PERFORMANCE AND

COMPENSATION
MANAGEMENT
Summer 2016 MBA Students

PERFORMANCE MANAGEMENT
FUNDAMENTALS
Learning Objective:

Understanding the nature, aims, characteristics, concerns

and guiding principles of performance management.

In addition, the differences between performance appraisal

and performance management will be examined

the views of different practitioners on performance

management will be shared

PERFORMANCE MANAGEMENT
FUNDAMENTALS
PERFORMANCE MANAGEMENT DEFINED:

Performance Management is a continuous process of identifying, measuring,

and developing the performance of individuals and teams and aligning
performance with the strategic goals of the organization.

Performance management is a systematic process for improving

organizational performance by developing the performance of individuals and
teams.

It is a means of getting better results from the organization, teams and

individuals by understanding and managing performance within an agreed
framework of planned goals, standards and competence requirements.

Processes exist for establishing shared understanding about what is to be

achieved, and for managing and developing people in a way that increases
the probability that it will be achieved in the short and longer term.

PERFORMANCE MANAGEMENT
FUNDAMENTALS
OTHER DEFINISTIONS OF PERFORMANCE MANAGEMENT:

Performance management is 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 (Lockett).

Performance management is managing the business (Mohrman)

Performance management is the process of directing and supporting

employees to work as effectively and efficiently as possible in line with the
needs of the organization (Walters).

Performance management is a strategic and integrated approach to

delivering sustained success to the organizations by improving the
performance of the people who work in them and by developing the
capabilities of teams and individual contributors (Armstrong and Baron)

PERFORMANCE MANAGEMENT
FUNDAMENTALS
AIMS AND OBJECTIVES OF PERFORMANCE MANAGEMENT:

The overall aim of performance management is to establish a high-performance culture in

which individuals and teams take responsibility for the continuous improvement of business
processes and for their own skills and contributions within a framework provided by effective
leadership.

Its key purpose is to focus people on doing the right things by achieving goal clarity.

Specifically, performance management is about aligning individual objectives to organizational

objectives and ensuring that individuals uphold corporate core values.

It provides for expectations to be defined and agreed in terms of role responsibilities and
accountabilities (expected to do), skills (expected to have) and behaviors (expected to be).

The aim is to develop the capacity of people to meet and exceed expectations and to achieve
their full potential to the benefit of themselves and the organization.

Importantly, performance management is concerned with ensuring that the support and
guidance people need to develop and improve are readily available.

PERFORMANCE MANAGEMENT
FUNDAMENTALS
AIMS AND OBJECTIVES OF PERFORMANCE
MANAGEMENT BY HERMAN AGUINIS:

Strategic Purpose
Administrative Purpose
Informational Purpose
Developmental Purpose
Organizational Maintenance Purpose
Documentational Purpose

PERFORMANCE MANAGEMENT
FUNDAMENTALS
AIMS AND OBJECTIVES OF PERFORMANCE
MANAGEMENT BY HERMAN AGUINIS:
Strategic Purpose

To help top management achieve strategic business

objectives
By linking the organizations goals with individual goals, the
PMS reinforces behaviors consistent with the attainment of
organization goals.
Through onboarding process, PMS ensures new employees
transition from being organizational outsider to
organizational insider through reinforcement of expected
behaviors in line with organizational culture and its value

PERFORMANCE MANAGEMENT
FUNDAMENTALS
AIMS AND OBJECTIVES OF PERFORMANCE
MANAGEMENT BY HERMAN AGUINIS:
Administrative Purpose

To furnish valid and useful information for making

administrative decisions about employees including
salary adjustments, promotions, employee retention or
termination, recognition of superior individual
performance, identification of poor performers, layoffs
and merit increases
Therefore, we can say that the implementation of
reward systems based on information provided by PMS
falls within the administrative purpose.

PERFORMANCE MANAGEMENT
FUNDAMENTALS
AIMS AND OBJECTIVES OF PERFORMANCE
MANAGEMENT BY HERMAN AGUINIS:
Informational Purpose

As an important communication device, PMS informs

employees about how they are doing and specific
areas they may need to improve
Related to the strategic purpose, PMS is a medium to
inform employees about the organizations and the
supervisors expectations and about aspects of work
which the supervisor and the company believe are
most important

PERFORMANCE MANAGEMENT
FUNDAMENTALS
AIMS AND OBJECTIVES OF PERFORMANCE
MANAGEMENT BY HERMAN AGUINIS:
Developmental Purpose

Feedback is an important component of a well-implemented PMS,

that is, identification and communication of an employees
strengths and weaknesses, as well as the cause of performance
deficiencies
Managers can use feedback to coach employees and improve
performance on an ongoing basis
Another benefit of providing feedback is that employees receive
information about themselves that can help them individualize
their career paths
Thus the developmental purpose refers to both short-term and
long-term aspects of development

PERFORMANCE MANAGEMENT
FUNDAMENTALS
AIMS AND OBJECTIVES OF PERFORMANCE MANAGEMENT BY
HERMAN AGUINIS:
Organizational Maintenance Purpose

PMS provides information to be used in workforce planning

Workforce planning-to allocate human resources where they can do the most good
An important component of any workforce planning is the talent inventory, which is
information on current resources like:
Skills;
Abilities;
Promotional potential;
Assignment histories; etc.
PMS should ideally be the primary means through which accurate talent inventories
can be assembled
Other organizational maintenance purposes of PMS include assessing future training
needs, evaluating performance achievements at the organizational level and
evaluating the effectiveness of HR interventions, example: whether employees
perform at higher levels participating in a training program.

PERFORMANCE MANAGEMENT
FUNDAMENTALS
AIMS AND OBJECTIVES OF
PERFORMANCE MANAGEMENT BY
HERMAN AGUINIS:
Documentational Purpose

Well documented data available in PMS can be

used for many analytical purposes, like to validate
newly proposed instruments, test development,
other administrative decisions
The information documented in PMS can help the
organization in case of litigation

PERFORMANCE MANAGEMENT
FUNDAMENTALS
AIMS AND OBJECTIVES OF PERFORMANCE MANAGEMENT QUOTES FROM RENOWNED
ORGANZATIONS:
The following are the aims of performance management as expressed by a variety of organizations

Empowering, motivating and rewarding employees to do their best (Armstrong World Industries).

Focusing employees tasks on the right things and doing them right. Aligning everyones individual
goals to the goals of the organization (Eli Lilly & Co).

