Defining Performance

and
Choosing a Measurement Approach
 Overview
Defining Performance
Determinants of Performance
Performance Dimensions
Approaches to Measuring Performance
 Defining Performance

Performance is:
• Behavior
• What employees do
 Defining Performance

Performance is NOT:
• Results or Outcomes
• What employees produce
Behaviors labeled as Performance are:
1. Evaluative
– Negative
– Neutral
– Positive
2. Multidimensional
– Many different kinds of behaviors
– Advance or hinder organizational
goals
Behaviors are Not always

– Observable
– Measurable
Results/Consequences may be used

– To infer behavior
– As proxy for behavioral measure
Determinants of Performance

Performance =
Declarative Knowledge
X
Procedural Knowledge
X
Motivation
 A. Declarative Knowledge
• Information about
– Facts
– Labels
– Principles
– Goals
• Understanding of task requirements
 B. Procedural Knowledge
• Knowing
– What to do
– How to do it

And
When to do it
Why to do it
 Procedural Knowledge (continued)
• Skills
– Cognitive 
– Physical skills
– Perceptual
– Motor 
– Interpersonal
 C. Motivation

• Choices
– Expenditure of effort
– Level of effort
– Persistence of effort
(Deliberate Practice leads to
excellence)
 Deliberate Practice
• Approach performance with goal of getting
better
• Focus on performance
– What is happening?
– Why?
• Seek feedback from expert sources
• Build mental models of job, situation,
organization
• Repeat first 4 steps on an ongoing basis
 Implications for Addressing
Performance Problems
• Managers need information to accurately
identify source(s) of performance problems
• Performance management systems must
– Measure performance
AND
– Provide information on SOURCE(s) of problems
 Factors Influencing
Determinants of Performance:

• Individual characteristics
– Procedural knowledge
– Declarative knowledge
– Motivation
• HR practices
• Work environment
 Performance Dimensions:
Types of multi-dimensional behaviors:
• Task performance
• Contextual performance
– Pro-social behaviors
– Organizational citizenship
 Task performance

Activities that
• transform raw materials
• help with the transformation process
– Replenishing
– Distributing
– Supporting
 Contextual performance
Behaviors that
• contribute to organization’s effectiveness
and
• provide a good environment in which task
performance can occur
 Differences Between
Task and Contextual Performance
• Task Performance
• Contextual Performance
– Varies across jobs
– Fairly similar across jobs

– Likely to be role
– Not likely to be role
prescribed
prescribed

– Influenced by
– Influenced by
• Abilities
• Personality
• Skills
Why Include Task & Contextual
Performance Dimensions in PM
system?
1. Global competition
2. Customer service
3. Teamwork
4. Employee perceptions of
PM
5. Supervisor views
 Job Performance in Context

That
A performer Engages in
In a given produce
(individual or certain
situation various
team) behaviors
results

TRAIT BEHAVIOR RESULTS

 Approaches to Measuring
Performance
• Trait Approach
– Emphasizes individual traits of employees
• Behavior Approach
– Emphasizes how employees do the job
• Results Approach
– Emphasizes what employees produce
 Trait Approach

• Emphasis on individual
– Evaluate stable traits
• Cognitive abilities
• Personality
– Based on relationship between
traits & performance
 Trait Approach (continued)
• Appropriate if
– Structural changes planned for
organization
• Disadvantages
– Improvement not under individual’s
control
– Trait may not lead to
• Desired behaviors or
• Desired results
 Behavior Approach

Appropriate if
– Employees take a long time to achieve
desired outcomes
– Link between behaviors and results is
not obvious
– Outcomes occur in the distant future
– Poor results are due to causes beyond
the performer’s control
Not appropriate if
• above conditions are not present
 Results Approach

Advantages:
– Less time
– Lower cost
– Data appear objective
 Results Approach (continued)

Most appropriate when:

– Workers skilled in necessary behaviors
– Behaviors and results obviously related
– Consistent improvement in results over
time
– Many ways to do the job right
Performance management and
employee development
 Performance Management
• Continuous process of …
• Identifying
• Measuring
• Developing
The performance of individuals and teams
• Aligning performance with the strategic goals
of the organization
 Employee Development
• Encouraging employees to acquire new or
advanced skills, knowledge, and view points,
by providing learning and training facilities,
and avenues where such new ideas can
be applied.
 Personal Development Plan
• The aim of creating a personal development plan is to
document a process of self-analysis, personal reflection
and honest appraisal of your strengths and weaknesses.
This should enable you to evaluate the value of the
leadership and management training you have received,
and to consider your future leadership development.
• “An Personal Development Plan (PDP) can be a helpful
tool. A well-prepared PDP might include occupational
exploration and research, professional development, skills
training, formal education or a job search campaign.”
Guidelines – Consider the following guidelines
for creating and implementing your PDP
• Know the Purpose of Your PDP
• Prioritize and develop a plan of action to reach
your short- and long-term career goals.
• Focus your personal efforts in the areas that
you have selected.
• Identify, outline and use resources.
• Create an action plan that is clear and
achievable.
• Put Your PDP into Action
• Discuss your IDP with your supervisor and other
appropriate individuals such as a career counselor.
Use this time to state your goals, clarify
expectations and agree upon modifications as
needed.
• Work your plan - take a first step.
• Evaluate your plan along the way and modify it as
needed.
• Expect obstacles and work to overcome them.
• Celebrate your successes along the way!
Stakeholders in the Development Process

