This document summarizes an assignment on managing employee performance through effective appraisal systems. It discusses the definition of performance management and factors that affect performance. It then reviews the history of different performance appraisal tools used over time, including their strengths and weaknesses. These tools include merit-rating systems, management by objectives, and behaviorally anchored rating scales. Finally, it compares management by objectives, performance appraisal, and performance management and concludes that performance management aims to continuously improve business effectiveness and individual performance through frequent review.
this is performance management of the employees we are found there is lot of employees not satisfied with their job what they have . and we need to improve their performance management in the organization this main reason we did this study
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Memorandum Of Association Constitution of Company.ppt
Mppm assignment
1. BM036-3.5-3-MPPM Chan Chee Mang TP021569
Executive Summary
This assignment is to answer the question given for Managing People and Performance. The
question is about the challenges and trend in managing employees’ performance through
effective 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 the
scope of the performance management.
In Chapter 2, I have shared some information on the history background of the previous
performance appraisals and tolls which are Merit-rating System, Management-by-Objectives and
Behaviourally-anchored rating scale. Also, explained in details the founder, how it was
developed, improved and later the other researchers or author criticism about the existed
performance appraisal practiced and the influence till nowadays.
In Chapter 3 and Chapter 4, I have ended the assignment title by summarising the conclusion
with the comparisons in table form of Management-by-Objectives, Performance Appraisal and
Performance Management.
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Table of Contents
No Contents
1.0 Managing Employee Performance (Performance Management)
1.1 Important feature of effective organisation
1.2 Factors affecting Performance
2.0 Antecedents of Performance Management using different Performance
Appraisals or Tools (Types of performance appraisals)
2.1 Managing Performance through Merit-rating System
2.1.1 Attacks on Merit-rating Systems
2.2 Managing Performance through Management-by-Objectives
2.2.1 Criticisms of MBO
2.3 Managing Performance using Behaviourally-anchored rating scales
2.3.1 Weakness of BARS
2.3.2 Recommendation for BARS
3.0 Comparisons between Management-by-Objectives (MBO), Performance
Appraisal (PA) and Performance Management (PM)
4.0 Conclusion
5.0 References
6.0 Appendixes
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1.0 Managing Employee Performance (Performance Management)
Abbreviations Definition
Managing Employee Managing Employee Performance is always referred as Performance
Performance 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 to
Management 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).
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Concern in performance To achieve organizational, team or individual effectiveness, as stated
improvement 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 effective
of performance process of continuous development. The core competences of the
management 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 of
and 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 a
Management 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, which
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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 organisation
Richard Boyatzis (1982) suggested in The Competent Manager, stated that ‘you may view
competency as the key that unlocks the door to individuals in realizing their maximum potential,
developing ethical organisational systems, and providing maximum growth opportunities for
personnel.’ Meaning that by developing competence will pursuit the high performance for an
effective organisation.
1.2 Factors affecting Performance
The definition of performance leads to the conclusion that when one is managing the
performance of teams and individuals, both inputs (behavior) and output (results) should be
considered. 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 which
should be taking into account which is enforced by Deming (1986).
Factors Explanations
Leadership The quality of encouragement, guidance and support provided by managers or team
leaders.
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Team 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 or
Tools (Types of performance appraisals)
2.1 Managing Performance through Merit-rating System
An American named WD Scott- the 1st person who introduced the rating abilities of workers in
industry in World War I. He was influenced by Taylor and invented the ‘man to man comparison
scale, which was Taylorism in action which is possible to argue that many of the developments
in this area followed even nowadays which is much influenced by Taylor. WD Scott rating scale
was modified and used to rate the efficiency of US Army which it is said to have supplanted the
seniority system of promotion in the army and initiated an era of this system itself on the basis of
meriting. The perceived success of this system is later adopted by British Army. The pioneering
efforts of Scott were developed in the 1920s and 1930s into what was termed the graphic rating
scale, used for reports on workers and for rating the managers and supervisors. For example, A
typical manager’s or supervisor’s scale included assessments of various qualities of considering
his/her success in winning confidence and respect through his/her personality. Below is the
sample.
inspiring favourable indifferent unfavarouble repellent
Times have changed. The justification made for the use of this sort of rating scale was that they
were educational. They ensure that those who are making the reports analysed the subordinated
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in terms of the traits essential for success in their work. The educational impact on employees
was described as imparting their knowledge that they were being judged periodically on essential
traits considered vital and important.
Merit-rating scale often involved and still involves under the disguise of performance appraisal
with the quantification of judgements against each factor which is in the belief that the
quantification of subjective judgements used makes them more objective. Some organisations
use the total merit score as the basis for ranking employees and this is later translated into a
forced distribution for performance-pay purposes. For example, the top 10% in the ranking get a
5% increase, the next 20% get a 4% increase and so on. Later on, an average score was
calculated for the whole company and the allocation of points in each department was equated to
the company average.