Proactively managing and resourcing performance against agreed accountabilities and objectives
(ICI Paints).

The alignment of personal/individual objectives with team, department/divisional and corporate

plans. The presentation of objectives with clearly defined goals/targets using measures, both soft
and numeric. The monitoring of performance and tasking of continuous action as required
(Macmillan Cancer Relief).

All individuals being clear about what they need to achieve and expected standards, and how that
contributes to the overall success of the Organization; receiving regular, fair, accurate feedback
and coaching to stretch and motivate them to achieve their best (Marks & Spencer Financial
Services).

The process and behaviors by which managers manage the performance of their people to deliver a
high-achieving organization (Standard Chartered Bank).

Maximizing the potential of individuals and teams to benefit themselves and the organization,

PERFORMANCE MANAGEMENT
FUNDAMENTALS
ADVANTAGES OF EFFECTIVE PERFROMANCE MANAGEMENT
Motivation to perform is increased Feedback and recognition increases the motivation for
future performance
Self-esteem is increased Employee feels valued
Managers gain insight about subordinates
The definition of job and criteria are clarified Better understanding of the expected behaviors
and results
Self-insight and development are enhanced
Administrative actions are more fair and appropriate
Organizational Goals are made clear
Employees become more competent Through IDPs resulting from PMS
Employee misconduct is minimized Employee past records as basis
There is better protection from lawsuits Arbitrary performance evaluations result in exposure
to litigations
There is better and more timely differentiation between good and poor performers Enabling
timely actions on good and poor performers
Supervisors views of performance are communicated more clearly
Organizational change is facilitated E.g. New Competencies for new culture (Read from book)
Motivation, Commitment, and Intentions to stay in the organization are enhanced
Voice behavior is encouraged As a result of performance review meetings
Employee engagement is enhanced Employees feel involved, compassionate, and empowered
which results in innovative and citizen ship behaviors

PERFORMANCE MANAGEMENT
FUNDAMENTALS
DISADVANTAGES OF A POORLY IMPLEMENTED PM SYSTEM
Increased turnover- Physically quit or withdraw psychologically
Use of misleading information- Absence of a standardized PMS, potential
for fabricated information for employees performance
Lowered self esteem- Inappropriate and inaccurate feedback can result in
employee resentment and lowered self-esteem
Wasted time and money- When PMS are poorly designed and
implemented
Damaged relationship- Due to deficient system, often permanently
Decreased motivation to perform-When performance does not translate
into tangible (pay increase) or intangible (recognition) rewards
Employee burnout and job dissatisfaction
Increased risk of litigation
Unjustified demands on Managers and employees resources- Due to
poorly implemented PMS
Varying and unfair standards and ratings
Emerging biases- Biases and relationships are likely to replace standards
Unclear ratings system

PERFORMANCE MANAGEMENT
FUNDAMENTALS
CHARACTERISTICS OF AN IDEAL PERFORMANCE MANAGEMENT SYSTEM
Strategic Congruence

Context congruence

Good, easy-to-use, instead of too expensive, time-consuming and convoluted

The benefit of using the system (e.g., increased performance and job satisfaction) must be seen as
outweighing the costs (e.g. time, effort, expense)

Meaningfulness Can be in several ways:

System should be thorough on 4 dimensions: All employees should be evaluated, all major job
responsibilities should be evaluated, evaluation should be done for the entire review period, finally,
feedback should be given for positive performance and need for improvement

Practicality

Cultural context or local specificities of the region or country,

example 360 degree feedback may not be valid everywhere

Thoroughness

PMS should be congruent with unit and organizations strategy

Standards and evaluations must be relevant

Assessment must emphasize those functions that are under the control of employee
Evaluation must take place at regular intervals and appropriate moments
Continuing skill development of evaluators
PMS results should be used for important administrative decisions

Specificity
Identification of effective and ineffective performance

PERFORMANCE MANAGEMENT
FUNDAMENTALS
CHARACTERISTICS OF AN IDEAL
PERFORMANCE MANAGEMENT SYSTEM
Reliability
Validity
Acceptability and fairness
Inclusiveness
Openness
Correct-ability
Standardization
Ethicality

PERFORMANCE MANAGEMENT
FUNDAMENTALS
PERFORMANCE MANAGEMENT AROUND THE WORLD

Mexico
UK
France
Germany
Turkey
India
China
South Korea
Japan
Australia

PERFORMANCE MANAGEMENT PROCESS

CHAPTER # 2 Herman Aguinis
Learning Objectives
Understand that PM is an ongoing process that includes the interrelated
components of 6Ps
Conduct a job analysis to determine the job duties, knowledge, skills and
abilities (KSAs), and working conditions of a particular job.
Write a job description that incorporates the KSAs of the job, and the
information on the organization and unit mission and strategic goals.
Understand that the poor implementation of any of the PM process components
has a negative impact on the system as a whole
Understand that a dysfunctional or disrupted link between any two of the PM
process components has a negative impact on the system as a whole
Understand the important prerequisites needed before a performance
management system is implemented, including knowledge of the organizations
mission and strategic goals and knowledge of the job in question

Cont

PERFORMANCE MANAGEMENT PROCESS

CHAPTER # 2 Herman Aguinis
Learning Objectives
Distinguish results from behaviors, and understand the need to
consider both in PMS
Describe the employees role in performance execution, and
distinguish areas over which the employee has primary responsibility
from areas over which the manager has primary responsibility
Understand the employees and the managers responsibility in the
performance assessment phase
Understand that the appraisal meeting involves the past, the present
and the future
Understand the similarities between performance planning and
performance renewal and recontracting
Create result-oriented and behavior-oriented performance standard

6 Key Components in the Performance

Management Process
Prerequisit
es

Performan
ce
Assessme
nt

Performan
ce
Planning

Performan
ce Review

Performan
ce
Execution

Performan
ce
Renewal
and
Recontract
ing

6 Key Components in the Performance

Management Process
1. PREREQUISITES
There are 2 important prerequisites that are required
before a PM system is implemented:

Knowledge of the organizations mission and strategic goals (As

a result of strategic planning taking directional insights from
mission and vision statements)
Knowledge of the job at question

Importance of strategic planning in PMS

What is strategic planning?

