Welcome

Kay Jay
 Human Resources
&
Personnel Management

9/29/2019 2
R U Ready for Chapter 12
HRM - II
 Performance Appraisal

Uses of Performance
Appraisal

Elements of Performance
Appraisal system

Performance challenges

Past Oriented Appraisal

Methods
Performance Management in action
 Definition

 A natural process of management contributes to the

effective management of individuals and teams to achieve
high levels of organizational performance

 A systematic approach to improving individual and team

performance in order to achieve organizational goals (Hendry)

6
Performance Management in action
 Definition

 The development of individuals with competence and

commitments, working towards the achievement of
shared meaningful objectives within an organization
that supports and encourages their achievements (Lockett)

 Directing and supporting employees to work as

effectively and efficiently as possible in line with the
need of the organization (Waltars)

7
Performance Management in action
 The overall purpose and aims

 Contribute to the achievement of high performance by

the organization and its people

 Reaching and exceeding stretching targets for the

delivery of productivity, quality, customer service,
growth, profits and share holder value

8
Performance Management in action
 The overall purpose and aims
 To make a good better
 Share understanding what is to be achieved
 Develop the capacity of people to achieve it
 Provide the support and guidance people need to
deliver high performance
 To capitalize the full potential of people to benefit of
Org.

9
Performance Management in action
 The overall purpose and aims
 Performance Management is concerned with under-
performers
 Positively providing the means to improve the abilities
to perform and achieve the organizational goals

10
Performance Management in action
 The performance Management cycle

Review Plan

Monitor Act

11
Performance Management in action
 The performance Management cycle
 Plan;
 Agreed objectives and competence requirements; identifying the
behaviours required by the organization; producing plan expressed in
performance agreements for meeting objectives and improving
performance; preparing personal development plans to enhance
knowledge, skills and competence and reinforce the desired behaviour

 Act;
 Carrying out the work required to achieve objectives by reference to
the plans and in response to new demands

12
Performance Management in action
 The performance Management cycle
 Monitor;
 Checking on progress in achieving objectives and responding to new
demands; treating performance management as a continuous
process. “managing performance all the year around” rather than an
annual appraisal event
 Review;
 Holding a review meeting for a ‘examination’ assessment of progress
and achievements and identifying where action is required to develop
performance as a basis for completing the cycle by moving into the
planning stage.

13
Performance Management Processes

 Classification of performance measures

 Finance –Income, shareholder value, added value, rates of return, cost.

 Output – Units.. Produced or processed, sales, new accounts etc...

 Impact- Attainment of standard(quality, level of service, behaviour etc.)

 Reaction – Judgement by others; colleagues, customers....

 Time – Speed of response, achievements compared with time table

14
Performance Management Processes
 Guidelines of Measuring Performance

 Measures should relate to results & observable behaviours

 Measures should be related to organizational measures of
performance such as balance scorecard
 Results should be with in the control of the individual and
based on targets
 Behavioural requirements (competencies) should be defined &
agreed
 Data (evidence) should be available for measurement

15
Performance Management Processes

 The objectives of Performance Reviews

 Development
 To provide a basis for developing and broadening abilities relevant to the
current and any future role the individual may have the potential to carry
out
 Enabling people to enlarge and enrich the range of responsibilities and
skills

 Communication
 To serve as a two-way channel for communication about roles,
expectations, relationships, work problems and aspirations.

16
Performance Management Processes

 Guidelines on providing Feedback

 Immediate feed back

 Describe, don’t judge
 Refer to specific behaviours
 Ask questions to probe reality
 Select key issues
 Focus
 Provide positive feedback
 Build feedback into the job

17
The Balanced Scorecard Focusing on Measures that Matter
Performance Measurement & Management Tool
 Developed by Harvard Professors
 Used by Fortune 500 Companies & Not-for-Profits (Hall of Fame)
Benefits
 Credible Business Measurement Methodology (Alumni is a SBU)
 Translates Vision to Strategy: Aligns Strategy to Activities
 Allows for Communication of Priorities & Measures
 Connects Strategy to 4 Most Important Business Areas
Customer

Balanced
Financial Scorecard Internal Processes
Perspectives

Knowledge
The Balanced Scorecard Framework 19
 Alignment of Scorecard Components
Make sure the components of your scorecard fit together. We want to create a
tight model for driving execution of your strategy.

