MEANING• Performance Management:“Strategic and integrated approach to increasing the effectiveness of companies by improving the performance of the people who work in them and by developing the capabilities of teams and individual contributors.” - Armstrong and Baron• It can be regarded as a continuous process for getting desired results.• Is beneficial to all the major stakeholders of an organization by clearly describes desired goals.• It is the heart of any HR processes in an organization as it influences the rest other HR functions or processes.
BENEFITS• Aligns the organization directly behind the CEOs goals• Decreases the time it takes to create strategic or operational changes by communicating the changes through a new set of goals• Motivated workforce• Optimizes incentive plans to specific goals for over achievement, not just business as usual• Improves employee engagement because everyone understands how they are directly contributing to the organizations high level goals
Contd..• Create transparency in achievement of goals• Improved management control• Flexible, responsive to management needs• Displays data relationships• Helps audit / comply with legislative requirement• Simplifies communication of strategic goals scenario planning• Provides well documented and communicated process documentation
OBJECTIVESThe major objectives of performance management are discussedbelow:• To enable the employees towards achievement of superior standards of work performance.• To help the employees in identifying the knowledge and skills required for performing the job efficiently as this would drive their focus towards performing the right task in the right way.• Boosting the performance of the employees by encouraging employee empowerment, motivation and implementation of an effective reward mechanism.• Creating a basis for several administrative decisions strategic planning, succession planning, promotions and performance based payment.
Contd..• Promoting a two way system of communication between the supervisors and the employees for clarifying expectations about the roles and accountabilities.• Identifying the barriers to effective performance and resolving those barriers through constant monitoring, coaching and development interventions.• Promoting personal growth and advancement in the career of the employees by helping them in acquiring the desired knowledge and skills.
OBJECTIVE SETTING Be sure the objective set is SMART• Specific• Measurable• Achievable• Result Oriented• Time bound
KEY QUESTIONS• There are six basic key questions of PM-1. WHY assess performance?2. WHAT performance to assess?3. HOW to assess performance?4. WHO do assess performance?5. WHEN to assess performance?6. HOW to communicate performance assessment?
WHY assess performance• Administer Salary & Wages• Correct Performance/Behaviour• Plan for Future (promotion, transfer, career development)• Facilitate Decision-Making (counseling, terminations)• Facilitate Human Resource Planning• Create Culture• Building Good Relationships• Increase Organizational Loyalty• Determine Effectiveness of Selection• Placement Methods
WHAT performance to assess That InteractSkills/Abilities/ with the Which Result inNeeds/Traits of Organization to Outcomes Individuals Produce Behaviors
HOW to assess performance• Traditional• Management-by-Objective• Assessment Center• Peer Review Panel• Critical Events• Upward Feedback• 360 Degree
WHO do assess performance• Superior Only• Subordinate(s)• Peers/Co-workers• Self• Customers• Stakeholders
WHEN to assess performance• Probation Period• Annually (anniversary date, assigned date, set date for all)• Semi-annually• For Cause• On-going• As needed
HOW to communicateperformance assessment• Orally• Writing• Public• Private• Formally• Informally
TRADITIONAL METHOD• Essay Appraisal Method- It is also known as “Free Form Method”. Here, the senior/ boss is write a narrative essay describing the qualities of his junior. He describe the strength and weakness, analytical abilities etc. the essay ends with a recommendation for future promotion or for future incentives.• Straight Ranking Method- It is the oldest and simplest techniques. Here, appraiser ranks the employees from best to poorest on the basis of their overall performance.
Contd..• Paired Comparison- In this method each and every person is the group, department or team is compared with every other person in the team/group/department. The comparison is made on certain criteria and finally ranks are given. This method is superior because it compares each and every person on certain qualities and provides a ranking on that basis.• Critical Incidents Method- In this method critical or important incidents which have taken place on this job are noted down along with employee’s behaviour and reaction in all these situations. Both +ve and –ve incidents are mentioned. This is followed by an analysis of the person, his abilities and talent, recommendations for the future incentives and promotions.
Contd..• Field Review- In this method, a senior member of the HR department or a training officer discusses and interviews the supervisors to evaluate and rate their respective subordinates. A major drawback -very time consuming method.• Checklist Method- The rater is given a checklist of the descriptions of the behaviour of the employees on job. The checklist contains a list of statements on the basis of which the rater describes the on the job performance of the employees.
Contd..• Graphic Rating Scale- In this method, an employee’s quality and quantity of work is assessed in a graphic scale indicating different degrees of a particular trait. The factors taken into consideration include both the personal characteristics and characteristics related to the on the job performance of the employees.• Forced Distribution- To eliminate the element of bias from the rater’s ratings, the evaluator is asked to distribute the employees in some fixed categories of ratings like on a normal distribution curve. The rater chooses the appropriate fit for the categories on his own discretion.
MODERN METHODS• Management By Objectives- In this method all members of the of the department starting from the lowest level employee to the highest level employee together discus, fix target goals to be achieved, plan for achieving these goals and work together to achieve them. The seniors in the department get an opportunity to observe their junior- group efforts, communication skills, knowledge levels, interest levels etc. based on this appraisal is done.
Contd..• Unique features and advantages of the MBO process-The principle behind this is for employees to have a clear understanding of the roles and responsibilities expected of them1. Motivation – Involving employees in the whole process of goal setting and increasing employee empowerment. This increases employee job satisfaction and commitment.2. Better communication and Coordination – Frequent reviews and interactions between superiors and subordinates helps to maintain harmonious relationships within the organization and also to solve many problems.3. Clarity of goals4. Subordinates tend to have a higher commitment to objectives they set for themselves than those imposed on them by another person.5. Managers can ensure that objectives of the subordinates are linked to the organizations objectives.
Contd..• 360 Degree Appraisal- In this method of appraisal and all round approach is adopted. Feedback about the employee is taken from the employee himself, his superiors, his juniors, his colleagues, customers he deals with, financial institutions and other people he deals with etc. This is one of the most popular methods.
Contd..• 720 Degree Appraisal- It is a feedback after the main 360 degree appraisal, here the boss sits down with the employee another time and gives him feedback and tips on achieving the targets set. It provides two rounds (pre and post). The pre intervention sets the baseline. Post intervention survey shows the amount of improvement in the results.• Assessment Centre- It is a place at which a person such as a member of staff is assessed to determine their suitability for particular roles.
Contd..• Behaviorally Anchored Ratings Scales- In this method the appraisal is done to test the attitude of the employee towards his job. Normally people with +ve approach or attitude view and perform their job differently as compared to people with a –ve approach.• Human Resource Accounting Method- In this method the expenditure on the employee is compared with the income received due to the efforts of the employee. A comparison is made to find out the utility of the employee to the organization. The appraisal informs the employee about his contribution to the company and what is expected in future.
PROBLEMS Deviation Do something from in different expectations way Do something Not do not expected/ something needed
CAUSES• Lack of ability• Low Motivation• Poor work ethic• Substance abuse• Personal problems• Lack of time• Poor peer relationships• Unfamiliarity with equipment or process.