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Chapter I SV

The document outlines the concept of Performance Management (PM), emphasizing its role in identifying, measuring, and developing employee performance in alignment with organizational goals. It highlights the contributions of PM to employees, managers, and organizations, while also discussing the dangers of poorly implemented PM systems. Additionally, it defines reward systems and outlines the characteristics of an ideal PM system, integrating it with other HR activities.

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Dr. Muhammad Nawaz Khan
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12 views38 pages

Chapter I SV

The document outlines the concept of Performance Management (PM), emphasizing its role in identifying, measuring, and developing employee performance in alignment with organizational goals. It highlights the contributions of PM to employees, managers, and organizations, while also discussing the dangers of poorly implemented PM systems. Additionally, it defines reward systems and outlines the characteristics of an ideal PM system, integrating it with other HR activities.

Uploaded by

Dr. Muhammad Nawaz Khan
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPT, PDF, TXT or read online on Scribd
You are on page 1/ 38

PERFORMANCE

MANAGEMENT
Performance Management
Todays Contents
 Definition of Performance Management (PM) - CS

 The Performance Management Contribution


 Disadvantages/Dangers of Poorly-implemented PM
systems
 Definition of Reward Systems
 Aims and role of PM Systems
 Characteristics of an Ideal PM system
 Integration with Other Human Resources and
Development Activities
Performance Management: Definition

Continuous Process of

Identifying performance of individuals and teams


Measuring performance of individuals and teams
Developing performance of individuals and teams
and
Aligning performance with the strategic goals of the
organization
PM is NOT performance appraisal

Performance Management Performance appraisal


– Strategic business – Assesses employee
considerations • Strengths &
• Weaknesses
– Ongoing feedback – Once a year
– So employee can improve – Lacks ongoing
performance feedback
– Driven by line manager – Driven by HR Dept
Contributions of PM
For Employees

The definitions of job and success are clarified


Motivation to perform is increased
Self-esteem is increased
Self-insight and development are enhanced
Contributions of PM
For Managers

Supervisors’ views of performance are


communicated more clearly
Managers gain insight about subordinates
There is better and more timely differentiation
between good and poor performers
Employees become more competent
Contributions of PM
For Organization/HR Function

Organizational goals are made clear


Organizational change is facilitated
Administrative actions are more fair and
appropriate
There is better protection from lawsuits
Disadvantages/Dangers of
Poorly-implemented PM Systems
for Employees
• Lowered self-esteem
• Employee burnout and job dissatisfaction
• Damaged relationships
• Use of false or misleading information
Disadvantages/Dangers of
Poorly-implemented PM Systems
for Managers
• Increased turnover
• Decreased motivation to perform
• Unjustified demands on managers’ resources
• Varying and unfair standards and ratings
Disadvantages/Dangers of
Poorly-implemented PM Systems
for Organization
• Wasted time and money
• Unclear ratings system
• Emerging biases
• Increased risk of litigation
Reward Systems: Definition

Set of mechanisms for distributing


 Tangible returns
and
 Intangible or relational returns

As part of an employment relationship


Tangible returns

 Cash compensation
Base pay
Cost-of-Living & Contingent Pay
Incentives (short- and long-term)
 Benefits, such as
 Income Protection

 Allowances

 Work/life focus
Intangible returns

 Relational returns, such as


 Recognition and status
 Employment security
 Challenging work
 Learning opportunities
Returns and Their Degree of Dependency
on the Performance Management System

Return Degree of Dependency


 Cost of Living Adjustment • Low
 Income Protection • Low
 Work/life Focus • Moderate
 Allowances • Moderate
 Relational Returns • Moderate
 Base Pay • Moderate
 Contingent Pay • High
 Short-term Incentives • High
 Long-term Incentives • High
Purposes of PM Systems:
Overview
 Strategic
 Administrative
 Informational
 Developmental
 Organizational maintenance
 Documentation
Strategic Purpose

 Link employee behavior with organization’s


goals
 Communicate most crucial business strategic
initiatives
Administrative Purpose

 Provide information for making decisions related to:


 Salary adjustments
 Promotions
 Retention or termination
 Recognition of individual performance
 Layoffs
Informational Purpose

Communicate to Employees:
 Expectations
 What is important
 How they are doing
 How to improve
Developmental Purpose

 Performance feedback / coaching


 Identification of individual strengths and
weaknesses
 Causes of performance deficiencies
 Tailor development of individual career
path
Organizational Maintenance Purpose

 Plan effective workforce


 Assess future training needs
 Evaluate performance at organizational
level
 Evaluate effectiveness of HR interventions
Documentational Purpose

 Validate selection instruments


 Document administrative decisions
 Help meet legal requirements
Characteristics of an Ideal PM System
Congruent with organizational strategy

• Consistent with organization’s strategy


• Aligned with unit and organizational goals
Thorough

• All employees are evaluated


• All major job responsibilities are evaluated
• Evaluations cover performance for entire
review period
• Feedback is given on both positive and
negative performance
Practical

• Available
• Easy to use
• Acceptable to decision makers
• Benefits outweigh costs
Meaningful

• Standards are important and relevant


• System measures ONLY what employee can
control
• Results have consequences Evaluations
occur regularly and at appropriate times
• System provides for continuing skill
development of evaluators
Specific

Concrete and detailed guidance to employees


• What’s expected
• How to meet the expectations
Identifies effective and ineffective performance

• Distinguish between effective and ineffective


– Behaviors
– Results
• Provide ability to identify employees with
various levels of performance
Reliable

• Consistent
• Free of error
• Inter-rater reliability
Valid

• Relevant (measures what is important)


• Not deficient (doesn’t measure
unimportant facets of job)
• Not contaminated (only measures what
the employee can control)
Acceptable and Fair

• Perception of Distributive Justice


– Work performed  evaluation received  reward

• Perception of Procedural Justice


– Fairness of procedures used to:
• Determine ratings
• Link ratings to rewards
Inclusive

• Represents concerns of all involved


– When system is created, employees should help
with deciding
• What should be measured
• How it should be measured

– Employee should provide input on performance


prior to evaluation meeting
Open (No Secrets)

• Frequent, ongoing evaluations and feedback


• 2-way communications in appraisal meeting
• Clear standards, ongoing communication
• Communications are factual, open, honest
Correctable

• Recognizes that human judgment is fallible


• Appeals process provided
Standardized

• Ongoing training of managers to provide


• Consistent evaluations across
– People
– Time
Ethical

• Supervisor suppresses self-interest


• Supervisor rates only where he/she has
sufficient information about the performance
dimension
• Supervisor respects employee privacy
Integration with other Human Resources
and Development activities

PM provides information for:


Development of training to meet organizational
needs
Workforce planning
Recruitment and hiring decisions
Development of compensation systems
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