G RO

UP
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PERFORMANCE MANAGEMENT
AND REWARDS
 G RO
UP
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Barte, Rea
Ollorga, Janet
Guinto, angelo
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J o b
p e r formanc e
r ewa r d s
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WHAT IS PERFORMANCE
MANAGEMENT
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 arrangements of working schedules
5. High involvement of employees
6.Better motivation of employees
 STAFFING Effective performance
begins with getting the right people,
and then providing them with the
right environment.
1. JOB ANALYSIS The process of staffing starts
with an understanding of the positions or jobs
for which individuals are needed in the
organization. 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
RECRUITMENT After job analysis, the next step in the
staffing process is the drawing of people to apply for the
various positions identified. This step is called recruitment
and it may be defined as a human resource management
practice designed to locate and offract 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.
Methods of Internal Recruitment.
1. Computerized career progression system – (CCPS) is one
that stores extensive amounts of information about employees of
a company.

2. Supervisor recommendations – another method of internal

recruitment. When a supervisor needs to fill a certain vacancy in
his unit, he is in the best position to identify the person who fits the
job. He can be asked to nominate internal candidates. Most likely,
the supervisor will nominate those whose capabilities are well-
known to him.
3. Job posting – a method of internal recruitment in which
a job vacancy notice is posted and all qualified employees
may bid. The nolice describes the job, the salary, work
schedule, and necessary qualifications.

4. Career development systems – constitutes another

method of internal recruitment. Under this method, the
organization places "fast-track" or high-potential
employees and a career path where they are groomed for
certain target jobs.
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.

Methods of External Recruitment.

1. Employee referrals is a method of recruitment in which
organizations ask their employees to solicit applications
from qualified friends and associates.
2. 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.

3. Help-wanted advertisements 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.
4. Private employment agencies and executive search
firms constitute another method of external recruitment.
Under this method, the hiring organization Initiates the
recruitment process by contacting the appropriate agency
or firm and informing if of the qualifications needed for
the job in question.

5. Campus recruiting is an external recruiting method in

which the organization's recruiters visit various college and
university campuses.
3. SELECTION After recruitment, the next step in the
staffing process is 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
6. A decision to hire or not.
3. SELECTION After recruitment, the next step in the
staffing process is 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
6. A decision to hire or not.
4. SOCIALIZATION The final step in the
staffing process is socialization, and it
involves creating new employees to
the organization and its work units,
especially the work units where the
newly hired employee will be working.
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 economics 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
 After the selection effort, the organization will
have to undertake measures that will ensure
that the knowledge, skills, and abilities of
employees are at par with the requirements of
their respective jobs.
TRAINING
Training is the process of changing
employee behavior, attitudes, or opinions
through some type of guided experience.
Training the individual employee occurs not
only initially but anytime improved skills are
needed to meet changing job requirements.
There are many ways to conduct training
programs and they may be classified as follows:
1. On-the-job training:
This training method is conducted while employees
perform job-related tasks. It is the most direct
approach to training.
2. Off the job training:
This type of training deals with work skills in setting
away from their ordinary workplace.
The common forms of on-the-job training are:
1. Internships – are opportunities for students to gain real
world experience. They are often offered during summer
breaks and may be with or without payment.
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.
The various off the job training techniques are:
1. Classroom lectures. These consist of lectures designed to
communicate specific interpersonal technical, or problem-
solving skills.
2. Videos and films. This training method uses various media
productions to demonstrate specialized skills that are not easily
presented by other training methods.
3. Simulation exercises. This is a training method that occurs
by actually performing the work. This may include case analysis,
experiential exercises, role playing, or group decision making
4. Computer based training. This is a training method
that simulates the work environment by programming a
computer to imitate some of the realities of the job.
5. Vestibule training. This is a training method where
training materials are condensed into highly organized,
logical consequences. It may include computer tutorials,
interactive video disks, or virtual reality simulations.
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
This item refers to the distinct stages that individuals
go through in their careers, typically including
establishment, advancement, maintenance, and
retirement.
The establishment stage
is one of the apprenticeships where the young employee enters an
organization who may be technically able but often without an
understanding of the organization's demands and expectations. As a
consequence, they work fairly closely with more experienced people.
In the advancement stage
the employee seeks growth and increased responsibility through the
continued development and utilization of his skills. This stage calls for
the employee to work as an independent contributor of ideas in a
chosen area. He is expected to rely much less on direction from
others.
During the maintenance stage
the employee may experience continued growth of performance
and accomplishments, or he may encounter career stability.
Sometimes, a further change in employers is necessary to sustain
advancement, but often the employee loses career flexibility.
Many people experience a career plateau during the
maintenance stage.
Career Plateau
A career plateau is a situation in which, for either organizational
or personal reason, the probability of moving up the career ladder is
low
Career plateau are of three types:
1. 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
2. Content plateau – which occurs when a person has learned a
job well and is bored with day-to-day activities.
3. 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
The retirement stage
is that stage when formal preparation for retirement is
made. The individual learning to accept a reduced role
and less responsibility. Depending on the individual this
can be either a positive or a highly upsetting stage of
one's career.
PERFORMANCE
APPRAISAL
PERFORMANCE APPRAISAL
Performance appraisal is a key aspect of performance
management. It may be defined as the process of
evaluating the performance of employees, sharing the
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 decision:
4. To make demotion and termination decisions; and
5. To develop information about the organization's
selection and placement decisions.
Criteria for Performance Appraisal
The three most popular sets of criteria are:
1. Individual task outcomes – one way of appraising performance
is evaluating the employee's task outcomes.
2. Behaviors – There are instances when it is difficult to measure
an individual's task outcomes. This is so for advisory jobs or
support positions and those who are assigned to work in a group.
3. Traits – Many organizations use traits as criteria in appraising
employee performance. This is true even if it is a very weak
means. It is weak because it has little connection with the actual
performance of the job.
The traits commonly used as basis for performance
appraisal include:
1. Good attitude
2. Showing confidence
3. Being dependable
4. Looking busy
5. Possessing a wealth of experience
THE PROCESS OF PERFORMANCE APPRAISAL
Performance appraisal is a process in an organization whereby each
employee is evaluated to determine how he or she is performing.

