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Introduction to Performance Management
Structure: 1.1 Introduction Learning Objectives 1.2 Evolution of Performance Management 1.3 Aims of Performance Management 1.4 Purpose of Performance Management 1.5 Basic Principles of Performance Management 1.6 Performance Management and its Dimensions Output or result dimension Input dimension Time dimension Focus dimension Quality dimension Cost dimension 1.7 Neglected Dimensions of Performance Management 1.8 Role of Appraisal in Performance Management 1.9 Summary 1.10 Glossary 1.11 Terminal Questions 1.12 Answers 1.13 Case Study
The process of identifying, evaluating and developing the work performance of employees in order to achieve the goals and objectives of an organisation is called as performance management. Effective performance management is designed to identify performance requirements, enhance performance, provide feedback relevant to those requirements and assist with career development. Performance management is a strategic and integrated process that delivers sustained success to organisations by improving the performance of the people who work in them and by developing the capabilities of individual contributors and teams – this unit introduces you to this process. Performance management has become a very essential process in any
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organisation – in this unit, we will discuss the evolution of performance management. Any process is designed to achieve some objectives and serve some purposes. Performance management has a set of aims and purpose – we will discuss these in detail in this unit. Every organisation has its own set of principles for performance management – in this unit, we will discuss those key principles of performance management that are common to all organisations. There are various dimensions of performance. Output, input, time, focus, quality and cost are some of the dimensions discussed in detail in this unit. Dyadic performance is the neglected dimension of performance management and team performance is the most misunderstood dimension of performance management. In this unit you will also find a detailed description of these two dimensions. Learning Objectives After studying this unit, you should be able to: explain the evolution of Performance Management. describe the aim of Performance Management. explain the purpose of Performance Management. list out the principles of Performance Management. analyse the various dimensions of Performance Management .
1.2 Evolution of Performance Management
In the earlier semesters you have learnt about performance management as a function in the course on Human resource management. In this course you will be studying in detail different aspects of performance management. Until the mid-1980s, the performance management systems of most companies were limited to managing the company as an ongoing enterprise and achieving the targeted net profit of the organisation. Shareholders were not given much importance. Eventually, employee remuneration took the form of salary, and bonuses were considered as short time earnings. In the late1970s, Alfred Rappaport and Joel Stern pointed out that creation of shareholder value had an impact on the way companies were managed. Value-Based Management (VBM) was the name given to this approach of performance management. VBM is
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a structured approach to measure the performance of a firm's unit managers or products in terms of the net benefit they provide to shareholders.1 The main idea behind VBM was to align the companies’ measurement system with economic value creation, which was not possible with traditional accounting-based measurement systems. The aim of the early systems was to ensure that the measurement systems fully took into account the cost of the capital that is tied up in the business. The idea of managing performance, both at an individual and organisational level is an old concept. The origin of this concept can be traced back to the 1950s, a decade that involved personality-based appraisal. A greater emphasis was given to goal setting and assessment of performance-related abilities in the appraisal practices of 1960s. Organisations underwent a process of rapid and successive change in the late 1980s and the whole of 1990s. As organisations became more performance oriented, the process of performance management attained more importance. Performance appraisal became a crucial mechanism to measure an employee’s performance, and a more holistic approach for managing people and business evolved. Figure 1.1 called as the continuum diagram depicts the evolution of performance management. It was developed by the Hay Group in the early1990s. The applications of the continuum diagram are: It encourages organisations to diagnose the state of development of their current performance management practice. It allows sponsors such initiatives to map their aspirations for changing this process and also think about the challenges they face along the way. The vertical y axis represents the level of impact that performance management or appraisal processes are seen to have within the organisation. The horizontal y axis encapsulates the degree of integration with other elements of the management process and the management capability required in the implementation of the process. Figure 1.1 illustrates the evolution of performance management.
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A once-a-year event 1
An ongoing process 2
Competency based 3
Major culture change 5
Impact on the Organisation
Figure 1.1: Evolution of Performance Management
1.3 Aims of Performance Management
One of the important objectives of performance management is identifying the strengths and weaknesses of employees and finding ways to overcome their shortcomings. This is done by evaluating employee output and the company’s overall ability to meet the goals by having quarterly or annual audits. Often, after an evaluation, there will be widespread company meetings where managers and employees discuss concerns and solutions to problems. Another objective is to discover where employees and the company are falling short. This is done by going through details such as profits earned, new clients acquired and the contribution of employees to make these things happen. Employees whose contribution are minimal or not up to the mark are counselled on how to improve performance. The evaluation of an employee’s performance is based on their work output and the amount of time spent by them on the project. Although time spent in an office is not an accurate way of measuring performance, most companies still have the notion that better employees put in longer hours of work. A better way of measuring employee productivity would be to measure the output of work and the accuracy of work completed.
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Overall evaluation of a company and its ability to set and reach goals is another important objective of performance management. Increasing revenue is the overall goal of any company. Other goals may be to acquire more or specific clients, develop new products or hire new talent. It is very easy to determine which of these goals have been met, because these are things that can be seen or calculated. The inability of a company to meet the goals is mainly due to poor leadership, poor planning, poor implementation or poor employee performance. Economic factors also play a major role, but it is better for companies to concentrate on factors that are within their control. The best way of improving a company’s overall output is motivating the employees and improving their performance. To identify and remedy situations that hinder company performance is another important objective of performance management. This includes replacing underperforming employees, gaining new clients, developing new strategies for reaching the goals and discussing strategies that have worked in the past. In order to meet the objectives of performance management and improve the overall performance of a company, every employee must work with the team members to develop new techniques and implement changes. The aims of performance management can be summarised into the following points. The aims of performance management are: To assist in the achievement of enhanced standards of work performance of an employee or class of employees. To assist employees to identify the knowledge and skills to perform their jobs efficiently. To ensure that the employees work towards the defined goals. To ensure that the employees receive regular feedback on performance. To assist the employees to achieve personal growth through acquiring relevant knowledge and skills and attitudes. To evaluate the company and its ability to set and reach goals. To identify and remedy situations that are hindering company performance.
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Activity 1: Visit the HR department of any organisation and identify the performance management objectives of that organisation. Hint: Evaluating the performance of employees. Self Assessment Questions 1. The process of identifying, evaluating and developing the work performance of employees in order to achieve the goals and objectives of an organisation is called as_______________. 2. _________________ approach pointed out that creation of shareholder value had an impact on the way companies were managed. 3. An employee’s performance is based on their _________ and _____________.
1.4 Purpose of Performance Management
The aim of a performance management strategy is to provide the means through which better results can be obtained from the individuals, teams and the organisation--by understanding and managing performance. Performance management involves the development of processes for establishing a shared understanding of the goal that has to be achieved and an approach to manage and develop people in a way that the probability of achieving the goal is increased. A major concern of performance management is performance improvement in order to achieve organisational, team and individual effectiveness. Performance improvement cannot be achieved unless there are effective processes of continuous development. This addresses the core competence of the organisation and the capability of individuals and teams. Performance management is concerned with satisfying the expectations of all the stakeholders of the organisation. The stakeholders of an organisation are the owners, the management, the employees, the customers, the suppliers and the general public. Performance management has to respect and cater to the needs of individuals and teams as well as those of the organisation. A performance management strategy is also concerned with communication and involvement. It should create a climate in which a continuous dialogue
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Employees are expected to be in a constant growth and learning mode. A performance management process developed to drive the achievement of key business results is designed to make sure that the goals and expectations of the organisation.Performance Management and Appraisal Unit 1 between the manager and the team takes place to define expectations and share information on the organisation’s values. are focused on key priorities and are well connected to the drivers of results. Let us explain them in detail: Driving results: The purpose of performance management is to drive improvement in business results through individual. career advancement and recognition. and using formal developmental coaching or mentoring. measurement. behaviours and knowledge that are critical to the organisation’s ability to execute its business strategy. Building capabilities: Performance management drives organisational and individual capability development by clarifying role-specific goals and competencies. building capability and growing talent. creating an environment of constructive feedback. A performance management process intended to drive capability development is developed to make employees understand what they need to learn and how they would go about doing it. Growing talent: Another important purpose of performance management is to motivate and retain high performers by providing career development programs that include motivation and reward strategies. Coaching and mentoring helps employees to learn the skills. objectives and mission. The purpose of performance management can be broadly classified into driving results. challenging work assignments and other on-the-job learning initiatives that will lead to career advancement and job satisfaction. team and individual are clearly defined. The results of these assessments can be used to make decisions involving work assignments. A performance management process for identifying and rewarding talent is developed to assess performance. group and enterprise goal alignment. 7 Sikkim Manipal University . Page No. performance coaching and performance information sharing. Performance management contributes to a high-involvement organisation by getting teams and individuals to define their objectives and the means to achieve them.
However. but who also provide support and direction through: o Having a thorough understanding of their institutional strategy and the ‘big picture’ and being vary of any assumptions they may hold about their employees’ interest in such matters before engaging with them on such issues. it aims at identifying standards of performance and understanding where every employee of the organisation is located across the range. Performance management helps to achieve the following: o To facilitate the integration of individual and organisational objectives and values and develop a performance-orientated culture. Let us now discuss some key principles of performance management that are common to all organisations. Performance management is not a fixed event. Effective organisations need effective performance management. in reality. it is a cyclic process centred on learning and development. as is often assumed. o To provide a basis for valuing people. Manager’s ability to deliver has an impact on performance management. Page No. o Recognising that appraisal is not about supervision.5 Basic Principles of Performance Management Every organisation has its own principles for performance management. Formal appraisal is but a single aspect of the process. o To identify poor performers.Performance Management and Appraisal Unit 1 1. Effective Performance management needs managers who not only have an open and honest management style. 8 Sikkim Manipal University . Performance management is often misunderstood to be a device that deals with difficult people at point A of the scale. Performance management deals with performance across the entire range from A (poor) to Z (excellent). but is more concerned with helping individuals set strategic goals for themselves that are consistent with those of the organisation. o To improve the quality of management. Organisational effectiveness is not possible without performance management. o To identify and meet individual development needs and to identify those employees with a good growth potential. Performance management does not just happen. at an annual event set up for the purpose.
It is perceived to be an artificial implant grafted on to the existing system. Sikkim Manipal University Page No. experienced. We all need high-quality regular feedback if we are to develop. the focus will. Performance management is the way an organisation views its employees. employees are no different to students. 6. which is a continuous and ongoing activity. Performance management is not a fixed event. Managers. It is more effective if it is planned in advance. rather than the system. but rather doing what is best for the organisation. then. building capability and _____________. The purpose of performance management can be broadly classified into driving results. even if negative. it is a cyclic process centred on___________ and _____________. conventional wisdom tells us that any feedback. Hint: Purpose of performance management.Performance Management and Appraisal Unit 1 Performance management is about learning and development. and in this respect. Performance improvement cannot be achieved unless there are effective processes of continuous development (True/False)? 5. bulilding capabilities and growing talent . need to be not only particularly skilled in this regard. Performance management is not a system. not paperwork. Indeed. It is a natural process of managing people. Activity 2: Discuss the performance management system of your organisation or any friend’s organisation and check if it meets the purpose of performance management with respect to driving results. reviewed and evaluated on a regular basis. Either way. aspirations and values of the organisation. invariably be on changing behaviour. climate. or should. Feedback on progress and achievement is an important aspect of the learning cycle. is better than none at all. This may not necessarily entail following best practices. but they must also seek every opportunity to provide feedback to the team members. Self Assessment Questions 4. Performance management works best and succeeds most when it is aligned with the culture. and should focus on the process. 9 .
In this section we will discuss the following dimensions of performance. These are also known as key result areas.1 Output or result dimension Output or result dimension is the most acceptable. Cost dimension. It describes the standards in an easily measurable form. For example-. Time dimension. The nature of activities to be undertaken by the individual. Input dimension.salary figures. developing and enhancing performance and related competencies.6 Performance Management and its Dimensions Performance management involves thinking through various aspects of performance. Performance can be managed better. 1. planning. Sikkim Manipal University Page No. visible and measurable dimension of performance. production targets and so on are all stated in a result form. the quality of inputs to be given and so on. Focus dimension.6. identifying the critical dimensions of performance. The performance equation comes into picture at this point. Performance has many dimensions. financial targets. The organisational support one gets to carry out these tasks. constitute the input dimension. if the nature of inputs required to be put in can be conceived without mistakes. customer numbers.2 Input dimension This dimension deals with the activities or tasks to be accomplished by the individual.6. they are: The ability or competence to perform various tasks.Performance Management and Appraisal Unit 1 1. Output or result dimension. final or summary form. completion of targets to meet some deadlines. the time frame. Quality dimension. It says that any individual’s performance is a function of three sets of factors. It describes the consequence of inputs in a semi–final. planned properly and implemented. 10 . The motivation to carry on each of these tasks or work effort to carry out the tasks. reviewing. the performance is bound to be poor. 1. If any one of these is less.
Input-output relationship An important issue to be understood in performance management is the input-output relationship. Page No. CEOs. Assume that the sales executive has charted out a plan to reach his target and has done every thing he planned to do. Performance management consists of the following: Defining performance taking into account all the complexities mentioned above. the performance is also likely to be inadequate. How do we rate his performance? We may give one of the following: Average or OK. new government policies could have had an impact or a new competitor could have attracted his customers. But. If a person contracted to give certain inputs with the assumption the inputs will lead to the targeted outcome or result gives more than the required input. His competencies may be limited. the market conditions may not have been conducive. he could only get 85 per cent profit instead of the targeted 95 per cent. They can also be considered as the input variables.Performance Management and Appraisal Unit 1 In this equation. If the inputs (ability. What if 85 per cent was a good profit for that particular market condition or his profit margin was better than other sales representatives? There are no easy answers to all these questions and that is what makes performance management a complex affair. performance is the output and organisational support and the ability are the intervening variables. work effort or motivation and organisational support) are inadequate. at the end. managers and HR professionals. how can we call his performance anything less than good or excellent? If he did not achieve the desired result it maybe because of various factors. Let us take the example of a sales executive who wants to reach a profit target of 95 per cent. Such a complex affair should not be treated lightly by experts. Excellent as he had done more than what he originally planned to do. Treating such a complex issue in a simple manner and reducing performance management to a simple form-filling exercise is the biggest mistake that managers have committed in the past. 11 Sikkim Manipal University . work effort is the input. Not good as he got a far lower percentage than what he aimed for.
Thus. for a day. Monitoring it and reviewing it.3 Time dimension Time is another dimension of performance.6. for a week. Time may become the target. Some of the organisations which are project driven. They may also be defined by tasks or project and not time. Measuring performance and understanding the limitations in measuring performance. Organisations are more concerned with the individual’s performance in a financial year or parts of a year. In information technology organisations. Identifying development needs and support requirements from this analysis. The time period for performance is important. Developing capabilities to perform or the capability to give inputs and possess the competencies to convert the inputs into desired output. for a month. Performance can be measured for a task. Performance of an individual in an organisation can be defined as the output delivered by an individual with respect to a given role during a particular Sikkim Manipal University Page No. for example the IT industry is more interested in the individual’s performance in a project as well as in a role – one wants to know how he has handled this particular project as project manager. and conditions under which these are to take place and so on. 12 . performance management is time bound as well as role specific. We normally consider how well an individual has done in a given role across a period of two or three years. Recognising various dimensions of performance and rewarding it where appropriate. Individual performance is judged in relation to a role and across a short period. Quarterly time frame helps mid-course corrections and ensures longterm performance.Performance Management and Appraisal Unit 1 Planning performance both in terms of the input. year or for life. Analysing performance and understanding what caused it or contributed to it both positively and negatively. 1. in the context of organisation. output. performance is evaluated over a quarter or a three-month period. Performance management is responsible for getting the individual to give their best in a given role and during a given period of time.
6. we must have an idea of the expected level of performance. In order to manage performance. in defining the performance of a sales executive. Sikkim Manipal University Page No. or new areas covered. the focus of performance can be on market share. 3. Performance management uses various interventions to make sure that the individual delivers maximum output of expected quality under the given circumstances.5 Quality dimension The outcome of performance should be of a good quality. or some of these or most of these. The focus can be on anything. Maximum output is a relative term. under what circumstances the previous performance level of the individual or similar individuals under similar circumstances and so on. 1. a manufacturing company which has set up a target of producing 200 products per day may have reached the target. 13 . the kind of support needed. Similarly. but if the quality of the product is not of good quality.6. a student’s focus could be to learn more or get more marks. profits. 1. Maximum is defined or determined by the following considerations: 1. Previous performance of the individual for a similar task and under similar circumstances. For example. 2.Performance Management and Appraisal Unit 1 period of time and under the set of circumstances operating at that point of time.4 Focus dimension Performance also has a focus dimension. The output may include turning every circumstance to one’s own advantage or changing the circumstances in order to deliver maximum output. Estimated performance of the individual specified in advance. It could be on quality or on cost or financial dimensions. For example. taking into accounts the capabilities and capacity limitation of the individual and the constraints imposed by the situation. Performance of any other comparable individual or a standard available at that time including the maximum performance of another individual with whom competition is being set. The focus of performance can be on many other dimensions. then the performance is a total failure.
or with respect to time and effort. 14 . As dyadic performance contributes substantially to an individual’s performance. such data is not easily available with respect to managers. 1. The cumulative performance of an employee and his superior together is called as dyadic performance.Performance Management and Appraisal Unit 1 Many a times. then every member in the organisation will have to put in more effort and time and the organisation will have to finance research and development of new products or to identify potential customers. The term dyad is used to represent the two with equal status. Self Assessment Questions 7.6 Cost dimension Cost is another dimension of performance. For example. ______________ dimension deals with the activities or tasks to be accomplished by the individual. consider a salesman who wants to increase his profit by 50%.7 Neglected Dimensions of Performance Management Performance management in the past was limited to individuals. if the overall performance target of an organisation is to double the profit. The role played by the boss or the subordinate in determining performance was completely ignored. In the context of organisation. visible and measurable dimension of performance. It was considered that it is each individual’s business to be a good performer. ________________is the most acceptable. Costs may be financial. Since managerial performance is highly interdependent and dynamic. similarly each dyad is expected to provide certain inputs and deliver certain results. Similarly. 8. though it is easier to get such data for blue collar workers whose physical labour can be easily measured. it becomes difficult to set standards and also to measure. He will have to spend more time and effort in understanding new ways of convincing customers. 1. 9. Sikkim Manipal University Page No. it deserves some attention. A team working in any department is expected to deliver some results. performance management is time bound as well as _____________. In organisations.6. a manager and their boss together constitute a dyad and have some responsibility to provide inputs.
4. who has a motivating value uniformly with each one of his six subordinates (dyads). He is a great motivator. 2. I get a lot of clarity about my job and what is expected out of my job. 6. Consider manager A. 15 .5. help and learning. He has a de-motivating influence on one of his subordinates. 1. and process measures essentially deal with interpersonal processes. His average dyadic performance with respect to his subordinates is 30 divided by 6 = 5. C have different levels of performance in terms of their dyadic performance vis-à-vis their subordinates.Performance Management and Appraisal Unit 1 There are two ways of measuring dyadic performance. 8. Now consider their dyadic Sikkim Manipal University Page No. I feel motivated to work with him. then he has a 30 point score on his dyadic performance. 5. Hence performance value = 2 x 3 = 6. If we rate the motivational value he has on a five-point scale and assign five to each. Performance value = 3 x 5 = 15 points. hence the performance value = 0 and with the other two he has an average motivational influence. A measure of dyadic performance: The following items of a questionnaire are used to measure dyadic performance. He complements and supplements my own effort. 7. Consider another manager C who motivates only one of his five subordinates while the other four avoid him and consider him of no help. Thus A. The sum of the scores will give the dyadic performance index. We work well as a dyadic team. His total dyadic performance value is 21(15 ÷ 6 + 0) and average is 3. He gives me feedback that is empowering. Outcome measures take into consideration the situational variations and are based on assumptions. They include the extent to which each person is a source of motivation to the other person. I enjoy working with this person. Another manager B has a good equation with three of his subordinates. He has a total dyadic performance score of five and an average of one. 3. He provides the information and support required to do my job well. B. He provides me the guidance and support required to do my job well. the extent to which joint effort yields results that are higher than the sum of individual efforts and the extent to which there is mutuality.
For example. Table 1.O for B and 2. However. it is most often mixed with individual performance.1 shows a dyadic performance table. Sikkim Manipal University Page No. A has greatly productive relationships with his boss and has a dyadic performance rating of 5 while B has a somewhat strained relationship and has a rating of 2 on a five-point scale. The totals appear to be as follows in the table. These are treated as individual accomplishments. This is only one dimension of dyadic performance.0 for A. and ability to provide technical guidance and so on. A has three colleagues who depend on his work (peers).0 Table 1. Employee Satisfaction Surveys have been treated as team performance indicators. problems solved.Performance Management and Appraisal Unit 1 performance with each of their bosses.0 5 4 14 Manager B 4. profit made and so on. general managers and unit heads are normally assessed for their performance in terms of the number of units produced and sales figures achieved. Another dimension of performance which is misunderstood is team performance.1: Dyadic Performance Table Dyadic score with Subordinates Seniors (Boss) Colleagues Total dyadic score Manager A 5. Departmental Surveys.0 3. A and B have one boss each. This is what needs to be identified and measures developed.5 for C with respect to their colleagues. It is assessed based only on relationship.5. Value = 5 with one and 2 with the other averaging out to be 3. These parameters may vary from organisation to organisation and are significant determiners of individual performance in terms of the output. 16 . In the recent past.5 2.5 7. C has five colleagues who depend on his work. 4.25 2 4 10. while in reality these are group performance indicators. Let us assume that the average dyadic performance scores of the three are 4.25 Manager C 1.1 indicates the total overall dyadic performance score. autonomy. Table 1. There are a variety of other dimensions like support provided. C has two bosses and he has a greatly productive relationship with one of them and poor relations with the other. products manufactured. Internal Customer Satisfaction Surveys. B has three colleagues who also depend on his work. Team performance has been widely recognised.
Performance management is a continuous process while appraisals are periodic activities. Managers should view it as aids for performance management. However. the net outcome of performance appraisal may be negative. some use conservative scales and some use no scales but merely feelings. This happens when the concerns get focused on appraisals rather than improvements or on ratings and rewards rather than performance enhancement and development. those who are not rewarded get de-motivated. Appraisal systems help managers manage their performance. Managing an organisation becomes difficult without some form of appraisal. then the organisation is spending more psychological energy. there is an appraisal taking place. the moment an organisation is assessed to determine where it stands. When appraisals are linked to rewards and when fewer people are rewarded than those expecting them. 17 . Appraisals are a part of performance management. Using appraisal systems should make the performance management process more effective and productive. If people continue to perform in spite of appraisals. and they do not have a positive attitude to appraisals. Managers need to learn to enjoy the Sikkim Manipal University Page No. If the management involves improvements. If those who expect to be rewarded exceed the number of those who actually get rewards. the numbers generated from the appraisal process are not comparable across functions. Since appraisal scales are not calibrated and equated. of an employee's performance at work. Appraisal is a static process. whereas performance management is a dynamic process.Performance Management and Appraisal Unit 1 1. This is because of de-motivation. Appraisals are not reducing the performance of individuals and dyads or teams to a five-point scale or a number. Managers should not be overwhelmed with appraisals and appraisal outcomes and should not ignore the most important aspects of performance management – performance improvements and competency building. in most organisations. departments and organisations.8 Role of Appraisal in Performance Management Performance Appraisal is the assessment. at regular intervals. It is the reduction of annual performance into a number and equating one number with another. Some organisations use liberal scales. performance appraisals have lead to decreased performance. levels. Performance appraisal should lead to increased performance.
In an organisation. as it occurs round the year and is not blocked by appraisals as they occur once in a while.9 Summary Performance management includes activities to ensure that an organisation’s goals are consistently being met in an effective and efficient manner. challenging work assignments and other on-the-job learning initiatives that will lead to career advancement and job satisfaction. However. Driving results is to drive improvement in business results through individual. employee. or even the processes to build a product or service. Building capability is to drive organisational and individual capability development by clarifying rolespecific goals and competencies. Sikkim Manipal University Page No. Self Assessment Questions 10. and using formal developmental coaching or mentoring. a manager and their boss together constitute a ________________. (True/False)? 1. 12. 18 . group and enterprise goal alignment. The objectives of performance management are identifying the strengths and weakness of employees. it is most often mixed with ________________. Team performance has been widely recognised.Performance Management and Appraisal Unit 1 performance management process itself. building capability and growing talent. The purpose of performance management can be broadly classified into driving results. which includes motivation and reward strategies. performance coaching and performance information sharing. creating an environment of constructive feedback. Appraisals are not a part of performance management. a department. Growing talent is to motivate and retain high performers by providing career development programs. measurement. 11. Performance management can focus on the performance of an Organisation. Performance management systems with an appraisal component built into them should lead to improved performance and more motivated and competent people. as well as many other areas. finding ways to overcome the shortcomings evaluating the overall ability of a company to set and reach goals and identifying and remedying situations that are hindering company performance.
1. adjust. 2. or even shorter time spans. input dimension that deals with the activities or tasks to be accomplished by the individual. no part of which can be distinguished from neighbouring parts except by arbitrary division. Dyadic Performance 1. The various dimensions of performance are output or result dimension that describes the consequence of inputs in a semi-final.10 Glossary Term Competence Calibrate Continuum Description Cluster of related abilities. knowledge and skills that enable a person to act effectively in a job or situation. commitments. time dimension that deals with performance measurement based on time and focus dimension that describes the focus of performance. or month.11 Terminal Questions 1.Performance Management and Appraisal Unit 1 There are various principles of performance management. 3. 19 . some which are discussed in this unit. Performance appraisal is a part of performance management. or whole. 1. or determine by comparison with a standard A continuous extent.12 Answers Answers to Self Assessment Questions 1. Quality dimension ensures that the outcome of performance is of a good quality and cost dimension explains the various costs of performance. final or summary form. Combined performance of two individuals. Performance appraisal is usually considered to be the process and time when manager and employee sit down to review the employee's performance over the last year. 5. succession. 4. Discuss the evolution of performance management. What are the aims of performance management? What is the purpose of performance management? Discuss the various dimensions of performance management. Performance management 2. Value-Based Management Sikkim Manipal University Page No. To check. Discuss the role of appraisal in performance management.
6 Performance Management and its Dimensions. 4. True Growing Talent. time consuming and inconsistently applied across the stores. While building the new EPM system. The EPM system used by the retailer was overly complex. 1. expanding from its country of origin to build profitable operations across Europe.4 Purpose of Performance Management. 12.Employee Behaviours. 4. underpinned by a distinctive Sikkim Manipal University Page No. 11. ABC applied a 3-perspective framework -. The retailer sought to have the EPM approach redesigned. 2. Activities and Results. learning and development Output or result dimension Input Role specific Dyad Individual performance False Answers to Terminal Questions 1. 10. It wants to redesign its employee performance management (EPM) system. Refer section 1. 6. Refer section 1. Refer section 1. 7. 3. Work output and the amount of time spent working. ABC’s new client is a fast-growing international retailer. 9. 8. Refer section 1. This client had been hugely successful to date.3 Aims of Performance Management. Refer section 1.8 Role of Appraisal in Performance Management. the Middle East and Asia. The foundation for this success was a differentiated product and service offering. This framework was used to identify balanced employee performance descriptors and measures appropriate to different employee positions. Africa. simplified and relaunched.Performance Management and Appraisal Unit 1 3.2 Evolution of Performance Management. The new system was to be used by several thousand staff members within some 150 retail outlets. 5. 5. 20 .13 Case Study Implementation of a Transparent EPM System ABC is a company that provides performance management solutions to its clients.
Five Key Principles of Corporate Performance Management. (2000).Performance Management and Appraisal Unit 1 ‘family’ culture and branding.slideshare.net/Jackie72/case-study-employeeperformance-management References Bob Poladino (2007). These were Regional Directors. Store Managers. The client believed that an objective and transparent EPM system would be crucial to maintaining company standards. Sage Publications Limited.net/definition/3570Value_Based_Management_VBM Sikkim Manipal University Page No. Growth had not been without cost however. Performance Management and Appraisal System. and staff attitudes and behaviours at their historical high levels. Michael Armstrong.slideshare. Do this for all the four employee levels Hint: The four employee levels are Regional Directors. Questions: 1.net/Jackie72/case-study-employee-performancemanagement http://www. ABC‘s solution was to build a set of performance evaluation criteria for the company’s four employee levels. 2.financeglossary. 21 . http://www. Assistant Managers and ‘Shop-Floor’ staff. Assistant Managers and ‘Shop-Floor’ staff. This case study is based on the content from the following link. Assume that you are a member of the team from ABC that is working for the new client. How would you go about helping the employees to identify. prioritise and choose employee personal objectives and their measures? Hint: You will have to think from a manager’s perspective. Kogan Page Limited. T Venkateswara Rao (2004). the consistency of the offer was being eroded and the culture was at risk of dilution. Store Managers. Strategic Human Resource Management: A Guide to Action. John Wiley and Sons. E-references http://www.
organisations can compete and create waves. organisations don't survive.3 Performance Management System and Appraisal Practices in India and Other Countries Performance management system and appraisal practices in India Performance management system and appraisal practices in some Asian countries Performance management and appraisal practices in North and Central America and the Pacific RIM 2. Organisations exist to perform.6 Glossary 2. and United States of America and so on. Sikkim Manipal University Page No.9 Case Study 2. Performance management is a continuous process – in this unit we will discuss the cycle of performance management. A Performance Management System is at the heart of any people management process in an organisation. This unit will familiarise you with performance management systems. This unit will also familiarise you with some of the performance management systems and appraisal practices followed in India and other countries like Japan.5 Summary 2.1 Introduction Learning Objectives 2.Performance Management and Appraisal Unit 2 Unit 2 Practices in Performance Management System Structure: 2. Malaysia. A „system‟ is basically a set of interacting components – we will discuss the components of a Performance Management System in detail.2 Performance Management System 2. If people do not perform. It will also introduce you to the changing approach to Performance Management.8 Answers 2.7 Terminal Questions 2.1 Introduction By now you must be familiar with the concept of Performance Management. If people perform at their peak level. Singapore. 22 .4 Performance Management from System to Spiritual Approach Latest trends in the performance management systems 2.
since any employee can achieve the performance rewards by following the expectations and goals set forth by the company. Each department in the company usually has different Page No. both people and systems must work together to ensure that right things happen. processes and data of a performance management system and the soft aspects such as culture. leadership and learning are inseparable.2 Performance Management System A system is a set of interoperating elements. review. 2. list out the performance management system and appraisal practices in India and other countries state a shift in viewing performance management as a system approach to a spiritual approach. 23 Sikkim Manipal University . In many companies a performance management system is implemented to set standards and expectations for employees at all levels in the organisation. Components of performance management system The components or parts of effective performance management system are: Performance planning: This is the process of identifying employee objectives and setting job expectations and goals for each position in the company. each element having its own specific capabilities and behaviour working together to perform value added processing that allows users to satisfy mission-oriented operational needs in a prescribed operating environment with a specified outcome and probability of success. you should be able to: explain a performance management system.Performance Management and Appraisal Unit 2 Learning Objectives After studying this unit. An effective performance management system helps to integrate planning. financial management and improvement systems to enable policymakers and managers to take the right decisions and improve services. The hard systems. In this section we will discuss the performance management system. Performance management systems also create a broad sense of equality. For performance management to be effective. Both have to work together simultaneously. A performance management system is a management tool used to measure employee performance and reward employees who achieve company objectives.
Other non-financial rewards such as extra time off. 24 Sikkim Manipal University . During this process managers also discuss the review and feedback process of the performance management system. The system also needs to include training or coaching processes to ensure that all company employees are able to improve their performance. Performance diagnosis and coaching: Employees who do not meet the criteria standards to be eligible for performance rewards may need additional training or coaching by their superiors to improve their job skills. although six-month reviews are often used. special company-paid vacations. Most companies have an annual review process. which ensures that the company gets the best performance out of each employee. Usually an employee's performance review is linked with the financial bonus or pay raise. whether financial rewards or another form of benefit motivates employees. Performance management systems are ineffective if they only reward employees for good performance. These review sessions will inform employees how well they are performing in their positions and what areas need to be corrected or improved. gifts for years of service or recognition banquets may also be offered. Ongoing performance communication: A company is benefited by the performance management system only when there is a timely employee review and feedback system implemented in the program. Clearly defined expectations and goals give employees the greatest opportunity for advancing in the company. Page No. Performance appraisal meetings: The supervisor and the employee meet to discuss the employee‟s performance during the appraisal period and to discuss potential goals for the upcoming appraisal period. Performance rewards: This is an important part of the performance management system. subsequent performance reviews may be scheduled to check if the employee has improved from the time of the initial review.Performance Management and Appraisal Unit 2 expectations for its employees based on the requirements of the positions in the department. The thought of earning rewards for their actions. gift certificates. Performance reviews is the starting point for the additional training. Timely employee reviews and feedback sessions are dependent on the company's business operations and human resource guidelines.
The process of using the outcome of review to change plans and take actions is called _____________. Informal appraisal reports are given by senior officers to the top management.3 Performance Management System and Appraisal Practices in India and Other Countries Performance management system and appraisal practices vary from organisation to organisation.Performance Management and Appraisal Unit 2 Activity 1: Visit or speak to the HR personnel of any organisation and discuss how performance is managed in that organisation and identify if a performance management system exists. 3.3. ______________ is the process of identifying employee objectives and setting job expectations and goals for each position in the company. Hint: If the components of performance management such as performance planning. In this section we will discuss the various performance management system and appraisal practices followed in India and other countries. such as generating data to take personal decisions Sikkim Manipal University Page No.1 Performance management system and appraisal practices in India Performance management and performance appraisal systems practiced in Indian organisations vary from almost no appraisal to a sophisticated appraisal system. Self Assessment Questions 1. it is common to find no formal mechanisms of appraising performance. 2. Performance appraisal systems of some organisations aim simultaneously at different objectives. then the organisation has a performance management system. performance rewards and so on are identified. 2. In some of the small and medium sized organisations. At the time of promotion decisions. _______________ is a management tool used to measure employee performance and extend rewards to employees who achieve company objectives. the top management takes the views of senior officers into consideration. 25 . 2.
Steel Authority of India (SAIL) and so on fall under this category. there are organisations having appraisals with various degrees of sophistication. They also take into account such statements of the employee for final assessment by the boss which is on work-related issues as well as behaviours of the employee. Public sector industries like Bharath Heavy Electricals Ltd ( BHEL ). mutuality. Most of the government departments in India fall into this category.Performance Management and Appraisal Unit 2 like rewards. drive and loyalty and ignore fully the job-related accomplishments of the employee. The appraiser is also required to discuss with the employee before the final assessment. promotions. transfers and creation of a new organisational culture of openness. Sikkim Manipal University Page No. The following observations are made from the results of a survey of appraisal practices. Bharath Earth Movers Limited (BEML). organisations can be classified into three categories: Organisations that have annual confidential reports which take into consideration only certain traits to be shown by the employee. hard work. energy and so on. trust and generation of enabling capabilities and employee development that use different components. 26 . leadership. punctuality. for example the department of health and family welfare. Hindustan Machine Tools (HMT). appearance. Organisations that have semi-confidential formats require the employee who is being evaluated to state their accomplishments. job-rotation. Based on the appraisal practices. education. which was conducted in 45 different organisations 34 private sectors and 11 public sectors: Around 50 percent of the organisations seem to understand the purpose of their appraisal as a tool for regulating employee behaviour as well as developing employee capabilities. Larsen & Toubro Limited follows such an appraisal system. for example sincerity. Some have a performance-cumtrait based confidential report formats. whereas some others have performance-cum-trait based appraisals open to the employee who is being evaluated for discussion and requiring the employee to make their comments before they are sent to the reviewing authority and then to the personnel department. In between these two sets.
Identification of training and developmental needs Appraising potential for promotions Identification of factors affecting performance and communicating them to the boss for his assistance and future action Signature by subordinates on the form after assessment by the boss. Appraisal discussions aiming at helping the employee to recognise his strengths.1 presents the percentage of organisations using different components as a part of the appraisal system that is being followed.Performance Management and Appraisal Unit 2 About 30 percent of the organisations still use appraisals only for controlling and regulating employee behaviour. Appraisal discussions aiming at helping the employee to recognise his weaknesses. A fairly high percentage of the organisations seem to use one or more components of appraisal discussed above. Table 2. About 10 percent of the organisations seem to use appraisals mainly for development purposes. for example leadership. co-ordination and so on. Appraisal feedback (written or verbal) to tell the employee the areas he needs to improve. Confidential ratings by an officer one level above or reporting officer. 27 . the performance review feedback which helps the employee recognises their strengths and Sikkim Manipal University Page No. Confidential ratings by an officer at least two levels above the employee being assessed. % reporting its use 62 49 53 69 44 73 87 78 44 33 71 40 This table shows a trend in the performance appraisal systems being used by different organisations in India. Particularly.1: Components of Performance Management used in different Organisations Components Some form of agreement between a boss and the subordinate on tasks or targets or functions forming a basis of appraisal. Self-appraisal to communicate to the boss the accomplishments of an employee Appraisal on managerial qualities required to perform any managerial job. Table 2.
Along with the assessment for branch managers. use of appraisal for identification of training needs. training needs. achievements. are likely to facilitate employee development. deficiencies pointed out. it appears that in a large number of organisations the final assessment appears to be that of a confidential nature.Performance Management and Appraisal Unit 2 weaknesses. Ratings are then given by the reporting officer of the employee on factors relating to job performance. Potential ability and development. 28 . the regional manager is also expected to send branch inspection report. Job knowledge/skills and personal characteristics. These factors are general intelligence. job knowledge. areas of aptitude and interest for future work. customer service. managerial ability. All these components. if monitored well. In the self. In this system officers are assessed in three specific areas: Job performance.The reporting officer makes comments on each of these areas and gives the final assessment using a five-point scale on seven factors. expenditure control and dependability. the employee gives details like the training courses attended. internal administration. efforts made for self-development and efforts proposed to be made and so on. business development public relations/customer service. job performance contributions made in the job during the year. The system used in Allahabad Bank aims at helping officers to identify their strengths and weaknesses and encourage improvement of performance on the job. basing the appraisal on mutually agreed tasks. In spite of this trend. business growth and training requirements in great detail is given by the branch manager in the appraisal system of the Indian Overseas Bank . job knowledge/skills and personal characteristics and potential ability and development. A self-appraisal on. targets or functions and self-appraisal seems to characterise about half of the organisations.appraisal. Vishakhapatnam steel plant of the Rashtriya Nigam Ltd has introduced a new development-oriented appraisal system. The appraisal is to be initiated by the employee with a self-appraisal. Let us now discuss some examples of performance management systems in India. Its important components are Sikkim Manipal University Page No.
The performance planning and appraisal also centres on development action planning. The satisfaction with the way the employee has been able to carry them out. At Modi Xerox. succession planning and management of motivation through rewards. Every employee is expected to initiate the appraisal process through filling a self-performance recording form. At Modi Xerox. Broadly the performance appraisal system has three parts. the performance planning and appraisal is based on the company‟s roles and responsibilities which are filled for every employee. Major achievements. Bank of Baroda has an elaborate development-oriented appraisal system. employee satisfaction. The situation of performance management system in India The following points characterise the situation of performance management system in India: Sikkim Manipal University Page No. 3. Unit Trust of India (UTI) bank which has been recently renamed as Axis bank has adopted an appraisal system whose aim is to primarily develop the boss-subordinate relationship. The reporting officer is expected to rate the employees‟ work performance factors. business results and quality. identification of training and development needs and performance assessment. second focuses on confidential aspect of potential as well as traits and third part is a review of the appraisal. first focuses on self-appraisal of performance. The job responsibilities. self-appraisal and discussion. 29 . The four goals areas taken are customer satisfaction. 4. 5.Performance Management and Appraisal Unit 2 target-setting/task assignment. Factors that may help the employee to be a better performer such as job rotation. In this the employee is expected to indicate: 1. An analysis of factors that might have prevented better performance. periodic performance monitoring and feedback. 2. a leading professionally managed company in India the performance management system is linked to career development. training and so on.
For example. employees not having an opportunity to project their performance. Such experiments which are taking place both in the private and the public sector are focussing on the role of appraisals as instruments for developing human resources. Most of them still do not recognise the full potential of good appraisal systems. but find it difficult to practise it skilfully due to motivational and emotional blocks. Almost all of them. lack of correlation with job-related factors. introducing open assessment without having a committed HRD philosophy and so on has resulted in problems forcing a rethink about the new appraisal systems. and the personnel departments are still struggling to find appraisal models suitable for their organisations. confidential formats of performance appraisal. Some organisations have already begun to experiment with the new systems of appraisal.Performance Management and Appraisal Unit 2 A large number of private and public sector organisations continue to follow trait-based. Personnel function has been widely recognised. Even those who recognise the potential of appraisal systems accept the development objective intellectually. A large number of managers still seem to he obsessed with the question „what am I going to get from the new appraisal system?‟ rather than Page No. Some organisations that changed their appraisal format from a closed system to an open system and introduced them without reorienting the managers to the new systems have run into serious difficulties. particularly for assessing managers. introducing counselling as a part of appraisal without training the managers in counselling skills. Managers want open systems of appraisals. 30 Sikkim Manipal University . however. Their dissatisfaction arises mainly from the following factors: high subjectivity in appraisals. employees somehow getting to know about their ratings and diminishing value of appraisal as an instrument of controlling or monitoring employee behaviour. Employees also want open appraisal systems. are dissatisfied with such forms of appraisals. but they seek it only when the manager‟s assessment of their performance does not work to their disadvantage.
At the same time. The appraisal of individual performance is underplayed in Japanese organisations and group work and organisational identity are promoted. Such change is only beginning now and may take time.Performance Management and Appraisal Unit 2 asking the question „how do I use this system to develop my subordinates and to increase my own managerial effectiveness?‟ A large number of senior level executives see the role of developing human resources as mainly that of the personnel or the HRD departments. human needs are well attended through a variety of practices like life-long employment. Performance appraisal in Japanese organisations needs to be understood in the context of the Zen philosophy and the Japanese management styles. This managerial culture should change for the new systems to become more useful. Performance appraisals are so integrated into organisational life that it is difficult to isolate and talk about appraisal systems and mechanisms. the signature becomes more important than the discussion. 31 . The Malaysian government is already in the process of changing its appraisal systems from traditional trait-based reports to a more participative responsibility-oriented and somewhat open system of appraisal. Sikkim Manipal University Page No. the symbols are taken more seriously than the purpose or the spirit behind these. Personnel departments are still struggling to overcome such problems.3. It varies from annual confidential form of appraisal to a fairly open system practised by multi national companies. social and economic needs and focus on their roles and responsibilities. In some of the organisations. if the employees are required to sign on the form as an indicator that they had a discussion with the appraiser. This lack of recognition of their HRD role prevents most executives from effective use of development-oriented appraisal systems whenever they are being introduced. For example.2 Performance management system and appraisal practices in some Asian countries The Malaysian performance management and appraisal system is somewhat similar to that in India. 2. Similarly. that individual employees need not bother much about the psychological. form filling becomes more important than the process of filling it.
Linking performance appraisal with administrative functions like pay and promotion. Previously performance appraisal in most Singapore companies involved supervisors merely filling out confidential forms. management information systems.3. the employee is told what is written about them and they are given an opportunity to have their say on their supervisor‟s reports. During the discussion. There is a high degree of awareness of the need to introduce professional management in government systems. Even in the government separate functionaries are being appointed to handle the personnel management development functions. Both sides agree on the final assessment and joint action plans are drawn up to improve work effectiveness. 32 . For example. the National Productivity Board of Singapore recognised the potential of open appraisal systems and started promoting it through a series of seminars. development and linking performance appraisals with pay and promotion purposes. Giving an opportunity to the subordinates to express themselves. Development.Performance Management and Appraisal Unit 2 In the Philippines several management systems and practices like management by objectives.3 Performance management and appraisal practices in North and Central America and the Pacific RIM An exploratory study to review the purposes and practices of performance appraisal in ten countries in North and Central America and Pacific Rim was conducted by Milliaman et al. and budgeting financial controls have been introduced. Culture and Sports has a separate office to look after the personnel management and development function headed by an Assistant Secretary .Innovative schemes are adopted to promote competence and high performance among employees. This type of appraisal system requires a quarterly or half-yearly discussion of the employee‟s performance with the employee with a final end-of-year assessment. Strengths and weaknesses are communicated. (2002). Eventually. gave high importance on documentation. The review indicates that the performance appraisals are basically conducted for: Documentation. the Ministry of Education. In the Pacific Sikkim Manipal University Page No. The study indicated that the performance management approach in the US. 2.
This approach is logical. they are used mainly for development. While the system approach identifies Sikkim Manipal University Page No. http://www. The Malaysian performance management and appraisal system is not similar to that in India. 6. predictable and tangible part and the spiritual. It is also used in Japan as a tool to encourage subordinate expression. the focus was more on using performance appraisal for developmental purposes whereas in Japan.ddiworld. In the United States. (True or False)? 2. Unfortunately.net/ajbas/2010/1495-1503. then it is called as _______________. reviewing performance. predictive and performance driven.4 Performance Management from System to Spiritual Approach The performance management approach that is followed by most of the organisations is a system approach. more fundamental questions on performance management still remain unanswered.pd. Activity 2: Visit websites of organisations located in Pakistan and China and identify the Performance Management Systems used by these organizations.Performance Management and Appraisal Unit 2 Rim. Performance appraisal in Japanese organisations needs to be understood in the context of _______________. 5. this system approach does not cover the fundamental requirements. setting targets. In Canada it is used much less for compensation and pay. but over-emphasis is given to scientific. assigning performance ratings. Hint: http://insipub.com/pdf/performancemanagementpracticessurveyinc hina_fullreport_ddi. dynamic. The system approach consists of identifying key performance areas. In Korea and Australia it is used for development and promotion purposes. Self Assessment Questions 4. If an appraisal is initiated by an employee itself. Due to the eagerness to promote a system approach and over commitment to professionalism. 33 . It is important to focus on the performance equation. it is used as a very critical tool for long term and short-term overall development of employees. abstract and unpredictable aspects are completely ignored. rewarding performance and so on.pdf.
Performance Management and Appraisal Unit 2 competencies and competency gaps. Top managements and human resource heads speak a lot about performance management system but fail to implement it. Values of self-discipline. interests. Performance management requires an understanding. It is people who have to utilise these opportunities. Systems provide opportunities. Sikkim Manipal University Page No. The system does not provide spirit. Spiritual approach requires spirit and spirited people. but a continuous process. A desire to discover and apply oneself. Organisational culture and is centred around people. a desire and discipline. desire to improve and learning. Some important questions of performance management which were not addressed properly by the system approach are: What motivates an employee to give their best? What are the conditions under which employees give their best? What should the organisation do continuously to engage its employees in giving their best performance? How does one keep finding out what is blocking performance and create favourable conditions for performance improvements? Are there limits to one‟s capabilities? How does one find out the limits? How does one release the hidden energies? The performance management system is not being implemented the way. the spiritual part is motivational and unpredictable. motives. The spiritual approach of performance management focuses on: Understanding that performance management is not an event. 34 . Understanding of the limitations of organisations as well as opportunities provided by organisations to discover and apply oneself. it should have been. spirit is provided by the people. The failure of a system indicates the need for a complete change in the system and a spirit that ensures its implementation. responsibilities. Understanding of one‟s self.
Developmental needs should be identified along with performance planning in the beginning of the year and thereafter continuously rather than at the end of the performance period. Performance coaching or mentoring and counselling is a very useful tool for performance improvements and the human resource department. Performance planning done in a participative way using the organisational context (vision. and EID Parry and so on. Titan Industries. the author of Performance Management and Appraisal Systems: HR Tools for Global Competitiveness has worked with several organisations on performance management systems such as Geologistics. enhance communication and solve problems and hence result in better performance. Experts are not required to the extent to which some organisations make it out to be. Rao arrives at a conclusion that a good performance management system can go a long way in ensuring performance improvements at all times including in times of difficulty. goals long and short term) will enhance commitment to performance.Performance Management and Appraisal Unit 2 T. 2. FAG Bearings. There is no great technology in identification of Key Performance Areas or in designing performance management systems. It is commonsensical and anyone can acquire it in a short time. The individual should own performance management more than the boss and the boss more than the human resource department. but making it a primary purpose will dilute or even nullify the focus on performance improvements and development goals. Performance planning is necessary for improvements.4. From his experiences. 35 . A lot of new features have been included.1 Latest trends in the performance management systems Performance management systems in various organisations are beginning to evolve. In his book Performance management and appraisal systems: HR Tools for Global Competitiveness. Venkateshwara Rao. mission. Let us discuss some of the latest trends in a performance management system. Linking with rewards may be fine. Rao shares the following lessons learnt from his experience. Tata Finance. A good performance plan gives a sense of direction and utilises human potential and enhances individual and organisational performance. Sikkim Manipal University Page No.
objectivity. rewarding performance and so on. Usage of selective internal task forces and other review mechanisms. assigning performance ratings. it may be training or job rotation or removing blocks or any other things that have to be attended immediately. 8. (True or False)? 2. empowerment and growth and problem solving rather than assessment. reviewing performance. Organisations are beginning to use objective assessment methods. Publishing key performance areas. and measurement and so on. The main objectives of development are lost when more importance is given to the format than the process. Encouraging employees to own their own performance management. The individual should not own performance management. The _______________consists of identifying key performance areas. Taking follow-up actions on time. Self Assessment Questions 7.5 Summary Performance management system is a management tool used to measure employee performance and extend rewards to employees who achieve Sikkim Manipal University Page No. More importance is given to process than formats. 36 .Performance Management and Appraisal Unit 2 The focus is more on improvement and development rather than appraisal. Formats keep the process in shape and in a systematic way. performance plans and such on the local network so that anyone can easily access them. Performance management is not an event. More emphasis is given to learning and development. it is the job of the boss. The performance appraisal rating scales whether it is a five-point scale or a 10-point scale mislead a lot. Shift from quantitative to qualitative assessment. Integrating other systems. Use of technology to facilitate learning from each other. (True or False)? 9. it is a continuous process. setting targets.
