Performance Management
● Performance Management is a continuous process that aims at planning,
monitoring and evaluating the objectives of an employee and his
total contribution to the organization. The basic purpose of performance
management is to encourage and improve employee’s efficiency and
effectiveness.
● In this process, both the employees and the managers participate in setting
the objectives, assessing the performance or progress, providing training and
feedback to the employees at regular intervals for improvement,
implementing development programs for employees and rewarding them
for their achievements.
● With the help of this process, both the employee and the employer get a
chance to set the combined goals of the employee that relates to the
ultimate goal of the organization by considering the employee’s performance.
In this way, the objectives of the parties became clear that helps to achieve
the overall objectives of the organization and the growth & development of
the employee as well.
Performance Appraisal
● Performance Appraisal is defined as an assessment of employees by the
manager, in which he/she evaluates the overall contribution made by the
employee to the organization. It is a systematic and logical review, conducted
by the organization annually to judge his potential in performing a task. It
helps to analyse the skills and abilities of an employee for their future growth
that increases the productivity of employees. It helps to identify, the employee
who performs their task well and those who are not, along with the reasons
for the same.
Nature of Performance Management
Performance Management
• Processes used to identify, encourage, measure, evaluate, improve, and reward employee
performance
• Provide information to employees about their performance.
• Clarify organizational performance expectations.
• Identify the development steps that are needed to enhance employee performance.
• Document performance for personnel actions.
• Informing and getting agreement on individual performance
• Facilitate them to achieve better results
• Provide rewards for achieving performance objectives.
Performance Management is A Part of HRM Cycle
Reward
Performance Appraisal
Recruitment &
Selection
5
Training and
Development
Performance Management Linkage
Types of Performance Information
Performance Standards
Performance Standards
Expected levels of performance
Benchmarks, goals, and targets
Characteristics of well-defined standards
Realistic
Measurable
Clearly understood
Challenging
Performance Appraisal
● “The systematic description of an employee’s strengths and weaknesses”
● The process of evaluation how well employees perform their jobs when
compared to a set of standards, and then communicating the information to
employees.
Performance Appraisal
● Informal appraisals : ongoing basic within the organization
● Formal appraisals : occurrence at certain intervals throughout that
person’s history of employment
Uses of Performance Appraisal
Performance
Appraisal
To provide To Providing To Provide
Rewards Training Potential
Benefits of Performance Appraisal
Individual
• Objectives can be established in relation the whole organization
• Key results and timescale can be established
• Can compare past performance and future activities against standards
• Can be known pay on the basis of performance
Organization
• Suitable promotion candidates can be identified
• Areas of improvement can be seen
• Communication is improved
• Basis for medium to long term HR planning
The Process of Performance Appraisal
• Step 1- Identification of criteria
• Step 2- Appraise for a period of time
• Step 3- Prepare an appraisal report by manager
• Step 4- Appraisal interview
• Step 5- Modify the report if necessary as a result of interview
• Step 6- Review of the assessment
• Step 7- Prepare the action plan for improvement
• Step 8- Implement the action plan
• Step 9- Follow up the result
Where to Appraise?
Common
Performance
Measures
Quantity of Quality of Timeliness of Presence at
Output Output Output Work
Appraisal Techniques
• Graphic Rating Scales
• Check List
• Essay
• Behavioural Rating Scales
• Management by Objectives (MBO)
Traditional Performance Appraisal Process
Types of Appraisals
• Downward Appraisal
• Upward Appraisal
• Peer Appraisal
• Self Appraisal
• Customer Appraisal
• Multi-source or 360 degree Appraisal
Who Conducts Appraisals?
Supervisors rating
their employees
Employees rating
Multi-source
Sources of their superiors
Performance
Appraisals
Outside sources Team members
rating employees rating each other
Employees rating
themselves
Multi-source Appraisal
Appraisal Interview
• Interview between Manger (may be one of the appraiser) and subordinate
(appraise)
• The purpose is to encourage collaborative problem solving and improvement
planning
• Three styles of manager that can be adopted
– Tell and sell
– Tell and listen
– Problem solving
Appraisal Errors
• Halo error: A situation in which a supervisor generalizes from one dimension
of a person’s job performance to all dimensions of performance.
• Error of central tendency: An error that occurs when a manager rates all
employees average, even when their performances vary.
• Leniency error: A situation occurs when manager rates all employees in a
group higher than they deserve.
Reasons to Fail Performance Appraise
● Manager not honest
● Unclear Language
● Manager not taking PA seriously
● Insuff. Rewards
● Lacks Information
● Lack of Appraisal skill
● Ineffective discussion
● No On-Going Feedback
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