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Efficiency and effectiveness of

work collective

Performance management
and appraisal
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Outline
• On- line lecture (30 – 45 min.)
• Practical assignment Case study. Siemens. (45
min)
• The assignment has to be uploaded to Ortus
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Productivity= Effectiveness + Efficiency

• Productivity – the amount of output that an
organisation gets per unit of input, with human
input usually expressed in terms of units of time.
• Effectiveness – a function of getting a job
done whenever and however it must be done.
“Did we do the right things?”
• Efficiency – a function of how many
organisational resources we used in getting the
job done
“Did we do things right?”
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Performance management
is a continuous process of
• identifying,
• measuring and
• developing the performance of individuals
and teams and aligning performance with
the strategic goals of the organization.
(Aguinis, 2005: 2)
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Five Elements of Performance

Management
Agreement,
Measurement,
Feedback,
Positive reinforcement
Dialogue.
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Performance Management Versus

Performance Appraisal

• Performance management is the process of

identifying, measuring, managing, and
developing the performance of the human
resources in an organization.

• Performance appraisal is the ongoing

process of evaluating employee performance.
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Performance Equation
P = f ( AMO)
Ability – a combination of knowledge, skills, attitude, behaviour
that affect a person’s capability to carry out a specified job.

Motivation – the individual’s choice to perform a particular task,

as well as the level of effort given to that task.
Opportunity to succeed is provided by a working environment.

Boxall and Purcell, 2003

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HR policies and practices that improve

performance
Employee resourcing
Ability
Learning and development

Reward management Motivation

Job design

Employee involvement Opportunity

and communication
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The performance management cycle

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Performance planning
• Expected knowledge, skills and abilities (KSAs)
required and the behavioural competencies
• Key result areas are defined in the form of objectives
or targets
• Good objective is SMART.
▫ S stands for specific
▫ M for measurable,
▫ A for agreed,
▫ R for realistic
▫ T for time-related.
• Individual goals are to be aligned with the strategic
goals of the organization.
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The performance review

The performance appraisal The performance review

• The static and • Role of performance

management is
historical approach • to look forward to what needs
• An analysis of where to be done by people to
the employees achieve the purpose of the job;
• to meet new challenges;
involved are now, and • to make even better use of
where they have come their knowledge, skills and
from. abilities;
• to develop their capabilities by
establishing a self-managed
learning agenda.
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Performance assessment
• Carried out during or after a performance review
meeting
• overall assessment : a general analysis of
performance, the aim is to reach agreement about
• future action
• rating: summarizes on a scale the views of the
rater on the level of performance achieved for
performance- or contribution-pay decisions
• visual assessment: an alternative to rating.
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Visual performance assessment matrix

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Case Study. Siemens

Creating a high performance culture
1. How does Siemens seek to provide good career
opportunities for employees?
2. Describe one of the systems that Siemens has created
which provides development opportunities for employees
at work.
3. How important is the appraisal system in helping
to create shared understandings about the objectives of the
organisation and personal objectives of individual
employees?
4. How effective do you think the Siemens approach to
people management will be in creating great results?
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The Performance Appraisal Process

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Why to Conduct Performance

Appraisals?
 Communicating : to provide an opportunity for
formal communication between management and
the employees (two-way communication).
 Decision Making (Evaluating) : making
decisions about employees within the organization
- assessing past performance
 Motivating (Developing) : to improve the way
employees work individually for developmental
purposes, which in turn will improve
organizational productivity overall.
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What is evaluated in a performance

appraisal?
• Trait Appraisals: physical or psychological
characteristics of a person.
“If we’re going to use traits in performance
evaluation, we must ensure that we focus on traits
that have a direct relationship to the essential
functions of the job being done, and they have to be
accurate measures. “
• Behavioural Appraisals: the actions taken by
individuals
• Results/Outcomes Appraisals : a measure of
the goals achieved through a work process.
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Performance Appraisal Measurement

Methods and Forms
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Performance Appraisal Measurement