Component of a person‟s behaviour that is assumed to serve as an enduring personal characteristic. These are isolated systems that have no interaction with the external environment – systems that do not take any input. performance appraisal meetings. The Malaysian performance management and appraisal system is somewhat similar to that in India. Performance management and performance appraisal systems practiced in Indian organisations vary from almost no appraisal to a sophisticated appraisal system. material or substantial. The failure of a system indicates the need for another system and a spirit that ensures its implementation. commitments. Many companies implement a performance management system to set standards and expectations for employees at all levels in the organisation. Performance planning. These are flexible systems that can adapt and change by interacting with the external environment.6 Glossary Term Competence Closed systems Open systems Pacific RIM Tangible Trait Description Cluster of related abilities. It refers to Countries and Cities located around the edge of Pacific Ocean. The performance management system is not being implemented the way it should have been. The National Productivity Board of Singapore recognised the potential of open appraisal systems and started promoting it through a series of seminars. Spiritual approach requires spirit and spirited people. Page No. performance communication.Performance Management and Appraisal Unit 2 company objectives. performance rewards and performance coaching are the various components of performance management system. knowledge and skills that enable a person to act effectively in a job or situation. Performance appraisal in Japanese organisations needs to be understood in the context of Zen philosophy and the Japanese management styles. discernible by the touch. 37 Sikkim Manipal University . spirit is provided by the people. Capable of being touched. The system does not provide spirit. It is people who have to utilise these opportunities. Systems provide opportunities. 2. Top managements and human resource heads speak a lot about performance management system but fail to implement it.
Sikkim Manipal University Page No. 6.4 PMS from system to spiritual approach. 2. Performance planning. 5.7 Terminal Questions 1. 3. 2. Refer section 2. 2. True. 5. False. 5. System approach 8. 7. 3. 9. Discuss the Performance Management Systems and Appraisal practices in India. 38 .Performance Management and Appraisal Unit 2 2. Self appraisal. Answers to Terminal Questions 1. Refer section 2. Discuss the Performance Management Systems and Appraisal practices in other countries.1 PMS and appraisal practices in India.3. 4. 4. Refer section 2. 4. Explain the cycle of performance management. Refer section 2.8 Answers Answers to Self Assessment Questions 1. Revise.2 Performance Management System. Refer section 2. What are the components of a Performance Management System? 3. False. Zen philosophy.3. Performance management system 2.2 PMS and appraisal practices in some Asian countries.2 Performance Management System. Explain the spiritual approach of performance management.
essays. http://www. because of China‟s open door policy.. Furthermore. 2. experience and so on. In addition. The main purpose of the study was to explore the possibilities whether the performance cycle model can be applied within an organisation with Chinese cultural background.Performance Management and Appraisal Unit 2 2. the researcher also mentioned the sad fact that had already happened in the recent past in a Chinese organisation (death due to overwork).se/essay/a2ab72c24c/ Sikkim Manipal University Page No. Make a list of the organisational cultural practices in China. both large and small organisations are facing an environment characterised by extremely high level of competition. thus leading the readers to have the glimpse of China‟s current organisational culture. which is located in China‟s capital city-Beijing. The current situation of HRM in China was analysed and the first part of the theoretical framework formed. thus to improve the organisation‟s competence. The researcher conducted this study in ABC Ltd. to improve the employees‟ performance and increase the organisation‟s competitiveness and profitability. The case study is based on the content from the link given below. the managerial implications were provided based on the major findings to indicate what efforts the managers could make in the Chinese culture context when facing up to the global competition. How would you go about upgrading the performance management system? Hint: The new Performance management system should be a more spiritual approach. Exchanging ideas and especially studying from western “readymade” advanced theories would be the shortcut for Chinese managers to shorten the gap. 39 .9 Case Study HRM in China With the trend of globalisation. China‟s managers are endeavouring to try every effort to improve employees‟ performance within sound organisational culture. Yet as a matter of fact. China‟s organisations especially managers lag behind their counterparts in the western world in terms of management. operating system. In order to be competitive. Questions: 1.
net/ajbas/2010/1495-1503. Strategic human resource management: a guide to action by action.ddiworld.pdf http://www. 40 . Performance Management and Appraisal System.com/pdf/performancemanagementpracticessurveyin china_fullreport_ddi.essays. T. Michael Armstrong (2004).Performance Management and Appraisal Unit 2 References Bob Poladino (2007). Five Key Principles of Corporate Performance Management. Kogan Page Limited. Venkateswara Rao (2004). John Willey and Sons.pdf http://www. Sage Publications Limited. E-references http://insipub.se/essay/a2ab72c24c/ Sikkim Manipal University Page No.
The focus on team is very important.4 Summary 3. 41 . A good performance management system helps organisations achieve their aims and objectives.1 Introduction The Performance Management Framework is a group of performancerelated processes and methodologies. Understanding how a team works Sikkim Manipal University Page No.6 Terminal Questions 3.1 Introduction Learning Objectives 3.3 Motivation Definition of motivation The process of motivation Intrinsic and extrinsic motivation Motivation related to attitude Need for plan of action Douglas McGregor‟s theory X and theory Y The Link between motivation and performance 3. the entire organisation is nothing but a big team.5 Glossary 3.8 Case Study 3.Performance Management and Appraisal Unit 3 Unit 3 Business Process and Performance Management Framework Structure: 3.7 Answers 3. The two important business processes that help in performance management are focusing on team performance and motivation. because on a wider perspective. trying to achieve a common goal – that is profit for the organisation.2 Focussing on Team Performance The need for shift Different types of teams in an organisation Building team performance Managing team performance 3. sequenced and integrated to effectively raise organisational awareness of performance management.
explain the process of motivation.1 The need for shift In the past.2. teams make decisions. we will discuss the process of motivation and the link between performance and motivation. today. In addition. In this unit. 42 . The employees are the biggest asset of an organisation. Motivation helps to make employees work to their full potential. Learning Objectives After studying this unit. organisations have realised that results are achieved by team efforts although individuals are also important. the focus was on performance management of individuals.2 Focussing on Team Performance A team consists of two or more individuals. The various sources of pressure are: Sikkim Manipal University Page No. discuss motivation and performance management. which in turn leads to individual as well as organisational growth. Teams can be distinguished from small works groups on the basis of the fact that teams have unique requirements for coordination and task interdependency. Teamwork normally involves team members adjusting to each other either sequentially or simultaneously in order to achieve team goals. we will discuss the various aspects of improving team performance. have specialised knowledge and skills and often work under conditions of high workload. These individuals have specific role assignments. This competence era further perpetuates individual performance management rather than team performance management. Managers should understand the process of motivation and use them effectively. This is mainly because of the pressure to differentiate. In this unit. you should be able to: describe the importance of focusing on team performance. Individual focused performance systems will only propagate divisiveness and may even hamper teamwork. 3.Performance Management and Appraisal Unit 3 and using methodologies to improve team performance leads to organisational growth and success. But. The changed global scenario has brought in a new era which is called the competence era. They must perform specific tasks and must interact or coordinate to achieve a common goal or outcome. Motivation is another important factor for organisational success. 3.
the organisation is creating some enablers for the team leader to be effective. rather than on the individual. 43 Sikkim Manipal University . They say that they have done their best as individuals. Willingness of some organisations to pay any amount for competent individuals. Enhanced salary structure forcing every organisation to compute return on investment on each employee or value addition of each employee. Need for competent managers. Organisations have to develop team chemistry and leadership has to help make it work. Some of them say that they have done their best but there are many factors beyond their control. Combined performance and overall outcomes are likely to be better if the focus is on the team. leadership. With all these influences. The team performance or output is an indicator of the individual leader‟s competence and there could be several cases where the team performs in spite of the leader and not necessarily due to the leader. Team chemistry could be managed better if team performance is focused. The performance management indicators are most often team performance based rather than individual performance. employee motivation.The following realities indicate the need for refocusing performance management on group or team performance in addition to individual performance: Strategic thinking.Performance Management and Appraisal Unit 3 Differentiated pay packets. Managers often blame the team for poor performance. but the team has not performed at its best. It becomes very difficult to quantify and measure the performance of individual senior managers. the measuring instruments fail to measure performance of managers. In such cases. Since performance indicators are qualitative and cannot be reduced to numbers. the team should be given adequate importance and team performance should not be merely attributable to the leader. Page No. development and team management competencies are critical at higher organisational levels and make a lot of difference. it is understandable that the corporate sector continues to focus on individual performance. By focusing on team performance.
Pseudo-teams: In this type of teams. Any movement pursued in this direction is worth trying. It is just a small group that works together for getting the work done. there is no focus on collective performance. The sum of the whole is less than the potential of the individual parts. In terms of performance impact pseudo-teams are the weakest of all groups.2 Different types of teams in an organisation A team‟s performance depends upon the type of bonding that exists between the team members.Performance Management and Appraisal Unit 3 Measuring team performance is easier and is more objective than measuring the individual performance at higher levels. and working approach is missing. The most worthwhile performance gain comes in between the stages of potential teams and real teams. 44 Sikkim Manipal University . to discuss practices and to make decisions to help each individual perform effectively in their area of responsibility. Let us now discuss the various types of teams: Working groups: These groups do not have any considerable incremental performance needs that would develop the opportunity of turning these groups into a productive and efficient team. as compared to individual performance. The above considerations make it necessary to recognise the importance of team performance management besides managing individual performance. Their contribution towards the company performance is less because the individual interest of each member varies from each other.2. though they work in a group. purpose. clarity of goals. The members of such teams interact only to share information. Focusing on team performance allows tackling many dimensions simultaneously. However. Potential teams: In this type of teams there is a considerable incremental performance need and the team members try hard to improve their performance impact. The team does not have a common interest in a purpose or set of performance goals. Here the team approach starts making sense and performance impact becomes high. although there is a considerable incremental performance needs and opportunity. Top level performance can be measured mainly in terms of team performance. Team performance is always closer to the organisational performance rather than individual performance. Page No. 3.
Team members should be selected based on their skills: A good team is the one which has team members possessing complementary skills. Hence during the selection process. Pseudo-teams remain where they are. Sikkim Manipal University Page No. A right set of people is needed at the right place and at the right time. because they are not ready to take any risks. This commitment is the soul of the group. the job profile of the individual is not the only basis. Too often there is a presumption that existing job status automatically warrants team membership. The team members must realise that they are a part of a critical accomplishment. but also for ongoing groups. a mix of technical and functional skills. and hence the task they are performing is important. Working groups depend on the sum of individual performance for their overall performance. The team members have complementary skills. Establishing purpose and sense of direction: All team members must believe that there is a worthwhile purpose for the existence of the team. To build up high performance. It serves as an excellent model for all “Real” and “Potential” teams. High-performance teams: The members of such a team are deeply committed to one another‟s personal growth and success. Yet. Selection of team members is not only an issue for task forces and special project teams. problem solving skills and interpersonal skills are necessary. but the necessary skill for job performance. The direction to be adopted for achievement should be clear. Real teams are basic units of performance. The performance expectations of each member have to be made clear.Performance Management and Appraisal Unit 3 Real teams: These are small teams of people committed to a common purpose.3 Building team performance There is no guaranteed technique for building team performance. Potential teams take the risk and face obstacles and they turn into „Real teams‟ and „High performing teams‟. the following of certain guidelines comes in handy. goals and work approach. 45 . 3. For effective performance.2. there are a variety of common approaches that can help potential teams take the necessary risk to grow in performance. for which they hold themselves mutually accountable. Such a team usually out .performs all other teams.
The more successful teams always find a way to spend extra time together. New facts often bring such groups into action. contributions. trust and openness.4 Managing team performance Identifying where the team is performing well and where it needs further development is the first step in managing team performance. 3. First meetings usually are not the first time the team members would have ever met as a group. The team performance report survey and associated analysis gives team members an Sikkim Manipal University Page No. including an overemphasis on individual instead of mutual accountability. commitment. The most crucial rules may be relevant to attendance. easily develop habits that seal access to new information and perspective. Rules are necessary for focus. members attentively monitor the signals given by others to confirm or dismiss assumptions and concerns. 46 . But too many potential teams fail to understand the importance of “first meetings” and instead allow existing habits and operating styles to dominate. Motivating through challenges: New challenges cause a potential team to redefine and enrich its understanding of the performance. constructive confrontation and end-product orientation. This time spent together can be scheduled or unscheduled. When the likely teams gather around for the first time. yet achievable goals that can be reached early on. particularly at the beginning. Spending time together: Teams must spend a lot of time together. Innovative insights develop when personal bonding takes place. Creating a code of conduct: All real teams develop rules of conduct to help them achieve their purpose and performance goals. shape a common purpose. Potential teams with more permanent. on the other hand. Potential teams can set such events in motion by immediately establishing a few challenging. confidentiality.Performance Management and Appraisal Unit 3 More consideration has to be given to initial meetings and actions: Initial impression goes a long way.2. Developing team spirit: Many teams organise urgent small tasks and performance oriented events that bring them together. The purpose of having such events is to achieve a spirit of being together. ongoing assignments. and improve on its common approach. They also help the team set clearer goals.
Without tolerance and patience the team will fail. which are now widely used by work teams throughout the world to assess their progress. The four stages of this model are: 1. As the stage title suggests. The team addresses issues such as what problems they are really supposed to solve. The problem can be easily fixed once it is identified. conflict and confrontation characterise this stage. It can be controversial. the individual's behaviour is driven by a desire to be accepted by others. 47 .Performance Management and Appraisal Unit 3 objective assessment of how the team is doing. exchange personal information. This is also a good opportunity to see how each member of the team works as an individual and how they respond to pressure. it may result in some loss of performance or focus on the task. as differences surface. Team members tend to behave quite independently. as illustrated in Figure 3. and make new friends. Bruce Tuckman‟s "team stages model” developed in1965 presented the four stages of teamwork. Tolerance of each team member and their differences needs to be emphasised. The common language ensures that everyone is focusing on the significant team performance factors and the measured gaps can then be converted into action plans for improved performance. how they will function independently and together and what leadership model they will accept. Storming: People begin to see themselves as part of a team. It provides an opportunity to compare the various viewpoints of team members and outsiders and relate them to the team vision and purpose. The storming stage is necessary to the growth of the team. unpleasant and even painful to members of the team who are unwilling to conflict. 3. the members of the team get to know each other. and then agrees on goals and begins to tackle the tasks. It is the diagnosis of the problems that is essential. The team meets and learns about the opportunities and challenges. Forming: The first step in team building is to form a team. This stage is very important because in this stage. Everybody is busy finding their place in the team and asking themselves why they are here. developing processes. Norming: This is the phase where team members get together by establishing the basic rules. clarifying roles and Sikkim Manipal University Page No. 2. Team members open up to each other and confront each other's ideas and perspectives. and to avoid controversy or conflict.1. In the initial stages.
Sikkim Manipal University Page No. all the team members take the responsibility and have the ambition to work for the success of the goals of the team. Performing Focus on the task Norming Forming Storming Relationship Figure 3. 4. By this time they are motivated and knowledgeable.1 illustrates the Tuckman‟s stages of teamwork. 48 . and it is normal for these teams to go through ups and downs as they develop relationships.Performance Management and Appraisal Unit 3 responsibility. In this stage.1 which shows the link between group relationships and task focus. Figure 3. This phase is characterised by a growing sense of togetherness. Tuckman's idea clearly indicates that it takes time to reach the performing stage.1: Tuckman’s Stages of Teamwork Model Tuckman's teamwork theory is best illustrated on a graph as in figure 3. Some team members may have to give up their own ideas and agree with others in order to make the team work. The teams are able to function as a unit as they find ways to get the job done smoothly and effectively without inappropriate conflict or a need for external supervision. Team members have become interdependent. autonomous and able to handle the decision-making process without supervision. Performance is delivered through people working effectively together. Performing: This is the final stage where increased focus is on both the task and team relationships. The team members are now competent. When relationships have developed within the group and the group has started delivering with a clear focus on the task then optimal or performing position is reached.
clarifying roles and responsibility is called as ______________. How would you manage the performance of the team? Hint: Use Tuckman‟s stages of team work model. 3. The members of _____________ team are deeply committed to one another‟s personal growth and success. In order to do this. ____________ involves the team members adjusting to each other either sequentially or simultaneously in order to achieve team goals. Although a lot of research has been done. Motivation is derived from the word „motive‟. You have been assigned the task of managing a new team.Performance Management and Appraisal Unit 3 Self Assessment Questions 1. developing processes. Activity 1: Assume that you are a team leader in a multinational company. the subject of motivation is not clearly understood and more often than not poorly practised. 2. urge within the personnel that leads them to action. The phase where team members get together by establishing the basic rules.1 Definition of motivation Motivation is defined by goal-directed behaviour. 49 . They make effective contributions at work because of strongly developed feelings of behavioural commitment. It implies that motivation Sikkim Manipal University Page No. 4. which means to arouse to action. Motivation is concerned with the strength and direction of that behaviour. The groups that do not have any considerable incremental performance needs are called _____________.3.3 Motivation The job of a manager in the workplace is to get things done through employees. Motivation of personnel is the desire to secure and maintain optimum performance from the employees regardless of where they are placed in the managerial hierarchy. The members of the new team are from different countries and cultural background. 3. Well-motivated people are those with clearly defined goals and who take such kind of action that they expect will achieve those goals. 3. the manager should motivate the employees.
If the goal is not achieved. the same action is less likely to be repeated.Performance Management and Appraisal Unit 3 takes place when people expect that a course of action is likely to lead to the attainment of a goal and a valued reward .” These definitions are based on the practical experiences of human behaviour at work and the results of extensive research done by eminent management experts. the need will be satisfied and the behaviour is likely to be repeated the next time a similar need arises.” Rensis Likert. The needs in turn create wants. According to the model. says “The task of management is to arrange organisational conditions and methods of operation so that people can achieve their own goals best by directing their own efforts towards organisational objectives.2. 3. explained motivation as “the core of management which shows that every human being earnestly seeks a secure. which is expected to facilitate the achievement of the goal. Sikkim Manipal University Page No. in his book Motivation: The Core of Management. Motivated people acknowledge that their efforts are required for both the needs of the organisation and their own interests. McGregor.one which satisfies their particular needs. Therefore. A supervisor should strive to treat individuals with dignity and recognition of their personal worth. in the context of Performance Management.3. friendly and supportive relationship which gives him a sense of worth in face-to-face groups which are most important to him.2 The process of motivation The motivation process can be modelled as shown in Figure 3. in his book The Human Side of Enterprise. It is a needs related model. Douglas M. Goals are then established which will satisfy these needs and wants and a behaviour trail is selected. which are desires to achieve goods or obtain something. motivation is initiated by consciously or unconsciously recognising unsatisfied needs. 50 . the process of motivation entails positive reinforcement progression. If the goal is achieved. These definitions will help us in understanding important aspects of motivation which has a significant impact on performance management.
The model can be used to illustrate a process of motivation. An understanding and appreciation of this is a necessity to effectively motivate employees. Establish Goal 1. 2. yet very complex too. equity. Page No. It is based on the motivational theories related to needs (achievements). Different individual systems develop with different patterns of needs. but continue to develop as they encounter new problems and experiences. values and perceptions. biological needs. Attain Goal Figure 3. behaviour modelling (reactance) and expectancy.3 Intrinsic and extrinsic motivation An individual can be conceived as a system of psychological motives. values and perceptions and hence each individual system will have unique characteristics. Need 2. Motivation can be understood by understanding human nature. which involves setting of corporate goals that are likely to meet individual and organisational needs and wants and encourage the behaviour required to achieve those goals. Take Action 3. 3.2: The process of motivation This model describes how individual motivation processes take place.Performance Management and Appraisal Unit 3 Figure 3. This means that an individual‟s system operates to maintain its internal balance while addressing demands placed upon it by external forces and it develops in response to individuals‟ basic needs so as to solve the problems presented by the external environment. Individual systems are not static. Human nature can be very simple.3. which leads to effective management and leadership. The two ways by which motivation can take place at work are: Intrinsic motivation: People can motivate themselves by seeking and carrying out work which satisfies their needs or at least leads them to expect that their goals will be achieved. goals.2 explains the process of motivation. 51 Sikkim Manipal University .
it is important to examine how it affects our goals. Subordinates are motivated by managers. Intrinsic motivators are likely to have a deeper and longer-term effect because they are inherent in individuals and not imposed from outside. and is. promotion. needs give rise to wants. Since attitude is such a critical factor in success. The most valuable resource of any business is human resource. praise and so on. whereas for a negative thinker. The foundation for success is the right attitude of a person towards the chosen field. Attitude determines reaction to a setback. it can be a Sikkim Manipal University Page No. Thus. Satisfaction is outcome already experienced. Unfortunately. in fact. more valuable than capital or equipment.Performance Management and Appraisal Unit 3 Extrinsic motivation: Management can motivate people through methods like pay. desires. Motivation is a term that can be applied to the complete class of drives. Managers do things which they hope will satisfy the subordinates‟ drives and desires and induce them to act in a desired manner. Understanding the worth of a goal motivates people to do things to reach that goal. good character. It refers to the drive towards an outcome and the effort to satisfy a want or a goal and finally it results in satisfaction. People can be both – the biggest asset and the biggest liability. The difference between these two types of motivation is that extrinsic motivators can have an immediate and powerful effect. The concept of Total Quality People refers to people who possess integrity. which results in satisfaction. Attitudes are feelings derived from relationships between perceived outcomes and individual values and needs. It can be a stepping stone to success for a positive thinker. and values along with a positive attitude. which cause tension. but it may not necessarily last long. Attitude can be considered both as a permanent nature of a person and the reaction of a person to situations. It refers to the contentment experienced when a want is satisfied. knowledge needs to be multiplied with motivation.3. it is also the most wasted resource.4 Motivation related to attitude For better performance ability. recognition. wishes. 52 . giving rise to action. 3. needs and similar forces. Attitude is another important factor.
3. Begin at the beginning. our attitude towards that person becomes positive and if we have a negative experience with a person. dedication and discipline is the reason that leads to failure of achieving objectives. and how we expect and plan to achieve it. Nurture your imagination to increase your own productivity. Give feedbacks and rewards to yourself. the output of a good performer goes down. a short-term goal and specific action. 53 . If we have a positive experience with a person.Performance Management and Appraisal Unit 3 stumbling block. the output of a marginal performer goes up. Remember that learning to become a manager does not stop with a master‟s degree in business administration. only then will you get things done. we need to decide as to what we want to achieve. Identify a long-term objective. experience and education. author of the book „Appraisal and Compensation Management‟ self motivation can be achieved by following the guidelines given below: Set a goal for yourself. our attitude towards that person becomes negative. Our behaviour changes with respect to our experiences with the people and events in our life.3.6 Douglas McGregor’s theory X and theory Y In the book “The Human side of Enterprise”. Develop an area of expertise built on your strength. direction. In a positive environment.5 Need for plan of action Apart from motivation and a positive attitude. Douglas McGregor states that employees of an organisation can be managed in two ways. an action plan is essential to achieve results. Learn a challenging new task every year. Before making an action plan. Set objectives for improving your position. Make your job a different one. According to Dewakar Goel. while. Lack of desire. The first is called category X which is basically negative. 3. in a negative environment. and the other is basically Sikkim Manipal University Page No. 3. The primary factors that determine our attitude are environment. Convert one of your weaknesses into your strength.
In contrast. under the assumptions of theory Y: Physical and mental effort at work is as natural as rest or play. McGregor concluded that a manager‟s view of the nature of human beings is based on a certain grouping of assumptions. After viewing the way in which the manager dealt with employees. Sikkim Manipal University Page No. individuals can achieve their own goals best by directing their efforts towards the success of the organisation.Performance Management and Appraisal Unit 3 positive. where the aims of the organisation and of the individuals in it are integrated. we can detect that theory X assumes that lower-order needs dominate individuals and theory Y assumes that higherorder needs dominate individuals. An organisation that is run on the lines of Theory X tends to be authoritarian in nature that is such organisations believe that they have the power to enforce obedience and the right to command. 54 . Looking at the way the things are organised. which falls under the category Y. Because employees dislike work. the average human being‟s brainpower is only partly used. In contrast. Theory Y organisations can be described as “participative”. Employees avoid responsibilities and do not work untill formal directions are issued. Average human beings are willing to take responsibility and exercise imagination. Under the assumptions of theory X: Employees inherently do not like work and whenever possible. The manager‟s behaviour towards subordinates is based on these assumptions. Most workers place a greater importance on security over all other factors and display little ambition. they have to be forced or threatened with punishment to achieve goals. Analysing these assumptions. People do exercise self-control and self-direction if they are committed to those goals. will attempt to avoid it. ingenuity and creativity in solving the problems of the organisation.
pay and motivation.3.3: Performance. This linkage can be perfected by the building blocks as illustrated in Figure 3. in the form of pay or some other sort of remuneration. pay is the dominant factor and considerations of pay seem most powerful in binding people to their present jobs . However. which they do not expect to achieve. doubts have been cast on the effectiveness of money. people who work just for money could find their tasks less pleasurable and may not do them so well.7 The link between motivation and performance The most obvious extrinsic reward for good performance would be money.Performance Management and Appraisal Unit 3 3. Pay and Motivation model According to an employer. But this feeling of jubilation can rapidly die away. There is a strong link between an employee‟s performance. On the other hand. Motivation strategies aim to create a working environment and to develop policies and practices that will provide for higher levels of performance from Sikkim Manipal University Page No. 55 . A number of factors are involved in performance improvements and many of those factors are interdependent. But badly designed and managed compensation and reward systems can demotivate the employees of an organisation. Money can therefore provide positive motivation in the right circumstances – not only because people need and want money. Needs Eg Food Values Eg Money can buy food Goals Eg Receive Payment Action Eg Go to work Figure 3. While the lack of money can cause dissatisfaction. but also because it serves as a highly tangible means of recognition. Most people prefer money. it is a highly tangible form of recognition and an effective means of helping people to feel that they are valued. People on fixed salaries or rates of pay who do not benefit directly from an incentive scheme may feel good when they get an increase.3. Extrinsic rewards may wear down intrinsic interest. Employees who are less confident may not respond to financial incentives. its provision does not result in lasting satisfaction either.People who are strongly motivated by money and who expect a high financial reward are motivated by financial incentives. apart from the extra money.
Working groups. ______________is defined by goal-directed behaviour. that employees feel they are valued. _______________are feelings derived from relationships between perceived outcomes and individual values and needs.htm Self Assessment Questions 5. pseudo-teams. It deals with measuring motivation to provide an indication of areas where motivational practices need to be improved and also ensuring. which satisfies their needs. which cause tension.rediff. real teams and high-performance teams are the different types of teams in an organization. 7. so far as possible. (True /False)? 3. Pseudo-teams remain where they are. A team is a small number of people with complementary skills who are committed to a common purpose.com/slide-show/2010/sep/06/slide-show-1-tech-thisis-how-infosys-grooms-its-future-leaders. Activity 2: Visit the websites of different organisations or go through certain articles to find out different techniques and methods used by organisations to motivate their employees. performance goals. People can motivate themselves by seeking and carrying out work. Potential Sikkim Manipal University Page No. Needs give rise to wants. which results in _____________. which will promote motivation and improve management skills.com/Global/Research_and_Insights/Outlook/By_Iss ue/Y2007/SalesForcePerformance. Hint: http://www. because they are not ready to take any risks. This is called as ______________. 9.4 Summary The two important business processes that are a part of the performance management frame work are focusing on team performance and motivation. Extrinsic rewards increase intrinsic interests. 6. and approach for which they are mutually accountable. potential teams. It also develops behavioural commitment and an organisation climate.accenture. 56 . giving rise to action. 8.Performance Management and Appraisal Unit 3 employees.htm http://business. Working groups depend on the sum of individual performance for their overall performance.
Psychological state of a person as expressed in selfconfidence. 4. Team performance can be improved through challenging tasks and spending time together. The first meeting of the team members is very important. and encouraging the behaviour required to achieve these goals. and/or loyalty to a cause or organisation. This model is widely used by work teams throughout the world to assess their progress. The process of motivation involves setting corporate goals that are likely to meet individual and organisational needs and wants. Explain the different types of teams. Employee motivation is key to achieving extraordinary results. 57 . 3. Sikkim Manipal University Page No. Discuss Douglas Mc Gregor's theory x and theory y.5 Glossary Term Pseudo Competence Morale Description Not genuine but having the appearance of Cluster of related abilities.6 Terminal Questions 1. Self motivation is called intrinsic motivation and motivation by the management is called extrinsic motivation. Explain Tuckman's stages of teamwork model. Motivation is the process of boosting the morale of employees to encourage them to willingly give their best in accomplishing the assigned tasks.Performance Management and Appraisal Unit 3 teams take the risk and face obstacles and they turn into „Real teams‟ and „High performing teams‟. Explain the process of motivation. knowledge and skills that enable a person to act effectively in a job or situation. A code of conduct has to be created for team members to follow. 3. commitments. Team performance can be built by establishing a sense of direction among team members. 2. Discuss the process of building team performance. A strong team is one. storming and norming. Bruce Tuckman‟s "team stages model” developed in1965 presented the four stages of teamwork that is forming. 3. 5. in which its members have complementary skills. enthusiasm.
4. This can affect the performance of the company. Motivation. failed to build a working model that encourages and motivates employees to perform their job at the peak of productivity. Teamwork.3 Building team performance. Answers to Terminal Questions 1. 2. XYZ. 2. 2.2.2. 6 Douglas McGregor‟s theory X and theory Y 3. Satisfaction.4 Managing Team Performance. Questions: 1.3.2 The Process of Motivation 5. How would you go about improving team performance? Hint: Use the guidelines given in section 3.2. which in turn has lead to less productivity. Assume that you are a manager with XYZ. Refer section 3.2 Different types of teams in an organisation. 58 . which in turn influences the bottom line that ultimately determines the success and profitability of the business. 7. 9. 3. False. Norming. Work groups. did not realise the important of employee motivation and as such.3. 3.8 Case Study Employee Motivation In any business organisation. Refer section 3. Refer section 3. 4. Refer section 3. You are handling a potential team. High – performance team. an Indian steel-making company. How would you motivate the team to become a high-performing team? Hint: Extrinsic motivation. There is no team spirit among employees at XYZ. Refer section 3.7 Answers Answers to Self Assessment Questions 1. 8. Attitudes. employee motivation is one of the biggest factors that can influence job productivity and workers‟ attitude. 5.3. Sikkim Manipal University Page No.Performance Management and Appraisal Unit 3 3.2. 6. Intrinsic motivation.
accenture.rediff.htm Sikkim Manipal University Page No. Evan M. Performance Appraisal And Compensation Management: A Modern Approach. Richard C. Beyerlein. Westview Press. PHI Learning Private Limited.com/Global/Research_and_Insights/Outlook/By_Is sue/Y2007/SalesForcePerformance. 59 . Douglas A. Michael M. JAI Press. Public Sector Performance: Management.Performance Management and Appraisal Unit 3 References Goel (2008). Berman (1999).htm http://business. Motivation and Measurement. Johnson. Susan T. Kearney. Beyerlein (2000). Team Performance Management. E-references http://www.com/slide-show/2010/sep/06/slide-show-1-techthis-is-how-infosys-grooms-its-future-leaders.
but it is also related to what employees do about monitoring and improving their own performance.2 Performance Planning Goal setting The performance agreement Planning performance development 4.16 Answers 4.14 Glossary 4.3 Defining Expectations The process of defining expectations 4.13 Summary 4.1 Introduction By now you must be familiar with the concept of performance management. 60 .4 Defining Objectives Characteristics of a good objectives 4.11 Coaching 4.9 Assessing Performance 4. The performance management process is not only concerned with interactions between managers and employees.Performance Management and Appraisal Unit 4 Unit 4 Process of Performance Management Structure: 4. Sikkim Manipal University Page No.1 Introduction Learning Objectives 4.15 Terminal Questions 4. In this unit we will discuss the process of performance management.6 The Continuous Process of Performance Management 4.12 Documentation 4.8 Providing Feedback 4.17 Case Study 4.5 Measuring Performance 4.10 Rating Performance 4. Performance management system consists of a number of interconnected processes which takes place throughout the year.7 Reviewing Performance 4.
This unit explains the process of performance management which includes planning. and stretching them to discover what they are capable of. It also motivates people by giving them the opportunity to perform and develop. explain Performance measurement. and what is to be achieved. Developing a common understanding of the goals and objectives that need to be achieved. now and in the future. Sikkim Manipal University Page No.Performance Management and Appraisal Unit 4 measuring performance and documenting the outcomes of performance management plans and reviews. It is forward-looking. Performance planning typically involves a meeting of about an hour or so between an appraiser and the employee being assessed. 4. how it is to be done. focusing on what people have to do to achieve their potential. It covers what has to be done. coaching and reviewing. Creating an appropriate individual development plan. describe how expectations are designed. you should be able to: explain Performance planning. Performance planning is the first step of an effective performance management process. The agenda for performance planning meeting includes: Agreeing upon the individual’s key job responsibilities. Identifying the most important competencies that the individual must display in doing the job. Performance planning is concerned with improving employee performance by helping them to learn and providing them with the support they need to do well. accepting performance agreements and agreeing personal improvement plans.2 Performance Planning Performance planning deals with setting the direction. The unit also familiarises you to the continuing process of performance management. discuss performance review. 61 . Learning Objectives After studying this unit.
This is an action plan for individuals to Sikkim Manipal University Page No.2 The performance agreement The result of the planning process is performance agreement. Mobilisation of individual and organisational energy. Increased probability of success. The performance agreement defines expectations–that are results to be achieved and the skills. Performance agreements are also influenced by organisational plans or strategies which result in a sequence of goals or objectives to be translated into individual objectives or actions.Performance Management and Appraisal Unit 4 4. Performance agreements emerge from performance reviews. 62 .1 Goal setting Goal setting is one of the important elements of performance planning. It will be used jointly by managers and individuals and collectively by teams to monitor progress and demonstrate achievements. they are talking about what the individual will do in addition to simply meeting the job description demands of the position. Concentration on high priority activities. It is based on the joint discussion and agreement of expectations. The agreed directions are recorded in the performance agreements. The results of goal setting are: Identification of significant success factors in the job. Increased productivity. Future requirements are analysed by assessing past performance. assessment and development in the performance management process. Apart from identifying the key responsibilities of the individual’s job and the competencies or behaviours that the organisation expects everyone to display.2. setting appropriate goals for the upcoming year is another critical element. knowledge and expertise required to attain these results. The two processes can take place at the same meeting.2.2. and this forms the base for performance feedback. The basis upon which performance will be measured and the evidence that will be used to establish levels of competence is identified and agreed. 4.3 Planning performance development A personal development plan is prepared and agreed during the performance planning process. When a manager and a subordinate are discussing goals. 4.
as is often assumed. It also focuses on enabling individuals to take on more responsibilities. Assume that you are the manager of the HR department in ABC. skills and competencies is recorded in the _______________. Activity 1: ABC is a software development company. extending their capacity to undertake a broader role. Its main focus is on improvement in the current job -. the extension of knowledge and skills. Expectations are also defined as short or medium term targets. The result of the planning process is _____________. 63 . How would you go about planning performance? Hint: Consider the various activities to be performed during performance planning. Expectations are defined and agreed in the form of role profiles. This plan helps to achieve continuous development.Performance Management and Appraisal Unit 4 implement with the support of their managers and the organisation. Self Assessment Questions 1.3 Defining Expectations Performance management is basically about managing expectations. which is based on the principle that everyone is capable of learning more and doing better in their jobs. ____________ is the first step of an effective performance management process. 2. It is an official training which includes a wider set of improvement activities such as learning self-managed project work. upholding the core values of the organisation and meeting behavioural requirements. The role profiles define what is required in each major aspect of the role. which are more than simply output targets. Sikkim Manipal University Page No. coaching and job enlargement and enrichment. The actions agreed to improve performance and to develop knowledge. skills and competencies is recorded in the development plan. The actions agreed to improve performance and to develop knowledge. It also contributes in enhancing the potential of individuals to carry out higher-level jobs. All these can be loosely referred to as objectives. 3. 4.that is to improve the capability of employees to perform the job well.
1 The Process of defining expectations Expectations should be defined based on a role profile which sets out the overall purpose of the role and the key result areas it contains. 64 . The competencies may be technical competencies and any specific behavioural competencies attached to the role.Performance Management and Appraisal Unit 4 4. Identification of further training. if the objective of an organisation is to improve customer satisfaction by responding to customer queries and complaints promptly. Role profiles define the overall purpose of the role. Role profiles include an organisation’s competency framework that defines the knowledge and skills required to achieve the role objectives and any particular behavioural requirements.3. The behavioural competencies are selected from the organisation’s competency framework and modified as required to fit the demands made on role holders. Agreement on how performance improvement in this area could be measured and assessed. efficiently and politely. The process starts at the performance planning stage. or a new role profile is created. Measuring and assessing performance improvement is a difficult part of the process and it is necessary to agree either quantifiable performance measures or any other type of evidence that can be made available to appreciate a job well done. The results of this discussion could be: Agreement on any changes in behaviour required and how they can be achieved. In each of the key result areas. An existing role profile is reviewed and changes are made if necessary.1 shows the role profile. Table 4. and the quantifiable targets are to respond to 90 per cent of queries in one working day. They may also include a list of the competencies required. For example. behavioural changes or improvement or training requirements related to those areas are discussed and agreed upon. the ongoing role expectations and any specific targets or tasks. then these expectations would call for a discussion on how the individual could contribute to upholding a core value for customer service. its reporting relationships and key result areas. Sikkim Manipal University Page No.
of accounting within a the management KEY PERFORMANCE AREAS In-depth knowledge of financial procedures and processes. In-depth knowledge of procurement as a discipline. 4. direct and manage accounting function for ABC. Lead. In-depth knowledge government entity. Business plan interpretation. Budgeting and cost control. Quantitative targets are numerical targets that are achievementbased.Performance Management and Appraisal Unit 4 Table 4. Relevant parties In-depth knowledge of finance as a discipline. Highly numerate. 65 . accounts payable. Highly analytical. This includes the provision of support services to all departments consisting of financial and management accounting. Attention to detail.4 Defining Objectives Managing expectations is based upon an agreement between the manager and the employee on the objectives of the job under discussion and how its achievement would be measured.1: Role Profile POSITION TITLE MAIN PURPOSE OF ROLE CHIEF FINANCIAL OFFICER To lead and direct the financial services of ABC. data processing and risk management. Corporate governance policies and procedures. Objectives can Sikkim Manipal University Page No. Annual financial reporting. budgeting. Qualitative objectives are expectations of behaviour. Planning and organising. direct and manage the financial accounting function for ABC. Maximising performance / drive for results. Objectives can be either quantitative or qualitative. Leadership. TECHNICAL KNOWLEDGE/ COMPETENCIES BEHAVIOURAL COMPETENCIES Lead. Trustworthy.
For example. Targets: These are quantifiable results to be attained which can be measured in terms of income. these objectives are defined as key result areas. innovation. teamwork. The aim is to get people to live up to the espoused values. taking the form of developmental or learning objectives which are concerned with what individuals should do to enhance their knowledge skills and potential and to improve their performance or change their behaviour in specialised areas. In the role profiles. The different types of objectives are: On-going role objectives: These objectives are based on roles. environmental concern. which can help in planning and reviewing performance. for example teamwork. Tasks/projects: Objectives can be set for the completion of tasks or projects by a specified date or to achieve a short-term result. and equal opportunities. Performance will be reviewed and assessed based on this objective. but they may also be defined individually under the framework headings. sales output. one of the key result areas for a sales representative could be to build customer satisfaction by responding to customer queries and complaints. Organisations often convert the aspirations contained in value statements into more specific examples of desirable and undesirable behaviour. reject rates and cost reduction. Competency frameworks may deal with areas of behaviour associated with core values. a customer service target could be to respond to 90 per cent of queries within two working days. level of service. For example. They can also be personal. Values: There are certain expectations to maintain the core values of the organisation in areas such as quality. Behaviour: Behavioural expectations are generally mentioned in the competency frameworks. care and consideration for people. Developmental: Developmental objectives specify areas for personal development in the shape of enhanced knowledge and skills. 66 Sikkim Manipal University . referring to the achievement of role requirements. Performance improvement: These objectives determine what has to be done in order to improve performance. Page No.Performance Management and Appraisal Unit 4 be work-related. customer service.
lack of experience or training and external factors beyond the individual’s control that might affect the individual’s capacity to achieve the objectives should be taken into consideration. Constraints such as lack of resources. It should be precise – that is.html. it should achievable within a defined timescale. It should be challenging. Hint: http://sawaal.wipro-technologies-476887. Objectives can be either quantitative or ______________. Activity 2: Visit the websites of different organisations or go through certain articles to find out the objectives of organisations. It should be achievable within the capabilities of the individual.com/computers-and-technology/what-aimsobjectives. 6.4.Performance Management and Appraisal Unit 4 4. that is. Self Assessment Questions 4. 67 . It has to stimulate high standards of performance and encourage progress. It should be mutually agreed upon by the manager and the individual concerned. 5. This would not be applicable to a standing or continuing objective.ibibo. It should be measurable. emphasising the need to work as an effective member of a team as well as stressing on individual achievement. It should be time-related. The performance measures should either be qualitative or quantitative. Expectations are defined and agreed in the form of _____________. using positive words. It should focus on teamwork. Objectives can be set for the completion of _____________by a specified date or to achieve a short-term result. Sikkim Manipal University Page No.1 Characteristics of a good objectives The characteristics of good work or operational objectives are: It should be consistent with the values of the organisation and departmental and organisational objectives. clear and well defined.
costs Output: These are measured in terms of units produced or processed. completion of work or project. if a sales representative is being assessed. internal and external customers Time: It is the speed of response or turnaround. 68 . Such measures are relatively easy. Sikkim Manipal University Page No. Performance assessments for these are based on objective evidence of behaviour and the outcomes of behaviour otherwise performance assessment becomes judgemental and therefore potentially biased.Performance Management and Appraisal Unit 4 4. It is important to ensure that judgements are based on factual evidences. time to market and delivery times. innovation Reaction: It is judgement by others such as colleagues. For example. Records of follow-up queries or complaints from customers would serve as an evidence for efficiency. The criteria that will be used to assess the extent to which objectives have been achieved is identified and agreed upon during the planning stage. changes in behaviour. The evidence for performance level with regard to promptness would be computer records of speed of response. level of take-up of a service. These could be straightforward performance measures or metrics referring to quantified outputs or they could be clear performance indicators which refer to a task or project being completed which meets specified requirements. sales.5 Measuring Performance It is very important to know what the current performance is in order to improve performance. added value. The evidence for politeness would be customer satisfaction surveys. new accounts Impact: It is the attainment of a standard such as quality or level of service. rates of return. shareholder value. throughput. Performance measures or metrics can be classified as: Finance: These can be measured in terms of income. achievements compared with timetables. amount of backlog. unfair or conflicting. It is difficult to use qualitative measures that refer to behaviours or unquantifiable outcomes.
Learning and work should be integrated and encouragement should be given to all managers and employees to learn from the successes. Role profiles and objectives should be revised as when there is a change in circumstances and more so. because it should be achieved throughout the year and it is not a once-a-year event. Conventional performance appraisal systems were usually built around an annual formal review. Performance management has to be considered as a basic part of the continuing process of management. Sikkim Manipal University Page No. Managers and employees should therefore be organised. development and improvement plans. Progress reviews can take place informally. More importance is given to the performance agreement and the on-going practice of performance management. 8. It is important to ensure that judgements are based on _______________. In some cases. these points could be related to ‘milestones’ contained in project and work plans. which tended to dwell on the past. But there should be more formal short-term reviews at around six months after the formal meeting. Performance management is a discontinuous process. Self Assessment Questions 7. An organisation that is constantly developing and applying the learning gained from experience and the analysis of the factors that have produced high levels of performance.6 The Continuous Process of Performance Management Performance management is a continuous process.Performance Management and Appraisal Unit 4 4. annual review is an important part of a performance management framework. 69 . Constant development of skills and capabilities. but not the most important part. often briefly. and then forgotten. during short-term reviews. __________ and work should be integrated in an organisation. This was carried out at the request of the personnel being appraised. (True/False)? 9. A formal. The process of continuing assessment should be carried out with reference to agreed objectives and to work. willing and able to define and meet development and improvement needs as they arise. This is based on a belief which emphasises on: Continuous improvements in performance. challenges and problems Inherent In their day-today work.
expectations. A formal review is also required if performance has to be rated for contribution related pay purposes. as it provides an avenue to discuss key motivational.7 Reviewing Performance Even if an organisation follows a continuous process of performance management. especially when ratings are required to inform performance-related or contribution-related pay decisions. recognition. Reviews can also provide the basis for rating performance. and hence it plays a vital role in performance management. Reviews give managers and the individual members of their teams the opportunity to pause and reflect on the key issues of personal development and performance improvement. praise and opportunities for growth and to clarify expectations. Sikkim Manipal University Page No. and this provides the basis for future work and development plans. relationships. performance and development issues. This aspect of role development is even more important in flatter organisations where career ladders have shortened and where lateral progression is likely to be the best route forward.Performance Management and Appraisal Unit 4 4. enabling people to enlarge and enrich the range of their responsibilities and the skills they require and be rewarded accordingly. it is advisable to have formal review once or twice a year. 70 . This allows for dialogues involving two-way communication on issues concerning work to take place. Communication: to serve as a two-way communication channel for discussing roles. work problems and aspirations. To empower people by encouraging them to take control over their own performance and development Development: To provide a starting point for improving and increasing abilities relevant both to the current role and any future role the employee may have the potential to carry out. Formal annual reviews complete and enhance informal or short-term progress reviews. The objectives of performance reviews are: Motivation: To motivate employees by providing a positive feedback. Development can be focused on the current role. It is a way to consider the future by understanding where the organisation is heading and where it is supposed to be heading.
Feedback should not be a judgement. Sikkim Manipal University Page No. events. but such interpretations should start from the actual situation as reported in the feedback. It is a waste of time to concentrate on areas which the employee can do little or nothing about. It is always based on evidence.8 Providing Feedback Feedback provides a chance to recognise achievements or to specify areas for improvement or development.Performance Management and Appraisal Unit 4 4. Interpretation of the facts does happen. 71 . Feedback should not be based on opinion. it should be based on facts and should be presented in a way that enables individuals to understand and accept it. Feedback should be provided on actual results or observed behaviour. The focus of feedback should be on aspects of performance the employee can improve. It should not be based on assumptions about the reason for the behaviour. review so that it makes the most impact. It refers to results. Feedback should make employees feel empowered – this can be done by pointing out areas where the performance was good along with areas of improvement. critical incidents and significant behaviours that have affected performance in particular ways. It should be presented as a description of what has happened. It should be given as soon as possible after the performance. Let us now discuss the various guidelines used to provide feed back. It should be backed up by evidence. Feedback should be provided immediately. not from the subjective views expressed by the provider of the feedback.
__________completes and enhances informal or short-term progress reviews. How would you go about giving the feedback? Hint: Use the guidelines to provide feedback Self Assessment Questions 10.1: Sample performance feedback form Activity 3: Assume that you are a HR manager who has reviewed an employee’s performance. Sikkim Manipal University Page No. Figure 4.Performance Management and Appraisal Unit 4 Figure 4.1 illustrates the sample performance feedback form. 72 .
Sikkim Manipal University Page No. average and inadequate performance. This involves clarifying with managers the key results and performance standards they must achieve and using systematic performance reviews to measure progress.Performance Management and Appraisal Unit 4 11. ______________ and communication. acceptable or unsatisfactory. _____________ should be provided on actual results or observed behaviour. The recent development in performance management has lead to an understanding that the means are as important as ends. Performance should be assessed not only on achieving objectives. 4.10 Rating Performance Performance appraisal systems almost always included some form of overall rating of performance. The rating-scale format can either be behavioural with examples of good. 4. Results are assessed against agreed objectives. numerically or by means of abbreviations or acronyms. The objectives of performance reviews are motivation. which progresses downwards from highly positive to negative is given in table 4. but also on the process of achieving objectives The performance assessment process begins with analysis of results and the reasons for the level of achievement reached. The scale points may be further described adjectivally for example exceptional. 73 . 12.9 Assessing Performance In conventional performance appraisal systems. for example ‘ex’ for ‘excellent’ and so on. Progress is measured with reference to the objectives. This behavioural analysis is conducted with reference to a competency framework supported by evidence that is examples of actual behaviour as agreed by the manager and the individual who contribute to good or not so good performance. The scale points may be defined alphabetically. A typical example of a five-point rating scale. or graphic which simply presents a number of scale points along a range. performance assessment is based on objectives. The analysis continues to discover any individual behavioural factors that might have influenced performance.2.
74 . The assessment of contribution refers both to outputs and to behaviours.3: Four Point Rating Scale Rating Very effective Effective Meaning Consistently performs in a thoroughly proficient manner beyond normal expectations Achieves required objectives and standards of performance and meets the normal expectations of the job A contribution that is stronger in some aspects of the job than others. Sikkim Manipal University Page No. where most objectives are met but where performance improvements should still take place. Another popular approach is to have a four-point rating scale that provides positive reinforcement or at least emphasises development needs at every level as given in table 4. This provides a ‘snapshot’ of their overall contribution. significantly above normal job requirements Good all-round performance that meets the normal requirements of the job Performance not fully up to requirements.Performance Management and Appraisal Unit 4 Table 4. A contribution which indicates that there Is considerable room for Improvement In several definable areas. which is presented visually and hence.2: Five Point Rating Scale Rating A B C D E Meaning Outstanding performance Superior performance. improvement is required Unacceptable. attitudes and overall approach. Developing Basic An alternative approach to rating involves agreement between the manager and the employee on where the employee has to be placed on a matrix or grid. provides a better basis for analysis and discussion than a mechanical rating.3 Table 4. constant guidance is required and performance of many aspects of the job is below a reasonable standard.
2 illustrates performance matrix. attitudes and overall approach towards work Figure 4. 75 . a sales executive who performs the required job of making 40 sales per day but does not get good customer satisfaction reports some times falls under the third quadrant. Progress is measured with reference to the ______________. For example. however.2 shows a performance matrix. Self Assessment Questions 13. some improvement required Performance is excellent Requirements are not met Positive approach. Measures of output Output is high. The performance of an employee who falls under the fourth quadrant is outstanding and does not need any improvement.2: Performance Matrix Figure 4.Performance Management and Appraisal Unit 4 Figure 4. The matrix or grid provides a ________________ of the employee’s overall contribution. some improvement is required. The rating-scale format can either be behavioural or ______________. The performance of employees who fall under the first quadrant is not up to the expectations of the role profile. The performance of employees who fall in the third quadrant is good. in which the matrix is divided into four quadrants. Sikkim Manipal University Page No. 15. The approach and attitude of employees who fall under the second quadrant is good but needs a lot of improvement. output is low Behaviors. 14.
