You are on page 1of 47

ACKNOLEDGEMENT First of all I would like to thank to ALLAH, who gave me strength to remake, and review this assignment.

I would also like to thank to those people who have helped me on this topic. On successful completion of this assignment I also thanks to my course facilitator SIR FAZAL AZIZ foe his all assistance and help. Who made me able to complete this task.

Thank you Regards, Aisha khan

INTRIODUCTION Performance management is a broad term coined by Dr. Aubrey Daniels in the late 1970s to describe a technology (i.e. science imbedded in applications methods) for managing behavior and results, two critical elements of what is known as performance.

Twenty-first century organizations and their leaders must understand and realize that their most important asset in achieving long-term success is not necessarily their technologies, but this competitive edge and the key to success lies in their people. This is why continuous performance assessment, coaching and developing of each employee in the organization are so critical in today s competitive workplace. Performance assessment and developing people are important elements of a holistic paradigm for the growth and development of organizations through effective performance management systems. Professor Herman Aguinis defined performance management as the continuous process of identifying, measuring, and developing the performance of individuals and teams and aligning performance with the strategic goals of the organization (2007). This definition emphasizes that an effective performance management program requires continuous feedback and improvement processes for the development of people. Aguinis states that A system that involves employee evaluations once a year without an ongoing effort to provide feedback and coaching so that performance can be improved is not a true performance management system (2007).

What Is Performance Measurement? Why did I choose this topic? Managers of any sports team need to know the running score so they can assess whether changes are needed for the team to win. Managers of public agencies and private, nonprofit organizations need similar information. For businesses, the running score is data on profits and market share. Costs alone mean little. Measuring that running score and using it for better performance are the subject of my assignment a subject popularly called performance measurement.

Performance measurement has many meanings, but it is defined here as regular measurement of the results (outcomes) and efficiency of services or programs.

There are three major determinants of performance like. Declarative knowledge. Procedural knowledge and motivation. These are the factors which affect an individual s performance. As we have three determinants we have three approaches also available also and the approaches are trait approach , behaviors approach and results approach now the question is which approach is to be adopted to get better results, this assignment we will discuss at the given situation which approach should be adopted.

DEFINING PERFORMANCE Performance management system usually includes measures of both behaviors (what an employee does) and results (the out comes of an employees behavior). The definition of performance does not include the results of an employees behaviors, but only the behaviors themselves. Performance is about behavior or what employees do, not about what employees produce or the outcomes of their work.
Performance is

Behavior What employees do


Performance is not

Results, outcomes what employees produce? Behaviors labeled as performance are 1 Evaluative Negative Natural Positive 2 Multi dimensional Many different kind of behaviors Advance or hider organizational goals

Behaviors are not always

Observable Measurable

DETERMINANTS OF PERFORMANCE What factor causes an employee to perform at a certain level???????? Why do certain people better perform then others????? A combination of certain three factors allows an individual to perform at high levels. 1. Declarative knowledge. 2. Procedural knowledge 3. Motivation Declarative knowledge is information about facts and figures it also including information regarding given task s requirements, labels, principles and goals. Procedural knowledge is a combination of knowing what to do and how to do and also includes cognitive, physical, motor, and inter personal, skills. Motivation It involve three types of choices of behaviors 1 Choice to put/ expend effort 2 choice of level of effort 3 choices to persist in the expenditure of the level of effort Performance= declarative knowledge X procedural knowledge X motivation If we assume that a determinant has a value of 0 then performance would also be 0. For example Consider an individual Mr. X who works in a store has impressive and excellent declarative knowledge, regarding store merchandise, we consider

Mr. X as a intelligent person as he has complete information about store so we consider Mr. X procedural knowledge is also very high but some how some way he is not willing to perform or we can say he is demotivated. When customer comes he does not approach them to buy some thing instead he keeps on talking on phone so over his performance is said to be POOR

Factors determining performance


Declarative knowledge procedural knowledge motivation

Facts perform Principles effort Goals effort

cognitive skills

choice to

physomotor skills

level of

physical skills

persistence

Interpersonal skills

Top performers keep their selves engage in deliberate practice. Deliberate practice involves five steps 1 Approach performance with the goal of getting better and better 2 As you are performing focus on what is happening, and any you are doing things the way you do. 3 Once your task is finished see performance feed back from experts and more sources. 4 Build mental model of your job, your situation, your organization. 5 Repeat step 1---4 continually and on ongoing basis.

MOTIVES, EVPECTANCIES OF SOURCES AND VALUES AS DETERMINANTS OF PERFORMANCE

Lewin s model of motivated behavior identified three variables very similar to those used by behaviors like Hull and Spence, although Lewin defined them in phenomenological or cognitive terms. He spoke the need or tension which is equal to drive strength properties of goal object which is equal to incentive value and psychological distance, which is a kind of phenomenological equivalent of the skill or habit variable in terms of how easy or hard to achieve the objective. The initial formula read as follow T=MXPXI Where T is the tendency to achieve success M is multiplicative function of the motive to achieve success P is expectancy or probability of success I is incentive value of success It was assumed that the incentive value of success could be defined as 1 _ P which means more difficult task the less probability of successuding it. Two types of such beliefs have been studied. One type has to do efficacy of effort in bringing about a consequence through a particular response in a given situation. The other type has to do generalize confidence people have that they can bring about outcomes through activities of any kind. So we can say that a belief in importance of effort facilitates performance.

IMPLICATIONS FOR ADDRESSING PERFORMANCE As we have discussed earlier performance is affected by the three (3) factors and these three factors has implications for addressing performance problems. In order to address performance problem manager must find information that will allow them to understand weather the source of problem is of declarative knowledge, procedural knowledge, motivation or some combinations of these factors. If an employee lacks motivation but manager believes the source of problem is declarative knowledge, the manager may sent employee to any training program so he can acquire the lacking knowledge. This would be nothing but wastage of time because it s the problem is lack of motivation not lack of declarative knowledge, procedural knowledge. This is why performance management systems need not only to measure performance but also to provide information about source of any performance deficiencies.

FACTORS INFLUACCING DETERMINANTS OF PERFORMANCE The factors that determine performances are affected by the employee (abilities, and previous experience), HR practice and work environment. In terms of procedural knowledge, employees may actually have the knowledge to perform certain tasks but may not have the skill to do them because of lack of opportunity for practice. In many companies declarative knowledge is not likely to be a big problem because when lack of knowledge is identified, employees have multiple opportunities to fill in the gap. However performance problems may be related more to procedural knowledge and motivation. In other words employee may have knowledge to perform certain tasks but may not have skills to do them because of lack of opportunity.

In terms of motivation, downsizing interventions may have caused SURVIVOR SYNDROME, which includes retained employees feelings of frustration, resentment, and even anger. These feelings are likely to have strong negative effects on motivation, and employees may expend minimal energy on their jobs. Thus, there are three individual characteristics that determine performance: Procedural knowledge, declarative knowledge and motivation. In addition HR practices and the work environment can affect performance. These are three individual characteristics that determine performance in addition HR practice and the work environment can affect performance. Manager first need to identify which of these factors is hampering performance and then help the employee improve his or her performance. PERFORMANCE DIMENSIONS As it was described earlier performance is a multidimensional process, which means we need to consider many different types of behaviors to understand performance. We can identify two different specific behaviors to understand performance. Facets stand out Task performance Contextual performance Contextual and task performance must be consider separately because they don t necessarily occur in tandem. An employee can be highly proficient at his task but be underperformer regarding contextual performance. Task performance is defined as Activities that transform raw material raw material into goods and services that are produced by organization. Activities that help transformation process by replenishing the supply of raw materials, distributing its finished goods, or providing important planning, coordination, supervising, or staff functions that enables the organization to function effectively and efficiently. CONTEXTUAL PERFORMANCE Contextual performance is defined as those behaviors that contributes to the organization s effectiveness by providing good environment in which

task performance can occur. Contextual performance includes behaviors such as the following Persisting with enthusiasm and exerting extra effort as necessary to complete one s own task activity successfully (e.g. being punctual and rarely absent, expending extra effort on job) Volunteering to carry out task activities that are not formally part of job (e.g. suggesting organizational improvement, making constructive suggestions) Helping and cooperating with others (e.g. assisting, helping coworkers) Following organizational rules and procedures Endorsing, supporting, and defending organizational objectives. Both task and contextual performance are important dimensions to take into account in performance management system. Many organizations now realize that there is need to focus on both task and contextual performance because organization can not function properly without a minimum dose of positive contextual behavior on the part of all employees.

