PERFORMANCE MANAGEMENT & APPRAISAL

What gets MEASURED gets IMPROVED.

Performance ManagementAn iterative process of observation and communication

to support, retain and develop employees for organization success.

Performance Management• Armstrong and Baron define Performance Management as “ a

Process which contributes to the effective management of individuals and teams in order to achieve high level of organizational performance.”

• In other words PM Should be:– Strategic- it is about broader issues and long-term goals.– Integrated- it should link various aspects of the business, people

management ,individuals and teams.

Performance ManagementIt should incorporate:• Performance improvement- throughout the organization, for

individuals, teams and organizational effectiveness.• Development- unless there is continuous development of

individuals and teams, performance will not improve.• Managing Behaviour-ensuring that individuals are encouraged

to behave in a way that allow better working relationship.

Why Manage Performance?

• Encourage and reward behaviors that are aligned with organizational mission and goals. •People want to feel what they do adds value and understand their contribution to the team.•Curb or redirect non-productive activities.

Factors that Influence Performance

Performance= f(A,M,E)

Parameters

PURPOSE To improve organizational performance

HOW Regular interactions between managers and employees

WHERE At the work- place

WHEN Continuously, often half yearly

BY WHOM Immediate supervisor and the employees.

The PM Process

Performance Appraisal• Performance Appraisal is the systematic evaluation of the

individual with respect to his/her performance on the job and his or her potential for development.

• It is a formal, structured system of measuring and evaluating an employee’s job, related behaviors and outcomes to discover how and why the employee is presently performing on the job and how the employee can perform more effectively in the future so that the employee, organization and society all benefit.

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Performance Appraisal• Performance Appraisal is a process that consolidates goal

setting, performance appraisal, and development into a single, common system, the aim of which is to ensure that the employees performance is supporting the company’s strategic aims.

• PA aims directly to link together individual goals, departmental purposes and organizational objectives.

Performance Appraisal

Process of • periodically measuring employees’ progress

toward agreed-upon objectives, • providing constructive feedback, and • taking corrective action if goals are not being

achieved

Copyright © 2005 Prentice-Hall

Relationship between job analysis and performance appraisal:

Job analysis performance Appraisal Standard

Describes work& Personnel RequirementOf a particularjob

Translate job Into levels of To acceptableOr unacceptableperformance

Describes the Job relevant strengths and weakness ofEach individual

Issues in Appraisal System

Appraisal Design

Formal and Informal

Whose Performance?

Who are the raters?

What Problems?

What Methods?

When to evaluate?

What to evaluate?

How to Solve?

Whose performance should be rated?

• Individual

• Work group

• Division

• Organization

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Who are Raters?• Immediate Supervisor

• Specialist from the HR department

• Subordinates

• Peers

• Committees

• Clients

• Self appraisal

• Combination of several

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Why PM & PA’s?

• Increased competitive pressures which put an emphasis on performance improvement.

• Attempts to achieve a clearer correlation between organizational goals and individual targets.

• The shift from collectivism to individualism, which has allowed for a more rigorous specification of individual performance standard and measure.

Characteristics• It is a step by step process• It examine the employee strengths and weaknesses• Ongoing and continuous process• Secure information for making correct decisions on employees • Clarify and help to translate corporate goals into individual

team, department and divisional goals.• Provide regular communication about business plans and

progress in achieving objectives.• Create a shared understanding of what is required to improve

performance and how it is to be achieved.

Characteristics• Encourage self-management of individual performance.• Systematically measure all performance against jointly agreed

goals.• Ensure that people are placed in the most suitable position.• Indentify employees ambitions regarding personal career

development.• Identify training needs.• To increase motivation.• HR Planning• To improve performance.

Purpose / Objective• Establishing job/performance targets for the coming year

and clarifying expectations.• Assessing performance achievement of past year and

providing performance feedback: strengths, weaknesses, future improvements – effectiveness, efficiency, timely etc.

• Identifying development needs• Awarding of performance based incentive – salary

increment• Awarding of level upgrade and/or promotion• Grievance and discipline programmes• HR planning

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Purpose / Objective• Performance Feedback• Reward Management• Training and Development Decision• Facilitate career and succession planning• Supervisory Understanding• Promotion , Transfer , Separation Decision• Diagnose the S & W of individuals• Provide coaching, counseling, career planning to subordinates• Develop positive relation and reduce grievance

Appraisal Benefits (cont.)

• Appraisals offer employees:– Direction– Feedback– Input– Motivation

Appraisal Benefits

• Appraisals offer the company:– Documentation– Employee Development– Feedback– Legal protection– Motivation system

Benefits of Performance Appraisal

For the Appraisee• Better understanding of their role in the organization- what is

expected and what needs to be done to meet those expectations.

• Clear understanding of their strengths and weakness to develop themself into a better performer in future.