11 Coaching The main aim of performance management is to improve performance. The forms should record agreements on performance achievements and the actions to be taken to improve performance or develop competence and skills. the agreed objectives and the improvements made. The need for coaching may arise from formal or informal performance reviews. but it may have notes for guidance. Coaching as part of the normal process of management consists of: Making employees aware of their performance. It should be self explanatory. Every time a manager provides an individual with feedback after a task has been completed. 4. Every time a manager assigns a new task to an employee. Performance management forms should be simple and brief with sufficient white space for comments. 76 . but opportunities for coaching will emerge during the normal day-to-day activities. This gives managers an opportunity to provide guidance at the outset. Creation of contingent pay schemes also require a record of assessments or ratings and the performance management forms serve as working documents for the same. Using appropriate situations to promote learning Encouraging people to take up higher-level issues and helping them identify how they would tackle them. The essential information to be recorded on a form should be: Sikkim Manipal University Page No. This will be of great help during annual performance reviews. It is very important to maintain records of the role profiles. Making sure that employees are not only aware of what is expected from them. a coaching opportunity is created to help the individual learn any new skills or techniques that are needed to get the job done. there is an opportunity to help that individual do better next time.12 Documentation The performance management process is not a mere form-filling activity.Performance Management and Appraisal Unit 4 4. This becomes the responsibility of the manager as a coach and support employees in their activities to develop their knowledge and skills. but also understand what they need to know to be able to complete the task adequately. as guidance at a later stage may be seen as interference.
Figure 4. The values or competency headings. The assessment of performance against each key result area Details of any plans for performance improvement and personal development are shown in figure 4.Performance Management and Appraisal Unit 4 The key result areas from the role profile.3: Personal Development Plan Sikkim Manipal University Page No. 77 . The objectives agreed for each key result area.3.
Performance planning is the first step of an effective performance management process. Activity 4: Do a research and identify the various tools used to document performance data. A personal development plan is prepared and agreed during the performance planning process. Self Assessment Questions 16. which sets out the overall purpose of the role and the key result areas it contains.htm.doc/dfht3/dfht3m0. The need for___________ may arise from formal or informal performance reviews. 17.ibm. The result of the planning process is performance agreement. Data obtained from the performance management process is fed into these tools to inform the managers.boulder.13 Summary Performance management is an on going process that happens through out the year. Managing Sikkim Manipal University Page No. During this process. accepting performance agreements and agreeing personal improvement plans. Performance planning deals with setting the direction. Hint: http://publib. (True/ false)? 18. Recording and analysing this appropriately could result in better understanding of the value of people and their contribution and assist management in taking decisions. 78 . Expectations should be defined based on a role profile.ts31.i bm. key responsibilities of employees are identified and goals are set. 4.cics. Different types of documentation tools such as dashboards or performance indicators are used by organisations.Performance Management and Appraisal Unit 4 A great deal of performance data is generated during the performance management process. Encouraging people to take up higher-level issues and helping them identify how they would tackle them is a part of coaching process. A great deal of ____________is generated during the performance management process. Performance management is basically about managing expectations.jsp?topic=/com.com/infocenter/cicsts/v3r1/index.
reaction and time. It is very important to know what the current performance is. This becomes the responsibility of the manager as a coach and support employees in their activities to develop their knowledge and skills. development and communication.Performance Management and Appraisal Unit 4 expectations is based upon an agreement between a manager and the employee on some objectives and how its achievement would be measured. It is very important to maintain records of role profiles. Performance measures or metrics can be classified into finance. values. 79 . agreed objectives and improvements made. Feedback provides a chance to recognise achievements or to specify areas for improvement or development. The objectives of performance reviews are motivation. targets. Rating employee performance can be done in different ways. This will be of great help during annual performance reviews. input. output. in order to improve performance. Sikkim Manipal University Page No. It can be done on a four point or a five point rating scale. Contingent pay schemes require a record of assessments or ratings. On-going role objectives. tasks/projects. Results are assessed against agreed objectives. The performance assessment process begins with analysis of results and the reasons for the level of achievement reached. The main aim of performance management is to improve performance. It is always based on evidence. Another alternative approach to rating involves agreement between the manager and the employee on where the employee has to be placed on a matrix or grid. behaviour. performance improvement and development are the different types of objectives. Reviews give managers and the individual members of their teams the opportunity to pause and reflect on the key issues of personal development and performance improvement.
14 Glossary Term Contingent pay Feed back Competence Description Compensation that is dependent on the achievement of some performance objectives The return of information about the result of a process or activity. 18. 9. 3. Feedback. 10. Explain the process of performance planning. Role profiles. 14. Qualitative. 17. 5. 3. What are the different ways of rating performance? Explain the importance of coaching in performance management. Snapshot. 80 . Performance planning. 15. 5. 4. 6. Graphic.16 Answers Answers to Self Assessment Questions 1. Performance data Sikkim Manipal University Page No.15 Terminal Questions 1.Performance Management and Appraisal Unit 4 4. Formal annual reviews. 4. 13. Tasks or projects. Learning. A cluster of related abilities. 4. 11. knowledge. Factual evidences. 4. 2. What are the different types of objectives? Explain the continuous process of performance management. 7. An evaluative response. Performance agreement. Development plan. 16. True. 8. and skills that enable a person to act effectively in a job or a situation. 2. False. Development. Coaching. Objectives. 12. commitments.
The survey also revealed that the competencies of the employees were mostly underutilized. Refer section 4. Refer section 4. To beat that competition. The existing performance management system at XYZ is established through the development process of five years planning based on the Chief Executive Officer's (CEO) direction. once developed have to be presented in front of the CEO and if the CEO agrees then these documents are signed as Five Years Business Plan for that department.11 Coaching. 3. XYZ needs to develop appropriate strategies supported with dependable Performance Management Systems both at corporate level as well as individual level. XYZ is the largest producer of food ingredients for products like instant noodles. The problem encountered in this current practice is that the system focuses on the annual budget for merely monitoring not for managing strategically. there is a trend in flavour business in Indonesia to merge Indonesian companies with international flavour houses to strengthen their competitiveness. For example -. 4. The human resource department of XYZ conducted a survey and arrived at the conclusion that the employees of XYZ seem to perform well individually but the overall performance of teams is marginal.10 Rating Performance.Performance Management and Appraisal Unit 4 Answers to Terminal Questions 1. 4. Refer section 4. These programs. Refer section 4.4 Defining Objectives. 81 .17 Case Study Improvement of Team Performance In recent years. Sikkim Manipal University Page No.the merger of International Flavour and Fragrance (IFF) with Bush Boke Allen. 2. Most of the current strategies and programs are developed separately in each functional department with no linkages among them and the feasibility of the programs is based on the availability of the budget.2 Performance Planning.6 The Continuous Process of Performance Management. 5. Refer section 4. which competes with multi national companies. snacks and processed meat.
Janus Performance Management by System. HRD Press.com/computers-and-technology/what-aimsobjectives-wipro-technologies-476887.jsp?topic=/com . Amacom. Performance Planning and Review: Making Employee Appraisals Work.html http://publib.itb.html Sikkim Manipal University Page No.ibm.ac.com/infocenter/cicsts/v3r1/index.boulder. National Library of Australia.ibm.ts31.pdf http://sawaal. How would you go about developing a new performance management system? Hint: Use the various performance management processes discussed in this unit. Jon Warner (2002).sbm.E-references E-references http://www. 82 . The Performance Appraisal Question and Answer Book: A Survival Guide for Managers.ibibo. References Dick Grote. Assume that you are a human resource manager at XYZ. Richard C. Richard Rudman (2004).cics.doc/dfht3/dfht3m0. Grote (2002).id/wp-content/uploads/2010/08/Design-ofCorporate-Performance-Management-System_A-Case-Study-at-PT-Xin-Indonesia_-D-Wibisono-etc.Performance Management and Appraisal Unit 4 Questions: 1.
Sikkim Manipal University Page No. This unit explains the performance management planning process. It is a task-and-people related activity that focuses on what has to be done. Performance management helps people to get into action.4 Managers' Responsibility in Performance Planning 5.5 Employee’s Responsibility in Performance Planning 5. how it is to be done and what is to be achieved.1 Performance Management Planning Introduction Learning Objectives 5.7 Evaluating the Performance Planning Process 5.Performance Management and Appraisal Unit 5 Unit 5 5. But it is equally concerned with developing people. so that they achieve the planned and agreed results. helping them to learn and providing them with the support they need to do well. The framework for performance management is provided by the performance and development plan.6 Drawing up the Plan Performance and development plans Work plans 5.2 Performance Management Planning 5. both in the present and in the future.12 Case Study 5.9 Glossary 5. we will discuss the performance planning process in detail.3 The Planning Process Contents of performance agreement 5. which is the outcome of performance planning.1 Introduction In the previous unit we discussed the performance management process.11 Answers 5. Performance planning is the first and very important process in performance management. In this unit. This unit will also describe the various responsibilities of managers and employees in performance planning and the process of drawing a plan for performance and evaluating the same. 83 .8 Summary 5.10 Terminal Questions 5.
In addition. develop a who have done more employees Designing assessment procedures is also a part of performance management planning. list out the responsibilities of a manager in performance planning. work gets effectively. As a result of this. The success of work teams and departments can be ensured by having a clear set of objectives for each employee to achieve. explain the responsibilities of employees in performance planning. you should be able to: define performance management planning. so that plans can be designed to meet those needs for the betterment of the entire organisation and its ability to reach long term goals. discuss how to draw up different plans for performance. human resource Sikkim Manipal University Page No. An understanding of how human capital can best be managed is essential for the success of an organisation. Performance management plans have to be designed for each individual employee to ensure that they are performing up to standards during set time periods. and hence the skills of each employee and each work-team have to be utilised so that goals can be met more efficiently. The better perform. comprehend to evaluate the performance planning 5. It is also critical to identify the differences in needs that exist within employee groups. which increases company profitability. having a performance management plan in place supports the overall mission and objectives of a company. Another aspect of performance management planning is to workforce training program to coach the existing employees potential for greater performance. 84 . Establishing a performance management plan often involves understanding the organisation from the employees’ perspective.Performance Management and Appraisal Unit 5 Learning Objectives After studying this unit.2 Performance Management Planning Performance management planning is the process of creating and setting forth the strategic plans for managing the performance of employees in order to achieve organisational success. the better the company can operate and grow. development and work. Every employee has unique talents and capabilities. When designing performance management plans.
Performance Management and Appraisal Unit 5 managers usually meet up with various members of management to agree on the overall goals of each department or division. This could be described as a work plan. Then a plan is drafted to best meet the needs of the department’s objectives . The input and output of performance planning process is illustrated in figure 5. After discussing this document with every employee. The outcome of the performance planning process is a formal document created for each department to follow when assessing current employee talents and shortcomings.Goals for the performance plan should be assessable. Since the managers and employees will jointly use these measures and evidence requirements to monitor progress and demonstrate achievements. 85 . It also establishes priorities that are the key aspects of the job to which consideration has to be given. Sikkim Manipal University Page No. The basis upon which performance will be measured and the evidence that will be used to establish levels of competence is agreed upon during the performance planning process. The plan also deals with how managers will provide the support and supervision the employees need. The establishment of a performance management plan helps employees to understand what is expected from them and provides managers a base for monitoring the performance levels of the subordinates. The performance plan is an agreement between the manager and employees on what has to be done to achieve objectives. attainable and enforceable to produce the most favourable results. 5. an individual performance management plan is designed for each individual employee.1.3 The Planning Process The performance planning part of the performance management cycle is largely a joint exploration of what employees are likely to do and know. it should be identified and agreed on earlier. increase standards and improve performance. and how they are expected to perform to meet the requirements of their role and develop their skills and capabilities.
agreement on measures and a personal plan. but more importantly it will integrate a wider set of development activities such as self-managed learning.Performance Management and Appraisal Unit 5 Output Agreement on objectives and standards Input Work Plan Manager and employee discussion Performance Planning Process Agreement on Measurements Personal Plan Figure 5. It is likely to focus on development in the current job. The personal development plan provides a learning action plan. extending their capacity to undertake a broader role. 86 . coaching. a work plan.1: The Input and Output of Performance Planning Process The figure shows that the input to the performance planning process is a discussion between manager and employee. mentoring. to enable individuals to take on wider responsibilities. It may include formal training. job enlargement and job enrichment. The development plan records the actions agreed to improve performance and to develop knowledge. The outcomes of the performance planning process are an agreement on objectives and standards. This plan therefore contributes to the achievement of a policy of continuous development that is predicated on the belief that everyone is capable of learning more and doing Sikkim Manipal University Page No. importantly. to improve the ability to perform it well and also. for which the employees are responsible with the support of their managers and the organisation as a whole. project work. skills and capabilities.
Quantitative targets are numerical targets that are achievement-based. An account of the conditions that exist when work is being performed efficiently can be defined as a performance standard. 87 . 5. departments and individuals are expected to achieve over a period of time. The performance standard definition is in the form Sikkim Manipal University Page No. Objectives can be work-related. behavioural changes or improvement or training requirements related to those areas are discussed and agreed upon. In some cases. or a new role profile is created. specific long-term quantifiable objectives based performance standards are used. setting out details of what the role holder is expected to accomplish. In each of the key result areas.Performance Management and Appraisal Unit 5 better in their jobs. Objectives and standards of performance: Objectives express something that has to be accomplished. They can also be personal. Objectives. the ongoing role expectations and any specific targets or tasks. Qualitative objectives are expectations of behaviour. Role profiles include an organisation’s competency framework that defines the knowledge and skills required to achieve the role objectives and any particular behavioural requirements. where it is not possible to set time-based targets. taking the form of developmental or learning objectives which are concerned with what individuals should do to enhance their knowledge skills and potential and to improve their performance or change their behaviour in specialised areas. which is based on the joint discussion and agreement of expectations. Role requirements: These are defined as role profiles in the form of the key result areas of the role.3. Objectives can be either quantitative or qualitative. although they may be changed if new circumstances arise. or goals define what organisations. The fundamental nature of performance standards may not change drastically from one review period to the next if the key result area or task remains unaffected. An existing role profile is reviewed and changes are made if necessary. But the plan will also contribute to enhancing the potential of individuals to carry out higher-level jobs. functions. Performance agreement defines the following aspects of performance expectations: 1. referring to the achievement of role requirements.1 Contents of performance agreement The output of performance planning is a performance agreement. 2.
Hint: Role requirements. cost reduction and security may also be specified. 4. average and inadequate performance. Performance measures and indicators: The performance agreement also contains the description of measures jointly agreed upon by the manager and the employees to assess the extent to which objectives and standards of performance have been achieved. You are in a performance planning meeting with an employee – how would you go about drafting a performance agreement. Knowledge. employee development and so on that employees are expected to maintain while carrying out their work. Activity 1: Assume that you are an HR manager in ABC Company.Performance Management and Appraisal Unit 5 of a statement. The rating-scale format can either be ___________ or graphical. functions. Self Assessment Questions 1. The rating-scale format can either be behavioural with examples of good. Performance is usually measured using a rating scale. 5. _____________ define what organisations. The performance plan is an _______________ between the manager and employees on what has to be done to achieve objectives. 3. team work. Sikkim Manipal University Page No. customer service. skills and capabilities: These are definitions of skills and competencies that each role holder has to know to be able to perform well and to know how they are expected to behave in particular aspects of their role. __________________ is the process of creating and setting forth of strategic plans for managing the performance of employees. 88 . specified and observable result happens. Some general operational requirements in areas such as health and safety budgetary control. or graphic. 2. Corporate core values or requirements: The performance agreement may also refer to the core values of the organisation for quality. increase standards and improve performance. 3. departments and individuals are expected to achieve over a period of time. which simply presents a number of scale points along a range. The statement declares that performance will be up to standard if a desirable. 4.
Recognise the most important competencies that are expected from the employees in performing the job. The manager needs to consider about the goals the individual needs to accomplish over the year and the important competencies or behaviours the manager expects the employees to display in their performance. and goals.4 Managers’ Responsibility in Performance Planning There are six basic responsibilities of a manager. Before the meeting. Think about the goals and objectives the person needs to achieve in the upcoming appraisal period. key position responsibilities. 89 . These responsibilities can be classified into two – those that the manager has to work on with the employees before the performance planning meeting and those accomplished during the performance planning meeting. Before the meeting begins. the manager and the employees should review the documents that provide a clear picture of the company’s mission statement and the corporate vision and values statement. The organisation’s strategic goals for the upcoming year. During the meeting the manager has to: Discuss and come to agreement with the employee on the most important competencies. A major part of the job involved in effective performance planning happens before the actual meeting. the manager can set the goals before the planning meeting begins.Performance Management and Appraisal Unit 5 5. or vision and values. the department or division goals and the individual’s job description also have to be reviewed. Determine what can be considered as fully successful performance in each area. Sikkim Manipal University Page No. the manager has to: Re-examine the organisation’s mission statement. Discuss and come to agreement on the employee’s development plan. If there are no goals set for the department. the manager can encourage each subordinate to set individual goals that help ensure that the overall department goals will be met. Understand the employee’s job description. and team’s goals. After setting goals for the entire team or department.
Sikkim Manipal University Page No. discuss competencies. quantifiable. then 45 to 60 minutes should be sufficient to discuss key responsibilities. the manager and subordinate will need to talk about how the job will be done. the manager also needs to think about the subordinate’s development needs. Hence it is important for the manager to have some specific ideas for areas in which the individual should consider setting goals. However. If the company has recognised some core competencies that it expects every employee to exhibit. If the company hasn’t formally identified competencies.” Before the meeting begins. it is also important to consider factors such as behaviour. It is the employee’s responsibility to create and execute a development plan. talk about how performance will be measured. The manager should begin the meeting after thinking about the expectations from the employee’s role. the managers also have to discuss how performance will be measured. The manager will discuss the goals for the department and the company as a whole during the meeting. and meaningful goals that will help accomplish the department’s and the organisation’s mission. The manager works with the subordinates to set significant. outcomes. or products. 90 . Apart from job-competencies and results. If the manager is well prepared. going through these will allow the manager and the individual to identify the ones that are of particular importance in the employee’s job. Along with the results.Performance Management and Appraisal Unit 5 Some organisations use job descriptions as models of excellence. The job descriptions are useful sources of data that specify areas where the employee needs to concentrate attention over the course of the year. set goals. then it’s up to the manager to identify and discuss the behaviours and skills and attributes that is expected from the employee’s performance. the manager needs to be prepared with suggestions on areas where development will have a payoff. and review the employee’s ideas about plans for development. The manager needs to describe what level of performance will be considered to be “fully successful. competencies or performance factors. Once the goals and responsibilities have been identified and reviewed. The manager and the subordinate then review the most important parts of the individual’s job and talk about which responsibilities are the most essential to success.
Before the meeting the employees should: Go through the organisation’s mission statement and their department or team goals. Be convinced that both the higher authority and the employee have a shared understanding of the job and performance expectations. description and determine their significant Sikkim Manipal University Page No.Performance Management and Appraisal Unit 5 At the conclusion of the planning phase. Some of the points mentioned above deal with employee performance because the point of the entire process. Self Assessment Questions 5. Have a clear understanding of how carrying out those responsibilities contributes to the work unit. 91 . is to help the employee succeed. 7. 5. the planning process focuses on where the employee needs to be and not as much on where the manager needs to be. The manager needs to describe what level of performance will be considered to be ______________. and team’s goals. Have dealt with methods to help the employee succeed and be committed to any actions required to help the employee. Have a few documents of the performance-planning process and decisions made. Before the performance planning meeting the manager has to reexamine the _______________. and if the team succeeds. (True/False)? 6. the team succeeds. the employees have seven responsibilities which can again be classified into responsibilities before the meeting and responsibilities after the meeting. Hence. the manager should be able to: Understand the employee’s day-to-day job responsibilities better. The reason underlying this is that if each employee succeeds. the manager must surely be succeeding. A major part of the job involved in effective performance planning happens after the actual performance planning meeting.5 Employee’s Responsibility in Performance Planning Just like the managers. from planning to reviewing. Review their job responsibilities. or vision and values.
the employee has to: Confer and come to agreement with the manager on the most important competencies for their job. During the meeting. The employees have to identify the most important job responsibilities and some possible goals for review during the planning session. responsibilities and competencies. think about the important competencies required for accomplishment of their job. the employees are expected to do the same kind of advance planning that the manager does.Performance Management and Appraisal Unit 5 Consider their roles and identify the most vital goals they should accomplish in the upcoming appraisal period. the individual should make a copy of the form with all of the notes and send it to Sikkim Manipal University Page No. While it is the responsibility of the manager to identify the goals. the employees have to think about their future goals and the development efforts that it will take to accomplish them. The employees should use a plain copy of the form and make notes on the goals. key position responsibilities. and reflect on how job performance will be measured. both the manager and the employee will work together to come to an understanding and agreement on the important goals and responsibilities. The primary responsibility of an employee is on development planning. Discuss with the manager and come to an agreement on their personal development plans. Before the meeting. During the meeting. the competencies. and the individual’s development plans for the next twelve months. 92 . Think about what they consider to be fully successful performance in each area. Performance appraisal form is the best tool used to record all of these agreements and understandings. Compose notes on a working copy of the performance appraisal form. and goals. When the meeting is over. it is the responsibility of the employee to identify developmental areas and needs. Prior to the meeting. In addition to identifying the common areas where developmental attention will be paid in the next twelve months. competencies and responsibilities that they will be held accountable for over the course of the next twelve months. the employees should also think about the resources that will be needed to complete the plan.
When an employee feels that the manager and employee are not on the same side or that they are manipulated by their manager. some soft outcomes should also be included in the performance plan. By the end of the performance-planning process. If this occurs and the decline is unchecked. it’s likely that the desire to do a good job will decrease. Sense that the manager is willing to help the employee.Performance Management and Appraisal Unit 5 the manager. but also to the motivation and desire of the employee to achieve those goals. How those job responsibilities are related to the goals of the team or department and the company How well or to what level the employees need to perform their job activities The criteria that will be used to review performance during and at the end of the review period Potential barriers to performing the job tasks and possible solutions Any assistance to be expected from the manager towards performing appropriately and overcoming possible performance barriers These can be called as hard outcomes which are related to the employee’s understanding of their job and expectations about the job. it creates an environment where performance problems arise. along with the hard job related outcomes. Hence. 93 Sikkim Manipal University . there are other outcomes which can be called as soft outcomes that don’t relate directly to getting the job done. the employee should: Understand that the manager is more interested in creating success than in finding fault later. This is important because it is not enough to pay attention to getting the job done. However. both the parties will have a full record of the expectations. Page No. By the end of the performance planning phase the employees should know: The most important job responsibilities that they need to complete When they must complete the job tasks that is the time allotted to complete the job. These have to do with how the employee perceives the whole process and the relationships between the manager and the company. In that way.
Performance Management and Appraisal Unit 5 Understand that the manager recognises that the employee has considerable knowledge and ability to increase productivity and achieve greater success in the job assigned. 5.6 Drawing up the Plan Every organisation has to pay attention to some tasks in order to grow and prosper. 94 . Activity 2: Assume that you are a manager in an organisation. Provide the necessary information and resources. Set objectives and develop plans for carrying out these objectives. little time would be spent on reviewing performance throughout the year. They help managers to remain focused and execute decisions aimed at achieving the organisation’s long and short term objectives. Set an expectation that supervisors and employees can develop themselves to meet changing organisational needs and to grow personally. The performance or development plan and work plan are two documents intended to help employees in an organisation fulfil these expectations. Set up policies and procedures. For example. These documents help individual employees to focus on their job responsibilities Sikkim Manipal University Page No. Establish measures of performance. Have a sense that the employees and the manager are on the same side on the same wavelength and they share similar goals and concerns. the organisation must: Institute a mission and organisational philosophy. How would you prepare for the performance planning meeting? Hint: Go through the organisation’s mission statement and team goals. Create programs to enable people to achieve the organisation’s objectives. If both these hard and soft outcomes are achieved during planning. Inspire or motivate employees to perform.
which in turn leads to the growth of the organisation. To reinforce performance or improve a skill that does not meet position requirements. to develop a communication or interpersonal skill or to improve work results or style. It helps both the management and the employee to understand each other. Employees with a specific and organised development plan can achieve full and unique potential benefits from the process. The development plan and the work plan deal with the basis and substance of every employee’s work life. The purpose here is to enrich someone’s current job. take on a new project or job responsibility that challenges the individual’s strengths or develops a skill. 95 Sikkim Manipal University . For example. To gain a new skill. The performance and development plan can be used: To build up a plan for personal growth and job improvement – for example. but all agree that it is a continuous process in which employees go through several phases of change.6. ability or understanding needed by the department. The purpose here is to bring someone up to the necessary level of performance. which needs the employees to change their direction. Page No. the direction of the department being changed or new responsibilities being taken over by the department. As employees go through these changes. a current system being upgraded to improve the department’s output. It is essential for an employee’s success and for the organisation’s survival. 5. and to acquire new skills. enjoyable. to improve a required technical skill. a new piece of equipment being introduced. they gain an understanding of themselves and their abilities. For example. This self-knowledge results in a need for job satisfaction and a need to test that knowledge. to stretch the present abilities.1 Performance and development plans There are a number of theories on personal development.Performance Management and Appraisal Unit 5 and achieve their personal goals and objectives as well as their organisations. to make it challenging. to learn a new skill or a better way of doing the present job. and interesting to come to work. The purpose here is to help employees keep pace with whatever direction their department is going or may want to go.
Performance Management and Appraisal Unit 5 To prepare the employee for any future plans they have for themselves. For example. Discuss with the manager and agree upon development and training actions. The work plan is one way of providing this information and feedback. attend a training session. Understand what skills or competencies need to be developed in order to develop performance in any particular area. Identify the activities that have to be accomplished in order to successfully carry out the responsibilities or projects. Basing the performance evaluation and feedback on priorities agreed upon by both the employee and the supervisor. to learn a new skill that is a level above that the individual is currently doing – that is.2 Work plans Another important aim of a performance management system is to make information related to performance readily available to employees. 96 . Increasing job focus and performance expectations.6. In the earlier systems. Work plans describe how objectives are to be accomplished. to take up a course. The work plan helps to manage the job in an easier way. the employees were not clear about the definition of success and did not receive regular feedback on how they were doing. The plan does this by: Encouraging discussions about specific tasks or projects. The purpose here is to meet an individual’s need to change jobs and direction. 5. or enrol in an on-line computer tutorial program. the employees were not that clear about their roles and expectations. The work plan helps employees to: Clearly understand the job responsibilities or project that has to be focused on in the next six months. Every performance and development plan should help the employees to: Analyse the areas of performance that needs improvement. At the start of the performance cycle. Have an understanding of the expected results. Recognise the support the manager can give to improve performance. They define programmes Sikkim Manipal University Page No. Identify training requirements to improve performance.
The performance agreement is expected to change or needs to be updated during the year.Performance Management and Appraisal Unit 5 of work for achieving targets. 97 . key position responsibilities and goals. Sikkim Manipal University Page No. It is helpful to document agreements and plans for reference during the year which forms the basis for progress reviews and revision in the light of changing circumstances. Self Assessment Questions 8. 10. but still it has to retain its value as a basis for setting direction. Such plans should be based on an analysis of performance in relation to previously agreed expectations. improving performance or completing projects. These should compare actual performance with the agreed objectives and standards and the outcome and effectiveness of previously agreed development and work plans. Based on these reviews. but this should be undertaken with care. The aim is to ensure that the meaning of the objectives and performance standards as they apply to everyday work is understood. The initial meetings during the launch of performance management concentrate on the agreement of role definitions. Departments run more smoothly when individual members are able to identify and understand their work objectives within the overall framework of the department. ________________ is the best tool used to record all of the agreements and understandings.7 Evaluating the Performance Planning Process The outcome of periodic review meetings are used to prepare performance agreements and plans. (True /False)? 5. especially when new situations or requirements arise that result in previously agreed plans needing to be changed or priorities having to be revised. Reviews may be held. new agreements and plans can then be made. The employees have to discuss with the manager and come to an agreement on their _______________. 9. They are the basis for converting aims into action. The document also helps manage time and can identify areas that may need special attention. measuring progress and establishing priorities. Some discussion may take place on a performance development plan. at any time of the year. objectives and standards. The manager is the one who decides the most important competencies. often informally.
Hint: Include new skills that have to be learnt to do the job better. objectives and standards.Performance Management and Appraisal Unit 5 The evaluation of performance planning process is very essential in order to gauge the progress of employees individually and the organisation as a whole. There are six basic responsibilities of a manager. 98 . performance standards and capability requirements. The performance agreement that emerges from the planning process is based on the joint discussion and agreement of roles. expertise and capabilities required to attain these results.the results to be achieved and the skills. The initial meetings during the launch of performance management concentrate on the agreement of role definitions. The performance agreement remains the same throughout the year. objectives and standards of performance. Performance agreements set the direction and form the basis for measurement. knowledge. They also identify the measures used to monitor. The outcome of ________________are used to prepare performance agreements and plans. assessment and development in the performance management process. skills and capabilities. Performance agreement is the output of performance planning. Self Assessment Questions 11. Prepare a personal development plan.8 Summary Performance planning is the starting point of the performance management cycle. You are going for a performance planning meeting with the manager. Re-examining the organisation’s mission statement. The contents of performance agreement are role requirements. performance measures and indicators and corporate core values or requirements. objectives. understanding the employee’s job description. (True/False)? 5. review and assess performance. (True/False)? 13. Activity 3: Assume that you are an employee of RBC Company. 12. recognising the most important competencies and defining Sikkim Manipal University Page No. They define expectations . feedback.
general. 5. key position responsibilities and goals and creating the employee development plan are the responsibilities that have to be accomplished during the meeting.9 Glossary Term Budgetary Control Description Methodical control of an organisation's operations through establishment of standards and targets regarding income and expenditure and a continuous monitoring and adjustment of performance against them. Broad. analysing and recording information about the relative worth of an employee. 99 . scope. An employee has seven responsibilities – reviewing the organisation’s mission statement and job description. Competence Job description Performance appraisal Sikkim Manipal University Page No. commitments. based on the findings of a job analysis. knowledge and skills that enable a person to act effectively in a job or a situation. These documents help individual employees to focus on their job responsibilities and achieve personal as well as their organisation’s goals and objectives. responsibilities. thinking about their roles and defining success are the responsibilities to be accomplished before the meeting. personal development plan and composes notes on performance appraisal form during the meeting. Cluster of related abilities. purpose. and working conditions of a job along with the job's title. Job description usually forms the basis of job specification.Performance Management and Appraisal Unit 5 successful performance are the responsibilities of the manager that have to be performed before the meeting. It is the process of obtaining. They help managers to remain focused and execute decisions aimed at achieving the organisation’s long and short term objectives. It generally includes duties. and written statement of a specific job. Discussing and agreeing on important competencies. and the name or designation of the person to whom the employee reports. The employee discusses with the manager and agrees upon key job responsibilities. The performance or development plan and work plan are two documents intended to help employees in an organisation fulfil these expectations.
What is the manager’s responsibility in performance planning? What is the employee’s responsibility in performance planning? Explain development plan and work plan. Performance appraisal form. False. Answers to Terminal Questions 1.3 The Planning Process. Performance management planning 2. 11. Sikkim Manipal University Page No. False. Personal development plans 9. 4. Behavioural. Work Plans commonly summarise different components of a job and how they will be implemented throughout that time span. True. 4. 2. 12. 5. 5. Refer section 5. Refer section 5. Refer to section 5. 6.2 Performance Management Planning. 5. False. Agreement 3.10 Terminal Questions 1. 5. Fully successful 8. 3. 10. Periodic review meetings.5 Employee’s Responsibility in Performance Planning. 7.4 Managers' Responsibility in Performance Planning. 2. 100 . Refer section 5. Refer section 5.11 Answers Answers to Self Assessment Questions 1. What is Performance management planning? Explain the performance planning process. 5. Objectives 4. 13. 3.Performance Management and Appraisal Unit 5 Work plans A work plan is a standard business management tool used for planning tasks during a specific time period.6 Drawing up the Plan. Organisation’s mission statement.
What are the responsibilities of the employees in the above scenario? Hint: Prepare a personal development plan. The company is a brand new enterprise. Goel (2008). What are the responsibilities of the managers in the above scenario? Hint: Understand the organisational objectives. Richard C. Amacom. McGraw-Hill Companies. And hence there arises a need to reintroduce a new and better performance management system. Sikkim Manipal University Page No. The Manager's Guide to Performance Reviews. Questions: 1. established in 2009. Hybrid Solutions has realised the urgent need to train its employees. PHI Learning Private Limited. Performance Appraisal and Compensation Management: A Modern Approach. This company has around 100 employees. Grote (2002). The human resource department is geared up to revise its organisational objectives and rewrite the organisation’s vision and mission statements.Performance Management and Appraisal Unit 5 5. Robert Bacal (2004). 2. As a lot of new game development soft wares and interfaces are released in the market. 101 . The result of a recent survey shows that the company has the potential to compete in the international gaming market. but the potential of the employees has been largely under-utilised. References Dick Grote.12 Case Study Hybrid Solution’s Performance Planning Hybrid Solutions is a gaming applications development company. The performance appraisal question and answer book: a survival guide for managers.
Sikkim Manipal University Page No. This unit discusses the advantages and disadvantages of performance appraisal from the point of view of appraisers and human resource department.1 Introduction By now you must be familiar with performance management planning. wherein the employee and their manager mutually discuss and evaluate the employee‟s performance for the past year.10 Summary 6. performance appraisal is a systematic and objective way of judging the relative worth or ability of employees in performing their job. Thus.2 Evolution of Performance Appraisal 6. It is the most crucial phase of the performance management process.11 Glossary 6.9 Disadvantages of Performance Appraisal 6.12 Terminal Questions 6. Performance appraisal is a necessary management technique. Performance appraisal is also known as performance evaluation or performance review.13 Answers 6. It is also an objective means of determining compensation. 102 .3 Performance Appraisal from an Organisational Perspective 6.7 Performance Appraisal Process 6.4 The Necessity of Performance Appraisal 6.6 Objectives of Performance Appraisal 6.5 Characteristics of Performance Appraisal 6.8 Advantages of Performance Appraisal 6.14 Case Study 6.1 Introduction Learning Objectives 6. Performance appraisal helps to have written records of the employee‟s performance to achieve more productivity through goal setting.Performance Management and Appraisal Unit 6 Unit 6 Performance Appraisal Structure: 6. Let us now discuss the characteristics and objectives of performance appraisal from the organisational perspective.
including both the quantitative and qualitative aspects of job performance. with specification of conditions under which it is to be delivered. Therefore. Heyel: 1973). Other definitions of performance appraisal “Performance Appraisal is the systematic evaluation of individuals with regard to their performance on the job and their potential for development. 103 . tasks and quality. 1 Strategic Approach to Human Resource Management By Tapomoy Deb Sikkim Manipal University Page No. “Performance Appraisal is the process of evaluating the performance and qualifications of the employee in terms of requirements of the job lot which he is employed. for the purposes of administration including placement. Beach: 1980) “Performance Appraisal is a method of evaluating the behaviour of employees in the work place. Cost dimension. selection for promotion. What is expected to be delivered is stated in terms of results or efforts. Focus dimension. Appraisal means the evaluation of worth or estimation of quality or merit. performance appraisal is the systematic description of the employee‟s job related strengths and weaknesses. Performance has many dimensions such as: Output or result dimension.” (Carrell and Kuzmits: 1982). providing financial rewards and other actions which require differential treatment among the members of a group as distinguished from actions affecting all members equally. Quality dimension.Performance Management and Appraisal Unit 6 The term „Performance Appraisal‟ can be divided into: Performance Appraisal = Performance + Appraisal1 Performance means what is expected to be delivered by an individual or a group of individuals within a time frame. Input dimension.” (C.” (Dale S. Time dimension.
categorise the advantages and disadvantages of performance appraisal. During the war. list out the characteristics of performance appraisal. as enlisted below: Personnel Management based phase. we can conclude that: Performance appraisal is concerned with evaluation of an individual employee with respect to their performance on the job. American business organisations started introducing formal appraisal programmes shortly before World War-I. During the period 1920-31. discuss the organisational perspective of performance appraisal. Performance appraisal serves as a basic objective for various human resource decisions. a rational wage structure for hourly paid workers was adopted in industrial units. New York City civil services first introduced a formal appraisal plan for its employees in 1883. the U. Performance appraisal is concerned with both quantitative as well as qualitative factors with respect to the job. Army adopted the man-to-man rating systems for evaluating military personnel. The evolution of performance appraisal is divided into three phases. Activity 1: Go through some Websites to find more definitions and views on performance appraisal stated by some popular proponents and contemporary researchers. Learning Objectives After studying this section you should be able to: explain the evolution of performance appraisal.2 Evolution of Performance Appraisal The practice of formally appraising an individual's performance began in the Wei-Dynasty (221-265 A. at the instance of Walter Dil Scott. when an imperial used to appraise the performance of the members of the official family.).D. In the United States.S. the policy allowing the increment in the grades of wages on the basis of merit was accepted and implemented. As a consequence. 104 . Hint: Carrell and Kuzmits 6. Sikkim Manipal University Page No.Performance Management and Appraisal Unit 6 From the above definitions.
Personnel management based phase In this phase. The operation of such a system involves burdensome paperwork and time and was often not truly representative of effective performance. a system is used to control employees and to provide data about employees. However. 105 . Agreeing performance standards and the ways to monitor and assess. Obtaining the commitment of the employee to follow the agreed plan and of the manager to give the agreed support. The emphasis was on: Reviewing earlier performance and results for a given period of time against the plans and commitments generated at the previous appraisal. Examining organisational and departmental plans and budgets to determine specific activities and targets for individual employees. Development of Individuals phase. either by the individual or by the organisation. The system administers control through report generation which is often confidential and not shown to the employee being reviewed. These shortcomings led to the growth of the second phase Improving current performance phase The primary approach in this phase was to change the way in which employees do their jobs. This system relies on rating performance. usually on predetermined numerical scale and uses the same for gathering information about the potential of employees. Sikkim Manipal University Page No. Identifying the opportunities and needs for improving the performance of the employee. and increasing support for other employees and the organisation. Identifying significant constraints and obstacles in implementation and planning out ways of coping with it. The report is produced annually on all employees and then kept in their personal file. Such system also has little insight into what might be done to improve performance. This phase was developed in 1960s and 1970s out of the „Management by Objectives‟ movement.Performance Management and Appraisal Unit 6 Improving Current Performance phase. there are some problems with this system: They do not offer scope for objective comparisons between employees.
and may therefore receive less attention than they warrant. and special projects.3 Performance Appraisal from an Organisational Perspective Performance appraisal from an organisational view-point plays a crucial role in forming the basis for a range of Human Resources Management (HRM) and Human Resource Development (HRD) decisions and systems of an organisation. The whole process is designed to achieve the full potential of the employee for the benefit of the organisation. It also emphasises on identifying the training and development needs of the individual and groups. It helps to increase consistency. Hint: http://www. completeness. Typically. The information generated from these performance appraisal programmes is used as a basis in certain Sikkim Manipal University Page No. Then identifying what additional or increased capabilities are required to produce an acceptable outcome. The end result of the appraisal process is an agreed action plan that includes training and development activities that might take off the job.com/performanceappraisalform.Performance Management and Appraisal Unit 6 Some important aspects of the job are difficult to specify in terms of quantifiable objectives. it starts by revising the role and job content of the employee and analysing what skills and abilities are needed to meet the defined roles. so making more frequent reviews and adjustments are necessary. fairness and accuracy in appraising employees. changes in job content and role. including coaching and counselling. Circumstances can change many times in a year. and seeking to provide opportunities for job discussions and counselling. It also includes a range of on-the-job activities.pdf. Activity 2: Go through a performance appraisal form and identify the important aspects of employees‟ evaluation process. These systems demand excellent interviewing and interpersonal skills for the employee and the manager.businessballs. 6. Personal plans and aspirations are reviewed to determine what modifications to the role and job can be mutually beneficial. Development of individual phase This phase focuses on providing an opportunity to reflect upon professional practice in a structured way. 106 .
Figure 6. According to them the major purpose of performance appraisal is to: Measure employee‟s performance. the organisational context and resources surrounding the employees also determine their performance. A schematic view of the human resource cycle is presented in Figure 6.1. Identify training needs and development. Validate rewards. appraisal rewards.1: The Human Resource Cycle According to Tichy. Fombrun and Devanne (1982). Research studies point out that in many Indian organisations formal performance appraisals are non-existent for workers and only managers are Sikkim Manipal University Page No. termination and training and development. Identify capable employees for promotion. Differentiate various levels of performance. promotion.Performance Management and Appraisal Unit 6 administrative and developmental decisions like: selection. placement. 107 .
Sikkim Manipal University Page No. The various steps involved are closely interlinked and cannot operate in isolation. 108 . They are: It provides satisfactory feed-back to subordinates to know where they stand. It intends to serve as a basis for improving or changing behaviour towards more effective working habits. the objectives of performance appraisal may vary from culture to culture. performance appraisal in organisations plays three critical HRM functions. salary increase and training or any other determinations. As organisations grow in size and adapt a professional approach to measurement. According to researchers. Administrative decisions include promotion. According to Saiyadin (1985). This process ends with recommendations from manager to the higher management for one or more administrative decisions regarding the employee. if the systems were to be effective.Performance Management and Appraisal Unit 6 subjected to a formal appraisal process. The sequence is significant because it begins and ends with the HRM functions.2 depicts a cycle of the six-step sequence of appraisal scenario from an organisational perspective. formal appraisal systems and controls become imperative. based on which several administrative decisions are taken for employees. organisation to organisation and in the same organisation from time to time. It provides data to managers with which they judge future job assignments and compensation. Figure 6. how well they are performing their assigned jobs and what changes in their behaviour are expected.
6. It facilitates Sikkim Manipal University Page No. Justify the scenario with relevant points.Performance Management and Appraisal Unit 6 Figure 6. 109 .4 The Necessity of Performance Appraisal Performance appraisal system provides the necessary information to management about an employee‟s performance which is used for succession plan by identifying people with potentialities. Hint: Organisational perspective of performance appraisal.2: The Performance Appraisal Scenario as an Organisational Event Activity 3: Assume that you are the HR manager of a software company and depict a scenario to explain the role of performance appraisal in the organisation.
110 . It is more well-defined just by going through a summary of two recent studies conducted by Shetty (1970) and Rudrabasavaraj (1969). the details of the surveys are given in Table 6. transfers and promotions. pay increase. purposes pertaining to an individual. demoting and transferring. Rao and Iqbal (1982) surveyed the appraisal practice of 25 banks and financial establishments. Bolar (1978) gave a detailed list of functions of employee appraisal which present more or less identical findings. (1977) found that performance appraisals are used for two broad purposes. transfer and lay-off. like.Performance Management and Appraisal Unit 6 management to take administrative decisions. Grider and Toombs (1992) draw attention to the variety of appraisal uses. promoting. firing. promotions. It also helps supervisors to known their subordinates and gives an opportunity to the subordinates to know where they stand with respect to their career.1 which captures the prominent issues involved in uses of performance appraisals. Employee development: Identification of training and developmental needs and performance feedback. They are: Administrative decisions: Guiding personnel actions such as hiring. though its potential as a development mechanism is not being used by most of the organisations. The report states almost all organisations use appraisal for salary and reward administration. Sikkim Manipal University Page No. placement. Cherrington (1987) classified five main purposes of performance appraisal. such as where they stand and how they can improve and develop and also purposes that relate to organisational needs. Incorporating human resource planning with the total human resource system. Practitioners generally agree that results of performance evaluations are used in a variety of organisational functions and this position is supported by authorities in the area of human resource development. such as. Williams et al. Underpinning behaviour through pay increases and other rewards. such as salary review. Assisting individual growth and personnel development. Among others.
3) – 6 (50. Mufeed S. The second rank is given by both samples to promotions and transfers.0) 11 (79.Performance Management and Appraisal Unit 6 Table 6.3) and (11.0) – – Indian Companies N=9 7 (77.0) 5 (83. According to the survey.3) 4 (33. While as the fourth rank is given to training and development and informing employees where they stand.1) respectively. Mufeed Ahmad. all the 12 American and 9 Indian companies used performance appraisals for determining wage increase.0) 9 (64.1) 1 (11.0) 3 (21. Shetty (1970) Purpose of Appraisal American Companies N=12 Promotion and transfer Determining wage increase Training and development Informing the employees about where they stand Follow-up interviews Discovering supervisory personnel Personnel research To help supervisors know their employees 9 (75.0) 1 (11.2) – – – 5 (83.0) 11 (79. The third rank is given in both the samples to discovering supervisory personnel. Ahmad Sikkim Manipal University Page No.0) 10 (71.0) 12 (100.0) 1 (17.0) – The table reveals a comparative study of 12 American and 9 Indian companies by Shetty (1970) which shows some interesting similarities in their objectives of performance appraisal.0) 5 (83. 2 Performance Appraisal Management By S.0) Rudrabasavaraj (1969) Indian Companies Public Sector N=6 6 (100. 111 .0) 4 (33.0) 7 (50.0) 5 (83.1: The Study of Purposes and Needs of Performance Appraisal System (PAS) in American and Indian companies2 Y.6) 9 (100.1) – 2 (22.K. in both cases the total score as reported is (33.0) – Private Sector N=16 11 (79.
Performance Management and Appraisal Unit 6 Likewise. Figure 6. the second part of the table consisting of 6 Indian public sector companies and 14 private sector companies by Rudrabasavaraj (1969) shows that the two sectors differed in their emphasis on the objective of performance appraisal. Figure 6. 112 .3: Determining Employee Administrative and Development Decisions Based on PAS Sikkim Manipal University Page No.3 depicts the uses of performance appraisal and determining administrative and developmental decisions based on performance appraisal system.
Among them one is for the organisation and two are for the individuals which are as follows: It generates information which is used for administrative decisions. in his classic piece titled “An uneasy look at performance appraisal” has identified three important functions/ needs of the performance appraisal. in order to train and develop the subordinate to their fullest potentialities. like salary increase. employee evaluation in organisations plays three crucial roles such as: An evaluative role. skill and attitude and job awareness. promotion. Mc Gregor‟s ideas emphasised on the input (human resource dimension) as well as output (production factors from the organisational point of view). On the basis of the above review. Improving organisational effectiveness. It is used as a basis for the coaching and counselling of the individual by his/her superior. transfer or reward (or penalty). Mc Gregor‟s formulations presupposed and called for a humanistic approach as against legalistic approach to appraisal. The conventional role of employee assessment system is the evaluative one. Short and long term developmental role. wherein employees are evaluated on their performance to meet the organisational objectives. Sikkim Manipal University Page No. transfer and some times demotion or termination. Developing the worth of employees. The excessive concern in the past for the evaluative role is cited by many authors as a major cause for the employee dissatisfaction with performance appraisals. Therefore.Performance Management and Appraisal Unit 6 Mc Gregor (1957). it is appreciated that besides serving the traditional purpose of administering a promotion. performance appraisals can be a useful tool for: Improving job performance. It provides feedback to subordinates as to how well they are performing and suggests what changes is needed in their behaviour. 113 . A communicative role. Building better relationship with employees.
shtml. it should help them to solve their problems at home and at office level and also to remove their deficiencies. Activity 4: Read the article “Does performance appraisal benefit anyone?” and discuss the critical aspects of performance appraisal. One of the methods of providing performance feedback is through a performance appraisal. 114 . For this reason. Instead. It may be unfair to measure a data processing employee on phone skills if that is not part of the job description. Thus. Some organisations may also require self-appraisals by employees or. For example. engage outside consultants to conduct the appraisals. the approach should not be to criticise the subordinates. types of performance ratings and clearly defined processes. Hint: http://www.Performance Management and Appraisal Unit 6 It can have some disturbing effect when used without a commitment to employee development on the part of the organisation.com/20030310/management1. and highlight their mistakes and weaknesses. some companies have their appraisals developed by third-party consultants who are specialists in this area. The major characteristics of performance appraisal are: Appraisals match the job descriptions: Performance appraisals must match the job descriptions and standards set for performance objectives.itpeopleindia. Organisations that conduct performance appraisals may have written policies in place that refer to time lines. 6. even. an employee who does data processing should be assessed based on the number of errors and timeliness of work as these are standards set for that particular job. Appraisals are legally compliant: Appraisals must be able to stand legal tests of reliability (questions must yield the same results for all employees if repeated more than once) and validity (does the appraisal measure what it is designed to measure).5 Characteristics of Performance Appraisal Some companies recognise the need to render employee feedback regarding performance. Sikkim Manipal University Page No. to make the appraisals more effective.
o Age distribution of the workforce. Sikkim Manipal University Page No. Performance appraisal acts as an integrating device for the human resource system. It provides: o Detailed list of types and number of technical and managerial employees. 115 . and knowing how to deal with conflict is an important tool. For example. o Skills profile of the workforce by aggregating individual performance appraisals. Instead. continue to train the employee and provide mentoring for continuous improvement. o Behavioural criteria advise managers on what they have to do to successfully execute strategic plans.Performance Management and Appraisal Unit 6 Appraisers must be trained: The supervisor or manager conducting the appraisal must be trained in the use of the evaluation tool and conducting the appraisal. Activity 5: “Performance appraisal is the centrepiece of the HR cycle” do you agree with the statement and justify your explanation using relevant points and examples. Performance appraisal is a data generation system for strategy conceptualisation and implementation. Appraisal systems require follow-up: It is important to the organisation and the employee to provide consistent monitoring and follow-up after the formal appraisal is given. do not take that performance for granted. Explaining the ratings of the appraisal and discussing future plans for improvement with the employee require good communication skills. The employees who require improvements will need clearly defined plans with regular follow-up and feedback. o Rationale for distributing rewards. For example. if the employee scored high with little need for improvement. dispute may arise if the employee disagrees with the outcome. It helps in: o Appraisal as the centrepiece of the HR cycle. o Recognition of developmental opportunities and weaknesses. Hint: Performance appraisal in human resource system. o Identification of appropriate characteristics and behaviours.
