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Mppm assignment

  1. 1. BM036-3.5-3-MPPM Chan Chee Mang TP021569Executive SummaryThis assignment is to answer the question given for Managing People and Performance. Thequestion is about the challenges and trend in managing employees’ performance througheffective appraisal system. In Chapter 1, the definition of managing employee performance(Performance Management) is given with the content of the concerns in business trend and thescope of the performance management.In Chapter 2, I have shared some information on the history background of the previousperformance appraisals and tolls which are Merit-rating System, Management-by-Objectives andBehaviourally-anchored rating scale. Also, explained in details the founder, how it wasdeveloped, improved and later the other researchers or author criticism about the existedperformance appraisal practiced and the influence till nowadays.In Chapter 3 and Chapter 4, I have ended the assignment title by summarising the conclusionwith the comparisons in table form of Management-by-Objectives, Performance Appraisal andPerformance Management. Asia Pacific Institution of Technology and Innovation (APIIT UCTI) 1
  2. 2. BM036-3.5-3-MPPM Chan Chee Mang TP021569Table of ContentsNo Contents1.0 Managing Employee Performance (Performance Management)1.1 Important feature of effective organisation1.2 Factors affecting Performance2.0 Antecedents of Performance Management using different Performance Appraisals or Tools (Types of performance appraisals)2.1 Managing Performance through Merit-rating System2.1.1 Attacks on Merit-rating Systems2.2 Managing Performance through Management-by-Objectives2.2.1 Criticisms of MBO2.3 Managing Performance using Behaviourally-anchored rating scales2.3.1 Weakness of BARS2.3.2 Recommendation for BARS3.0 Comparisons between Management-by-Objectives (MBO), Performance Appraisal (PA) and Performance Management (PM)4.0 Conclusion5.0 References6.0 AppendixesAsia Pacific Institution of Technology and Innovation (APIIT UCTI) 2
  3. 3. BM036-3.5-3-MPPM Chan Chee Mang TP0215691.0 Managing Employee Performance (Performance Management)Abbreviations DefinitionManaging Employee Managing Employee Performance is always referred as PerformancePerformance Management. Performance Management is a fairly imprecise term, and performance-management processes which are the systems, as some people persist in calling them, manifest themselves in many different forms. There is no one right way of managing performance. The approach must depend on the context of the organisations’ culture, structure, technology, the views of stakeholders and the type of people involved.Performance Performance management is a strategic and integrated approach toManagement delivering sustained success to organisations by improving the performance of the people who work in them and by developing the capabilities of the teams and individual contributors. Thus, Performance Management is: In strategic, it is concerned with the broader issues facing the business if it is to function effectively in its environment, and with the general direction in which it intends to go to achieve longer-term goals. In integrated, it had 4 senses which are vertical integration ( linking or aligning business), functional integration (linking functional strategies in different parts of the business), human resource integration (linking different aspects of human resource management, on organizational development and human resource development, reward, to achieve coherent approach to the management and development of people), last but not least, the integration of individual needs (for those in the organization).Asia Pacific Institution of Technology and Innovation (APIIT UCTI) 3
  4. 4. BM036-3.5-3-MPPM Chan Chee Mang TP021569Concern in performance To achieve organizational, team or individual effectiveness, as statedimprovement by Lawson (1995), organisation must get the right things done successfully. Performance is not only about what to achieve, but it is more concern about how to achieve? Management involved in direction, measurement and control but the exclusive concerns which a manager supposes are more on the participation of teams and individuals as stakeholders.Concern in development Performance improvement is not achievable unless there is effectiveof performance process of continuous development. The core competences of themanagement organisation and the capabilities of individual and team. ‘The real concept of performance management is associated within the approach to create a shared vision of the purpose and aims of the organisation, helping each employee understand and recognize their part of contribution, and in so doing, manage, enhance the performance of both individuals and the organisation’ (Fletcher, 1993a).Concern in the planning Performance management is also concern with planning ahead to achieve future success. Meaning that defining expectations expressed as objectives and in business plans.Concern in measurement Performance management is concerned with the measurement ofand review results and the reviewing progress towards achieving objectives as basis of action.Scope of Performance Performance management is about managing the organisation. It is aManagement natural process of management, not a system or technique (Fowler, 1990). Furthermore, it is also about managing within the context of business with its internal and external environment issues, whichAsia Pacific Institution of Technology and Innovation (APIIT UCTI) 4