Task performance

Contextual performance

Varies across jobs Likely to be role prescribed prescribed Antecedents: abilities and skills

fairly similar across jobs not likely to be role

antecedent: personality

Above are main differences between task and contextual performance. First task performance varies across jobs which mean task performed by HR manager must be different by the task preformed by LINE MANAGER. On the other hand contextual performance is fairly similar across functional and hierarchical level. Second task performance is likely to be role prescribed, meaning that task performance is usually included one s job description. On the other hand contextual performance behaviors are usually not role prescribed and instead are typically expected without making them explicit.

Finally task performance is mainly influenced by abilities and skills (cognitive and physical), whereas contextual performance is mainly influenced by personality (conscientiousness). There are main reasons that why task performance is included in performance management system 1 global competition is raising the level of effort required of employees. 2 issues of global competition is need to offer out siding from customer service. Contextual performance behaviors can make a profound impact on customer service. Contextual performance can make an impact on customer satisfaction. 3 many organizations are forming employees into teams. Although some teams are not permanent because they are created to complete specific short-term tasks. Interpersonal is a key determinate of team effectiveness. Thus contextual performance becomes relevant to team work. 4 including both task and contextual performance in the performance management system provide additional benefits: employees being rated are more satisfied with the system and also believe the system is fairer if contextual performance is measured in addition to task performance. 5 when supervisors evaluate performance its difficult for them to ignore the contextual dimension, even through the evaluation from they are using may not include any specific question about contextual performance. Since contextual performance has an impact on rating on overall performance even when only task performance is measured, it makes sense to include contextual performance more explicitly.

In short performance includes both task and contextual dimension. Both should be considered because both dimensions contribute to organizational success. In case of both task and contextual performance, each behavior should be defined clearly so that employee understands what is expected of them. Organization that includes both task and contextual performance are likely to be more successful.

JOB PERFORMANCE IN CONTEXT

A performer

In a given
Individual or team

Employees in certain behaviors

Situation

That produce various results RESULTS

TARIT

BEHAVIOUR

APPROCHES TO MEASURING PERFORMANCE TRAIT APPROCH Emphasizes on individual trait of employees. BEHAVIOUR APPROCH Emphasizes hoe employee do the job. RESULTS APPROCH Emphasizes what employee produce.

TRAIT APPROACH

Traits are an implicit part of most measurement procedures in applied psychology. There are many interperatations of trait sources. Differences in interpretations have profound societal, scientific, and clinical implications. It is also assumed that traits defined by an assessment process are more less valid reflection of the behaviors of the person being described.

The trait approach emphasizes the individual performer and ignores the specific situation, behaviors, and results. If one adopts the trait approach, raters evaluate relatively stable traits. These can include abilities, such as cognitive abilities (which are not easily trainable) or personality (which is not likely to change over time). For example, performance measurement may consist of assessing an employees intelligence and conscientiousness at the end of each review period. This approach is justified based on the positive relationship found between abilities (such as intelligence) and personality traits (such as conscientiousness) and desirable work-related behaviors. A traits approach also emphasizes individual traits that remain fairly stable throughout an individuals lifespan (e.g., cognitive abilities or personality). This approach may be most appropriate when an organization anticipates drastic structural changes. A major disadvantage of this approach is that traits are not under the control of individuals, and, even when individuals possess a specific positive trait (e.g., high intelligence), this does not necessarily mean that the employee will engage in productive behaviors leading to desired results. 

What are some of the challenges of implementing a system that emphasizes the measurement of traits only? First, traits are not under the control of individuals. In most cases, they are fairly stable over one s Life span. They are not likely to change even if an individual is willing to exert substantial effort to do so. Consequently, employees may feel that a system based on traits is not fair because the development of these traits is usually beyond their control.19 second; the fact that an individual possesses a certain trait (e.g., intelligence) does not mean that this trait will necessarily lead to desired results and behaviors. As noted in Figure 4.1. Individuals are embedded in specific situations. If the equipment is faulty and coworkers are uncooperative, even a very intelligent and conscientious employee is not likely to engage in behaviors conducive to supporting the organization s goats. In spite of these challenges, there are situations in which a trait-oriented approach can be fruitful. For example, as part of its business strategy. An

organization may anticipate drastic structural changes that will result in the reorganization of most functions and the resulting reallocation of employees. In such a circumstance, it may be useful to assess the traits possessed by the various individuals so that fair and appropriate decisions are made regarding the allocation of HR resources across the newly crated organizational units. This is, of course, a fairly unique circumstance. In most organizations. Performance is not measured using the trait approach. Two more popular approaches to measuring performance are based on behaviors and results, discussed next.
TRAIT APPROCH

Emphasis individual trait of employee: Evaluate stable traits Congnative abilities Personality Based on relationship between trairs and performance
Approptiate if

Structural changes planned for organization Disadvantages Improvement not under individual s control

Trait may not led to

Desired behaviours Desired results

BEHAVIOR APPROACH A behavior approach emphasizes what employees do (i.e., how work is done). This approach is most appropriate when (a) it will take a long time to achieve the desired outcomes, (b) the link between behaviors and results is

not obvious, (c) outcomes are distant in the future, or (d) poor results are due to causes beyond the employees control. A behavior approach may not be the best choice if most of these conditions are not present. In most situations, however, the inclusion of at least some behavior-based measures is beneficial.

The behavior approach emphasizes what employees do on the job and does not consider employees traits or the outcomes resulting from their behaviors. This is basically a process-oriented approach that emphasizes how an employee does the job.

The behavior approach is most appropriate under the following circumstances: The link between behaviors and results is not obvious Sometimes the relationship between behaviors and the desired outcomes is not clear. In some cases, the desired result may not be achieved in spite of the fact that the right behaviors are in place. For example, a salesperson may not be able to close a deal because of a downturn in the economy. In other cases, results may be achieved in spite of the absence of the correct behaviors. For example, a pilot may not be check all the items in the preflight checklist but the flight may nevertheless be successful (i.e., take off and land safely and on time). When the link between behaviors and results is not always obvious, it is beneficial to- focus on behaviors as opposed to outcomes.

Outcomes occur in the distant future

When the desired results will not be seen for months, or even years, the measurement of behaviors is beneficial. Take the case of NASAs Mars Exploration Rover Mission program. NASA launched the exploration rover Spirit on June 10, 2003, which landed on Mars on January 3,2004, after traveling 487 million kilometers (302.6 million miles). Its twin, the exploration rover Opportunity, was launched on July 7, 2003, and landed on the opposite side of Mars on January 24, 2004. From launching to landing, this mission took about six months to complete. In this circumstance it is certainly appropriate to assess the performance of the engineers involved in the mission by measuring their behaviors in short intervals during this six-month period rather than waiting until the final result (i.e., successful or unsuccessful landing) is observed.