Deming. ______ or ______. 116 . Establishing and monitoring objectives and targets. probation. 6. transfer and many more. and highlight their mistakes and weaknesses. The above observations are valid but organisations are practising performance appraisal for a number of objectives. in the absence of a reliable. 2. It is inherently unfair. Appraisal process is an agreed action plan that includes ______ and _________ activities that might take off the job. It is often self-defeating. 6. It acts as an alternative for proper management. Providing a basis for promotion. conditions of service and other rewards. Sikkim Manipal University Page No. 4. It is discrepant with team work. dismissal. (True/False)? 5. (True/False)? 3. a proponent of Total Quality Management (TQM) considers performance appraisal in its present form as dysfunctional due to the following reasons: It reinforces people with rewards for manipulating the system rather than improving it. The major objectives of performance appraisal are as follows: Providing feedback on individual performance. Maintaining fairness in treatment of employees. Performance appraisal is also known as performance _______ or _______. Performance means what is expected to be delivered by an individual or a group of individuals within a time frame. The supervisor or manager conducting the appraisal must be trained in the use of the _______ and ______ the appraisal. viable and validated alternative performance assessment system.6 Objectives of Performance Appraisal Edwards W. confirmation. Performance appraisal serves the traditional purpose of administering a ______. Reviewing salary. The performance appraisal approach should criticise the subordinates.Performance Management and Appraisal Unit 6 Self Assessment Questions 1. Providing a basis for self-evaluation. reassignment.
7 Performance Appraisal Process After the competencies and expectations of an employee are defined.4: Performance Appraisal Process Sikkim Manipal University Page No. Figure 6.4 illustrates the performance appraisal process. Monitoring the effectiveness of HR policies.Performance Management and Appraisal Unit 6 Discovering individual potential. particularly with regard to a lack of clarity about what the job entails and on what criteria their performance is evaluated. 6. Avoiding trouble through meeting legal or political needs. the need for an effective measurement of the employee‟s ability to both deliver and improve their role is important to the future success and growth of everyone involved. these basic questions will be answered and the organisation will move forward and grow. If the appraisal process is properly designed. 117 . Figure 6. One of the sources of frustration for employees is the lack of communication. Facilitating succession planning.
Performance = Ability x Motivation x Organisational Support + or Chance Factors o It is the communication of the actual performance to the employee. 6. Performance measures: These are specific measures that outline how an employee is performing against the set targets or standards. Standards of performance: Standards are the established performance criteria based on job description (role description) and job specification. Generally. Implementing appraisal: It is the conducting of appraisal by the manager. Also. Deviations can be in the form more than required by the standards of performance or vice versa. Employee performance: It is finding out the actual performance of the employee against standards of performance for finding out deviations. The standards must be clear. including conducting of interview and scrutiny of records and reports. o Complete involvement by the employee in the review and discussions.Performance Management and Appraisal Unit 6 The seven steps of a performance appraisal system are: 1. 2. o Empathetic attitude of manager. o Averting discussion on compensation and related benefits. the employee performance is compared with their past performance and that with other employees. performance objectives are set together by the employee (appraisee) and their manager (appraiser). Performance objectives: It is the identification and setting quantifiable (measurable) targets so that employees have greater clarity of their activities to be performed. trust and mutuality. to find out where the employee stands. 5. o Emphasis on work oriented behaviour. 118 . Performance review and discussions: It is the formal discussion between the employee and the manager on the employee‟s performance for a given period of time. o Performance review and discussions requires the following: o General environment of openness. concise and must incorporate all relevant factors. It helps to identify the factors that positively or negatively affect the performance and to prepare action plans to improve the performance using the performance equation. 4. 3. Sikkim Manipal University Page No.
Opportunities for counselling employees on problems related to work are created. Results of training are transferred and monitored easily. Page No. Ultimately. Post appraisal actions: It is the means for identifying various human resource decisions in respect of the employee by taking appropriate actions.hrvinet. Communication between departments can be improved. Activity 6: Research on Web and prepare a report on various appraisal processes followed by financial organisations.8 Advantages of Performance Appraisal Some of the important advantages of performance appraisal are: Organisations can use appraisal as vehicles to publish and promote collective values about work and performance. 6.9 Disadvantages of Performance Appraisal Disadvantages owing to appraisers Following are disadvantages of performance appraisal: Spending more time on performance appraisal than performance planning or ongoing performance communication. 119 Sikkim Manipal University .com/performance-appraisalprocedure/ 6. Training and development is more likely to be emphasised. Employees get to know how they are being perceived and where they stand. Hint: http://www. It is based on the information as revealed by the appraisal. the appraisal records are consigned to the personal file of the employee for future reference.humanresources. Employees are better informed about what they are expected to do.Performance Management and Appraisal Unit 6 7. Accountability for standards and results is more evidently identified. More open and receptive working environment can be created. Emphasis on improved communication at work allows discussion on how the organisation is operated and the impact of management or leadership in its work.
When employees reach their salary ceiling. Comparing employees with each other. not just about pay. because there won‟t be any surprises. impartial tool. Most managers are not in a position to monitor the employee consistently enough to be able to Sikkim Manipal University Page No. Performance appraisal aims to improve performance. Stopping performance appraisal when a person‟s salary is no longer tied to appraisals. managers do not bother. the appraisal is easy to do and comfortable. Forgetting appraisal is about improvement. Managers deceive themselves into believing they can evaluate employee performance. Many organisations use rating forms to evaluate employees. or pay is not connected to appraisal and performance. ratings are subjective and rating forms do not indicate the actual performance of the employee.Performance Management and Appraisal Unit 6 Performance appraisal is the end of a process that goes on all the time a process that is based on good communication between manager and employee. even if they hardly ever see their staff actually doing their jobs. And also. or the results of their jobs. and doesn‟t help anyone. If there is a point to performance appraisal it must be getting the manager and the employees working together to have everyone get better. They do that because it is faster than doing it right. That is because the blaming process is pointless. 120 . more time should be spent preventing performance problems than evaluating at the end of the year. However. Managers who forget this end up developing employees who do not trust them. the manager can become a great target for hostility too. not to find faults in employees or blame them. or even cannot stand them. not blaming. Thinking a rating form is an objective. So. Performance appraisal is for improving performance. Comparing employees creates hard feelings. damages morale and makes employees to compete so badly that they will not work as a team. When managers do good things during the year. Believing they are in position to accurately evaluate employees. Managers conduct appraisals so long to justify or withhold a pay increase.
Thinking all employees and all jobs should be appraised in exactly the same way using the same procedures. or some such thing. Managers are fast to define customer service as answering the phone within three rings. Measuring overall customer service is hard. Performance appraisal form is not going to withstand legal scrutiny. Employees are too smart not to notice the low priority placed on appraisals. that‟s exactly what they get . Measuring or appraising the trivial. and then huge amounts of resources are wasted. Some need specific feedback. The easiest things to measure or appraise are the least important things with respect to doing a job. some do not. Some need more communication than others. Pitfalls owing to human resource department Following are the pitfalls of human resource department: Focusing on and stressing on paperwork and forms. That is easy to measure if you want to. Believing that ratings based form of appraisal will serve as protection against challenges by employees. performance evaluation using the same approach cannot he done in all jobs. Sikkim Manipal University Page No. because it is too subjective and too vague. Human resource department‟s emphasis on the forms and paperwork overshadows the real purpose of doing appraisals. 121 .Performance Management and Appraisal Unit 6 assess well. But they will measure the trivial. But it says to employees that the process is unimportant or phony. Cancelling or postponing appraisal meetings. If managers aren‟t willing to commit to the process. When HR departments concentrate on getting the forms done. then they shouldn‟t do it. What is not easy to measure is the total quality of service that will get and retain customers. That is why appraisal is a partnership between employee and manager.Forms done. Often managers postpone meetings at the last moment. so many managers do not do it. All employees do not need the same things to improve their performance.
If they feel they were useful. which goes often wrong. Unfortunately. Perhaps it is not their fault. it is his or her boss that should be evaluating the manager. a goad many HR departments believe it is just a question of ordering. they would do them. But. and distributing them to managers. No appraisal system will work until each manager‟s boss makes it clear that getting it done is going to be a factor in the manager‟s own appraisal. The assumption is managers will know the purpose. This is because the only way it works is when employee and manager work together. Unfortunately. The key to getting them done is to make them useful. Playing the appraisal cop. 122 . It is a cascading process. The responsibility lies with the management.Performance Management and Appraisal Unit 6 Under training managers in the process. If a manager is not accomplishing the responsibility. There are other reasons. One reason managers postpone with respect to doing appraisals is that they do not see the point. HR departments get stuck with the responsibility of getting appraisals done by managers. Sikkim Manipal University Page No.appraisal function. in partnership. That does not answer the reasons why managers aren‟t doing them. too. or see it as a waste of time. Both manager and employee should have the same understanding about why they are doing the appraisal. one of which will be their fulfilment of the performance management and . each manager is assessed on a number of things. Thinking „pressurising‟ managers to get the forms is productive. printing nut some basic instructions. but it is a strong indicator that the system being used has failed because in an accurately functioning system. All that a performance appraisal technique needs is thorough training of the appraisers (managers) by the HR department. how it will be done and what is expected. yelling. Most can be handled by using approaches that take into account the needs of managers. coercing or begging managers to get them done. the HR department is usually content with designing some new forms. Not training employees.
10 Summary Performance appraisals are necessary for the effective management and evaluation of employees. Directors are appraised by the CEO. Deming considers performance appraisal in its present form as dysfunctional.businessknowhow. Each employee is appraised by their manager. depending on the size and structure of the organisation. Formal performance appraisals are normally conducted annually for all employees in the organisation. Hint: http://www. Appraisals help develop individuals. Employee performance appraisals also institute individual training needs and enable organisational training needs analysis and planning. improve organisational performance and nurture business planning. htm. It is possible that the critics of the appraisal process are the people who can't conduct themselves very well.Performance Management and Appraisal Unit 6 Activity 7: Assume that you are the HR manager of a software development company and suggest some methods to overcome the disadvantages of performance appraisal. (True/False)? 9.com/manage/performance-appraisal. Human Performance is finding out the actual performance of the employee against standards of performance for finding out deviations. and delegation of responsibilities and tasks. It is sometimes trendy in the 'modern age' to dismiss traditional processes such as performance appraisals as being irrelevant or unhelpful. Performance appraisals facilitate management and monitoring of standards. It's a common human response to want to get Sikkim Manipal University Page No. 123 . One of the sources of frustration for employees is the lack of ________. Self Assessment Questions 7. (True/False)? 6. (True/False)? 10. Standards are the identification and setting quantifiable targets so that employees have greater clarity of their activities to be performed. who is in-turn appraised by the chairman or company owners. 8. Edwards W. agreeing expectations and objectives.
3. Evaluation tool. reward 7. 6. 6. Training. 4. 6.12 Terminal Questions 1. Communication 8. Promotion. False 5. What are the characteristics and objectives of performance appraisal? Briefly explain the advantages and disadvantages of performance appraisal. False 9. for good reasons. It is an opinion or instruction given to employees to direct them towards better performance. development 4. 2. transfer. Appraisals in whatever form have been the mainstay of management for decades.Performance Management and Appraisal Unit 6 rid of something that one finds difficult. What is the need of performance appraisal? Justify.13 Answers Answers to Self Assessment Questions 1. review 2. 124 . Describe the three phases of evolution of performance appraisal in brief. It is the examination or investigation of performance records and reports.11 Glossary Term Appraisee Counselling Pitfalls Proponent Scrutiny Description An individual who is being assessed based on performance. 5. Evaluation. True Sikkim Manipal University Page No. The drawbacks/disadvantages An individual who propounds a theory or concept or definition. True 10. conducting 6. Discuss the organisational perspective of performance appraisal in brief. True 3.
Refer section 6. Refer section 6. 6.8 Benefits of Performance Appraisal process. 125 . developing end-user training and building the bank's performance appraisal forms. 4. which includes developing the leadership competencies and skills of the bank's managers and executives. Upsilon Bank's Wholesale Bank spans 21 countries.4 The Necessity of PA. Refer section 6. distinguished by its extensive operations in 17 countries. A trainer spent one week with the bank in training employees. After struggling for two years to develop an in-house system. This move is considered to ensure that the employee evaluation process is easier to manage and will offer complete reporting information on appraisal data. 2. 3. Outside the Asian continent. 5. For the bank. By implementing its in-house system.7 Performance Appraisal Processes and 6.14 Case Study E-appraisal in Upsilon Bank Upsilon Bank Group is the largest bank. Refer section 6.5 and Characteristics of Performance Appraisal and 6. Employees adopted the solution and their investment in the system is increasing every year. the bank hoped to support regulatory compliance. the bank is excited that it was able to implement an eAppraisal system. Refer section 6. To support overall objectives related to performance appraisal. Because of this commitment. as well as the overall annual review process. employee performance and their appraisal is the key to its ongoing strategic plan and success. the bank moved from a paper-based process to a computer-based process designed in-house in 2001. with a focus on emerging markets. There is an element of resistance to the idea of Sikkim Manipal University Page No.2 Evolution of PA.3 PA from the Organisation‟s Perspective. and a number of initiatives to develop performance appraisal. the bank is extremely frustrated since previous performance management solutions failed to meet expectations.6 Objectives of Performance Appraisal. The bank is devoted to an effective learning and development system.Performance Management and Appraisal Unit 6 Answers to Terminal Questions 1. Within a few weeks the first appraisals were under way.
The bank is continuing to shorten the time it takes to finish its performance appraisals and to further increase its on-time completion rate. As a result. E-references http://www.com/customers/case-studies/financialservices/study_standardbank.com/performanceappraisalform.php Sikkim Manipal University Page No.pdf http://www.com/customers/case-studies/financialservices/study_standardbank.com/performance-appraisalprocedure/ http://www.humanresources. but.businessknowhow. The hustle of employee appraisals increased. What are the advantages of an eAppraisal system? Hint: To get over element of resistance. Atlantic Publishers and Distributors.com/list_6157246_characteristics-performanceappraisal-systems.shtml http://www.php from References Tapomoy Deb (2006). 126 . They don't need to refer to separate documents.hrvinet.Performance Management and Appraisal Unit 6 performance appraisals in the past that HR had to overcome initially.itpeopleindia. Source: This case is based on an article taken http://www. it is easier for managers. Employees are more comfortable working within the system and using the authoring aids and links to competencies than they were writing everything out by hand.html http://www. Managers now take the time and use the in-built comment option to provide more constructive feedback to employees.com/manage/performance-appraisal. 2. but perhaps more importantly the quality improved with the eAppraisal. in part because of the eAppraisal's ease of use. Why did the bank move from a paper-based process to an in-house computer-based process? Hint: Evaluation process.htm http://www.com/20030310/management1.halogensoftware. Questions: 1.ehow.halogensoftware.businessballs. The information is all there for them. Strategic Approach to Human Resource Management. that issue is being resolved.
7 Glossary 7.4 Modern Methods Management by Objectives or Result method Behaviorally Anchored Rating Scales method Human Resource Accounting method Assessment centre techniques 360 degree method Potential appraisal Appraisal by Rater concerns 7.10 Case Study 7. In addition. On the other hand.2 Performance Appraisal Methods 7.5 Performance Appraisal of Bureaucrats – A New Approach 7. even employees at every level need to have a good idea of what they would be doing and what is expected from them in respect of quantity and quality of output. For several decades. This unit introduces you to the various performance appraisal methods. performance appraisal has been one of the mostdebated management practices.1 Introduction Learning Objectives 7. as those organisations requires systematic information on how well employees are performing in their jobs. The unit describes the traditional. modern and the latest methods of performance appraisal.8 Terminal Questions 7. which has created a wide variety of viewpoints.6 Summary 7.3 Traditional Methods 7. 127 . Performance appraisal is an important component of human resource management. most people want to be in a Sikkim Manipal University Page No.9 Answers 7.Performance Management and Appraisal Unit 7 Unit 7 Performance Appraisal Methods Structure: 7.1 Introduction After studying the previous units you must be familiar with the concept of performance appraisal.
Sikkim Manipal University Page No. to identify the training needs. you should be able to: explain the traditional methods of performance appraisal.2 Performance Appraisal Methods The qualitative and quantitative aspects of job performance are measured by performance appraisal methods. companies also use multiple evaluators to evaluate various measures (360 degree appraisal).Performance Management and Appraisal Unit 7 position where they can perform better the next time. to set and prepare on future objectives and goals. The main objectives of an appraisal are – to evaluate previous performance. and to ease the accomplishment of these goals. list out the modern methods of performance appraisal. Learning Objectives After studying this unit. 7. An appraisal system evaluates the employee's performance and also their potential for development. state new approaches for performance appraisal. Subordinate or reverse appraisals and team rating techniques are used by some appraisal systems. and a performance appraisal feedback would help them to do so. In many cases. discuss the Human resource Accounting Method. However. 128 . the appraiser is the manager of the person who is to be evaluated.
The traditional methods of performance appraisal are: Essay appraisal method. Paired comparison method.Performance Management and Appraisal Unit 7 A general model of performance appraisal methods is given in the fig. one can identify that these are the methods that are most commonly used. Sikkim Manipal University Page No. 7. Critical incidents method.1. 129 . Straight ranking method.3 Traditional Methods From the name itself. Figure 7.1: Performance Appraisal Methods 7.
one at a time. ranking regularly results in general evaluation of employees. unstructured nature of the essay appraisal makes it highly susceptible to evaluator bias. By not emphasizing on all job-related behaviors or results. The indefinite. Once the data based on Sikkim Manipal University Page No. Straight ranking demands an evaluator to order a group of employees from best to worst overall. then the rest. resulting in an ordering of employees in relation to one another. The ranking process is carried out in a specific manner (for example. This paired comparison methodology systemizes ranking and enables better comparison among individuals to be rated.) Paired comparison method A better technique of comparison than the straight ranking method. or from best effective to worst effective in terms of a certain condition. the employees are given the final rankings. lack of consistency is a major problem. by selecting the best employee in a group first. Rather than in specific judgments about a number of job components. After all the comparisons on the basis of the overall comparisons. this method compares each employee with all others in the group. 130 . an evaluator may simply stress on those that reflect conditionally or unconditionally on an employee. Besides using the information for decisions on pay rise. Graphic ratings scale method. Since essay appraisals are unstructured and undefined to a great extent. promotion or termination of employees. Essay appraisal method The essay method includes an evaluated report created by the appraiser. This does not generally represent a clear picture of the employee or the job. which basically includes appraising an employee's performance based on facts and evidences. in descending order. Forced distribution method. it can also be used for developmental purposes. which brings down the reliability of the method.Performance Management and Appraisal Unit 7 Field review checklist method. Each member of the group is compared with all others in the group one at a time. Straight ranking method Ranking methods compare employees with each other.
Although this method is very time consuming. It can be a technique to help every evaluator to observe the standards evenly and thus match the other evaluators. although they can have more or less. or anchors. Critical incidents method This method describes how the employee behaved during the critical incidents with respect to performance over a period of time. Each scale is a band of definite points. and so forth. behavior. from good to poor. 131 . a fault or get recognized for a good display of idea. To overcome this. Graphic rating scales may or may not describe their scale points. the angle to which an employee reflects a particular trait. the employees are given the final rankings. Evaluating forms comprise a number of scales. they unintentionally introduce bias in their ratings. Moreover. Graphic ratings scale method One of the most common methods of performance appraisal. responsibility or quality of work. and may hold-up the feedback to employees. Sikkim Manipal University Page No. analytically notifying areas of inter-evaluator disagreement. it has a drawback in that the evaluator has to make a note of the critical incidents as and when they occur. which range from high to low. from most to least effective.Performance Management and Appraisal Unit 7 the overall comparisons for each employee is prepared. These are then matched with the employee focusing on actual behavior rather than on qualities. That may be an unrealistic task. In the field review method. Scales mainly have five to seven points. the graphic ratings scale method requires an evaluator to measure on a scale. 'a representative of the HRM staff meets a chunk of evaluators from the supervisory units to discuss each rating. essay and graphic rating measures can be combined in an organised review process. each relating to a certain job or performance-related measurement. Though this method suits well in performance review interviews. Field review checklist method Since every individual differs in quality and attitude. it is very much reliable. such as job skills. or performance result. it makes little sense to wait for months or a year to solve a misdeed.
performance appraisal is not only a process to assess an employee‟s performance over a specified period in the past. Forced distribution is primarily used to remove rating errors such as compassion and centralisation. career development paths. even if every employee in a unit is doing a good job.cisco. particularly in small groups or where all the group members are equally talented. www. this method is not accepted. For this reason. rather than only one component of job performance.com. Now. Sikkim Manipal University Page No. For example. Field checklist review method can be a technique to help every evaluator to observe the standards evenly and thus ________ the other evaluators.intel.com. but also a tool to identify better performing employees from others. but the process itself can cause rating errors because it forces subtle differences between employees even where job performance is quite similar. Critical incidents methods describes how the employee________ during the critical incidents. Self Assessment Questions 1. rewards and bonuses and their promotions to the next levels. 3. In contrast to ranking methods. 7. (True/False)? 2. 4. employees‟ training needs. forced distribution is frequently applied to several. 132 . Graphic rating scales ________or ________describe their scale points. Paired comparison involves comparison between two individuals. the forced distribution method suggests some of them to be placed at the bottom of a graded range.4 Modern Methods The modern methods of performance appraisal have helped organisations to bring in a proper structure in the performance appraisal system.Performance Management and Appraisal Unit 7 Forced distribution method Forced distribution is a structure of comparative evaluation in which an evaluator rates subordinates according to specified directions. Activity 1: Visit a corporate website and find out which type of performance appraisal is being used by them. Hint: www.
Assessment Centre. transfers. the heads of department and their subordinates set short-term performance targets. appraisals are a continuous and periodic activity. 133 . 3.1 Management by Objectives (MBO) or Result Method This method involves setting particular calculable goals with each employee and then respectively discussing their progress towards these goals. The most important component of the modern approach to performance appraisals is its feedback process that helps to strengthen the relationships between superiors and subordinates and improve communication throughout the organisation. In other words.4. Set departmental goals: Here the heads of each department set goals for their respective department in consultation with their superiors. how an employee can contribute to department in achieving its goals? 4. demotions. Set the organisation’s goals: Create organisation-wide plan for the next year and set goals. Some of the modern methods of performance appraisal considered presently are: Management by Objectives (MBO). Review the performance and evaluate the results: The heads of department compare actual performance for each employee with expected results. Behaviorally Anchored Rating Scales. Define accepted results (set individual goals): Here. The term MBO refers to an inclusive organisation-wide goal setting and appraisal program that consists of six main steps: 1. 2. Human Resource Accounting. the results of which are used to take various other HR decisions like promotions. 7. training and development and reward outcomes. 5. 360 degree Appraisal. Discuss and allocate department goals: The heads of department discuss the organisation‟s goals with all the subordinates in the department and ask them to develop their own individual goals. Sikkim Manipal University Page No.Performance Management and Appraisal Unit 7 Today.
2: Management by Objectives (MBO) 7. Provide feedback: The heads of department hold periodic performance review meetings with subordinates to discuss and evaluate the progress level in achieving the expected results. flexibility and reliability. planning and organising capabilities. It comprises behavioral statements describing fair or unfair performance with respect to important qualities.2 illustrates the Management By Objectives. These attributes may refer to inter-personal behavior. this is a comparatively new technique. BARS are measuring scales whose scale points define definite and indefinite behaviors.4. An evaluator must indicate which point on scale best describes an employee's behavior. Sikkim Manipal University Page No. Figure 7.2 Behaviourally Anchored Rating Scales Method Also known as (BARS). Figure 7. The scales represent a band of expressive statements of behaviors ranging from least to most effective also known to be behaviorally fixed. 134 . These are developed from critical incidents collected both from the evaluator and the appraisee.Performance Management and Appraisal Unit 7 6.
4. 2.Performance Management and Appraisal Unit 7 The scale points are specially defined behaviors which differentiate BARS from other rating scales that are commonly used. 7.htm. 135 . induction and training costs and so on. Assignment of numerical values to each behavior within each measurement that is. recruitment and selection costs. Hint: http://www. the costs related to human resources are maintained as assets on the balance sheet. the contribution of the employees should be greater than the cost incurred on them. The human resource accounting method tries to find the relative worth of these assets to the organisation in terms of money. In the HRA approach. Activity 2: Gather some more information about BARS.org/faq/bars. In this method the performance of the employees is judged in terms of cost and contribution of the employees. All the expenses incurred on the employees like their compensation. Classification of definite and indefinite behaviors to appropriate performance dimensions 4. scaling of behavioral anchors). are considered as costs incurred on the employees. Listing of all the important aspects of performance for a job. The difference between the cost and the contribution is calculated and employees are ranked on the basis of their worth in terms of money. There are few steps in the BARS construction process: 1. Moreover. opposing the traditional accounting approach which treats costs related to a company‟s human resources as expenses on the income statement that reduce profit.com/1277-behaviorally-anchored-rating-scalesbars/http://performance-appraisals.3 Human Resource Accounting Method Human Resource Accounting (HRA) counts the company‟s management and employees as resource that provides future benefits. Sikkim Manipal University Page No. BARS are designed by the evaluators who are going to use them. Ideally. Collection of critical incidents of definite and indefinite behavior 3. in terms of money. whereas their contribution includes the total value add brought by them to the system.citeman.
4 Assessment centre techniques This method of performance appraisal is appropriate while considering the employees for promotion. and career orientation and so on. Interviews with “subordinates” or “clients”. The purpose of these evaluation tests is to judge the employee with respect to characters like interpersonal skills. Here an individual is required to forward his/her views with proper justification.4. 136 . Analysis of problems and decision-making Oral presentations. This is done to check the individual‟s level of understanding. motivation. The final assessment helps in creating a merit-queue ranking for each employee. The individual whose potential is to be appraised has to work on specific as well as group assignments similar to those they would be required to handle if they are promoted.Performance Management and Appraisal Unit 7 7. The judgment of observers is collective. In-basket exercises: These are very interesting exercises. Fact-finding exercises. Common job simulations used in an assessment centre are: In-basket exercises. This also refers to leadership qualities. Group discussions: In this process a group of individuals are assigned a topic and are asked to put their views and debate with his/her opponent. intellectual capability. Sikkim Manipal University Page No. Group discussions. planning and organising capabilities. Analysis of problems and decision-making oral presentations: This checks the individual‟s decision making capability and ability to analyse a problem. where individuals are given a fixed amount of time to review the materials in the basket and then write or narrate the actions related to those items. and paired comparison or alteration ranking is sometimes used to arrive at a final assessment. Interviews with “subordinates” or “clients”: This is done in order to assess the individual from the subordinates‟ or clients‟ perspective. Fact-finding exercises: This type of exercise checks the individual‟s ability to interact with people or learn a situation and find out the reason for the same.
vendors and so on.3 illustrates 360 degree method. 137 . customers. peer Sikkim Manipal University Page No. Research has revealed that assessment approaches with multi-rating sources yield more accurate.Performance Management and Appraisal Unit 7 Assessment centre techniques are also used to determine the training and development needs of the employees. the emphasis has shifted to feedback from the full circle of sources of information – that is from all the entities that come into contact with the employee with reference to the job. reliable and convincing information. performance appraisal has been restricted to a feedback process between supervisors and employees. as also the purpose of obtaining the feedback should also be considered.3: 360 Degree Method It is not always appropriate to include all the feedback sources in a specific appraisal program.5 360 degree method In general. But now. managers. employee development and customer service. 7. For example.4. Figure 7. The culture and the mission of the organisation. These sources could be the employee‟s peers. Figure 7. subordinates. subordinates can provide valuable developmental guidance. This multi-input approach to performance feedback is called “360-degree assessment” to represent the full circle. The feedback from all these sources is collected with an increased focus on teamwork.
This requires brief descriptions to be made available for each job. skills. and attitudes the employee may possess for better performance. The argument is that performance is a thing of the past. The goal of appraisal and the specific aspects of performance that are to be evaluated must be established before determining which sources are suitable. Many organisations consider and use potential appraisal as part of the performance appraisal processes. so as to evaluate if they are capable of assuming higher positions and responsibilities in the organisational hierarchy. Potential appraisal refers to the identification of the hidden talents and skills of a person. Qualities required: Besides job descriptions.6 Potential appraisal On the basis of the concept of human resource development that has replaced the former personnel management in many organisations. more stress is being laid on the appraisal of the employees‟ potential in addition to their performance. it is necessary to have a detailed list of qualities necessary to perform these functions. The purpose of potential appraisal is to identify and assess the potential of the employees. The objectives of potential appraisals are: To inform employees of their future prospects To enable the organisation to draft a management succession programme To update training and recruitment activities To advise employees about the work to be done to enhance their career opportunities The following are some of the requirements and steps to be followed when determining a potential appraisal system: Role description: A good potential appraisal system should be based on transparency of roles and functions associated with different roles in an organisation. 7.4. while potential includes the actual knowledge.Performance Management and Appraisal Unit 7 feedback can provide inputs about the employee‟s capabilities for team work and the customer‟s feedback focuses on the quality of the team or agency. 138 . These descriptions should speak out the functions involved in performing the job. These are generally divided into four categories: Sikkim Manipal University Page No. The employee might or might not be aware of them.
statistics of these qualities. Behavioural capabilities. the individual with the best performance is taken as an ideal employee. 7. Indicators of qualities: A good potential appraisal system. Administrative capabilities and qualities. the techniques used by the organisation to evaluate their potential. Psychological tests. besides listing down the functions and qualities. Other employees are then ranked against this employee in descending order of comparison on a scale of best to worst ratings.Performance Management and Appraisal Unit 7 Technical knowledge and skills. and mechanisms for generating these statistics are clear. the qualities needed to carry out these functions. Some of the methods for judging these qualities are: Rating by others. the organisation is in a sound position to launch and operate the potential appraisal system. A good potential appraisal system should provide the results of assessment so as to guide a person to understand the qualities necessary for performing the role they think they could. should also have various techniques for judging these measures in an individual. Such establishments require transparency in organisational policies and systematization of its efforts. The Sikkim Manipal University Page No. These are done through regular analysis and guidance sessions by either the appraisal department or the respective evaluators. and the results of evaluation.7 Appraisal by Rater concerns Under this method.4. Simulation games and exercises. Performance appraisal records. 139 . Conceptual capabilities. Potential appraisal feedback: The organisation should attempt to generate a climate of openness if it believes in conducting potential appraisal. Such a climate is necessary for helping the employees to know their strengths and weaknesses and to create developmental opportunities. Organising the system: Once the functions. This should encourage the employees in developing sensible selfperceptions and plan their career and growth. A good potential appraisal system always provides opportunities to the employees to know their strengths and weaknesses.
but treats colleagues like helpless creatures.1 Appraisal by Rater Concerns Sl. ten being the highest. 140 2 Exceeds expectations 3 Solid Performer 4 Developing Performer Sikkim Manipal University . A relative rank for each member in the group is determined by averaging the points given by each evaluator. the manager might opt to give the employee nine marks.1 shows a sample copy of rating sheet with description. the work gets done but their behaviour towards co-workers is unacceptable. No. Developmental Page No. All requirements were met and goals and objectives were achieved above the established standards. Table 7. An evaluation at this level reflects that the individual is in a development and learning mode in terms of organisational values and/or job competence.Performance Management and Appraisal Unit 7 alteration ranking method generally involves evaluation by many evaluators. In other words. Table 7. it is not used by large groups. 1. All Job Competence requirements. Since this is a simple method. Good growth and development are in the process of being achieved. People in this category continuously exceed expectations in most of the organisational values. In addition. A dual rating system can reflect the actual performance contributions of the individual being rated more accurately. People in this category consistently meet potential and at times exceed them in representing organisational values.10. On a rating scale of 1 . Accomplishments were made in unforeseen areas. Consider a case: a highly competent employee completes all of the job responsibilities. planned goals and objectives were achieved well above expectations. RATINGS Outstanding/ Out performing RATING DESCRIPTION People in this category demonstrated exceptional ability to display organisational values. there may be wide variations in ability between ranks for different positions. The necessities of performance were met and goals and objectives were achieved. The rating has been brought down by one point to account for the employee‟s unacceptable behaviour with colleagues.
was used to measure the performance of Sikkim Manipal University Page No. Is filling up the appraisal forms enough for analysing performance? (True/False)? 9. This rating requires that a performance support Plan should be written.Performance Management and Appraisal Unit 7 goals and skills support will help this individual continue to learn and grow the capabilities. a form of traditional mechanism usually known as ACR. Supervision required Performance is always below expectations. 8. 10.5 Performance Appraisal of Bureaucrats – A New Approach Until now. Potential appraisal involves the evaluation of an individual‟s________. but some elements of acceptable Performance is exhibited. (True/False)? 7. A rating at this level requires that a performance plan must be written. 5 Improvement Required Performance is below expectations for full competence. 141 . 360 degree appraisal method involves an________ assessment. Self assessment involves evaluation of an employee on self-basis. Recently promoted or transferred employees fall into the growth and development mode. A rating at this level denotes that improvement is achievable. Needs support in the form of coaching and feedback to continue making progress. 6 Unsatisfactory Activity 5: Consider that you are the supervisor of an organisation. an annual confidential report. Rate yourself according to the work done with respect to the objective set and the standards of ranking. Hint: ratings Self Assessment Questions 5. Is it necessary to set objectives before starting a project work? (True/False)? 6. Is feedback from customers an essential component of performance appraisal of employees? (True/ False)? 7.
The PAR is divided into four sections. By the introduction of performance appraisal reports. giving them the liberty to act as per their thoughts and capabilities. This type of an assessment is very appropriate for government servants. promotions and so on were taken. they would practice a lot of favouritism. the new system attaches accountability more strictly with the intention of raising competence and rewarding performances based on the employee‟s ability to generate good results. juniors and clients in confidence. The PAR is not the only document that is being used in conducting the performance appraisal of bureaucrats. The ACR as an independent mechanism used to have a lot of scope for pleasing the dictatorial way of the bosses. giving little exposure to the public sector towards new appraisal techniques. based on which decisions such as salary increase. It also helps to evaluate the officer‟s reputation in terms of integrity. It is used in addition to a new system of peer review. The Indian Government finally decided to get rid of ACR in May 2005 by approving Performance Appraisal Reports (PAR). undertaking their personal work. Since it was the bosses who used to fill up these confidential reports. This is followed by a report card with a scale of points 1 to 10. The EPG seeks to ascertain the reputation of a civil servant by obtaining inputs from peers. as it is bound to increase their accountability and efficiency and encourage them to be more pro-active in their work. entertaining their family and friends. In order to obtain excellent or remarkable rating from the boss. Sikkim Manipal University Page No. The PAR is completely different from an ACR in the sense. it does not allow any scope for the personal opinion of the superior. competence. attitude and other qualities. The system sustained for a long period of time. The PAR takes stock of an officer‟s performance against 15 to 20 indicators such as work output. The first section consists of basic information on tax and property returns. and so on. the subordinates would do anything to please them like flattering the boss. The appraisal framework has been designed to facilitate a more objective and transparent appraisal of bureaucrats. personal attributes and functional competence. 142 . with the overall grade being the median of the score for each indicator. which is conducted by an eminent persons‟ group (EPG).Performance Management and Appraisal Unit 7 bureaucrats. These reports help the government departments to evaluate the bureaucrats in terms of their performance rather than their relationship with the higher-ups.
The primary aim of the PAR system is to facilitate improvement in the performance of those in responsible positions of civil service in the Government of India. 12. Thus. but that report will be confidential and will not form part of the PAR. while the fourth and last consist of a numerical grading. there is also something called an „Integrity Certificate‟.6 Summary The appraisal system flows through many guidelines and instructions followed by various methods.Performance Management and Appraisal Unit 7 medical reports and so on. The third section is meant for peer appraisal. which is the final appraisal. The PAR is filled based on the performance of the officers with respect to the tasks agreed upon in the annual work plan. 7. At the beginning of every year. so as to ensure that they assess an officer only once. The second section has space for the officer to write their self-appraisal. the work plan can be reviewed in between the year. These traditional methods are taken as a general task for measuring the quality aspects. These EPG members will have a five-year term. the new PAR system has brought in a complete change in the appraisal system of bureaucrats. is conducted. Depending upon the events and circumstances. in order to eliminate the possibility of bias. specifying the tasks to be accomplished and attaching priorities to them. the senior bureaucrat and their junior. Traditional methodologies are used commonly everywhere as a part of performance appraisal. Over and above this appraisal. PAR refers to _____________________________________. in their capacities as the appraiser and the appraisee will prepare an annual work plan. ACR refers to ____________________________________. Once the PAR is filled. The EPG can seek information on the officers from intelligence agencies. which can satisfy the expectations of all concerned and act as a link between the common man and the bureaucrats. Self Assessment Questions 11. Some of the traditional methods are: Sikkim Manipal University Page No. the next stage. A high-level selection committee comprising the Prime Minister of India and the leader of the opposition in the Parliament will select the EPG members. 143 .
Assessment Centre. Forced distribution method. 144 Sikkim Manipal University . Critical incidents method. A plan of action designed to achieve a particular goal. Human Resource Accounting. 7. Initialization of a procedure or a planned strategy. 4. Field review checklist method. Paired comparison method. Straight ranking method. 360 degree Appraisal.Performance Management and Appraisal Unit 7 Essay appraisal method. The modern approach to performance appraisal is a future oriented approach and is developmental in nature. Some of the modern methodologies of performance appraisal are: Management by Objectives (MBO). What are the objectives of performance appraisal methods? What is the role of traditional methods in an organisation? Explain modern approaches to performance appraisal. To provide support or back-up.8 Terminal questions 1. 5. Graphic ratings scale method. 3. In a deviating manner. 7.7 Glossary Term Discriminatory Reimbursement Simulation Reinforcement Analytical Depicted Heretical Strategy Description Reflecting a difference An area involving compensation and settlement related matters. Behaviorally Anchored Rating Scales. In a logical or practical way Described through the pictures. It recognizes employees as individuals and focuses on their development. What are BARS? How are they beneficial? What are the different measures to rate yourself? Page No. 2.
shot to fame within no time. 4. Refer section 7. False. Performance appraisal report. India. 4. 7. so that they can set clear. which came into being in the late 1900s. As the company‟s turnover increased and the size with respect to manpower swell. measurable objectives that translates into higher profits and also increased employee satisfaction. Refer section 7. under the able leadership of Mrs. 5.2 Behaviourally anchored rating scale. Compare. True. 11. Mrs. 2. 8. True. True.4 Modern Methods. 12. The company. Refer section 7. Answers to Terminal Questions 1. 6. Mohan. Skills. 2. 10. The driving factor behind the need for bringing in an appropriate appraisal system was the belief that thorough. who is a 1985 batch pass-out from IIM. Overall. Refer section 7.9 Answers Answers to Self Assessment Questions 1. 3. 5. Behave. 9.4. accurate reviews help employees to better understand what's expected of them. It is Mrs.4 Modern Methods. Annual confidential report. 3. 145 .10 Case Study Performance Management System to Reflect the Company’s Strategies Meghan Ltd.2 Performance Appraisal Methods. May or may not. 7. Mohan‟s opinion that Sikkim Manipal University Page No. is a candy manufacturing company located in Bangalore.Performance Management and Appraisal Unit 7 7. True. Mohan saw a need to bring in an appropriate performance appraisal system that would reflect and support the company strategies. Bangalore. Refer section 7.1 Introduction.
Thirdly. To meet their strategic goals. and how did the automated system help them meet the requirements? Hint: Ease of use.php Sikkim Manipal University Page No. leads to improved talent management and employee retention. What were the requirements of the company with respect to performance appraisal system. Mohan and her team drew up a list of the criteria that a new system had to meet. Last but not the least. Top on the list was ease of use. The web-based product also helps remote and travelling managers maintain access to the forms and the data they need to evaluate their staff. the new system also had to save time. This case study is adapted from: http://www. the managerial staff of Meghan Ltd. This in turn. This way. Meghan Ltd. They didn't want to end up with a system that is so complicated that the managers would find it difficult to use. 2. which management experts know is a key factor in corporate growth and market leadership. Questions: 1. it boosts their morale. Why was there a need to bring in a performance appraisal system in Meghan Ltd? Hint: The growing number of employees. Apart from this. it needed to be web-based for accessibility. So based on the requirements and also taking the cost factor into consideration. which is extremely user friendly and has given them a lot of opportunities to customize according to requirements. Mrs. After receiving initial training on how to use the software..Performance Management and Appraisal Unit 7 when employees think that they have got an accurate and fair review. realised how organising and automating the appraisal process results in performance appraisals that are more accurate and fair.halogensoftware.com/customers/case-studies/servicesmanufacturing/study_jbelly.. because employees were in multiple locations. the managerial staff members were well-equipped to try it in the next round of performance appraisal. it had to be flexible. easily incorporating core competencies into different forms. 146 . Both the managers and the subordinates are happy about the new appraisal software. flexibility and so on. selected a good web-based employee appraisal software.
Corey Sandler and Janice Keefe.php http://www.html http://www. 147 .citeman.org/faq/bars.com/customers/case-studies/servicesmanufacturing/study_jbelly.htm www.Performance Management and Appraisal Unit 7 References Richard C..com/%20%28Strategic%20Management%29. The Performance Appraisal Phrase Book.blogspot.naukrihub.com/. Grote (1996).com/%20%28Training%20and%20Develo pment%29 www.pdf Sikkim Manipal University Page No.amazon./0814403131 appraisals.halogensoftware. Amacom..Performance-Appraisal/. The Complete Guide to Performance Appraisal..blogspot.com/%20%28Goal/Target%20Setting%29%20and%20h ttp://trainingfunction.blogspot.com/definition-concept. E-references http://strategicmanaging.org/fileadmin/user_upload/VA/pdf/IRC2017_en..com/1277-behaviorally-anchored-rating-scalesbars/http://performance-appraisals.%20http://goal-targetsetting.fao.
explain the process of 360 degree feedback. list out the advantages and disadvantages of the 360 degree appraisal method. the feedback about an employee‟s performance comes from all the sources that come in contact with the employee on his/her job. you must be familiar with the different methods of performance appraisal.8 The Process of 360 Degree Feedback 8.13 Answers 8.12 Terminal Questions 8. Sikkim Manipal University Page No.9 Operating 360 Degree Appraisal 8.11 Glossary 8.3 The Recent Rise in the Popularity of 360 Degree Feedback 8.1 Introduction Learning Objectives 8. In 360 degree appraisal.4 Purpose 8.10 Summary 8. explain the purpose.1 Introduction After studying the previous units.Performance Management and Appraisal Unit 8 Unit 8 360 Degree Appraisal Structure: 8.7 Advantages and Disadvantages of the Method 8. tell about the popularity of 360 degree feedback. 148 .6 Ratings 8.2 The Impact of 360 Degree Feedback on Organisations 8.5 Methodology 8. methodology and rating of 360 degree appraisal. Learning Objectives After studying this unit. This unit discusses the 360 degree appraisal in detail.14 Case Study 8. you should be able to: discuss the impact of 360 degree appraisal on the organisation.
Other dissimilarity from traditional performance appraisal is that 360-degree feedback is supposed to be provided in an anonymous way. 149 . there are some confusion and distress. human resource executives. and deviations to 360-degree feedback programs can range from the traditional vertical form of performance appraisal to highly sophisticated feedback systems that systematically gather. the influence and authority of 360-degree feedback has made engineers. part of the evaluation and appraisal process. In this process. Many organisations employ 360-degree feedback without defining the objective and the perspective of the programs clearly. Interestingly. sales representatives. external customers (of the company‟s products) and internal customers (of the unit's work). peers. individuals get higher remarks from those whom they know compared to anonymous raters. graduates. While the 360-degree concept has much to offer and many successes have been recorded. There is little regularity to what is being done. The person who has been evaluated is asked to use the feedback to improve performance and to make an earnest effort to contribute as per the needs of the company. subordinates. It elects multiple entities to provide feedback to selected organisational members. Many of them failed to focus on contributions they could have made to a firm's competitive environment due to lack of a strategic goal. crew-members. Apart from managers. Unlike the traditional appraisal model. customer service executives. secretaries and supervisors. the 360-degree approach does not rely exclusively on the manger or the superior to provide feedback to the employees. analyse and circulate behaviour data to managers. the recipient of the feedback is asked to evaluate his or her own performance on the mentioned behavioural measures. Studies have revealed that anonymous feedback is more truthful and closer to what raters actually feel about the recipients. Sikkim Manipal University Page No. professionals and even rank-and-file workers functioning in teams.2 The Impact of 360 Degree Feedback on Organisations The concept of 360-degree feedback has much to offer to the present environment. which is then compared with that provided by the other feedback providers. This linking of individual‟s performance with feedback from all related communities creates a competitive team-based workplace. pilots. and co-workers in support areas. This community includes superiors. As a result.Performance Management and Appraisal Unit 8 8.
when they assume that they can satisfactorily be in touch with their employees‟ needs by depending only on an “open door” policy. while the final third reported no change. reduce the value of the exercise. Caution to be addressed While using subordinate evaluation as a basis of performance feedback. Hence. This process adds validity and reliability to the feedback. that is. Failure in problem recognition that often occurs can lead to disappointment. and confirm the hypocrisy that affects 360-degree results. Subordinates may hesitate to provide a feedback on their superiors or avoid giving a negative feedback for the fear of reprisal or being punished. Another third reported negative changes in performance. Moreover. the feedback report should not be provided to the supervisor. Creating a collective appraisal from the averaged ratings of several subordinates is possible by combining subordinate ratings and peer ratings. 150 . organisations may not be fully conscious of the problems that often go along with its adoption. there is discouraging proof regarding the effectiveness of the feedback-intervention programs as tools in bringing improvements in performance. the need for discrimination is necessary. Contribution A broader picture of employee problems and requirements becomes available to supervisors through organised subordinate feedback session. In their rush to achieve the market benefits of 360-degree feedback. if the rating pool for a particular manager contains less than four subordinates. This is where a 360 degree feedback is beneficial. A review of several feedback studies on 360 degree appraisal has revealed that only one-third of the total population reported progress in performance.Performance Management and Appraisal Unit 8 individuals receiving the feedback are confused with the results and avoid developing objectives and strategic plans regarding 360-degree applications. and evaluate each element carefully. The purpose of designing the feedback form (basically a survey) is to build it from the role played in key skill areas: split these into elements. Managers and supervisors get a very contradictory feedback. give feedback with respect to each Sikkim Manipal University Page No.
and obtain more benefits by clearly operating this kind of process. A broader picture of employee problems and requirements becomes available to supervisors through organised subordinate feedback session. recognisable and finally behavioural change. The data collection is organised. The ________ degree concept has much to offer in the present business environment. some find it difficult to overcome the criticism made through feedback by an unnamed entity. However.com/2007/02/05/stories/2007020502890 100. An established organisation with relatively a good number of experienced people should be able to cope with. while some employees and managers are fine with the anonymous feedback. these additional groups can be peers who are engaged in the same level of job as the recipient of feedback. prepared in a systematic way through aptitude tests or interviews. 3. obtained from several stakeholders. (True/False)? 4. Hence. Subordinates are usually more than willing to provide feedback about their superiors. 2. numbers more than this indicate feedback from various other groups apart from the top-down and bottom-up across the organisation. data is collected and then fed back to the individual to promote perceptive. that is. Studies have revealed that anonymous feedback is more ________. (True/False)? 8. 151 . it could be said that 360 degree feedback is the organised collection of appraised data of an individual or group. The Sikkim Manipal University Page No.Performance Management and Appraisal Unit 8 question. For example. There is both collection of data and a feedback process. While 180-degree refers to top-down and bottom-up feedback.3 The Recent Rise in the Popularity of 360 Degree Feedback The number (360) indicates all-round appraisal.htm Self Assessment Questions 1. Activity 1: Gather some information about implementing 360 degree appraisal system in the Indian organizations.thehindubusinessline. Hint: http://www.
Stakeholders are the sources of data. Figure 8.1: 360: Degree Appraisal Thus 360-degree feedback signifies transition from top-down.Performance Management and Appraisal Unit 8 performance of both an individual and a group can be calculated. Figure 8.4 Purpose A 360 degree feedback helps an organisation to take decisions in the following areas: Self-improvement and individual analysis. singlestakeholder appraisal and results that are much more diverse and related to processes. Team-construction. Validation of training and other initiatives. 8. 152 . „Associate‟ training program. Strategic or planned organisation development. Managing performance. Here.1 depicts a 360 degree feedback. Reward management. stakeholders are people who are affected by the individual‟s performance and also interact with the individual in their day-to-day tasks. who answer certain questions about the behavioural attitude of individuals. Sikkim Manipal University Page No.
bringing in a change in the attitude and behaviour of the employee and discussion and implementation of individual and organisational aims. confirmed. including unexploited hidden strengths. Following are the tasks that a 360 degree feedback can assist in. since a 360 degree feedback provides a proper. Assessment and analysis of organisational training needs. when managed appropriately: Performance measurement – clear. Motivation through objective and target approval. Developing a common perspective between individual and manager. Creating mutual awareness. they are essential for staff motivation. This will encourage positive connections between the administration and the employees. precise. frequent and regular review of an employee's performance. approving the prospective goals and assignment of responsibilities and tasks. understanding and relationship. Performance evaluations through 360 degree appraisal are also necessary for developing goals and business strategies . A 360 degree performance evaluation commonly reviews every individual's performance against the goals and strategies for the previous financial year that were approved and agreed upon at the previous evaluation sessions. removing confusions and errors through interaction and connection. Moreover. Educational desires and training needs – evaluation and agreement. Motivation though success and feedback.for individuals. Defining the career and growth strategy – both individual and managerial. Clarification about the team‟s role and structure. Identification of individual strength and abilities. and objectives for further development. and for the association as a whole.Performance Management and Appraisal Unit 8 Annual assessment by way of 360 degree feedbacks assists in the management and monitoring of values. defining and revising priorities and objectives. critical jobs. long term explanation. which normally leads to business planning for the next financial year. Page No. A 360 degree performance appraisal is usually integrated into the yearly compensation and grading reviews. 153 Sikkim Manipal University .
