PER

FORMANCE MANAGEMENT

By Ronald Kimaiyo &

Magdalene Kamunya
 Objectives

o Define performance management

o An appreciation of the scope of Performance

management
o Introduction of the different tools of

performance scorecard
 Definition of Performance Management cont.

o Performance management is a shared understanding

about how individuals contribute to an organization's goals.

o Performance management can also be defined as a

broad system that is linked with the processes of planning,

implementing, reviewing and evaluating, for augmenting
growth and productivity at both the individual and
organizational level
 Process of Performance Management

 Process of performance management

 According to A Handbook for Measuring Employee
Performance(Amira El-Deeb,DBA) performance
management is the systematic process of
 planning work and setting expectations
 continually monitoring performance
 developing the capacity to perform
 periodically rating performance in a summary fashion
 rewarding good performance
 Process of Performance Management

Planning:- The supervisor should meet with

employees to create their performance plans. The
supervisor should establish measurable goals that
align to the strategic and operational plans and
consult with his/her employees when creating these
goals.
Monitoring. The supervisor should monitor employee
progress, not only when there is a progress review due,
but on a continuous basis throughout the appraisal
period.
 Process of Performance Management

Developing. The supervisor should be able to determine

from continuous monitoring whether employees need
additional development to achieve their assigned
responsibilities.
Rating. The supervisor will use the knowledge
gained from monitoring the employee's performance
during the appraisal period to compare that
performance against the employee's elements and
standards and assign a rating of record
 Process of Performance Management

Rewarding. The supervisor must make meaningful

distinctions when granting awards. Award amounts
should be clearly distinguishable between different
performance levels that are fully successful or above.
 Evolution of Performance management

Early 1900s: The Performance Appraisal’s Informal

Beginnings – During this period, Annual Confidential
Reports (ACR’s) /Employee service Records were
maintained for controlling the behaviors of the
employees and these reports provided substantial
information on the performance of the employees.
1950s: Developing a Formal System - The key
hallmark of this phase was that whatever adverse
remarks were incorporated in the performance
reports were communicated to the employees
 Evolution of Performance management

1960s: Measuring Objectives & Goals -the

influence of the management by objectives started in
this period, PA developed a greater emphasis on
goal-setting and the assessment of performance-
related abilities.

1970s: Finding Flaws - there was a lot of criticism

about how appraisals were being conducted, and
several cases were even taken to court.(use of
psychometrics less subjective)
 Evolution of Performance management

1980s – Early 2000s: Holistic Measures-

measuring brand new metrics as part of their
appraisal process, such as self-awareness,
communication, teamwork, conflict reduction and
the ability to handle emotions.

Modern Day Performance Management -

increase in performance management systems that
seek multiple feedback sources when assessing an
employee’s performance – this is known as 360-
degree feedback.
Performance management process
 Prerequisites for effective PMS

o A well defined connection between PMS and

corporate strategy
o Well defined roles and timelines for both managers

and employees
o A well-articulated process for evaluation

o An effective evaluation tool

o A well understood process and measurement tools

Organisational benefits from effective PMS

o Clarified jobs

o Clarified job expectations

o Enhanced employee engagement

o Talent management & development strategy   

o Aligns culture with the strategy.

o  A basis for critical HR decisions

o  Improves communication within business

 Benefits of a PM on the Organisation

o Improvement of the overall organizational

performance by managing the performances of

teams and individuals
o Ensures that the employees understand the

importance of their contributions to the

organizational goals and objectives.
 Benefits of a PM on the Organisation

 Enables equitable distribution of incentives and rewards on

a fair and equated basis.
 Establishes clear performance objectives by facilitating an
open communication and a joint dialogue.
 Recognizes and rewards good performance in an
organization hence enables talent retention.
 Providing maximum opportunities for career growth.
  Facilitates a cordial and a harmonious relationship
between an individual employee and the line manager
based on trust and empowerment.
 PM Benefits to Employees