Poor results are due to causes beyond the performers control

When the results of an employee s performance are beyond the employee s control, then it makes sense to emphasize the measurement of behaviors. For example, consider a situation involving two assembly-line workers, one of them working the day shift and the other the night shift. When the assembly line gets stuck because of technical problems, the employee working during the day receives immediate technical assistance, so the assembly line is back in motion in less than five minutes. In contrast, the employee working the night shift has very little technical support and, therefore, when the assembly line breaks down, it takes about 45 minutes for it to be up and running again, If we measured results, we would conclude that the performance of the day-shift employee is far superior to that of the night-shift employee, but this would be an incorrect conclusion. Both employees may be equally competent and do the job equally well. The results produced by these employees are uneven because they depend on the amount and quality of technical assistance they receive when the assembly line is stuck.

Behavior approach
Appropriate if

Employees take a long time to achive desired outcomes Link between behaviors and results is not obvious Outcomes occur in the distant future Poor results are due to causes beyond the performers control
Not appropriate if

Above conditions are not present

RESULTS APPROACH A results approach emphasizes the outcomes and results produced by employees. This is basically a bottom-line approach that is not concerned about how the work is done as long as certain specific results are obtained. This approach is most appropriate when (a) workers are skilled in the needed behaviors, (b) behaviors and results are obviously related, (c) results show consistent improvement over time, or (d) there are many ways to do the job right. An emphasis on results can be beneficial because it could encourage employees to achieve the desired outcomes in creative and innovative ways. On the other hand, measuring only results is typically not welcomed by employees, even in types of jobs for which the expected result is very clear (e.g., as in the case of sales jobs such as at The Limited).

The results approach emphasizes the outcomes and results produced by the employees. it does not consider the traits that employees may possess or how employees do the job. This is basically a bottom-line approach that is not concerned about employee behaviors and processes but, instead, focuses on what is produced (e.g. sales, number of accounts acquired, time spent with clients on the telephone, number of errors). Defining and measuring results usually takes less time than defining and measuring behaviors needed to achieve these results. Also, the results approach is usually seen as more costeffective because results can be less expensive to track than behaviors. Overall, data resulting from a results approach seem to be objective and arc intuitively very appealing. The results approach is most appropriate under the following circumstances:

Workers are skilled in the needed behaviors An emphasis on results is appropriate when workers have the necessary knowledge and skills to do the work. In such situations, workers know what specific behaviors are needed to achieve the desired results and they are also sufficiently skilled to know what to do to correct any process-related problems when the desired results arc not obtained. Consider the example of a professional basketball player. A free throw is an unhindered shot made from the foul line which is given to one team to penalize the other team for committing a foul. Free throw shooting can make the difference between winning and losing in a close basketball game. Professional players know that there is really no secret to becoming a great free throw shooter: just hours and hours of dedicated practice besides actual basketball play. In assessing the performance of professional basketball players, the free throw shooting percentage is a key results- oriented performance indicator because most players have the skills to do it well. Its just a matter of assessing whether they do it or not.

Behaviors and results are obviously related.

In some situations, certain results can be obtained only if a worker engages in certain specific behaviors. This is the case of jobs involving repetitive tasks such as assembly-line work or newspaper delivery. Take the case of a person dcli4iering newspapers Performance can be measured adopting a results approach: whether the newspaper is delivered to every customer within a particular time frame. For the employee to obtain this result, she needs to pick up the papers at a specific time and use the most effective delivery route. If these behaviors arc not present, the paper will not be delivered on time.
Results show consistent improvement over time

When results improve consistently over time, It is an indication that workers are aware of the behaviors needed to complete the job successfully. In these situations, it is appropriate to adopt a result approach to assessing performance.

There are many ways to do the job right.

When there are different ways in which one can do the tasks required for a job, a results approach is appropriate. An emphasis on results can be beneficial because it could encourage employees to achieve the desired outcomes in creative and innovative ways.

Adopting a behavior approach to measuring performance Li most appropriate when

The link between behaviors and results is not obvious Outcomes occur in the distant future Poor results are due to causes beyond the performers control

Adopting a results approach so measuring performance is most appropriate when

Workers are skilled in the needed behaviors Behaviors and results are obviously related Results show consistent improvement over time There are many ways to do the job right

Columbus, Ohio. The Limited, Inc., now operates 3,500 retail stores and seven retail brands, including Victoria s Secret, Express, The Limited, Bath & Body Works, C. 0. Bigelow, The White Barn Candle Co., and Henri BendeL The Limited aims to foster an entrepreneurial culture for its managers: therefore, managers who thrive in the company have a history of delivering impressive business results. The Limited decided to design a new performance management system that is now used uniformly by all The Limited companies. With the involvement of outside consultants and employees, The limited developed a performance management system wherein managers arc measured on business results including total sales, market share, and expense sale growth ratio, as well as leadership competencies that are tailored to The Limited. A few of these competencies include developing fashion sense, financial acumen, and entrepreneurial drive. Overall, The Limited has been pleased with the new system because It helps align individual goals

Behavior approach verses results approach

The link between behaviors and results is not obvious Outcomes occur in the distant future Poor results are due to causes beyond the performers control Adopting results approach to measuring performance is most appropriate when Workers are skilled in the needed behaviors Behaviors and results are obviously related Results show consistent improvement over time There are many ways to do the job right. RESULTS APPROCH
Advantages

Less time Lower cost Data appear objective

CONCLUSION

Performance is about behavior or what employees do, not about what employees produce or the outcomes of their work. Performance management systems typically include the measurement of both behaviors

(how the work is done) and the results (the outcomes of one s work). Performance is evaluative (i.e., we judge it based on whether it helps advance or hinder organizational goals) and multidimensional (i.e., many behaviors are needed to describe an employee s performance). Performance is determined by a combination of declarative knowledge (i.e.. information), procedural knowledge (i.e., know-how), and motivation (i.e., willingness to perform). Thus, Performance = Declarative Knowledge X Procedural Knowledge X Motivation. If any of the these determinants of performance has a very small value (e.g.. very little procedural knowledge), then performance will also have a low level. All three determinants of performance must be present for performance to reach satisfactory (and better) levels. There are two important facets of performance: task and contextual, Task performance refers to the specific activities required by one s job. Contextual performance refers to the activities required to be a good organizational citizen (e.g., helping coworkers, supporting company initiatives). Both task and contextual performance are needed for organizational success, and both should be included in a performance management system. A traits approach emphasizes individual traits that remain fairly stable throughout an individuals lifespan (e.g., cognitive abilities or personality). This approach may be most appropriate when an organization anticipates drastic structural changes. A major disadvantage of this approach is that traits are not under the control of individuals, and, even when individuals possess a specific positive trait (e.g., high intelligence), this does not necessarily mean that the employee will engage in productive behaviors leading to desired results.

A behavior approach emphasizes what employees do (i.e., how work is done). This approach is most appropriate when (a) it will take a long time to achieve the desired outcomes, (b) the link between behaviors and results is not obvious, (c) outcomes are distant in the future, or (d) poor results are due to causes beyond the employees control. A behavior approach may not be the best choice if most of these conditions are not present. In most situations, however, the inclusion of at least some behavior-based measures is beneficial. A results approach emphasizes the outcomes and results produced by employees. This is basically a bottom-line approach that is not concerned about how the work is done as long as certain specific results are obtained. This approach is most appropriate when (a) workers are skilled in the needed behaviors, (b) behaviors and results are obviously related, (c) results show consistent improvement over time, or (d) there are many ways to do the job right. An emphasis on results can be beneficial because it could encourage employees to achieve the desired outcomes in creative and innovative ways.

On the other hand, measuring only results is typically not welcomed by employees, even in types of jobs for which the expected result is very clear (e.g., as in the case of sales jobs such as at The Limited). Absolute systems include evaluations of employees performance without making direct reference to other employees. Such systems include essays, behavior checklists, critical incidents and graphic rating scales. Essays are difficult to quantify but produce useful and often detailed feedback. Behavior checklists are easy to use and understand, but the scale points used are often arbitrary, and we cannot assume that a one-point difference has the same meaning along the entire scale (i.e., the difference between employees scoring 5 and 4 may not have the same meaning as the difference between employees scoring 3 and 2). Critical incidents allow supervisors to focus on actual job behavior rather than on vaguely defined traits, but gathering critical incident data may be quite time consuming. Graphic rating scales are arguably the most frequently used measurement method to assess performance. For this type of measurement to be most useful, the meaning of each response category should be clear, the individual interpreting the ratings (e.g., HR manager) should be able to tell clearly what response was intended, and the performance dimension being rated should be clearly defined for the rater.