154 . Responsiveness and recognition of 360 degree feedbacks. On the other hand. A 360-degree process is only as effective as the items that make up the survey. The best research are cautiously structured and locally authorised and the process is made easy by customised survey platforms of modern approach. like any other powerful tool. more reasonable. Modernisation in 360degree systems has made feedback easier. and this creates a challenge for the inexperienced user who is at the learning stage. well-structured research items. plans and preferences and so on. Organisational strength. Much is possible now that was a mere dream decades ago. Sikkim Manipal University Page No. Use well-examined. all 360-feedback publishers are not innovative with the same pace or in the same course. ethics. Future prospects and recommendations 360-degree feedback is influential because it makes it easy to collect and account probable feedback about specific issues that are otherwise hard to put a figure on. more acceptable. more flexible and more diverse than before. However.Performance Management and Appraisal Unit 8 Support and communicate organisational theories. People give honest feedback if there is a benefit in doing so. Here are some suggestions for avoiding problems: Learn about the technology before you apply it. Feedback practices. objectives. You should set up policies and measures that keep ratings unknown and give supervisors only the data they need. a systematic. However. Make sure that the organisation is well-equipped for a 360-degree feedback. Readiness can be improved by addressing the following areas: A climate of trust. Protect privacy. updated review of what is accessible now will ensure you the maximum potential with the least investment. it also needs to be used with concern in order to obtain all the benefits. 360 degree feedbacks are changing as rapidly as hardware and software systems. Availability of computers. Development practices.
Now let us explain the four components: Self appraisal: Self appraisal gives a chance to the employee to compare his/her abilities. 8. People who have experience making this process successful should lead these meetings. It provides a "360-degree evaluation" of the employee‟s performance and is measured to be one of the most realistic performance appraisal methods. training and encouragement of developmental actions are essential to obtain optimum results. Peer appraisal. 155 Sikkim Manipal University . limitations.5 Methodology The 360 degree appraisal works on four essential components: Self appraisal. Superior appraisal: Superior‟s appraisal outlines the traditional thought of performance appraisal. It can focus on priority. (True/False)? affected by an individual‟s 6. Superior appraisal. development requirements and create strong inspiration to change in many people.Performance Management and Appraisal Unit 8 Use skilled personnel. but individual growth strategy. Self Assessment Questions 5. Annual assessment allows managing and monitoring of values. where the employee‟s tasks and actual Page No. A 360 degree feedback process is only as effective as the items that make up the survey (True/False)? 8. (True/false)? (True/false) 7. Stakeholders are people who are performance. People give honest feedback if there is a benefit in doing so. Self evaluation is an essential part of 360 degree appraisals and therefore contribution of employees to 360 degree performance systems is large and also has a powerful effect on attitude and performance. A 360 degree feedback alone will not improve performance. success with others and judge one‟s own performance. Subordinate appraisal.
but measures should be taken to make sure that subordinates are appraising parameters of which they have knowledge. The subordinate‟s feedback is effective. as it helps in evaluating their leadership and supervision styles. as well as the evaluation of team and work scenario by senior managers. However. There are both considerable assistance and serious consequences that must be cautiously considered before including this type of feedback in an all-round appraisal program. Sikkim Manipal University Page No. Peer ratings are considered when the individual‟s capability is known or the result of the performance can be computed. mainly in evaluating the supervisor‟s interpersonal skills. This form of assessment involves the evaluation of individuals by supervisors on pre-determined parameters in an employee‟s performance record. A 360 degree appraisal is generally more appropriate at the managerial level. This method is being successfully used around the globe for improving performance. The superiors (supervisors and senior managers) have the authority to change and modify an employee‟s or a team‟s work on the basis of the assessment of the individual and the team. Subordinate appraisal: Subordinates‟ feedback involves the evaluation of an individual on parameters like communication and convincing abilities. Peer appraisal: Peers usually have an exclusive point of view on a colleague‟s job performance and individuals are generally very friendly to the idea of rating each other. 156 . team leading qualities and so on. Microsoft and Wipro Technologies.Performance Management and Appraisal Unit 8 presentation is rated by the superior. Subordinate appraisal is most advantageous when developmental needs are considered. a 360 degree application can prove to be highly useful in keeping the track of alterations in others‟ perceptions about the employees. superior‟s ability to assign the work. it may not be as proper or convincing for measuring task-oriented skills. Taken as an effective developmental tool and conducted periodically. It can also be used in the evaluation of record sheets. Some of the companies that have been successfully following 360 degree appraisals are TCS.
data-focused ways of measuring them. achievement of corporate standards of behaviour or values. 157 . The increasing stress by organisations on assessing employee opinions on a number of issues such as communications or morale.” Sikkim Manipal University Page No.Performance Management and Appraisal Unit 8 Activity 2: Visit the websites of Microsoft and Wipro and find out the differences in the 360 degree feedback followed by them.6 Ratings Many organisations have explored modern ways of measuring their success as corporate giants by measuring the contribution of employees. The increasing use of business excellence models as part of total quality movement and the need to have more precise. The evaluation of different teams and departments by finding out what happens within the group-communication and decision making processes.com 8.wipro. Hint: www. Different types of rating Following are the different types of rating.com. Supervisors usually start this kind of discussion with asking the employee about their own opinion. www. The use of external measures by organisations to assess how the outsiders see them – this typically involves using market research or other forms of survey to assess customer satisfaction. Some organisations also seek similar feedback from their suppliers.microsoft. Self rating This form of performance rating is quite common but mainly used as an informal part of the supervisor-employee appraisal feedback session. which demonstrates: The organisation‟s inclination when assessing individuals to look not just at the results achieved – but how they were achieved. For example: “How do you feel you have performed during the last year?” or “identify your key accomplishments that you feel the best during the past year.
not on the summary level determination. Self-ratings usually tend to be consistently higher. employees tend to be selfdemeaning and may feel intimidated. 158 . The most prominent features of self rating could be summarised as: The value of self-ratings is widely accepted. A range of rating sources. as they are excellent indicators of future performance.Performance Management and Appraisal Unit 8 Self-ratings are more useful if the employee is involved in the entire cycle of self assessment. Self ratings are particularly valuable in situations where the supervisor is not available at the work site and hence cannot observe the work behaviors and task outcomes. Sikkim Manipal University Page No. Sometimes employees may rate themselves lower than what they actually deserve. the employee should keep note of the tasks accomplished and the achievements and failures throughout the performance monitoring period. Following are some of the characteristics of peer rating: The addition of peer feedback can help move the supervisor into a coaching and mentoring role rather than a purely judging and evaluating role. help to get the information for the summary rating. Supervisors’ rating Evaluations by superiors are the most traditional source of employee feedback. In such situations. This discrepancy in self-rating and supervisor-rating can lead to defensiveness and alienation if supervisors do not use good feedback skills while discussing the appraisal. For example. Self-ratings should center around the appraisal of performance elements. including self-assessments. Peer rating Peer ratings have proven to be very useful for employee development. This form of evaluation includes both – the ratings on individuals by supervisor on elements in an employee‟s performance plan and the evaluation of programs and teams by senior managers.
This feedback can then be used as part of the appraisal for each member of the team. dishonest feedback. The need for discrimination is essential when using subordinate ratings as a source of performance feedback data. it may not be as appropriate or valid for evaluating task-oriented skills. or they will give gratuitous.Performance Management and Appraisal Unit 8 Peer input can be effectively used for decisions about recognition and awards. neglecting this feedback can result in not serving the purpose of the business. as it is customer satisfaction and customer‟s opinion which is the most important aspect of any business venture. if they fear reprisal from their supervisors. The characteristics of subordinate ratings are: Like peer ratings. 159 Sikkim Manipal University . Customers’ rating Contribution of this rating source are: Customer feedback serves as the “proof” for almost all other performance factors. which is sometimes referred to as a SAM. The value of customer service feedback is most suitable for evaluating team or organisational output and outcomes. However. unless the provider of the feedback is much experienced. This is one big advantage of subordinate rating as it takes the opinions of multiple subordinates into consideration. The feedback from subordinates is particularly effective in evaluating the supervisor‟s interpersonal skills. as employees fear retaliation or even possible vengeance from the managers in case of negative feedback. Hence. Page No. Subordinates’ rating An upward-appraisal process or feedback survey. However. the ratings of subordinates can be combined to have a comprehensive rating that is averaged. for “Subordinates Appraising Managers” is among the most significant. there is a natural reluctance concerning implementation of this rating dimension. Subordinate ratings can provide immensely valuable data on performance elements concerning managerial and supervisory behaviours of managers. Subordinates simply will not participate. The use of peer evaluations can be very time consuming.
Peer input can be effectively used for determining awards and recognition. the result could be difficult to work out.7 Advantages and Disadvantages of the Method This section defines the use of 360 degree feedback in an organisation as a substitute to the traditional performance evaluation techniques. The increased interest in 360 degree feedback technique. than the customers who use them? Designing and validating customer surveys are an expensive and timeconsuming process.Performance Management and Appraisal Unit 8 Customers. Sikkim Manipal University Page No. which derives information from the employee‟s environment. It can work wonders for organisations that are moving towards an open. Self Assessment Questions 9. 160 . thus the technique is often restricted to managerial level. It can lead to positive behavioral change. it becomes difficult to ignore. If too many evaluators are involved. It can be supportive for people who underestimate themselves. usually. supportive and fair culture. Leadership qualities are perfectly judged by peers and subordinates rather than seniors. After all. Supervisor‟s feedback is one of the most ________ forms of employee feedback. (True/false)? 8. who else can be a better judge to our products and outputs. objective and over-all ideas. Advantages of 360 degree feedback The advantages of 360 degree feedback are: Collective opinion gives perfect. are better at evaluating outputs. When a number of colleagues express the same comment. Disadvantages of 360 degree feedback The disadvantages of 360 degree feedback can be summarised as: It is more time-taking and costly. is now often used as a development or training tool and is usually not linked to salary. 10.
unless handled carefully and delicately. On the other hand. It can provide a proper direction to the employees of your organisation and help them to develop their own careers as well as serve the customers better. unless managed transparently and sincerely. it can prove to be a disaster. Review the feedback. Select the raters. The feedback is firmly planted in behaviours needed to exceed customer expectations. A 360 degree feedback is a method and a tool that provides each employee the opportunity to receive performance feedback from his or her supervisor and four to eight peers. 8. Sikkim Manipal University Page No. reporting staff members.Performance Management and Appraisal Unit 8 It can be critical. Following are the steps of the process of 360 degree feedback: Select the feedback tool and process. The feedback provides insights about the skills and behaviours desired in the organisation to accomplish the mission. and to provide suggestions regarding the appropriate changes to be brought in for professional development. if you just include it in your appraisal system just because it is the latest trend in organisations and not take care of the nitty-gritty of its implementation. Use the feedback. a 360 degree feedback can prove to be a highly beneficial addition to your performance management system. 161 . The purpose of the 360 degree feedback is to assist each individual to understand his or her strengths and weaknesses. and goals and live the values. It helps each individual to understand how his/her effectiveness as an employee. or staff member is viewed by others.8 The Process of 360 Degree Feedback If implemented with care and proper training. Most 360 degree feedback tools are also responded to by each individual in a self assessment. vision. co-workers and customers. co-worker. Manage and integrate the process into a larger performance management system. It can create an environment of doubt.
services. Multi-rater feedback cannot be a substitute for managing a poor performer. and customers may be considered radical in top down cultures. Here are some common mistakes to avoid while implementing a 360 degree appraisal: One of the main reasons for the unsuccessful implementation of a 360degree feedback process is the lack of a clear purpose. team relations. which is a radical departure from the way people are traditionally given feedback and managed. compromising and guiding ability cannot be easily calculated or measured. The best way to get objective about these aspects of presentation is by using a 360-degree feedback. It shouldn‟t take the place of managers assessing and managing the performance of subordinates. interactive skills. However. or because a recent benchmarking study reports that world-class organisations are doing it. This happens when the feedback doesn‟t address an organisational performance issue or strategic need. This is because introducing a multi-rater system is a major change in an organisation. accurate perception on how others view their management practices. Page No. 162 Sikkim Manipal University . individual qualities such as leadership skills. staff. On the other hand.9 Operating 360 Degree Appraisal A 360 degree feedback is most useful for measuring the hard-to-quantify aspects of work. it can‟t replace direct communication between the employee and his or her manager. sales acumen.Performance Management and Appraisal Unit 8 8. it would be a mistake to reward an employee based on the process of work rather than work outcomes. such as interpersonal skills. The concept of upward feedback to a supervisor or manager and collecting information from peers. An organisation should not be too ambitious to get immediate results when introducing a 360 degree feedback. It is a tool for helping people gain a rich. because a senior manager thinks it‟s a good idea. The best way is to use 360 degree feedback for developmental initiatives and not for rewards. but instead it‟s being done because it‟s the latest management trend. Though feedback from a 360-degree process can help an employee to become aware of their strengths and weaknesses. interpersonal skills and effectiveness.
(True/False)? 14. so that they are able to provide valuable inputs and support in implementing the system. Complete communication is of no importance with 360-degree feedback. and goals. A 360 degree feedback helps each individual to understand how his contribution as an employee. Hence. is concerned by others. when they assume that they can satisfactorily be in touch with their employees‟ needs by depending only on an “open door” policy. it‟s also essential to communicate clearly about confidentiality issues. Complete communication is of utmost importance with 360-degree feedback.Performance Management and Appraisal Unit 8 It is crucial to involve the key stakeholders in the design and implementation of a 360-degree appraisal process. This is because the stakeholders should be aware of the important decisions and the rationale behind them. The feedback is strictly planted in behaviour needed to exceed Sikkim Manipal University Page No. it is important that its purpose be communicated clearly. it is very important to identify the key stakeholders and involve them in the decision making. commonly known as 360 degree appraisal and feedback system. The most powerful 360 degree feedback is based on behaviours that other colleagues can see. Multi-rater feedback can work as a very good substitute for managing a poor performer. Since it may involve a lot of information about the recipient‟s attitude which can be quite sensitive. (True/False)? 8. One of the main reasons for the unsuccessful implementation of a 360degree feedback process is the lack of a clear purpose. (True/False)? 13. The feedback presents a view about not only the skills but also the values and behaviour required for the organisation to attain the target.10 Summary A broader picture of employee problems and requirements becomes available to supervisors through organised multi-rater feedback session. To avoid potential misunderstanding or feelings of betrayal. Self Assessment Questions 11. It is unnecessary to involve the key stakeholders in the design and implementation of a 360-degree appraisal process. (True/False)? 12. 163 . objectives. Managers and supervisors get a very contradictory feedback.
employees are evaluated by their colleagues who are usually working in the same type of job. from fear of reprisal. An up-ward appraisal is one where the subordinates provide feedback about the performance and skills and capabilities of their reporting manager. To conclude. Page No. A 360 degree feedback is mostly used for computing the hard-to-calculate aspects of work. the performance of a team as a whole is evaluated by a manager or a representative of the clients. This method is being successfully used around the globe for improving performance. if the rating pool for a particular manager contains less than four subordinates. or will provide unnecessary. one may have to exercise a lot of caution. which are expected of a person working at a supervisory level. The report should not be provided to the supervisor. 360 degree application is taken as an effective developmental tool. Under team appraisal. Subordinates will merely not involve.11 Glossary Term Peer appraisal Description In peer appraisal.Performance Management and Appraisal Unit 8 customer‟s interest. A stakeholder of an organisation can be a person who is an employee. unfair feedback. such as an individual‟s interpersonal skills. Moreover. 164 Team appraisal An upward-appraisal Stakeholders Supervisory behaviors Sikkim Manipal University . The set of behaviour such as leadership skills and interpersonal skills. 8. the process is seen as a tough administrative task and emotionally difficult. as when conducted periodically. helps in keeping the track of alterations in others‟ perceptive about the employees. While using subordinate evaluation as a basis of performance feedback. Managers and others equivalent generally dislike appraisal feedback from subordinates and attempt to avoid them. customer or an owner/shareholder who has responsibilities towards the organisation and hence has an interest in its success. A 360 degree appraisal is generally more appropriate at the managerial level as it helps in evaluating their leadership and supervision styles. The process is demoralising and time-taking for these people.
4 Purpose of Conducting a 360 Degree Feedback. Enumerate the steps involved in the process of 360 degree appraisal. Traditional 11.13 Answers Answers to Self Assessment Questions 1. Explain the advantages and disadvantages of 360 degree feedback. Subordinates ratings 9. False 13.8 The Process of 360 Degree Feedback 5. 4. 2. True 6. Staff inspiration 7. Refer section 8. 2. 360-degree 8. Truthful 3.12 Terminal Questions 1. True 12. 3. Define and explain 360 degree feedback. Refer to section 8. 8. Explain the common mistakes that are committed while executing a 360 degree appraisal. False 14.2 Impact of 360 Degree Feedback.6 Ratings. Sikkim Manipal University Page No. 4.Performance Management and Appraisal Unit 8 8. 165 . 5. True 10. Refer section 8. Refer section 8. False 5. Discuss the purpose and benefits of 360 degree feedback.7 Advantages and Disadvantages of 360 Degree Feedback. True 4. False Answers to Terminal Questions 1. 3. Refer section 8. 360 degree 2.
Jagan encountered resistance. he also inherited a team of 10 team leads. and John was much younger than most of his direct reports. reinforcing service standards and trying to build a cohesive team. She assured everyone that their responses would be anonymous. Despite his best efforts. John selected the behaviors critical to his leadership. Many of the team leads thought they deserved the promotion and resented Jagan‟s appointment. Over the next few weeks. He soon discovered that the performance of his team leads was below par. Jagan met with his direct reports individually and as a group. With his new position.14 Case Study Software Company Implements 360 Degree Feedback For case study let us take the case of a software company which involved 360 Degree Appraisal and deduce its benefits. Jagan was a newly promoted manager with a major software company. Most were long-term employees. He explained and clarified certain aspects of the feedback. productivity increased and a cohesive and coordinating team to take Sikkim Manipal University Page No. He also spoke to the senior management of the company and obtained their permission to go ahead with the Working with a consultant. the consultant met with Jagan to help him to interpret the data and establish his priorities for action. After the feedback was collected. When he learned about 360 degree appraisal. He knew that his juniors were unhappy. She also coached him on how to respond to the feedback. 166 . spent a lot of time working on relationships with each of them. but he couldn't get them to talk about their dissatisfaction. He also explained which priority areas he planned to work on first and why he did not plan to alter some behaviors. and performance did not improve.Performance Management and Appraisal Unit 8 8. He hoped that the information gained would provide a basis for dialogue and team building. he decided to use it to ask for feedback about his leadership practices. The consultant then met with the team and explained how the feedback would be collected. Hence. Resistance decreased. He saw an immediate change in his team.
He attributed much of his success to the feedback process and the open dialogue it produced.360- Sikkim Manipal University Page No. The idea for this case study is taken degreefeedback.html http://www. How did 360 degree feedback help John to overcome his problem? Hint: Building a productive team.ehow.360-degreefeedback.html. Over time.html. 2. Questions: 1.com/case_studies.com/case_studies. from: http://www.com/list_6157246_characteristics-performanceappraisal-systems.com/human-resources/employeebenefits/567661-1. 167 .html http://www. They pulled together to become the only team to meet or exceed all established performance goals for the next quarter. E-References http://www. They continued to perform well. he was able to build a very good and productive team.allbusiness. and within the year Jagan received a substantial promotion.Performance Management and Appraisal Unit 8 hold. What was the problem faced by Jagan? Hint: Lack of communication.
From the past few years. It was thus advised that it should be swapped by a more effective saying: "evaluation enlarges professional boundaries".1 Introduction Learning Objectives 9. and to interchange the hunt for knowledge with "expression in action" in a working atmosphere. Introduction of new evaluation tools such as the behaviourally anchored rating systems (BARS) and their positive outcomes has had a system-wide effect on professions as well as the business scenario as whole.8 Summary 9. Now let’s concentrate on some facts for improving quality of performance ratings.6 Reducing Rater Biases 9. This signifies the Sikkim Manipal University Page No.4 Behaviourally Anchored Rating Scales 9. and paper.7 Performance Rating for Development Vs Administrative Decisions 9. to create a set of performance measures.tests have been taken over by computerised tests. 168 . though definitely true.9 Glossary 9.2 Types of scales 9.11 Answers 9.1 Introduction After studying the previous unit.10 Terminal Questions 9.12 Case Study 9. Efforts have been made to regulate subjective decisions. to deduce evaluation data from multiple sources. Simple processes have been substituted by typical processes. The custom pass/fail results are upgraded to evaluation standards. we came to know about the 360 degree appraisal techniques and its benefits. The normally employed motto that "evaluation forces learning".Performance Management and Appraisal Unit 9 Unit 9 Improving Quality of Performance Rating Structure: 9. and the evaluation of information has been substituted by the evaluation of capability. we have observed a quick advancement of evaluation processes from the traditional ones towards more advanced evaluation strategies.3 Subjectivity and Errors in Rating 9. presents a quite bounded concept.5 Theoretical Considerations on Factors Affecting Appraisals 9.
you should be able to: list the different types of rating scales. 9. explain subjectivity and errors in rating.Performance Management and Appraisal Unit 9 essential role of evaluation in exploiting multiple aspects of professionalism. and offers data that can be employed to develop prospectus. we cannot overlook the significance and consequence of the evaluation processes in the real time environment. Thus. restructured evaluation methods. computer case imitations. Evaluation can supply feedback and inspiration for continuous development of individuals.2 Types of Scales Since we know about the areas to be improved for increasing the quality of performance rating. The different rating scales and the factors that affect rating are explained in this unit. to make sure that essential questions are replied and related needs are meet. A comparison between performance rating for development and administrative decisions is also discussed in this unit. It measures employee’s success to please external demands. This "expressive evaluation" employs words to review and explain an employee’s level of competency on the basis of quantitative evaluation procedures. which produces a score. It is essential to be systematic in creating an application of evaluation. Sikkim Manipal University Page No. differentiate performance rating for development and administrative decisions. and had been helpful in the birth of Best EvidenceBased Evaluation (BEBA). mainly a number. we should now focus on the types of scales available to measure performance. Learning Objectives After studying this unit. Such evaluations engage a lot of resources and involve a high level of technique. and advanced programme developers. This unit familiarises you with the concept of improving the quality of performance rating. Evaluation allows the key question to be asked and replied. peers. discuss theoretical considerations that affect appraisals. The advanced growth of "quantified tests". and the present concentration on the value of the evaluation proof and the employment of the related examined information have been inspiring. and to document success or failures. 169 .
behaviour and consistency is also taken into account. The behaviourally anchored Sikkim Manipal University Page No. others are using more advanced techniques. 170 . Another famous process is the forced grading process. The third and last relative method is the paired comparison process which is exceptional as the combined work performance of paired employees is matched with other employees involved with the similar tasks. Absolute standard evaluation system This evaluation system evaluates individuals under several criteria and rates accordingly. The third one is the weighted checklist process. the graphic rating scale which is the first absolute process is generally employed by Organisations. failings and improvement as well as guidance requirement of the individual. where an individual’s performance is measured and then graded according to the percentages. where records are preserved to display best and worst performance incidents. the top graded employees are remunerated and the bottom graded must cope up with the results (involving possibility of termination). Moreover their way of communication. where the overall work performance of an individual is compared to that of others. The employees are graded based on their "total" work performance in descending order from most responsible to least responsible. Compared performance is not considered by the supervisor involved with this process. The supervisor considers the best and worst indications on the record and deduces an average rating of the individual.Performance Management and Appraisal Unit 9 The types of scales that are being followed by organisations across the world can be broadly classified as: Relative standard evaluation system Organisations employ the relative standard performance method to grade employees with respect to one another. A second process includes documenting the achievements. which mainly concentrates on the upper and lower altitudes of the individual's performance. The fourth and last absolute standard is the critical process. Employees are not compared with each other. Managers employ this process to measure the abilities and success of the employees. Other advanced evaluation systems While several Organisations persist to employ traditional appraisal methods. For example. According to this process. The most preferred is the straight grading process.
Standard performance method grade _________ employees with respect to each another. a definite extent of subjectivity is likely to occur. 9.3 Subjectivity and Errors in Rating We have understood the processes followed in the different types of evaluation systems. Let us now look at the errors that may occur with these systems. The 360 degree appraisal process is an assessment based on the evaluation report of several unspecified employees in the Organisation and external customers. 3. The other evaluators might adapt a reverse theory while inspecting their appraisee and thus lean to rate them too harshly (Severity effect). 171 . The graphic rating scale is an absolute_________ process. The forced grading process measures an individual’s _________ performance. Subjectivity As long as the evaluation and comparison of individuals would be concerned. 2. thus grade him/her confidently on all other measures (called Halo effect). assessing and praising them when achieving the established goals. The following are generally recorded events that add to errors and biases in evaluation raising subjectivity: Sometimes evaluators accept or reject some particular acts or attributes of the individual enormously and.Performance Management and Appraisal Unit 9 rating scales (BARS) process measures an individual's performance keeping in concern only the behavioural parameters mentioned on the rating scale. Subjectivity or biases tend to occur when the grading allotted by any evaluator to any individual is derived more from aspects rather than the presentational or behavioral manner exhibited by individual on the aspects under evaluation. Sikkim Manipal University Page No. Self Assessment Questions 1. Some evaluators feel to believe that they should be fair to their appraisee and thus lean to assign them compassionate grades (leniency effect). moreover. The management by objectives (MBO) process concentrates on establishing goals for individuals.
172 Sikkim Manipal University . that is. People being graded may not be presenting in their natural behaviour. he was behaving in an arrogant manner. While watching the friendly tape the evaluators graded the employee more positively on appeared qualities. in one of the two videos of the same employee. they lean to grade most of their appraisees around the average (Central tendency and averaging). Page No. while in the other. For example. There are several arguments against the weight-age of scores deduced from grades. Sometimes evaluators allocate grades on account of the current behavior they have noticed in their appraisee without recalling about the past deeds over a period of time (Recency effect). We should understand the occurrence of error in rating as it can lead to confusions and misunderstandings. Some appreciate those who posses uniqueness which the evaluator does not have but would like to incur (called assimilation or differential effects). Some of the grading effects that have been recognised and considered are: The halo effect. such as body language and sense of behaviour.Performance Management and Appraisal Unit 9 Some evaluators assign nearly equal grades to their appraisee due to their conscious nature. The parody that an evaluator rates an employee on one parameter can contradict his or her notion of that individual on other parameter. Some evaluators prefer to favour individuals who are more like them – who think on the same lines and thus allot them a higher grade than those who seem to have a different opinion. the employee was acting in a friendly manner. Comparatively some evaluators make opinion about individuals on account of their first impression and are likely to carry these feelings over a long period of time (First impression errors). let’s see what makes an evaluator to overlook such rating errors. Understanding rating errors As we just discussed in the previous paragraph about subjectivity and its effect. Some evaluators lean to evaluate their appraisee on the basis of their probability and observations made from their own assessment program. The condition or assignment may not draw out normal attitude. Or the graders may have accidentally disfigured the results.
Hint: http://www.springerlink.com/index/n1p1652160288642. These assertions are deduced from critical incidents.Performance Management and Appraisal Unit 9 Stereotyping. so now we should look forward for a more formal and effective approach to rate performance. The end of a scale is not utilised _________ by some of the judges. 5. but then every team leader is required to be bold. Sikkim Manipal University Page No. It contains determined key regions of work performance or groups of behavioural reports describing the requirement of essential work presentation qualities. The parody that an evaluator develops about a whole group can vary when compared with a single member of the group.pdf) Self Assessment Questions 4. Perception differences. 173 . The end of a scale is not utilised by most of the judges. ________ is the parody that an evaluator figures about an employee in the group. The perspectives and previous incidents of an evaluator can influence his/her understanding of one’s behaviour.4 Behaviourally Anchored Rating Scales From the previous unit we conclude that rating systems were partially effective and also tend to produce rating errors. For example: a manager may discover boldness in a team leader.edu/~humanres/forms/appraisal_handbook.eiu. he/ she may manage by allotting grades that are thoroughly higher or lower. Behaviourally Anchored Rating Scales (BARS) is a comparatively new system which unites the graphic rating scale and critical incidents process. flexibility. Leniency/stringency error. _________ is the parody that an evaluator develops about a whole group 6. 9.pdf) Hint: www. When an evaluator doesn't have sufficient data to deduce an objective grading. such as inter-personal bonds. consistency and work understanding and so on. Scale shrinking. Activity 1: Get more details about the rating errors on performance appraisal.
such that it maintains compatibility with the Organisational structure. Advantages The advantages of BARS are: Grades are not simply subjected to different analysis of graders.Performance Management and Appraisal Unit 9 In this process. It approaches EEOC (Equal Employment Opportunity Commission) instructions for reasonable service practices. keeping records). An organisation should create an evaluation system that replicates the organisational structure and offer training to managers so that they are acquainted with the ability to assign grades and support individual development. Individuals can provide inputs to the strategy and consider devoted to a new system. 174 . Disadvantages The disadvatantages of BARS are: Involves inspectional ability and suitable prediction of unstable behaviours. but these factors will assist employers to concentrate on individual success. an individual’s genuine work behaviour is evaluated against the expected behaviour by accounting and measuring the behaviour with BARS. since work principle for evaluation are derivative of genuine work performance and are associated to it. 9. so we should now concentrate on factors affecting our appraisal systems. Recognition of crucial behaviours consumes a lot of time and effort .5 Theoretical Considerations on Factors Affecting Appraisals We now know about the various approaches made towards rating performance. lack of sufficiency can lead to ambiguous data. Implementing and using BARS involves professional knowledge. and documentation of data also requires attentive and regular inspections (that is. There are many aspects that force an evaluation system's success grade. If Sikkim Manipal University Page No. A performance evaluation system makes a standard approach to evaluate how employees do their work. Less favourable due to resemblance to quality measures. Design An Organisation must plan a performance evaluation system.
" that measures their actual performance. If performance evaluations are employed only to decide pay hikes. and are much more efficient. If employees are liable for their grades. so that they could use those honest grades provided by their managers for self evaluation and as a help in raising their performance. Also. the system can incorporate instruction programs for employees. individuals will not contribute much in order to develop the workplace. how to discuss what they evaluate and how to give a feedback to the appraisees. Sikkim Manipal University Page No. rather than administrative goals. they should get more influence in the evaluation system. individuals will not get the consideration they require from the administration. The resultant stress will adversely affect the workplace customs. managers would be able to provide feedback to employees under their own administration.Performance Management and Appraisal Unit 9 implemented perfectly. they would require a performance evaluation system. they should be given training in how to measure performance. If managers identify how to communicate their evaluation of individual performance throughout the working period. A study included in "The absolute Guide to Performance Evaluation. If there is a variance between organisational arrangement and the strategy of the evaluation system. Managers employ an evaluation system to guide employees with a partial feedback that will assist them in performing better at their respective places. 175 . Training Training is another decisive aspect that influences the efficiency of a performance evaluation process. If employees carry out higher level of independent work or correspond to those work groups." suggests that if managers will employ grading scales to appraise. In this method. Managers will supply feedbacks that are not proper and employees will become dissatisfied. to grant subordinates accurate grades. Moreover. members of work groups can estimate each other. they would be proficient. such as "360-degree appraisal. it will be unproductive. Employee development Studies have proved that performance evaluation methods concentrate on individual development.
(True/False)? 9. Sikkim Manipal University Page No. Self Assessment Questions 7. while some find it difficult to deal particularly with the criticism from a known person. Allusions for team instructors who employ peer evaluations for rating the team projects are examined. (True/False)? 8. Hence. Performance evaluations are employed only to decide pay hikes. Now we should research on some measures to overcome these rating biases. Training influences the efficiency of a performance evaluation. A grown-up organisation with talented associates should be capable to deal with. and determine each through cautiously framed questions. Evaluation of graded scores of the analysis group by the administration group reflected minimum common style rating bias in the analysis group. A research used a quasi tentative control group strategy in an organisational scenario to compute the impact of a grader-training process on limiting common rater bias in an inter-organisation peer assessment after holding for capability based on GPA. (True/False)? 9. while considerable bias was displayed in the administration group. and obtain more advantage from. give comment with respect to the one concerned in question. operating the system clearly. that is. the factors we concluded were responsible for affecting the grades allotted by evaluators and thus influence the organisational structure to a great extent.Performance Management and Appraisal Unit 9 The technique of preparing a feedback form is to fabricate it from the individual's key expertise areas: split these down into components. 176 . which the individuals answer and likewise performance is graded. The logical collection and evaluation of performance figures on an employee or a team is deduced from a determined number of the evaluators in their performance.6 Reducing Rater Biases We just studied about the factors which affect a performance appraisal system. Stress will adversely affect the workplace customs. but development is gained in the manner of competition. Some individual are happy with the feedback given secretly.
There is both an analysis and a feedback process. The performance of either an employee or a group can be measured. The suppliers of data are stakeholders in the individual’s (the employee being rated) performance. Due to some grading faults such as those explained earlier. i.Performance Management and Appraisal Unit 9 The collection of data is organised – that is done in some logical way through aptitude tests or direct-interviews. Various considerations could be taken into account to alter potentially biased grades provided by multiple sets of different evaluators. Calculation through simply averaging each individual's grades – or one can say. Stakeholders are a group of people (called ‘evaluators’) who are influenced by your presentation and also interact with the individuals sufficiently enough to be capable of answering particular questions associated with the way of communication and behavioural manner. data is collected and then fed back to the employee in a transparent way. the grader effect is hardly zero. no logical bias appears in the score sheet. 177 . a problem occurs if. multiple sets of several evaluators are employed in a typical scenario while scoring essays. recognising associations and evaluating individual performance. Let’s have a look on techniques implemented and approaches made for reducing rater biases. all of the participants receive equal advantage or consequences from the grader's lenience or ruggedness.e. Using statistical techniques The variation between a grader's average calculation and the average calculation of all grades is called the "grader effect. Moreover. designed to promote understanding. doing nothing – these analytical considerations have been observed to minimise Sikkim Manipal University Page No. acceptance and ultimately changed behaviour. The grades are not biased. and none of them receive special treatment." If the grader effect is equal to zero. some grading errors might not be a difficulty. If all the evaluators grade each one being assessed. This systemises people’s decision by reflecting the normal relations they have maintained with each other. Individuals evaluated by multiple sets of different graders may obtain biased grades because they draw relatively liberal or comparatively rude evaluations.
and arbitrary error. Three statistical approaches discussed in the present atmosphere are: Common least squares failure: where the deduced grade is observed as the combination of the individual's true capability. logical bias appears in the score sheet. Self Assessment Questions 10. _________ sets of several evaluators are employed. If the grader effect is equal to zero. (True/false)? 11. a grader effect. Biased least squares failure: where each grader's feedback is biased by a measure of the grader's regularity. consider moving to a performance management system. Place the focus on what you really want to create in your organisation – performance management and development. were the only appraisal process for 56 percent of respondents. Another 16 percent expressed that their appraisals are also based solely on supervisor opinions. This way.Performance Management and Appraisal Unit 9 evaluation error and maximize correctness. The declaration approach is most accurate when each grader appraises only a few individuals. 178 .7 Performance Rating for Development Versus Administrative Decisions In a recent Human Resources Forum poll for organisations. (True/false)? 12. Evaluators grade each one being assessed. but administered more than once a year. The biased failure approach is most accurate when fluctuations are predicted in grader consistency. If the goal of performance appraisal in your organisation is organisational improvement. When manipulated on a genuine performance figure. provided once a year. the staff will feel better about participating and the performance management system may even positively affect employee performance. Problem occurs if. and Declaration of misplaced data: where actual figure is employed to compute scores for the individuals that the grader missed to assess. Supervisory opinions. 16 percent of the people responding had no performance appraisal system at all. 9. they naturally make considerable modifications and alter certain amounts of pass/fail decisions. Sikkim Manipal University Page No.
This recognition could be by means of rewards and appreciation and so on. 179 . employees can develop their career goals. Sikkim Manipal University Page No. and inputs from others familiar with the employee’s work. 2. Identifying and nurturing these potential talents can help in preparing the individuals for higher responsibilities and positions in the future. demotions. Performance appraisal is also closely linked to other HR processes like identifying the training and development needs. Based on the evaluation. Performance appraisal encourages employees to improve their performance by working on the strengths and overcoming the weaknesses. Here. promotions. The following steps help in planning and executing a performance development plan: 1. The latest strategy being followed by organisations across the world is "get paid according to what you contribute". Performance appraisal helps to rate the performance of the employees and evaluate their contribution towards the organisational goals. which helps to identify the hidden talents and potential of the employees. Ask the staff member to review personal performance. changes in the compensation and so on. A feedback communicated in a positive manner goes a long way in motivating the employees and helps to identify individual career developmental plans. Performance appraisal as Career Development refers to the recognition of the work done by the employees.Performance Management and Appraisal Unit 9 Performance appraisal is a part of career development. reports. the performance appraisal process in itself is developmental in nature. 3. Schedule the Performance Development Planning (PDP) meeting and define pre-work with the staff member to develop the performance development plan (PDP). Hence. document the self-assessment comments and gather the needed documentation. if available. including 360 degree feedback results. Potential appraisal is a part of performance appraisal. performance appraisal plays the role of the link between the organisation and the employees’ personal career goals. The focus of the organisations is turning to performance management and specifically to individual performance. Instruct the supervisor to prepare for the PDP meeting by collecting data including work records. achieve new levels of competencies and plan their career progression.
There are basically three ways by which performance appraisal evaluations form the basis for administrative decisions. Performance appraisal is also closely linked to other HR processes like identifying the training and development needs. because he/she has been continuously rated as a good performer. Here. 180 . For example. Therefore. In this case. they might depend on the prediction of future performance. as much as an evaluation of the past performance. Schedule and conduct a meeting between the supervisor and the employee. In lag relationships. which in turn affect some other personnel or administrative decision. decisions are made on the basis of performance assessment. In lead relationships. 5. These low ratings. performance appraisals and decisions can include both lead and lag elements. we can assume that positive appraisals are the cause of subsequent administrative decisions. changes in the compensation and so on. the company’s decisions affect the appraisals. Self Assessment Questions 13. by following the lag method. the employee may be given low ratings. in turn. a company might decide to fire a poor performing employee. and to think and decide about areas for potential development. promotions. Promotion decisions are not purely dependent on performance appraisals. to examine how the employee is performing against all criteria.Performance Management and Appraisal Unit 9 4. Likewise salary decisions may depend on market forces. as much as they depend on performance rating. may lead to decisions for remedial training for the employee. Performance rating for administrative decisions The most obvious purpose of a performance appraisal is a decision aid. Performance appraisals help in deciding who should be given a raise. The outcomes of performance appraisal do play a very important role in most of the personnel decisions of an organisation. Finally. For example. (True/False)? Sikkim Manipal University Page No. performance appraisals are filled out to justify or strengthen decisions that have already been taken or to make it easier to execute a plan of action that has already been decided upon. promoted. an employee may receive a big hike in the salary. the importance of having a good performance appraisal system cannot be underrated. in the third method. However. demotions. Document and implement the plan. or terminated.
Performance appraisals do not have a role in an employee’s career development. Other advanced evaluation systems Many Organisations have been using more advanced performance appraisal techniques. Absolute standard evaluation system The complete standard evaluation process evaluates individuals under diverse criteria and measures.8 Summary From this unit. subjectivity and consequences of rating biases.Performance Management and Appraisal Unit 9 14. It evaluates individual success to overcome external necessities. Relative standard evaluation system One of the most preferred methods under this system is the straight grading process. Sikkim Manipal University Page No. Performance appraisal allows the typical issues with respect to employee performance to be raised and acknowledged. behavioural manner and trustworthiness. the BARS measurement technique. 181 . different methods to reduce rating biases. as well as their influence in administrative as well as development decisions. Behaviourally anchored rating scales Behaviourally Anchored Rating Scales (BARS) is a comparatively modern approach which joins the graphic rating scale and critical incidents process. Another frequently applied method is the forced grading system. and to register achievements or downfalls. Supervisors employ this process to measure the skills and success of the employees as well as their way of interaction. where individuals are graded respectively from best to worst on the basis of their "total" work performance. where an individual’s performance is compared after evaluation and are then graded based on percentages. we came to know about different types of rating scales. Comparison is not made between employees. and supplies information that can be employed to develop training programs. (True/False)? 9. The behaviourally anchored rating scales (BARS) process compares an individual's performance based only on behavioural parameters mentioned in the vertical rating scales.
One of several ways of representing a group with a single. 9. 3. Aspects or categories in which performance in a domain or subject area will be judged.9 Glossary Term BEBA Analytic Scoring Rubric Benchmark Cut Score Dimension Mean Explicit Replicate Description Best Evidence-Based Evaluation. Employee performance standards. 2. What is the difference between performance management and performance evaluation? 4.Performance Management and Appraisal Unit 9 Today. To exhibit one’s quality or behaviour. What are the causes of subjectivity and how does error in rating occur? Sikkim Manipal University Page No. Justify the sentence – Performance evaluation is not merely for evaluation but is for accomplishment and improvement of performance. A set of printed rules or instructions. To reflect the absolute manner. we also learnt how performance appraisals can be used for both employee developmental purposes as well as administrative purposes. Various considerations could be taken into account to alter potentially biased grades provided by multiple sets of different evaluators. typical score.10 Terminal Questions 1. In this unit. 9. Compare performance evaluation and performance management. 182 . A type of rubric scoring that separates the whole into categories of criteria that are examined one at a time. Score employed to determine the minimum performance level needed to pass a competency test. efforts are being made to mitigate subjectivity and rating bias in performance appraisal systems.
Administrative Purposes. Absolute 4. 4. Refer to section 9. The application was to be designed in such a way that the rating would be considered with STARs.3 Subjectivity and Errors in Rating. True 9. 2. 9. which appraises their employees’ performance by STAR rating system. False 11.7 Performance Rating for Development Reasons Versus. Administrative Purposes. 9. Refer section 9. Refer section 9. False 10. Refer section 9.2 Types of Scales. 3. and 9. The higher the performance of the employee the higher the ratings would be.2 Types of Scales. Grade 2.Performance Management and Appraisal Unit 9 9. 9.5 Some Theoretical Considerations of Factors Affecting Appraisals. True 12. False Answers to Terminal Questions 1. and 9. Stereotyping 7. The halo effect 6. True 8.3 Subjectivity and Errors in Rating. Multiple 13. True 14. Individuals 3. 183 .12 Case Study Performance Appraisal Model Background ADC Company wanted to develop software. Utilised 5.11 Answers Answers to Self Assessment Questions 1.7 Performance Rating for Development Reasons Versus. Anybody can rate the performance of the Sikkim Manipal University Page No.3 Subjectivity and Errors in Rating.
calculating the performance of the employee became very easy and of course. Once the person collects five stars.com/index/n1p1652160288642. Results: The application worked wonders.springerlink. It also provided flash certificate for star allocation.html http://www. Also. anyone could give a STAR to anyone and the manager of that person will approve the star. the employee can view the star. the employee would be awarded with a GIFT from giftcard. as all employees were very happy to use the product.pdf www. With this application.html Sikkim Manipal University Page No. he/she can claim a gift from giftcard.allbusiness.html http://appraisals. and if the rating achieves a certain level. which was entrusted with the project. the manager would count the STARs. 184 . Performance Management and Appraisal System.com/human-resources/employeebenefits/567661-1. At the end. Challenges: Connect with active directory services Create a schedule to update ADS settings to SQL database Create flash certificate Solution: RMS Software Company. Sage Publications Limited.Performance Management and Appraisal Unit 9 employee in the company. E-references http://www. After the star is approved.softwebsolutions.com. Hint: This case is based on a case study http://www.html found in References T. claimed stars and gift sending. pending stars.com.com/cs-all-star-recognition.naukrihub. Venkateswara Rao (2004).softwebsolutions.eiu.pdf http://www. analysed the requirement and planned out a perfect appraisal model.com/appraisal-and-career-development.edu/~humanres/forms/appraisal_handbook. RMS also provided many reports for star allocation.com/cs-all-star-recognition. getting awarded with the gifts is a great idea which was welcomed by one and all.
2 Role of Feedback 10.7 Levels of Performance Appraisal Feedback 10.10 Summary 10. and consequences of performance appraisal feedback.1 Introduction In the earlier units you have studied about different aspects of performance management.3 Making Performance Feedback Meaningful 10.13 Answers 10.4 Performance Appraisal Feedback Models 10.14 Case Study 10.12 Terminal Questions 10. perspectives. because we do not like to hear a negative feedback. This will obviously do little to help the individual receiving the feedback improve their performance and grow personally and professionally.11 Glossary 10.5 Performance Appraisal Feedback Perspectives 10.6 Performance Appraisal Feedback Consequences 10. Sikkim Manipal University Page No. This unit discusses the role of feedback and the process of making the performance appraisal feedback meaningful. 185 .8 Performance Appraisal Feedback Planner 10.1 Introduction Learning Objectives 10. We transfer our negative feelings about the information we receive to the person who was unlucky enough to be the one who delivered the bad news. Most people would prefer not to receive feedback on how they are performing their job.Performance Management and Appraisal Unit 10 Unit 10 Performance Appraisal Feedback Structure: 10. The performance appraisal procedure is incomplete without the feedback given to the employee about the appraisal and their performance. It also familiarises you to models.9 Self Directed Feedback 10.
in which your performance is measured against pre-established criteria. an opportunity for a formal. The drawback to this approach is that there can be many factors that influence the supervisor’s perception of the individual that are not related Sikkim Manipal University Page No. documented communication. 10. on a regular basis. that is. job placements.3 Making Performance Feedback Meaningful Making performance feedback meaningful to both the individual and the organisation should be the ultimate objective of any efforts to improve in this area. you should be able to: explain the role of feed back in performance appraisal. in the form of an annual evaluation. Let us look at some of the common pitfalls of performance feedback systems. This type of an appraisal review offers both the parties – the giver and the receiver. A single evaluator’s feedback determines the outcome of the performance appraisal. For example. People need to hear how they are doing – both positive and negative. out-placements. such as. is usually.Performance Management and Appraisal Unit 10 Learning Objectives After studying this unit. promotions. In addition. Once a year. generally. Feedback serves as a cornerstone to help employees to improve their performance in any organisation. performance reviews are scheduled annually. discuss the perspective of performance appraisal feedback. many career-altering decisions. explain the consequences of performance appraisal feedback. the entire salaried merit distribution plan is often based on the annual performance review that people receive from their supervisors. selections. list out the various performance appraisal feedback models. This is the only way that a person can realistically be expected to grow and develop in their job. Performance feedback should be given on an ongoing basis throughout the year. Performance feedback evaluation is conducted annually.2 Role of Feedback Performance feedback is. and rejections are typically based on a person’s annual performance feedback. transfers. 186 . just not enough to give people adequate feedback about their performance. 10.
The evaluations turn out to be more of an argument. covering for co-workers during their absence. These include many extra efforts that too often go unrecognised. These can include any biases. It doesn’t really matter whether the person’s perceptions about their supervisor’s feelings are right or wrong . if a person feels that the supervisor does not like him or her. they become magnified when presented by the supervisor. philosophical differences. such as coming in early to work and staying late. Feedbacks are either coupled to raises or are not. This gives rise to a negative feeling about feedback. anything that is presented in the performance evaluation will be filtered through this perception. They do not address the behaviours involved in achieving these desired results. and working through sickness and personal problems.the message the person hears remains the same. Defending or justifying the rating given to the individual becomes the main objective rather than providing meaningful feedback. Only the formal aspects of job performance are addressed. conflicts. If problems such as those mentioned above exist. A supervisor finds something that someone did wrong and saves it to be presented to him or her during their annual performance evaluation. Annual performance evaluations usually focus on the results of an individual’s efforts during the past year. For example. Tying these two systems together has the potential of rewarding and motivating Sikkim Manipal University Page No. 187 . and so on that might exist at any level. There are as many problems with systems that tie performance evaluations to merit raises as there are in systems that do not. The supervisor’s opinion is the primary input for the feedback. rivalries. jealousies. Performance feedbacks are negatively interpreted.Performance Management and Appraisal Unit 10 to his or her actual job performance. Often these are the things that people make the greatest personal sacrifices to achieve and of which they are proudest. Doing so makes the performance review more negatively based than developmental. The supervisor spends more time on explaining his or her rationale for rating the person the way he or she did than on anything else during the review.
(True/False)? 2. Not specific enough about the individual’s performance. Once a year is enough to give people adequate feedback about their performance. Self Assessment Questions 1.Performance Management and Appraisal Unit 10 people by giving them more money for achieving greater levels of performance. Performance appraisals should be based on a single evaluator’s feedback. Limitations on the number of people that can be grouped into various rating categories. Formal reviews are generally full of surprises. 188 . it will lose its value and significance. People should not be surprised by any information presented in their formal performance evaluations. there really should not be any entirely new information presented during the annual performance review. It is believed that if everyone is rated in the top performance category. The focus of the approach is to prevent too many people from being given the top performance rating. (True/False)? 3. People want and need to have specific details about how they are perceived and evaluated. If you as a supervisor have done a good job of communicating performance feedback to your subordinates throughout the year. Justify your reason as to why this should not be done on an annual basis. A performance appraisal needs to include very specific information about the individual being evaluated. Summary and review rather than surprise should be your guide in conducting an annual performance review. (True/False)? Sikkim Manipal University Page No. A performance appraisal needs to include very specific information about the individual being evaluated. You have been assigned the task of designing a performance evaluation feedback which is analysed annually. Activity 1: Assume that you are working as the HR manager of a company named ABC. Hint: The drawbacks of the annual feedback system. The result is that the remaining majority of the people in the evaluation system feel excluded.
GIVER P E Biases Security Experience Communications Sensitivity Expectations Values R C E P T I O N S Figure 10. These barriers act as filters and thus affect the actual message that is heard. (True/False)? 5.4 Performance Appraisal Feedback Models Performance Appraisal Feedback Models help us to achieve what is known as a meaningful performance feedback. Making performance feedback meaningful to both the individual and the organisation should be the ultimate objective in any efforts to improve in this area.Performance Management and Appraisal Unit 10 4.1: Feedback Model RECEIVER Receptivity Growth Commitment Goals Self-Esteem Motivators Values Figure 10. there are certain perceptual barriers that these communications have to travel through. Formal performance reviews should be full of surprises. is best achieved through proper communication between the feedback giver and the feedback receiver. (True/False)? 10. as we know. In Figure 10. different variables of performance feedback have been incorporated into a feedback model. 189 .1 illustrates the feedback model.1 lists only a few of the endless list of possible variables that these perceptions can create. We see that the variable for both the giver and the receiver of feedback is determined by the perceptions of the participants. Meaningful performance feedback. Figure 10. Sikkim Manipal University Page No. Irrespective of who provides the feedback to the receiver.1.