It consists of the following steps:

1. Establishment of performance standards –
Performance standards are those by which performance is to be
evaluated. It 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.
2. Mutually set measurable goals
– When goals are set with the active participation of the
employees, appraising employee performance will be an
easy task
3. Measure actual performance
– the third step in the appraisal process.
To determine what actual performance is, it is necessary
to acquire information about it. Information may be
derived from the following sources:
1. Personal observation
2. Statistical reports
3. Oral reports
4. Written reports
4. Compare actual performance with standards
5. Discuss the appraisal with employee
6. If necessary, initiate corrective action.
 METHODS OF
PERFORMANCE
APPRAISAL
three different approaches which can be used for
appraising employees:

1. ABSOLUTE STANDARDS. Under this approach,

the subjects of appraisal are not compared with
other persons. This approach consists of the
following methods:
the essay appraisal the adjective rating scale
the critical incident forced choice
appraisal behaviorally anchored
the checklist rating scales
A. The essay appraisal is a performance appraisal
method whereby an appraiser writes a narrative about the
employee. The employee's strengths and weaknesses are
described and recommendations for development are
indicated.
B. The critical incident appraisal is a performance appraisal
method which requires effective or ineffective performance for
each employee being appraised
The checklis The adjective rating scale
C. The 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. The supervisor or others familiar with the ratee's
performance evaluate how applicable each statement is.
D. Behaviorally anchored rating scale (BARS) is a rating
instrument composed of traits anchored by job behaviors.
Appraisers select the behavior that best describes the worker's
performance level.
2. RELATIVE STANDARDS. This category of
appraisal methods compare individuals against
other individuals. The most popular in this
category are:

Group order ranking

Individual ranking method
Paired comparison
Group order ranking is a relative standard of performance characterized
as placing employees into a particular classification such as top "one-
fifth."

Individual ranking method requires the evaluator merely to list the

employees in order from highest to lowest. This method does not show
the difference between the first and second, or between the second and
third.

Paired comparison is an appraisal method whereby subordinates are

placed in all possible pairs and the supervisor must choose which of the
two in each pair is the better performer.
3. OBJECTIVES. The third approach to appraisal
makes use of objectives. This approach. also
known as management by objectives (MBO), is a
process of joint goal setting between a supervisor
and a subordinate. It is also a process of
converting organizational objectives into
individual objectives.
MBO consists of four steps:
In goal setting, the individual objectives are set based on the
organization's overall objectives. These goals are agreed upon and then
become the standards by which the employee's results will be evaluated

In action planning, realistic plans are developed to attain the objectives

Self-control refers to the systematic monitoring and measuring of

performance.

Periodic reviews are the means used to determine whether there is a

need for corrective action.
The advantages of MBO are the following:
1. It improves job performance by monitoring and directing behavior,
2. It is practical and inexpensive;
3. Il fosters better communication between employees and supervisors.

The disadvantages of MBO are the following:

1. It does not specify the behavior required to reach goals:
2. It tends to focus on short-term goals;
3. The successful achievement of MBO goals may be partly a function of
factors outside the worker's controls;
4. MBO does not provide a common basis for comparison of performance
standards: and
5. It often fails to gain acceptance.
ERRORS IN PERFORMANCE APPRAISAL
-A perfect performance is an ideal goal and
to make it happen, errors should be
prevented from happening. To eliminate the
possibility of errors, they must first be
identified.
HALO ERROR – This is a rating error that occurs when a rater assigns ratings on
the basis of an overall impression (positive or negative) of the person being
rated.

LENIENCY ERROR – This is a rater's tendency to give relatively high ratings to

virtually everyone. The opposite of this is strictness error where the raters tend to
give everyone a low rating. Most often, leniency errors happen when peers assess
one another.

CENTRAL TENDENCY ERROR – This occurs when a rater lump everyone together
around the average, or middle, category. The idea is that there are no very good
or very poor performers on the dimension being rated. As a result, no true
performance discrimination is made.
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. The result is a false picture of the individual's
job performance during the entire period.

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. The requirement refers to the
design and implementation
of reward systems.
TYPES OF ORGANIZATIONAL INCENTIVES
Organizational incentives consist of rewards to motivate people to work.
Rewards may be classified as either:

1.Intrinsic or Extrinsic
Intrinsic rewards are those that the worker receives from the job itself,
such as pride in one's work, a feeling of accomplishment, or being part of
a team. These rewards are self-regulated as the worker is not dependent
on an outsider, such as the manager, to provide for them.
Extrinsic rewards are those that the workers get from the employer,
usually money, a promotion, or benefits.
2. Financial or Nonfinancial
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 vacations,
paid sick leaves, and purchase discounts.

3. Performance-based or Membership-based
Performance-based rewards are those given using performance as the 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 increase attributable to labor-market conditions, seniority or time in
rank, credentials such as a college degree, or future potentia
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