References  Performance management 2/e new edition by Aguinis page # 78  Human motivation by David C MaCcelland  Handbook of work and organizational psychology: Personnel psychology by
Pieter J D. Drenth page #15

 Human motivation page # 516


 Johan Leopold, Lynette Harris, Tony Waston. Strategic human resourcing Principles, perspectives and practicespitman Publishing  James Rollo.( 2001) Performance Management Pocket Guide Book  www.Shelfri.com  www.google books.com  www.ebooks.com  www.emerald.com

The Scope of Performance Measurement In New York City, a priest and a taxicab driver died and went to heaven. Saint Peter showed the priest his eternal dwelling placea shack. Saint Peter then showed the driver his eternal dwelling placea mansion. The priest was angry and asked Saint Peter, "Why the difference?" Saint Peter said, "When you preach, people sleep. When riders get into his cab, they pray!" For this book, RESULTS are what count! What Is Performance Measurement? Why Do It? Managers of any sports team need to know the running score so they can assess whether changes are needed for the team to win. Managers of public agencies and private, nonprofit organizations need similar information. For businesses, the running score is data on profits and market share. Costs alone mean little. Measuring that running score and using it for better performance are the subject of this booka subject popularly called performance measurement.
Performance measurement has many meanings, but it is defined here as regular measurement of the results (outcomes) and efficiency of services or programs. The new element in this definition is the regular

measurement of results or outcomes. Regular measurement of progress toward specified outcomes is a vital component of any effort at managing-for-results,1 a customer-oriented process that focuses on maximizing benefits and minimizing negative consequences for customers of services and programs. The customers may be citizens receiving services directly or citizens or businesses affected indirectly. If the right things are not measured, or are measured inaccurately, those using the data will be misled and bad decisions will likely

follow. As the old saying puts it: garbage in, garbage out. A major use of performance information is to establish accountability, so citizens and elected officials can assess what programs have achieved with the funds provided. Another major use is to help programs develop and then justify budget proposals. But performance information is at least as important to help managers throughout the year. Public and private managers often say that performance information will not help them because their problem is too few resources to do what needs to be done. Yet managers need performance information to help them decide how to increase their ability to get the job done with whatever resources they haveand to provide evidence to the budget decision makers that they are indeed getting the biggest bang for the buck. Programs have been tracking expenditures and physical outputs for decades. Tracking these elements is useful to program personnel but says little about what resultedhow customers and the public benefited. Regular tracking of outcomes is intended to fill this gap. Outcome tracking is the new kid on the block for most public and private services and programs, although ample precedents exist. Police and other law enforcement agencies for many years have regularly tracked and reported such data as crime and clearance rates. Transportation agencies have tracked accidents, injuries, and deaths. Health officials have tracked the incidence of serious diseases and mortality. Fire agencies have tracked the number of fires and the resulting injuries and deaths. Environmental protection agencies have tracked the pollutant content of air and water. School districts have tracked dropouts and test scores. However, such tracking focused on jurisdiction-wide data, not specific program outcomes that are essential information. Regular tracking is a key characteristic of performance measurement. For budget purposes, annual data are usually sufficient, but agencies and their managers need more frequent outcome information to assess the success of their program activities, identify where significant problems exist, and motivate personnel to strive for continuous service improvement.2 A particularly crucial outcome characteristic for public programs often neglected in discussions of performance measurementis equity. A well-designed measurement system enables agency managers to assess the fairness of a program and adjust it appropriately. A good performance measurement system will help officials demonstrate to the public and to policymakers that services

are delivered fairlythus building trust in the program. As chapter 8 discusses, disaggregating outcome data by the characteristics of the citizens affected is a major way to help assess equity. Limitations of Performance Measurement All those using performance measurement information, whether inside or outside government or in a private agency, should understand what it can and cannot do and keep their expectations realistic. Performance measurement has three primary limitations. 1. Performance Data Do Not, by Themselves, Tell Why the Outcomes Occurred In other words, performance data do not reveal the extent to which the program caused the measured results. This point is an important one. The analogy to managers of sports teams helps here. The manager needs to know the running score. If the team is losing, whether an individual game or over the whole season, the manager and other team officials may need to change the game plan. But the score does not tell the officials why the score is the way it is. Nor does the running score tell what specifically needs to be changed to improve the score. For that information, the managers, coaches, and other team officials need to seek explanations before they act. It is the same for service delivery. Managers and other officials need to track results and use that information to help guide them about what, if any, future actions to take. Performance measurement is designed primarily to provide data on outcomes (the score). But to be most helpful (as discussed in chapters 9 and 10), performance measurement systems also need to have built into them opportunities to analyze the details of program performance and steps to seek explanations for the outcome data such systems produce. This limitation raises a major issue in performance measurement that generates controversy: accountability. What should managers be held accountable for? In the past, the government of New Zealand had taken the view that responsibility for program outcomes rested solely with officials at the policymaking level, thus removing all accountability for outcomes from the operating departments. Important outcomes are seldom, if ever, fully under the control of a particular agency (public or private). Nevertheless, the agency and its personnel do share responsibility for producing those outcomes. As long as a program has any role in delivering a service intended to help produce particular outcomes, the managers of that programand its personnelhave a responsibility to track the relevant outcomes and

use that information to help improve results. Agency personnel and other officials are often too ready to believe they lack responsibility over outcomesin part out of fear that they will be blamed unfairly for poorer-than-desired outcomes. This fear is reasonable. However, recognizing shared responsibility helps agencies create innovative solutions that can improveservice outcomes, even in the face of highly limited resources. And this understanding can lead to more use of performance partnerships among programs, agencies, levels of government, and between the private and public sectors. 2. Some Outcomes Cannot Be Measured Directly The classic example is success in preventing undesirable events, such as prevention of crime or reduction of illicit drug use. In such cases, surrogates can usually be used, such as indicators that reflect trends over time in the number of incidents that were not prevented. This is not ideal, but this is the real world. 3. Performance Measurement Provides Just Part of the Information Managers and Elected Officials Need to Make Decisions Performance measurement does not replace the need for expenditure data or political judgments, nor does it replace the need for common sense, good management, leadership, and creativity. A major purpose of performance measurement is to raise questions. It seldom, if ever, provides answers by itself about what should be done. Exhibit 1-1 presents common objections from agencies and programs required to implement an outcome-based performance measurement process. Each objection is an element for concern. Subsequent chapters will address most of these concerns and hopefully will at least allay them. Outcome-Focused Efficiency Measurement In performance measurement, efficiency is usually defined as the ratio of the amount of input (usually monetary expenditures or amount of employee time) to the amount of product created by that input. Unitcost ratios that relate expenditures to physical outputs have been common in public agencies for years. The trouble with input-to-output ratios is they can be improved by reducing the quality of the output. If outcomes are tracked, a considerably more accurate indicator of true efficiency becomes possible. For example, cost per client served is an output-based efficiency indicator. Efficiency appears to increase when a program spends less per client, even if the condition of the

