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Analyzing, Assessing & Review of Performance

Performance Planning
Pre-requisites Performance Planning

Performance Execution

Performance Assessment

Performance Review Performance Renewal & Recontracting

Defining Performance

Performance Mngt System includes measures of both: Behaviours and Results. 2 characteristics of behaviour are labelled as performance:

Evaluative: behaviour can be positive negative or neutral for individual ! organisational effectiveness Multidimensional: many "ind of behaviours that have the capacity to advance the organisational goals.


$ontribution to effectiveness of others in the %or" unit Set of behaviours
− − − − −

&or"s %ith others %ithin and outside the unit in a manner that improve their effectiveness Shares information and resources Develop effective %or" relationship Build consensus $onstructively manages conflict

Sales volume generated reflects that employee is engaged in right "ind of behaviour by the supervisor. 'll behaviours are not measurable and hence PM system include measures of result or conse(uences that %e infer are direct result of employee behaviour.  .

/ %ill give-up after little %hile v3s . ....Determinants of Performance  &hat causes some people to perform better than others) &hy some people perform at a certain level) −  Performance = Declarative knowledge X Procedural Knowledge X Motivation  Declarative *no%ledge: information about facts principles goals things about given tas" re(uirements./ %ill %or" today01 2evel of efforts ./ %ill persist no matter %hat01. Procedural *no%ledge: combination of %hat to do and ho% to do it include cognitive perceptual motor and interpersonal s"ills. Motivation: include + types of behaviour − − −   $hoice to perform ./ %ill put my best efforts at %or" v3s %ill not try hard1 Persistence of efforts .e#pend the efforts-.

Performance Dimensions    4as" Performance $onte#tual Performance 4as" Perfomance − − − − Part of 5ob description 6aries across the 5ob 2i"ely to be role prescribed 'ntecedents: abilities s"ills .

:utstanding customer service PM system to include both Tas & contextual !erformance dimensions  $onte#tual performance − − −  Significant impact on customer satisfaction: − − . 7elping and cooperating %ith others. 8airly similar across the 5obs 9ot li"ely to be role prescribed 'ntecedent: personality employee put an e#tra effort to satisfy customers. $onte#tual Performance: defined by behaviours that contribute to the organisational effectivness by providing a good enviornment in %hich tas" performance can occur /nclude behaviours li"e: − − −  Punctuality rare absenteism 6olunteering for tas"s that are not part of the 5ob.

Behaviour 'pproach +.4rait 'pproach 2.Result 'pproach  4rait 'pproach − − − Emphasis on individual ignores specific situation behaviour and result.'pproach to measure performance . Raters rate employee traits li"e intelligence conscientiousness Successful %hen ma5or restructuring is done in orgn<n employee allocation can be done using this approach ..

Behaviour approach  Emphasis is on behaviour %hile assessing performance. 'ppropriate %hen − − −   2in" bet%een behaviour and result is not obvious :utcome occurs in distant future Poor results are due to causes beyond performer=s control . Process oriented approach defines ho% employee does the %or".

$ost effective Data resuting is logical Most appropriate to use %hen − − − −     &or"ers are s"illed in needed behaviour Behaviour and results are related. Results sho% consistent improvement over time 4here are many %ays of doing the 5ob right. Bottom line approach focuses on result3%hat employee produces at the end.Result 'pproach  8ocus on result and do not consider traits or behaviour of individual. .

4ypes of Performance to Measure  Results produced by the employee − E#ample for a salesperson: 'mount of sales .>1 in the past month E#ample for a salesperson: 9umber of sales calls in the past month E#ample for a salesperson: 8riendliness  Behaviors of the employee −  Traits of the employee − "# .

e#amples of some results for %hich the store manager has responsibility and so should be held accountable1:     Sales of the store Profit per s(uare foot /nventory shrin"age $ustomer satisfaction Results matter .4ypes of Performance to Measure  Results-based results-oriented!" measure the results produced by the employee − E#amples for a retail store manager .usually1 "$ − Ma"es sense for most 5obs  .

4ypes of Performance to Measure  Results-based .more1 − $hallenges:      &hich results are relevant may not be obvious for all 5obs Some results are not under the employee?s control May foster a .results at all costs0 mentality May interfere %ith team%or" May be difficult to provide effective feedbac" "% .