• Employees
– Help plan their own development
– Improve their own performance
• Managers
– Help guide the process of development
– Support success of process
 Personal Developmental Plans

• Specify actions necessary to improve

performance
• Highlight employee’s
– Strengths
– Areas in need of development
 Personal Developmental Plans answer:

• How can I continuously learn and

grow in the next year?
• How can I do better in the future?
• How can I avoid performance
problems of the past?
 Personal Developmental Plans:
Overview

• Developmental Plan Objectives

• Content of Developmental Plan
• Developmental Activities
 Overall Developmental Plan Objectives

• Encourage:
– Continuous learning
– Performance improvement
– Personal growth
 Specific Developmental Plan Objectives

• Improve performance in current job

• Sustain performance in current job
• Prepare employee for advancement
• Enrich employee’s work experience
 Content of Developmental Plan

1. Developmental objectives
– New skills or knowledge
– Timeline
2. How the new skills or knowledge will be
acquired
– Resources
– Strategies
 Content of Developmental Plan
3. Standards and measures used to assess
achievement of objectives
4. Based on needs of organization and
employee
Content of Developmental Plan (continued)

5. Chosen by employee and direct

supervisor
6. Taking into account
– Employee’s learning preferences
– Developmental objective in question
– Organization’s available resources
 Developmental Activities
‘On the job’

• On-the-job-training
• Mentoring
• Job rotation
• Temporary assignments
 Developmental Activities
In addition to ‘on the job’

• Courses
• Self-guided reading
• Getting a degree
• Attending a conference
• Membership or leadership role
– in professional or trade
organization
 Direct Supervisor’s Role:

• Explain what is necessary

• Refer employee to appropriate
developmental activities
• Review & make suggestions
regarding developmental objectives
 Direct Supervisor’s Role (ongoing):

• Check on employee’s progress

• Provide motivational
reinforcement
 PDP Activity
• Activity :
 Where am I now?
Review Regularly Review Regularly
What is my current situation?

What am I good What do I need to What could help What could stop
at? work on? me along? me?

Where do I want to be?

Consider all factors, professional and personal, such as time, support, finance,
motivation and imminent changes.

How can I get there?

Split task into…..

Short-Term Medium-Term Long-Term

Objectives Objectives Objectives

360 degree performance appraisal
 360-degree Feedback Systems
Tools to help employees improve
performance by using performance
information gathered from many
sources
»Superiors
»Peers
»Customers
»Subordinates
»The employee
 360-degree Feedback Systems

• Anonymous feedback
• Most useful when used
– For DEVELOPMENT
– NOT for administrative purposes
• Internet used for collecting data
 Necessary organizational norms include:

• Cooperation
• Openness and trust
• Input and participation
valued
• Fairness
Overview of 360-degree Feedback Systems

• Advantages of 360-degree Feedback

Systems
• Risks of 360-degree Feedback Systems
• Characteristics of a Good 360-degree
Feedback System
Advantages of 360-degree Feedback Systems

• Decreased possibility of biases

• Increased awareness of expectations
• Increased commitment to improve
• Improved self-perception of performance
• Improved performance
• Reduction of ‘undiscussables’
• Increased employee control of their own
careers
 Risks of 360-degree Feedback Systems

• Unconstructive negative feedback hurts.

