HUMAN RESOURCE MANAGEMENT

PERFORMANCE MANAGEMENT AND APPRAISAL

Performance Management

• Goal- oriented process directed toward ensuring organizational processes are in place to maximize productivity of employees, teams, and organization

• Training and performance appraisal play significant role in process

• With PM, training appraisal and rewards is integrated and linked for the purpose of continuous organizational effectiveness

Performance Appraisal Defined

• A formal system of review and evaluation of individual or team task performance

Uses Of Performance Appraisal

• Human resource planning- data must be available to identify those who have potential to be promoted

• Recruitment and selection- may be helpful in predicting the performance of job applicants

• Training & development- essential in assessing and employee’s strengths & weaknesses and determining the person’s potential

Use Of Performance Appraisal(Cont.)

• Compensation programs- provide a basis for rational decisions regarding pay adjustments

• Internal employee relations- used for decisions in several areas of internal employee relations, including promotion, demotion, termination, layoff and transfer

• Assessment employee potential- some organizations attempt to assess employee potential as they appraise their job performance

Labor Unions And Performance Appraisal

• Have traditionally stressed seniority as the basis for promotions and pay increases

Performance appraisal process

Establish performance criteria(Standards)

Traits Behaviors

Competencies Goal achievement

Improvement potential

Traits

• Certain employee traits such as attitude, appearance, and initiative are the basis for some evaluations

• May be either unrelated to job performance or difficult to define

• Certain traits may relate to job performance and, if this connection is establish, using them may be appropriate

Behaviors

• Organization may be evaluate person’s task related behavior or competencies

• Examples; leadership style, developing others teamwork and cooperation

• If certain behaviors result in desired outcomes, there is merit in using them in the evaluation process

Competencies

• Broad range of knowledge, skills, traits and behaviors that may be technical in nature, relate to interpersonal skills or be business oriented

• In leadership jobs, relevant competencies might include developing talent, delegating authority and people management skills

• Competencies selected should be those that are closely associated with job success

Goal Achievements

• Use if organizations consider ends more important than means.

Improvement Potential

• Firms should emphasize future, including behaviors and outcomes needed to develop the employee and in the process, achieve firm’s goals

Responsibility For Appraisal

Immediate supervisorSubordinatesPeers and team membersSelf-appraisalCustomer appraisal

Immediate Supervisor

• Traditionally been most common choice• Supervisor is usually in excellent position to

observe employee’s job performance• Supervisor has responsibility for managing a

particular unit

Subordinates

• Our culture has viewed evaluation by subordinates negatively

• Some firms conclude that evaluation of managers by subordinates is both feasible and needed

• Will do a better job of managing

Peers And Team Members

• Work closely with evaluated employee and probably have an undistorted perspective on typical performance

• Problems include reluctance of some people who work closely together, especially on teams, to criticize each other

Self-Appraisal

• If employees understand their objectives and criteria used for evaluation, they are in good position to appraise their own performance

• Employee development is self-development• Employees who appraise their own

performance may become more highly motivated

Customer Appraisal

• Customer behavior determines a firm’s degree of success

• Organizations used this approach because it demonstrates a commitment to customer, holds employees accountable and fosters change

The Appraisal Method

• Prepared at specific intervals

• Usually annually or semi-annually

• Period may begin with employee’s date of hire

• All employees may be evaluated at the same time

Performance Appraisal Method

• 360-Degree Evaluation• Rating Scales• Critical incidents• Essay• Work standards• Ranking• Paired Comparison

• Forced Distribution• Behaviorally

Anchored Rating Scales (BARS)

• Result Based system

360-Degree Evaluation

• Multi rater evaluation• Input from multiple levels within firm and

external sources• Focuses on skills needed across organizational

boundaries• More objective measure of performance • Process more legally defensible

Rating Scales

• Rates according to defined factors

• Judgments are recorded on a scale

• Many employees are evaluated quickly

Critical Incidents

• Written records of highly favorable and unfavorable work actions

• Appraisal more likely to cover entire evaluation period

• Does not focus on last few weeks or month

Essay

• Brief narrative describing performance• Tends to focus on extreme behavior• Depends heavily on evaluator’s writing ability• Comparing essay evaluations might be difficult

Work Standards

• Compares performance to predetermined standards

• Standards- normal output of average worker operating at normal pace

• Time study and work sampling used• Workers need to know how standards were

set

Ranking

• All employees from group ranked in order of overall performance

• Comparison is based on single criterion such as overall performance

Paired Comparison

• Variation of ranking method• Compares performance of each employee

with every other employee in the group

Forced Distribution

• Rater assigns individual in work group to limited number of categories similar to normal distribution

• Assume all groups of employees have some distribution

Behaviorally Anchored Rating Scales(BARS)

• Combines traditional rating scales and critical incidents methods

• Job behaviors derived from critical incidents described more objectively

Result- Based System

• Manager and subordinate agree on objectives for next appraisal

• Evaluation based on how well objectives accomplished

HANDLING LOW PERFORMERS

How to deal with it???