Strategic planning allows an organization to:
Clearly

define its purpose or reason for existing

Where it wants to be in the future
The goal it wants to achieve, and
The strategies it will use to attain these goals

6 Key Components in the Performance

Management Process
PREREQUISITES (CONT)
Linking Strategic Planning and PMS
Once the goals for the entire organization have been
established, similar goals cascade downwards, with
departments setting objectives to support the
organizations overall mission and objectives

The cascading continues downwards until each employee has a

set of goals compatible with those of the organization
Unfortunately, many organizational units are not in tune with
the organizations strategic direction, which reflects inefficiency
and ineffectiveness of performance management system in the
organization
Recall that an important objective of any PMS is to enhance
each employees contribution to the goals of the organization

6 Key Components in the Performance

Management Process
PREREQUISITES (CONT)
Understanding/knowledge of the job in question
How it is done?

This is done through job analysis

What is job analysis?

Job analysis is a process of determining the key component of a particular job,

including:
Activities
Tasks
Products
Processes,

and

Services

A job analysis is a fundamental prerequisite of PMS

Without a job analysis it is difficult to understand what constitutes the required

duties for a particular job
If we dont know what an employee is supposed to do on the job, we wont know
what needs to be evaluated and how to do so, that is where Job Analysis plays its
role

6 Key Components in the Performance

Management Process
PREREQUISITES (CONT)
Understanding the Job Analysis
As a result of job analysis, we obtain information regarding the tasks carried out
through a particular job and the knowledge, skills, abilities (KSAs) requirements of a
particular job.

Knowledge includes having the information needed to perform the work.

Skills refer to required attributes that are usually acquired by having done the work in the
past.

Ability refers to having the physical, emotional, intellectual, and psychological aptitude to
perform the work.

The information obtained from a Job Analysis is used for writing a Job Description.

Accurate Job Descriptions resulting from a good Job Analysis process is a

key Prerequisite for any effective Performance Management System,
because they provide the criteria (i.e. Yardstick) that will be used in
measuring performance of the job holder. Such criteria may concern
behaviors (i.e. how part) or Results (i.e. what part).

6 Key Components in the Performance

Management Process
2. PERFORMANCE PLANNING (Understanding the
expectations and rules of the game)
Employees should have a thorough knowledge of the
performance management system (Rules of the game).

At the beginning of each performance cycle, a supervisor

and the employee meet to discuss and agree upon what
needs to be done and how it should be done (Expectation
Management and organizational support)
The performance planning discussion includes a
consideration of:
The expected Results and Behaviors (expectation
management), as well as a:
Development plan (organizational support)

6 Key Components in the Performance

Management Process
2. PERFORMANCE PLANNING (Understanding the expectations and rules of the game)
Results:

Behaviors:

What needs to be done or the outcomes an employee must produce

It incudes key accountabilities, or broad areas of a job for which the employee is responsible for producing the
results, as per JD
Expected results also include specific objectives that the employee will achieve as part of each accountability
Objectives are statements of important and measurable outcomes
Discussing results also means discussing performance standards
A performers standard is a yard stick used to evaluate how well employees have achieved each objective
Performance standards (KPIs) provide information about acceptable and unacceptable performance (E.g.,
quality, quantity, cost, and time)
An exclusive emphasis on results only can give a skewed or incomplete picture of employee performance.
How?
For example, to have a balanced assessment of a salesperson, apart from the results in terms of sales figures,
should also include behavioral criteria such as communications skills and product knowledge
A consideration of behaviors includes discussing competencies
Competencies are measurable clusters of KSAs that are critical in determining how results will
be achieved
Examples of competencies are: customer service, written or oral communication, creative thinking,
dependability etc.

Development plan

An important step before the review cycle begins is for the supervisor and employee to agree on a
development plan.
At a minimum, this plan should include identifying areas that need improvement and setting goals to be
achieved in this area.

6 Key Components in the Performance

Management Process
3. PERFORMANCE EXECUTION
In the performance execution phase, the
employee strives to produce the results and
displays the behaviors agreed upon earlier
as well as to work on developmental needs
The employee has primary responsibility
and ownership of this process, the manager
has the role of enabler of this process
At the performance execution phase, the
presence of the following factors must be
ensured by both Employee and Manager:

6 Key Components in the Performance

Management Process
3. PERFORMANCE EXECUTION

Factors to be ensured by Employee:

Commitment

to goal achievement (one way to enhance commitment is

to allow the employee to be an active participant in the process of
setting the goals)
Ongoing performance feedback and coaching

Employee should not wait until the review cycle is over to solicit performance
feedback
Employee should not wait until a serious problem develops, to ask for coaching
Employee needs to take proactive role in soliciting performance feedback and
coaching from the supervisor

Communication

Supervisors are busy with multiple obligations, the burden is on the employee to
communicate regularly and openly with the supervisor

Collecting

and sharing performance data

Employee should provide the supervisor with regular updates on progress

towards goals achievement, in terms of both, behaviors and results

Preparing

with supervisor

for performance reviews (Self-Appraisals)

The employee should engage in an ongoing and realistic self-appraisal so that

immediate corrective actions can be taken if necessary

6 Key Components in the Performance

Management Process
3. PERFORMANCE EXECUTION

Factors to be ensured by the Manager:

Monitoring

and managing the performance of team members is a key

competency of any good manager
Supervisors have primary responsibility over the following issues:

Observation and documentation:

Supervisors must observe and document performance on daily basis, as it is
important to keep track of examples of both good and poor performers
Updates:
It is important to update and revise initially agreed objectives, standards and key
accountabilities for both Results and Competencies according to the changing goals
of the organization throughout the year
Feedback:
Feedback on progression towards goals and coaching to improve performance
should be provide on a regular basis throughout the performance cycle
Resources:
To ensure that the employee has the necessary supplies and funding to perform the
job properly
Provide employees with resource and opportunities to participate in developmental
activities (Training, special assignments etc.)
Reinforcement:
In addition to observation and communication, supervisors must reinforce effective
behavior and progress toward the goal and also take

6 Key Components in the Performance

Management Process
4. PERFORMANCE ASSESSMENT
The assessment phase essentially comprises of the effort to be made both by the
employee and the manager for collecting, accumulating performance information to
assess/evaluate extent to which the desired results have been achieved and the desired
behaviors have been displayed, before actually going into a formal one-on-one appraisal
meeting.
Many sources can be used to collect performance information. E.g. Organizational
Performance records, passed e-mails, records of feedback sessions, feedback from internal
customers, peers and subordinates, relevant survey results etc.
The assessment process also includes first-cut self-appraisal by the employee by filling out
his/her own appraisal form and also by the supervisor (filling out employees appraisal
form) independently and individually before the performance review through a formal
appraisal meeting or discussion.
Benefits of Performance Assessment:

When both the employee and the supervisor are active participants in the valuation process, there
is a greater likelihood that the information will be used productively in the future
Inclusion of self-ratings helps emphasize possible discrepancies between self-views and the views
that important others, i.e. supervisors and internal/external customers, have of our behavior
The discrepancy between these two views actually triggers developmental efforts, particularly when
feedback from the others is very different than the employees self-evaluation
Self-appraisals can reduce an employees defensiveness during an appraisal meeting and increase
the employees satisfaction with the performance management system
It also enhances the perception and reality of fairness and accuracy, resulting in acceptance of the
system and ultimately in a less aggrieved, more productive and engaged workforce.

