OVERVIEW OF PERFORMANCE

MANAGEMENT AND REWARD SYSTEM

NAME: MOHD TALHA SHAIKH

HPGD/JL22G2/3806
SPECIALIZATION: HUMAN RESOURCE
MANAGEMENT
JULY 2024
PERFORMANCE MANAGEMENT
- Refers to the procedures and systems designed to improve employee
outputs and performance, often through the use of economic incentive
systems.
Apart from economic incentives, the other means used to improve
employee performance are:
1. Goal setting
2. Streamlined organizational structure
3. Better technology
4. New arrangement of working schedules
5. High involvement of employees
6. Better motivation of employees
An effective performance management
process considers human resource (HR)
strategic planning as a basic requirement. HR
strategic planning is the process of providing
capable and motivated people to carry out the
organization's mission and strategy.
STAFFING
Refers to the HR planning, acquisition, and development
aimed at providing the talent necessary for organizational
success.
Staffing process consists of the following:
1. Job analysis
2. Recruitment
3. Selection
4. Socialization
1. JOB ANALYSIS
A technical procedure used to define the duties,
responsibilities, and accountabilities of a job.
The results of job analysis are very useful in:
1. Preparing job descriptions
2. Evaluating and classifying jobs
3. Training and career development
4. Performance appraisal
5. Other HR aspects
1. JOB ANALYSIS
Job description contains information
concerned with the job. The information
include job duties and responsibilities,
equipment and materials used, working
conditions and hazards, supervision, work
schedules, standards of performance, and
relationships to other jobs.
1. JOB ANALYSIS
To meet the job requirements specified in the job
description, the job specification is derived.
Job specification requirement:
1. Education and experience;
2. Technical knowledge;
3. Physical aptitudes and abilities;
4. Interpersonal and communication skills;
5. Analytical aptitudes and abilities; and
6. Creative abilities
2. RECRUITMENT
Defined as a human resource management
practice designed to locate and attract job
applicants for particular positions.

Recruitment involves the following:

1. Advertisement of a position vacancy
2. Preliminary contact with potential job candidates
3. Preliminary screening to obtain a pool of
candidates
2. RECRUITMENT
2. RECRUITMENT - INTERNAL

Process for attracting job

applicants from those currently
working for the firm.
2. RECRUITMENT - INTERNAL
Advantages
1. It is good public relations
2. It builds morale
3. It encourages good individuals who are ambitious
4.It improves the probability of a good selection, since information on the
individual's performance is readily available.
5. It is less costly than external recruitment
6. Those chosen internally already know the organization
7.When carefully planned, promoting from within can also act as a training
device for developing middle and top-level managers.
2. RECRUITMENT - INTERNAL
DISADVANTAGES
1.It can dysfunctional to the organization to utilize
inferior internal sources only because they are
there, when excellent candidates are available on
the outside.
2.It may generate infighting among the rival
candidates for promotion.
3. It may decrease the moral levels of those not
selected.
4. It may promote "inbreeding".
2. RECRUITMENT - INTERNAL
METHODS OF INTERNAL RECRUITMENT
A. Computerized career progression system
B.Supervisor recommendations
C.Job posting
D.Career development systems
 2. RECRUITMENT - INTERNAL
A. COMPUTERIZED CAREER PROGRESSION SYSTEM (CCPS)
One of that stores extensive amounts of information about
employees of a company. It is a useful means of recruiting people
currently employed by the organization. The system's computer file
contains information on employees such as job history, education,
strengths and weaknesses, leadership development needs,
developmental needs, training, and special skills.
The computer may also provide information on job title, location,
skills requirement, and potential successors to the position.
2. RECRUITMENT - INTERNAL
B. SUPERVISOR RECOMMENDATIONS
- are another method of internal recruitment. When
supervisor needs to fill a certain vacancy in his unit,
he is in the best position to identify the person who
fits the job. Most likely, the supervisor will nominate
those whose capabilities are well-known to him.
2. RECRUITMENT - INTERNAL
C. JOB POSTING
- is a method of internal recruitment in which a
job vacancy notice is posted and all qualified
employees may bid. The notice describes the
job, the salary, work schedule, and necessary
qualifications. The most qualified applicants
are chosen for interview.
2. RECRUITMENT - INTERNAL

