The document outlines the key aspects of a performance management system (PMS), including theoretical frameworks, dimensions of performance, appraisal methods, and performance management principles. It discusses traditional appraisal methods like ranking and grading. Modern methods covered include management by objectives, 360-degree feedback, and assessment centers. Performance management involves setting goals, providing feedback, formal reviews, and rewards to improve role clarity, accountability, and effectiveness. Goal-setting, control, and social cognitive theories are examined in relation to their application in performance management.

1. PMS
UNIT I
Dr. Prachi Ajit

2. Unit 1
• Part 1 - Introduction and Theoretical Framework:
• Dimensions of Performance,
• Performance Appraisal & Potential Appraisal,
• Methods of Performance Appraisal: Traditional, Modern Methods,
• Components of PMS.
• Part II - Performance Management:
• Planning Performance for Role Clarity, Accountability and Effectiveness.
• Goal Theory and its Application in Performance Management,
• Control Theory and its Application in Performance Management,
• Social Cognitive Theory and its Application in Performance Management. (6 +3).
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3. PART I
• Part 1 - Introduction and Theoretical Framework:
• Dimensions of Performance,
• Performance Appraisal & Potential Appraisal,
• Methods of Performance Appraisal: Traditional, Modern Methods,
• Components of PMS.
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4. Introduction of PMS
• Introduction –
• A performance management system(PMS) is a mechanism for tracking the
performance of employees consistently and measurably.
• It allows the company to ensure that employees and departments across the
organization are working effectively towards achieving the business' strategic goals.
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5. Theoretical Framework of PMS
• The performance
management systems
framework is based on
inductive reasoning applied
to various studies.
• It represents a powerful
research tool for examining
the structure of an
organization's PMSs in a
holistic manner.
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6. Dimensions of Performance
• 7 Important Dimensions:
Result and Output,
Input,
Time,
Focus,
Quality,
Cost and Output.
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7. Performance Appraisal & Potential Appraisal
• Potential appraisal helps to
identify the hidden
talents and potential of
the individuals. ...
• Performance appraisal is a
part of career development.
Performance appraisal helps
to rate the performance of
the employees and evaluate
their contribution towards
the organizational goals.
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8. Methods of Performance Appraisal: Traditional
Traditional Methods
These are the old methods of performance appraisal based on personal qualities like
knowledge, capacity, judgment, initiative, attitude, loyalty, leadership, judgment etc.
1. Unstructured Method of Appraisal - Under this method appraiser has to
describe his impressions about the employee under appraisal in an unstructured
manner.
2. Straight Ranking Method- It is quite simple and old method of performance
appraisal. Under this method the employee and his performance are considered as an
entity. All the employees are evaluated by the appraiser considering their performance
of job as a base and ranks are given.
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9. Methods of Performance Appraisal:
Traditional: (Contd)
• 3. Paired Comparison Method:
This method is an attempt to improve upon the simple ranking method. Under
this method employees of a group are compared with one another at one time.
• 4. Man to Man Comparison Method:
This method was used during World War I by the American army. Under this
method certain factors are selected for analysis. The factors include leadership
qualities, initiative etc.
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10. Methods of Performance Appraisal:
Traditional: (Contd)
• 5. Grading Method:
These selected and well defined categories include grade ‘A’ for outstanding, ‘B’ for
very good, ‘C’ for average, ‘D’ for poor etc. These grades are based on certain selected
features of employees such as knowledge, judgment, analytical ability, leadership
qualities, self expression etc.
• 6. Graphic Rating Scale:
This is one of the most widely used performance evaluation technique. The evaluator
is asked to rate employees on the basis of job related characteristics and knowledge of
job.
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11. Methods of Performance Appraisal: Modern
(Contd)
• Modern Methods of Performance are
1. Management by objectives (MBO),
2. Behaviorally anchored rating scale (BARS) method,
3. Assessment center method,
4. Human resource accounting method,
5. 360 degree,
6. 720 degree method.