6 Key Components in the Performance

Management Process
5. PERFORMANCE REVIEW
The performance review stage involves the meeting between the employee and the manager
to review their assessments, this meeting is usually called the appraisal meeting or discussion
The appraisal meeting is often regarded as the Achilles heel of the entire process, because,
many managers are uncomfortable providing performance feedback, particularly when
performance is deficient
This high level of discomfort, which often translates into anxiety and the avoidance of the
appraisal interview, can be mitigated through training those responsible for providing feedback
Apart from the review of the past performance and behaviors, a good appraisal meeting should
also include a discussion of the employees developmental progress, as well as plans for the
future goals and developmental plans for the next cycle
In addition, a good appraisal meeting includes information on what new compensation, if any,
the employee may be receiving as a result of his performance.
In short, the appraisal discussion focuses on the past (what has been done and how), the
present (what compensation is received or denied as a result), and the future (goals to be
attained before upcoming review session).
Importance of Appraisal Meeting

Appraisal meeting is important because it provides a formal setting in which the employee receives
feedback on his or her performance
Providing feedback in an effective manner leads not only to performance improvement but also to
employee satisfaction with the system
Avoiding giving negative feedback is very dangerous because it conveys the message that mediocrity is
acceptable and damages the morale of the top performers who are about four times as productive as
the poor performers

6 Key Components in the Performance

Management Process
6. PERFORMANCE RENEWAL AND
RECONTRACTING
The final stage in the performance management
process is renewal and recontracting which
essentially is identical to the performance
planning component
The main difference is that the renewal and
recontracting stage uses the insights and
information gained from the other phases.
For example, some of the goals may have been
set unrealistically high given an unexpected
economic downturn; this would lead to setting less
ambitious goals for the upcoming review period

6 Key Components in the Performance

Management Process
SUMMARIZING IMPORTANT INSIGHTS ON THE WHOLE
PERFORMANCE MANAGEMENT PROCESS
The performance management process includes a cycle which
starts with prerequisites and ends with performance renewal and
recontracting. The cycle is not over after the renewal and
recontracting stage. In fact, the process starts all over again:
there needs to be a discussion of prerequisites, including the
organizations mission and strategic goals and the jobs KSAs.
Because markets change, customers preferences and needs
change, and products change, there is a need to continuously
monitor the prerequisites so that performance planning and all
the subsequent stages are consistent with the organizations
strategic objectives. Recall that, in the end, one of the main goals
of any PMS is to promote the achievement of organization-wide
goals. Obviously, if managers and employees are not aware of
the strategic goals, it is unlikely that the performance
management system will be instrumental in accomplishing the
strategic goals.

PERFORMANCE
MANAGEMENT AND
STRATEGIC PLANNING
LINKING THE TWO

PERFORMANCE MANAGEMENT AND

STRATEGIC PLANNING
CHAPTER # 3 Herman Aguinis
Learning Objectives
Define strategic planning, its overall goal and its specific
purposes.
Why the usefulness of a PMS relies to a large degree with
strategic plans.
Define the elements of strategic planning, i.e.,
environmental analysis, organizational mission and vision.
Understand the relationship between mission, vision,
goals, and strategy.
Understand how a strategic plan determines various
choices regarding PMS design

PERFORMANCE MANAGEMENT AND

STRATEGIC PLANNING

DEFINITION AND PURPOSES OF STRATEGIC PLANNING

Definition:
Strategic planning is a process that involves describing the
organizations destination, assessing barriers that stand in the
way of that destination and selecting approaches for moving
forward.

The main goal of SP is to allocate resources in a way that

provides organizations with a competitive advantage

SP results in a strategic plan which serves as a blueprint that

defines how the organization will allocate its resources in pursuit
of its goals. A strategic plan also provides critical information to
be used in the PMS

PERFORMANCE MANAGEMENT AND

STRATEGIC PLANNING

DEFINITION AND PURPOSES OF STRATEGIC PLANNING

Purposes:
SP allows organizations to define their identities, i.e., providing organizations with a
clearer sense of who they are and what their purposes are.
SP helps organizations prepare for the future because it clarifies the desired
destination (knowing where the organization wants to go is a key first step in
planning how to get there)
SP allows organizations to analyze their environment and by doing so SP enhances
their ability to adapt to environmental changes and even anticipate future changes
SP provides organizations with focus and allows them to allocate resources to what
matters most, in order to stimulate growth and improved profitability
SP can produce a culture of cooperation within the organization given that a
common set of goals is created, such a culture gives a competitive edge t the
organization
SP is a corporate eye-opener as it generates new options and opportunities to be
considered
SP can be a powerful tool to guide employees daily activities because it identifies
the behaviors and results that really matter

PERFORMANCE MANAGEMENT AND

STRATEGIC PLANNING

SIGNIFICANCE OF LINKING PERFORMANCE MANAGEMENT (PM) TO THE

STRATEGIC PLAN
The mere presence of a strategic plan does not guarantee that the information
produced by the strategic plan will be used effectively as part of the PMS
In fact, countless organizations spend thousands of hours creating strategic plans
that lead to NO tangible actions
Similarly, many organizations spend too much time and effort crafting their
mission and vision statements without undertaking any concrete follow-up
actions
The process then ends up being a huge waste of time, a source of frustration and
long-lasting cynicism
A recent study in India involving 350 individuals working in various sectors,
indicated that although there was a good strategic planning process in place in
most firms, there was no clear relationship between firm-level and individual-level
goals
Thus, to ensure that strategy cascades down the organization and leads to
concrete actions, a conscious effort must be made to link the strategic plan with
individual performance

UNDERSTANDING THE LINK AMONG ORGANIZATION &

UNIT STRATEGIC PLANS AND PM THROUGH
INDIVIDUAL AND TEAM PERFORMANCE
Organizations
Strategic Plan
Mission
Vision
Goals
Strategies

Units Strategic
Plan
Mission
Vision
Goals
Strategies

Job

description
Tasks
Knowledge
Skills
Abilities

Individual and Team

Performance
Results
Behaviors
Development
al Plan

PERFORMANCE MANAGEMENT AND

STRATEGIC PLANNING

STRATEGIC PLANNING
There are several steps that must be considered in creation of a
successful strategic plan. They include:
The conduct of an environmental analysis, i.e. the identification of internal
and external perimeters of the environment in which the organization
operates like:

1.