2.1.1 Attacks on Merit-rating Systems
A strong attack done by McGregor (1957) in Harvard Business Review article stated ‘An uneasy
look at the performance appraisal’. He suggested that the emphasis should be shifted from
appraisal to analysis. In summary, the main factor in the management of performance should be
the 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 the
Merit-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-Objectives
The management-by-objectives (MBO) claimed that it has overcome the discredited problems if
traits rating. MBO was introduced by Peter Brucker (1955) which he emphasise that ‘an effective
management must direct the vision and efforts of all managers towards a common goal’. This
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would ensure that individual and corporate objectives were integrated and would also make it
possible for managers to control their own performance such as self-control means stronger
motivation 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
plans
The MBO cycles
Strategic Plan
Review & Control Tactical Plan
Key results &
improvement plan
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2.2.1 Criticisms of MBO
Levinson (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 scales
Behaviourally-anchored rating scale (BARS) are designed to reduce the rating errors that is
assumed are typical of conventional scales which include a number of performance dimensions
such as teamwork, and manager rates each dimension on a scale. For example:
Grades Descriptions
A 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 others
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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 BARS
It is said that the BARS behavioural descriptions in such scales discourage the tendency to rate
on the basis of generalized assumptions about the personality traits which were probably highly
subjective by focusing attention on specific work behaviours.
2.3.2 Recommendation for BARS
There is still room for making subjective judgements based on different interpretations of the
definitions of levels of behaviours. BARS takes time and probably trouble to develop and are not
in common use except in a modified forms of dimensions in a differentiating competence
framework.
3.0 Comparisons between Management-by-Objectives (MBO), Performance Appraisal (PA)
and Performance Management (PM)
MBO PA PM
Packaged System Usually tailor made Tailor made
Applied to Managers Applied to all staff Applied to all staff
Emphasis on individual Individual objectives may be Emphasis on integrating
objectives included corporate, team and individual
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objectives
Emphasis on quantified Some qualitative performance Competence requirements
performance measures indicators may also be often included as well as
included quantified measures
Annual appraisal Annual Appraisal Continuous review with one or
more formal reviews
Top-down system with ratings Top-down system with ratings Joint process, ratings less
common
May not be a direct link to Often linked to payment May not be direct link to
payment payment
Monolithic system Monolithic system Flexible process
Complex paper work Complex paper work Documentation often
minimized
Owned by line managers and Owned by personnel Owned by line management
personnel department department
(Fowler, 1990)
4.0 Conclusion
To conclude this, Performance management is believed to be a continuous process on aiming to
increase business effectiveness not only on productivity by improving the performance of
individuals. The annual planning, development and evaluation of performance require frequent
review between persons involved to monitor targets, discuss achievements and development
progress. From the review session of PM, it helps the organisation to explore how reward in its
widest sense can be used in reinforcement of performance.
5.0 References- Journals, Articles, Magazines
Antonioni D. (1994), ‘Improve the performance management process before discontinuing
performance appraisals’ Compensation for Benefits Review, May-June, pp 29-37
Argyris C. (1992), On Organisational Learning, Cambridge Mass., Blackwell
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Armstrong M. (1976), A Handbook of Personnel Management Practise, 1st edn., London, Kogan
Page
Armstrong M. (1996b), Employee Reward, London, Institute of Personnel and Development
Audit Commission (1987), Performance Review in Local Government, London, Audit
Commission
Baguley P. (1994), Improving Organisational Performance, Maidenhead, McGrawhill
Bailey R. T. (1983), Measurement of Performance. Aldershot, Gower
Bandura A. (1989), ‘Deficiencies and perpetuation of power: latent functions in performance
appraisal’, Journal of management studies, pp 499-517
Bones C. (1996) ‘Performance management: the HR contribution’, address at the Annual
Conference of the Institute of Personnel and Development, Harrogate
Boyatzis R. (1982), The Competent Manager, New Yorok, Wiley
Boyett J. H. and Conn H. P. (1995), Maximum Performance Management, Oxford, Glenbridge
Publishing
Cave A. (1994), Organisational Change in the Workplace, London, Kogan Page
Deming W. E. (1986), Out of Crisis, Cambridge, Mass., Massachusetts Institute of Technology,
Centre for Advanced Engineering Studies
Drucker P. (1955), The Practice of Management, London, Heinemann
Engelmann and Roesch (1996), American Compensation Association
Fletcher C. (1993a), ‘Appraisal: Routes to improved performance’, London, Institute of
Personnel and Development
Fletcher C. (1993b), ‘Appraisal: An idea whose time gone?’, Personnel Management, pp 34-37
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Fowler A. (1990), ‘Performance Management: MBO of the ‘90s?’, Personnel Management, pp
47-54
Guile E D. and Fonda N. (1998) Performance Management through Capability, Issues in People
Management No.25, London, Institute of Personnel and Development
Handy C. (1989), The Age of Unreason, London, Business Books
Herzberg F. (1968), ‘ One more time: how do you motivate your employees?’ Harvard Business
Review (Jan-Feb), pp 109-120
Jones P., Palmer J., Whitehead D. and Neeham P. (1995), ‘Prism of Performance’, The Ashridge
Journal, pp 10-14
Jones T. W. (1995), ‘Performance management in changing context’, Human Resource
Management, Fall, pp 425-442
Levinson H. (1970), ‘Management by whose objectives?’, Harvard Business Review (Jul-Aug),
pp 125-134
Levinson H. (1976), ‘Appraisal of what performance?’ Harvard Business Review (Jul-Aug), pp
30-46
McGregor D. (1957), ‘An uneasy look at performance appraisal’, Harvard Business Review
(May-June), pp 89-94
Watermann R. (1994), The Frontiers of Excellence, London, Nicholas Breadley
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