1. PERFORMANCE MANAGEMENT 8

2. 8 OBJECTIVES Understand Aims, Objectives and Purpose of Performance Management Differentiate the Various Methods of Performance Appraisal Understand the Performance Rating Process and Errors of Performance Appraisal Positive Aspects and Drawbacks of Performance Management

3. Performance appraisal is formal evaluation of an employee’s job performance in order to determine the degree to which the employee is performing effectively. Griffin and Ebert (2002).8 PERFORMANCE MANAGEMENT

4. Performance is about how things are done as well as what is done. Performance is the degree of accomplishment of the tasks of a particular job. It reflects how much and how the requirements of the job have been fulfilled. Performance is measured in terms of result.8 PERFORMANCE MANAGEMENT Performance

5. Effort is the amount of energy used by an employee or how much he was motivated to do a job. Abilities are personal characteristics needed to perform a job. Role Perception is the direction in which employees channelize their efforts.8 PERFORMANCE MANAGEMENT Determinants of Performance

6. Define and document job responsibilities Define expectations Provide guidelines and framework for employees and supervisors Ensure that people are motivated and increase the commitment of employees Develop constructive and open relationships Align individual performance expectations with organizational goals, and provide opportunities to individual to express their aspirations and expectations about their work Performance management is always to be understood in the context of the organization.8 PERFORMANCE MANAGEMENT Aims of Performance Management

7. Improves performance Motivates and increases commitment of employees Underpins core values Helps in integrated training and development process Enlarges and enhances the skill base Provides the base for career-planning Helps to retain employees Supports organizational initiatives and helps in managing change8 PERFORMANCE MANAGEMENT Benefits of Performance Management For the Organization

8. Clarifies performance and behavioral expectations Develops a framework for reviewing performance and competence levels Enhances team and individual performance Provides the basis for helping and taking decisions for under performance Information is useful for individual development Provides the basis for providing non-financial rewards, e.g. recognition, opportunity for growth and development8 PERFORMANCE MANAGEMENT Benefits of Performance Management For Managers

9. Clarity of roles and goals Support and encouragement from supervisors for better performance Provision of guidance and help in developing abilities and performance Opportunities to contribute to the formulation of objectives and plans, and improvements in the way work is managed and carried out An objective and fair basis for assessing performance8 PERFORMANCE MANAGEMENT Benefits of Performance Management For Individuals

10. 1. Improving work performance 2. Administering merit pay 3. Advising employees of work expectations 4. Counseling employees 5. Making promotion decisions 6. Motivating employees 7. Assessing employee potential 8. Identifying training needs8 PERFORMANCE MANAGEMENT Purpose of Performance Management System

11. 9. Better working relationship 10. Helping employees set career goals 11. Assigning work more effectively 12. Making transfer decisions 13. Making decisions about layoffs and terminations 14. Assessing long range planning 15. Validating hiring procedures 16. Justifying other managerial actions8 PERFORMANCE MANAGEMENT Purpose of Performance Management System

12. Rank-Based Method Paired Comparison Forced Distribution Graphic Rating Scales Production Standards Method Essay Appraisal Critical Incident Method Check-List Method Behaviorally Anchored Rating Scales (BARS) Goal Setting or Management by Objectives (MBO) 360 Degree Feedback Balance Score Card Method8 PERFORMANCE MANAGEMENT PERFORMANCE APPRAISAL METHODS

13. POSITIVE ASPECT OF PERFORMANCE APPRAISAL 8 PERFORMANCE MANAGEMENT Facilitates communication Promotes trust Reinforcement of desired behavior Performance improvement Determination of training needs Exhibit 8.6 Benefits of Performance Appraisal

14. DRAWBACKS OF FORMAL APPRAISAL SYSTEM Exhibit 8.7 Drawbacks of Performance Appraisal System8 PERFORMANCE MANAGEMENT Detrimental to quality improvement Negative perception Errors Legal Issues Performance goals Derail merit pay or performance-based pay

15. Leniency Central tendency Recovery Halo effect Contrast effect First impression error Similar-to-me effect Negative and positive skew Attribution bias Stereotyping 8 PERFORMANCE MANAGEMENT Potential errors in performance appraisal:

16. Designing Performance Management System Exhibit 8.88 PERFORMANCE MANAGEMENT

17. Perception of Fairness in Performance Appraisal Exhibit 8.98 PERFORMANCE MANAGEMENT 1.Distributive justice is related to satisfaction with performance appraisal ratings 2. Procedural justice is related to satisfaction with performance appraisal system 3. Interpersonal justice is related to satisfaction with the rater 4. Informational justice is related to satisfaction with feedback Role of the rater is of utmost importance in intrapersonal justice. Managers should be trained and educated on how to enact their roles in an interactionally fair manner. They should shape the perceptions of distributive justice. Training will help raters to base evaluation strictly on employees’ contributions, and evaluate honestly and clearly, and provide feedback in an informational yet sensitive manner. System once laid down and communicated, broadens the perception and builds trust in procedural justice.

18. Political Distortion in Performance Appraisal 8 PERFORMANCE MANAGEMENT 1. Fear of damaging work relationships 2. Avoiding conflict 3. Enhance personal agendas 4. Results are linked to pay 5. Protect employees with personal problems 6. Higher ratings where the objective is promotional 7.Leniency in ratings where poor performers are to be given face to face feedback 8. Lenient ratings are given when accountable for ratee

19. Exhibit 8.1 Forced Distribution TypeCriteria Bell Curve10% exceed expectation (top performers) 80% meet expectation (vital performers) 10% do not meet requirement (poor performers) Totern PoleTop performers and poor performers are on the two extremes and the rest are ranked consecutively on QuartilesEmployees are distributed in four equal quartiles based on performance.8 PERFORMANCE MANAGEMENT

20. Exhibit 8.2 Methods of Setting Production Standards MethodsApplicability Average work or productionWhere employees perform the same task Performance of specially selected employees Where employees perform similar tasks, but it is difficult and time consuming to use Time StudyJob involving repeated tasks Work SamplingNon-cyclic type of work where difficult types of tasks are performed and there is Expert OpinionWhere none of the above given methods can be applied8 PERFORMANCE MANAGEMENT

21. Exhibit 8.5 Job Analysis Information Area of Information Job title and location Organization Relationship No. of persons being supervised and the nature of supervision needed Relation to other jobsCoordination required for the job Job Summary Condensed explanation of the content of the job Information concerning job requirements Information related to man, machine, material and complexity, attention demands of the job and working conditions8 PERFORMANCE MANAGEMENT