I.
II.

2.

3.

4.

5.

External - Economic, political, legal, social, technological, competitors, customers,

suppliers
Internal Organizational structure, Organizational culture, Politics, Processes, Size,
Growth rate etc.

The creation of an organizational mission, i.e. statement of what the

organization is all about
The creation of an organizational vision, i.e. statement of where the
organization intends to be in the long term, say, about
Setting goals, i.e. what the organization intends to do in the short term,
say, one to three years
The creation of strategies that will allow the organization to fulfill its
mission and vision and achieve its goals, i.e. description of game plan or
how-to procedures to reach the stated objectives

PERFORMANCE MANAGEMENT AND

STRATEGIC PLANNING

MISSION
After the environmental analysis has been completed, the members
of the organization must determine who they are and what they do.
This information will then be incorporated into the organizations
mission statement.
Definition of Mission Statement:
The mission statement summarizes the organizations most
important reasons for its existence.
Criteria of a good mission statements
A good mission statements provide answers to the following
questions:

Why does the organization exist?

What is the scope of the organizations activities?
Who are the customers served?
What are the products or services offered?

PERFORMANCE MANAGEMENT AND

STRATEGIC PLANNING

EXAMPLE OF MISSION STATEMENT OF COCA-COLA COMPANY

Consider the mission statement for the Coca-Cola Company:
Everything we do is inspired by our enduring mission:

This mission statement provides some information regarding the 4 questions noted
earlier. Lets see how:

To Refresh the Worldin body, mind, and spirit

To Inspire Moments of Optimismthrough our brands and actions
To Create Value and Make a Differenceeverywhere we engage

we have information why the company exists (i.e., to refresh the world)
the scope of the organizations activities (i.e. to create a value and make a difference).
The mission statement does not, however, include information on who are the customers
served and what are the products and services offered.
Also, there is no information about specific products (e.g. Sprite, Minute Maid, Powerade, and
Dasani).

Critical analysis of Coca-Colas mission statement

More specific and detailed information is needed if Coca-Colas mission statement is
to be used by its various units to create their own mission statements.
More detailed information is also needed if both the organization and unit mission
statements will be used as input for individual job descriptions and for managing
individual and team performance.

PERFORMANCE MANAGEMENT AND

STRATEGIC PLANNING

COMPONENTS OF A COMPREHENSIVE MISSION STATEMENT:

In general, thorough mission statements include the following components:
1.
2.
3.
4.
5.

Basic product or service to be offered (does what?)

Primary markets or customer groups to be served (to whom?)
Unique benefits and advantages of products or services (with what benefits?)
Technology to be used in production or delivery
Fundamental concern for survival through growth and profitability

Mission statements also typically include information on the organizations

values and beliefs, including:
6.
7.
8.

Managerial philosophy of the organization

Public image sought by the organization
Self-concept of business adopted by employees and stockholders

In sum, a mission statement defines why the organization exists, the scope
of its activities, the customers served, and the products and services offered.

PERFORMANCE MANAGEMENT AND

STRATEGIC PLANNING

VISION
An organizations vision is a statement of future aspirations. In
other words, the vision statement includes a description of what
the organization would like to become in the future (about 10
years in the future)
Characteristics of a good vision statement

Brief
Verifiable
Bound by a timeline
Current
Focused
Understandable
Inspiring
A stretch

A vision statement emphasizes the future, whereas mission

statement emphasizes the present.

PERFORMANCE MANAGEMENT AND

STRATEGIC PLANNING

GOALS
The purpose of setting goals is to formalize statements about
what the organization hops to achieve in the medium to longrange period (i.e., within the next three years or so)
Goals provide more specific information regarding how the
mission will be implemented
Goals can also be a source of motivation and provide
employees with a more tangible target for which to strive
Goals also provide a god basis for making decisions by keeping
desired outcomes in mind
Finally, goals provide the basis for Performance Measurement
because they allow for a comparison of what needs to be
achieved versus what each unit, group, and individual is
achieving
(Read Goals Example of Harley-Davidson Inc. from the book)

PERFORMANCE MANAGEMENT AND

STRATEGIC PLANNING

STRATEGIES
Strategies are the descriptions of game
plans or how-to procedures to reach the
stated goals/objectives
The strategies address issues of growth,
survival, turnaround, stability, innovation
and leadership etc.
Developing strategic plans at the unit level

Organizations strategic plans has direct

impact on the units strategic plans

PERFORMANCE MANAGEMENT AND

STRATEGIC PLANNING

JOB DESCRIPTIONS
Job descriptions need to be congruent with the
organizations mission, vision, goals, and strategies
JD provides information about the various tasks
performed together with a description of some of
the KSAs required for the position
The tasks and KSAs included in individual JD must
be congruent with the strategic plans
JDs that are detached from strategic priorities will
lead to performance evaluations focused on
behaviors and results that are not central to an
organizations success

PERFORMANCE MANAGEMENT AND

STRATEGIC PLANNING

INDIVIDUAL AND TEAM

PERFORMANCE
This topic specifically deals with
individual and group performance
management, it will be covered along
with next main topic i.e. Defining
Performance and Choosing a
measurement approach

PERFORMANCE MANAGEMENT AND

STRATEGIC PLANNING

CASE STUDY 1
Evaluating mission and vision
statements at PepsiCo

Chapter 4 Herman Aguinis

DEFININING
PERFORMANCE AND
CHOOSING A
MEASUREMENT APPROACH

PDEFINING PERFROMANCE AND CHOOSING

A MEASUREMENT APPROACH

LEARNING OBJECTIVES
Define what performance is and what it
is not
Understand the evaluative and
multidimensional nature of performance
.(other points)