typical client deteriorates. Cost per client whose condition improved after services is an outcome-focused efficiency indicator. It gives a much more meaningful picture of a programs real accomplishments. Take the example of a program that holds regular sessions to help customers stop smoking. Cost per session held is considerably under the control of the program. Cost per customer who quits smoking is not, because whether someone quits probably also depends on a host of other factors besides the stop-smoking sessions. But is cost per session held a true measure of efficiency? Officials and citizens are considerably more likely concerned with efficiency in producing the desired outcome. Even if a causal link cannot be firmly drawn, the program still has some responsibility for affecting the desired outcome. An outcome-based indicator provides more insight into how much the program is helping accomplish that objective. Which Organizations Are Suitable for Performance Measurement? Managing-for-results applies to all agencies that provide services to the public, whether the agency has ample or highly limited resources, is small or large, is public or private, or is in a developing or developed country.3 As long as the agency is delivering services to the public, its management and elected officials should be intensely concerned with the quality, outcomes, and efficiency of those services and should measure performance. Even small agencies with very limited resources should be able to track some aspects of service quality and outcomes (probably more than seems possible at first glance) and improve operations with their existing resources. Poorer agencies with fewer resources will have to rely on less sophisticated procedures and, perhaps, more volunteers. The same principles apply to all agencies. Officials and managers need to recognize and support the need for outcome information and be willing to use it to improve services, however tight their budgets. Which Services Are Suitable for Performance Measurement? The procedures and issues of performance measurement are applicable to most public and private servicesranging from public safety programs, to public works programs, to human service programs, to environmental protection programs, to regulatory programs, and to defense programs. Performance measurement is even applicable to internal support services, such as building maintenance, fleet maintenance, information systems, personnel activities, and

purchasing. However, outcomes of these support services occur primarily within an organization, and it is usually difficult, if not impossible, to estimate the effect these internal services have on the outcomes of external services. This book focuses on external services, but the same principles apply to support services. The regular tracking of performance measurement may not be readily applicable to activities whose important outcomes do not occur for years, if not decades. Long-range planning and basic research are primary examples. The federal governments Government Performance and Results Act of 1993 has been applied broadly to every type of federal program. Nevertheless, basic research programs have had only slight success at fitting tracking systems into the annual outcome-oriented performance measurement process. Regular tracking can be used to assess whether timelines have been met, expenditures have been kept within budget, and the quality of any interim product is acceptable (such as by using expert panels to rate the quality and progress of ongoing research). For assessing the major outcomes of research, analytical resources are better spent on later, in-depth evaluations. Performance Measurement in Relation to Other Evaluation Activities Program Evaluations and Other In-Depth Studies Performance measurement can be considered a field of program evaluation. However, program evaluation usually refers to in-depth, special studies that not only examine a programs outcomes but also identify the whys, including the extent to which the program actually caused the outcomes. Such in-depth program evaluations are not the subject of this book.4 In practice, many of the so-called program evaluations undertaken by government (federal, state, or local) provide information on outcomes but little evidence on the causal link between activities and results. Even so, in-depth studies can provide many insights about what happened and why. Performance measurement cannot generally provide this information. Because of the time and cost involved, in-depth evaluations are usually done much less frequently and only for selected programs. Performance measurement and in-depth program evaluations are complementary activities that can nourish and enhance each other. Findings from a program evaluation completed during a given year can add to or supersede that years performance measurement data. Data from an agencys performance measurement system can offer program

evaluators data, useful indications of trends, and questions that encourage more in-depth evaluation. Sometimes evaluators can use the existing performance measurement procedures to collect data. Performance Auditing Performance audits, which are becoming more frequent, are typically conducted by auditors or inspectors general. They are ad hoc studies, often closely resembling in-depth program evaluations, that are applied to a selection of public programs each year. Performance auditors should have considerable interest in performance measurement systems as ways to provide data on outcomes for use in audits. In addition, these offices are likely to be given the responsibility for periodically assessing agencies performance measurement systems, the indicators used, and the data being provided. (This quality control responsibility is discussed in chapter 14.) Budgeting, Strategic Planning, and Policy Analysis Performance measurement provides information primarily about the past. Budgeting, strategic planning, and policy analysis are primarily about the future. As discussed in later chapters, performance data provide a baseline for decisions and give clues about what might happen in the future. The future-oriented processes require estimation and judgment skills that performance measurement systems cannot provide by themselves. Subsequent chapters (especially 12 and 13) introduce these issues but do not attempt comprehensive coverage of budgeting, strategic planning, or policy analysis. Rather, these topics are discussed only in the context of the (important) role that outcomefocused performance measurement systems play in these activities. Role of Agency Employees The employees of agencies undertaking performance measurement clearly have a stake in the process. Later chapters address the roles of this important stakeholder group in helping identify appropriate performance indicators and in using performance information to help improve services. The performance measurement work described here does not address the measurement of employee job satisfaction, however, because employees are considered suppliers of services, not customers. Moving Performance Measurement into Performance Management Performance measurement focuses on measuring outcomes and efficiency. If at least some of the measurement information generated

is not used, the effort and cost of the performance measurement process will be wasted. Use of the performance information whether by program managers, agency officials, officials in the central government, elected officials, members of boards of private nonprofit organizations, or citizenstransforms performance measurement into performance management. The purely measurement chapters of this book are chapters 1 through 7, 14, and 15. Chapters 8 through 11 discuss key components that can greatly enhance usefulness and that reflect the transition from measurement into usefulness. Chapters 12 and 13 discuss the various uses of performance information. Thus, this book is about both performance measurement and performance management. A Guide to This Volume Chapter 2 completes Part I by providing definitions that are the basic background for the material in the rest of the book. Part II addresses the performance measurement process. Chapter 3 discusses organizational start-up. Chapters 4 through 6 address determining what the programs objectives are and who its customers are (chapter 4), what outcomes should be tracked (chapter 5), and what the specific outcome indicators should be (chapter 6). Chapter 7 addresses how the data can be obtained. Part III covers the critical issues of how to analyze, report, and use the performance measurement data. Chapters 8 and 9 focus on ways to make performance data useful to program personnel and others. Chapter 8 discusses the importance of procedures for providing more detailed breakouts of outcome data. Chapter 9 discusses benchmarkingthat is, what comparisons should be made to help interpret outcome levels. Chapter 10 discusses analyses that can make the outcome information fully useful. Chapter 11 provides suggestions on an all too frequently neglected key element: reporting the findings. Chapters 12 and 13 identify major uses of performance information, with special attention to results-based budgeting. Part IV (chapters 14 and 15) addresses various other important performance measurement concerns, including the long-term problem of controlling the quality of the information performance measurement produces (chapter 14), political considerations, and the need for personnel training (chapter 15). Part V (chapter 16) summarizes the principal points about performance measurement that are important in producing a practical process with

real world utility.

References and Notes 1. Governing-for-results and results-oriented government refer to the same process. We have used managing-for-results here to indicate that the process is not restricted to government (executive or legislative) but is equally applicable to private service agencies. Other phrases have been used, such as results-based management, managing by results, and the like. Recent work on legislatures has used the phrase legislating for results. 2. A distinction is often made between the way in which a service is delivered (such as its timeliness, accessibility, and courteousness to customers) and the results the service is intended to achieve (such as actual improvements in the condition of customers). As will be discussed in chapter 4, these aspects of service delivery quality are important to customers (and, thus, we have categorized them intermediate outcomes), but they usually do not indicate how much progress has been made toward service objectives. 3. Numerous publications have been written on this subject. A few recent ones are John Kamensky and Albert Morales, eds., Managing for Results 2005 (Lanham, MD: Rowman & Littlefield Publishers, 2005); Barry White and Kathryn Newcomer, eds., Getting Results: A Guide for Federal Leaders and Managers (Vienna, VA: Management Concepts, 2005); and Dall W. Forsythe, ed., Quicker, Better, Cheaper? Managing Performance in American Government (Albany, NY: Rockefeller Institute Press, 2001). For those interested in performance measurement in the international scene, some publications are Jody Zall Kusek and Ray Rist, Ten Steps to a Results-Based Monitoring and Evaluation System (Washington, DC: The World Bank, 2004); Anwar Shah, ed., Public Services Delivery (Washington, DC: The World Bank, 2005); Korean Development Institute, Reforming the Public Expenditure System: Medium-Term Expenditure Framework, Performance Management, and Fiscal Transparency, (Seoul and Washington, DC: Korean Development Institute and The World Bank, Conference Proceedings, March 2004); Hans de Bruijn, Managing Performance in the Public Sector (London: Routledge, 2002); and Burt Perrin, Moving from Outputs to Outcomes: Practical Advice from Governments around the World (Washington, DC: The World Bank and IBM Center for the Business of Government, 2006). 4. Considerable literature exists describing in-depth program

evaluations and how they might be done.

