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Human Resource
Management
Performance aPPraisal and
Performance management
 Performance appraisal
 Evaluating an employee’s current and/or past
performance relative to his or her performance
standards.
 Performance management
 The process employers use to make sure employees
are working toward organizational goals.
difference between Pm and Pa
Processes used to identify,
encourage,
measure,evaluate,
improve, and reward
employee performance.
The process of evaluating how
well employees perform their
jobs and then communicating
that information to the
employees.
Performance aPPraisal
definitions
According to Newstrom, “It is the process of evaluating
the performance of employees, sharing that information with
them and searching for ways to improve their performance’’.
meaning
Performance appraisal is the step where the management
finds out how effective it has been at hiring and placing
employees.
A “Performance appraisal” is a process of evaluating an
employee’s performance of a job in terms of its requirements.
wHY tHe Performance aPPraising
 Appraisals play an integral role in the employer’s
performance management process.
 Appraisals help in planning for correcting deficiencies
and reinforce things done correctly.
 Appraisals, in identifying employee strengths and
weaknesses, are useful for career planning
 Appraisals affect the employer’s salary raise decisions.
benefits of Performance aPPraisal
continuous imProvement
 A management philosophy that requires employers to
continuously set and relentlessly meet ever-higher
quality, cost, delivery, and availability goals by:
 Eradicating the seven wastes:
overproduction, defective products, and
unnecessary downtime, transportation, processing
costs, motion, and inventory.
 Requiring each employee to continuously improve
his or her own personal performance, from one
appraisal period to the next.
Performance aPPraisal roles
 Supervisors
 Usually do the actual appraising.
 Must be familiar with basic appraisal techniques.
 Must understand and avoid problems that can
cripple appraisals.
 Must know how to conduct appraisals fairly.
Performance aPPraisal roles (cont’d)
 HR department
 Serves a policy-making and advisory role.
 Provides advice and assistance regarding the
appraisal tool to use.
 Prepares forms and procedures and insists that all
departments use them.
 Responsible for training supervisors to improve their
appraisal skills.
 Responsible for monitoring the system to ensure that
appraisal formats and criteria comply with EEO laws
and are up to date.
stePs in aPPraising
Performance
1.Defining the job
 Making sure that you and your subordinate agree on
his or her duties and job standards.
2.Appraising performance
 Comparing your subordinate’s actual performance
to the standards that have been set; this usually
involves some type of rating form.
3.Providing feedback
 Discussing the subordinate’s performance and
progress, and making plans for any development
required.
designing the aPPraisal
tool
 What to measure?
 Work output (quality and quantity)
 Personal competencies
 Goal (objective) achievement
 How to measure?
 Graphic rating scales
 Alternation ranking method
 MBO
Performance Appraisal Methods
Performance aPPraisal
methods
Graphic rating scale
 A scale that lists a number of traits and a
range of performance for each that is used to
identify the score that best describes an
employee’s level of performance for each
trait.
Graphic
Rating
Scale with
Space for
Comments
© 2005 Prentice Hall Inc. All rights reserved.
9–16
Figure 9–3
comParative methods
Ranking
 A listing of all employees from highest to lowest in
performance.
Drawbacks
 Does not show size of differences in
performance between employees
 Implies that lowest-ranked employees are
unsatisfactory performers.
 Becomes difficult process if the group to be
ranked is large.
Forced-Choice Method
 A trait approach to performance appraisal that requires the rater
to choose from statements designed to distinguish between
successful and unsuccessful performance.
 Similar to grading on a curve; predetermined percentages of
rates are placed in various performance categories.
 Example:
 15% high performers
 20% high-average performers
 30% average performers
 20% low-average performers
 15% low p
Behavioral /oBjective methods
Behavioral Rating Approach
 Assesses employees’ behaviors instead of other
characteristics
Consists of a series of scales created by:
 Identifying important job dimensions
 Creating statements describing a range of desired and
undesirable behaviors (anchors)
Type of behavioral scale
 Behaviorally anchored rating scales (BARS)
BARS is an appraisal tool that anchors numerical rating
scale with specific examples of good or poor
performance.
