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Performance Management

Performance management is an ongoing process to improve organizational effectiveness through alignment with strategic goals, while performance appraisal is a periodic, formal review to provide feedback and identify training needs to help employees improve. Several common performance appraisal methods are discussed, including graphic rating scales, forced distribution, and behavioral anchored rating scales, with an emphasis on creating specific, measurable goals through management by objectives to conduct effective performance reviews.

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laalan ji
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17 views

Performance Management

Performance management is an ongoing process to improve organizational effectiveness through alignment with strategic goals, while performance appraisal is a periodic, formal review to provide feedback and identify training needs to help employees improve. Several common performance appraisal methods are discussed, including graphic rating scales, forced distribution, and behavioral anchored rating scales, with an emphasis on creating specific, measurable goals through management by objectives to conduct effective performance reviews.

Uploaded by

laalan ji
Copyright
© © All Rights Reserved
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
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Performance Appraisal ⊂ Performance management

• Performance management:
– Dynamic, continuous process.
– Improves organizational effectiveness.
– Aligned with strategic goals(e.g. ideapreneurs – strategic planning )

• Performance appraisal:
– Periodic (usually annual) event.
– Formal review.
– Providing feedback with a aim to improve or help employees.
Why performance appraisals?

To identify training
needs, to correct
deficiencies (if
Opportunity to
any) and to
communicate the
reinforce
expectations
behaviours as
required by the
job. (job analysis)

To identify
employee
To decide salary
strengths and
hikes, promotions
weaknesses, and
& retention
use the same for
career planning.
Steps in Performance Appraisal

• Defining the job


– Making sure that you and your subordinate agree on his or
her duties, job standards and set goals. (SMART goals)
• Appraising performance
– Comparing your subordinate’s actual performance to the
standards that have been set; this usually involves some
type of rating form.
• Providing feedback
– Discussing the subordinate’s performance and progress,
and making plans for any development required.
VIDEO-PA
POLL 1
Who Should Do the Appraising?
• The immediate supervisor
• Peers
• Rating committees
• Subordinates
• 360-Degree feedback
• Self appraisals??
Performance Appraisal Methods
• Graphic rating scale.
• Ranking method.
• Forced distribution method.
• Critical incident method.
• BARS–behaviorally anchored rating scale.
• MBO–management by objectives.
• Balance Score card
• Graphic rating scale
Performance Appraisal
– A scale that lists Methods
a number of traits and a range of
performance for each that is used to identify the score
that best describes an employee’s level of performance
for each trait.
Graphic
Rating
Scale
Alternation Ranking Scale

Ranking employees
from best to worst
on a particular trait,
choosing highest,
then lowest,
until all are ranked.
Paired Comparison Method

Ranking employees by
making a chart of all
possible pairs of the
employees for each trait
and indicating who is the
better employee of the
pair.

Note: + means “better than.” − means “worse than.” For each chart,
add up the number of 1’s in each column to get the highest-ranked
employee.
Forced distribution method

– Similar to grading on a curve; predetermined


percentages of ratees are placed in various
performance categories.

– Example:
• 15% high performers
• 20% high-average performers
• 30% average performers
• 20% low-average performers
• 15% low performers

9–13
Example of a
Behaviorally
Anchored
Rating Scale for
the Dimension
Salesmanship
Skill
VIDEO
Balance score card
Management by Objectives (MBO)

Poorly written objective:


Increase widget production.
This objective sounds like a good goal, but it is so illusive that employees
would not know how to accomplish the task and certainly no way to measure
its accomplishment.
SMART objective:
Control product defects to increase annual widget production by 5 percent
while maintaining current budget and specification levels.
This objective fits the SMART formula. It’s specific. It tells employees what
the end result should be–a 5 percent increase in production.

It tells employees what to work on–product defects.


It identifies the time period–one year.

Finally, it gives measurable parameters for accomplishment–within budget


and specifications.

The objective is specific, measurable, attainable, realistic and timely.


Computerized and Web-Based
Performance Appraisal
• Performance appraisal software programs
(eg. BambooHR, Zoho people, etc)
– Keep notes on subordinates during the year.
– Electronically rate employees on a series of
performance traits.
– Generate written text to support each part of the
appraisal.

Electronic performance monitoring (EPM)


– Having supervisors electronically monitor the
amount of computerized data an employee is
processing per day, and thereby his or her
performance.
POLL 2
Appraisal Interview
• Types of appraisal interviews
– Satisfactory—Promotable
– Satisfactory—Not promotable
– Unsatisfactory—Correctable
– Unsatisfactory—Uncorrectable
• How to conduct the appraisal interview
– Talk in terms of objective work data.
– Don’t get personal.
– Encourage the person to talk.
– Constructive feedback.
VIDEO- HANDLING DIFFICULT
EMPLOYEES
Potential Errors in Appraisals

Central tendency
– A tendency to rate all employees the same way, such as
rating them all average.
Halo effect
-  Letting one negative work factor or behaviour you dislike
color your opinion of other factors or Letting one positive
work factor you like affect your overall assessment of
performance.
• Strictness/leniency – (Personality??)
– The problem that occurs when a supervisor has a
tendency to rate all subordinates either high or low.

• Bias
– The tendency to allow individual differences such as age,
race, and gender to affect the appraisal ratings employees
receive.
• Favouritism. Overlooking the flaws of favoured or "nice"
employees, especially those whom everyone likes.

• Guilt by association. Rating someone on the basis of the company


they keep, rather than on the work they do.

• Holding a grudge. A dangerous luxury that may result in your


ending up in court. Never try to make employees pay for past
behaviour.

• Recency. Rating only recent performance, good or bad.


VIDEO – RATERS’ BIAS
How to Avoid Appraisal Problems
– Train supervisors to reduce rating errors such as halo,
leniency, and central tendency.
– Have raters compile positive and negative critical incidents
as they occur.
– 360° Reviews
– Custom forms -Use the right appraisal tool. Each tool has its
own pros and cons.
– Automated performance management systems

9–27
Organisations are moving to real-time performance
appraisal:
Head-Human Capital Management, Cloud Applications, Asia Pacific at
Oracle - Economic times, Feb 3, 2019
POLL 3
CITIBANK – CASE DISCUSSION

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