Performance Measurement, Second Edition, by Harry P. Hatry, is available from the Urban Institute Press (paper, 8" x 11", 342 pages, ISBN 978-0-87766-734-6, $34.50). Because of the social and economic value of new business enterprises (Birch, 1987; Reagan, 1985; Schumpeter, 1934), models leading to an improved understanding of the determinants of new venture performance represent significant contributions to the literature. Perhaps the most compelling model of new venture performance developed in the last decade was proposed by Sandberg and Hofer (1987). Their model specified that the performance of a new venture was the consequence of a confluence of factors that encompass attributes of the entrepreneur (E), strategy (S), and industry structure (IS), as shown below. New Venture Performance = f (E, IS, S) (1) Using information on new ventures that sought funding from venture capitalists, Sandberg and Hofer found evidence that industry structure and strategy, separately and in combination, influenced new venture performance. Although their data did not support the importance of the entrepreneur, Sandberg and Hofer stated that additional research would be required before the entrepreneur could or should be removed from the model of new venture performance. Subsequent work by Feeser and Willard (1990), Keeley and Roure (1990), and McDougall (1987), among others, has corroborated Sandberg and Hofer's findings with respect to strategy and industry structure. Furthermore, Herron's (1990) study on the skills of the entrepreneur provided empirical evidence of the paramount importance of the entrepreneur in the new venture performance model. Despite the importance and appeal of the model proposed by Sandberg and Hofer (1987), it is incomplete. There are other variables that can affect the performance of a new venture that go beyond the skills and behaviors of its founders, the form of its strategies, and the structure of its industry. More specifically, their model does not include the resources upon which a venture's strategy must be based, or the organizational structure, processes, and systems by which the venture's strategy must be implemented. To fill this gap, this article discusses the determinants of new venture performance from the perspective of strategic management theory and describes why the concepts of resources and organizational structure, processes, and systems are

essential elements of any fully specified model of new venture performance. KEY ASSUMPTIONS AND DEFINITIONS Before proceeding further, it is necessary to define key terms, and the scope of this article, discuss the contextual basis of the extended theoretical model of new venture performance proposed, and examine the critical assumptions that led Sandberg and Hofer to exclude resources and organizational structure, processes, and systems from their model. Definitions and Scope A new venture is the end result of the process of creating and organizing a new business that develops, produces, and markets products or services to satisfy unmet market needs for the purposes of profit and growth (Gartner, 1985; Normann, 1977; Sandberg, 1986). In this article, we define entrepreneurship as the creation of new ventures, and entrepreneurs as the creators of new ventures (Gartner, 1988). There is evidence that many ventures are founded by teams of entrepreneurs and that the completeness of these teams has a positive impact on new venture performance (Cooper & Bruno, 1977; Roure & Keeley, 1990; Route & Madique, 1986). While acknowledging the importance of such teams, it is, nevertheless, beyond the scope of this article to deal with nuances concerning the number of founding entrepreneurs associated with a new venture. A venture is considered new if it has not yet reached a phase in its development where it could be considered a mature business. The precise moment in time in which a new venture becomes a mature business has not yet been determined. However, the idea of business maturation could be equated with a firm that has fully completed the transition to a Stage II organization in the sense of the model of organizational growth proposed by Scott (1971), or has reached the point of stability proposed in Kazanjian's (1988) four-stage model, or, more generally, has overcome the "liability of newness" discussed by Stinchcombe (1965). The length of time it takes for a new venture to mature will vary depending on its industry, resources, strategy, etc. It seems reasonable to assume that the earliest this might occur would be three to five years after its creation, and, more usually, not until the venture is eight to twelve years old (Biggadike, 1979; Kazanjian & Drazin, 1990). It is not the purpose of this article to describe the stages of growth through which a new venture may pass. However, because a venture's problems appear to be contingent upon its stage of growth (Greiner, 1972; Kazanjian, 1988; Kazanjian & Drazin, 1990), we shall

explore the manner in which the relative importance of the determinants of new venture performance change as a venture evolves. A new venture can take several forms: as a joint venture between two or more established firms; as a corporate venture initiated as a selfcontained organizational unit within the boundaries of an established company; or as an independent venture initiated and controlled by one or more individuals acting in their own self-interest (Vesper, 1980). Each type of venture possesses some unique characteristics with respect to ownership, genesis, and purpose (cf. Borys & Jemison, 1989; Burgelman & Sayles, 1986; Gartner, 1985; Katz & Gartner, 1988). In keeping with the intent to extend the model proposed by Sandberg and Hofer (1987), this article focuses its discussion on the independent venture. Nevertheless, we assume that the extended model applies to ventures of any form because, first, venturing is a special case of strategic management theory and, second, the model is derived from the dominant paradigm of that field. At the same time, given that venturing is a special case and there are different types of ventures, we do not make the same claim of generality with respect to the propositions to be derived in the article. There are many methods by which the performance of a venture might be measured (Dollinger, 1984), and it is beyond the scope of this article to debate the relative merits of these approaches. Rather, we shall discuss venture performance along two dimensions: survival and success. The first, survival, is the opposite of failure. A venture fails when it ceases to exist as an economic entity. Failure may occur because a venture is unable to satisfy its financial obligations to creditors or because it is unable to meet the objectives of its owners. Put differently, survival is an absolute measure of venture performance that depends on the ability of the venture to continue to operate as a self-sustaining economic entity (Barney, 1986a). Success, by contrast, is a relative measure of venture performance that occurs when the venture creates value for its customers in a sustainable and economically efficient manner (Barney, 1991; Coyne, 1986; Schumpeter, 1934). Although it may take several years for a new venture to earn a profit (Biggadike, 1979; Weiss, 1981), its ability to create lasting, hard-to-imitate value, suggests that if it survives those initial years, superior levels of profitability and growth vis-a-vis its competitors should occur. We take this two-dimensional view of new venture performance because a central assumption of the theoretical model presented in this article is that the determinants of a venture's survival are somewhat different from the determinants of its success. For example, while strategy is considered a primary cause of business

success (Hofer & Schendel, 1978), it is rarely featured prominently as a cause of business failure (Cochran, 1981; Dickinson, 1981). Venturing and Strategic Management Theory The initiation of a new business venture is predicated upon the decisions of its founders concerning customers, products or services, resources, technologies, and methods of organization (Cooper, 1979; Gartner, 1985; Katz & Gartner, 1988). In the field of strategic management such decisions are called "strategic" because each has a significant impact on the performance of the business making them. For example, strategic management theory suggests that a business unit's performance is both directly and indirectly related to the environment of the industry in which it competes, the resources it controls, the strategy it uses to align available resources with environmental opportunity, and the organizational structure, processes, and systems it employs to implement its chosen strategy (Hofer & Schendel, 1978; Porter, 1980, 1985; White & Hamermesh, 1981). Theorists also agree that top management is responsible for making strategic decisions, and, therefore, is responsible for the performance of a business (Andrews, 1971; Schendel & Hofer, 1979). Such decisions are also important to a new venture, although the nature of the decisions and the problems it confronts are different from those facing an established business owing to differences in history, age, size, attitudes toward change, and so on (Cooper, 1979; Stinchcombe, 1965). In fact, as the research models used in the studies of new venture performance shown in Table 1 suggest, the determinants of performance of a new venture and an established business are nearly identical. Based on this evidence, we conclude that the performance of new ventures and established businesses depends upon a set of factors that vary more in importance and form than type. As a consequence, any theory of new venture performance should be treated as a special case of strategic management theory (Sandberg, 1986; Schendel & Hofer, 1979) and include consideration of the entrepreneur (E), industry structure (IS), [TABULAR DATA FOR TABLE 1 OMITTED] business strategy (BS), resources (R), and organizational structure, processes, and systems (OS), as shown in the functional relationship depicted below. New Venture Performance = f(E, IS, BS, R, OS) (2) Implicit Assumptions of the Sandberg & Hofer Model