Behavioral /oBjective methods
Management by Objectives
 Specifying the performance goals that an individual and
his or her manager agree that employee will try to attain
within an appropriate length of time.
Key MBO Ideas
 Employee involvement creates higher levels of
commitment and performance.
 Encourages employees to work effectively toward
achieving desired results.
 Performance measures should be measurable and should
define results.
Narrative methods
Critical Incident
 Manager keeps a written record of highly favorable
and unfavorable employee actions.
Drawbacks
 Variations in how managers define a “critical
incident”
 Time involved in documenting employee actions
 Most employee actions are not observed and may
become different if observed
Narrative methods(coNtd..)
Essay
 Manager writes a short essay describing an employee’s
performance.
Drawback
 Depends on the managers’ writing skills and their
ability to express themselves.
360 Feed Back system
A system of collecting performance information from
multiple parties.
Multiple parties include one’s subordinates peers, supervisors
and customers
It is also used to design promotion and reward.
360 degree perFormaNce
appraisal
poteNtial ratiNg scale
appraisal proBlems
 Unclear standards
 An appraisal that is too open to interpretation.
 Halo effect
 Occurs when a supervisor’s rating of a subordinate on one
trait biases the rating of that person on other traits.
 For example, supervisors often rate unfriendly employees
lower than the others, on all traits.
 Central tendency
 A tendency to rate all employees the same way, such as
rating them all average.
poteNtial ratiNg scale appraisal
proBlems (coNt’d)
 Strictness/leniency
 The problem that occurs when a supervisor has a
tendency to rate all subordinates either high or low.
 Bias
 The tendency to allow individual differences such as
age, race, and sex to affect the appraisal ratings
employees receive.
how to avoid appraisal
proBlems
 Learn and understand the potential problems, and the
solutions for each.
 Use the right appraisal tool. Each tool has its own pros and
cons.
 Train supervisors to reduce rating errors such as halo,
leniency, and central tendency.
 Have raters compile positive and negative critical incidents as
they occur.
Who Should do the
ApprAiSing?
 The immediate supervisor
 Peers
 Rating committees
 Self-ratings
 Subordinates
 360-Degree feedback
performAnce mAnAgement
mAin purpoSeS of performAnce
mAnAgement
 Individual Rewards (Base and Incentive)
 Feedback for Sub-Ordinate (Plus and Minus)
 Recognition of Superior Performance
 Documentation of Weak Performance
 Personnel Decision-Making
 Future Goal Commitments (Planned
Achievements)
Why performAnce mAnAgement?
 Increasing use by employers of performance
management reflects:
 The popularity of the total quality management
(TQM) concepts.
 The belief that traditional performance appraisals
are often not just useless but counterproductive.
 The necessity in today’s globally competitive
industrial environment for every employee’s efforts
to focus on helping the company to achieve its
strategic goals.
SourceS of performAnce
mAnAgement
 Managers
 Have the ability to rate employees
  Feedback from MANAGERS is strongly related to
performance
 Peers
 Co-worker
 Expert knowledge of job requirement
 Observe employee daily!
 Bring a different perspective in the evaluation process -
provide extremely valid assessment of performance
 Useful esp. if supervisor does not always observe
employee (e.g. law enforcement)
SourceS of performAnce
mAnAgement
 Subordinates
 Evaluation of managers
 UPWARD FEEDBACK
 Self
 Not often used
 Observe own behaviour
 Customers
 Often the only best person to observe employee performance
 BEST source of information
 Customer evaluation sheet
 Random mail surveys
 Telephone survey
performAnce mAnAgement:
A four Step proceSS
Step 1: Performance Planning and Communication
Step 2: Coaching/Feedback
Step 3: Performance Review
Step 4: Staff Development
the componentS of An effective
performAnce mAnAgement proceSS
 Direction sharing
 Role clarification
 Goal alignment
 Developmental goal setting
 Ongoing performance monitoring
 Ongoing feedback
 Coaching and support
 Performance assessment (appraisal)
 Rewards, recognition, and compensation
 Workflow and process control and return
objective Setting:
be Sure it’S S.m.A.r.t.
