1. HUMAN RESOURCE MANAGEMENT
PERFORMANCE MANAGEMENT AND APPRAISAL

2. Performance Management
Goal- oriented process directed toward ensuring organizational processes are in place to maximize productivity of employees, teams, and organization
Training and performance appraisal play significant role in process
With PM, training appraisal and rewards is integrated and linked for the purpose of continuous organizational effectiveness

3. Performance Appraisal Defined
A formal system of review and evaluation of individual or team task performance

4. Uses Of Performance Appraisal
Human resource planning- data must be available to identify those who have potential to be promoted
Recruitment and selection- may be helpful in predicting the performance of job applicants
Training & development- essential in assessing and employee’s strengths & weaknesses and determining the person’s potential

5. Use Of Performance Appraisal (Cont.)
Compensation programs- provide a basis for rational decisions regarding pay adjustments
Internal employee relations- used for decisions in several areas of internal employee relations, including promotion, demotion, termination, layoff and transfer
Assessment employee potential- some organizations attempt to assess employee potential as they appraise their job performance

6. Labor Unions And Performance Appraisal
Have traditionally stressed seniority as the basis for promotions and pay increases

7. Performance appraisal process
Identify Specific Performance Appraisal Goals
Establish Performance Criteria (Standards) & Communicate Them To Employee
Examine Work Performed
Discuss Appraisal With Employee
Appraise The Results

8. Establish performance criteria(Standards)
Traits
Behaviors
Competencies
Goal achievement
Improvement potential

9. Traits
Certain employee traits such as attitude, appearance, and initiative are the basis for some evaluations
May be either unrelated to job performance or difficult to define
Certain traits may relate to job performance and, if this connection is establish, using them may be appropriate

10. Behaviors
Organization may be evaluate person’s task related behavior or competencies
Examples; leadership style, developing others teamwork and cooperation
If certain behaviors result in desired outcomes, there is merit in using them in the evaluation process

11. Competencies
Broad range of knowledge, skills, traits and behaviors that may be technical in nature, relate to interpersonal skills or be business oriented
In leadership jobs, relevant competencies might include developing talent, delegating authority and people management skills
Competencies selected should be those that are closely associated with job success

12. Goal Achievements
Use if organizations consider ends more important than means.

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

14. Responsibility For Appraisal
Immediate supervisor
Subordinates
Peers and team members
Self-appraisal
Customer appraisal

15. Immediate Supervisor Traditionally been most common choice
Supervisor is usually in excellent position to observe employee’s job performance
Supervisor has responsibility for managing a particular unit

16. Subordinates
Our culture has viewed evaluation by subordinates negatively
Some firms conclude that evaluation of managers by subordinates is both feasible and needed
Will do a better job of managing

17. Peers And Team Members
Work closely with evaluated employee and probably have an undistorted perspective on typical performance
Problems include reluctance of some people who work closely together, especially on teams, to criticize each other

18. Self-Appraisal
If employees understand their objectives and criteria used for evaluation, they are in good position to appraise their own performance
Employee development is self-development
Employees who appraise their own performance may become more highly motivated

19. Customer Appraisal
Customer behavior determines a firm’s degree of success
Organizations used this approach because it demonstrates a commitment to customer, holds employees accountable and fosters change

20. The Appraisal Method Prepared at specific intervals
Usually annually or semi-annually
Period may begin with employee’s date of hire
All employees may be evaluated at the same time

21. Performance Appraisal Method
360-Degree Evaluation
Rating Scales
Critical incidents
Essay
Work standards
Ranking
Paired Comparison
Forced Distribution
Behaviorally Anchored Rating Scales (BARS)
Result Based system

22. 360-Degree Evaluation Multi rater evaluation
Input from multiple levels within firm and external sources
Focuses on skills needed across organizational boundaries
More objective measure of performance
Process more legally defensible

23. Rating Scales Rates according to defined factors
Judgments are recorded on a scale
Many employees are evaluated quickly

24. Critical Incidents
Written records of highly favorable and unfavorable work actions
Appraisal more likely to cover entire evaluation period
Does not focus on last few weeks or month