• Increased motivation, job satisfaction, and self-esteem.• Opportunity to discuss work problems and how they can be

overcome.• Improved working relationship with supervisors.

For the Management• Identification of performers and non-performers and their

development towards better performance.• Opportunity to prepare employees for assuming higher

responsibilities.• Identification of training and development needs• Generations of ideas for improvements• Better identification of potential and formulation of career

plans.• Opportunity to improve communication between the

employees and management.

For the Organization:• Improved performance throughout the organization.• Creation of a culture of continuous improvements

and success.• Conveying the message that people are valued.

Why Appraisal are Important?

• Recognize Accomplishments• Guide Progress• Improve Performance• Review Performance• Set Goals• Identify Problems• Discuss career development

How PA adds CA to Firm

PERFORMANCE ASSESSMENT GUIDE

Job Standards are Communicated

Are job standardsbeing achieved?

Employeereceives feedbackon performance

Supervisorinvestigates reasons

Performance PlanningWorksheet may be

developed or modified

Discipline maybe imposed

Are job standardsbeing achieved?

No

No

Yes

Yes

Process of PA

1. Setting performance

standards6. Taking correctivestandards

5. Discussingresults

4. Comparing standards

3. Measuringstandards

2. Communicatingstandards

Steps in PA

Performance Evaluation Problems• Lack of standards (leads to only a subjective guess or feeling about

performance)• Irrelevant or subjective standards (non job related standards)• Unrealistic standards (reasonable but challenging standards have the

potential to motivate)• Poor measures of performance• Rater errors (biases, prejudices)• Poor feedback to employee (less tactful, threatening)• Negative communications (communication of negative attitudes such

as inflexibility, defensiveness and non-developmental approach)• Failure to apply evaluation data

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Performance Criteria

• Job Descriptions should be prepared and provided to respective staff members; it should be upgraded/modified as and when the nature of job/responsibilities change

• Mutual expectations/targets should be discussed and agreed

• Evaluation should be primarily based on actual work done and targets achieved, not on other unrelated issues

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Performance Rating / Process ..• Direct supervisors are to be responsible for evaluating their

subordinates and, if warranted, held accountable for ratings provided; evaluations done by the supervisor should not be unilaterally changed at higher levels without a transparent mechanism.

• Additional motivational factor must also be linked to the level of effort; it should not be rigidly pegged to forecasted revenue generation expectations of the company.

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Performance Feedback

• Feedback should be given instantaneously and continuously, not only at the end of the performance period

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Methods of Rating• Rating scales

Several numerical scales each representing a job related performance criterion such as dependability, initiative, output, attendance, attitude, cooperation and the like.

• Checklist MethodTick the column- Yes or No- Total score is arrived at.Weighted Checklist if weighted

• Forced Choice MethodDescription given and the rater indicates which statements is most or least descriptive of the employee…..HR

• Forced Distribution Method15% high performers20% high –average performers30% average performers20% low-average performers15% low performers

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Methods of Rating• Critical Incident Method

Focuses on certain critical behaviour of an employee that make all the difference between effective and non effective performance of the job. Such incidents are recorded by the superiors as and when they occur

• Field Review Method This is an appraisal by someone outside the assessee’s own department usually someone from the HR department or corporate office.

• Performance Test and ObservationsPaper-and-pencil test or an actual demonstration of skills

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Methods of Rating• Confidential Reports

• Essay MethodIt can be used independently but it is combined with other methods.

Comparison Evaluation Approaches • Ranking Method

Starting from best to worst- no explanations or questioning on ‘how’ and ‘why’

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Checklist method

•Simple checklist method•Weighted checklist method•Forced choice method

Simple checklist method:Is employee regular Y/NIs employee respected by subordinate Y/NIs employee helpful Y/NDoes he follow instruction Y/NDoes he keep the equipment in order Y/N

Weighted checklist method

weights performance rating (scale 1 to 5 )

Regularity 0.5Loyalty 1.5Willing to help 1.5Quality of work 1.5Relationship 2.0

Forced choice method

Criteria Rating

1.Regularity on the job Most Least•Always regular•Inform in advance for delay•Never regular•Remain absent•Neither regular nor irregular

Graphic Rating ScaleName_____________________________ Dept.___________________________ Date_______________

Outstanding Good Satisfactory Fair UnsatisfactoryQuantity Volume of acceptableof work work under normal conditions ___ ___ ___ ___ ___

Comments: Quality Thoroughness, neatness, and ___ ___ ___ ___ ___ of work accuracy of work

Comments:

Knowledge Clear understanding of the facts ___ ___ ___ ___ ___of job or factors pertinent to the job

Comments:

Personal qualities Personality, appearance, ___ ___ ___ ___ ___

sociability, leadership, integrity Comments:

Key Points to Remember• You must conduct objective appraisals on a

scheduled basis.

• Appraisals tell employees how they’re doing and how they can improve.

• Appraisals help create a system of motivation and rewards based on performance.

THANK YOU