  5. 5. BM036-3.5-3-MPPM Chan Chee Mang TP021569 will affect how it is developed, what it will set out to be, and how it operates as to say ‘manage context not performance’ (Jones, 1995). Not just only managers, performance management concerns of everyone in the organisation. It rejects the cultural assumption that only managers are accountable for the performance of their teams and replaces with belief and responsibility that shared between them. Guile and Fonda (1998) stated that managers and their teams are jointly accountable for results and they are jointly involved in agreeing what they need to do and how they need to do (in monitoring performance and taking action)?1.1 Important feature of effective organisationRichard Boyatzis (1982) suggested in The Competent Manager, stated that ‘you may viewcompetency as the key that unlocks the door to individuals in realizing their maximum potential,developing ethical organisational systems, and providing maximum growth opportunities forpersonnel.’ Meaning that by developing competence will pursuit the high performance for aneffective organisation.1.2 Factors affecting PerformanceThe definition of performance leads to the conclusion that when one is managing theperformance of teams and individuals, both inputs (behavior) and output (results) should beconsidered. Performance is about how things are done as well as what is done (Hartle, 1995).Cardy and Dobbins (1994) points out that Performance are affected by a few factors whichshould be taking into account which is enforced by Deming (1986).Factors ExplanationsLeadership The quality of encouragement, guidance and support provided by managers or team leaders.Asia Pacific Institution of Technology and Innovation (APIIT UCTI) 5
  6. 6. BM036-3.5-3-MPPM Chan Chee Mang TP021569Team The quality of support provided by colleagues.Systems The system of work and facilities provided by the organisation.Contextual Also known as the situational factor which is internal and external environmental pressures and changes.2.0 Antecedents of Performance Management using different Performance Appraisals orTools (Types of performance appraisals)2.1 Managing Performance through Merit-rating SystemAn American named WD Scott- the 1st person who introduced the rating abilities of workers inindustry in World War I. He was influenced by Taylor and invented the ‘man to man comparisonscale, which was Taylorism in action which is possible to argue that many of the developmentsin this area followed even nowadays which is much influenced by Taylor. WD Scott rating scalewas modified and used to rate the efficiency of US Army which it is said to have supplanted theseniority system of promotion in the army and initiated an era of this system itself on the basis ofmeriting. The perceived success of this system is later adopted by British Army. The pioneeringefforts of Scott were developed in the 1920s and 1930s into what was termed the graphic ratingscale, used for reports on workers and for rating the managers and supervisors. For example, Atypical manager’s or supervisor’s scale included assessments of various qualities of consideringhis/her success in winning confidence and respect through his/her personality. Below is thesample.inspiring favourable indifferent unfavarouble repellentTimes have changed. The justification made for the use of this sort of rating scale was that theywere educational. They ensure that those who are making the reports analysed the subordinatedAsia Pacific Institution of Technology and Innovation (APIIT UCTI) 6
  7. 7. BM036-3.5-3-MPPM Chan Chee Mang TP021569in terms of the traits essential for success in their work. The educational impact on employeeswas described as imparting their knowledge that they were being judged periodically on essentialtraits considered vital and important.Merit-rating scale often involved and still involves under the disguise of performance appraisalwith the quantification of judgements against each factor which is in the belief that thequantification of subjective judgements used makes them more objective. Some organisationsuse the total merit score as the basis for ranking employees and this is later translated into aforced distribution for performance-pay purposes. For example, the top 10% in the ranking get a5% increase, the next 20% get a 4% increase and so on. Later on, an average score wascalculated for the whole company and the allocation of points in each department was equated tothe company average.2.1.1 Attacks on Merit-rating SystemsA strong attack done by McGregor (1957) in Harvard Business Review article stated ‘An uneasylook at the performance appraisal’. He suggested that the emphasis should be shifted fromappraisal to analysis. In summary, the main factor in the management of performance should bethe analysis if the behavior required achieving agreed results, not the assessment of personality.The later Rowe (1964) has broaden the discussion and ended up with 3 major weakness of theMerit-rating Systems: 1) Appraisers were reluctant to appraise. 