Performance management is a continuous process of identifying, measuring, and developing employee performance to align it with organizational goals. It involves ongoing feedback rather than annual assessments. Key elements include performance planning, managing performance through feedback, reviewing performance, and rewarding performance. While performance appraisals assess past performance and identify strengths and weaknesses, performance management is focused on ongoing feedback to help employees improve. An effective performance management system provides clear expectations and feedback, identifies good and poor performance, and facilitates employee development and organizational change.
3. • “All organizations are perfectly designed to get the
results they are now getting. If we want different
results, we must change the way we do things”.
-Tom Northup
4. At the end of this chapter, students
are expected to…
• Define the elements included in the evaluation of
employee performance.
• Differentiate between objective and subjective
performance measure.
5. Performance Management Definition
Continuous Process of
• Identifying performance of individuals and teams
• Measuring performance of individuals and teams
• Developing performance of individuals and teams
• Aligning performance with the strategic goals of the
organization
6. PM is not performance appraisal
PM
– Strategic business
considerations
– Ongoing feedback
– So employee can
improve performance
– Driven by line manager
Performance Appraisal
– Assesses employee
• Strengths
• Weaknesses
– Once a year
– Lacks ongoing feedback
– Driven by HR
7. Contribution of Performance
Management
• The definitions of job and success are clarified
• Motivation to perform is increased
• Self-esteem is increased
• Self-insight and development and enhanced
8. Contribution of PM to 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
9. Contribution of PM for
Organizations/HR Functions
• Organizational goals are made clear
• Organizational change is facilitated
• Administrative actions are more fair and appropriate
• There is better protection from lawsuits
10. 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
11. 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
13. When is Performance Appraisal
Conducted?
• Annually
• Semi-annually
• others.
14. Reward Systems: Definition
• Set of mechanisms for distributing
• Tangible returns
• Intangible or relational returns
• As part of an employment relationship
15. 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
16. Intangible Returns
• Relational returns, such as
• Recognition and status
• Employment security
• Challenging work
• Learning opportunities
18. Strategic Purpose
• Link employee behavior with organization’s goals
• Communicate most crucial business strategic
initiatives
19. Administrative Purpose
• Provide information for making decisions re:
• Salary adjustments
• Promotions
• Retention or termination
• Recognition of individual performance
• Layoffs
22. Developmental Purpose
• Performance feedback/coaching
• Identification of individual strengths and weaknesses
• Causes of performance deficiencies
• Tailor development of individual career path
23. Organizational Maintenance Purpose
• Plan effective workforce
• Assess future training needs
• Evaluate performance at organizational level
• Evaluate effectiveness of HR interventions
25. Characteristics of an Ideal PM System
• Congruent with organizational strategy.
• Thorough
• Practical
• Meaningful
• Specific
• Identifies effective and ineffective performance
• Reliable
• Valid
• Acceptable and Fair
• Open (No Secrets)
• Correctable
• Standardized
• Ethical
26. Performance Interview
• It is a formal process of evaluating employee
performance. (Levy 2000)
• Potentially important part of any organization’s
performance appraisal system that function in
several ways. (Cederblon 1982)
• It is the formal meeting for the specific purposes of
discussing the various aspects of performance and
the performance management system. (Aguinis
2009)
27. Main purposes of Performance
Interview
• Counseling and development
• Evaluation and discussion
28. Importance of Performance Interview
• It provides feedback to the central office
• Feedback also eliminates surprises as staff members
have a continuous discussion between staff and
management.
29. Sample of typical questions
• Which tasks were not performed in a satisfactory
manner? What could be the reason for this?
• How satisfied are you in terms of the cooperation
given by your manager?
• Which of the areas of cooperation is positive? Which
are can still be improved?
• Which qualifications and training measures are
necessary and should be provided for you to achieve
your career goal?
30.
31. Types of Performance Appraisal
Method
• Traditional Approach
• Studying the personal
qualities of the employees
such as:
• Knowledge
• Initiative
• Loyalty
• Leadership
• Decision making
characteristics
• New Approach
• Performance appraisal is
used for developmental
and motivational
purposes in the
organization
39. The 360 Degree Feedback
Mechanism
• This is known by a variety of names to include
multisource assessment.
• It covers…
• 360 degree feedback
• Multi-rater assessment
• Three dimensional or full-circle appraisal
• It relies on the inputs of an employee’s superior,
colleague, subordinates, customers, suppliers and
sometimes spouse.
• The information collected and feedback received are
provided in full circular way from top down and bottom
up.
40. Limitations of 360 degree feedback
• It is not a way to measure employee’s performance
objectives (MBO)
• It is not a way to determine whether an employee is
meeting the basic job requirements.
• It is not focused on basic technical and job-specific
skills.
• It should not used to measure objective things like
attendance and sales quotas.
43. Advantages of Performance Appraisal
• It provides documentation and records of employee’s
performance.
• This process creates a structure where a manager can meet
and discuss performance with an individual employee.
• Employees crave for feedbacks on how they are doing in their
jobs.
• Clarifies expectation on the side of the employee as managers
can discuss clearly
• It also provides an annual planning venue and for the
employee to think through the goals for the incoming year.