D. CAREER DEVELOPMENT SYSTEM

- Constitute another method of internal recruitment.
Under this method, the organization places ‘’ fast-
track’’ or high-potential employees on a career path
where they are groomed for certain target jobs.
2. RECRUITMENT - EXTERNAL
EXTERNAL RECRUITMENT
- It is a process of attracting job applicants from
outside the organization. It is undertaken when no
suitable candidates are available from within the
organization. This recruitment source tends to bring
in ‘’new blood’’ and fresh ideas to the organization.
2. RECRUITMENT - EXTERNAL
METHODS OF EXTERNAL RECRUITMENT
A. Employee referrals
B.Applicant-initiated recruitment
C. Help-wanted advertisement
D.Private employment agencies and executive search firms
E.Campus recruiting
2. RECRUITMENT - EXTERNAL
A. EMPLOYEE REFERALS
- Is a method of recruitment in which
organizations ask their employees to solicit
applications from qualified friends and
associates.
2. RECRUITMENT - EXTERNAL
B. APPLICANT-INITIATED RECRUITMENT
- is a method of external recruitment in which an
organization accepts unsolicited applications or
resumes from individuals interested in working
for the organization.
2. RECRUITMENT - EXTERNAL
C. HELP-WANTED ADVERTISEMENT
- is a method of external recruitment in which an
organization places an advertisement for the position
in the appropriate media such as newspaper,
magazine, and the like.
2. RECRUITMENT - EXTERNAL
D. PRIVATE EMPLOYMENT AGENCIES AND EXECUTIVE SEARCH FIRMS
- constitute another method of external recruitment. Under this method, the hiring organization
initiated the recruitment process by contacting the appropriate agency or firm and informing if
of the qualifications needed for the job in question. The agency or firm assumes the task of
soliciting applications, and then refers top applicants to the hiring organization for further
screening.
Private employment agencies are those that provide organization, for a fee, with clerical,
blue collar, technical, and lower managerial personnel. Their services are especially useful
when many individuals are expected to apply for a job or when qualified candidates are
hard to find.
Executive search firms are employment agencies used to recruit middle and top level
managers. These firms can locate successful executives working elsewhere who are not
even actively seeking a new job
2. RECRUITMENT - EXTERNAL
E. CAMPUS RECRUITING
- is an external recruiting method in which the
organization’s recruiters visit various college and
university campuses to recruit individuals for
positions requiring a certain degree.
3. SELECTION
- This involves assessing and choosing among job candidates.
The selection process involves the following steps:
1. Completing the application form;
2. Conducting an interview;
3. Completing any necessary tests;
4. Background investigation;
5. Physical and medical examination; and
6. A decision to hire or not
4. SOCIALIZATION
- The final step in the staffing process and it
involves orienting new employees to the
organization and its work units, especially the
work units where the newly hired employee will
be working. The purpose of socialization is to
enable new employees to quickly become
productive members of the organization.
4. SOCIALIZATION
In socialization, the new employees are provided with
information about the following:
1. Key organization factors which includes an overview of
the organization, policies and procedures, compensation,
benefits, safety and accident prevention, employee and
union relations, physical facilities, and economic factors; and
2. Department and job-related issues including department
functions; job duties and responsibilities; policies, rules,
procedures, and regulations; the autonomy of the
department; and socialization into the work group.
TRAINING AND CAREER
PLANNING AND
DEVELOPMENT
TRAINING
-is the process of changing employee behavior,
attitudes, and opinions through some type of
guidance experience.
Classification of Ways to Conduct Training
1. On-the-job training
2. off-the-job training
TRAINING
On-the-Job Training
-this training method is conducted while
employees perform job-related tasks. It is
the most direct approach to training.
TRAINING
Common Forms:
1.Internships - are opportunities for students to gain real
world experience.
2.Apprenticeships - involve learning a trade from an
experienced worker.
3.Job rotation - provides a broad range of experience in
different kinds of jobs in an organization. It is often used
to provide background for future managers and is
sometimes used to try to alleviate worker boredom.
TRAINING
Off-the-Job Training
- This type of training deals with work skills in settings away from their
ordinary workplace.
Techniques:
1. Classroom Lectures
2. Video and Films
3. Simulation Exercises
4. Computer-based training
5. Vestibule Training
6. Programmed instruction
CAREER PLANNING
AND
DEVELOPMENT
Career may be defined as the pattern of
work- related experiences that span the
course of a person's life.
Career Stages - refers to the distinct stages
that individuals go through in their careers,
typically including establishment,
advancement, maintenance, and retirement.
CAREER STAGES
1. ESTABLISHMENT STAGE
- is one of apprenticeship where the young
employee enters and organization who may
be technically able but often without an
understanding of the organization's demands
and expectations.
CAREER STAGES
2. ADVANCEMENT STAGE
- The employee seeks growth and increased
responsibility through the continued development
and utilization of skills. This stage calls for the
employee to work as an independent contributor of
ideas in a chosen area.
CAREER STAGES
3. MAINTENANCE STAGE
-During this stage the employee may experience continued growth of
performance and accomplishments, or he/she may encounter career stability.
- But often the employee loses career flexibility. This may be a result of personal
considerations such as:
Limited interest in learning new skills;
Organizational considerations, such as a basic lack of opportunity; and
Family considerations that make it difficult to change jobs or to take additional
work responsibilities
CAREER STAGES
- Some experience career plateau, a situation in which, for either organizational or
personal reason, the probability of moving up the career ladder is low.
Types of Career Plateaus:
Structural Plateau - which marks the end of promotions and the affected employee,
will now have to leave the organization to find new opportunities and challenges.
Content Plateau - which occurs when a person has learned a job too well and
is bored with day-to-day activities.
Life Plateau - which occurs when an employee experiences a loss of identity and
self-
esteem when there is no longer success in his work area.
CAREER STAGES
4. RETIREMENT STAGE
-is that stage when formal preparation
for retirement is made.
-The individual learns to accept a reduced role
and responsibilities.
PERFORMANCE APPRAISAL
- is a key aspect of performance
management. It may be defined as the
process of evaluating the performance of
employees, sharing that information with
them, and searching for ways to improve their
performance.
FUNCTIONS OF PERFORMANCE
APPRAISAL
Performance appraisal is undertaken for the following reasons:
1. to give employees feedback on performance
2. to identify the employee's developmental needs
3. to make promotion and reward decisions
4. to make demotion and termination decisions
5. to develop information about the organization's selection and placement
decisions
CRITERIA FOR PERFORMANCE
APPRAISAL
- There are certain criteria used, the three most popular sets of criteria are:
1. Individual Task Outcomes - evaluating the employee's task
2. outcomes. Behaviors
3. Traits - the traits commonly used as basis for performance appraisal include:
A. good attitude
B.showing confidence
C. being dependable
D.looking busy
E.possessing a wealth of experience
THE PROCESS OF PERFORMANCE
APPRAISAL
- It is a process in an organization
whereby each employee is evaluated to
determine how he or she is performing.
THE PROCESS OF PERFORMANCE
APPRAISAL
- It consists of the following steps:
1. establishment of performance standards
2. mutually set measurable goals
3. Measure actual performance - to determine what actual
performance is, it is necessary to acquire information about it.
4. compare actual performance with standards
5. discuss the appraisal with the employee
6. if necessary, initiate corrective action
THE PROCESS OF PERFORMANCE
APPRAISAL
Information may be derived from the following
sources:
A. personal observation
B.statistical reports
C. oral reports
D.written reports
PERFORMANCE STANDARDS
- should be clearly defined and communicated
to the employee. These standards should be
based on job-related requirements derived
from job analysis and reflected in the job
descriptions and job specifications.
METHODS OF PERFORMANCE
APPRAISAL
METHODS OF PERFORMANCE
APPRAISAL- ABSOLUTE STANDARDS
-In this approach, the subjects of this appraisal are not
compared with other persons.

