Performance Appraisal Systems – Managing for excellent

Performance

- Soma Bose Biswas

Source: Fundamentals of Human Resource Management 4th edition by R.A. Noe, J.R. Hollenbeck, B. Gerhart, and P.M. Wright. CHAPTER 16
Creating and Maintaining High-Performance Organizations. McGraw Hill, 2011Copyright © 2011 by The McGraw-Hill Companies, Inc. All
McGraw-Hill/Irwin Rights Reserved. 16-1
 What Do We Need to Know?

1. Define high-performance work systems and

identify the elements of such a system.
2. Summarize the outcomes of a high-
performance work system.
3. Describe the conditions that create a high-
performance work system.
4. Explain how human resource management can
contribute to high performance.

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What Do We Need to Know? (continued)

5. Discuss the role of HRM technology in high-

performance work systems.
6. Summarize ways to measure the effectiveness
of human resource management.

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 High Performance Work Systems
(HPWs)
• High Performance Work Systems, sometimes
known as high involvement or high
commitment organizations, are organizations
that use a distinctive managerial approach
that enables high performance through
people (Pfeffer, 1998)

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 High-Performance Work Systems

• The right combination of people, technology,

and organizational structure that makes full
use of the organization’s resources and
opportunities in achieving its goals.
• To function as a high-performance work
system, each of these elements must fit well
with the others in a smoothly functioning
whole.

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Elements of a High-Performance Work
System

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 Elements of a High-Performance
Work System
• Organizational structure: the way the organization
groups its people into useful divisions,
departments, and reporting relationships.
• Task design: determines how the details of the
organization’s necessary activities will be grouped,
whether into jobs or team responsibilities.
• People: well suited and well prepared for their
jobs.

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 Elements of a High-Performance
Work System (continued)
• Reward systems: contribute to high
performance by encouraging people to strive
for objectives that support the organization’s
overall goals.

• Information systems: modern information

systems have enabled organizations to share
information widely.

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 In a high-performance work system, all the elements –
people, technology, and organizational structure – work
together for success.

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Outcomes of a High-Performance Work
System

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 Outcomes of a High-Performance
Work System
• Outcomes of a high-performance work system
include higher productivity and efficiency.
• These outcomes contribute to higher profits.
• Other outcomes include:
– High product quality
– Great customer satisfaction
– Low employee turnover

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 Outcomes of a High-Performance
Work System (continued)
• The outcomes of each employee and work group
contribute to the system’s overall high
performance.
• The organization’s individuals and groups work
efficiently, provide high-quality goods and
services, etc., and in this way they contribute to
meeting the organization’s goals.
• When the organization adds or changes goals,
people are flexible and make changes to as
needed to meet the new goals.

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How HPW works?

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 Conditions that Contribute to
High Performance
• Teams perform work.
• Employees participate in selection.
• Employees receive formal performance
feedback and are actively involved in the
performance improvement process.
• Ongoing training is emphasized and rewarded.
• Employees’ rewards and compensation relate
to the company’s financial performance.

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 Conditions that Contribute to
High Performance (continued)
• Equipment and work processes are structured
and technology is used to encourage
maximum flexibility and interaction among
employees.
• Employees participate in planning changes in
equipment, layout, and work methods.
• Work design allows employees to use a variety
of skills.

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 Conditions that Contribute to
High Performance (continued)
• Employees understand how their jobs
contribute to the finished product or service.
• Ethical behavior is encouraged.

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 Features of HPWs
• Employment security.
• Selective hiring of new personnel.
• Self-managed teams and decentralization of decision making
as the basic principles of organizational design.
• Comparatively high compensation contingent on
organizational performance.
• Extensive training.
• Reduced status distinctions and barriers, including dress,
language, office arrangements, and wage differences across
levels.
• Extensive sharing of financial and performanceinformation
throughout the organization.

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Job Satisfaction

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 Test Your Knowledge
• Charlotte is a manager overseeing the work of
a team. Which of the following behaviors
would empower the team the least?
a) Opening lines of communication between the
team and other groups within the organization.
b) Directing the team and monitoring their day-to-
day activities. 
c) Ensure the team has the resources they need.
d) Keep the team informed as new, relevant
information becomes available.

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 Test Your Knowledge

• Kamran has worked for the same company for 3

years, is enthusiastic and passionate about his
work, hasn’t missed a day in two years, and has
several close friends he enjoys working with.
Which of the following best describes Kamran?
a) He is satisfied with his job.
b) He is empowered. It’s C
c) He is experiencing occupational intimacy.
d) He is probably going to quit soon.

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HRM Practices that Can Help Organizations
Achieve High Performance
• HRM practices match • Work design permits
organization’s goals flexibility in where and
• Individuals and groups when tasks are
share knowledge performed
• Work is performed by • Selection system is job
teams related and legal
• Organization • Performance
encourages continuous management system
learning measures customer
satisfaction and quality

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HRM Practices that Can Help Organizations
Achieve High Performance(continued)

• Organization monitors • Skills and values of a

employees’ satisfaction diverse workforce are
• Discipline system is valued and used
progressive • Technology reduces
• Pay system rewards time and costs of tasks
skills and while preserving quality
accomplishments

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• To develop future leaders, new IBM managers participate in IBM’s
Basic Blue program for an intensive nine-month training program.
• IBM is considered one of the best companies in the development of
future leaders.

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 Summary
• A high-performance work system is the right
combination of people, technology, and
organizational structure that makes full use of the
organization’s resources and opportunities in
achieving its goals.
• A high-performance work system achieves the
organization’s goals, typically including growth,
productivity, and high profits.

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 Summary (continued)
• Many conditions contribute to high-performance
work systems by giving employees skills, incentives,
knowledge, autonomy, and employee satisfaction.
• Organizations can improve performance by creating a
learning organization, in which people constantly
learn and share knowledge so that they continually
expand their capacity to achieve the results they
desire.

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 Summary (continued)
• By taking a customer-oriented approach, HRM can
improve quality by defining the internal customers
who use its services and determining whether it is
meeting those customers’ needs.
• One way to do this is with an HRM audit.
• Another way to measure HRM effectiveness is to
analyze specific programs or activities.
• This analysis can measure success in terms of
whether a program met its objectives and whether it
delivered value in an economic sense.

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 Performance Management

• Each aspect of performance management should be

related to the organization’s goals.
• Business goals should influence the:
– kinds of employees selected and their training
– requirements of each job
– measures used for evaluating results
• This means the organization:
– identifies what each department must do to achieve the
desired results
– defines how individual employees should contribute to
their department’s goals

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Employee Performance as a Process

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 Performance Management (continued)

Guidelines to make the performance management

system support organizational goals:
1. Define and measure performance in precise terms.
2. Link performance measures to meeting customer
needs.
3. Measure and correct for the effect of situational
constraints.

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 Test Your Knowledge
• The HR director of a medium-sized corporation
spends 90% of his time meeting and working with
fellow HR staff. He is primarily concerned with
ensuring the company meets all legal requirements
with regard to HR activities. This HR director:
a) Is a major contributor to a high-performance organization
b) Has a strategic focus
c) Is concerned with customer satisfaction
d) Has limited the utility and value he could bring to the
organization
D

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