• It can motivate employees as rewards can be forthcoming
depending on the results of appraisal.
44. Disadvantages of Performance
Appraisal
• It creates negative experience when not done right.
• Time consuming and both parties have to relegate
much efforts to do the process especially when there
are hundreds of employees.
• It opens possibility that there will be natural biases.
• Other consider this process a waste of time.
• Process can make the workplace stressful.
45. In a Nutshell
• The company is the sum total of what all its manpower
will achieve-either individually, as a term or as an
organization.
• Employees must perform as their peak and ensure that
corporate goals are reached.
• Performance is the key.
• It is very essential to business – both through its informal
and formal process.
• It helps align the employees, resources, and systems to
meet strategic objectives.
46. • It should emphasized however, that performance
reviews and evaluation is not about unloading a long list
of criticisms but rather an honest evaluation.
• Provide an important avenue and a way for employees
to quantify their performance and you give them
something to work toward for the achievement of mutual
goals.
47. Citations
• Bernardin, H. J., & Wiatrowski, M. (2013). Performance
appraisal. Psychology and policing, 257.
• Prowse, P., & Prowse, J. (2009). The dilemma of performance
appraisal. Measuring business excellence, 13(4), 69-77.
• Bratton, J., Gold, J., Bratton, A., & Steele, L. (2021). Human
resource management. Bloomsbury Publishing.
• Stone, R. J., Cox, A., & Gavin, M. (2020). Human resource
management. John Wiley & Sons.
• Stewart, G. L., & Brown, K. G. (2019). Human resource
management. John Wiley & Sons.
Editor's Notes
None of the organization is perfectly designed to get desired result. Only the way to get continuous desire result is to keep on improving weaknesses in your process. If you need different result in same domain then you've to first think out of the box and then you've to make sure that your thought will be in action. But, in both you've to be prudent and wise enough to take into consideration of market scenario.
It is a formal process of discussing, identifying and planning the organization as well as individual goals which an employee can and would achieve in a given time frame.
It is an on going process which is designed to ensure that an individual’s performance contributes to the aims and objectives of the organization.
This is a key component of employee development. It is intended to be fair and balanced.
This is just as important as motivating and monitoring performance. Rewards can go beyond just the financial aspects-other incentives can be given.
Consistent with organization’s strategy. Aligned with unit and organizational goals
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.
Available • Easy to use • Acceptable to decision makers • Benefits outweigh costs
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.
Concrete and detailed guidance to employees • what’s expected • how to meet the expectations
Distinguish between effective and ineffective – Behaviors – Results • Provide ability to identify employees with various levels of performance.
Consistent • Free of error • Inter-rater reliability
• Relevant (measures what is important) • Not deficient (doesn’t measure unimportant facets of job) • Not contaminated (only measures what the employee can control)
Perception of Distributive Justice – Work performed - evaluation received - reward • Perception of Procedural Justice – Fairness of procedures used to: • Determine ratings • Link ratings to rewards
Frequent, ongoing evaluations and feedback • 2-way communications in appraisal meeting • Clear standards, ongoing communication • Communications are factual, open, honest
Recognizes that human judgment is fallible • Appeals process provided
Ongoing training of managers to provide Consistent evaluations across – People – Time
Supervisor suppresses self-interest • Supervisor rates only where he/she has sufficient information about the performance dimension • Supervisor respects employee privacy
It is about employees performance which allow employees to improve their performances by identifying performance problem encountered and to look for solution to overcome the problem.
1. It can be the basis for the coaching, accountability-based performance appraisals, designing a human resource plan
Simplest method as jobs are arranged from highest to lowest. In order to establish value of such job to the organization. It can be arranged according to the level of difficulties in performing it.
It is a scale that lists a number of traits and a range of performance for each of the employee. They are then rated identifying scores that best describes the employee’s performance.
Combines the elements from the critical incident report and graphic rating scale approaches. The supervisor rates the employees according to the items on a numerical scale
Evaluator writes an explanation about the employees strength and weaknesses, his previous performance and recommended areas of improvement
Employees are evaluated on how well they are accomplished a specific set of objectives.
It is keeping a record of uncommonly good or bad and undesirable examples of an employees work related to behavior and reviewing it with the employee
Identify one worker’s level or standing compared to another worker.
Employees from best to the worst are ranked on a particular trait, choosing the highest then the lowest until all concerned employees are ranked
Each person is directly compared with all the other being rated
A set of percentage of all those being rated into a pre-determined performance category
This feedback process gives opportunity for anonymous feedback to a co-worker and they might be uncomfortable giving directly. It also gain insights on how others perceived them and therefore, have a chance to adjust behaviors and develop skills that will give them avenues to excel in their jobs.
They are in the best position to evaluate employee’s performance especially those directly under them.
They are interact with the one being evaluated, they know the level of performance of the person being evaluated.
They are very valuable as source of information regarding particular aspects of a supervisor or leader’s performance to include delegation.
This is to be used for developmental purposes.
They also can assist in terms of giving feedbacks for as long as we are careful in watching for built in biases.