4ypes of Performance to Measure  Behavior-based behavior-oriented!" measure the employee?s behaviors − E#amples for a retail store manager:      @ood attendance $ompletes management reports correctly ! on time Monitors customers and employees for theft $oaches employees to %elcome customers to the store ! offer assistance %ithin + minutes and to than" customers as they leave $onducts regular sessions %ith employees to develop team%or" Ase it %here how the employee produces results matters − Ma"es sense for many 5obs  "& .

4ypes of Performance to Measure  Behavior-based .Bou didn?t achieve your sales goal.0 .Bou are allo%ing your employees to %ait too long before offering help to customers.Measured by observations of a secret shopper1 Difficult to capture the full range of relevant behaviors − $hallenges:  "' .Measured by sales reports1 − 8eedbac" %ith behavior-oriented performance appraisal: .0 .more1 − 'dvantage: Ma"es it easier to provide effective performance feedbac" to employees  E#amples for a retail store manager: − 8eedbac" %ith results-oriented performance appraisal: .

racism ageism etc.1 7ard to use traits to provide effective feedbac" − 4his is usually a bad idea for several reasons:   "( .4ypes of Performance to Measure  Trait-based trait-oriented!" measure the employee?s personal characteristics − E#amples for a retail store manager:     'bility to ma"e decisions 2oyalty to the company $ommunication s"ills 2evel of initiative Measurements of traits are more li"ely to be sub5ect to biases .

Methods of 'ppraisal  Ran"ing methods − − − Simple Ran" :rder Paired $omparison 8orced Distribution @raphic Rating Scale Behaviourally 'chored Rating Scale $ritical /ncident 4echni(ue 'ssessment $entres  Rating methods − − − − .

.a b c1 or numerically . Ranking − − Simplest method Employees are rated from e#ceptional to poor on performance criteria /ndicate level of performance or competency achieved or displayed by an employee Scales can be defined   Rating − −  'lphabetically . 2 + C1 6erbal definitions li"e e#pectional performance: e#ceeds e#pectations and consistently ma"es an outstanding contribution that significantly e#tends the impact and influence of the role. .

Always -ften )airly -ften -ccasionally /ever *even Point *cale +Amount. Three Point *cale All Exceeding An Extraordinary Amount expectations  A great amount of .Rating )ive Point *cale +)requency.uite a bit of Moderate amount of *ome what /one  Fulfilling expectations Not fulfilling expectations  .

− Basic: ' contribution that indicates that there is significant room for improvement in several definable areas. .  Positive definition − provide positive reinforcement or atleast emphasi<es the need for improvement at the lo%er end. Scale deliberately avoids .  E#ample: − − 6ery effective: meet all ob5ectives of the 5ob e#ceeds re(uired standards and performs consistently beyond normal e#pectations.unacceptable0 rating or its e(uivalent. Positive and 9egative definition − − ': :utstanding performance in all the respects of the 5ob B: Anacceptable constant guidance is re(uired and performance at many aspects of the 5ob are %ell belo% standards.

$an be avoided by carefully %ording the level of description to ensure that the middle category is used appropirately. Raters concentrate on middle rating and avoid discriminating bet%een superior and inferior performance.  .Rating  Rating drift: tendency to push rating into higher categories.

 Ran"ing Method: 8orced-Distribution Method Employee apportioned in appro# normal distribution  2DE:E#ceeding E#pectations FDE: Meeting E#pectations .DE: 9ot meeting e#pectations Easy to e#plain Decisions resulting are clear 2imit baises Resulting data is a ran" so no actual score difference bet%een employees is un"no%n. #ited b$ Microsoft" Peo%le began to think that their %lacement in one of the bucket was large %art of the evualtion than the work the$ did& '( love the com%an$ but ( hate the #urve)    Merits:   Demerits  . E#-' might score better than B but the difference is similar bet%een B and $ employees.

DE must be rated H I E#cellent 2HE must be rated C I 6ery satisfactory CHE must be rated + I Satisfactory .Performance 'ppraisal Methods *orced distribution" evaluator must place a fi#ed percentage of employees in each performance category G E#ample: .HE must be rated 2 I Ansatisfactory HE must be rated . I 6ery unsatisfactory G 9ote that you are com%aring one employee to another G Problem: %hat if the distribution being forced doesn?t fit) #% .

/t %ill be done till all are ran"ed. Merit −   Simple $ost Effective 4ransparent 9ot suited for large %or"force  Demerit − . Managers are as"ed to place ran"ing of employees based on the most valuable to the least valuable.'lternation Ran"ing  &hen easier to distinguish a top performer from a %orst performer.