Sandberg and Hofer (1987) also considered venturing as a special case of strategic management theory, yet did not include resources or organizational structure, processes, and systems variables in their model. By excluding variables representing these determinants of performance, they made two implicit assumptions that require examination. 1. Resources and organizational structure, processes, and systems have, at best, a marginal direct affect on new venture performance. 2. The venture possesses, or can develop, the resources and organizational structure, processes, and systems necessary to implement its intended strategy. While not included in their model, Sandberg and Hofer (1987) recognize the importance of resources, pointing out that any strategy intended to be non-imitative is indicative of some desired distinctive competence. Nevertheless, an intended strategy is not always realized (Mintzberg,
http://books.google.com.pk/books?id=Ouai80_2VV8C&pg=PA77&dq=perfor mance+and+choosing+a+measurement+approach&hl=en&ei=X5elTeaqI8asr Af8qOzeCQ&sa=X&oi=book_result&ct=result&resnum=1&ved=0CCsQ6AEw AA#v=onepage&q=performance%20and%20choosing%20a%20measuremen t%20approach&f=false What factor causes an employee to perform at a certain level???????? Why do certain people better perform then others????? A combination of certain three factors allows an individual to perform at high levels. 1 declarative knowledge. 2 procedural knowledge 3motivation DK is information about facts and figures it also including information regarding given task s requirements, labels, principles and goals. P K is a combination of knowing what to do and how to do and also includes cognitive, physical, motor, and inter personal, skills. Motivation

It involve three types of choices of behaviors 1 Choice to put/ expend effort 2 choice of level of effort 3 choices to persist in the expenditure of the level of effort Performance= declarative knowledge X procedural knowledge X motivation If we assume that a determinant has a value of 0 then performance would also be 0. For example Consider an individual Mr. X who works in a store has impressive and excellent declarative knowledge, regarding store merchandise, we consider Mr. X as a intelligent person as he has complete information about store so we consider Mr. X procedural knowledge is also very high but some how some way he is not willing to perform or we can say he is demotivated. When customer comes he does not approach them to buy some thing instead he keeps on talking on phone so over his performance is said to be POOR

Factors determining performance Declarative knowledge Facts perform Principles effort Goals effort procedural knowledge cognitive skills motivation choice to

physomotor skills

level of

physical skills

persistence

Interpersonal skills

Top performers keep their selves engage in deliberate practice. Deliberate practice involves five steps 1

Approach performance with the goal of getting better and better 2 as you are performing focus on what is happening, and any you are doing things the way you do. 3 once your task is finished see performance feed back from experts and more sources. 4 build mental model of your job, your situation, your organization. 5 repeat step 1---4 continually and on ongoing basis. IMPLICATIONS FOR ADDRESSING PERFORMANCE As we have discussed earlier performance is affected by the three (3) factors and these three factors has implications for addressing performance problems. In order to address performance problem manager must find information that will allow them to understand weather the source of problem is of declarative knowledge, procedural knowledge, motivation or some combinations of these factors. if an employee lacks motivation but manager believes the source of problem is declarative knowledge , the manager may sent employee to any training program so he can acquire the lacking knowledge. This would be nothing but wastage of time because it s the problem is lack of motivation not lack of declarative knowledge, procedural knowledge. This is why performance manage4ment systems need not only to measure performance but also to provide information about source of any performance deficiencies. FACTORS INFLUACCING DETERMINANTS OF PERFORMANCE The factors that determine performances are affected by the employee (abilities, and previous experience), HR practice and work environment. In many companies declarative knowledge is not likely to be a big problem because when lack of knowledge is identified, employees have multiple opportunities to fill in the gap. However performance problems may be related more to procedural knowledge and motivation. In other words employee may have knowledge to perform certain tasks but but may not have skills to do them because of lack of opportunity.

In terms of motivation, downsizing interventions may have caused SURVIVOR SYNDROME, which includes retained employees feelings of frustration, resentment, and even anger. These feelings are likely to have strong negative effects on motivation, and employees may expend minimal energy on their jobs. These are three individual characteristics that determine performance in addition HR practice and the work environment can affect performance.

Manager first need to identify which of these factors is hampering performance and then help the employee improve his or her performance. PERFORMANCE DIMENSIONS As it was described earlier performance is a multidimensional process, which means we need to consider many different types of behaviors to understand performance. We can identify two different specific behaviors to understand performance. Facets stand out Task performance Contextual performance. Contextual and task performance must be consider separately because they don t necessarily occur in tandem. An employee can be highly proficient at his task but be underperformer regarding contextual performance. Task performance is defined as Activities that transform raw material raw material into goods and services that are produced by organization. Activities that help transformation process by replenishing the supply of raw materials, distributing its finished goods, or providing important planning, coordination, supervising, or staff functions that enables the organization to function effectively and efficiently. CONTEXTUAL PERFORMANCE Contextual performance is defined as those behaviors that contributes to the organization s effectiveness by providing good environment in which task performance can occur. Contextual performance includes behaviors such as the following

Persisting with enthusiasm and exerting extra effort as necessary to complete one s own task activity successfully ( e.g. being punctual and rarely absent, expending extra effort on job) Volunteering to carry out task activities that are not formally part of job ( e.g. suggesting organizational improvement, making constructive suggestions) Helping and cooperating with others (e.g. assisting, helping coworkers) Following organizational rules and procedures Endorsing, supporting, and defending organizational objectives. Both task and contextual performance are important dimensions to take into account in performance management system. Many organizations now realize that there is need to focus on both task and contextual performance because organization can not function properly without a minimum dose of positive contextual behavior on the part of all employees.

Task performance

Contextual performance

Varies across jobs Likely to be role prescribed prescribed Antecedents: abilities and skills

fairly similar across jobs not likely to be role

antecedent: personality

Above are main differences between task and contextual performance. First task performance varies across jobs which mean task performed by HR manager must be different by the task preformed by LINE MANAGER. On the other hand contextual performance is fairly similar across functional and hierarchical level. Second task performance is likely to be role prescribed, meaning that task performance is usually included one s job description. On the other hand contextual performance behaviors are usually not role prescribed and instead are typically expected without making them explicit. Finally task performance is mainly influenced by abilities and skills (cognitive and physical), whereas contextual performance is mainly influenced by personality (conscientiousness).

There are main reasons that why task performance is included in performance management system 1 global competition is raising the level of effort required of employees. 2 issues of global competition is need to offer out siding from customer service. Contextual performance behaviors can make a profound impact on customer service. Contextual performance can make an impact on customer satisfaction. 3 many organizations are forming employees into teams. Although some teams are not permanent because they are created to complete specific short-term tasks. Interpersonal is a key determinate of team effectiveness. Thus contextual performance becomes relevant to team work. 4 including both task and contextual performance in the performance management system provide additional benefits: employees being rated are more satisfied with the system and also believe the system is fairer if contextual performance is measured in addition to task performance. 5 when supervisors evaluate performance its difficult for them to ignore the contextual dimension, even through the evaluation from they are using may not include any specific question about contextual performance. Since contextual performance has an impact on rating on overall performance even when only task performance is measured, it makes sense to include contextual performance more explicitly.