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12. Methods of Performance Appraisal: Modern
(Contd)
• 1. MBO - Peter Drucker has developed this method of performance appraisal. It is
a powerful method of managing and of evaluating performance. It attempts to keep
external controls to minimum and internal motivation to maximum. It sets the goal
jointly for superior and subordinates both increasing subordinate’s own control of
his work.
• 2. Behaviorally Anchored Rating Scales (BARS): It is recently developed
method of rating in behavioral terms. The exponents of BARS claim that it is more
reliable and advantageous method of performance appraisal. It is designed to
identify critical areas of performance of a job. Under this method the behaviorally
anchored ratings scales are outlined to recognize the critical areas of effective and
ineffective performance behaviour for getting results
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13. Methods of Performance Appraisal: Modern
(Contd)
• An assessment center: typically involves the use of methods
like social/informal events, tests and exercises, assignments being given
to a group of employees to assess their competencies to take higher
responsibilities in the future.
• Human resource (cost) accounting method: analyses an employee's
performance through the monetary benefits he/she yields to the
company. It is obtained by comparing the cost of retaining an employee (cost
to company) and the monetary benefits (contributions) an organization has
ascertained from that specific employee.
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14. Components of PMS
• 1.) Establish business/developmental goals at the individual level
• 2.) Provide ongoing coaching and feedback to maximize performance
• 3.) Conduct formal reviews and evaluations
• 4.) Share rewards and recognition
• 5.) Repeat steps 1-4
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15. Components of PMS
Performance Management: Four Components for Success
• 1.) Establish business/developmental goals at the individual level
• Set “smart” goals—goals that are specific, measurable, achievable, relevant and
time-bound.
• Describe success and measurement from both the “what” and the “how”
perspective
• Include individual developmental goals to improve role performance and to identify
specific activities or tactics
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16. Components of PMS (Contd)
2.) Provide ongoing coaching and feedback to maximize performance
• Feedback
• When giving feedback, realize it is a gift to move employees toward success
• Be positive and corrective—what’s going well and where is adjustment needed?
• Focus feedback on performance, not personality
• Feedback is owned by the giver using “I” statements; make it theirs
• Continually check for comprehension
• Make feedback timely so that it has maximum impact—act quickly and efficiently
• Coaching
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17. Components of PMS (Contd)
3.) Conduct formal reviews and evaluations
• Key components of review and evaluation:
• Employee self-assessment
• Feedback of key stakeholders
• Your observations (as manager/superior/etc.): be sure to compare all results
to goals set; share final assessment, evaluation and adjust if needed based on
discussion with employee; and inform employee of reward, if any
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18. Components of PMS (Contd)
4.) Share rewards and recognition
• When it comes to reward and recognition, the definition is up to you
• You must push past any discomfort or insecurity about offering
recognition—even giving something as small as a genuine thank you.
• Think of one time you received recognition for something you did
well: What was the recognition? How did it make you feel? Use your past
experience to choose the positive reinforcement you’ll show to your
employee
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19. Components of PMS (Contd)
5.) Repeat steps 1-4
• A robust Performance Management Process is just one key to engagement
in reversing nonprofit employee burnout. If the organization would benefit
from learning hands-on tactics for retaining and recruiting top talent.
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20. Time for some warmup……………………….
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21. Part II
• Part II - Performance Management:
• Planning Performance for Role Clarity, Accountability and Effectiveness.
• Goal Theory and its Application in Performance Management,
• Control Theory and its Application in Performance Management,
• Social Cognitive Theory and its Application in Performance Management. (6 +3).
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22. Performance Management
• Performance management can be defined as the development of individuals
with competence and commitment, working towards the achievement of
shared meaningful objectives within an organization which supports and
encourages their achievement.
• According to Michael Armstrong and Angela Baron – ‘Performance
management is a process which contributes to the effective management of
individual and teams in order to achieve high levels of organisational
performance.’
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23. Planning Performance for Role Clarity,
Accountability and Effectiveness
• What is role clarity in performance management?