• Diagnosing Poor Performance• Enhancing Ability• Improving Motivation

Diagnosing Poor Performance

Find out why their performance is low???

• Over-difficult tasks.• Low individual aptitude, skill, and knowledge.• Evidence of strong effort, despite poor performance.• Lack of improvement over time.

Enhancing Ability

• There are five main ways to overcome performance problems associated with a lack of ability. Consider using them in this sequence, which starts with the least intrusive:

• Resupply• Retrain• Refit• Reassign• Release

Resupply Focus on the resources provided to do the job. Do

employees have what they need to perform well and meet expectations?

• Ask them about additional resources they think they need.

• Listen for points of frustration. • Note where employees report that support is

inadequate.• Verify the claims with your own investigation. People

will often blame external sources for their poor performance before admitting their own fault.

Retrain

Provide additional training to team members. Explore with them whether they have the actual skills required to do what's expected. Given the pace of change of technology, it's easy for people's skills to become obsolete.

• This option recognizes the need to retain employees and keep their skills current. There are various types of retraining you can provide:

• Training seminars with in-house or external providers.• Computer-based training (CBT).• Simulation exercises.

Refit

• When these first two measures aren't sufficient, consider refitting the job to the person. Are there parts of the job that can be reassigned?

• Analyze the individual components of the work, and try out different combinations of tasks and abilities. This may involve rearranging the jobs of other people as well. Your goal is to retain the employee, meet operational needs, and provide meaningful and rewarding work to everyone involved.

Reassign

• When revising or refitting the job doesn't turn the situation around, look at reassigning the poor performer. Typical job reassignments may decrease the demands of the role by reducing the need for the following:

• Responsibility• Technical knowledge • Interpersonal skills • If you use this option, make sure the reassigned job is

still challenging and stimulating. To ensure that this strategy is successful, never use demotion as a punishment tactic within your organization.

Release

• As a final option for lack of ability, you may need to let the employee go. Sometimes there are no opportunities for reassignment, and refitting isn't appropriate for the organization. In these cases, the best solution for everyone involved is for the employee to find other work. You may need to consider contractual terms and restrictions; however, in the long run, this may be the best decision for your whole team.

Improving Motivation

• Sometimes poor performance has its roots in low motivation. When this is the case, you need to work closely with the employee to create a motivating environment in which to work.

Benefits of an Employee Performance Management system• Encourage quality performance by rewarding

workers who do well.• Helps to improve current performance by

providing workers with feedback• Helps to identify workers who need training• Assists in identifying workers who may need to

transferred or even dismissed for poor performance

• Provides a channel of communication between managers and their subordinates

The Key Components of an Employee Performance Management System

• The preparation of organizational plans, including the setting of objectives which are established for all levels down to the individual worker.

• The implementation of the work by the individual worker, accompanied by appropriate forms of monitoring by the worker’s manager or supervisor

The Key Components of an Employee Performance Management System

• The appraisal of the work of the individual workers

• Follow-up action taken after appraisal. The nature of the follow-up action depends upon the quality of performance of the individual workers.

Bias in Performance Appraisal• The recency effect – whereby the appraiser

bases the appraisal of an employee on recent behavior and performance

• The halo or horns effects – the appraiser is over influenced by on aspect of the employee being appraised and ignores others

• Central/Leniency/Strictness tendency –Central tendency occurs whenever an appraiser

rates all his subordinates as being average on all criteria being evaluate

Leniency tendency occurs when the appraiser gives high ratings to all his subordinates

Bias in Performance Appraisal• Prejudice and stereotyping– many people are

prejudiced whether knowingly or unknowingly. They hold negative opinions about a particular group of people.

• Fatigue – when an appraisal system requires a manager to appraise all his subordinates at the same time, perhaps within 2 week period, fatigue may blur his judgement.