• Are individuals comfortable with the
system? (User acceptance is crucial.)
• If few raters, anonymity is compromised.
• Raters may become overloaded.
• Stock values may drop.
Characteristics of a Good 360-degree Feedback System

• Anonymity
• Observation of employee performance
• Avoidance of survey fatigue
• Raters are trained
Characteristics of a Good 360-degree Feedback System

• Used for developmental purposes

only
• Emphasis on behaviors
• Raters go beyond ratings
• Feedback interpretation
• Follow-up
 Examples of 360 degree performance appraisal method

These companies are using 360 Degree

Performance Appraisal Method

Wipro Maruti Udyog

Infosys HCL Technologies
Reliance Industries Wyeth Consumer
Health (WCH)
 Performance Management and Reward
System
• Reward Management:
It is about development, implementation,
maintenance, communication and evaluation of
reward processes.
these processes deals with the assessment of
related job values, the design and management of
pay structures, P.M., paying for performance,
competency and skills, the provision of employee
benefits and pensions, and management of reward
procedures.
 Objective of Reward Management
• Reward people according to what the organization
values and want to pay for.
• Reward people for the value they create for their
organization.
• Reward the right behavior and actions of the
employees in order to reinforce appropriate behavior
and outcomes.
• Foster and maintain high performance work culture.
• Motivate employees in order to obtain their
commitment and engagement.
• Attract and retain the talent that the
organization needs.
• Emphasize the right mix of financial and non-
financial rewards.
• Operate in ways that are fair, equitable,
consistent, and transparent.
 Component of Reward System
• Financial Reward:
• Non-Financial Reward:
• Psychological Satisfaction:
Click to add text
Contribution from the Inducement from the
employee organization
•Reward
•Effort
•Job Security
•Ability
•Benefits
•Loyalty
•Career advancement
•Skills
• learning opportunities
•Time
•Status
•Competencies
 Model
Cultural
Individual
Attributes
Competencies

Opportunity Motivation

Job
Performance
Higher
Performance
Performance
linked Rewards

Continues
Job
improvement
Satisfaction
and learning
 Business Strategy

HR Strategy

Reward Strategy

Financial Reward Performance

Management Non- Financial
Processes
Processes Processes

Employee Recognition,responsibility,
Base Variable
Benefits achivement,development,
Pay Pay
growth

Job Pay
Evaluation Surveys

Pay
Structure Improved
Individual/Team
Performance
Total
Remuneration
Improved
Reward System Organizational
Management Effectiveness
 Performance Linked Career Planning and
Promotion Policy
• Career Planning is a relatively new personnel
function. Established programs on
Career Planning are still rare except in larger or
more progressive organizations.
• Career Planning aims at identifying personal
skills, interest, knowledge and other features;
and establishes specific plans to attain specific
goals.
 Aims and Objective of Career Planning
• Career Planning aims at matching individual potential for
promotion and individual aspirations with organizational
needs and opportunities.
• Career Planning is making sure that the organization has
the right people with the right skills at the right time.
• In particular it indicates what training and development
would be necessary for advancing in the career altering the
career path or staying in the current position.
• Its focus is on future needs and opportunities and removal
of stagnation, obsolescence, dissatisfaction of the
employee.
 Components of Career Planning

Organization Design/HR
Plans

Career Paths/Roles and

Corporate Plan
requirement

Career Planning

Potential/ Performance
Development / Appraisal
Opportunity

Promotion Policy
 Need for Career Planning
1.To attract competent persons and to retain them in
the organization.
2. To provide suitable promotional opportunities.
3. To enable the employees to develop and take them
ready to meet the future challenges.
4. To increase the utilization of managerial reserves
within an organization.
5. To correct employee placement.
6. To reduce employee dissatisfaction and turnover.
7. To improve motivation and morale.
 Promotion Policy
Promotion Policy Objective:
• To integrate the growth opportunities of the executives with
the fulfillment of the company’s objectives.
• To identify, train and develop competent personnel with
growth potential and to provide a policy environment for
high level of performance.
• To provide a system of equality in opportunity, equity in
assessment and uniformity in implementation among all the
Units, Business Groups, Directorates and Officers of The
Company in the matter of promotion.
• To seek and provide a continuous team of work sustained
high levels of competence in the company.
 Promotion System
There shall be two systems of promotion within
the executive position in the company:
a. Promotion WITHIN the GROUPS
b. Promotion BETWEEN the GROUPS
All the promotions made in accordance with
this Promotion Policy will be from one scale
of pay to the next.
 Promotion Norms
• The promotion norms shall consist of two parts:
a. Eligibility Factors: which include a qualifying
period, qualification norms, attendance,
conduct, prescribed standards in performance
appraisal.
b. Suitability Factors: which includes an interview
and an assessment of the potential of the
executive in his own channel of promotion or
for a post other than in his own channel of
promotion.
Performance Linked Remuneration system

• Remuneration
• Types of Remuneration
• Compensation’s
• Employee Benefits:
• Commission.
• Performance linked Incentives
• Incentives
• Types of Incentives:
 Financial Incentives:
 Non-Financial Incentives:
Method of Financial Incentives:
i. Price rate system
ii. Cent Percentage Premium
Non-financial incentives
Question and Answers