 Specific
 Measurable
 Achievable
 Results Oriented
 Time bound

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performance appraisals and management

  • 2.
  • 3. Performance aPPraisal and Performance management  Performance appraisal  Evaluating an employee’s current and/or past performance relative to his or her performance standards.  Performance management  The process employers use to make sure employees are working toward organizational goals.
  • 4. difference between Pm and Pa Processes used to identify, encourage, measure,evaluate, improve, and reward employee performance. The process of evaluating how well employees perform their jobs and then communicating that information to the employees.
  • 6. definitions According to Newstrom, “It is the process of evaluating the performance of employees, sharing that information with them and searching for ways to improve their performance’’. meaning Performance appraisal is the step where the management finds out how effective it has been at hiring and placing employees. A “Performance appraisal” is a process of evaluating an employee’s performance of a job in terms of its requirements.
  • 7. wHY tHe Performance aPPraising  Appraisals play an integral role in the employer’s performance management process.  Appraisals help in planning for correcting deficiencies and reinforce things done correctly.  Appraisals, in identifying employee strengths and weaknesses, are useful for career planning  Appraisals affect the employer’s salary raise decisions.
  • 9. continuous imProvement  A management philosophy that requires employers to continuously set and relentlessly meet ever-higher quality, cost, delivery, and availability goals by:  Eradicating the seven wastes: overproduction, defective products, and unnecessary downtime, transportation, processing costs, motion, and inventory.  Requiring each employee to continuously improve his or her own personal performance, from one appraisal period to the next.
  • 10. Performance aPPraisal roles  Supervisors  Usually do the actual appraising.  Must be familiar with basic appraisal techniques.  Must understand and avoid problems that can cripple appraisals.  Must know how to conduct appraisals fairly.
  • 11. Performance aPPraisal roles (cont’d)  HR department  Serves a policy-making and advisory role.  Provides advice and assistance regarding the appraisal tool to use.  Prepares forms and procedures and insists that all departments use them.  Responsible for training supervisors to improve their appraisal skills.  Responsible for monitoring the system to ensure that appraisal formats and criteria comply with EEO laws and are up to date.
  • 12. stePs in aPPraising Performance 1.Defining the job  Making sure that you and your subordinate agree on his or her duties and job standards. 2.Appraising performance  Comparing your subordinate’s actual performance to the standards that have been set; this usually involves some type of rating form. 3.Providing feedback  Discussing the subordinate’s performance and progress, and making plans for any development required.
  • 13. designing the aPPraisal tool  What to measure?  Work output (quality and quantity)  Personal competencies  Goal (objective) achievement  How to measure?  Graphic rating scales  Alternation ranking method  MBO
  • 15. Performance aPPraisal methods Graphic rating scale  A scale that lists a number of traits and a range of performance for each that is used to identify the score that best describes an employee’s level of performance for each trait.
  • 16. Graphic Rating Scale with Space for Comments © 2005 Prentice Hall Inc. All rights reserved. 9–16 Figure 9–3
  • 17. comParative methods Ranking  A listing of all employees from highest to lowest in performance. Drawbacks  Does not show size of differences in performance between employees  Implies that lowest-ranked employees are unsatisfactory performers.  Becomes difficult process if the group to be ranked is large.
  • 18. Forced-Choice Method  A trait approach to performance appraisal that requires the rater to choose from statements designed to distinguish between successful and unsuccessful performance.  Similar to grading on a curve; predetermined percentages of rates are placed in various performance categories.  Example:  15% high performers  20% high-average performers  30% average performers  20% low-average performers  15% low p
  • 19. Behavioral /oBjective methods Behavioral Rating Approach  Assesses employees’ behaviors instead of other characteristics Consists of a series of scales created by:  Identifying important job dimensions  Creating statements describing a range of desired and undesirable behaviors (anchors) Type of behavioral scale  Behaviorally anchored rating scales (BARS) BARS is an appraisal tool that anchors numerical rating scale with specific examples of good or poor performance.