A. Essay Appraisal
B.Critical Incident
C. Checklist
D.Adjective Rating Scale
E.Forced Choice
F.Behaviorally Anchored Rating Scale
METHODS OF PERFORMANCE
APPRAISAL- ABSOLUTE STANDARDS
a. Essay Appraisal - is a performance appraisal method whereby an appraiser
writes a narrative about the employee.
▪Advantages: Provides excellent opportunity to point out the unique characteristic of
the employee.
▪Disadvantages:
it is very time consuming
the quality of the appraisal may be influenced by the appraiser's writing skill and
composition style
It tends to be subjective and may not focus on relevant aspects of job performance.
METHODS OF PERFORMANCE
APPRAISAL- ABSOLUTE STANDARDS
b. Critical Incident Appraisal - is a performance appraisal
method which requires effective or ineffective
performance for each employee being appraised.
- This method can be very useful if the appraisal is
given enough time to observe the subject employee.
METHODS OF PERFORMANCE
APPRAISAL- ABSOLUTE STANDARDS
c. Checklist - is a performance appraisal method wherein the
evaluator uses a list of behavioral descriptions and checks off those
behaviors that apply to the employee.
•Advantage: it reduces some biases since the rater and the scorer are
different.
• Disadvantage: it is when there are many job categories, a checklist of
items must be prepared for each job categories and that is costly in terms
of materials and time consumed.
METHODS OF PERFORMANCE
APPRAISAL- ABSOLUTE STANDARDS
METHODS OF PERFORMANCE
APPRAISAL- ABSOLUTE STANDARDS
d. Adjective Rating Scale Method - also known as graphic rating scale, is a
performance appraisal method that lists a number of traits and a range of performance
for each.
▪Advantages: it is practical and costs less to develop
▪Disadvantages:
1. It does not clearly indicate what a person must do to achieve a given rate.
2. It does not provide a good mechanism for providing specific, nonthreatening
feedback.
3. Accurate ratings are not likely to be achieved because the points on the rating
scale are not clearly defined.
METHODS OF PERFORMANCE
APPRAISAL- ABSOLUTE STANDARDS
METHODS OF PERFORMANCE
APPRAISAL- ABSOLUTE STANDARDS
e. Forced-choice Appraisal - is a type of
performance appraisal in which the rater must choose
between two or more specific statements about an
employee's work behavior.
METHODS OF PERFORMANCE
APPRAISAL- ABSOLUTE STANDARDS
f. Behaviorally Anchored Rating Scale (BARS) - is a
rating instrument comprised of traits anchored by job behaviors
Advantage: is its ability to direct and monitor behavior. The
behavioral anchors let employees know what types of behavior
are expected of them which gives appraisers the opportunity to
provide behaviorally based feedback.
Disadvantage: is the difficulty of selecting the one behavior on the
scale that is most indicative of the employee’s performance level.
METHODS OF PERFORMANCE
APPRAISAL- ABSOLUTE STANDARDS
METHODS OF PERFORMANCE
APPRAISAL- RELATIVE STANDARDS
Group order ranking –is a relative standard of performance
characterized as placing employees into a particular
classification such as top “one-fifth” for example, excellent,
5%; above average, 15%; average, 60%; below average,
15%; and poor, 5%.
METHODS OF PERFORMANCE
APPRAISAL- RELATIVE STANDARDS
Individual Ranking – this method requires the
evaluator merely to list the employees in order
from highest to lowest.
METHODS OF PERFORMANCE
APPRAISAL- RELATIVE STANDARDS
Paired Comparison – is an appraisal method
whereby subordinates are placed in all possible
pair and the supervisor must choose which of the
two in each pair is the better performer.
METHODS OF PERFORMANCE
APPRAISAL- OBJECTIVES
▪The third approach to appraisal makes use of objectives.
▪This approach is also known as, management by objectives, is a
process of joint goal setting between a supervisor and a
subordinate.
METHODS OF PERFORMANCE
APPRAISAL- OBJECTIVES
Steps:
1. Goal Setting- the individual objectives are set based on the organization’s
overall objectives.
2. Action Planning- realistic plans are developed and measuring of
performance.
3. Self- control – refers to the systematic monitoring and
measuring of performance.
4. Periodic Reviews – are the means used to determine whether there is a
need for
corrective action.
 METHODS OF PERFORMANCE
APPRAISAL- OBJECTIVES
Advantages of MBO:
It improves job performance by monitoring and directing behavior; It is practical
and inexpensive;
It fosters better communication between employees and supervisors.