DEFINING PERFROMANCE AND CHOOSING

A MEASUREMENT APPROACH

DEFINING PERFORMANCE
PMSs usually include: measure of both
Behaviors (what an employee does) and
Results (the outcomes of an employees
behavior)
The definition of Performance, however, does
not include the result of an employees
behavior, but only the behaviors themselves
So, Performance is about behavior, or what
employees do, not about what about employees
produce, or the outcome of their work

DEFINING PERFROMANCE AND CHOOSING

A MEASUREMENT APPROACH

CHARACTERISTICS OF BEHAVIORS WHEN LABELED AS

PERFORMANCE
There are 2 characteristics of behavior when labeled as
Performance:

First, they are Evaluative

Second, Performance is Multidimensional

Evaluative means that such behaviors can be judged as

negative, neutral, or positive for individual and
organizational effectiveness, in other words, it can be
evaluated that whether these behaviors contribute towards
accomplishment of individual, unit, and organizational goals
Multidimensional means that there are many different kinds
of behaviors that have the capacity to advance (or hinder)
organizational goals

DEFINING PERFROMANCE AND CHOOSING

A MEASUREMENT APPROACH

AN EXAMPLE OF EVALUATIVE AND MULTIDIMESIONAL NATURE OF

PERFORMANCE WHEN IN THE CONTEXT OF BEHAVIORS
Consider a set of behaviors that can be grouped under the general label
contribution to effectiveness of others in the work unit. This set of
behaviors can be defined as follows:

Works with others within and outside the unit in a manner that improves their
effectiveness: shares information and resources: develops effective working
relationships: builds consensus: and constructively manages conflict.

Evaluative nature the above behavior can be assessed by using a scale

(1-5) including anchors, demonstrating various levels of competence, like
outstanding, significantly exceeds standards, fully meets standards,
does not fully meet standards, and unacceptable.
Multidimensional nature because there are several behaviors when
combined together affect the overall perceived contribution that an
employee makes to the effectiveness of others in the work unit
The gist of the above example is that we would be missing important
information if we only consider shares information and resources and do
not consider the additional behaviors listed above

DEFINING PERFROMANCE AND CHOOSING

A MEASUREMENT APPROACH

IF PERFORMANCE IS ALL ABOUT

BEHAVIORS, WHY, THEN, PMSs ALSO
INCLUDE RESULTS/MEASURES OF RESULTS
FOR EMPLOYEE EVALUATIONS

Because not all behaviors are observable or

measurable, PMSs often include measures of
results or consequences that we infer as the
direct result of employees behaviors.

(Read Example for explanation of above point on page number 88, last
paragraph)

DEFINING PERFROMANCE AND CHOOSING

A MEASUREMENT APPROACH

DETERMINANTS OF PERFORMANCE
What factors cause an employee to perform at a certain level? Why do certain individuals
perform better than others?
A combination of three factors allow some people to perform at higher levels than others:

Declarative Knowledge is information about facts and things including information

regarding a given tasks:

requirements,
principles,
and goals

Procedural Knowledge is a combination of what to do and how to do it and includes:

Declarative knowledge
Procedural knowledge
Motivation

cognitive,
physical,
perceptual,
motor, and
interpersonal skills

Motivation It involves three types of choice behaviors:

Choice to expend effort (E.g., I will go to work today)

Choice of level of effort (E.g., I will put in my best effort at work versus I will not try very hard)
Choice to persist in the expenditure of that level of effort (E.g., I will give up after a little while
versus I will persist no matter what)

DEFINING PERFROMANCE AND CHOOSING

A MEASUREMENT APPROACH

SIGNIFICANCE OF DETERMINANT FACTORS OF

PERFORMANCE
All three determinants of performance must be
present for performance to reach high levels. In
other words, the three determinants have a
multiplicative relationship such that

Performance= Declarative Knowledge X Procedural

Knowledge X Motivation
If any of the determinants has a value of 0, then performance
also has a value of 0

DEFINING PERFROMANCE AND CHOOSING

A MEASUREMENT APPROACH

IMPLICATIONS/SIGNIFICANCE OF DETERMINANTS
OF PERFORMANCE IN MANAGING PERFORMANCE
AND ADDRESSING PERFORMANCE PROBLEMS

In order to address performance problems,

managers must find information that will allow
them to understand whether the source of the
problem is Declarative knowledge, Procedural
knowledge, Motivation, or some combination of
these factors
PMSs must not only measure performance but
also have provisions for information about
source of any performance deficiencies

Factors influencing determinants of performance (Read 2.2 on page 91)

DEFINING PERFROMANCE AND CHOOSING

A MEASUREMENT APPROACH

PERFORMANCE DIMENSIONS

As noted earlier, performance is multidimensional, that we need to

consider many different types of behaviors to understand performance, in
this regard, we can identify any specific behaviors, however, two types of
behaviors or performance facets stand out:
TASK PERFORMANCE
CONTEXTUAL PERFORMANCE

Task performance is defined as:

Activities that transform raw materials into the goods and services that
are produced by the organization
Activities that help with the transformation process by replenishing the
supply of raw materials, distributing the finished products, or providing
important planning, coordination, supervising, or staff functions that
enable the organization to function effectively and efficiently

Contextual Performance is defined as:

Those behaviors that contribute to the organizations effectiveness by

providing a good environment in which task performance can occur,
like:

Persisting with enthusiasm

Volunteering to carry out tasks

DEFINING PERFROMANCE AND CHOOSING

A MEASUREMENT APPROACH

WHY BOTH TASK AND CONTEXTUAL PERFORMANCE ARE

IMPORTANT DIMENSIONS TO TAKE INTO ACCOUNT IN PMSs?
Imagine what would happen to an organization in which all
employees are outstanding regarding task performance but do not
perform well regarding contextual performance
What if a colleague whose cubicle is next to yours needs to take a
bathroom break and ask you to answer the phone if it rings
because an important client will call at any moment? What if
he/she said, That is not MY job?
Organizations cannot function properly without a minimum dose of
positive contextual behavior on the part of all employees
Take example of TRW Automotive Inc.
When TRW wanted to become more performance driven,
experiment in new markets, and offer greater value to its
shareholders, the senior management team developed what they
labeled the TRW Behaviors
These behaviors were communicated throughout the company and
had a prominent role in the Performance Management Process

