Performance

Management
Andung J. Nugroho, ST., MSc.

1
 Perspective
Macro Micro

Hard Basic facilities such Production capacity

Infrastructure airport, road systems and
water supplies

Soft Free market policies Company policies

Infrastructure Fiscal & monetary policies Corporate management
Social economic Organization &
environment administration
Work ethics Corporate culture
Human resource Training and development
development

2
Perspective
• GE, HP, Jawa Post, memakai Forced Ranking Systems:
• GE: Top 20%, Mid 70%, bottom 10%
• HP: Top 15%, Bottom 5%
• Ada konsekuensi terhadap hasil rangking ini!
• Apakah sistem ini merupakan sistem terbaik untuk me-
manage kinerja?
• Jika semua anggota tim adalah ‘superstars’ apakah sistem ini
adil?

3
Requirements of Performance
Management

ce
an
rm
rfo
Pe
e
in
ef
D
To energize
employee
performance
o u rage
En c a n ce F
Pe a c i l i
r m
Perfo rfo tat
rm e
an
ce
4
Define Performance
• Key elements
• Goals
• Measures
• Assessment
• Goal yang tidak jelas, e.g. “make the company
successful” tidak memberikan efek positif!! Buat
lebih tangible: Menurunkan defect 10%!
• Goal setting can improve productivity by 10%
[Cascio, 2005]
5
Performance Facilitation
• Eliminate roadblocks to successful performance
• Provide adequate resources to get job done right and on time
• Pay careful attention to selecting employees

6
Selecting Employees
• Microsoft, with more than 15000 employees, hires software
writers “like we’re a ten-person company hiring an 11th”
• Salah orang bisa menurunkan produktivitas dan
“mempengaruhi” yang lain!

7
Encourage Performance
To encourage performance, especially repeated good
performance:
• Provide a sufficient amount of rewards that employees really
value,
• In a timely,
• Fair manner

8
Provide reward in a timely
• If there is an excessive delay between effective performance
and receipt reward, then the reward loses its potential to
motivate subsequent high performance!

9
Fair manner
• Voice—collect employee input
• Consistency—ensure that all employees are treated
consistently
• Relevance—rewards that employees really care
• Communication—explain clearly the rules and logic of the
rewards process

10
Performance Appraisal
• To improve employees’ work performance
• To provide information to employees and manager for use in
making work-related decisions

11
Performance Appraisal
Employment decisions

Diagnosis of Purposes of
organizational Performance Appraisal Employee feedback
problems Systems

Objectives for Criteria in test

training programs validation
12
Effective Appraisal System
• Relevance
• Clear link between performance standards and the
jobs
• Sensitivity
• Capable to distinguishing effective and ineffective
performer
• Reliability
• Consistency of judgment
• Acceptability
• By all (the most)
• Practicability
• Easy for manager and employees to understand and
use 13
Relationship of performance standards
to appraisal
Job Analysis Performance Performance
Standard Appraisal

Describes Translate job Describes the

work and requirements job-relevant
personal into level of strengths and
requirements acceptable/ weaknesses of
of a particular unacceptable an individual or
job performance team

14
Catatan:
• If appraisal of past performance is to be used as
predictor of future performance (i.e.,
promotions), evidence must show that
• The ratings of past performance are, in fact, valid
• The ratings of past performance are statistically
related in the future performance in another job
• Organization should keep accurate records of
who is eligible for and interested in promotion.

15
(Sampai Sini)Example: PER-50

Goal or Project: Observation:

Complete a Inventory completed;

detailed physical documentation detailed
inventory of and neat. Great Job!
mowing Thanks
equipment by
< date >.

16
.040 Overall Rating
Consistently Exceeds Expectations
10% - 20% of the workforce

Occasionally Exceeds Expectations

20% - 30% of the workforce

Meet Expectations
40% or more of the workforce

Below Expectations
Less than 10% of the workforce

17
 Per-50 Communicate
(Optional) PER-47
Expectations
Performance Employee
on Goals and Performance
Projects Review

Observe Observe
Performance Performance

Provide Provide
Feedback Feedback

Per-49 PER-48
(Optional) (Optional)
Professional Employee’s
Development Annual Report
& Growth Plan Communicate
of Activities 18
Expectations
Methods of Appraising Employee
Performance
• Behavior-Oriented Rating Method
• Process
• Results-Oriented Rating Method
• Product (MBO)

19
When and How Often Should Appraisal be
Done?
• Traditional: once or twice a year
• Hard to remember what several employees did over the previous
6 or 12 months. (Need a diary!)
• Western Digital, Southern California Gas, Fluor:
• Add frequent, informal “progress” reviews between annual ones.

20
Effective of Performance Feedback
Interviews
Before
• Communicate frequently with subordinates about their
performance
• Get training in performance appraisal interviewing
• Plan to use a problem-solving approach rather than ‘tell-and-
sell’
• Encourage subordinate to prepare for performance feedback
interviews

21
Who Should Evaluate Performance?
• The immediate supervisor
• Peers
• Subordinates
• Self-appraisal
• Customers served
• Computers—computer software that monitors employee
performance

22
Effective of Performance Feedback
Interviews
During
• Encourage subordinate to participate
• Judge performance, not personality
• Be specific, and be active listener
• Set mutually agreeable goals for future improvements
• Avoid destructive criticism

23
Effective of Performance Feedback
Interviews
After
• Communicate frequently with subordinates about their
performance
• Periodically access progress toward goals
• Make organizational rewards contingent on performance

24