 Regularly providing open and transparent job feedbacks to the

employees.
 Establishing a clear linkage between performance and
compensation
 Providing ample learning and development opportunities by
representing the employees in leadership development
programmes, etc.
  Ensures each employee understands what is expected from
them and equally ascertaining whether the employees possess
the required skills and support for fulfilling such expectations.
 Ensures proper aligning or linking of objectives and facilitating
effective communication throughout the organization.
 Biases and judgment errors in
performance appraisal
 First Impression (primacy effect): Raters form an overall
impression about the ratee on the basis of some particluar
characteristics of the ratee identified by them
 Halo Effect: The individual’s performance is completely
appraised on the basis of a perceived positive quality, feature
or trait
 Horn Effect: The individual’s performance is completely
appraised on the basis of a negative quality or feature
perceived.
 Excessive Stiffness or Lenience: Depending upon the
raters own standards, values and physical and mental makeup
at the time of appraisal, ratees may be rated very strictly or
leniently.
 Biases and judgment errors in
performance appraisal
Central Tendency: Appraisers rate all employees as average
performers. That is, it is an attitude to rate people as neither
high nor low and follow the middle path
Personal Biases: The way a supervisor feels about each of the
individuals working under him - whether he likes or dislikes
them - as a tremendous effect on the rating of their
performances.
Spill over Effect: The present performance is evaluated much
on the basis of past performance
Recency Effect: Rating is influenced by the most recent
behaviour ignoring the commonly demonstrated behaviours
during the entire appraisal period.
 Performance management Tools

360 degree feedback

Management by Objectives

Behavior checklist

Psychological appraisals
Components of Performance
Appraisal
 Performance management Tools
cont.
 360-Degree Feedback
360 degree appraisal involves feedback of the
manager, supervisor, team members and any direct
reports. In this method of appraisal, employees’
complete profile has to be collected and assessed. In
addition to evaluating the employees work
performance and technical skill set, an appraiser
collects an in-depth feedback of the employee.
 Performance management Tools
cont.
Management by Objectives
This is an objective type of evaluation which falls
under modern approach of performance appraisal.
In MBO method of performance appraisal, manager
and the employee agree upon specific and obtainable
goals with a set deadline. With this method, the
appraiser can define success and failure easily
 Performance management Tools
cont.
 Behavioral checklist: Behavioral checklist has a
list of criteria that an employee should workup to be
a diligent worker. The behaviors differ according to
the type of job been assessed. This method is
considered favorable as the evaluation is done on the
basis of individual employee performance without
comparisons.
 Performance management Tools
cont.
 Psychological appraisals: This appraisal method
evaluates the employees’ intellect, emotional
stability, analytical skills and other psychological
traits. This method makes it easy for the manager in
placing the employees in appropriate teams.
 Performance Management
Trends.
Performance Ratings Will Continue to Disappear
Conversations Will Replace Annual Reviews
Professional Development Will Rise to the Forefront
of Engagement
Employers Will Focus on Gender Bias
Appraisal tool . The Balanced Score
Card Perspectives
INTRODUCTION TO SCORECARD
 Cont.

The proposed PMS is based on the Balance

scorecard performance model which offers a
somewhat balanced view of a business : views
a business from four perspectives
PESPECTIVES
 Cont.

A performance scorecard is a graphic or an

application that shows the progress over time
of a set of targets towards identified business
goal.
MONITORING AND EVALUATING PERFORMANCE
 Performance standards

A management-approved expression of the

performance threshold(s), requirement(s), or
expectation(s) that must be met to be
appraised at a particular level of performance.
Example of Performance Standards & Ratings
 Rating Description Implicati
on /
Action
5 Excellent: Has exceeded Incentive
Two Star Target by over
** 10%.

4 Very Has exceeded Incentive

Good: target by up to
One star* 10%, i.e.
between 101% -
110%.
 Rating Description Implication /
Action
3 Good Has hit target, or Basic Incentive
has a variance of
up to 10%, i.e.
90% - 100%.
2 Fair Has achieved Performance
between 80% - coaching for 6
89%. months, and
thereafter PIP
for 3 months
1 Poor Performance of PIP for 3
below 80%. months
 Advantages of Performance Standards

o Communicates key performance factors &

expectations.
o Explains how and why employees are

evaluated
o Provide a job-relevant basis for evaluating

employees, increasing fairness.

 Who will evaluate?

o Managers

o Peers

o Direct reports

o Customers

o Board
 Performance review plan

o Reward – February

o Target setting / 4th Quarter review – Dec

o 1st Quarter Review – End march

o 2nd Quarter Review – End June

o 3rd quarter Review – End September

Asante Sana