DEFINING PERFROMANCE AND CHOOSING

A MEASUREMENT APPROACH

MAIN DIFFERNECE BETWEEN TASK AND

CONTEXTUAL PERFORMANCE

Task Performance

Contextual Performance

Varies across jobs

Fairly similar across jobs

Likely to be role prescribed

Not likely to be role prescribed

Antecedents: Abilities and Skills

Antecedent: Personality

DEFINING PERFROMANCE AND

CHOOSING A MEASUREMENT APPROACH

Also, there are numerous pressing reasons why both Task and Contextual
Performance dimensions should be included in a PMS:
First, global competition is raising the levels of effort required of employees.
Second, related to the issue of global competition is the need to offer
outstanding customer service. Contextual Performance Behaviors can make a
profound impact on customer satisfaction.
Third, many organizations are forming employees into teams. Although some
teams may not be permanent because they are created to complete shortterm specific tasks, the reality of todays world is that teams are here to stay.
Also, when supervisors evaluate performance, it is difficult for them to ignore
the contextual performance dimension, even though the evaluation form
they are using may not contain any questions about Contextual Performance.
Consequently, since Contextual Performance has such an impact on ratings
of overall performance even when only task performance is measured, it
makes sense to include Contextual Performance more explicitly
Finally, there is an additional type of behavior that is another facet of
Contextual Performance, but it is different from traditional ways of thinking
about it: voice behavior. Voice Behavior is a type of behavior that emphasizes
expression of constructive challenge with the goal to improve rather than
merely criticize, it challenges the status quo in a positive way, and it is about
making innovative suggestion for change and recommending modifications
to standard procedures even when others, including an employees

DEFINING PERFROMANCE AND

CHOOSING A MEASUREMENT APPROACH

APPROACHES TO MEASURING
PERFROMANCE

There are 3 approaches that can be used to measure

performance: the behavior, results and trait approaches.

BEHAVIOR APPROACH:

The behavior approach emphasizes what employees do on

the job and does not consider employees traits as the
outcome resulting from their behaviors

This is basically a process oriented approach that

emphasizes how an employee does the job

The behavior approach is most appropriate under the

following circumstances: (Discuss the examples on Page 95)

The link between behaviors and results is not obvious

Outcomes occur in the distant future

Poor results are due to causes beyond the performers control

DEFINING PERFROMANCE AND

CHOOSING A MEASUREMENT APPROACH

APPROACHES TO MEASURING
PERFROMANCE

There are 3 approaches that can be used to measure

performance: the behavior, results and trait approaches.

RESULT APPROACH:

The result approach emphasizes the outcomes and results

produced by the employees and does not consider the
behaviors/traits that employee may possess

The results approach is most appropriate under the

following circumstances:

Workers are skilled in the needed behavior

Behaviors and results are obviously related

Results show consistent improvement over time

There are many ways to do the right job

DEFINING PERFROMANCE AND

CHOOSING A MEASUREMENT APPROACH

APPROACHES TO MEASURING
PERFROMANCE

There are 3 approaches that can be used to measure

performance: the behavior, results and trait approaches.

TRAIT APPROACH:

The trait approach emphasizes the individual performer and

ignores the specific situation, behaviors, and results

If one adopts the trait approach, raters evaluate relatively

stable traits

Traits can include abilities such as cognitive abilities (which

are not easily trainable) or personality (which is not likely to
change over time)

The traits approach is used under the circumstances when:

When a positive relationship is found between abilities (such as

intelligence and personality traits such as conscientiousness) and
desirable work-related behaviors

Chapter 5 Herman Aguinis

MEASURING RESULTS AND

BEHAVIORS

MEASURING RESULTS AND PERFORMANCE

LEARNING OBJECTIVES

Understanding how to implement and measure

Performance through a Result based and
Behavior based approach using a performance
management system.
Understanding the concepts of Accountabilities,
Objectives and Standards and Competencies.
Relative or Comparative and Absolute
Performance Measurement approach and
systems and respective advantages and
disadvantages.

MEASURING RESULTS AND PERFORMANCE

Let us try to learn through a detailed

description that how to measure
performance, adopting the two most
common approaches:

Measuring Results and Measuring

Behavior.

MEASURING RESULTS AND PERFORMANCE

MEASURING RESULTS
When we decide to use Results as a measure of
Performance then in order to fully gauge the
outcome, we need to ask the following three
questions:

1. What are the different areas in which this individual

is expected to focus efforts (Key Accountabilities)

2. Within each area, what are the expected objectives?

3. How do we know how well the results have been

achieved. (Performance standards)

MEASURING RESULTS AND PERFORMANCE

KEY ACCOUNTABILITIES
Key accountabilities are broad areas of a job for which the employee is responsible for producing results
The job description, resulting from the job analysis, is the primary source for determining accountabilities
PERFORMANCE OBJECTIVES
As a result of the determined accountabilities specific objectives that the employee is expected to
achieve are called performance objectives
Performance objectives are statements of important and measurable outcomes that, when accomplished,
will help ensure success for the accountability
The purpose of establishing objectives is to identify a limited number of highly important results that,
when achieved, will have a dramatic impact on the overall success of the organization
Objectives are clearly important because they help employees guide their efforts.
PERFORMANCE STANDARDS
The answer to the question How do we know how well the results have been achieved? is performance
standards
A discussion around measuring results will remain meaningless without accounting for the performance
standards. Why?
A performance standard is a yardstick used to evaluate how well employees have achieved each
objective
Performance standards provide information on acceptable and unacceptable performance, for example,
regarding quality, quantity, cost, and time
Organizations that implement a management by objectives (MBO) philosophy are likely to implement
components of PMS, including Objectives and Standards

MEASURING RESULTS AND PERFORMANCE

Let us try to understand the concepts and ways to determine Accountabilities, Objectives
and Performance Standards
DETERMINING ACCOUNTABILITIES (FOR MEASURING RESULTS THROUGH A PMS)
The first step in determining accountabilities is to collect information about the job for
which primary source is, of course, the Job Description that has resulted from the Job
Analysis and a consideration of unit and organization-level strategic priorities
The JD provides information on the task performed, those tasks are grouped into clusters
of tasks based on their degree of relatedness
Degree of relatedness of accountabilities
Each of these clusters of accountabilities is a broad area of the job for which the employee
is responsible for producing results
Degree of relative importance of accountabilities
We then determine the degree of relative importance of accountabilities and need to ask
the following questions:

What percentage of the employees time is spent on each accountability?