HEARD A SAID C D B MEANT FELT Figure 10. The aim of the matrix can be achieved only when all the participants in the performance feedback process use it. and clockwise. To illustrate how the matrix can be put to work.2: Said/Heard — Meant/Felt Feedback Matrix The Said/Heard – Meant/Felt Matrix can be used in any way or direction. It can be used either by the giver or the receiver of performance feedback or both. horizontally. This implies that the matrix can be applied vertically. let us begin by using the matrix in a clockwise direction starting at the 9:00 o’clock position. From this point we begin with what is “Said.” Let us label the four quadrants A.3: Said/Heard — Meant/Felt Quadrants Sikkim Manipal University Page No.1. B. and D as shown in Figure 10.3.Performance Management and Appraisal Unit 10 Reading further will help us to get a clear understanding of how perceptions of different participants affect the feedback.2 should help give more clarity to the concepts introduced in Figure 10. counter clockwise. 190 . C. HEARD SAID MEANT FELT Figure 10. The Said/Heard – Meant/Felt Feedback Matrix The Said/Heard – Meant/Felt Matrix in Figure 10.
wherein the statement must now pass through the perception barrier that has been represented as the vertical axis of the matrix. Let us begin with Figure 10. “You could have contributed much more to the project.4: Quadrant A In Quadrant A.” This is where the challenge arises.5. 191 . the feedback giver has said. It is illustrated in Quadrant B in Figure 10. Sikkim Manipal University Page No. Let us now look into what has been heard by the receiver.4 looking into what is “Said.” HEARD A Giver: You could have contributed much more to the project P E R SAID C E P T I O N MEANT FELT Figure 10. let us look at how the matrix can used during a typical performance review.Performance Management and Appraisal Unit 10 Now.
we must understand that this may or may not have been what the feedback giver would have actually meant.Performance Management and Appraisal Unit 10 HEARD A Giver: You could have contributed much more to the project P E R SAID C E P T I O N MEANT B Receiver: I have not done my part well FELT Figure 10. Sikkim Manipal University Page No. you can see in Quadrant B that what was heard was “I have not done my part well.” Now.5: Quadrant B After passing through the receiver’s perceptual barrier. 192 .
Performance Management and Appraisal Unit 10 In Figure 10. but there is a lot more you could do. HEARD A Giver: You could have contributed much more to the project P E R SAID C E P T I O N C Giver: You have performed well. Quadrant C.6: Quadrant C In Quadrant C. it is observed that the feedback giver’s meaning was very different when compared to what was perceived by the receiver. Sikkim Manipal University Page No. given your potential MEANT B Receiver: I have not done my part well FELT Figure 10. 193 . the giver now clarifies to the receiver the intended meaning of his message shown in the Quadrant A statement.6.
Sikkim Manipal University Page No. by using the matrix. 194 . Hence.Performance Management and Appraisal Unit 10 Now the receiver’s feeling towards this feedback has been illustrated in Quadrant D in Figure 10. The matrix can also be used by the receiver to get clarification on points that were not made clear during the performance review. the giver of the feedback can understand how the feedback has been perceived by the receiver and then try to clear the misunderstandings. I can grow well in the company P T I O N C Giver: You have performed well. These misinterpretations can be very counterproductive and will not support the goals and objectives of providing feedback.7. HEARD A Giver: You could have contributed much more to the project P E R SAID C E D Receiver: If I work hard. given your potential MEANT B Receiver: I have not done my part well FELT Figure 10.7: Quadrant D Utilising the matrix We observe that there is a dramatic contrast between what the receiver perceived the performance feedback message to be in Quadrant B versus what the message actually meant in Quadrant D. The issue with many performance review sessions is that the communications end at Quadrant B. but there is a lot more you could do.
Meaningful performance feedback is best achieved by understanding the interaction between the ________ and the _________. These events can have a dramatic effect on the perspective that people have on performance feedback. 7. With negative feedback. be prepared to give examples of the individual’s poor performance. Negative feedback can be some of the most potentially valuable information about yourself that you might ever receive. Listen to the reasons and rationale for the behaviour and performance. Even the most effective performance feedback systems can have some negative elements. 10. Be willing to accept the fact that there might be factors beyond the person’s control for these problems. 195 . As with any feedback. Do not rush too quickly to judgment before you have heard their side of the story. Let us look into some of the ways in which a supervisor can use negative feedback in the most positive ways possible.Performance Management and Appraisal Unit 10 Self Assessment Questions 6. Gain an insight into the individual’s performance. Plan for ways to correct or address these factors to help the person improve on their performance. and perspective is how we see these messages. there are _______ that these communications must pass through. you need to keep an open mind and be willing to accept what you hear. Negative feedback Receiving negative feedback about one’s job performance is definitely a perspective-changing experience. Sikkim Manipal University Page No. It is the feedback that is the most difficult to hear but provides us with the maximum growing opportunity. Know exactly what performance you are addressing.5 Performance Appraisal Feedback Perspectives Perceptions involve how we interpret the messages we receive. Give the person a chance to defend themselves. Regardless of who presents the feedback to the receiver.
Sikkim Manipal University Page No. People seem to fear the worst when they hear negative feedback about their performance. Make it clear what performance needs to be improved and why.Performance Management and Appraisal Unit 10 Do not convey a “mixed message” to the individual. The person should be told the following concerning their unacceptable performance: o Why the performance is not meeting requirements. 196 . then do not try to sugar coat it by wrapping it up in complimentary feedback and sandwiching it in between. The _________ involve how we interpret the messages we receive. Hint:http://performance-appraisals. Consequences need to be realised. Self Assessment Questions 8. o What the person must do to improve this performance. o When the person’s progress made toward the desired performance goals will be reviewed and how frequently. Activity 2: Read some articles on: Effective ways to give performance feedback. then it should not be delivered. Negative feedback should be constructive in its purpose. If the reason for delivering negative feedback is anything other than to constructively help the individual. The feedback should be productive. Negative feedback needs to include at least some discussion about its ultimate consequences so that the receiver understands the reason for receiving a negative feedback. A mixed message is one where you hear two seemingly contradictory things at the same time. o How this performance will be measured and how improvements will be communicated to the person in the future. If you have a negative message to deliver to someone.htm. 9.org/experts/perffeedback. Do not have the person leave not knowing if he or she was told that they were doing a good job or a bad one. A ___________ message is one where you hear two seemingly contradictory things at the same time. This will only serve to confuse the person more. and __________ is how we see these messages.
dinners. Informal recognition can be a very powerful way of providing performance feedback. Informal recognition includes all those ways people might receive feedback that do not require executive approval in order for it to be provided. Each organisation should evaluate these various levels of performance feedback and choose the one which is best suited for their type Sikkim Manipal University Page No. this type of formal recognition is presented by some higher-ranking official in the organisation to the individuals receiving the honour. Most performance appraisal systems have rating categories. especially negative feedback. or with copy to all the employees in the team. Typically. 197 . plaques and so on. People can be very sensitive about any type of criticism they receive about themselves. Negative feedback can be some of the most potentially valuable information about yourself that you might ever receive. it can also stereotype people.Performance Management and Appraisal Unit 10 10. It is important that we think about all the possible consequences to any type of performance feedback we give to people across the organisation. publicity. that is the greatest source of dissatisfaction and complaints. there are going to be consequences. Examples could be sending an appreciative mail either only to the person concerned. Generally. Not only can this rating assignment system upset those not placed in the highest category. (True /False)? 10.6 Performance Appraisal Feedback Consequences Whenever feedback is given to people. They might involve ceremonies. 10.7 Levels of Performance Appraisal Feedback This section will give you an insight into the different levels of performance feedback. The Psychological effects of performance feedback The most obvious psychological effect is the potential “labelling process” that is a result of many performance feedback systems. having a sort of contest every month. Recognition can be formal such as reward programs that honour outstanding performance. it is the lack of recognition for the good work that people do. so that the best performers of the month is recognised and so on. typically three to five in number.
198 . 5. but no personalised communications. Formal system. 2. the organisation might not be in a very justifiable position when it comes to its employment and personnel actions. Formal feedback system including personalised communications from supervisor to subordinate. 6. No formal feedback or documentation. people have far fewer opportunities to grow professionally in their jobs. it is easier for managers and supervisors to put into practice. 4. 3. without any feedback. 1 The Power of Feedback : 35 Principles for Turning Feedback from Others into Personal and Professional Change by Joseph R. No feedback. Without any formal discussions. multi-source (for example: 360-degree feedback and team feedback). or documentation concerning people’s job performance. not only do most people dislike receiving performance feedback. The biggest drawback of this system is that. Folkman Sikkim Manipal University Page No. They are most likely to be told when they do something wrong. supervisors do not savour the thought of giving it. 10. Level 1 – No feedback The only positive aspect of this type of a feedback system is that. The drawback of this kind of a feedback system is that. Each level requires various amounts of involvement and commitment on the part of different people in the organisation. The truth is that. The organisation must be able to support the feedback methodologies that are put in place and practised.8 Levels of Performance Feedback1 There are six levels of performance feedback. the absence of formal feedback does not interfere with other personnel-related processes. Formal feedback system including written documentation. written records. These are: 1.Performance Management and Appraisal Unit 10 of business. Self-directed feedback. However. the employees who work in this kind of an environment can only guess how their supervisor feels about their job performance.
Another aspect of this level is that the performance feedback is not tied to other personnel systems in any formal way. This type of performance feedback format is the most common. even though it might not be formal or documented. The format is often Sikkim Manipal University Page No. is given. people are probably much more likely to be told when they do something wrong than be given positive feedback about their performance. given raises. employees are still promoted. 199 .Performance Management and Appraisal Unit 10 Level II – No formal feedback or documentation In many of the organisations. comparisons in performance can be easily made from one evaluation period to another. Level Ill – Formal feedback system This kind of a feedback system includes formal feedback systems with documentation. but not personalised communications. There are neither standardised forms that are used nor any other written records of performance appraisals of feedback. Thus. The advantage of this system is that it has the ability to provide formal feedback to the individual and at the same time can address a great number of performance areas in a crisp manner. Working in this type of feedback environment. The performance evaluation form is a checklist of performance criteria to be reviewed for each person. because of its quantitative design. This format is generally preferred by many supervisors because of its straightforward approach. The drawback in this type of a system is the lack of formal or documented performance feedback will ultimately result in employees being confused about where they stand in the organisation. Not being personalised means the information is more quantitative in nature rather than being narrative. and are demoted or even terminated due to performance. Another advantage is that. It relies almost entirely on the information provided on the evaluation form. the organisation itself suffers as well. as it does not have the ability to properly identify and reward those who are truly the top performers. The quantitative approach of performance feedback might be in the form of a rating scale. However. Not being formal or documented means that there is no official system in place that regulates the performance feedback process. some form of performance feedback.
Level IV – Formal feedback system – personalised communications This level of feedback combines the quantitative performance measures and personalised feedback. which is to get the recipient to understand and accept the information about their performance. 200 . subordinates. Some of the methods adopted to achieve this level of feedback have been mentioned below. supervisors. But. The forms are sent to the individual’s Sikkim Manipal University Page No. Multiple-source performance feedback provides an individual a number of different perspectives about how others in the organisation see them. and even the individual themselves. The performance feedback form is designed in such a way that the supervisor is required to personalise certain aspects of the feedback that the individual receives. Level V – Formal system. This level of feedback helps in the achievement of the objective of any performance feedback. multi-source In each of the four levels of performance feedback.Performance Management and Appraisal Unit 10 accompanied by a performance index scale that assigns a rating based on the resulting points assigned to each performance rating area. so as to provide the individual a more complete understanding of how others perceive them. This kind of a feedback is predominantly valuable to the individual as it eliminates many of the inherent problems of single-source feedback. Let us look into them in a little detail. an individual receives feedback from almost all the people who work around them. there is one common factor: the supervisor is the source of the performance feedback. in level V. The objective of this is to give the individual personal feedback from a variety of perspectives. 360-Degree feedback In this system of feedback. The feedback process includes a standardised questionnaire that looks at a number of dimensions of an individual’s job performance. The more personalised the performance feedback becomes. the more meaning it provides to the individual receiving it. the focus begins to change from this single source (supervisor) to a multiple source. Feedback is provided from different directions which include peers. 360-Degree feedback systems provide the individuals with feedback from a variety of levels in the organisation. of performance feedback.
The feedback a person receives from a 360-degree feedback system will surely provide an opportunity for the individual to take an honest look at themselves. If the feedback indicates the presence of a relationship problem. 201 . Sikkim Manipal University Page No. We can observe a number of variations of how an individual’s job performance might be viewed by different sources. It helps them to identify both their strengths and weaknesses and thus can develop action plans for both. a confidential summary report is sent to the individual. Self Assessment Questions 11. the team members are actually helping everyone to work more efficiently. will be discussed in detail in the section 10. The _____________ systems provide the individuals with feedback from a variety of levels in the organisation. initiatives to improve the situation can also be inculcated. An organisation or team generally develops their own form and format to meet their particular needs.Performance Management and Appraisal Unit 10 supervisor. Team feedback Team feedback.9. self-directed feedback. creating the full circle of feedback. This system also includes a form that the individual completes. The last level of performance feedback. There are many ways through which team feedback systems can be administered. Team feedback helps an individual to focus on those aspects of their performance that are most supportive of the needs of the team. peers. The objective of the team feedback system is to improve the effectiveness of the group. wherein they can go back to those who provided them with their feedback and ask for their support so as to help improve their performance. By providing this feedback to one another. and direct reports. Use of e-mail is one such option. This would give them an opportunity to express their perceptions. The information also supplies the individual with an opportunity. Once the filling up of the forms is completed. as the name suggests. Teamwork is not something that always comes naturally to people. These variations can sometimes provide the greatest insights. is provided by the employee’s team members.
10. care must be taken to see that you do not employ one single source of feedback that you think would be perceived by others as the best. While planning your own performance feedback process. Some of these resources might already exist and be part of the feedback systems that are presently in place. The purpose of creating a personal performance feedback mission is to develop a personal statement that identifies what you plan to achieve by your performance feedback planner. Activity 3: Design your own performance appraisal feedback planner. When people accept ownership of and responsibility for their actions. 202 .8 Performance Appraisal Feedback Planner Performance Appraisal Feedback Planner is a tool wherein the individual designs the feedback questionnaire format. There is no right or wrong method of giving and receiving performance feedback. It is a system that is initiated by the individual rather than the organisation. The performance feedback planner will allow you to maximise the potential of the feedback resources that exist in your organisation. It is important to include what you are comfortable with and what according to you has the greatest potential to help you improve your performance. Hint: Performance Appraisal Feedback Planner Sikkim Manipal University Page No. The objective of __________ systems needs to be focused on improving the effectiveness of the group. It is not something that should be taken lightly or without a great deal of thought.Performance Management and Appraisal Unit 10 12. Everything about the performance feedback planner is designed by you (inside-out). The performance feedback can help you to receive some of the most important communications you ever receive on your job. The most important aspect is that it meets the goals and expectations of an organisation and those participating in the process. Your performance feedback planner can and should incorporate these sources in order to gain the greatest potential benefit from them. it has a greater meaning and significance to them.
it is important. Like many other aspects of interpersonal communication.9 Self Directed Feedback As the name suggests. awareness is the key to understanding. 203 . you can see that the feedback perspective this time begins with the receiver. we are not just looking at perceptual differences in the way different people view performance.8: Self-Directed Feedback Perceptions Although the difference between the two feedback systems is subtle. It is intended to be non-evaluative in its design. Self-directed feedback can be one of the best means of identifying and understanding perceptual differences. The main goal of self-directed feedback is to explore the perceptions of others about an individual’s performance. In Figure 10. The objective is not only understanding these perceptions. self-directed feedback is conducted by the individuals themselves.8. similar to the 360-degree and team feedback systems. but addressing them as well. In self-directed feedback.Performance Management and Appraisal Unit 10 10. It should also have no direct impact on other formal performance evaluation systems that are part of other compensation or organisational developmental processes. Self-directed feedback is unique in that it begins from the point of view or perceptions of the receiver of feedback. Selfdirected feedback is intended to help the individual’s personal development in such a manner that is most acceptable to them. RECEIVER P E R C E P T I O N S SENDER Figure 10. but we are also beginning to address self-perceptions. Self-perceptions are the most Sikkim Manipal University Page No.
Its principal advantage is the level of acceptance the individual will have. This is because.1 gives us a study of both the traditional as well as the self directed feedback. let us compare it to traditional performance feedback systems using the familiar five questions of Who What? When? Where? and How? Table 10. it is instead more of the learning opportunity it is intended to be. and perhaps those that need the greatest care.1: Self Directed Feedback Compared to Traditional Feedback2 TRADITIONAL WHO: Who decides person(s) providing feedback? WHAT: What aspects of performance will be included in feedback? WHEN: When will feedback be given? Determined by the System Determined by the form/format SELF-DIRECTED Individual receiving feedback Individual designs own feedback Schedule is set by the system Individual sets own feedback schedule within certain parameters All information is in the control of the individual WHERE: Where does the feedback go after it is provided? HOW: In what way performance feedback administered? If part of the formal appraisal process.1 shows a self directed feedback compared to traditional feedback. Instead of feedback becoming a potential threat to a person’s self perceptions. to the person’s employment file According to established procedures Individual develops own procedures Table 10. thereby. it is the individual who decides who is to provide the feedback. concerning the feedback received. by addressing the questions like Who? What? When? Where? And how? Here. To illustrate the benefits of self directed feedback. we observe that the individual is completely responsible for his feedback. 204 . reducing the chances of any kind of unfair 2 Giving and Receiving Performance Feedback by Peter R Garber Sikkim Manipal University Page No.Performance Management and Appraisal Unit 10 important of all. Table 10.
Sikkim Manipal University Page No. Most importantly. important to provide a constructive feedback to the employee. Feedback. and improve poor performers. all the information is in the individual’s control. 205 . It should be given such that it will motivate him to perform better. They can set their own feedback schedule. this unit by now should have been able to give you a good insight into the feedback appraisal feedback.Performance Management and Appraisal Unit 10 partiality occurring. effective. Feedback is an essential part of improving performance regardless of current performance levels. This implies that the individual is responsible for developing his own corrective procedures. The individuals design their own feedback and thus have the freedom to decide on the perspectives covered. Thus. and long-term change. It is needed to maintain high performers. The highly effective people are able to turn feedback into a real. especially the not-so-positive variety is the most difficult.10 Summary The performance appraisal process as we have seen is incomplete without the feedback given to the employee about his appraisal and his feedback. It is thus. Yet. this kind of a feedback helps the individual to grow not just professionally but also as an individual. The way of giving as well as receiving the feedback varies from person to person as well as their way of handling the issue. it is one of the important factors in any performance appraisal. 10. The feedback models mentioned if adapted will surely work wonders for you. Thus.
One's "point of view". Explain the giver-receiver performance appraisal feedback model using an example. 4. perceptions. mixed 10. False 3. feedback receiver 7. feedback giver. 10. 8. Briefly explain the role of feedback in performance appraisal feedback systems. True 4.11 Glossary Term Feedback Models Performance Appraisal Perspective Planner Description Information about actions returned to the source of the actions. What are the consequences that performance appraisal feedback can have on its employees? 5. perceptual barriers. 2. False 2. Briefly explain the different levels of performance appraisal feedback systems. 360-Degree feedback 12.Performance Management and Appraisal Unit 10 10.12 Terminal Questions 1. operational and logistical activities necessary for judging an employee’s feedback 10. perspective 9. beliefs and experiences Coordinates the strategic. True 6. team feedback Sikkim Manipal University Page No. A problem-solving technique used for problems with which causal modelling does not function well It is an analysis of an employee's recent successes and failures. How can performance appraisal feedback be made meaningful? 3. the choice of a context for opinions.13 Answers Answers to Self Assessment Questions 1. False 5. personal strengths and weaknesses. 206 . true 11. and suitability for promotion or further training.
14 Case Study ABC Bank’s Effort to Avoid Biased Performance Appraisal In our country. It was decided that irrespective of the performance feedback. performance appraisal feedback systems are different for both public as well as the private sectors.7 Levels of Performance Feedback.Performance Management and Appraisal Unit 10 Answers to Terminal Questions 1. 207 . The performance appraisal feedback was to be used only during promotions and the feedback would be just a part of the other factors determining the employee’s promotion. Refer section 10. 3. This created dissatisfaction among the employees of ABC bank. Hence. if the employee and the supervisor are not in good terms. Even if the supervisor tries to give feedback justly. we are going to discuss about the performance appraisal feedback systems relevant to the centralised banking sector. Another aspect they decided on was not to link salary appraisals with the performance feedback. performance appraisal feedback is conducted mainly by two persons. They are the supervisor. 5.6 Performance Appraisal Feedback Consequences. Sikkim Manipal University Page No. 4. 10. The drawback of the current system is that. if the supervisor was truly biased in giving the feedback about an employee. Refer section 10. all employees would be given the same increment. 2.2 Role of Feedback.3 Making Performance Appraisal Feedback Meaningful. Hence. the result would appear biased to the employee because of their perspective towards the supervisor.4 The Said/Heard-Meant/Felt Feedback Matrix. then the appraisal feedback is the area wherein the supervisor could give it back to the employee. Refer section 10. Refer section 10. the management of ABC bank decided to adopt a situation wherein not just the supervisor. Refer section 10. In this case study. but also the manager was required to give a feedback to the employee. then this would be set right in the manager’s feedback. and then the immediate manager. They do not follow the concept of 360-degree feedback system. In the banking sector.
6 and 10. HRD Press. References Joseph R. Peter R Garber (2002). Sikkim Manipal University Page No. finds its use in the centralised banking sector. The Power of Feedback: 35 Principles for Turning Feedback from Others into Personal and Professional Change. E-references http://performance-appraisals. Folkman (2006). 208 . What were employee perspectives that affected the performance appraisal feedback systems? Hint: Refer section 10. Questions: 1.org/appraisallibrary/Giving_Employees_Performance_Feedback/ http://performance-appraisals. What were the methods adopted to make the performance appraisal feedback meaningful? Hint: Refer section 10.8.5 2.htm.4 and 10. John Wiley and sons Peter R Garber (2004).org/experts/perffeedback. Giving and Receiving Performance Feedback. Models and tables adapted from Giving and Receiving Performance Feedback.Performance Management and Appraisal Unit 10 This is how performance appraisal feedback.
A schematic model of performance management is explained in this unit. The various performance management theories and measures are also Sikkim Manipal University Page No.8 Assessments and Evaluations 11.5 Rewarding Performance 11.9 Summary 11.Performance Management and Appraisal Unit 11 Unit 11 Performance Managing and Monitoring Structure: 11.1 Introduction By now you must be aware that the performance appraisal process is incomplete if the feedback is not given to the employees. You have also learnt how to make a performance feedback meaningful. The key to assess or monitor any employee's performance is the setting of objectives.7 Monitoring Performance 11. It is also important to know how to manage and monitor performance in order to encourage employees and maintain the standards of organisation in all aspects. the various performance feedback models. 209 .1 Introduction Learning Objectives 11. consequences and the different level of performance appraisal feedback.11 Terminal Questions 11.2 A Schematic Model of Performance Management 11.3 Performance Management: Underlying Theories Goal Setting theory Expectancy theory 11. This unit introduces the performance managing and monitoring process.6 Feedback and Amendments 11.12 Answers 11.13 Case Study 11.4 Measuring Performance Quantitative measure Qualitative measure Appraisal system 11.10 Glossary 11. perspective.
We will focus on one of the aspects called as Plan-DoReview-Revise cycle to comprehend the management of performance. service. and so on. you will be able to: define a schematic model of performance management. and evaluation. evaluation and rewarding process. Figure 11. corporate. which come under performance management. team.1: Plan-Do-Review-Revise Cycle Sikkim Manipal University Page No. state the underlying theories of performance management. assess how to reward performance. 210 . 11.Performance Management and Appraisal Unit 11 discussed in this unit. presently there is no model that is accepted worldwide or is in use on performance management. There are many ideas and contributions from different management aspects. individual. assessment. Learning Objectives After studying this unit. comprehend feedback. The Plan-Do-Review-Revise cycle takes place over different time scales and at many levels. amendments.2 A Schematic Model of Performance Management Do you think there is a need for a model for performance management? Well. Examples for many levels and different time scales would be a community.1 describes the plan do-review rewise cycle Figure 11. This unit will also familiarise you to the assessment.
Following are the stages in the cycle: Plan: This stage: Understands the current performance. Changes the future plans. Plans for improvement. Helps people to achieve better performance. Revise: This stage: Uses the lessons learned from review. Ensures that the future action is more appropriate. Do: This stage: Ensures that the proper systems and processes are in place to support improvement. we will be discussing the underlying theories of performance management. effective. 211 . Gets a better picture of varying circumstances. Thus we have understood the schematic model of performance management with the help of Plan-Do-Review-Revise cycle. Speaks to users and stakeholders about their experience. Identifies actions that need to be taken. ______ stage ensures that the proper systems and processes are in place to support improvement. Self Assessment Questions 1. Takes action and manages risk. Reviews performance. In the next section. _____________________________ is one of the methods used to comprehend the management of performance. Sikkim Manipal University Page No. Review: This stage: Understands the impact of your actions. Prioritises the work needs to be done. and efficient. 2.Performance Management and Appraisal Unit 11 The stages of Plan-Do-Review-Revise cycle depend on whether you are in an organisation and over what time-scale you are looking at.
In this paper. effective. _________ stage ensures future action is more appropriate. Rather. and directed.edwinlocke. Hint: Model of performance management 11. This is its detailed consideration of the ways in which people are motivated to perform. the links in the cycle can be audited.3. he argued that goals pursued by employees can play 1 http://www. However. Activity 1: With the help of internet. 212 . Edwin Locke1 established the Goal-setting theory. the theory is elapsed in favour of searches for immediate solutions to pragmatic problems. concepts of performance management are definite understandable inventions that are founded on well developed theories. Managers have always planned and executed many ways officially or unofficially. to lay down activities.3 Performance Management: Underlying Theories The use of the term “Performance Management” has recently grown into popularity even though it was an old concept. The essence of performance management is to create a framework in which performance of human resources can be refined.Performance Management and Appraisal Unit 11 3. Expectancy theory. tasks and alterations calculated to secure further developments or improvements. In addition. the principal hypothetical foundation of performance management is social psychology. motivated. The two theories which are particularly applicable to discussions of performance management are: Goal-setting theory. and efficient.com/ Sikkim Manipal University Page No. monitored. However. 11. it may be fairer to say that the theoretical case for performance related pay is a formalisation of existing practice. find out other ideas or concepts used for performance management.1 Goal setting theory In a paper published in 1968. due to which a considerable body of theory has grown up around concepts of performance management in use. Naturally. referring to an underlying theory provides a solid base or understanding and criticising applications of performance measurement. Over and over again.
Succeeding experimental research into goal-setting has specified more precisely the conditions necessary for organisational goals to be motivating to employees. Mill and Bentham described a principled system in which people determined their actions by a conscious calculation of the consequences. integration of the wider objectives of the organisation with the behaviour of its employees is observed. In fact. While following these goals. They surmise themselves that their goals will not be achieved by their current behaviour. They expected the actions to bring about the changes. 11. and direct it to secure strategic outcomes. These principles offer clear guidance to designers of performance management systems. In many cases. which makes an individual to adjust the behaviour in a way that is most likely to lead them to attain the goals. The resulting fact provides a set of meticulously tested principles. they will have to either modify their behaviour. They can bind a source of motivation to perform. it draws on a tradition which can be traced back to the early utilitarian. or choose more realisable goals.3. Expectancy theory puts forward that it is the probable acceptance of the valued goals.Performance Management and Appraisal Unit 11 an important role in motivating superior performance.2 Expectancy theory The book “Work and Motivation” published by Victor Vroom2 in 1964 encouraged an outbreak of research interest in expectancy theory as a framework for understanding motivation at work.org/wiki/Victor_Vroom Sikkim Manipal University Page No. while the recognition of expectancy theory is relatively recent. if managers can interfere to establish the organisation’s goals or change those for the group or individual then it will be worthwhile for employees to accept. people examine the consequences of their own behaviour. They are: Goals should be precise. 213 . Goal-setting theory has been subjected to a great deal of hypothetical and experimental inspections since it was first advanced. Famous psychologists 2 http://en.wikipedia. Consequently. other than general or vague Feedback should be given on performance Goals need to be accepted by employees as enviable.
Performance Management and Appraisal
such as Lewin (1938) and Tolman (1932), as advocates of theories of performance by people, believed that performance is administered by expectations concerning future events. They also curved a normative theory of how people should base their actions into a positive theory of how people do behave. The most immediate predecessors of expectancy theory were Georgopoulos (1957) with their path-goal approach. This approach was used for productive performance at work. The path-goal theory stated that “if a worker perceives high output as a path leading to the attainment of one or more of his personal goals, he will tend to be a high producer. Equally, if he perceives low output as a path to the achievement of his goals, he will tend to be a low producer”. Expectancy theory has been developed from Vroom’s early specifications that can be expressed very clearly with a combination of three factors: The person’s own evaluation of whether performing in a certain way will result in a quantifiable result. This factor is labelled as expectancy. The perceived probability that such a result will lead to attaining a given reward is known as instrumentality. The third factor is the person’s evaluation of the likely satisfaction, or valence associated with the reward. These factors are expressed in a diagrammatic form in the next page as shown in the figure 11.2. As a practice, if a person perceives that performing in a certain way will bring about a reward which he or she values, then this individual is more likely to perform in that way. This person diverts from the concept or relationship between effort and measured performance. Similar to the goal-setting theory, expectancy theory provides some of the key design values, which consultants face in creating systems of performance management.
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Figure 11.2 illustrates the expectancy model.
Figure 11.2: Expectancy Model
Self Assessment Questions 4. The use of the term “Performance Management” has recently grown popularly even though it was an old concept. (True/False) 5. Edwin Locke did not establish the Goal-setting theory. (True/False) 6. Mill and Bentham described a principled system in which people determined their actions by a conscious calculation of the consequences. (True/False) Activity 2: ABC Company is a huge BPO sector. Assuming you are a manager in ABC Company, would you prefer the goal setting theory or the expectancy theory? Why? Hint: Performance management theories.
11.4 Measuring Performance
How do we measure performance? Well, an organisation can identify the particular dimensions of performance and choose to include only those dimensions in its own performance management system. However, this will create another set of issues as how the dimensions will be measured. As a practice, selecting or choosing objectives and setting measures of performance are often linked. Fowler has suggested that performance dimensions are sometimes chosen not because they are most valued by the
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organisation; because they are the most easily measured. We will discuss about some of the measures used for measuring performance. 11.4.1 Quantitative measure It is important for you to know that most of the organisations use at least some type of quantitative (that is, statistical) indicators to measure their employees’ performance. This is also done to measure whether the organisation is achieving the goals which were set by them. For example, many organisations will have financial health as one of their objectives. Therefore, they monitor their financial performance very regularly. They are quite likely to cascade this objective down through the organisation. With the help of this they may monitor financial performance against budgets for groups and individuals. In addition, organisations classically generate, or can access, a whole range of quantified data such as productivity, output, sales figures, absenteeism, and so on. It is very important to know that there might be two types of problems arising while choosing quantitative measures in a system of performance management. The first concerns their sufficiency and the second is the quality. A performance management system which has indisputably extracted dimensions of performance to be applied to individuals and groups from its wider strategy, may find that some of the dimensions are not measured by existing indicators. In addition, it may not be available from the current management information system. It is possible, for example, that increasing satisfaction of customer is identified as an outcome to be rewarded and encouraged. However, no satisfactory measure exists to report this. In this case, the organisation must do one of the following two things: Remove the objective from the performance management system. or Develop a way or means to measure the dimension. The other problem which must be addressed with reference to quantitative measures is the organisation’s quality. Although quantitative measures often have lot of objectives surrounding them and an aura of robustness exists, a closer analysis reveals that they may be rather more objective and arbitrary than expected.
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Though profitability of a team or an individual would seem to be an endeavoured and experienced performance measure, accountants or financial managers often validate that profits are highly subject to decisions made by managers. Managers’ decision will be based on how to treat costs, revenues, and when to perform the release of paper gains onto the profit and loss account. 11.4.2 Qualitative measure Do you think you can measure all the aspects of performance? Well, the answer is no, as aspects of performance cannot be easily quantified and measured. You may be able to arbitrate whether someone is competent or not, but you will find it difficult to place a precise image on how competent they are or will be. Many aspects of performance identified for inclusion in a performance management system which is to be assessed, not only rely on the quantitative measures, but they also rely on qualitative judgements. It is encouraging to know that the quantitative measures have traditionally enjoyed a higher status. However, it is clear that many instances of hard data, such as accounting information are actually more inconsistent than is commonly supposed. Alternatively, if qualitative assessments of performance are thoroughly audited, and well designed, then their outcomes may be a more valid and accurate reflection of reality than many quantitative measures. As a general rule, the quality of any performance indicator or measure of performance will depend whether it is both reliable and valid. Validity always refers to whether the indicator actually measures what it is supposed to measure. For example, productivity or profitability of a particular group or unit might be taken as an indicator of managerial effectiveness. However, it is likely that aspects outside the manager’s control could have a greater effect on profitability, and thus it is not a valid indicator of managerial effectiveness. Reliability is a simpler decisive factor. It means that related results will be exposed if the measure is used on the same person or object by different people and/or at different times. Thus, reliability reflects repeatability and validity describes whether you are measuring what you intend to measure. In addition, for practical reasons, an excellent measure needs to be clear-cut to understand and economical to collect. If for instance, when these conditions are not met, a performance management
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system will include flaws which make it depart from the expectancy theory ideal. Organisations always perform the judgements about performance frequently. Most people will have a clear picture of the ability and performance of a colleague with whom they work closely. More often than not, this outlook will rely only in part on formal quantitative measures and to a large extent on a variety of qualitative judgements. Inevitably, whatever measures are used, there is always an element of objective judgement. For example, promotion is a probable element of a performance management system, which is frequently made on the basis of objective assessments of a person’s performance and suitability for a new job. The challenge for a performance management system is that its procedures should be auditable, so that it can be verified that the measures being used are fair and effective. This inclines to result in a move to formalise the process of objective performance measurement. The most common and effective way in which this is carried out is via a system of appraisal. 11.4.3 Appraisal system We have understood that the most effective way to manage a performance is the system of appraisal. Appraisal systems can take many forms such as: Annual verbal discussions between the supervisor and the employee. Indicators or systems which may include written reviews from superiors and subordinates, as well as peers. Use of various quantitative performance indicators. The common characteristic of each form is that the employee’s performance is recorded on a regular basis with an objective assessment. Some question the effectiveness of appraisals as an adequate means of assessing employees’ performance because they predictably involve objective judgements. One school of thought highlights the social processes that underlie performance appraisals. Their argument is that because these ratings are given by people to other people, it makes it impossible to separate the social influences that may exist, such as: Do the appraisee and appraiser enjoy a social understanding? Do non-relevant aspects of the appraisee influence the awareness which the appraiser has of his/her performance?
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An example of this last point is research conducted in the US, which reveals that employees receive significantly higher ratings from appraisers of their own race. For example, many studies have indicated that women’s success rate at traditional men’s tasks are often credited to luck or ease of the task rather than the superior performance by women. By and large, appraisers may feel socially uncomfortable about giving appraisal ratings that may be relatively poor. The solution to this may be to gather ratings artificially around the mean, or to give way to a general rating creep by awarding more marks above a suggested mean than below. An increasing number of organisations are using 360 degree feedback to support decisions about resourcing, appraisal and rewards. The apprehension here is that employees in these circumstances can manipulate the process for their own purposes. Another perspective on appraisal comes from the power analysis. Far from being a neutral effect in seeking out the truth, appraisals may be an extremely political process, with the parties involved pursuing their own power ploy through it. For example, an appraisal may signify an ideal vehicle for a boss to merge his or her power over a subordinate. This power is provided by an understanding of performance that is consistent with the one that the appraiser is trying to adopt. One type of solution applied to overcome these problems with the appraisal is to increase the number of appraisers that add to the objective evaluation of an employee. This would tend to take care of any bias in response with respect to particular appraisers. However, it would not address the problem of group bias against racial or gender groups. For example, increasing the number of appraisers to an appraisal might also dilute the social pressure on the appraiser. This will result in allocating too high ratings. For example, a certain proportion of higher grades must be allocated as well as a certain proportion of lower grades. This can also be done numerically by forcing a certain required distribution of ratings onto the actual ratings given by appraisers. Apart from the probability of biased opinions, another problem frequently encountered by organisations is the complexity of the appraisal systems, which makes it bureaucratic and cumbersome. This can lead to the use of undesired resources (favouritism, politics) in the organisation and seen as
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each theory takes a different route. unless employees consciously act to achieve the objectives. Self Assessment Questions 7. 9.5 Rewarding Performance It is important to know that the performance management systems will not succeed. such as a time off from work. For example. More basically. Rewards which are offered can be divided into intrinsic or extrinsic rewards. Goalsetting theory and expectancy theory both emphasise on the significance of ensuring self decision making capabilities of employees. the sense of achievement of meeting performance targets may be reward enough for many employees to cause them to endeavour for certain performance outcomes. such as a cash bonus or non-financial. 11. team-work and devolution of previously centralised policies. However. 8. 220 . Intrinsic rewards take place within the system. which is valued by employees. Sikkim Manipal University Page No. Profitability of a team or an individual would seem to be an _______________ and experienced performance measure. empowerment.Performance Management and Appraisal Unit 11 an administrative trouble and therefore not taken seriously by either appraisers or appraisees. Activity 3: Do you support the idea of adding more appraisers into the appraisal system of your company? Why/Why not? Hint: Advantages of having more appraisers. The quality of any performance indicator or measure of performance will depend on whether it is both _________ and ___________. Extrinsic rewards are added separately to the system and may be financial. Expectancy theory specifies that the rewards should be given for performance. the practical propositions of this aspect of performance management in terms of bureaucracy and formalism may be in direct opposition towards delegation. The most effective way to manage performance is to follow the system of ____________. whereas goal-setting theory stresses on the need for acceptance of the goals by the employees.
221 . The second problem arises from individual differences. it should not be assumed that performance management is always money driven. The problem for practitioners is always two fold. goal-setting theory is a useful tool compared to expectancy theory for designers of performance management systems. different employees may have different preferences for rewards. From early days. which are: Sikkim Manipal University Page No. While the ideal solution would be to shape the rewards to meet the preferences of individual employees. This becomes particularly important for organisations in the voluntary sector. it must be the subject of continuous review. Rather. an important guideline is that it is not adequate to choose and integrate goals or rewards that are currently valued by employees. Within an organisation.6 Feedback and Amendments Feedback and amendments are very important components of a performance management system. A solution to this would be to conduct an initial research among employees to discover their preferences. 11.Performance Management and Appraisal Unit 11 Even though performance related pay is extensive. how to find out which rewards or goals will be valued by employees. or views with reference to which goals are valuable. This is because goal-setting theory places particular importance on the intrinsic motivation associated with accomplishing the performance goals that have been set. companies should offer a second best system. psychological research has debated time after time that pay is variable in its attractiveness to employees. As a result. how would you reward your employees for additional hours of work? Hint: Using intrinsic or extrinsic rewards aspects. For managers who design a performance management system. this could introduce excessive complexity into a performance management system. There are two aspects of feedback and amendments. This makes the point very dearly that a performance management system should not be designed and left unchanged during its period of operation. Activity 4: If you are the program manager of a BPO sector. The first problem is. In this regard.
This carries the great risk that tactics. Reviewing the performance of the performance management systems. Sikkim Manipal University Page No. This may conflict with the frankness needed for a sensitive discussion of ways to improve performance. It serves a number of information flow functions from establishing strategic objectives in the minds of employees and offers advice on how performance can be improved. Reviewing individual goals and behaviour Goal-setting theory lays great emphasis on the need of feedback of information on performance. which are proving unworkable or damaging. In addition. the process could support a group-think by which employees feel the need to express commitment to the tactical objectives of the organisation. persevere without amendments and thereby handicap the organisation. When an appraisal process decides rewards. This will be directed instrumentally towards securing the rewards on offer. even PMS needs to be assessed to find out how effective and efficient it is. Therefore. most applications of the theory go further to specify the need for coaching on how performance can be improved. The requirement arises from the fact that performance management is based on a sequenced expectancy theory. if employees are to be motivated to perform well. It is obvious that. Reviewing the performance of the performance management systems The second element of feedback and amendments is the reassess evaluation of the performance management process itself. performance management and appraisal process should provide a proposal for practical feedback. Like any other management system. the expectancy theory itself predicts the employee behaviour within the process. whatever might be the motivation of a person to perform. For example. This could possibly be addressed if brought to the attention of the organisation. employees may feel the need to present a disguise of confidence and competence to their appraiser which might mask the difficulties that they are experiencing. This feedback should be on how to change the ways or behaviour of an employee so as to make them contribute to the organisation’s strategic objectives. This shows the role of performance management as a communications process. 222 . from a tactical point of view. if they actually cannot see how their behaviour should be changed. In addition. and then they will be unable to achieve any performance improvements.Performance Management and Appraisal Unit 11 Reviewing individual goals and behaviour.
_________ and ___________ are very important aspects in the performance management system. type. 11. These systems should have a complete structure.Performance Management and Appraisal Unit 11 which is more frequently presented as a linear chain. For example. Sikkim Manipal University Page No. without an interior feedback mechanism. Monitoring performance classically involves: Planning procedures to measure the performance over a period of time Verifying that the targets and supporting standards are measured Reviewing the cost-efficiency of the monitoring process. They are: First. 223 . 11. ______________ rewards are added separately to the system. Activity 5: If you are the quality analyst of a project.7 Monitoring Performance How important is monitoring performance according to you? Well. but rather constantly developing. This will allow service providers to: Monitor performance of assets by scheme. Third is that the system must be capable of restructuring itself to take account of lessons from practice. tactical goals themselves may be far from fixed. the monitoring of performance is the integral part of a performance management process. There are three main reasons why the continuous review of the operation of performance management needs to be carried out. linked to the financial management system and the asset register. It is very important that the performance management information systems support the performance monitoring process. the feedback given to a telephonic sales representative by his quality coach using internal feedback tool should be monitored by the supervisor of the quality coach to check the correctness and validity of the tool. the need for such reflexivity is basic to the tactical role of performance management. how would you provide the feedback to your subordinates to focus on the goals Hint: Reviewing individual goals and behaviour. Self Assessment Questions 10. or facility. Secondly.
Evaluating existing practice with excellent practice. rather than a minimum level of performance.8 Assessments and Evaluations Performance assessment is a significant step in understanding the extent of performance achievement and management. targets. 11. and other means of gathering information. Typical information in the performance management information systems should include: Performance against intended or planned targets. Targets: Targets express scientific performance levels or changes of levels to be attained in future. Introducing the excellent practice. Assess performance and put into practice the strategies to improve performance. so that an employee will achieve the required competency to be promoted to the next level. For example. Benchmarking: Benchmarking consists of: Searching for excellent practice.Performance Management and Appraisal Unit 11 Evaluate and analyse the effectiveness and cost efficiency of programs. Performance against standard and benchmark. checklists. Advise and report on program performance to directors or elected members. setting a measure. feedback. providing a certain quality score as the minimum score for the overall job. milestones. 224 . Genuine performance and planned targets. Customer surveys. Sikkim Manipal University Page No. It is based on assessments using a range of benchmarks. Benchmarking can concentrate on comparing: The same action between diverse parts of the same organisation The same action in other organisations that deliver a similar service Similar procedures with other organisations Performance information is used to evaluate and compare practices within and between organisations. and standards. For example.
objective assessment of the effectiveness. meeting the standards put forwarded by the client or higher management or by the organisation. operations.Performance Management and Appraisal Unit 11 Milestones: Milestones help performance managers determine whether a program or activity is: Heading in the right direction Making the most efficient use of resources. Investment provider’s management service strategies such as energy performance contracting and greenhouse gas reduction. In general. We have discussed about the performance assessment till now. Milestones mark the accomplishment of significant stages of program performance. It should ensure that the maintenance. 225 . Service performance evaluations can: Enhance service delivery outcomes. Going further. evaluation is the systematic. we will discuss about performance evaluation. Milestones are particularly significant for large and/or complex activities. For example. Help account for service performance. They can be placed for any aspect of program or an organisation. Assist in decision-making. investment and renewal or replacement of programs are evaluated. For example. Life cycle planning of asset. employee’s consistent achievements calculated every quarterly. Performance evaluation should be part of the performance management program. Standards: Standards are predefined levels of performance specifications or excellence. half yearly or annually. The continued evaluation of the performance programs will lead to an enhanced understanding of the program's performance and its link with: Service delivery requirements of the organisation. Standards are placed to describe the expected level of performance. It should be noted that it is very easy to measure the progress in delivering the service against the standard. efficiency and compliance of a service or part of a service. Sikkim Manipal University Page No.
(True/False) 14. Standards express scientific performance levels. Expectancy theory. there are many theories that have emerged around the concepts of performance management. (True/False) 15. you have understood the Plan-Do-Review-Revise cycle in order to understand the performance management. Considerably. Service providers should assess performance and put into practice the strategies to improve performance. performance dimensions are sometimes chosen not because they are most valued by the organisation Sikkim Manipal University Page No. You are aware that according to Fowler.9 Summary In this unit. (True/False) 11. Performance management information systems support the performance monitoring process. evaluations need high-quality performance information. Goal-setting theory states that goals pursued by employees can play an important role in motivating better performance. 226 . The stages of Plan-DoReview-Revise cycle will look diverse depending whether you are in an organisation and over what time-scale you are looking at. Activity 6: What all criteria will you consider to make an assessment form for evaluating the performance of a Customer Care Executive or a Recruitment Executive? Hint: Range of assessments Self Assessments Questions 12. Expectancy theory provides a framework for understanding about the motivation at work. Some of them which have been discussed in this unit are: Goal-setting theory. Evaluations can be chiefly useful to observe the progress of a service provider’s performance management system. (True/False) 13. Milestones are predefined levels of performance specifications or excellence.Performance Management and Appraisal Unit 11 However. so that they can focus on important issues.
With this you have come across the information which talked about performance monitoring and how to perform the assessments and evaluations. You have also understood the importance of the appraisal system. targets. The goals should not be considered as fortunate by the employees. It is also important to know that performance management systems will not succeed unless employees consciously act to achieve the objectives. The theories or practices which have the old practical approach.10 Glossary Term Arbitrate Enviable Inevitably Qualitative measure Quantifiable Quantitative measure Surmise Utilitarian Description To judge whether the employee are competent or not under qualitative measure. The measures which are used might sometimes be unavoidable. The results which are obtained scientifically. Once these objectives are achieved. You have also understood as why feedback and amendments are very important aspects in the performance management system. Finally. 11. The measures that involve distinctions based on qualities. it is the manager's or organisation's responsibility to reward the employee. 227 . The measures quantities. milestones. and standards aspects. Qualitative and Quantitative measures are the types of measures of performance appraisal which you have learnt in this unit.Performance Management and Appraisal Unit 11 but because they are the most easily measured. Sikkim Manipal University Page No. based in quantifiable data or Guessing of results by oneself with reference to performance. you have learnt that the assessments are done using a range of benchmarks.
False Answers for Terminal Questions 1.11 Terminal Questions 1. Do 3. How to monitor performance? Explain the assessment and evaluation concepts. amendments 12. True 7.7 Monitoring Performance. 4. Revise 4. Endeavoured 8. 2. Feedback. Refer section 11. Refer section 11.Performance Management and Appraisal Unit 11 11. 3. True 13. Sikkim Manipal University Page No.3 Performance Management: Underlying Theories. False 15. True 5. 2. Refer section 11. Refer section 11.2 A Schematic Model of Performance Management. 3. Explain the performance management underlying theories. False 6. Plan-Do-Review-Revise Cycle 2. Extrinsic 11.8 Assessments and Evaluations. 11.12 Answers Answers for Self Assessment Questions 1. True 14. Appraisal 10. 4. 228 . Reliable. valid 9. Define the Plan-Do-Review-Revise cycle of performance management.
what would have been your solution Hint: Use the Appraisal system section notes of this unit. For Subhadra bank. The computer based process did not consider the additional time spent by the employee with reference to work. However. there were issues with the system it developed. which was done using computer based processes.Performance Management and Appraisal Unit 11 11. It is South India’s largest bank. This move was made to ensure that the employee evaluation process was easier to manage and would offer complete reporting information on appraisal data. employee performance and talent management is key to its ongoing strategic plan and success. To support overall objectives of the bank related to performance management. it moved from a paper-based process to a computer-based process designed in-house in 2009. The bank came to know about these issues after the first year appraisal. distinguished by its extensive operations in all four states of South India. Hint: Problems faced by the bank 2. The issues were that The bank was not able to provide the exact appraisal ranking as the options were limited with the use of computer based process. 229 . The reason the bank faced these sorts of simple issues is because the bank concentrated on inexpensive solutions from the internal resources. What made Subhadra bank to approach its internal resource to build a computer based process with reference to its appraisal system. Sikkim Manipal University Page No. The computer based process did not consider the additional work of the employee which was performed outside the scope of normal work.13 Case Study Subhadra Bank Avails Professional Help Subhadra bank is a global bank with South Indian roots. If you were approached to provide a solution by Subhadra bank. Questions: 1. ABC solution quickly fixed the issue and made the performance appraisal of Subhadra bank a cherished one. The bank consulted the ABC solutions company to get the appropriate solutions with reference to their issues.
Sikkim Manipal University Page No. Graeme Salaman. Clays Limited. Human resource management: A Strategic Introduction. Blackwell Publishers Limited. Performance Management: Key Strategies and Practical Guidelines. John Storey (1998). Strategic Approach to Human Resource Management.Performance Management and Appraisal Unit 11 References Christopher Mabey. Tapomoy Deb (2006). 230 . Atlantic Publishers and Distributors. Michael Armstrong (2000).