2) The follow-up was inadequate. 3) No attempt should be made to clarify or categorise performance in terms of grades. The difficulty of achieving common standards and the reluctance of appraisers to use the whole scale.2.2 Managing Performance through Management-by-ObjectivesThe management-by-objectives (MBO) claimed that it has overcome the discredited problems iftraits rating. MBO was introduced by Peter Brucker (1955) which he emphasise that ‘an effectivemanagement must direct the vision and efforts of all managers towards a common goal’. ThisAsia Pacific Institution of Technology and Innovation (APIIT UCTI) 7
  8. 8. BM036-3.5-3-MPPM Chan Chee Mang TP021569would ensure that individual and corporate objectives were integrated and would also make itpossible for managers to control their own performance such as self-control means strongermotivation to desire to do their best rather than just.In 1972, MBO was later defined by John Humble as a continuous process of: Reviewing critically and restarting the company’s strategic and tactical plans Clarifying with each manager the key results and performance standards he must achieve, and gaining his contribution and commitment to these, individually and as a team member Agreeing with each manager a job improvement plan which makes a measurable and realistic contribution to the unit and company plans for better performance Providing conditions, an organisation structure and management information in which it is possible to achieve the key results and improvement plan Using systematic performance review to measure and discuss progress towards results Developing management training plans to build on strengths, to help managers to overcome their weaknesses and to get them to accept responsibility for self-development Strengthening the motivation of managers by effective selection, salary and succession plansThe MBO cycles Strategic Plan Review & Control Tactical Plan Key results & improvement planAsia Pacific Institution of Technology and Innovation (APIIT UCTI) 8
  9. 9. BM036-3.5-3-MPPM Chan Chee Mang TP0215692.2.1 Criticisms of MBOLevinson (1970) criticized MBO weakness, stated that: 1) Every organisation is a social system, a network of inter-personal relationships. A person doing an excellent job by objective standards of measurement may fail miserably as a partner, superior, subordinate or colleague. 2) The greater the emphasis on the measurement and quantification, the more likely the subtle, non-measurable elements of the task will be sacrificed. Quality of performance frequently loses out to quantification. 3) MBO leaves out the individual’s personal needs and objectives, bearing in mind that the most powerful driving force for individuals comprises their needs, wishes and personal objectives.2.3 Managing Performance using Behaviourally-anchored rating scalesBehaviourally-anchored rating scale (BARS) are designed to reduce the rating errors that isassumed are typical of conventional scales which include a number of performance dimensionssuch as teamwork, and manager rates each dimension on a scale. For example:Grades DescriptionsA Continuous contributions on new ideas and recommendations. Holding a leader’s role in group meetings and tolerant attitude on supporting the colleagues and respects other’s opinions. Keeps everyone updated about own activities and well aware of what other team members are doing.B High commitment in group meetings and useful contribution of ideas. Listen to colleagues and keeps them well informed with own activities while monitoring their work.C Able to deliver opinion and suggestion in group meeting from time-to-time but not paying as the major contributor on new ideas or planning. A receptive of other’s opinion in general but willing to change own plans to fit in. Not always keep othersAsia Pacific Institution of Technology and Innovation (APIIT UCTI) 9