  • 20. Behavioral /oBjective methods Management by Objectives  Specifying the performance goals that an individual and his or her manager agree that employee will try to attain within an appropriate length of time. Key MBO Ideas  Employee involvement creates higher levels of commitment and performance.  Encourages employees to work effectively toward achieving desired results.  Performance measures should be measurable and should define results.
  • 21. Narrative methods Critical Incident  Manager keeps a written record of highly favorable and unfavorable employee actions. Drawbacks  Variations in how managers define a “critical incident”  Time involved in documenting employee actions  Most employee actions are not observed and may become different if observed
  • 22. Narrative methods(coNtd..) Essay  Manager writes a short essay describing an employee’s performance. Drawback  Depends on the managers’ writing skills and their ability to express themselves.
  • 23. 360 Feed Back system A system of collecting performance information from multiple parties. Multiple parties include one’s subordinates peers, supervisors and customers It is also used to design promotion and reward.
  • 25. poteNtial ratiNg scale appraisal proBlems  Unclear standards  An appraisal that is too open to interpretation.  Halo effect  Occurs when a supervisor’s rating of a subordinate on one trait biases the rating of that person on other traits.  For example, supervisors often rate unfriendly employees lower than the others, on all traits.  Central tendency  A tendency to rate all employees the same way, such as rating them all average.
  • 26. poteNtial ratiNg scale appraisal proBlems (coNt’d)  Strictness/leniency  The problem that occurs when a supervisor has a tendency to rate all subordinates either high or low.  Bias  The tendency to allow individual differences such as age, race, and sex to affect the appraisal ratings employees receive.
  • 27. how to avoid appraisal proBlems  Learn and understand the potential problems, and the solutions for each.  Use the right appraisal tool. Each tool has its own pros and cons.  Train supervisors to reduce rating errors such as halo, leniency, and central tendency.  Have raters compile positive and negative critical incidents as they occur.
  • 28. Who Should do the ApprAiSing?  The immediate supervisor  Peers  Rating committees  Self-ratings  Subordinates  360-Degree feedback
  • 30. mAin purpoSeS of performAnce mAnAgement  Individual Rewards (Base and Incentive)  Feedback for Sub-Ordinate (Plus and Minus)  Recognition of Superior Performance  Documentation of Weak Performance  Personnel Decision-Making  Future Goal Commitments (Planned Achievements)
  • 31. Why performAnce mAnAgement?  Increasing use by employers of performance management reflects:  The popularity of the total quality management (TQM) concepts.  The belief that traditional performance appraisals are often not just useless but counterproductive.  The necessity in today’s globally competitive industrial environment for every employee’s efforts to focus on helping the company to achieve its strategic goals.
  • 32. SourceS of performAnce mAnAgement  Managers  Have the ability to rate employees   Feedback from MANAGERS is strongly related to performance  Peers  Co-worker  Expert knowledge of job requirement  Observe employee daily!  Bring a different perspective in the evaluation process - provide extremely valid assessment of performance  Useful esp. if supervisor does not always observe employee (e.g. law enforcement)
  • 33. SourceS of performAnce mAnAgement  Subordinates  Evaluation of managers  UPWARD FEEDBACK  Self  Not often used  Observe own behaviour  Customers  Often the only best person to observe employee performance  BEST source of information  Customer evaluation sheet  Random mail surveys  Telephone survey
  • 34. performAnce mAnAgement: A four Step proceSS Step 1: Performance Planning and Communication Step 2: Coaching/Feedback Step 3: Performance Review Step 4: Staff Development
  • 35. the componentS of An effective performAnce mAnAgement proceSS  Direction sharing  Role clarification  Goal alignment  Developmental goal setting  Ongoing performance monitoring  Ongoing feedback  Coaching and support  Performance assessment (appraisal)  Rewards, recognition, and compensation  Workflow and process control and return
  • 36. objective Setting: be Sure it’S S.m.A.r.t.  Specific  Measurable  Achievable  Results Oriented  Time bound