• Role clarity is the degree to which employees have a clear
understanding of their tasks, responsibilities and processes at work. ...
To reduce these feelings and improve both personal effectiveness and the
organization's overall performance, role clarity is crucial.
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24. Planning Performance for Role Clarity,
Accountability and Effectiveness (Contd)
• How do you perform accountability?
• Gallup's research and consulting experience shows that, to promote
accountability, leaders and managers should:
• Define what people are accountable for. ...
• Set and cascade goals throughout the organization. ...
• Provide updates on progress. ...
• Align development, learning and growth. ...
• Recognize and celebrate progress.
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25. Planning Performance for Role
Clarity, Accountability and
Effectiveness (Contd)
• What makes a performance effective?
• Honest and regular feedback and
reviews — The more frequent and precise
the feedback, the better individual
performance. It's that simple. Employees
want regular insights into their work and
the better-informed employees are
regarding their performance, the better
able they are to improve and excel.
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26. Exercise
Group Name Profile (Job
Tittle)
Role Clarity Accountability Effectiveness
Faculty
Sr. Sales Manager
CFO
BDE
Financial Analyst
Marketing Manager
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27. Goal Theory and its Application in
Performance Management
• What is goal-setting theory?
• Goal-setting theory is a theory based on the idea that setting specific and
measurable goals is more effective than setting unclear goals.
• Edwin A. Locke developed this theory in 1968 in his article, "Toward a Theory
of Task Motivation and Incentive.” In this article, Locke showed how employees
are more motivated by well-defined goals and constructive feedback and are
more likely to accomplish these goals when they are specific and measurable.
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28. Goal Theory and its Application in
Performance Management (contd)
• What is goal-setting theory?
• In addition to setting clear goals, Locke emphasized the fact that employees
work well when they are faced with challenging goals.
• Tackling these more difficult goals forces employees to work hard and
develop their skills, and, as a result, receive positive feedback and an overall
sense of achievement.
• This, in turn, may result in improved employee engagement, productivity
and satisfaction in the workplace.
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29. Principles of the goal-setting theory
• According to Locke's goal-setting theory, there are five main principles of
setting effective goals:
• Clarity:
• Challenge:
• Commitment:
• Feedback:
• Task complexity:
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30. Application of Goal Theory
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31. Control Theory and its Application in
Performance Management
• What is control theory of performance management?
• Control theory helps in sustaining the performance management
system by defining forms of control between the organization and the
systems within.
• According to control theory, actions of all systems should be in sync with
the overall goals and objectives of an organization (Barrows & Neely, 2012).
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32. • Control theory is a branch of Applied Mathematics dealing with the use
of feedback to influence the behaviour of a system in order to achieve
a desired goal. One can distinguish two classes of systems for which
control theory plays an indispensable role, namely man-made systems and
biological systems.
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33. Social Cognitive Theory and its Application in
Performance Management.
• What is Social Cognitive Theory in performance management?
• Social Cognitive Theory (SCT) is the belief that people learn by
observing others. ... It asserts that when people observe someone else
performing a behavior and the consequences of that behavior, they use that
information to guide their own subsequent behaviors.
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34. Social Cognitive Theory and its Application in
Performance Management
• What are the key concepts of Social Cognitive Theory?
• Key constructs of social cognitive theory that are relevant to nutritional
intervention include observational learning, reinforcement, self-control,
and self-efficacy .
• Principles of behavior modification, which have often been used to promote
dietary change, are derived from social cognitive theory.
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35. Social Cognitive Theory and its Application in
Performance Management
• What is an example of Social Cognitive Theory?
• Think of a time that you have learned a skill or behavior from observing
another person. For example, you may have learned altruistic behavior
from seeing your parents bring food to a homeless person, or you may
have learned how to train a dog from watching The Dog Whisperer.
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36. Determinants in Social Cognitive Theory
In the personal factors,
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37. Application of PM Theories in the workplace
Goal Theory Control Theory Cognitive Theory
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38. TIME FOR Q AND A

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