  10. 10. BM036-3.5-3-MPPM Chan Chee Mang TP021569 informed.D Average tendency to comply and passively with other’s suggestions. A minority attendance for group meeting shows personal antagonism to others. Not showing interest on informing others’ activities or operations.E Tendency to go own way without taking much concern of the need to make contribution towards the team. Sometimes uncooperative and unwilling to share information.F Uncooperative in common sense. Goes as in own way, completely ignores other team members’ wishes and totally no interest in the achievement of team objectives.2.3.1 Weakness of BARSIt is said that the BARS behavioural descriptions in such scales discourage the tendency to rateon the basis of generalized assumptions about the personality traits which were probably highlysubjective by focusing attention on specific work behaviours.2.3.2 Recommendation for BARSThere is still room for making subjective judgements based on different interpretations of thedefinitions of levels of behaviours. BARS takes time and probably trouble to develop and are notin common use except in a modified forms of dimensions in a differentiating competenceframework.3.0 Comparisons between Management-by-Objectives (MBO), Performance Appraisal (PA)and Performance Management (PM) MBO PA PMPackaged System Usually tailor made Tailor madeApplied to Managers Applied to all staff Applied to all staffEmphasis on individual Individual objectives may be Emphasis on integratingobjectives included corporate, team and individualAsia Pacific Institution of Technology and Innovation (APIIT UCTI) 10
  11. 11. BM036-3.5-3-MPPM Chan Chee Mang TP021569 objectivesEmphasis on quantified Some qualitative performance Competence requirementsperformance measures indicators may also be often included as well as included quantified measuresAnnual appraisal Annual Appraisal Continuous review with one or more formal reviewsTop-down system with ratings Top-down system with ratings Joint process, ratings less commonMay not be a direct link to Often linked to payment May not be direct link topayment paymentMonolithic system Monolithic system Flexible processComplex paper work Complex paper work Documentation often minimizedOwned by line managers and Owned by personnel Owned by line managementpersonnel department department (Fowler, 1990)4.0 ConclusionTo conclude this, Performance management is believed to be a continuous process on aiming toincrease business effectiveness not only on productivity by improving the performance ofindividuals. The annual planning, development and evaluation of performance require frequentreview between persons involved to monitor targets, discuss achievements and developmentprogress. From the review session of PM, it helps the organisation to explore how reward in itswidest sense can be used in reinforcement of performance.5.0 References- Journals, Articles, MagazinesAntonioni D. (1994), ‘Improve the performance management process before discontinuingperformance appraisals’ Compensation for Benefits Review, May-June, pp 29-37Argyris C. (1992), On Organisational Learning, Cambridge Mass., BlackwellAsia Pacific Institution of Technology and Innovation (APIIT UCTI) 11
  12. 12. BM036-3.5-3-MPPM Chan Chee Mang TP021569Armstrong M. (1976), A Handbook of Personnel Management Practise, 1st edn., London, KoganPageArmstrong M. (1996b), Employee Reward, London, Institute of Personnel and DevelopmentAudit Commission (1987), Performance Review in Local Government, London, AuditCommissionBaguley P. (1994), Improving Organisational Performance, Maidenhead, McGrawhillBailey R. T. (1983), Measurement of Performance. Aldershot, GowerBandura A. (1989), ‘Deficiencies and perpetuation of power: latent functions in performanceappraisal’, Journal of management studies, pp 499-517Bones C. (1996) ‘Performance management: the HR contribution’, address at the AnnualConference of the Institute of Personnel and Development, HarrogateBoyatzis R. (1982), The Competent Manager, New Yorok, WileyBoyett J. H. and Conn H. P. (1995), Maximum Performance Management, Oxford, GlenbridgePublishingCave A. (1994), Organisational Change in the Workplace, London, Kogan PageDeming W. E. (1986), Out of Crisis, Cambridge, Mass., Massachusetts Institute of Technology,Centre for Advanced Engineering StudiesDrucker P. (1955), The Practice of Management, London, HeinemannEngelmann and Roesch (1996), American Compensation AssociationFletcher C. (1993a), ‘Appraisal: Routes to improved performance’, London, Institute ofPersonnel and DevelopmentFletcher C. (1993b), ‘Appraisal: An idea whose time gone?’, Personnel Management, pp 34-37Asia Pacific Institution of Technology and Innovation (APIIT UCTI) 12
  13. 13. BM036-3.5-3-MPPM Chan Chee Mang TP021569Fowler A. (1990), ‘Performance Management: MBO of the ‘90s?’, Personnel Management, pp47-54Guile E D. and Fonda N. (1998) Performance Management through Capability, Issues in PeopleManagement No.25, London, Institute of Personnel and DevelopmentHandy C. (1989), The Age of Unreason, London, Business BooksHerzberg F. (1968), ‘ One more time: how do you motivate your employees?’ Harvard BusinessReview (Jan-Feb), pp 109-120Jones P., Palmer J., Whitehead D. and Neeham P. (1995), ‘Prism of Performance’, The AshridgeJournal, pp 10-14Jones T. W. (1995), ‘Performance management in changing context’, Human ResourceManagement, Fall, pp 425-442Levinson H. (1970), ‘Management by whose objectives?’, Harvard Business Review (Jul-Aug),pp 125-134Levinson H. (1976), ‘Appraisal of what performance?’ Harvard Business Review (Jul-Aug), pp30-46McGregor D. (1957), ‘An uneasy look at performance appraisal’, Harvard Business Review(May-June), pp 89-94Watermann R. (1994), The Frontiers of Excellence, London, Nicholas BreadleyAsia Pacific Institution of Technology and Innovation (APIIT UCTI) 13