Methods and Forms (cont.)
• Ranking method is a performance appraisal
method that is used to evaluate employee
performance from best to worst.
• Graphic rating scale form is a performance
appraisal checklist on which a manager simply
rates performance on a continuum such as
excellent, good, average, fair, and poor. The
continuum often includes a numerical scale, for
example from 1 (lowest performance level) to 5
(highest performance level).
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Performance Appraisal Measurement

Methods and Forms (cont.)
Behaviorally Anchored
Rating Scale (BARS)
• is designed to bring the
benefits of both
qualitative and
quantitative data to the
employee appraisal
process.
• BARS compare an
individual’s performance
against specific examples
of behaviour that are
anchored to numerical
ratings.
Performance Appraisal Measurement
Methods and Forms (cont.)

• Narrative method or form requires a

manager to write a statement about the
employee’s performance.
• Management by Objectives (MBO) method
is a process in which managers and employees
jointly set objectives for the employees,
periodically evaluate performance, and reward
according to the results.
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Performance Appraisal Measurement

Methods and Forms (cont.)

• Critical incidents method is a performance

appraisal method which involves identifying and
describing specific events (or incidents) where
the employee did something really well or
something that needs improvement. .
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Who Should Assess Performance?

• Immediate supervisor
• Peers
• Subordinates (mostly for manager-level employees )
• Self-assessment
• People outside the organization: customers, suppliers,
etc.
• 360 Evaluation: analyzes individuals’ performance from
all sides—from their supervisor’s viewpoint, from their
subordinates’ viewpoint, from customers’ viewpoint (if
applicable), from their peers’ viewpoint, and using their
own self-evaluation.
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Common Problems With the Performance

Appraisal Process
• Bias: a personality-based tendency, either
toward or against something.

• Stereotyping: mentally classifying a person

into an affinity group, and then identifying the
person as having the same assumed
characteristics as the group.

• Errors
Case Study:
How Google does
Performance Reviews
• Annual performance review (including mid-
year checkpoint)
• Monthly performance check-ins (part of
regular 1:1 meetings that also comprise other
themes such as career development, coaching,
personal issues, etc.
• Googlegeist engagement survey  is an
annual survey of all employees where they are
asked to rate their managers and life at Google. 
 Upward Feedback Survey
• Donovan and Patel 
• is based on Google’s Project Oxygen
• a feedback review (a checklist that employees use to anonymously rate their
managers)
• the nine behaviors this survey judges managers on:
▫ They give actionable feedback that helps their employees improve their
performance.
▫ They do not micromanage by getting involved in details that should be handled at
other levels.
▫ They show consideration for their employees as individuals.
▫ They keep their team focused on its priority results/deliverables.
▫ They regularly share with their team relevant information from their own manager
and senior leadership.
▫ They have meaningful discussions about career development with each member of
their team at least once every six months.
▫ They communicate clear goals for their team.
▫ They possess the technical expertise required to effectively manage their team.
▫ Their employees would recommend them to their colleagues.
 OKR: Google’s approach to goal setting
• Objectives and Key Results
• Doerr’s Goal Formula:
I will (Objective) as measured by (this set of Key Results).
Objectives are memorable qualitative descriptions of what is going to
achieve. Objectives should be short, inspirational and engaging. they should
motivate and challenge.
Key Results are a set of metrics that measure the progress towards the
Objective. For each Objective, a set of 2 to 5 Key Results. 

Example
▫ Objective
 Increase the profitability of the company
▫ Key Results
 Increase revenues by 10%
 Reduce costs by 3%
 Maintain general, and administrative expenses nominally constant
Key terms
• Performance
• Performance management
• Performance appraisal
• Performance appraisal measurement methods
• Upward Feedback Survey
• OKR (Objectives and Key Results)
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Further reading
• Joshi, M. (2013). Human Resource
Management. Chapter 6. Performance Appraisal

• Senyucel, Z. (2009). Managing the Human

Resource in the 21th Century. Chapter 9
Managing the Human Recourses in the 21th
century.