HUMAN CAPITAL - represents the human factor in the POSSIBLE PERFORMANCE MANAGEMENT - Development Coaching is

organization. They are the source of combined intelligence, OBJECTIVES process in which leaders assist high-potential
skills and expertise that gives the organization a distinctive employees in developing certain competencies for
character. higher roles.

PERFORMANCE MANAGEMENT - is a system that ensures

the employees are clear on how they can contribute to the
accomplishment of the organization.

WHY IS IT IMPORTANT TO LEARN ABOUT

PERFORMANCE MANAGEMENT?
The Performance Management Cycle
1. It measures the competency of the organization.
A. Performance Planning and Commitment
2. Performance management articulates the job
- In this phase, organization objectives and
performance of an employee.
competencies are translated into individual performance plans.
D. Performance Rewards
- An important part in this process is ensuring the
alignment between organizational, group, and individual goals. - These are important in motivating and sustaining
- The clearer the goals are the organizational and performance.
group levels, the easier it is to align individual. - It is important to understand what rewards matter to
- It serves two purposes: facilitates achievement of employees in order to retain and engage them.
organizational objectives and highlights employees’ - It is important to look at the link between
contribution to the overall performance of the organization. performance and rewards.
B. Performance Review and Feedback - It is just as important to look at intrinsic rewards.
- Performance monitoring and assessment requires
a clear scoreboard as well as mechanism to track Measuring Job Performance
performance. It may be quantitatively (performance indicators)
or qualitatively (critical incidents). 1. Individual performance can be evaluated using
- Philippine context: Employees consider OBJECTIVE and SUBJECTIVE PERFORMANCE.
TOTAL PERFORMANCE MANAGEMENT AS performance and personhood one and the same. Hence, - Objective performance criteria are measures of job
ILLUSTRATED BY ATENEO CENTER FOR leaders must be sensitive to the feelings of their subordinate. performance that are tangible and can easily be quantified.
ORGANIZATION RESEARCH AND DEVELOPMENT - More personal approach would be more effective 2. Objective performance criteria are called TARGETS.
(ATENEO CORD) especially when giving feedback (Carbonnell, 2008). - Targets are objectives that define the quantifiable
- Sandwich Approach is the popular approach when result to be attained in terms of output, throughput, income,
giving feedback. sales, levels of service delivery, cost reduction, and reduction
C. Training and Development of rates. (Armstrong, 2006)
- Organizations need to provide mechanisms to 3. These targets are role specific, that is, a given target
ensure training and development. depends on what a particular job role has to do or achieve.
- The most common methods for training and (Armstrong, 2006)
development: - Example: A target for a sales representative can be
the amount of sales generated per month.
4. Following SMART mnemonic in writing clear
performance objectives or target.

