. It is
directly linked to several benefits, including increased market share, lower costs, or higher
revenue. There’s an undeniable connection between customer satisfaction and business
performance, that helps ensure that your clients are happy with your products and services.
4. Prevent customer churn

Customer feedback is an opportunity to prevent customer churn and foster long-term relationships
with them. Unhappy customers need a little extra work – pick up the phone and call them, hone in
on their pain points, and strive to provide an effective solution. Checking on them regularly and
showing you care goes a long way in building a healthy business relationship, supporting
reputation marketing, and ensuring customer retention.

5. Make data-driven decisions

Customer feedback is one of the most reliable sources of data used for making business decisions.
Taking their suggestions into consideration may reveal where you should allocate your money to
get the highest return on investment.

For instance, you might discover that further product development is not necessary in your case;
instead, you should focus on promoting your brand to get bigger exposure.

Customer feedback is a valuable source of such data, but the key is to learn how to listen to it and
translate it into actionable takeaways for your business.

7 MOST EFFECTIVE CUSTOMER FEEDBACK METHODS

1. Surveys

Online survey tools often come in the form of a feedback button or email invite, and have become
increasingly popular since the emergence of website feedback.

2. Contact forms

Contact forms are one of the easiest ways to gather candid customer feedback. Because it’s a
support channel for most companies, you can use each interaction as an opportunity to gather
feedback. To maximize the likelihood of hearing back from a customer, be sure to set clear
expectations, organize the form appropriately, and send personalized responses.

3. Usability tests

For usability testing to bring valuable insights to your company, it requires more upfront planning.
With a clear strategy, you can uncover challenges that customers don’t realize they’re facing and
actionable insights that make their experiences better.
4. Customer interviews

Reaching out to customers directly opens up conversations that otherwise wouldn’t happen.

Qualitative stories from customers bring color and nuance to quantitative feedback (data). These
personal experiences help a team understand the feelings behind customer decisions and the
community response to a company’s brand or decisions.

5. Social media

Social listening can give you access to a pool of candid feedback from customers. Direct comments
or mentions on social networks aren’t the only way to collect customer feedback. There are many
other networks including built-in polling tools.

6. In-app feedback

In-app feedback tools are used to provide a shortcut to submit feedback to app users. With the in-
app feedback process, users can rate or submit the feedback directly from the app screen.

7. Onsite activity via analytics

Analytics reveal what customers don’t know about how they use your product. Especially if you
sell a digital product or service, you benefit from leveraging analytics to understand how users
interact with your company.

BALANCED SCORE CARD

A balanced scorecard is a strategic planning framework that companies use to assign priority to
their products, projects, and services; communicate about their targets or goals; and plan their
routine activities. The scorecard enables companies to monitor and measure the success of their
strategies to determine how well they have performed.