Performance Management and Appraisal
Implementation of Performance Management
Structure: 12.1. Introduction Learning Objectives 12.2 Features of Performance Management Framework 12.3 How are Performance Management Systems Different from Appraisal Systems 12.4 Implementation Mistakes 12.5 Reviewing Performance Management System 12.6 Summary 12.7 Glossary 12.8 Terminal Questions 12.9 Answers 12.10 Case Study
By now you must be aware about the various theories of performance management. You have also learnt how to measure, reward, and monitor performance. You have studied how to provide feedback and how to perform assessments and evaluations. This unit will familiarise you with the process of implementation of performance management. You will also learn how performance management systems and appraisal systems differ from each other. The process of reviewing a performance management system is also explained in this unit. Learning Objectives After studying this unit, you should be able to: explain the features of the performance management framework. differentiate between performance management systems and appraisal systems. discuss implementation mistakes. explain the process of reviewing a performance management system.
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12.2 Features of Performance Management Framework
Before discussing the features of a performance management framework, we will try to understand what exactly a performance management framework is. Performance Management Framework (PMF) is a cutting-edge, complete, best of all present platforms, which facilitates comprehensive and persistent operational performance management across an entire business. 1With the help of a PMF, companies can create a true culture of responsibility, visibility and performance enhancement by the influence of: Personalised end user dashboards. Metric blogging. Print-quality publishing. Mobile alerts. In-depth analytical capabilities. PMF is a fully-incorporated, complete, unique and special solution that fully supports any existing performance management methodology. For example, we can take a Balanced Scorecard (BSC) – it has all the functionalities and the tools, which companies require to effectively and efficiently set strategies, converse the plans throughout the organisation, involve all stakeholders in measurement and monitoring, and define related metrics. All of these are done from a single, intuitive, easy-to-access, browser-based environment. Everyone who is part of the organisation is authorised with everything to actively participate in the performance management process. Following figure 12.1 depicts a performance management framework.
Figure 12.1: A Performance Management Framework
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With the help of a performance management framework, companies can: Clearly converse the goals and key performance strategies across the entire organisation. Instantly publish the performance data. Permit open collaboration among all key stakeholders. Support the processes, goals, and people involved in performance improvement. Gain complete insight into operational performance with in-depth logical capabilities Quickly roll-out performance management throughout their entire business. Influence unparalleled flexibility to support change and growth. Collect and aggregate performance data from any enterprise source. Following are the features of a Performance management framework: It is flexible and adaptable. It can be easily customised, enhanced, modified or expanded to address emerging or unique requirements. It helps in performance measuring, evaluating, and reporting. It summarises performance to a service level. It measures and reports all types of planning performance It assesses and reports the program performance for investment, management and renewal or disposal. It also assesses performance for investment, asset management and management-in-use. It improves the strategies included in the strategic planning process. It enhances the organisation‟s performance focus, which is always on the developed strategy improvement and implemented by its individual services. Self Assessment Questions 1. ___________ is a cutting-edge, complete, best of all present platforms. 2. __________________ has all the functionalities and the tools, which companies require to effectively and efficiently set strategies. 3. Companies can instantly _______________ the performance data with the help of a performance management framework.
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4. Performance management framework improves the __________ included in the strategic planning process. Activity 1: Research on the web for types of other performance management frameworks followed by different countries Hints: Companies culture and type of business. http://www.accenture.com/Global/Consulting/Finance_and_Performance _Mgmt/Enterprise_Performance_Mgmt/Client_Successes/SwedishFramework.htm - Sweden.
12.3 How are Performance Management Systems Different from Appraisal Systems
In any organisation, it is very difficult to come across a manager who would declare “Our organisation has a good performance management system and it is working well”. Many surveys of Fortune 500 or 1000 companies signify a high degree of disappointment with the performance management and appraisal systems. This is perhaps because the nature of performance management is such that it can never bring out a satisfying response from its users or implementers. However, human resource people almost constantly claim that their performance management systems are excellent and working well. This leads to us to discuss more on how the performance management system is different from an appraisal system. The main difference between the appraisal systems and performance management2 systems is their respective importance and fortitude. In the past, many organisations have effectively used performance appraisal systems in place of performance management systems. They may have used a different traditional title that seems to mean a lot in communicating the suitability of the systems and their importance. The following table gives you the differences between a performance management system and an appraisal system.
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Table 12.1: Differences between a Performance Management System and an Appraisal System Performance management system Focuses on performance management. Emphasises on performance improvements of individuals, teams and organisations, performance planning, analysis, review, development and improvements. It is a continuous process with quarterly performance review discussions. Performance rewarding may or may not be an integral part; defining and setting performance standards will be an integral part. Designed by the human resource department, but monitored by the respective departments themselves. Ownership is with line managers; the human resource department facilitates its implementation. Key Result Areas are used as planning mechanisms. Developmental needs are identified in the beginning of the year on the basis of the competency requirements for the coming year. There are review mechanisms essentially to bring performance improvements. Tied to achieve increased organisational performance Appraisal system Focuses on generation of ratings and performance appraisal. Emphasises on relative evaluation of individuals and ratings.
It is an annual exercise which is done through periodic evaluations. Rewards and recognition of good performance is an important element and an integral part. Monitored and designed by the human resource department. Ownership is mostly with the human resource department. Key Result Areas are used for bringing in objectivity. Developmental needs are identified at the end of the year on the basis of the appraisal of competency gaps. There are review mechanisms to ensure objectivity in ratings. Not tied to achieve organisational performance
Self Assessment Questions 5. The main difference between the appraisal systems and performance management is their respective importance and fortitude. (True/False) 6. Performance management systems focus on generation of ratings. (True/False)
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7. An appraisal system is tied to achieve increased organisational performance. (True/False) 8. Under, appraisal systems key result areas are used for bringing in objectivity. (True/False) Activity 2: Do you support the performance management system or the appraisal system? Explain briefly. Hint: Difference between performance management system and appraisal system.
12.4 Implementation Mistakes
Many mistakes are made at the time of implementing performance management systems. Most problems and mistakes in performance management systems have to do with the designing of the implementation process, and these mistakes are called as Design Mistakes. The general problem areas that can be classified under implementation mistakes are: Over condemnation of the past and over protrusion of the new or changed system as a magic potion for all past problems. Big exhibition or fanfare to introduce a system, but eventually, not even half that effort put to help the employees in implementation of the same. Lack of organisational support and competencies in the human resource department. Human resource department‟s image and inability to promote a sense of ownership of the system among the managers. Lack of follow up on the part of the human resource department. Top management commitment. Past experience with all the systems. Nature of the system.
Now, we will discuss about the design mistakes which are observed at the time of a performance management system. Design mistakes Design mistakes are generally observed in the design of the implementation process of a performance management system. Some of the common design mistakes are:
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Mistake 1: Not having the right emphasis Most performance management systems pretend to be approachable and friendly. However, at the end of the day they actually end up emphasising performance appraisals or ratings. This is the most possible cause of the problem. The moment ratings take priority over performance improvements, an unhealthy competition is generated. Ratings are always deceptively skewed. It is a misconception to think that by having an appropriate rating system, the objective can he achieved. For example, we will compare the ratings on a ten point scale given by different superiors to their subordinates: A rating of seven is given by a conservative materials manager to a wellperforming subordinate. A rating of seven is given by an indulgent IT manager to an average programmer. A rating of seven is given by the human resource manager who is new to the organisation to the only assistant officer. A rating of seven is given by the program manager to a performing assistant manager whose process met all the criteria targets.
The above example shows a similar treatment to all the four employees, though there are so many other factors than just meeting the criteria targets that differentiate them from each other. For this reason, the emphasis on numbers is the first problem in performance management systems. The emphasis should be on the performance and process improvements such as: What are the tasks well done? What are the tasks not so well done? What are the tasks not done at all? What are the tasks that need not to be done? What is a better way of doing these tasks? Could they be completed more cost effectively? Are the competencies of the member of staffs put to the best use? Are there any other better ways of putting them to use? How does one develop work motivation?
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or lack of guidance available for employees in performance planning. However. Goal setting. point out at all the problems of the previous system and specify how the new system is meant to take care of all those problems. Out of these. Over criticism of the previous system will automatically raise the expectations from the present system. but may increase Sikkim Manipal University Page No. Identification of developmental needs. Mistake 3: Over criticism of the past and over projection of the new or changed system as a magic potion for all past problems Most organisations. very little effort is applied to tackle the implementation problem. Attributes or competencies. they can become a part of the process. Review discussion. 238 . then the employees will start assuming that by merely changing the system. It may ease or facilitate the introduction of the new subsystem.Performance Management and Appraisal Unit 12 Mistake 2: Multiple components may make it a sophisticated system Similar to objectives. If these issues are not tackled and understood well. at the time of pioneering a new system. Potential appraisal. the failure of the previous system is more because of the implementation problems rather than design problems. Self appraisal. Performance analysis. the most important implementation issue may be the lack of inadequate commitment of the top management or managerial time. Review by a committee or reviewing officer. the rest of the things could he taken care of. the most important components could be performance review. It is useful to simplify and at the same time endorse a good process of performance improvements and performance development. performance planning and communication for competence building. performance management systems can have a number of mechanisms or components. However. There are at least 10 mechanisms identified in the past such as: Key Performance Areas (KPAs) or Key Responsibility Areas (KRAs). All these must not be overplayed. Generally. For example. Performance ratings.
It is not appropriate for an organisation Sikkim Manipal University Page No. Human resource departments usually build good and reasonable budgets for introducing a new system or changing the old system. Organisational support may be in terms of basic facilities. Implementation needs to be monitored more meticulously and may take more time than the initiation workshops. A lot of help and guidance is required. This kind of lack of support is not as much for the structure as it is for individual workers to enable them to do better. For example. necessary to pay sufficient attention to the post-initiation work. they always forget that the real effort of their work begins after introducing the new system. and competencies. manuals. motivation. a constantly working help line is needed for a human performance related system such as the one we are talking about. new formats. It is therefore.Performance Management and Appraisal Unit 12 the chances of disparagement later. or in preparing a performance improvement programme at the group levels or at even individuals. if any worker has to deliver results. 239 . As seen in many instances. Help may be required in review. and everything is forgotten. These get emphasised in any performance management system. they need to have organisational support. A lot more effort is necessary in the initial years to make the system work. inputs from internal customers and so on. work conditions. most performance management systems fail to take off. No system works by simply introducing it. It is essential to find out one critical difference either in terms of the process or in terms of objectives and emphasise the same while introducing the new system. Once the fanfare is over. Mistake 4: System introduced with a fanfare but inadequate effort to help in its Implementation This is an additional common mistake made by most organisations. In a competitive world. education programme or skill building workshops are all over. These types of single point focus and understanding the implementation issues increases success. due to lack of organisational support. But. resources. Mistake 5: Lack of organisational support Organisational support is one of the main components required for a good performance management system. the consultants. internal task forces. or in performance planning. It is vital and may even be necessary to have at least one person for every 100 managers to guide and monitor performance management. workshops.
240 . it is observed that the human resource department‟s lack of competencies as the biggest bottleneck in effective implementation of performance management systems. Counselling skills. Interest in working with the line managers. Performance planning competencies specially like identifying Key Process Areas (KPA) or Key Result Area (KRA) and performing performance review discussions. providing them to the respective agencies and creating problem solving conditions. Interpersonal sensitivity.Performance Management and Appraisal Unit 12 to keep saying that every employee has to work within the limitations. The types of competencies which are required are: Business sense and participation in the main business of the organisation. If the performance Sikkim Manipal University Page No. In addition to all these. Initiative and proactiveness. This is understood without saying. System building and monitoring skills. They should develop special components or mechanisms to keep collecting data. Performance orientation. Credibility to carry on monitoring the line staff. The human resource department should act like an organisation development (OD) facilitator. the organisation should be prepared to listen to the problems faced by the employees and should try to resolve them. Information and facts of all the departments and gratitude for each of them and their roles. The reason to have these competencies is that the effective implementation is their business as much as it is of the line managers. Organisational diagnosis skills and perseverance Ability to set an example. however. The organisation should also inform the employees or staff members about the efforts being made and thus build credibility and trustworthiness on a continuous basis. Mistake 6: Lack of competencies in Human Resource Department With reference to many scholars‟ experience. they need to have time skill and role clarity.
Sikkim Manipal University Page No. then it is mostly due to the shifting priorities of the human resource department. Hence it is necessary for the human resource department to have an effective and a successful follow up process in place. Task forces to supervise the open reviews and implementation are a good mechanism to encourage ownership. It is also vital to create a sense of accountability or ownership among line managers. The follow up could take the form of survey feedback. Another major hurdle is the human resource department‟s image. quarterly performance review meetings. and so on. Mistake 8: Lack of follow up on the part of the Human Resource Department If competencies are available and the human resource department fails to follow it up. It is also coupled with their lack of competencies in monitoring and implementing the system. it is advisable to employ the right staff or outsource the task to a specialised agency. One of the ways of encouraging ownership is a decentralised implementation of the system. The common mistake here is to assign the task to a department that is not perceived to be trustworthy and is supposed to have promoted subjectivity in the past. Mistake 7: Human Resource Department’s image and inability to promote a sense of ownership of the system among the line managers. implementation review meetings. if the human resource staff do not have the required competencies for implementing the performance management system. upward evaluation of the appraisers by their subordinates on the time spent. Organisations may not think of options or may not have other options due to lack of knowledgeable and trained people and they may also think that it is the legitimate role of the human resource department. However. The follow up should be done both at the primary group level and at the individual level. update on the extent to which they understood and listened to the problems of their juniors.Performance Management and Appraisal Unit 12 management system has not taken off in an organisation. gather. Heads of departments should take accountability to analyse. 241 . and use the data originating from the performance management system. then it is a case of sheer negligence. collect.
if a budgeting system had been commenced and abandoned or a new management information system (MIS) had been introduced and was given up. For example.Performance Management and Appraisal Unit 12 Mistake 9: Top management commitment The most significant obstacle in effective implementation of a performance management system is the lack of time for senior or top-level managers to prepare their own or their subordinate‟s performance. Likewise. The temperament of the system we are talking is by itself an issue as it is a vault to dissatisfy at least a few every year. the top management should put together a performance management system into all other interventions. there will be at least a few who will feel that they deserved to be rewarded and the company did not notice them. which make it difficult for all people to appreciate. then there is one type of an issue and if rewards are delinked then there is another type of an issue. Sikkim Manipal University Page No. Such statements will send erroneous signals all through the company. On the other hand. It is very important to know that the people who perform and do not get rewarded are likely to blame the system. In such organisations there are natural difficulties in making the system work. The last thing for any senior-level or top-level manager to say is that performance planning or review can wait and more important is performance. as this is the main system of planning and managing performance. reassurance. and renewal to keep it alive and productive. Therefore. if organisations had a culture of introducing systems and giving up then it bound to lead to scepticism. One unit head not performing the work will send the wrong signals all through the unit and defeats the reason of a performance management system. it needs constant strengthening. 242 . For every 10 persons. If rewards are linked. the performance management system would not have worked because most of the systems introduced earlier would have been disasters. Mistake 10: Past experience with all the systems In some of the organisations. Mistake 11: Nature of the system It must be recognised here that a performance management system has some natural issues.
The review of a performance management system must focus upon achievements and allow a full discussion on areas for development. The reviewer will have access to an external perspective. Self Assessment Questions 9. The reviewer can also help to provide a positive outlook which may overcome the often negative view on the performance management system. The appropriate and relevant paperwork distributed well in advance. An objective for the meeting which provides focus/purpose. The follow up should be done both at the ___________ group level and at the individual level. 11.5 Reviewing a Performance Management System The reviewing of a performance management system is an opportunity for the practitioner to reflect upon their organisation‟s and employee‟s performance.Performance Management and Appraisal Unit 12 Till now. The reviewer‟s role is very important in this process. which are observed at the time of implementing process under a performance management system. 10. With the help of good practice. we discussed the different types of design mistakes. 12. A scenario conducive to good discussion with no interruptions. it is been observed that the following are the minimum requirements of an effective review of a performance management system: The time/date of the meeting agreed well in advance. An open quality dialogue between the two participants. Sikkim Manipal University Page No. One of the ways of encouraging ownership is a ___________ implementation of the system. 12. __________________ are generally observed while implementing the process of performance management system. 243 . Activity 3: Select any of the design mistakes from the above section and suggest your ways of dealing with it. Over _____________ of the previous system will automatically raise the expectations from the present system. a wide range of evidence. Hint: Reasons for the mistake. and be able to see the whole picture.
A vital part of both the review process and the feedback depends upon the higher authority asking the right type of questions. tasks. Have an overall summary of the progress made towards each objective. and standards set for the employees Identification of the achievements and strengths of the employee Assurance of any actions taken following the informal discussion between the higher authority and the employee A discussion of the areas for improvement and how these requirements will be met A discussion of the professional improvement requirements of the employee and how these will be met. This must be always confidential. Open types of questions: These are asked to elicit as much information as possible. Get signatures of both the participants. Following are the possible types of questions which can be asked. In a performance management system. The written statement should have the following things covered to have an efficient review of the performance management system. Another important aspect of a performance management system‟s review is the type of questions. what part of your teaching do you most enjoy? Which part of your teaching is tough? Probing types of questions: These are designed to go deeper into an issue. Give out a basis for the next planning cycle. how did you feel when you had completed the task? What is your opinion to avoid the same mistakes in future? Page No. 244 Sikkim Manipal University . It is important to avoid the closed question as this may only bring a „yes/no‟ reply and may need to be followed up with alternative material to provide the required information. Note the areas for development. For example. there must be a written statement following the review. For example.Performance Management and Appraisal Unit 12 The reviewing of a performance management system should involve: Confirmation of the objectives. which is asked at the time of the review. Conduct an assessment of overall performance. This must detail the outcomes agreed and provide the basis for planning the next year‟s cycle.
a company or an organisation can have an effective performance management review system and it will also be enjoyed by all participants within the setting. Self Assessment Questions 13. For example. For example. (True/False) Sikkim Manipal University Page No. Monitor results of the new procedure/process. It is important to allow sufficient time for all meetings. what are the similarities and differences between yours and your colleague‟s appraisals? The higher authority needs to have a wide variety of questions available to meet the needs of the feedback process. discussions. The standardisation of any performance management review systems should: Describe and manuscript of the new standardised process/procedure. 245 . Build up compliance standards. what will you do if the organisation which you work for stops providing you the allowances without any notice? Evaluative types of questions: These require complicated levels of cognitive and emotional opinions. For example. and so on during the performance management system‟s review. are you telling me ……? Do you think you can do it? Divergent types of questions: These allow investigating different resources and creating many different variants and alternative answers. The right of the employee is a rigorous process and it is the one which will meet their requirements within the needs of the setting. The outcome of any performance management review system should be A measured impact of performance improvement solutions.Performance Management and Appraisal Unit 12 Reflective types of questions: These allow understanding and reflect information back to the job holder. By following these guidelines. The reviewing of a performance management system is an opportunity for the practitioner to reflect upon their organisation‟s and employee‟s performance. An analysis of deviations from the performance management plan.
you were introduced about the help and the features of performance management system frameworks. visibility. you have studied that the Performance Management Framework (PMF) is a cutting-edge.Performance Management and Appraisal Unit 12 14. You also came to know about the main difference between the appraisal systems and performance management. (True/False) 15. The higher authority needs to have a wide variety of questions available to meet the needs of the feedback process. In a performance management system. complete.6 Summary In this unit. A measured impact of performance improvement solutions must be one of the outcomes of performance management review systems. which facilitates comprehensive and persistent operational performance management across an entire business. Later. and best of all present platforms.com/in/en/corp/d/corp-comm/cr-diversity-wf-talentmgmt. and reporting. asset management and management-in-use. (True/False) Activity 4: Research on the web on the minimum requirements of the performance management review system of Dell. It also assesses performance for investment. It improves the strategies included in the strategic planning process. You have also understood that with the help of PMF. Some of the features of performance management system framework.dell. 246 . Hint:http://content. there must be a written statement following the review. companies can create a true culture of responsibility. (True/False) 16. Sikkim Manipal University Page No. you were introduced with the differences between the performance management system and appraisal system. and performance enhancement. which is nothing but their respective importance and fortitude. are: It helps in performance measuring. Later. evaluating. which you studied. 12.aspx.
247 . Sarcasm shown when a new subsystem is introduced at the time of implementation Incorrect information shared throughout the company Strength observed between the performance management system or appraisal system A lenient supervisor or a line manager Over projection of the new or changed system 12. the outcomes and the standardisation. Human resource department‟s image and inability to promote a sense of ownership of the system among the managers. written documentation. Some of the major mistakes are: Over condemnation of the past and over protrusion of the new or changed system as a magic potion for all past problems Big exhibition or the fanfare to introduce a system and consequently not even half that effort is put to help the employees in implementation. 12. you studied how to review a performance management system. Sikkim Manipal University Page No. Lack of organisational support and competencies in the human resource department. Explain any three types of Design mistakes.8 Terminal Questions 1. you learnt about the implementation mistakes which are observed in any performance management system. Lack of follow upon the part of the human resource department. 3. Then finally. You understood the reviewing of a performance management system with the essential minimum requirements.Performance Management and Appraisal Unit 12 After studying the differences. Provide any 6 differences of performance management systems and appraisal systems. 2. types of questions which are supposed to be asked. Describe the features of a Performance Management Framework.7 Glossary Term Condemnation Disparagement Erroneous Fortitude Indulgent Protrusion Glossary Over criticism of previous systems or plan with reference to performance management.
Refer section 12.2 Features of Performance Management Framework. 12. Mention the main features of a performance management review system. True 16. Refer section 12. 2.9 Answers Answers for Self Assessments Questions 1. Decentralised 12.3 Differences Between Performance Management Systems and Appraisal Systems. Criticism 11. Publish 4. Primary 13. Design mistakes 10. True Answers for Terminal Questions 1. True 15. Strategies 5. 4. False 7. Refer section 12.Performance Management and Appraisal Unit 12 4. Performance Management Framework 2. 248 . Balanced Scorecard 3. False 8.4 Implementation Mistakes. True 14. True 6. Sikkim Manipal University Page No.5 Reviewing Performance Management System. True 9. Refer section 12. 3.
contributions. interests.Performance Management and Appraisal Unit 12 12. Identification of achievements and strengths of the employee were not monitored appropriately. To have a set standard of objectives. It is a charitable organisation. Satyam Bank Association had many challenges. To identify the achievements. Xena solutions first analysed and studied the review system of Satyam Bank Association and were able to recognise lacking aspects. The problem was that the higher authority whoever was supposed to perform the review for all the employees did not have the appropriate objectives. and standards to talk about as the organisation did not have any one of those. tasks.” SBA employs close to 100 people and is the only organisation of its kind in India to serve as a policy for association for all the member banks in India and work towards becoming the voice of banking industry in India. It was unable to satisfy its employees at the time of review process. Xena solutions were able to provide the following solutions for Satyam Bank Association. growth path. the Satyam Bank Association approached Xena Solutions who are the pioneers in providing the best solutions with reference to performance management review systems. tasks. professional and forward looking banking and financial services industry in a manner consistent with public good. By closely analysing the problem areas. 249 . This was mainly due to the inappropriate performance management review system which was used by the Satyam Bank Association. In order to overcome all these problems. and strengths of the employees To chart out a detailed performance management plan To carry out quarterly feedback process for all the employees To check the interests of the employee from time To recognise the employees for their additional contributions apart from their normal designated work Sikkim Manipal University Page No. Satyam Bank Association‟s vision is “To work positively and practically for the growth of a healthy.10 Case Study Xena’s Solutions Satyam Bank Association is the foremost service organisation of the banking industry in India.
Questions: 1. E-references http://www.com/about_6629194_difference-management-systemperformance-appraisal. Performance Management and Appraisal Systems: HR Tools for Global Competitiveness.com/in/en/corp/d/corp-comm/cr-diversity-wf-talentmgmt. What were the problems faced by the Satyam Bank Association? Hint: Refer the Satyam Bank Association challenges section. Richard C. the Satyam Bank Association was able to satisfy its employees at the time of next performance review time. SAGE Publications.com/products/webfocus/webfocusPMF.informationbuilders. Integrated Performance Management: A Guide to Strategy Implementation. T.dell. Venkateswara Rao. The Complete Guide to Performance Appraisal. Amacom T. Grote (1996).accenture.com/Global/Consulting/Finance_and_Performance _Mgmt/Enterprise_Performance_Mgmt/Client_Successes/SwedishFramework.ehow.htm http://www. 250 . Refernces Kurt Verweire.aspx Sikkim Manipal University Page No. Rao (2004). Name the solutions which were provided by the Xena solutions? Hint: Refer the Xena Solutions analysis and study section. Lutgart Berghe (2004).Performance Management and Appraisal Unit 12 After implementing the solutions provided by Xena solutions. Response Books. 2.ht ml http://www. V.html http://content.
1 Introduction After going through the previous units.7 Case Study 13. 251 . explain succession planning. Learning Objectives After studying this unit. You have also studied how performance management systems and appraisal systems differ from each other and how to review a performance management system.4 Glossary 13.3 Summary 13.6 Answers 13. promotion. In this unit. Sikkim Manipal University Page No. discuss career planning.Performance Management and Appraisal Unit 13 Unit 13 Performance Management through Data Management Structure: 13. you will be introduced to the concept of performance management by data management. discuss the process of training and development.1 Introduction Learning Objectives 13. This unit also familiarises you to the process of training development. you must be aware about the process of implementation of performance management.2 Use of Data for Human Resource Decision Training and development Promotion Career planning Success planning 13. career planning and success planning with the help of human resource data. you should be able to: state the use of data for HR decision.5 Terminal Questions 13.
Working alongside stakeholders improves the process and allows the learning to develop as much as possible. This helps in resolving the daily challenges faced by the HR department and positively impacts the human resource practices and policies followed by the organisation. so they can enhance their skills using the actual data in real-life situations. It is equally important to know about the two-way process of making informed human resource policy and management choices based on a suitable study of relevant data and information. the main aim of any human resource system must be to encourage the better use of the available data about the employees. practitioners and policy analysts in structuring a bridge between human resource data and reports to effective human resource policy and management decisions. Well. Leveraging and identifying opportunities for enhanced data sharing across different levels of the organisation and with other stakeholders. Sikkim Manipal University Page No.2 Use of Data for Human Resource Decision You must be wondering how to use the data to make the human resource decision. In addition. Providing chances for decision makers to experience significant decision making moments. Advancing communication among users of data. In spite of providing an enclosed training program for using data to make a decision. which assist human resource managers. it is also important to note the factors that are important in the context of using data effectively. There are ten fundamental and practical pillars. The traditional ways in which data is used for successful and effective decision-making depends on the lively involvement of a huge range of stakeholders working together. it is better to connect all stakeholders in understanding how they use data both individually and collectively as an organisation. It is also essential to understand the context in which the data is used to take decisions. Some of the examples to improve the use of data for decision making include: Planning how data is used to support a decision. 252 . the labour market conditions and the business scenario to drive effective decision-making.Performance Management and Appraisal Unit 13 13. This process is called as Data-driven decision-making (DDDM).
Context matters The context is the entire setting or environment in which human resource data are being gathered. However. manipulate the quality and security of data use? 3. and individuals at different levels of the organisation. For example. Developing a culture of enquiry Effective data utilisation requires a mindset as well as an organisational philosophy that actively invests in a culture of inquiry that helps people question the status. if any. 2. what decisions do they inform? What is the mechanism for facilitating the use of these data (the answer could be – senior management meetings. the subsequent questions can be asked to converse and plan the use of information to support various decisions: What human resource data is required to gather? How do we actually use data. All of them must regularly probe and scan the atmosphere in a way that will help them determine and provide answers to a set of human resource policy and management questions.Performance Management and Appraisal Unit 13 The ten fundamental and practical pillars are: 1. and so on)? How frequently does this process take place? What issues. since. In the field of human resource. This experience shows that it is not enough to make data available. analysed and used to make policy and management decisions. annual sector review meetings. 253 . if this process is faulty or insufficiently shared. It is vital for human resource managers and planners to comprehend the various determinants and dimensions of the context. this practice of inquiry should be characterised by work groups. Making use of the data One of the foremost misapprehensions about the effective use of human resource data in decision-making might be summed up as “Build or gather data and they will use it”. teams. it is Sikkim Manipal University Page No. For example. data-driven decision-making can produce unacquainted decisions or swing the focus away from priority issues. health sector leaders need a process in place for analysing reports and information. within which. and ensuring the power and resources to act on the data. getting the data to the right decision-maker at the right time. the data are used to take decisions. department meetings.
Historical and cultural factors. Otherwise. whether or not data will generate any decisions will also depend on the values. human resource planners and policy-makers are faced with a distinctive challenge. Aligning different forces. and past experiences of these contributors. Nevertheless. These relationships and connections will need to be recognised and aligned by human resource managers and planners for the decision-making process to be productive. Such a streamlined and collaborative approach of sharing data is important when compared to the sensitive nature of the human resource. Sikkim Manipal University Page No. 2000). one approach that is being considered in Uganda is following of a simple framework for analysing and presenting human resource data and making the data available for discussion during annual joint review meetings. 4. Similarly. interests and beliefs The theory of Policy analysis suggests that data “affects existing beliefs of vital people about major features of the problem under study and how it might be solved or mitigated” (Eugene Bardach. in a variety of forms and perhaps at different times and frequencies. or failure to use the data. there is a possibility of conflict. it is not enough if only a few people in an organisation examine data and information as part of their daily functions. Resource contexts. political and other forces at work in the human resource policy environment throughout the country. Other important factors include economic costs and timing of those decisions. But. beliefs. Additionally. the ways in which such data are used in effective decision-making are mainly determined by a broad range of contributors. Some vital elements of the context include: Social. skills. 254 . They may have access to diverse types of human resource information from numerous sources. the decisions that need to be made using these data may involve different people across multiple agencies who do not work together all the time. For example.Performance Management and Appraisal Unit 13 essential for effective policy-making and practice. Health system factors. as this may not lead to ground decisions. In addition.
these factors include: o Convolution of what is being presented. For example. This can lead to a lack of interest or disinclination to engage. since it is the individuals who choose whether to reject or accept new data findings. As a result. we may be providing information which people may have known for years but never worked upon. then there are higher chances of success. o o 6.Performance Management and Appraisal Unit 13 5. o Partnership links. people tend to reject or accept new ideas based upon individual inclination. What are the professed benefits of change? Many individuals time and again tend to avoid change. Sikkim Manipal University Page No. o Organisational support for change. o Risk awareness. they are also influenced by the obvious benefits of change. o Knowledge and skill sets. Preparing for data sceptics Many data users decide the helpfulness of a data by asking some questions like: o What is latest here? How is this distinct from what we already have or know?: As data collectors. 255 . At the individual level. Part of the solution could be combining these messages with ways of clearing out the mindset that produces such skepticism or complacency in the first place. o Status or position of the individual within the organisation. or the level to which an individual avoids change. Even when presented with convincing data. What do these evidences or reports mean? The complexity of the evidence and reports may draw out the reaction that more work is required just to understand the evidence. The power of the Individual Many individuals are key members in taking decisions about how data should or should not be used. o Beliefs and values as well as current position on certain issues. However. These active seekers must be favourable to change and even willing to take risks. if human resource managers and planners are able to categorise a decisive bunch of active seekers of new ideas. data from the literature suggests that individual decisions are influenced by a push of personal capacities and qualities that any decision-making process must take into consideration.
Navigating difficult conversations Constantly. o The nature of staff (gender. instead might point out the Sikkim Manipal University Page No. In most cases. function. and degree of skills. structure. an atmosphere of trust and mutual partnerships among different members within the same organisation and among the various organisations that need to work together. all-inclusive. no threatening communication style and provide plenty of relatable examples to guide groups of decision-makers through potentially difficult conversations that data may generate. composition. and the kind of support obtainable for improvement of action. Part of the strategy for strengthening data-driven decision-making includes an interactive session that uses an experienced facilitator and a communication-based model and understanding and responding to difficult conversations. One method is to use a humorous. This ultimately helps in reaching a mutually beneficial common ground. 256 . These are: o Organisational culture. and socioeconomic context. and they fear the rise of negative emotions in difficult conversations. 8. many people are uncomfortable with conflict. This generally happens when a new data challenges a particular policy issue or status quo that has been in place for a long time. level of training. data will create situations that involve complicated discussions within a team or organisation that can cause chaos or volatility. the facilitator does not intend to correct or entail order on the group conversation. o The influence of interest group activity or public opinion on the organisations with human resource related decision-making functions.Performance Management and Appraisal Unit 13 7. o The level to which new thoughts or ideas are welcomed or accepted by management figures. Doubts of difficult discussions can frequently lead to avoiding or rescheduling important discussions because people are worried about argument and damage to workplace relationships. values. Generally speaking. age. The power of organisation There are several organisational factors that influence the decision-making process. the situation can easily slip into a sinister team disagreement. o The level to which data can generate awareness of authenticity. racial composition). If the resulting communications are not handled with sensitivity and diplomacy.
o Think both tactically and practically about the decisions that they make. 10. o Enhance communication and understanding. 9. professional and organisational barriers. o Allow participants to conquer individual.Performance Management and Appraisal Unit 13 presence of polarising standpoint and also support some ways to suspend assumptions and steer the conversation toward common ground. plans and data successfully by converting them into policies. Sikkim Manipal University Page No. it is an in-progress knowledge-driven process that needs continuous compilation. o Consider several options. practices and results. However. dynamic process. always leaving open the possibility that users might see and hear the data and still make a decision to de-emphasise or even ignore the information. this dynamic is often underrated or even overlooked in the process of datadriven decision-making. Process and relationships It is observed that people build strategies. A second key factor is to present possible conflict producing data using clear and lenient language. o Weigh the available evidence. It is a core function that must be implanted into the culture of organisation. This is regrettable because when implemented correctly. It provides decision-makers with the collective ability to: o Tackle the most important human resource questions of the day. o Construct a greater sense of joint ownership. Rather. A Journey. o Construct a unified leadership team focused on moving the business of human resource planning and management in the right direction. not a destination Many theorists supporting data-driven decision-making argue that evidencebased decision-making is not a onetime answer or a standard tool to be applied at random. the process can: o Fetch core issues to the forefront. the nature of bonding between the possible data users within an organisation is one of the most critical dynamics determining success or failure. analysis and sharing of data since it is the only way in which both positive and negative trends can be discovered and acted upon. 257 . As such. Data-driven decision-making is also a collaborative.
let us first discuss the meaning of training. If you want to make the most of the training and development results work with reference to performance management. Activity 1: Which one of the ten fundamental and practical pillars interested you and why? Hint: Ten fundamental and practical pillars. Data-driven decision-making is also a collaborative and _____________ process. it is important to know that training and development guarantee that the unpredictable behaviour of a program or a project is reduced and the learning or behavioural change takes place in a structured format. 13. Without their interference. They can also schedule time for senior management and multi sector teams to review. Before getting into training development. Training is a well planned system designed to improve or develop skills. it will be difficult for human resource data to become an essential part of an organisation’s operations. query.2. Coming back to training and development. then it is very important to Sikkim Manipal University Page No. They can sculpt data use and support it by sharing the successes and benefits. analysed and used to make policy and management decisions. knowledge. 3. and discuss on reports required to notify decisions. and abilities to perform a particular task or job. 2. Many theorists supporting ________________________ argue that evidence-based decision-making is not a onetime answer or a standard tool to be applied at random. Self Assessment Questions 1. it is a subsystem of an organisation. 258 .1 Training and development Do you know the meaning of training development? Well.Performance Management and Appraisal Unit 13 Human resource managers and planners need to lead this journey and act as agents of change. meet. The _______________ is the entire setting or environment in which human resource data are being gathered. 4. One of the foremost misapprehensions about effective use of human resource data in decision-making might be summed up as ___________________________.
It is often a group activity. If a manager instructs an employee in an ongoing project or venture. For example. if a manager pairs up a moderately new employee with a more experienced employee to help the new employee to learn about the job. Figure 13. employees may take turns with reference to job tasks to learn about the jobs of their colleagues and gain experience. There are two approaches of training development. then it is also employee development. development is a broader term that includes training as one of its methods for persuading employee learning. Training usually refers to some kind of organised event like a seminar or a workshop that has a specific commencement date and ending date. then direct training would be more appropriate than job rotation. 259 . on the other hand. This is because. then this is said to be a good employee development. is a much bigger thing. job rotation might work very well. if the purpose is to provide an employee with a better understanding of how the organisation works. the word training is also used to refer to imparting of specific instructions done one on one. Otherwise. For example. In other words.1 depicts the two approaches of training development. However. This is also a type of employee development. Development. If the goal is to improve the employee's ability to use a computer based application.1: Types of Training and Development Sikkim Manipal University Page No. it is important to choose the right means for addressing any needs we have. Following figure 13. This might ultimately help with more promotion opportunities. The vital point to note here is that the different activities are superior at the achievement of different results.Performance Management and Appraisal Unit 13 understand the difference between training activities and development activities.
There were some views that training is a very costly affair and there were no returns from it. promotion that may be proposed to improve the performance of a hard working employee can even result in the turn down of their productivity. This happens when the employees are promoted to their level of incompetence. Self Assessment Questions 5. the scenario seems to be changing. (True/False) 6.2. HP.org/wiki/Peter_Principle Sikkim Manipal University Page No. However.wikipedia. The Modern approach: Nowadays. In the same manner. 260 . Lawrence Peter warns that there is a risk that dependable 1 http://en. Organisations used to believe more in administrative practices. Organisations believed and adhered to the traditional view that managers are born and not made.2 Promotion Many a times. (True/False) 7. The training system in the Indian industry has not yet been changed to create a smarter workforce and yield the best results. Aditya Birla Minacs. Training is now measured as more of a maintenance and retention tool than a cost burden. Indian organisations have realised the significance of corporate training.” In the book with the same title. Organisations believed and adhered to the traditional view that managers are born and not made. companies need to take decisions about what is important for an employee? Salary or promotion? It is observed that the salary increases based on skewed merit rating may even rebound and decrease initiative and productivity. Training development is a subsystem of an organisation. Hint: Dell.Performance Management and Appraisal Unit 13 Traditional approach: It will be surprising to know that initially most of the organisations never used to believe in training. 13. (True/False) Activity 2: Research on the web for various training development schemes followed by any major BPO industry. Dr. The training system in the Indian industry has been changed to create a smarter workforce and yield the best results. also known as the “Peter Principle1.
To avoid conflict. However. This frequently happens when promotion is used as a recompense for good performers who are promoted to managerial level. However. Promotion can also affect organisational units with the virus of envy if not properly handled. The probation will also serve as a fortification for the company in case the Peter Principle happens and there will be a need to reinstate the promoted employee to their old. All employees must be given the opportunity to seek for a vacant higher position by announcing it and accepting applicants from within. This will serve as a fitting evolution from the old to the new responsibilities. they should first be trained in effective management before being promoted. it would still be best to make the employee undergo the maximum probationary period of six months. the standards and criteria of promotion should first be made clear to everybody and then applied in the most purposeful way possible. there is some possibility that the employee will feel unevenly paid with the new responsibilities given Sikkim Manipal University Page No. lower position. expect the interest to become rumours of conflict. even if they do not have managerial competencies. Whenever there is a promotion. it should be part of the process for the immediate superior to regularly provide feedback and on-the-job training to the probationary employee. In addition. With or without training in the higher position. the possibility of confrontation to promotion decisions can be avoided. it is not rare that the people who are left behind will sense that they should have been the ones promoted. 261 . The practice in some companies of just announcing somebody’s promotion out rightly must be avoided. the principles and methods of assessment to pass probation should be made clear to the employee promoted and to the immediate superior. In this manner. it creates a major interest in the organisation. In this case. The interest will disappear if the promotion of the person is accepted by the peers in the old and new ranks. When this happens. like any other change event. It is habitually satisfactory for the promoted employee to still receive just their previous salary during probation.Performance Management and Appraisal Unit 13 employees may no longer be competent when they are promoted to positions with responsibilities they cannot handle. Preferably.
career planning is a constant progression. There is a method to maintain fairness. Promotion can also affect organisational units with the _________ of envy if not properly handled. emerging in your job. Activity 3: Investigate the promotional paths followed in any of the major banks. Syndicate bank. Probationary Phase: The probationary phase is a primary part of the selection process. Hint: Citibank. placements. It allows the appointing authority to coach an employee and evaluate the employee's evolution. 9. and other personnel actions. These evaluations will be used to improve employee efficiency.2. When the promotion system is comprehensible and always implemented. In addition. probably changing careers. 13.3 Career Planning What is career planning according to you? Well. Canara bank. Self Assessment Questions 8. getting a job. With or without training in the _____________ position. it is extendable by the project or process head for a period not to go beyond six months for good cause. and ultimately retiring. Generally. It is done by granting the promotion on probation allowance. lower pay. However. promotion becomes a motivator and a very powerful tool for performance and productivity improvement. it also helps in providing a basis for decisions on promotions.Performance Management and Appraisal Unit 13 the old. effort and adaptability. salary advancements. 262 Sikkim Manipal University . measure training requirements and plan training activities. it would still be best to make the employee undergo the maximum probationary period of ________ months. The employee Page No. Performance evaluation: An employee’s performance and capability shall be evaluated all through and at the end of the probationary phase and annually thereafter. separations. the probationary phase is six months in most of the organisation. which includes selecting a profession. Career planning can divided into the following steps with reference to performance management within an organisation.
as well as excellence and duration of service. which involves discovering and deciding upon the right people Sikkim Manipal University Page No.2. Training: Some of the employees may receive training to ensure high quality performance. An employee’s performance and capability shall be evaluated all through and at the end of the probationary phase and annually thereafter. director of personnel management.4 Succession planning Succession planning is basically ensuring to have the right people in the right place at the right time. and the organisation commission. (True/False) 12. Each elected superior and training head must develop and execute a program to improve the job and career related skills of employees so that they may deliver more valuable service to the organisation. (True/False) 11. Employees may receive training to so as to improve their quality of performance. 263 . Promotion: When it is in the best interest of the organisation to fill vacant positions from the internal current employees. 13. Self Assessment Questions 10. The affected employee shall be notified of the action planned to be taken. It is a part of human resource planning for the organisation. the evaluation of eligibility may be limited to a specific project or department. All promotions must be certified by the project or department head. Promotions shall be based on demonstrated capability.Performance Management and Appraisal Unit 13 may appeal directly to the career service council with reference to any undue extension of the period designated to prevent merit principles. Hint: Steve Jobs. The promotion phase is a primary part of the selection process. (True/False) Activity 4: Research on web about the career plans of any major IT entrepreneurs. Bill Gates. Evaluating Probationary Employees: The appointing authority shall submit in writing for evaluation and approval for action at least one month earlier to the employee's eligibility to graduation from probation.
review processes and performance appraisals help to evaluate the attitude. Succession planning is a complex process and requires time and constant effort. Succession planning is being practised since a long time now and has become a vital and indispensable part of a corporate tactic in most of the organisations. Therefore. The action plans of each Sikkim Manipal University Page No. Apart from the various other factors. competencies. Their ability to meet the altering and bigger level of standards and dimensions set by the management. Succession planning is practical in nature and results in the formation of a talent pool of contenders with the essential potential and competencies who can take the high positions in future and help in the growth of the organisation. The accomplishment or success of the organisation is largely dependent on the excellence of its human resources and leaders. and therefore. talent. Wipro carries out standard quarterly Talent Engagement and Development (TED) reviews. knowledge. and potential of the employees. In addition. they also help in discovering the coaching and mentoring requirements if any. the succession planning agenda is called Talent Review and Planning (TRP). succession planning is based on: The positions for which the planning is carried out The present and past performance intensity of the employees How have the chosen employees self supervised to improve since their last review? The attitude and the growth potential of the employees. One of the best advances to succession planning is performance based success planning. help to identify the right candidates for taking future responsibilities. 264 . The performance appraisal process (similar to competency assessment and performance reviews) and success planning mutually can help in strategically recognising and increasing the needed talent pool. For example at Wipro. ability.Performance Management and Appraisal Unit 13 to take higher responsibilities in an organisation. Human resource planning for the credible future requirements is a challenge for the human resource managers and a good performance review system can help extremely to attain this challenge.
which are Traditional approach. Sikkim Manipal University Page No. You also studied about promotions in an organisation and came to know that unconditional promotion can affect organisational units with the virus of envy if not properly handled. Advancing communication among users of data. which are: Planning how data are used to support a decision. practitioners and policy analysts in structuring a bridge between human resource data and reports for creating an effective human resource policy and take the right management decisions. You also studied about the ten fundamental and practical pillars. Modern Approach. Providing chances for decision makers to experience significant decision making moments. Self Assessment Questions 13. 13. Therefore. which is nothing but a subsystem of an organisation that guarantees learning or behavioural changes in a structured format. which assist human resource managers. ________________ based success planning aids in creating a necessary talent pool of employees for the future needs of the organisation. You were also provided with some of the examples to improve the use of data for decision making. 14. With this.3 Summary In this unit. ________ is a complex process and requires time and constant effort. you also studied about the two types of training development. Going further. so that they can enhance their skills using the actual data in real-life situations. you studied about the usage of data to make the human resource decision.Performance Management and Appraisal Unit 13 business unit and vertical are reviewed and a talent pool of the suitable identified candidates is prepared. 265 . you were also familiarised with the training development. performance based succession planning aids in creating a necessary talent pool of employees for the future needs of the organisation.
The observation period where the employees’ attitude. 2. where it was discussed that the succession planning is all about guaranteeing the right people in the right place at the right time. Explain succession planning. Build or gather data and they will use it 2. emerging in your job. 3. Dynamic 4. 13. Mention the ten fundamental and practical pillars which assist human resource managers. you also studied the different career planning steps with reference to performance management within an organisation. 4.5 Terminal Questions 1. and commitment are observed. Promotion given to an employee as a reward. probably changing careers.4 Glossary Term Disinclination Fortification Probationary Recompense Description Reluctance towards the evidence or reports during preparation for data sceptics. performance. we concluded this unit. Explain performance management by data management. Finally. What is training development and mention the two approaches of it. Data-driven decision-making 5. True Sikkim Manipal University Page No. 13. True 6. work ethics. 266 . which includes selecting a profession. by understanding the succession planning aspect under performance management. Context 3. you studied that career planning is a constant progression. The probation strengthening of the company in case the Peter Principle occurs.Performance Management and Appraisal Unit 13 Later. In addition. 13. and ultimately retiring. getting a job. What is career planning? 5.6 Answers Answers for Self Assessment Questions 1.
2.1 Training and development. six True False True Succession planning Performance. e-Gyan. 8.2 Use of Data Human Resource Decision.Performance Management and Appraisal Unit 13 7. organisation Answers for Terminal Questions 1. False Virus Higher. 14. Refer section 13. MALLOP.2. the Parivartan was launched in Maharaj Soaps Limited (MSL) to coach new and active employees on a variety of features of business and to inspire them. 13. 10. This case describes each of these schemes in detail and the advantages that the group garnered from all these schemes. Refer section 13. Refer section 13. Therefore. 12. Spark. 11. In September 1990. Sikkim Manipal University Page No. 4. Refer section 13. 5. the Maharaj group started various training and development programs such as the Parivartan. English language training. 9. Refer section 13. 13.3 Success Planning.7 Case Study Training Development Schemes at Maharaja Group The following case describes the training development schemes of the Maharaj group from the late 1980s. 3. and BPO training. Maharaj developed a complete and pioneering training program for management trainees and named it Maharaj Accelerated Learning Leadership and Orientation Programme (MALLOP). A need was felt in early 1992 among the top employees of Maharaj to install a performance driven culture in the organisation. During late 1980s.2. 267 .2 Use of Data Human Resource Decision.3.2 Career planning. The objective of MALLOP was to train a beginner and make him/her a professional by giving hands-on project experience and eventually developing a sense of belonging to the company.
Performance Management and Appraisal Unit 13 Shortly.org/casestudies/catalogue/Human%20Resource%2 0and%20Organization%20Behavior/Training%20and%20Development% 20at%20Godrej. At the end of 1992. Stan Lankowitz. ASTD Press Editorial. In January 1993. Leslie Rae (2000). All the schemes which were introduced by Maharaj were successful and it achieved all the set objectives. Doug Toft. This case study is based on an article found in http://www.org/wiki/Peter_Principle http://www. a special human resource program on perfecting the negotiation and interpersonal skills of higher employees was launched. Kogan Page Limited.htm References Christee Gabour Atwood (2007). Career Planning. 268 .htm. in October 1993. E-gyan was introduced in Maharaj to boost the learning prospective of employees.icmrindia. Which of the training do you recommend as the vital one if you are the CEO of an Organisation? Hint: Different schemes followed by Maharaj. a training scheme for managers to help them become efficient coaches.org/casestudies/catalogue/Human%20Resource%2 0and%20Organization%20Behavior/Training%20and%20Development %20at%20Godrej. Ed Stupka (2003). Maharaj introduced Spark. Effective Planning in Training and Development. Dave Ellis. so that they could follow all orders issued in that language autonomously. Succession Planning Basics. in September 1992. Question: 1. E-references http://en. an English language training program was held for base workers of Maharaj and Boyce Manufacturing Company Ltd (MBML).icmrindia.wikipedia. Further. Sikkim Manipal University Page No.
describe the reward management model. promotion.11 Case Study 14. career planning and success planning.2 Reward System and Organisational Implication Reward management and reward strategy 14. you must be familiar with performance management by data management. 269 Sikkim Manipal University .8 Glossary 14. You will study the Reward Management Model. Therefore. you should be able to: explain reward system and organisational implication. You have studied how the data is used to make human resource decisions.9 Terminal Questions 14. the reward drivers and the process of developing a reward system. in this unit. Learning Objectives After studying this unit.4 Reward Drivers 14.3 The Reward Management Model 14.7 Summary 14.5 Developing a Reward System 14. reward systems should be in line with the corporate and business unit strategies.10 Answers 14.1 Introduction Learning Objectives 14. It is important to know that to have an influence on organisational performance. Page No.6 Reward System: The Results 14.1 Introduction After going through the previous units. you will understand how performance management is linked to the reward system. You also studied about the process of training development. You will also study the results of the reward system.Performance Management and Appraisal Unit 14 Unit 14 Performance Management Linked to Reward System Structure: 14.
which has been encouraged by reward or discouraged through punishment. which are: Operant conditioning. if a mother wants her son to clean his room then she may give him some sweets every time he cleans it. Operant conditioning is a term used to explain behaviour. it states how well an organisation has integrated the reward system in its customs. your friend teaches you how to play cricket. you first need to experience it at the level of sensation through your five senses. Skinner was a master in the field of behaviorism in the late 1930s and continued his contributions through the mid-1970s. explain the process of developing a reward system. as without your senses learning would be virtually impossible. Operant conditioning is one of the key concepts of this school of psychology. because operant conditioning entails actions on the part of the learner. the boy will start to clean his room more frequently. However.Performance Management and Appraisal Unit 14 identify the reward drivers. For example. Given an adequate amount of time. since he knows that he will get some sweets in return. the boy’s behaviour (cleaning his room) is modified (conditioned) because he has learnt to associate that behaviour with a reward. Classical conditioning. Sikkim Manipal University Page No. As a result. 14. Although this may sound similar in principle to classical conditioning (discussed below) it is in fact diverse. to distinguish it from classical conditioning the conditioning theory developed by the Russian physiologist Ivan Pavlov. For example. Operant Conditioning: Harvard psychologist B. The reward system within an organisation follows either of the two psychosomatic approaches towards reward. Skinner called his brand of conditioning as operant conditioning. which has been acquired through experience. 270 . later you get a qualified coach who improves and changes your technique for betterment. Classical conditioning: It is a term used to explain learning.2 Reward System and Organisational Implication What exactly do you understand when you read reward system and organisational implication? Well.F. You are well aware that in order to learn something.