Em!loyees Managers A ' Manager 0 & Manager 1 ( Mean Ran Partha ' Sushmita 8 7 5 6.6 Tarna $ # " # *urender % ' & & Poonam % & & %2' .

9.      . :f employees to be rated if H employees than .Paired $omparison Ran"ing  Ma"e ran"ing precise Employee is paired %ith and compared to every other employee based on certain characteristics Manager provided t%o employees name and he need to mention %hich he considers better. 'll employees are compared %ith all possible combinations 8ormula---.132 9Jno.9-.D comparisions are re(uired.

Rating Methods ▸ Graphic Rating-Scale Method ◦ − ' trait approach to performance appraisal %hereby each employee is rated according to a scale of individual characteristics. Manager rates each employee by tic"ing relevant point on the scale %hich best describes employee performance. 'ssessment is done on (uality and (uantity of %or" Easy to construct understand and use. 'ssigned values are then totalled. 7igh degree of sub5ectivity Rating may means different to different people −  Merit −  Demerit − − .

Graphic Rating Scale with Provision for Comments .

4he manager "eeps a log or diary for each employee throughout the appraisal period and notes specific critical incidents related to ho% %ell they perform. 8ocus on t%o areas: particularly (uestionable outstanding behaviour and particularly (uestionable behaviours. $ategorises them as positive3satisfactory behaviour and negative3unsatisfactory behaviour.ritical !ncident Method ▸ 'n unusual event that denotes superior or inferior employee performance in some part of the 5ob. Employee=s rating is influenced by the %hich pile of data is taller: Satisfactory or Ansatisfactory. ▸ ▸ ▸ .

ones ordered a com%uter and it was delivered to the student/s teacher& 0o training was %rovide to the child1 her teacher1 her %arents& The la%to% was never used& (ncident recorded b$ a school %rinci%al regarding %erformance of Tom1 the head of disabilit$ services office! &eighing the no.$ritical /ncident 4echni(ue  + student with learning disabilities was e. ▸ .%eriencing difficult$ in writing& -er %arents wanted a la%to% for her& Tom . of satisfactory behaviours against the unsatisfactory can lead to erroneous conclusion if one unsatisfactory behaviour cost the company its best client or line of credit.

. of negative behaviours can be noted more than the positive ones.ritical !ncident "echni#$e  /ssues − − − 4ime consuming Difficult to (uantify the impact of incident 9o.

e.i.  $onsists of a series of scales one for each dimension of 5ob performanceK typically developed by a committee that includes both subordinates and managers. :riginally conceived by Smith ! *endall . NBehavioral anchors?1 %hich represents a dimension factor or %or" function considered important for performance Developed thorugh careful collection of observable 5ob behaviours that e#plicitly describe actual behaviour that e#emplify various level of performance in a 5ob: both superior and inferior.LM+1 are graphicperformance rating scales %ith specific behavioral descriptions defining points against each scale .. %ehaviorally Anchored Rating Scale &%ARS'   .

    .B'RS  Ase critical incidents as anchors. @roup of employees generate all important dimensions of a 5ob 'nother group of employees generate critical incidents mentioning lo% average high s"ills of performance for each dimension +rd gp of employees and supervisor ta"es each dimension and accompanying definition and randomi<ed list of critical incident. 4hey match critical incident %ith correct dimension @roup of 5udges assign a scale value to each incident.

 Oob *no%ledge:amount of 5ob related "no%ledge in all areas of his3her 5ob that an employee possesses. Exce!tional Em!loyee consistently dis!lays high level of 3ob nowledge in all areas of his4her 3ob2 -ther em!loyees go to this !erson for trainings2 *how high level of 3ob nowledge in most areas of his4her 3ob2 1onsistently com!letes all normal tas s2 *earch for more 3ob nowledge and may see guidance in some areas2 Em!loyee shows an average level of 3ob nowledge in all areas of the 3ob2 May need assistance in the com!letion of the 3ob2 Measuring Oob *no%ledge & % Advanced $ 1om!etent # 5m!rovement 6oes not consistently meets deadlines or com!lete tas s /eeded required for this 3ob2 6oes not attem!t ot acquie new s ills or nowledge to im!rove !erformance2 Ma3or Ty!ically !erforms tas s incorrectly or not at all2 Em!loyee has 5m!rovement no a!!reciation for im!roving his4her !erformance needed " .