S – Specific/stretching - clear, unambiguous, straightforward,

o Job Enrichment involves giving understandable, and challenging.
additional opportunities to high-potential employees in order
for them to gain experience and competencies outside their M – Measurable - quantity, quality, time, money
normal work.
A – Achievable - challenging but within the reach of
o Job Rotation involves exposing
competent and committed person.
individuals to different roles in order to expand their expertise.
o Coaching: R – Relevant - relevant to the objective of the organization
- Performance Coaching so that the goal of the individual is aligned to corporate
refers to assisting employees to perform better on goals.
their current role.
- Career Coaching refers to T – Time framed - to be completed within an agreed
assisting employees in identifying and preparing for timescale.
their desired careers or roles.
5. Subjective performance criteria are those aspects of
the job that cannot be easily seen and are often
behavioral in nature (Riggio, 2003)
- Competencies can be considered as subjective
performance criteria as these represent knowledge, skills, and
behaviors. (Armstrong, 2006).
Example: A sale representative can be relationship building
skills.
6. In using whether targets or competencies (or both), it
is important that these performance measures are:
• related to the strategic goals and measures that are
organizationally significant and drive business
performance;
• linked to the job roles and objectives of the
individuals concerned;
• focused on outputs, outcomes, inputs, and
behaviors that can be clearly defined and for which
evidence can be available;
• verifiable, that is, information that will confirm the
extent to which expectations have been met is
available;
• precise as possible in accordance with the purpose
of the measurement and the availability of date;
• a sound basis for feedback and action; and
• comprehensive, covering all the key aspects of
performance.
7. Sources of performance ratings:
o Peer rating
o Self- appraisal
o Subordinate rating
o Customer rating
Methods of Rating Performance
Organizations have utilized various methods to assess
performance. In general, these methods can be grouped
into:
Comparative methods – seek to compare and differentiate
various individuals’ performance
- Rankings – ranking of individuals from best to
worst performers. May not be effective if
performance is not evaluated objectively.
- Paired comparisons – an individual’s performance
is compared with another individual’s performance.
May be unwieldy when the number of individuals
becomes larger.
- Forced distribution – assignment of workers to
predetermined categories, for example, from poor
to outstanding performers, and organizing them
along the normal curve. Problematic if there are
many people who are either poor or outstanding
performers and their performance is forced fit in a
normal distribution.
Individual methods – used in evaluating individual
performance.
- Graphic Rating Scales – use of a predetermined
rating scale to rate performance on certain aspects
of the job. Ideally, the rating scale should match the
performance aspect being rated and the points in
the rating scale should have descriptions.
- Checklists – rater uses a list of statements to
assess an individual, with each statement
corresponding to a numerical value. The rater
would then choose statements that would describe
the individual. The final rating would be the sum of
all the numerical values corresponding to the
statements chosen by the rater.
- Narratives – written accounts of an individual’s
performance of listing of the individual’s strengths
and weaknesses. Using narratives gives the
individual the freedom to describe their own
performance; however, the drawback would be that
some entries may not just reflect performance and
that the narrative may not be useful for work that
needs quantification.
Problems and Pitfalls in Performance Appraisals
- Getting performance data from several sources and
choosing a method to rate performance are efforts to make
the rating process more objective and less biased. Despite
these efforts, the raters’ judgment about performance may still
be subject to distortions. These pitfalls include:
- Leniency/Severity errors – occurs when the rater
has the tendency to either give high or low appraisals
regardless of actual performance.
- Central tendency bias – occurs when the rater
has the tendency to give ratings that are in the middle of the
scale.
- Halo effects – occurs when a rater gives a
positive appraisal based on only one positive characteristic or
action, and ignoring areas where the individual did not do too
well.
- Recency effects – occurs when the rating is
mostly influenced by the most recent performance of the
individual, and not considering earlier performance.
- Personal biases – occurs when other factors,
such as age, gender, race, and physical attributes influence
the rating.
Roles in Performance Management
Top Executives
- Communicating the key role of performance
management in the organization
- Linking organizational goals with department/unit
goals clearly
- Setting clear performance expectations for the
organization
- Communicating progress in the achievements of
organizational goals
- Role modelling of key values and competencies
Line Managers
- Setting performance goals and expectations with
individual employees
- Monitoring performance
- Giving feedback
- Looking out for employee development
- Linking performance with rewards
Employees
- Reviewing for performance meetings
- Participating in setting performance goals
- Evaluating peers if the performance management
system warrants it.
Human Resources
- Facilitating the competency building of line
managers and employees in performance
management.
- Evaluating the effectiveness of the performance
management system.
Success Factors in Implementing a Performance
Management System
- Gaining commitment of line managers and employees by
clearly communicating the goals and benefits of the system.
- Involving line managers and employees in the development
of the system.
- Equipping line managers with the competencies in goal-
setting, giving feedback, and coaching so that they can
implement the system.
- Ensuring that the system is simple enough to implement by
using technology and making the forms easy to understand
and use.
- Institutionalizing a culture wherein performance
management is not just considered an annual activity, but a
cycle that should be performed all throughout the performance
period.
Implications
- Organization instills a performance-based culture, where
everyone in the organization see the alignment of personal
goals to organization and unit goals.
- Top management, supervisors, and staff are oriented and
skilled at doing performance management.
- Organization members should see performance
management as a continuous activity of setting goals,
monitoring performance, and giving feedback throughout the
performance period.