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

26. Work Standards Compares performance to predetermined standards
Standards- normal output of average worker operating at normal pace
Time study and work sampling used
Workers need to know how standards were set

27. Ranking
All employees from group ranked in order of overall performance
Comparison is based on single criterion such as overall performance

28. Paired Comparison Variation of ranking method
Compares performance of each employee with every other employee in the group

29. Forced Distribution
Rater assigns individual in work group to limited number of categories similar to normal distribution
Assume all groups of employees have some distribution

30. Behaviorally Anchored Rating Scales(BARS)
Combines traditional rating scales and critical incidents methods
Job behaviors derived from critical incidents described more objectively

31. Result- Based System
Manager and subordinate agree on objectives for next appraisal
Evaluation based on how well objectives accomplished

32. HANDLING LOW PERFORMERS

33. How to deal with it??? Diagnosing Poor Performance Enhancing Ability
Improving Motivation

34. Diagnosing Poor Performance
Find out why their performance is low???
Over-difficult tasks.
Low individual aptitude, skill, and knowledge.
Evidence of strong effort, despite poor performance.
Lack of improvement over time.

35. Enhancing Ability
There are five main ways to overcome performance problems associated with a lack of ability. Consider using them in this sequence, which starts with the least intrusive:
Resupply
Retrain
Refit
Reassign
Release

36. Resupply
Focus on the resources provided to do the job. Do employees have what they need to perform well and meet expectations?
Ask them about additional resources they think they need.
Listen for points of frustration.
Note where employees report that support is inadequate.
Verify the claims with your own investigation. People will often blame external sources for their poor performance before admitting their own fault.

37. Retrain
Provide additional training to team members. Explore with them whether they have the actual skills required to do what's expected. Given the pace of change of technology, it's easy for people's skills to become obsolete.
This option recognizes the need to retain employees and keep their skills current. There are various types of retraining you can provide:
Training seminars with in-house or external providers.
Computer-based training (CBT).
Simulation exercises.

38. Refit
When these first two measures aren't sufficient, consider refitting the job to the person. Are there parts of the job that can be reassigned?
Analyze the individual components of the work, and try out different combinations of tasks and abilities. This may involve rearranging the jobs of other people as well. Your goal is to retain the employee, meet operational needs, and provide meaningful and rewarding work to everyone involved.

39. Reassign
When revising or refitting the job doesn't turn the situation around, look at reassigning the poor performer. Typical job reassignments may decrease the demands of the role by reducing the need for the following:
Responsibility
Technical knowledge
Interpersonal skills
If you use this option, make sure the reassigned job is still challenging and stimulating. To ensure that this strategy is successful, never use demotion as a punishment tactic within your organization.

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

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

42. Benefits of an Employee Performance Management system
Encourage quality performance by rewarding workers who do well.
Helps to improve current performance by providing workers with feedback
Helps to identify workers who need training
Assists in identifying workers who may need to transferred or even dismissed for poor performance
Provides a channel of communication between managers and their subordinates

43. The Key Components of an Employee Performance Management System
The preparation of organizational plans, including the setting of objectives which are established for all levels down to the individual worker.
The implementation of the work by the individual worker, accompanied by appropriate forms of monitoring by the worker’s manager or supervisor

44. The Key Components of an Employee Performance Management System
The appraisal of the work of the individual workers
Follow-up action taken after appraisal. The nature of the follow-up action depends upon the quality of performance of the individual workers.

45. Bias in Performance Appraisal
The recency effect – whereby the appraiser bases the appraisal of an employee on recent behavior and performance
The halo or horns effects – the appraiser is over influenced by on aspect of the employee being appraised and ignores others
Central/Leniency/Strictness tendency –
Central tendency occurs whenever an appraiser rates all his subordinates as being average on all criteria being evaluate
Leniency tendency occurs when the appraiser gives high ratings to all his subordinates

46. Bias in Performance Appraisal
Prejudice and stereotyping– many people are prejudiced whether knowingly or unknowingly. They hold negative opinions about a particular group of people.
Fatigue – when an appraisal system requires a manager to appraise all his subordinates at the same time, perhaps within 2 week period, fatigue may blur his judgement.