Goal Objective Measurement Target Initiative

Reduce Operational Cost per Outlet 5% - Year 1 Activity Based

Achieve Service Costs by Office, Cost per
10% - Year 2 Costing /
50% over the next 5 Region, Cost per
Agency 15% - Year 3 Management
years FTE
operational
efficiencies
with best Waste stream
Waste Volume
Reduce identified reductions of 5%
practices in Charts, Rework
re-activities within each year,
Tracking, Cycle Lean / Six
the private primary processes Reworks cut in
Time End to End in Sigma
sector by 80% over the half for next 3
S-LX (5 of 7
next 3 years years, cycle time
Regions)
cut by 75%
Performance Management

 Consultancy models of Human Capital

 Consultancy bodies have their own methodologies and models

for assessing human capital
 Development for these models is based on consultancy work
and also based on wide range of organizational experience

 Mercer’s Human capital wheel

21
Performance Management

Mercer’s Human Capital Wheel

22
Mercer’s Human Capital Wheel

23
Mercer’s Human Capital Wheel

1. People
2. Work Processes
3. Managerial Structure
4. Information & Knowledge
5. Decision Making
6. Rewards

24
Performance Management

 Mercer’s Human Capital Wheel

 People
 Identify who is in the organization, their skills and competencies on
hiring
 What skills and competency they develop through training and
experience
 The level of qualifications and extent to which they apply firm
specific or generalised human capital
 Work process
 Detailing how works get done, the degree of team work,
interdependence among organizational units and the role of
technology

25
Performance Management

 Mercer’s Human Capital Wheel

 Managerial structure
 Reflecting the degree of employee discretion, management direction
& control, spans of control, performance management and work
procedure

 Information and knowledge

 How information is shared and exchanged among employees through
formal or informal means

26
Performance Management
 Mercer’s Human Capital Wheel

 Decision making
 How important decisions are made and who makes them
 The degree of decentralisation, participation and timeliness of
decision
 Rewards
 How monetary and non-monitory incentives are used?
 How much variable pay is at risk?
 Individual versus group rewards
 Immediate versus career rewards

27
 Performance Appraisal:
1. Employees’ job performance is an important issue for all employers.
However, satisfactory performance does not happen automatically; therefore,
it is more likely with a good performance management system.
2. A performance management system consists of the processes used to
identify, encourage, measure, evaluate, improve, and reward employee
performance at work.
3. In this chapter the focus is on identifying, measuring and evaluating
performance.

4. Performance management system: Processes used to identify,

encourage, measure, evaluate, improve, and reward employee performance

9/29/2019 28
Terms Used to Define Standards at One Company

9/29/2019 29
 Performance Appraisal: Uses

9/29/2019 30
 Performance Appraisal: Uses
 Performance Improvement
 Compensation adjustment
 Placement decisions
 Training and development needs
 Career Planning and development
 Staffing process deficiencies
 Informational accuracies
 Job-design errors
 Equal employment opportunity
 External challenges
 Feedback to human Resources

9/29/2019 31
 Performance Appraisal: Uses

 Practicality and understanding of the system

 Standardizations / Performance Standards

9/29/2019 32
 Appraisal: past oriented method
 Past oriented approaches
a) Rating scale
b) Forced choice
c) Field review method
d) Behaviorally anchored rating scale
e) Performance tests and observation
f) Accomplishment records

9/29/2019 33
 Appraisal: Future oriented
 Future oriented approaches
a) Self appraisal
b) Management by objective
c) Psychological appraisals
d) Assessment centers

9/29/2019 34
 Performance Appraisal: Measures
 Objective Measures
 Computer Measures
 Subjective Measures
 MBO
 360- Degree appraisal.

9/29/2019 35
360° Feedback
 Managing Performance; 360˚Feedback

 The Use of 360-Degree

 Personal development of individuals is the priority

 Individual and organizational Performance Improvement

 The development for personal change and growth is emphasized

 Strengths and weakness are regarded as development opportunities

 A part of a self-development and/or Management development programs

 It is used to generate ratings for employees’ pay purposes in an organization

37
 Performance Appraisal: challenges
 Legal constraints (discrimination)
 Rater biases
a) Halo effects
b) Error of central tendencies
c) Leniency and strictness biases
d) Cross cultural biases
e) Personal prejudice
f) The recency effect

9/29/2019 38
 Appraisal Process: Implication
 Training Raters and Evaluators
 Evaluation interviews (giving feedback)
 Guidelines for effective performance evaluation interviews
 Page-368
 Feedback

9/29/2019 39
  Feedback for the human resource function
 Without feedback about their career development efforts, it is
difficult for employee to sustain the years of preparation
 Unsuccessful candidates for internal job openings should be
told about what went wrong or whet went well?

9/29/2019 40
Thanks
Widescreen Pictures