Performance Management and Appraisal Unit 14 Once an organisation rolls out the reward system. The following is a good example: Tyco laboratories decided to have an incentive compensation plan that is directed towards improving and maintaining the commercial spirit. the managers started to manipulate returns and profits by hastening or accelerating deliveries to customers. who think and act like owners. will certainly direct the employees to better their performance. The above examples illustrate that. the managers compromised on the quality of the deliverables which in turn. For example. affected the long-term growth as well as the brand value of the company. Managers at the corporate level are anxious about the strategic scope of the organisation and about the corporate strategy which addresses the main concerns of the multidivisional firms. To make this happen and keep the managers motivated. it is an established fact that a good reward system. the company follows a tangible incentive plan. if they managed to improve the profits as compared to the previous year. As a result. mechanics started making unnecessary and pointless repairs. organisations see rewarding as a quick fix. which is directly tied to each business unit’s performance in terms of profits. all too frequently. This has worked very well for the company. By performing this. which might be inherent in some reward systems. As a result.2. drive and originality of managers. which takes the organisational goals as well as the employees’ preferences into account.1 Reward management and reward strategy It is important to know that some researchers have also observed to know whether a corporate strategy affects reward systems. This led to temporary closing of all the Maruti Suzuki car repair shops in the country. 271 . Similarly. 14. another example is at Maruti Suzuki – mechanics working for a car repair business were rewarded according to the income produced through repairs requested by customers. Nevertheless. Heinz Company decided to pay a bonus to its managers. many of the antagonists of reward management and system often refer to some examples that have confirmed that rewarding can affect organisational performance negatively. Researchers have focused mainly on diversification (which is about the close relation of the different businesses of the same Sikkim Manipal University Page No. without investigating the possible contradictory results or sub-optimal effects.
4. which are Algorithmic compensation strategies and Experimental compensation strategies. Activity 1: Which one do you think is more appropriate in today’s scenario? Is it operant or classical learning? Hint: Psychosomatic approaches. Some of the challenges and difficulties are: Useless communications. Poor performance management failing to motivate. This approach can be helpful in addressing many of the challenges and difficulties that organisations have with their reward management. or the contribution the employees make to the organisational goals. Self Assessment Questions 1. It is very important to know that reward management is not easy. 3. 2. performance. Gomez-Mejia has identified two different reward strategies that integrate different compensation dimensions. ____________________________ is used to explain learning. lack of trust. The reward system within an organisation follows two _____________ approaches towards reward.Performance Management and Appraisal Unit 14 organisation). Therefore. as there will be no link to productivity. ____________________________ is used to explain behaviour. Sikkim Manipal University Page No. _______________ has correlated the diversification strategy to compensation strategies. Gomez-Mejia (1992) has correlated the diversification strategy to compensation strategies and has investigated whether performance is driven by the fit between these two strategies. Weak performance evaluation capabilities of line managers who decide on merit and more generally. organisations should focus on reward very vigilantly and develop a clear reward strategy before moving to implementation. 272 . which are seen as two extremes on a range of reward systems and practices. Lack of reward management skills. Deficiency in support systems.
reward objectives. Although the pay levels within an organisation reflect external competitiveness and internal impartiality considerations. management of the pay system. People and jobs skill is compared in terms of their relative contributions to the organisation’s business objectives. and benefits and which will help achieve the compensation objectives? Progressively more organisations argue their pay systems are marketdriven. External competitiveness refers to compensation relationships external to the organisation such as the comparison with competitors. internal alignment. and the software engineer? Does one chip in to provide solutions for customer and satisfy shareholders more than another? Internal alignment pertains to the pay rates -. for example. For example. how should an employer place its pay comparative to what entrants are paying? How much do we desire to pay accountants in contrast to what other employers would pay them? What combination of pay forms the base. Internal alignment refers to assessments among jobs or skill levels within an organisation. the decision on the final pay level or the organisation’s pay policy will be determined by many factors. Determining the right pay entails merging the results of the job analysis and job assessment processes and market pay data. incentives. Fundamentally. You may be wondering how? Well.both for employees doing equal work and for those doing dissimilar work.3 The Reward Management Model Currently. the software architect. stock.Performance Management and Appraisal Unit 14 14. it also includes competitive strategy. Reward policies provide procedures and strategies for the implementation of reward strategies and design and management of a reward process. every employer must follow four major policies such as external competitiveness. there is a need for a good reward management framework that can assist managers with critical reward decisions. based approximately and exclusively on what competitors Sikkim Manipal University Page No. formulating what is a suitable difference in pay for people performing different work is one of the key challenges facing managers. In addition. organisational design and culture. and employee contributions. human resource strategy. does the work of the programmer compare with the work of the systems analyst. In fact. that is. 273 .
In addition.1: Reward Management Model Sikkim Manipal University Page No. Most of the employers may set their pay levels superior than their competitors. To manage labour costs. ranging from supervisory level to directors’ level. Figure 14. the other building blocks of this model of reward management will be discussed in the rest of this unit as reward strategy is already discussed above. Figure 14. We will now discuss an integrated strategic model. they may be more likely to leave. If employees do not notice their pay as competitive in comparison to what other organisations are offering for similar work. In external competitiveness. hoping to attract the best applicants.1 illustrates the reward management model. market driven gets interpreted more into practice in diverse ways. Except the reward strategy. 274 . through managers to clerical and even proletarian workers. as also to the most critical jobs or job families. In addition. such as: To make sure that the pay is adequate to attract and retain employees. However. so that the competitiveness directly affects both competence and fairness. which is applicable to all kinds of organisations and is time-independent. it must do so in a way that complies with relevant legislation. it can be applied to the entire workforce.Performance Management and Appraisal Unit 14 pay. the decisions of both – “how much” and “what forms” have a twofold effect on objectives.
This in turn will determine the reward strategy. Society. Our shareholders. Determining the right pay entails merging the results of the job analysis and job assessment processes. As an example. 1 Our customers. Therefore. vision and mission are also the bridge between the organisation and its external environment. Reward policies provide procedure and strategy for the implementation of reward strategies. (True/False)? 7. It is very important to know that the organisation’s objectives are the first and foremost reward driver. In addition. 275 . We will discuss about the most vital reward drivers in general. (True/False)? 14.4 Reward Drivers A reward system’s success always depends upon the types of reward drivers and analysis of the same. let us look into the vision of Volvo Cars Gent1: What are we ultimately out to achieve? Securing our continued excellence and growth by providing satisfaction to: Our employees. In this respect. culture. design. An organisation’s objectives can be found in the vision and mission of every organisation. they should also provide information about the organisation’s stakeholders as well as the organisation’s objectives towards these stakeholders. the mission is about the present development and definition of the business and its objectives. In external competitiveness decisions both the “how much” and “what forms” have a twofold effect on objectives. the internal and external environments also play vital roles in establishing the reward strategy.Performance Management and Appraisal Unit 14 Self Assessment Questions 5. Any values. and strategies of the organisation. culture. and strategy. Volvo’s largest manufacturing plant outside Sweden Sikkim Manipal University Page No. (True/False)? 6. While the vision informs the prospect of business path which may not be realistic. and management of reward process. The most vital reward drivers are the organisation’s values. cultures and strategies followed by employees come from the values.
For example. A major increase in salary is due to tenure of employment and performance. A normal culture is characterised by fraternal relationships. Sikkim Manipal University Page No. we must have a distinction between a normal culture and a market culture. Promotion practices convey concern for the long-term career of the employees. Reward systems should also be aligned with the organisational culture. 276 . A purely contractual relationship between individual and organisation. It is a common observation by many that this is forgotten in many cases and therefore the reward system does not send out the right signals. A bonus-based reward system excellently fits this kind of culture. people management skills. This clearly shows that reward management does not take the reward drivers sufficiently into consideration. and collective initiative. A market culture is characterised by: An encouragement of a strong sense of freedom and individuality. Providing a bonus is dependent on a superior’s judgement. results of employee satisfaction review. Bonus pay-outs are increased in order to emphasise the importance of long-term commitment. In such a system: Bonuses are comparatively small and based on corporate performance. An absence of job security and loyalty. senior management’s bonus at Volvo Cars Gent should not be concluded by short-term financial measures only. An absence of a common set of expectations regarding management style or philosophy. It should also take into consideration the managers’ performance en route for employees such as retention rates. and customer satisfaction. A limited interaction and individual initiative. Promotion from within is the standard policy. To do so. long-term assurance. loyalty. We have already described how and to what extent the reward systems could be linked to organisational strategies. interdependence.Performance Management and Appraisal Unit 14 This vision will have significant implications on the organisation’s reward strategy. a sense of tradition and style.
can influence the reward system.Performance Management and Appraisal Unit 14 The reward system that best fits this culture is called the performance-based reward system. and tasks. 277 . Base salary increases on the basis of external labour market circumstances and performance. Therefore. standardisation. flexible definition of the job. Sikkim Manipal University Page No. The organisational structure is a vital reward driver linked to the internal environment. An organic organisational structure is most the opposite. abilities. Payment of management bonuses based on the performance of their department. This goes hand in hand with a more task flexibility. training and development. organisations in general are becoming flatter and have smaller amount of layers. scope. knowledge. duties. Finally. there are still various methods in which the work can be organised. For example. but also to skills. Pay bands should be broader and competences should be included as variables determining base pay levels. modern job assessment schemes might become role assessment schemes that not only pay attention to responsibilities. there might be differences among sectors. Although organisations might have lesser hierarchical levels. and a narrow span of control. and disintegrating barriers between jobs. which is characterised by: Bonuses forming a major part of compensation – indicating that the organisation considers a star performer to be more valuable than a team player. attitudes and beliefs required to perform job duties successfully. Internal environment: The internal environment of an organisation can have a lot of impact on the organisational strategy. This means that many job assessment systems must he adjusted (sometimes even discarded). employee involvement and so on. an organisation with a resultoriented culture may not pay a bonus just because of its poor performance over the past year. In this respect. which in turn. the reward system should also be linked to the global resources tactic or strategy and its actualisation in the level of labour relations. This will have significant implications for the reward strategy. a mechanistic organisational structure is characterised by a high degree of centralisation. Even though. teams.
Performance Management and Appraisal Unit 14 A second major internal reward driver is the business unit of the organisation. Different stages in the lifecycle of an organisation might need quite different rewarding systems. while incentives are more determined on cost repression. it might be exceptionally difficult to shift to performance-related pay in an organisation that has always been paying its employees on a fixed basis. 278 . The last internal reward driver we would like to discuss is the reward history itself. the general human resource focus is on maximisation of productivity. During the start-up phase. it is better for the reward managers to construct a clear picture of the history of the reward system and changes that have been made in the past. External environment: In many organisations. Definitely. organisations might be unwilling to introduce new pay schemes since they have previously had bad experiences with this. Business units are determined towards recruitment and can afford to pay market salary. In addition. and so on. the emphasis is on the use of longterm incentives that reward market performance. Therefore. The ability of bonuses might be strongly linked to the profits of the organisation. stock options are a much admired reward vehicle in this stage. Therefore. base pay systems are based on Sikkim Manipal University Page No. experiences with the system. For example. the reward system is driven by the external environment. Base pay will be below the market rate and the importance will be on variable pay because of the need to invest money. which has always been an important element in reward management Labour-intensive organisations will have fewer possibilities for paying relatively high wages because this would have a strong influence on their profit. For example. Variable pay is still vital because matured organisations focus on retention base pay levels compared to the market increase in maturity phases. there are a number of other factors that are related to the internal environment and that might have an influence on the reward strategy. A few of them are: A workforce comprising mainly women might pay more attention to worklife related benefits Internal relations with the unions might have an influence on collective bargaining. In addition.
the reward system is driven by the _____________________. 14. In order to obtain profits such as increased efficiency and productivity. 279 .com/presspass/press/2003/jul03/0708comppr. In addition. based on the individual or group's previous accomplishments. The organisational structure is a vital reward driver linked to the ___________________. Reward systems should also be aligned with the ________________. Communication of plans to employees. the entrepreneur who develops a reward system must recognise the organisation goals to be reached.Performance Management and Appraisal Unit 14 market data and multi-sector collective bargaining. Actually. the entrepreneur should recognise the performance or behaviours that will contribute to the reward Sikkim Manipal University Page No. these organisations do not consider reward systems to be a tool for strategy implementation.mspx. Determination of suitable rewards. Hint: Microsoft http://www. 10. Identification of the required employee performance or behaviours that will strengthen the organisation’s goals. The keys for developing a reward system are as follows: Recognition of organisation or group goals. which the reward system will support. Self Assessment Questions 8. In addition. employee benefits are directly linked to tax and social security legislation. Determination of key dimensions of the performance or behaviour. we have discussed about the various reward drivers which are very essential to any organisation.microsoft. managers must look at the encouraging forces that drive their employees to perform. 9.5 Developing a Reward System Before developing a reward system. Activity 2: Research on the web for any of the companies which uses stock options as reward drivers. In many organisations. Thus.
saving a meagre amount of money for the organisation through improved common negotiation.Performance Management and Appraisal Unit 14 system development. Similarly. In view of the fact that rewards have a genuine cost in terms of time or money. which can include such variables as improved financial performance along with enhanced customer service. the procedures need to relate to small business goals. small business owners require to ensure that performance has actually enhanced before rewarding it. Finally. If teamwork is a business goal. the essentials need to be clearly spelled out for every employee. (True/False)? Sikkim Manipal University Page No. if quality is a vital issue for an entrepreneur. Motivation depends on the person’s ability to understand what is being asked of him or her. Once this has been done.” When developing a reward system. While this may seem understandable. and reduced defects. Perfect turnout might merit a different reward than. Most reward systems use multiple measures or procedures. in order for a reward system to be triumphant. As Linda Thornburg noted in HR Magazine. Once again. Keep your communications simple but recurrent to ensure that the team members are updated about the changes to the system. 280 . organisations commonly make the mistake of rewarding achievements or behaviours that either fails to further business goals or actually sabotages them. Measuring the performance in an appropriate way guarantees that the program pays off in terms of business goals. Self Assessment Questions 11. customer satisfaction. The entrepreneur who develops a reward system must not recognise the organisation goals to be reached. an entrepreneur should think about matching the rewards to the end result for the organisation. reinforce the original communication with usual meetings or memos promoting the system. It is also vital to consider rewarding both individual and group achievements in order to promote both individual proposals and group cooperation and performance. the reward system that they develop should not emphasise rewarding the quantity of work accomplished by a business unit. for example. a bonus system that rewards employees who progress their efficiency by themselves or at the expense of another is not logical. "Performance measures in a rewards system have to be linked to an overall business tactic.
6 Reward System: The Results Obtaining results from a developed reward system is also a vital aspect of any organisation. the essentials need not to be clearly spelled out for every employee. Appropriately measuring performance guarantees the programs pays off in terms of business goals. One of the reasons many dependability and maintenance progress initiatives fail to deliver the expected results is a lack of team work within and between internal branches. (True/False)? 14. However. 281 . It is still frequently seen that the operations and maintenance do not work as a team which they are supposed to be. The engineering branch is sometimes described as the black hole by the maintenance staff. Lowest price does hardly ever include the future total cost of ownership.Performance Management and Appraisal Unit 14 12. For a reward system to be triumphant. Additionally. (True/False)? 13. then an organisation stands a better chance to work in partnership towards the same goal. it is not the project manager’s issue! Sikkim Manipal University Page No. Operations Manager. the project manager may be supplied with inferior equipment. A project manager is rewarded if a project is completed on time and at the lowest price. so you may be wondering why is it so? Probe yourselves what is the most vital accomplishment for a: Project Manager. This could be measured in manufacture reliability or overall manufacture competence or prime cost. “This is where we send drawings to be updated. This will result in higher operations and maintenance prices. If this overall measurement would be applied to all branches and coupled with each branch’s measurement and reward systems. Maintenance Manager. no documentation or relevant training in operating and maintaining equipment and so on. Store room Manager. and we never see them again” is one common comment heard from the support staff. However. this is not always the case. It is known that all employees in a plant should work for the identical goal to competitively produce a quality product on time.
Performance Management and Appraisal Unit 14 An operations manager is rewarded if quality production output is improved with improved reliability and if operations prices are down. 282 Sikkim Manipal University . then the reward systems must be developed to drive everybody’s performance and actions toward the goal. A store room manager is appreciated or rewarded if he or she manages to reduce the account value. pumps. how can you blame the operations manager for not keeping the costs down ? A maintenance manager is acknowledged or rewarded when the maintenance prices are going down. operations. many maintenance managers will agree that they might be in more dilemmas if they overspend the maintenance funds than required. If an organisation is serious about an earlier incorporation between branches. engineering and stores are all rewarded and measured by production reliability and total manufacturing costs. Joint measurement between maintenance and operations. Style of average life of common machineries such as motors. The above examples are general and these reward systems do not encourage true and necessary partnership between departments. However. However. Measures operating practices as well as implementation of accuracy maintenance. Joint measurement between maintenance and operations. as people start keeping their own stores in region. Style of average vibration level. Measures operating practices as well as execution of precision maintenance. Maintenance. This is hidden in maintenance costs. Scheduled to unscheduled shut downs. This means: Mean time between breaks for a paper machine. the total cost for spare parts and material will go up. if the maintenance prices go high due to reasons beyond the operations manager’s control. This frequently leads to the understanding that the value of what is kept in store is going down. However. Page No. Results measurements All results are the conclusions of actions. This is not divided by department. A better measurement would be to sustain the service level of 98% and reduce inventory value. Of course everyone knows that the vital thing to do is to keep the apparatus in operation.
283 . and strategy. which are: Operant conditioning.7 Summary In this unit. drive everybody’s 14. we have discussed how to obtain results from a developed reward system along with the results measurements. With reference to reward management model. Classical conditioning. 15. The most vital reward drivers are the organisation’s values. Measures how well maintenance and operations converse and execute agreed upon disciplines. Later you understood that a reward system’s success always depends upon the types of reward drivers and analysis of the same. Thus. you studied about the reward system and organisation implication which is nothing but evaluating how well an organisation has implied the reward system in its customs. On the other hand. you were informed that there is still a need for a good reward management framework that can assist managers with critical reward decisions.Performance Management and Appraisal Unit 14 Maintenance scheduling observance for shut downs and weekly daily joint measurement between operations and maintenance. The reward system within an organisation follows either of the two psychosomatic approaches towards a reward. You also understood the concept of developing a reward system where managers must look at the encouraging forces that drive their employees to Sikkim Manipal University Page No. the internal and external environments also play vital roles in establishing the reward strategy. Reward systems must be developed to ______________ and actions toward the goal. culture. Self Assessment Questions 14. You also understood that organisations should focus on reward very vigilantly and develop a clear reward strategy before moving to implementation as reward management is not easy. All employees in a plant should work for the __________ goal to competitively produce a ___________ product on time.
9. Elucidate the process of developing a reward system. 14. 4. 2. 3. Explain the reward management model. 14. False 12. True 8. 11. True 6. Identical. you comprehended that obtaining results from a developed reward system is also vital for any organisation.8 Glossary Term Antagonists Contradictory Psychosomatic Vigilantly Description Group of people who confirmed that rewarding can affect organisational performance negatively. Psychosomatic 2. 284 . False 14. Operant conditioning 3. Gomez-Mejia 5. Organisational culture. Explain the different types of reward drivers. quality 15. 10. 14.Performance Management and Appraisal Unit 14 perform.9 Terminal Questions 1.10 Answers Answers to Self Assessment Questions 1. Describe how performance management is linked to reward system. Performance Sikkim Manipal University Page No. True 13. External environment. Classical conditioning 4. Possible inconsistent results with certain rewards Emotional reward or psychological approaches towards A cautious focus on reward system from the organisation. Internal environment. True 7. Finally.
Mr. The company planed their marketing activities in order to get back its market share. Ravish James was able to contact people and get the bookings done easily. 2. with the entry of the new generation of fuel-efficient cars the company started losing its market. They usually arranged a paid holiday trip for the good performers along with the spouse. Ravish James was accordingly informed by the marketing manager to go to Andaman Islands with his wife on company expenses. The ikons were yet to gain a foot hold in the market. These are available in the brand names kons and ikons where kons is the traditional product of Moon manufacturers and ikons is the enhanced version. the customers who prefer to buy ikons were given easy loans. The company had its own system of rewarding those whose performance happened to be good. The company also introduced a new financial assistance method. Company recruited young sales engineers to launch a strong sales drive. However. Mr. Under this method. Refer section 14.4 Reward Drivers. Refer section 14.3 The Reward Management Model. His performance was good in the first year and in the second year of his service. The Moon manufacturers immediately started developing the improved ikons. However.2 Reward System and Organisational Implication. Refer section 14. 3. Kons had a logically good status and the company was comfortable in the market. 14. 4. Mr. it was too late as the competitors had already strengthened their position in the market. Ravish James was given a region to contact the forthcoming customers and to book the orders.5 Developing a Reward System. Ravish James. Refer section 14.11 Case Study Reward System at Moon Manufacturers Moon manufactures are primarily into manufacturing of cars.Performance Management and Appraisal Unit 14 Answers to Terminal Questions 1. Ravish James asked him Sikkim Manipal University Page No. 285 . a MBA holder in marketing was put on the job Mr. Mr.
Performance Management and Appraisal Unit 14 as to how much it would cost to the company. On his return. Thomas B.in cash instead of the trip as he had better plans.chrmglobal.com/Replies/3543/1/Case-study-RewardSystem. Helen Murlis. He quickly asked him whether he could get that 50.html References James W.000/. During the subsequent days Mr Ravish James' performance was not all that satisfactory which was evident in his lukewarm attitude towards his job and the subordinates. Kogan Page. Hay Group (2007). 2. Wilson (2003). The marketing manager calculated and told him that it would cost about 50. Ravish James reluctantly went for the trip and returned. Performance Management: Putting Research Into Practice. What is your recommendation to avoid such situations in future? Hint: Reluctantly going for trip.com/presspass/press/2003/jul03/0708comppr.microsoft. Manuel London (2009). Reward Management: A Handbook of Remuneration Strategy and Practice.chrmglobal.html Sikkim Manipal University Page No. McGraw-Hill. as he actually needed the money for something more important and of a higher priority for him.mspx http://www. The marketing manager and the personnel manager thought he was a bit too fussy about the money and some of his colleagues also thought so.000/-. Innovative Reward Systems for the Changing Workplace. E-references http://www. Smither. he was heard complaining to one of his colleagues that he could not enjoy his trip. Mr. Questions: 1. The marketing manager informed that it would not be possible to give him a cash reward. This case study is based on an article found in http://www. Jossey Bass.com/Replies/3543/1/Case-study-RewardSystem. 286 . According to you was the company’s reward system good? Hint: Package trip. Michael Armstrong.
if the person being reviewed feels ignored. It is the way the information is conveyed.9 Case study 15.8 Answers 15. A performance appraisal feedback which helps the individual to recognise objectives that are closely linked with that of the organisation's. they are not told why. their feelings of personal worth will suffer.1 Introduction Learning Objectives 15.6 Glossary 15. Often.Performance Management and Appraisal Unit 15 Unit 15 Ethics in Performance Appraisal and Performance Practices in India Structure: 15.5 Summary 15. Performance appraisal feedbacks need to be recognised and treated as an ethical issue of high importance and risk.2 Role of HRM in Creating an Ethical Organisation Creating an ethical organisation 15. Performance appraisal sessions are usually far more significant than the decision made or information conveyed in the session.7 Terminal Questions 15. 287 . when employees due for promotions are informed of the decision that somebody else has been selected. which makes all the difference. The overall objective of performance review should be to provide an honest evaluation of performance and to simultaneously develop a plan to improve the employee‟s productivity. moulds the Sikkim Manipal University Page No. or the feedback is given. During a performance review.4 Objectives of the Organisation for Providing Performance Appraisal 15.1 Introduction After studying the earlier units you must be familiar with the different types of performance appraisal feedback systems and the implications of benefits and rewards on employee performance. This will need you to inform the individuals where they stand.3 Role of Ethics in Performance Appraisal 15. This is because the managers or supervisors do not feel equipped enough to explain the reasons in a systematic and rational way.
Performance Management and Appraisal
individual to perform at a higher level and the organisation is less likely to lose a valuable employee. The objective of the performance appraisal feedback is to develop the individual and not to threaten their self-esteem. Hence, treatment of people is the most fundamental ethical issue. Thus, performance review is a matter of ethics. This unit familiarises you to the various ethics in performance appraisal and the various performance practices followed in India. Human resource management plays an important role in creating an ethical organisation. This unit also explains the role of ethics in performance appraisal. Learning Objectives After studying this unit, you should be able to: explain the role of human resource management in creating an ethical organisation. tell the role of ethics in performance appraisal. identify the objectives of an organisation in providing performance appraisal.
15.2 Role of HRM in Creating an Ethical Organisation
Now that we have got an introduction into this unit, let us read and find out the role of HRM in the creation of an ethical organisation. We all are aware that ethical dilemma and issues thrive in HR activities. Some of the areas of unethical conduct revolve around issues pertaining to: Employment. Remuneration and benefits. Labour relations. Health and safety. Training and development. As we know, there are certain fixed professional codes of conduct to be followed by the HR persons. However, most of the professionals argue that it is difficult to stick on to these codes because of pressures from political, economic and social groups. This eternal truth is beautifully expressed by 1 Daniel Defoe in the following lines: “Wherever God erects a house of prayer
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The devil always builds a chapel there And it will be found upon examination The latter has the largest congregation”. Let us look into the figure 15.1 to understand ethics in an organisation.
Figure 15.1: Components that Comprise Ethics in an Organisation.
Figure 15.1 gives us an illustration of the different components that make up ethics in an organisation. HRM personnel at all times should be guided by the highest principles of integrity and devotion to the welfare of the people. Only then can they succeed in creating an organisation which is humane, comfortable and civilised. It is important that the HR managers be realistic in their approach. The art of management is probably the greatest of all the available skills for the following reasons: Its aim is to create order and logic out of confusion. It behaves as an instrument to create economic growth and banish poverty. It is used to uphold the dignity of man. HRM personnel are the best driving factors for building a strong ethical foundation. An organisation's core values are manifested by its culture. These include the basic ways in which the business is handled, such as, how: Decisions are made. Rewards are distributed.
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Employees learn the ways of performing business by observing their co workers and leaders. Supervisors and managers in organisations are eligible for a level of respect from their employees because of their leadership position. HR professionals are in the leadership roles by virtue of their visibility and authority. Employees look up to their leadership as role models to guide their own behaviour. Employees can learn to trust and respect each other and managers only if they observe characteristics that reflect trust and respect. Human Resources can greatly influence the organisational culture. The HR system is the key to the development and maintenance of ethical culture. Following are some of the steps that the HR managers can adopt: Focus on how ethics and values can be inculcated into the design of key systems, which include performance management and reward systems. Integrate accountability for ethics and values into performance systems, as the implementation of ethical values will add significant value in promotion and compensation decisions. Focus on reward systems, that is, reward excellent ethical behaviour. Unethical conduct must be disciplined consistently and this should be done right from the high levels, so as to send a powerful signal that management is serious about ethics. Focus on how cultural systems can fit together or align in support of ethical conduct. Thus, by following the above mentioned steps, the HRM can create an ethical climate within the organisation. This can be put into implementation by: Developing a all-inclusive code of conduct Providing in-progress ethics training Reinforcing and rewarding ethical behaviour Having top management and other role models behaving ethically. 15.2.1 Creating an ethical organisation Now that we have understood the role of HRM in creating an ethical organisation, let us look into how we can create an ethical organisation. The organisation culture should represent the core values, beliefs and attitudes of an organisation. An ethical organisation culture is one which supports and
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promotes ethical behaviour within the organisation. The building of an ethical organisation culture requires: A clear definition of the core values of the organisation. Selection of the most apt personnel. Rewarding of excellent ethical behaviour. Keeping a check on unethical behaviour. This section will give us an insight into the guidelines for building such organisation cultures keeping in mind the performance practices followed in India. Let us first look into the ethics strategy involved to create an ethical organisation. The ethics strategy must be concerned with ensuring that all the organisational activities are ethical, legal, and within all the prescribed regulatory guidelines. The actions, be it right or wrong, generally arise from character. An ethics strategy should provide the road map to guarantee the ongoing development of both the individual as well as the organisational character. This can be achieved through the introduction of “ethics programs” to train the employees. It is important that the ethics strategy provides for monitoring and policing organisational activities so as to reduce and thus prevent ethical and legal violations. Ethics programs have become increasingly important, because a recent case law states that individual board members can be held liable for ethical lapses, in case ethical plans and programs are not incorporated. While developing an ethics strategy, regulatory requirements should be the prime consideration, as they impose a minimal, de facto ethical standard on every organisation. The plans and programs that are to be established should ensure that the organisation is in complete agreement with all these regulatory requirements. Once these regulatory requirements have been addressed, organisations can then work towards the enhancement of their corporate character. The “ethics program” should consist of a series of ethical training modules that is designed in such a way to educate and build ethical character on an individual basis. The ethics programs and training lay the necessary
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foundation required to ensure a continuous and deepening response to ethical issues as they arise for employees on the job. Eight steps to be followed while building an ethical organisational culture: 1. The right leader: An organisation can never be ethical unless the managers are role models for ethical behaviour and set the standards. They need to be clear about their values and exhibit them in actions as well as words. 2. A clear purpose and strategy: Three differences between companies that achieved high performance levels over long time spans and companies that failed when they reached a certain size were that the companies: Aimed on short term gains, and not on the long term value. Did not have a clear strategy. Badly mismanaged risk. 3. A focus on doing the right thing: For an ethical culture to prevail, it is important for the employees to feel responsible and accountable for their actions. Creating an environment where employees can stand up for what they believe is right and take responsibility is essential. Without it there cannot exist an ethical culture as small and large daily wrongdoings will tend to go unchecked. It is the regular employees who are aware of what generally goes on. The negative aspects are generally hidden from the management. Hence, the organisation has to create a strong culture of speaking up and standing up for what they believe is right. 4. Hire the right people: It is important to hire people with the right values, skills and knowledge. Interviews and assessment programs should be designed such that they help the managers to explore what people have done in certain situations and should be able to ask them about their rationale for their actions. 5. Fire the wrong people: If you do not fire employees for wrongdoing, you may be sending out a wrong message that behaving ethically does not matter all that much. Actions, as we all know, speak louder than words and people become very sceptical if they see their senior managers advocate one thing and do another.
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6. Run training courses on values and ethics: It is very difficult to spot an ethical situation in the first place, then only comes advocating the best way to handle it. All employees should be educated with the required knowledge and skills so as to identify and tackle ethical situations. Running mandatory ethics training for everyone in the company will convey the message that ethics is of high priority. 7. ‘Reward’ people for doing the right thing and challenge them when they do the wrong thing: It requires a lot of courage to raise concerns about the actions of colleagues. People should be encouraged to do so by rewarding them. This could be in the form of appreciation from the management which could include a positive mark in their performance appraisal. People often do not question the wrongdoing for fear of isolation from colleagues and management. Hence, care should be taken to see that they are actively encouraged to do so. 8. Do not tolerate mistakes: Generally, when people are afraid to make mistakes they tend to either always „play it safe‟ or cover up any errors for the fear of „punishment‟. Both these can be a hindrance in the growth path of the company. Figure 15.2 illustrates some of the values that make an ethical system successful in the organisation.
CODE OF ETHICS
Figure 15.2: Ethics Code Management Business Strategy Concept Diagram Illustration
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Managers need to realise that ethics is an ongoing process of deciding and acting.3 Role of Ethics in Performance Appraisal Now that we have read on the role of the HRM in creating an ethical organisation. People should not be encouraged to raise concerns about the unethical actions of colleagues. This just goes on to show how one‟s success is dependent on the other. 294 . Unethical conduct should not be disciplined. A clear purpose and strategy are necessary for the overall ethical development of an organisation. Hint: 8 steps to build an ethical organisational culture 15. Handling of performance review sessions is usually far more important when compared to the decision made or information conveyed during the feedback session. they are all inter-related. Self Assessment Questions 1. Sikkim Manipal University Page No. values and beliefs that define what are right and wrong behaviour is defined as managerial ethics. according to you would help in designing the same. The ethical issues related to performance feedback have caused both the managers and employees at all levels to become frustrated. all these together can lead to the success of the organisation as a whole.2. Briefly explain the steps. To abandon or abuse the performance appraisal process is a violation of business ethics. that is. (True/False) 2. is directly linked with the level of ethical behaviours demonstrated within a company. let us look into the role of ethics in Performance Appraisal. (True/False) Activity 1: Assume that you are the HR manager responsible for the designing of an ethical organisation. one of the key design components of an organisation‟s internal environment. Performance appraisal. economic and social groups. which. each of the systems is inter-linked. And how. Most of the ethical questions that arise are from people relationships within the organisation. (True/False) 4. Principles.Performance Management and Appraisal Unit 15 As we see in figure 15. Most of the HRM professionals argue that it is difficult to stick on to the ethical codes because of pressures from political. Neither of the four are independents. (True/False) 3. Mistakes should not be forgiven. (True/False) 5.
Schedule an ongoing assessment program based on the ethics requirements.com/. The activities that they perform have a purpose. The policies and practices too are aligned with the vision. Let us look into what these are. the outcome is that no mixed messages are conveyed. This purpose acts as a way of operating with high values which in turn ties the organisation to its environment. Hence. ethics programs convey corporate values. There exists a clear vision and picture of reliability throughout the organisation.. clarifies: "Typically. They provide guidance in ethical dilemmas. Organisations should manage the ethical issues in their workplace by establishing an ethics management program. Executive Secretary of the Association for Practical and Professional Ethics. The organisation‟s mandate that the individuals are responsible to themselves./Business-Ethics-Between-Morality-and-Compulsory Sikkim Manipal University Page No. The reward systems are aligned with this vision. Ethics are directly linked to fairness." There are various advantages of formally managing ethics as a program. Most of us are aware of the moral benefits of attention to business ethics. The ground rules emphasise that the other person‟s interests should count as much as the individual himself. depending on the organisation. 2Brian Schrag. Responsibility is more on an individual rather than collective basis.Performance Management and Appraisal Unit 15 It is not possible to act in accordance with the rituals and surface requirements of performance feedback without inculcating the proper spirit into the feedback process. 2 www. Let us look into some of the roles of ethics in performance appraisal from our country‟s perspective.. 295 . The vision is generally owned and put into practice by the top management. It is understood and incorporated that every significant management decision has ethical value dimensions tagged to it. Ethics programs: Establish an organisational role to manage ethics. and can include extensive training and evaluating. often using codes and policies to guide decisions and behaviour.scribd.
must also be able to generate policies. it involves the incorporation of values and associated behaviours: Values are inculcated through the ongoing process of reflection. Structure plans to resolve ethical confusions. 296 Sikkim Manipal University . Such decisions taken generally increase the credibility of the process and in turn benefit the outcome because of the reduced suspicion of unfair bias. the development of such programs educates the employee about the importance of ethical considerations and thus helps to minimise the chances of the occurrence of unethical behaviour in the work place. The decisions. procedures and training required to translate these values to acceptable behaviours. Facilitate ongoing evaluation and provide updates to the program. decisions made as a group usually produce better quality decisions as this will be inclusive of the diverse interests and perspectives. Align the organisational behaviour with its operating values.Performance Management and Appraisal Unit 15 Establish the required operating values and behaviours. pertaining to ethics. Listed below are some of the guidelines that ensure that the ethics management program is operated in a meaningful fashion: Understand that managing ethics is an ongoing process. Help in convincing the employees that attention to ethics is not just an automatic reaction done to get out of trouble or done just to improve the individual‟s public image. This is because. Integrate the ethical guiding principles towards decision making. The success of an ethics program lies in the accomplishment of fair and just behaviours exhibited at the work place: Practices that generate the lists of ethical values. or codes of ethics. The most important aspect from the ethics management program perspective is the process of reflection and discussion that produces these deliverables. should be collective: The reason being that. Page No. Occurrence of ethical dilemmas should be avoided: Practices that develop codes of ethics and codes of conduct are important. Develop a sense of awareness and sensitivity towards the ethical issues.
The following functions point out the responsibilities that need to be included within the organisation. when a mistake is made by any of these individuals. Trying to operate ethically and making a few mistakes rather than not trying at all: All organisations are made up by persons who need not necessarily be perfect. these organisations may be accused of being deceitful. The organisation's chief executive should be in support of the program. This makes it easier to get them to advocate its ethical values. this should not be the case. while developing the values statement. Involve cross-functional teams both during the development and the implementation stages of the ethics management program: It is vital that the employees working in an organisation feel a sense of participation and ownership in the ethics program. Consider establishing an ethics management committee. Consider establishing an ombudsperson. Develop design policies in such a way that you are able to reflect on what ethical values that you would like to be the most prominent in the organisation's culture. What should matter is the will power to try. assigning roles may prove useful in managing ethics: These roles can be either full-time roles or part-time functions. 297 . success will follow. the organisation is the one that suffers. However. In our society. care should be taken to include the ethical values preferred at the workplace. Sikkim Manipal University Page No. Value forgiveness: The most important ingredient that helps us to remain ethical is in trying to behave ethical. This involves helping people to recognise and address their mistakes. Consider assigning/developing an ethics officer. However. Hence. The roles are generally held by someone already in the organisation. Consider establishing an ethics committee at the board level.Performance Management and Appraisal Unit 15 Ethics management should be integrated along with other management practices: During the stage of strategic planning. You should be able to continue to support them in their struggle to operate ethically. Depending on the size of the organisation. most managers are scared to announce an ethics management program.
To abandon or abuse the performance appraisal process is a violation of _____________. Ethics management should be __________along with other management practices. Organisations should manage the ______________ in their workplace by establishing an ethics management program. 298 . Being reliable and prompt. 10. Write down your justifications. Some of these include: Preferred style of dress. You have been asked to draft a mail stating the advantages of the same. 9. The most important ingredient that helps us to remain ethical is in trying to behave ___________. 15. let us look into the objectives an organisation should aim at for providing Sikkim Manipal University Page No. Certain codes of conduct need to be followed to ensure the implementation of the ethics programs. Activity 2: You are working for an organisation. Self Assessment Questions 6.Performance Management and Appraisal Unit 15 Note that one person must ultimately be responsible for managing the ethics management program. Hint: Advantages of formally managing ethics as a program. Complying with laws and regulations. Reporting illegal or questionable activity. Following instructions of superiors. Avoiding discrimination of any form. Maintaining confidentiality. 8. they wish to inculcate good work place ethics. 7. wherein. The success of an __________ lies in the accomplishment of fair and just behaviours exhibited at the work place. Not accepting personal gifts from stakeholders as a result of company role.4 Objectives of the Organisation for providing Performance Appraisal Having understood the role of ethics in performance appraisal systems.
Link both the information gathering and decision making process. An effective performance appraisal system should emphasise on the individual‟s objectives. It has been found that there are two primary objectives behind the use of this methodology.Performance Management and Appraisal Unit 15 performance appraisal. The aim of the performance evaluation feedback system is to: Identify the performance gap: It helps determine the gap between the actual performance of the employee and what exactly is required or desired by the organisation. These are to use it as: An evaluation system. selecting and compensation. These objectives may vary from organisation to organisation or even within the same organisation from time to time. finance and production. Performance appraisals are considered to be the most significant and indispensable tool for the management as they: Provide useful information towards the decision making concerned with areas of promotion. A feedback system. the employee is given an opportunity to speak about the problems to the superior. Let us understand as to how each one‟s objective is different from the other. the performance appraisal should talk about What task the individual is expected to do? How well the individual has done the task? How can his performance be further improved? The reward for doing well. Help to identify areas of concerns in the primary systems like marketing. From the viewpoint of the individual. Inform the employee about the quality of their work or performance: It acts as an interactive process. Almost all organisations practise performance appraisal in one form or another in order to achieve certain objectives. Enhance the knowledge required for training and counselling. merit rating and compensation reviews. wherein. This link behaves as the basis for judging the effectiveness of personnel sub functions which include recruiting. organisational objectives and also mutual objectives. 299 . Sikkim Manipal University Page No.
improve efficiency and effectiveness so as to serve as a mechanism of control and to provide a rational compensation structure. The key purpose of a performance appraisal is to. the mutual goals emphasise on: Growth Development Harmony Effectiveness Profitability Figure 15. 300 .Performance Management and Appraisal Unit 15 From the organisational view point.3 explains how performance ethics is achieved. It is basically a combination of the three factors.3: Performance Ethics The figure 15. leadership and ethics. Doing Performance appraisals without having clear objectives set in advance is a recipe for disagreement. the appraisal system should be able to establish and uphold the principle of accountability in the absence of which an organisation failure is the only possible outcome. measure what an employee does at work. performance. without any bias.3 illustrates the factors that contribute to performance ethics. a performance appraisal should be able to generate manpower information. Finally. argument and poor morale3. ETHICS PERFORMANCE ETHICS PERFORMANCE LEADERSHIP Figure 15. This implies that. A successful performance 3 The Key to Successful Performance Objectives-By Josh Greenberg Sikkim Manipal University Page No. namely.
Objectives of performance appraisal The most important objective of a performance appraisal is to review the employee‟s performance over a certain period of time. This makes it important to learn how to set employee goals and objectives. They help the staff members to achieve maximum results to promote business growth and make continuous improvements to meet the challenges and changing demands of the marketplace. and their interest should not be neglected. This in turn also increases harmony. Improve management's organisational control. Provide impartial information to base promotion and pay raise decisions. Performance appraisal should also aim at the mutual goals of both the employees and the organisation. Improve the working relationship between the management and their subordinates. Sikkim Manipal University Page No. This is essential because an employee can grow only when the organisation's interests are fulfilled. 301 . thereby enhancing the effectiveness of the employees.Performance Management and Appraisal Unit 15 appraisal will also measure the employee's value to the organisation and thus provides guidelines to improve their current performance and hence potential of the employee is increased. Performance appraisals go much more smoothly when there are clear objectives and criteria for evaluation. Mutual goals are one such which provides for growth and development of the organisation as well as of the human resources. Give an insight into the necessary training and development. These objectives are a necessity in setting clear goals for employees. Clarify job responsibilities. Let us classify all the above mentioned into three points that define the main objectives and aims that the performance should be able to achieve. It should be able to: Identify and close the gap between current and desired performance. The organisation's biggest strength is its employees. as mentioned earlier in this section. It also plays a major role in defining the end results expected through your employees‟ hard work and dedication. Performance objectives establish terms and criteria on how your business plans can be achieved.
It is important to be specific towards achieving results and guide action in result oriented ways towards the objective. performance objectives should be able to link back to the company's overall strategy and business plan. A clear definition of what they are specifically accountable for will help reduce confusion at the time of performance feedback. Accountable: Accountability for performance objectives must be made clear and should specifically defined as to who is accountable. This allows individuals to focus their efforts and guides them in making the necessary changes to achieve results. The more the detail the better. Defining accountability will ensure a sense of urgency and purpose on the part of the employee. Assign specific target dates for each of the performance objectives.Performance Management and Appraisal Unit 15 Now that we understand the importance of clear performance objectives. Well thought out performance objectives help to create a link between the direction of each individual employee and the goals of the entire organisation. Sikkim Manipal University Page No. let us investigate the criteria of a well documented performance objective. it must be realistic and reasonable. A well written performance objective focuses on the goals and the path required to meet the objective. Strategically Linked: Every performance objective is linked to the overall business plan and strategy of the organisation. Some objectives can be measured quantitatively while others may be measured qualitatively. Complex objectives should be broken into sub-objectives. Criteria of a successful performance objective The criteria‟s for successful performance objective are Specific: Keeping objectives simple ensures that they are clear and specific. Measurements are subject to change and should be reviewed periodically. Measurable: Every objective can be measured. 302 . but should not be unrealistic or unattainable. Ultimately. It reduces the chances for disputes or confusion during the performance appraisal time. Time based: An achievable time frame must be set for reaching the organisation‟s goals. Objectives should challenge employees towards continuous improvement. Realistic: For an objective to be meaningful.
Explain the role of ethics in performance appraisal. Hence. 12. Performance appraisal should aim at the ___________ of both the employees and the organisation. 2. Most importantly. What are the steps involved in creating an ethical organisation? 3. Sikkim Manipal University Page No. we can come to the conclusion that Performance objectives must be clear and should be able to guide action. 15. We discussed how the human resource management plays a significant role in the creation of an ethical environment. A system of accepted beliefs which control behaviour. Someone who works for a government or large organisation and deals with the complaints made against it.6 Glossary Term De facto Ethics Ombudsperson Resources Description Existing in fact. especially a system based on morals. legal or accepted. Performance appraisals go much more smoothly when there are clear _____________and criteria for evaluation. It should be able to lead the company to achieve great heights. We have also studied the objectives of the organisation for providing performance appraisal feedback.7 Terminal Questions 1. we have understood the role of ethics in the performance appraisal feedback systems in the organisation. 303 . We also learnt the strategies involved in the creation of an ethical organisation. 15. Briefly explain the role of HRM in creating an ethical organisation. 15. This has helped us to understand why we need to inculcate ethics in an organisation.Performance Management and Appraisal Unit 15 Self Assessment Questions 11. A useful or valuable possession of an organisation. although not necessarily intended.5 Summary By now you must have understood the various ethics involved in performance appraisal systems and the various performance practices followed in India.
False 3. True 4. Integrated 10. Business ethics 7. Ethical 11. Refer section 15. 15.4 Objectives of the Organisation for Providing Performance Appraisal. 3. What should be the objectives of an organisation while providing Performance Appraisal? 5. 5.4 Objectives of the Organisation for Providing Performance Appraisal. Ethics program 9. True 2.1 Creating an Ethical Organisation. Mutual goals Answers to Terminal Questions 1. Ethical issues 8. Refer section 15. Briefly explain the criteria involved in successfully planning the performance objectives.2. 304 .8 Answers Answers to Self Assessment Questions 1. 4. Objectives 12. False 6.Performance Management and Appraisal Unit 15 4. Refer section 15. Refer section 15.2 Role of HRM in Creating an Ethical Organisation. Refer section 15. False 5. Sikkim Manipal University Page No. 2.3 Role of Ethics in Performance Appraisal.
Soon after ABC started. if the score for two employees was identical. he responded. The company's been very good to them. Each department manager was to submit a list of employees ranked by the average score of their last three appraisals. the company decided to make its lay-off decisions based on the annual performance appraisal scores of the employees. He is the only nonfamily member of the company. 305 . As ABC was reviewing the evaluations. "Oh. They just aren't performing the way they used to. they told him these employees had been with the company almost since the beginning. They've got plenty of retirement Sikkim Manipal University Page No.Performance Management and Appraisal Unit 15 15. the CEO agreed to the long time employees' request that they keep receiving informal evaluations as they always had. At some point. The managers told ABC that they had questioned this decision. ABC became the chief financial officer and a member of the Executive Committee of a medium-sized and moderately successful family-owned contracting business six months ago. The CEO was relying on ABC to help him determine how to downsize in an ethical manner. but it's time for them to retire anyway.9 Case study The Role of Ethics in Performance Appraisal Mr. who had been through this before when he was a senior manager in his previous company. ABC. and those below the line would be laid off. or if there was some extraordinary circumstance. he was puzzled to find three departments in which the employee at the bottom of the list had "N/A" where the evaluation score should have been written. When he asked the managers to explain. When performance appraisals had been instituted six years earlier. ABC and the Executive Committee would draw a line. the manager would note it and make a decision about where to rank the person. If the employee had been with the company for less than three years. I know. agreed this was good for the long-term health of the 20-yearold company. When Frank raised this issue with the CEO. I haven't really evaluated them in a long time. On ABC‟s recommendation. the company decided for the first time to reduce the headcount to respond to rapid changes in its business. and the CEO had told them it wasn't their problem.
. They're making pretty good money. "They should.com/Articles/Apr2.3 2.." "Do they know they're not performing well?" Frank asked.ethicsgovernance.com/..scribd.4 Note: Case study has been taken from www. so cutting them should let us lower the line a little and save jobs for some of the younger people--you know. 306 .Performance Management and Appraisal Unit 15 stored away. No way they'd do that.in/ethics-of-performance-appraisals/ http://www. Business Ethics: An Indian Perspective. "I don't know. Fernando (2009). not to mention the severance you've convinced me to offer.com/./Business-Ethics-Between-Morality-and-Compulsory www.org/experts/succobj. ABC‟s initiative to deal with this situation? Hint: Refer section 15.html ____________________ Sikkim Manipal University Page No./the-case-of-the-performance-appraisal.. E-references http://bms.com/. And don't worry about a lawsuit. young kids with families just starting out." Questions: 1./the-case-of-the-performanceappraisal.com/quotes/authors/daniel_defoe_a001.. What according to you should be Mr.ethics-governance. Everybody else in the company does.giga-usa. What was the drawback of this company? Hint: Refer section 15.htm www.html References C. Dorling Kindersley (India) Private Limited.co." the CEO responded..e-hresources.htm www.htm http://performance-appraisals.
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