In short performance includes both task and contextual dimension. Both should be considered because both dimensions contribute to organizational success. In case of both task and contextual performance, each behavior should be defined clearly so that employee understands what is expected of them. Organization that includes both task and contextual performance are likely to be more successful.

JOB PERFORMANCE IN CONTEXT

A performer Individual or team

In a given Situation

Employees in certain behaviors

That produce various results

TARIT

BEHAVIOUR

RESULTS

APPROCHES TO MEASURING PERFORMANCE

TRAIT APPROCH Emphasizes on individual trait of employees. BEHAVIOUR APPROCH Emphasizes hoe employee do the job. RESULTS APPROCH Emphasizes what employee produce.

Defining Performance and Choosing a Measurement Approach

Summary

Performance is about behaviours or what employees do, and not about what employees produce or the outcomes of their work. However, performance management systems typically include the measurement both of behaviours (how the work is done) and of results (the outcomes of ones work). Performance is evaluative (i.e., we judge it based on whether it helps advance or hinder organisational goals) and multidimensional (i.e., many behaviours are needed to describe an employees performance).  Performance is determined by a combination of declarative knowledge (i.e., information), procedural knowledge (i.e., know-how), and motivation (willingness to perform). Thus Performance = Declarative knowledge Procedural knowledge Motivation If any of the three determinants of performance has a very small value (e.g., very little procedural knowledge), then performance will have a low level also. All three determinants of performance must be present for performance to reach satisfactory (and better) levels.  There are two important facets of performance: task and contextual. Task performance refers to the specific activities required by ones job. Contextual performance refers to the activities required to be a good organisational citizen(i.e., helping co-workers, supporting company initiatives, etc.). Both task and contextual performance are needed for organisational success, and both should be included in a performance management system.  Employees performance does not take place in a vacuum. Employees are in a specific situation, engaging in specific behaviours that produce certain results. An emphasis on the employee leads to a trait-based approach to assessing performance. An emphasis on behaviours leads to a behaviourbased approach to assessing performance. An emphasis on results leads to a results-based approach to assessing performance.  A traits approach emphasises individual traits that remain fairly stable throughout an individuals lifespan (e.g., cognitive abilities or personality). This approach may be most appropriate when an organisation anticipates drastic structural changes. A major disadvantage of this approach is that traits are not under the control of individuals, and, even when individuals possess a specific positive

trait (e.g., high intelligence), this does not necessarily mean that the employee will engage in productive behaviours leading to desired results.  A behaviour approach emphasises what employees do (i.e., how work is done). This approach is most appropriate when (a) it will take a long time to achieve the desired outcomes, (b) the link between behaviours and results is

not obvious, (c) outcomes are distant in the future, or (d) poor results are due to causes beyond the employees control. A behaviour approach may not be the best choice if most of these conditions are not present. In most situations, however, the inclusion of at least some behaviour-based measures is beneficial.  A results approach emphasises the outcomes and results produced by employees. This is basically a bottom-line approach that is not concerned about how the work is done as long as certain specific results are obtained. This approach is most appropriate when (a) workers are skilled in the needed behaviours, (b) behaviours and results are obviously related, (c) results show consistent improvement over time, or (d) there are many ways to do the job right. An emphasis on results can be beneficial because it could encourage employees to achieve the desired outcomes in creative and innovative ways. On the other hand, measuring only results is typically not welcomed by employees, even in types of jobs for which the expected result is very clear (e.g., as in the case of sales jobs such as at The Limited). 5 Measuring Results and Behaviours Summary In measuring performance adopting a results approach, the first step is to identify accountabilities. These are the various areas in which an individual is expected to focus. Once all key accountabilities are identified, the second step is to set objectives for each. Objectives should be (a) specific and clear, (b) challenging, (c) agreed upon, (d) significant, (e) prioritised, (f)

bound by time, (g) achievable, (h) fully communicated, (i) flexible, and (j) limited in number.  Finally, the third step involves determining performance standards. These are yardsticks designed to help understand to what extent the objective has been achieved. In creating standards, we must consider the quality, quantity and time dimensions. Good standards are: (a) related to the position; (b) concrete, specific, and measurable; (c) practical to measure; (d) meaningful; (e) realistic and achievable; and (f) reviewed regularly.  In measuring performance adopting a behaviour approach, the first step involves identifying competencies. Competencies are measurable clusters of KSAs critical in determining how results will be achieved. Examples of competencies are customer service, written or oral communication, creative thinking and dependability.  The second step involves identifying indicators allowing us to understand the extent to which each individual possesses the competency in question. These indicators are behavioural manifestations of the underlying (unobservable) competency.

 In describing competencies, one must first clearly define them, and then describe behavioural indicators showing the presence of the competencies, describe behavioural indicators showing the absence of the competencies, and list suggestions for developing the competencies.  Once the indicators are identified, the third step includes choosing an appropriate measurement system, and there are two choices: comparative and absolute.  Comparative systems base the measurement on comparing employees with each other, and include simple rank order, alternation rank order, paired comparisons and forced distribution. Comparative systems are easy to explain, and the resulting data are easy to interpret, thus facilitating administrative decisions. On the other hand, employees are usually compared with each other in terms of one overall single category rather than specific behaviours or competencies. This produces less useful feedback for employees to use for future improvement.  Absolute systems include evaluations of employees performance without making direct reference to other employees. Such systems include essays, behaviour checklists, critical incidents and graphic rating scales. Essays are difficult to quantify but produce useful and often detailed feedback. Behaviour checklists are easy to use and understand, but the scale points used are often arbitrary, and we cannot assume that a one-point difference has the same meaning along the entire scale (i.e., the difference between employees scoring 5 and 4 may not have the same meaning as the difference between employees scoring 3 and 2). Critical incidents allow supervisors to focus on actual job behaviour rather than on vaguely defined traits, but gathering critical incident data may be quite time consuming. Graphic rating scales are arguably the most frequently used measurement method to assess performance. For this type of measurement to be most useful, the meaning of each response category should be clear, the individual interpreting the ratings (e.g., HR manager) should be able to tell clearly what response was intended, and the performance dimension being rated should be clearly defined for the rater.

APPROCHES TO MEASURE PERFORMANCE Employee does not perform at vacuum, but employee work in an organization context, engaging in certain behaviors that produce certain results. The same employee may behave differently MOTIVES, EVPECTANCIES OF SOURCES AND VALUES AS DETERMINANTS OF PERFORMANCE From the book human motivation page# 516

Atkinson (1964) and wiener (1980) Lewin s model of motivated behavior identified three variables very similar to those used by behaviors like Hull and Spence, although Lewin defined them in phenomenological or cognitive terms. He spoke the need or tension which is equal to drive strength properties of goal object which is equal to incentive value and psychological distance, which is a kind of phenomenological equivalent of the skill or habit variable in terms of how easy or hard to achieve the objective. The initial formula read as follow T=MXPXI Where T is the tendency to achieve success M is multiplicative function of the motive to achieve success P is expectancy or probability of success I is incentive value of success It was assumed that the incentive value of success could be defined as 1 _ P which means more difficult task the less probability of successuding it. Two types of such beliefs have been studied. One type has to do efficacy of effort in bringing about a consequence through a particular response in a given situation. The other type has to do generalize confidence people have that they can bring about outcomes through activities of any kind. So we can say that a belief in importance of effort facilitates performance. TRAIT APPROCH From the book Assessment of personality and Behaviour problems by Roy P Martin Traits are an implicit part of most measurement procedures in applied psychology. There are many interperatations of trait sources. Differences in interpreatations have profound societal, scientific, and clinical implications. It is also assumed that traits defined by an assessment process are more less valid reflection of the behaviours of the person being described.

Handbook of work and organizational psychology: Personnel psychology page #15