Disadvantages of MBO
It does not specify the behavior required to reach goals
It tends to focus on short term goals
The successful achievement of MBO goals may be pertly a function of factors outside the worker’s control.
MBO does not provide a common basis for comparison of performance standards
•It often fails to gain acceptance
 ERRORS IN PERFORMANCE
APPRAISAL-
▪Halo Error – This is a rating error that occurs when a rater assigns ratings on
the basis of an overall impression of the person being rated
▪Leniency Error – This is a rater’s tendency to give relatively high ratings to
virtually everyone.
▪Central Tendency Error – this occurs when a rater lump everyone together around
the average, or middle, category.
▪Recency Error – this is a biased rating that develops by allowing the individual’s
most recent behavior to speak for his or her overall performance on a particular
dimension.
▪Personal Bias Error – this occurs when a rater allows specific biases, such as
racial, age, and gender, to enter into performance appraisals.
REWARDS
▪After staffing, training, career planning and development, and performance
appraisal, a final requirement is necessary to ensure effective performance.

TYPES OF ORGANIZATIONAL REWARDS

▪Rewards may be classified as either:

1. Intrinsic or extrinsic
2. financial or nonfinancial
3. performance-based or membership-based
REWARDS
Intrinsic rewards are those that the worker receives from the job itself, such
as pride in one’s work, feeling of accomplishment, or being part of a team.
Theses rewards are self-regulated as the worker is not dependent on an
outsider.

Extrinsic rewards are those that the workers get from the employer, usually
money, a promotion, or benefits.
REWARDS
Financial rewards are those that enhance an employee’s financial well-
being directly through wages, bonuses, profit-sharing, and the like.

Nonfinancial rewards are indirect enhancement of an employee’s financial

well-being. This is done through supportive benefits like pension plans, paid
vacation, paid sick leaves, and purchase discounts.
REWARDS
Performance-based rewards are those given using performance as basis.
These rewards take the form of commissions, piecework pay plans,
incentive systems, group bonuses, or other forms of merit pay.

Membership-based rewards refer to those that are given to all employees

regardless of performance. This type includes cost-of-living increases;
benefits; and salary increases attributable to labor-market conditions,
seniority or time in rank, credentials such as a college degree, or future
potential such as a new MBA degree from a prestigious university.