(nowledge of Acco$nting Standards)"heory* 4echnical foundation application of "no%ledge on the 5ob ability to identify problem areas and %eigh theory v3s practice $ 7igh Point Performance 6is!lays very strong technical foundation8 able to !roficiently a!!ly nowledge on the 3ob8 wilingly researches areas8 able to identify !roblems8 can weigh theory v4s !ractice2 1an resolve normal accounting issues8 has adequate technical foundation s ills8 a!!lication requires some refinement8 has !roblem in weighing theory v4s !ractice8 can identify ma3or !roblem areas2 # Mid Point Performance " 9ow Point Performance 6is!lay wea accounting nowledge and4or technical ability to a!!ly nowledge to situations4issues on an engagement8 has difficulty in identifying the !roblems and4or weighing factors of theory v4s !ractice .

%ARS +.ample .

LFF1 are summated scales based on statements about desirable ! undesirable %or" behavior.%ehavior -. Preferred over B'RS for maintaining ob5ectivity distinguishing good performers from poor performers providing feedbac" and identifying training needs.critical incidents1. ◦ ◦ .servation Scale &%-S' ◦ ' performance appraisal that measures the fre(uency of observed behavior . Developed by 2atham ! &e#ley ..

%ehavioral hecklist Method  4he rater chec"s statements on a list that the rater believes are characteristic of the employee?s performance or behavior.H1 'gree :r @enerally .C1 Andecided :r Sometimes .21 Strongly disagree :r 9ever .+1 Disagree :r Seldom . Based on desirable or undesirable %or" behaviour $onduct performance revie%s on time $onducts revie%s as a dialogue %ith an employer 'ddresses learning needs of special students efficiently − − − − −    Strongly agree :r 'l%ays .1 ..


some of many1 for a retail store manager:  :b5ective: Sales goal for year I >2 million  Sub5ective: $ustomer satisfaction goal I average rating of C.Performance 'ppraisal Methods  Management B$ 2b3ectives MB2!" evaluate employee 5ob performance in terms of the e#tent to %hich the employee achieved each of his or her goals during a specified period of time − @oals can be both ob5ective and sub5ective − E#ample goals .H on H-point customer satisfaction rating scale − $ommonly used for managers and professionals %" .

C2..D. %# . p.Performance Management $ycle Development Tool Administrative Tool Source of figure: 'dapted from 8isher Schoenfeldt ! Sha% .2DDM1 8igure .

r.'ppraisal 8orms  $ore of any performance mngt system entails: Basic employee information 'ccountabilities ob5ectives and standard −   Result 'pproach: name and description of each accountability ob5ectives agreed upon by manager and employee e#tent to %hich they are achieved. :b5ectives are %eighted in terms of importance %hich leads to calculations of overall performance score. $ompetencies and /ndicators: Behaviour 'pproach: include behavioural competencies to be assessed %ith behavioural indicators. − . /n some cases described %ith OD %. &hy performance is high3lo%.t.

Employee $omments: 7elp in perceived fairness of the system. Developmental 'chievements:information about the e#tent to %hich developmental goals are set for revie% and acheived. Signature      . Ma5or 'chievement and $ontributions: /nclude ma5or achievement3accompalishment of individual being rated during period.people %ho have /st hand e#perience and affected by employee performance1. Developmental needs plan and goals: %hen form is future oriented includes information about goals and timetables for employee development. Sta"eholder input: 2i"e $ustomer feedbac" . $ould focus on result and behaviour both. 2i"e %or"shop training attended ne% s"ill learned.

used for developmental purposes1.$haracteristics of 'ppraisal forms  9o universally correct format. 8e% may emphasi<e on competency and ignore results . Sufficiently descriptive so that a third party can clearly understand the performance information conveyed. $an focus on development and ignore behaviour3result . Descriptiveness: Rater to provide evidence for performance regardless of performance level.for result approach1.for behaviour approach1 or vice-versa . /eat$res* Simplicity: easy to understand use administer (uic" to complete concise. Relevancy: /nformation on tas" and 5ob responsibility.      .

$omprehensiveness: /nclude all ma5or areas of performance for a particular position for entire revie% period.     . $omprehensiveness: include all ma5or areas  'daptability: 'llo% managers in different functions3dept to adapt them for particular needs. Enhance consistency of rating. $ommunication: form components are successfully communicated.%ide spread use of form. Definition $larity: Desirable competency and results are clearly e#plained for all raters so that everyone evaluates the same attribute.. 4ime :rientation: 'ddresses past and future aspects.