If the accountability were performed inadequately, would there be a significant impact on the work
units mission?
Is there a significant consequence of error? Say, for example, could inadequate performance of the
accountability contribute to a serious property damage, or loss of time and money, or major injury
to an employee or others?
(Refer to Example of determining accountabilities of a Training Specialist/Consultant Leadership &
Team Development for target corporation, page 110 and 111)

MEASURING RESULTS AND PERFORMANCE

DETERMINING OBJECTIVES
After the accountabilities, the next step in measuring results is to
determine specific performance objectives, or simply, objectives.
To serve a useful function, objectives must have the following
characteristics:

Specific and clear

Challenging
Agreed upon
Significant
Prioritized
Bound by time
Achievable
Full communicated
Flexible
Limited in number

(Read example of Microsofts SMART objectives and objectives of training

specialist/consultant Leadership & Team Development at target
corporation, page 112)

MEASURING RESULTS AND PERFORMANCE

DETERMINING PERFORMANCE STANDARDS

Standards provide raters with information about what to look for to determine the
level of performance that has been achieved in terms of:

Standards usually describe fully satisfactory performance. As soon as a standard has

been created, one can create standards that describe minimum performance and
outstanding performance (Read Example third Para, page 113)
Following characteristics determine whether one has a useful standard:

Quality: How well the objective has been achieved? This can include usefulness,
responsiveness, effect obtained (problem resolution), acceptance rate, error rate, and
feedback from users or customers (customer complaints, returns)
Quantity: How much has been produced, how many, how often, and at what cost?
Time: Due dates, adherence to schedule, cycle times, deadlines (how quickly? E.g.,
timetables, progress reports) Read Example second Para page 113

Related to the position

Concrete, specific, and measurable
Practical
Meaningful
Realistic and achievable
Reviewed regularly

(Consider Example of Target Corporations Standards for the position of Training

Specialist/Consultant, page 114)

MEASURING RESULTS AND PERFORMANCE

MEASURING BEHAVIORS
A behavior approach to measuring performance includes the assessment of competencies
Competencies:
Competencies are measurable clusters of knowledge, skills and abilities (KSAs) that are critical in determining
how results will be achieved. Examples of competencies are customer service, written or oral communication,
creative thinking, dependability etc.
To understand the extent to which an employee possesses a competency, we measure indicators
Each indicator is an observable behavior that gives us information regarding the competency in question
So, essentially, we dont measure the competency directly, but we measure indicators that tell us whether the
competency is present or not
An indicator is a behavior that, if displayed, suggests that the competency is present
A competency can have several indicators (Consider the example for a professor teaching an online course on
pages 115 and 116, also consider example of Consideration as a competency to define good leadership and
its respective indicators on Para 1, page 116)
In describing a competency, the following components must be present:

Definition of competency
Description of specific behavioral indicators that can be observed when someone demonstrates a competency effectively
Description of specific behaviors that are likely to occur when someone doesnt demonstrate a competency effectively
(what a competency is not)
List of suggestions for developing the competency in question

In contrast to the measurement of results, the measurement of competencies is intrinsically judgmental

Competencies are measured using data provided by individuals (raters) who make a judgment regarding the
presence of the competency
Typically, raters are the direct supervisor, but raters might also include peers, customers, subordinates and the
employee himself

MEASURING RESULTS AND PERFORMANCE

COMPARATIVE AND ABSOLUTE

SYSTEMS TO EVALUATE
COMPETENCIES
In simple words, Comparative Systems
base the measurement of a competency
on the basis of comparing employees
with one another whereas Absolute
Systems base the measurement on
comparing employees with a
prespecified performance standard

MEASURING RESULTS AND PERFORMANCE

COMPARATIVE SYSTEMS
Comparative Systems of measuring behaviors imply that employees are compared
(comparable) to one another
Following are the five competitive evaluation systems generally used in PMSs:

Simple rank order

Alternation rank order
Paired comparisons
Relative percentiles
Forced distribution

Forced distribution method became more popular after its use by GE, let us look into
it in a bit more detail:
Forced Distribution Method:
Employees apportioned as per normal distribution
For example, 20% of employees must be classified as exceeding expectations, 70%
must be classified as meeting expectations, and 10% must be classified as NOT
meeting expectations
As per former GE CEO Jack Welch, who calls it vitality curve, it enables managers to
manage low-achieving performers better
At GE, each year 10% of managers are assigned the C grade, and if they dont
improve, they are asked to leave the company.

MEASURING RESULTS AND PERFORMANCE

ADVANTAGES AND DISADVANTAGES OF COMPARATIVE MEASUREMENT

METHODS
Advantages:

Easy to explain
Resulting decisions are fairly straightforward as it is easy to see which employees are where
in the distributions
Tend to control several biases and errors by raters like leniency, severity and central
tendency

Disadvantages:

Employees are compared only in terms of a single overall category

Individual behavior or even individual competency are ignored which results in lack of
development and feedback approach
There is no information about the actual distance between employees because the resulting
data are based on rankings and not actual scores
It shifts peoples focus to get a placement in one of the brackets instead of focusing on real
performance
The assumption of normal distribution may not hold true for all units within the organization
It discourages contextual performance behavior which undermines teamwork
It can produce unhealthiness, unhealthy competition among employees
Difficult to implement when organization is not experiencing any growth
If you keep on slicing the tail, eventually you will start cutting the bones and muscle

MEASURING RESULTS AND PERFORMANCE

ABSOLUTE SYSTEMS
Employees are evaluated without
making direct reference to other
employees.
Common types of Absolute Systems:

Essays
Behavior Checklist
Critical Incidents
Graphic rating scales

MEASURING RESULTS AND PERFORMANCE

Common types of Absolute Systems:

Essays

Behavior Checklist

A supervisor writes an essay describing each employees strength and weaknesses and makes
suggestions for improvement
It consists of a form listing behavioral statements that are indicator of the various competencies to be
measured. And Supervisor just has to indicate (check)statement describe the employee being rated.

Critical Incidents
Every job includes some critical behaviors that make a crucial difference between doing a job
effectively and doing it ineffectively.
In this method, reports of situations are gathered in which employee was especially effective and
ineffective in accomplishing their jobs.

Graphic rating scales (BARS)

It is actually a improved variation of Critical incidents method.
First the major elements of a an important dimension of a job are identified
Then a rating scale is developed for each of the dimension with an anchor (defining the
specific level of behavior) for each rating.
Then critical incidents are gathered with respective to that particular job dimension.
Based on review of incidents vis a vis the rating scale, the best suited rating is assigned to
the employee on that particular job dimension
(Home Assignment, read from page 120 to 126 for discussion in the next class)