Performance Management

And Appraisal
Definitions, Concepts & Tools

Mira, Sylvia C.
Villamor, Prairie Anne B.
Ybanez, Youlah Mae B.
 PERFORMANCE MANAGEMENT

Nature of Performance Management

• Series of activities designed to ensure that the organization
gets the performance it needs from its employees.
 Clarify organizational performance expectations

 Provide performance information to employees

 Identify areas of success and the development steps needed to enhance

employee performance.

 Document performance for personnel records and actions

 Provide rewards for achieving performance objectives

 PERFORMANCE MANAGEMENT

Performance Management Linkage

 PERFORMANCE MANAGEMENT

Performance Management vs. Performance Appraisal

Performance Management Performance Appraisal

Series of activities designed to The process of evaluating how well

ensure that the organization gets the employees perform their jobs
performance it needs from its relative to a standard and
employees communicating that information to
them
 PERFORMANCE MANAGEMENT

Components of
Performance Management
 PERFORMANCE MANAGEMENT

Components of a
Performance-Based Culture
 PERFORMANCE MANAGEMENT

Performance- Based Culture

Benefits

 Significantly higher growth in company revenue,

employment, and stock prices

 Improved performance, increase in motivation, and

augment employee retention

 Strengthen the link between employee and organization

goals
 PERFORMANCE MANAGEMENT

Identifying and Measuring Employee Performance

Performance

What an employee does and does not do

 Quantity of output  Presence/ attendance on the job

 Quality of output  Efficiency of work completed

 Timeliness of output  Effectiveness of work completed

 PERFORMANCE MANAGEMENT

Identifying and Measuring Employee Performance

Job Criteria

Important elements in a given job

PERFORMANCE MANAGEMENT

Types of Performance Information

 PERFORMANCE MANAGEMENT

Types of Performance Information

TRAITS BEHAVIOR RESULTS

Tend to be ambiguous Several behaviors can May leave out equally

lead to successful important but difficult-
High potential for rating performance to-measure parts of work
errors
Have some potential for Ethical or legal issues
Court decisions held rating error may arise
these as too vague
PERFORMANCE MANAGEMENT

Relevance of Performance Criteria

Deficiency
Deficiency Contamination
Contamination

Performance
Performance
Criteria
Criteria

Over-emphasis
Over-emphasis
PERFORMANCE MANAGEMENT

Relevance of Performance Criteria

Reliability
Reliability Practicality
Practicality

Performance
Performance
Appraisal
Appraisal

Fairness
Fairness
 PERFORMANCE MANAGEMENT

Performance Standards
1. Expected levels of performance

 Benchmarks, goals, and targets

2. S.M.A.R.T. approach for writing performance standards

 S= Specific
 M= Measurable
 A= Attainable
 R= Relevant
 T= Time-bound
 PERFORMANCE MANAGEMENT

Performance Standards
3. Should be established before work is performed
 PERFORMANCE MANAGEMENT

Contributions of Performance Management

To employees To Managers

• Clarify job description and success criteria • Communication of performance

views more clearly
• Increase motivation to perform
• Gain insight about subordinates
• Enhance self-insight and development
• Better and more timely
• Become more competent differentiation between good and
poor performers
 PERFORMANCE MANAGEMENT

Contributions of Performance Management

To Organization/ HR Function

• Clarify organizational goals

• Facilitate organizational change

• Fairer, more appropriate administrative actions

• Better protection from lawsuits

 PERFORMANCE MANAGEMENT

Perils of Poorly-implemented PM System

For employees

• Lowered self-esteem

• Burnout and job dissatisfaction

• Damaged relationships

• Use of false or misleading information

 PERFORMANCE MANAGEMENT

Perils of Poorly-implemented PM System

For Managers

• Increased turnover

• Decreased motivation to perform

• Varying and unfair standards and ratings

 PERFORMANCE MANAGEMENT

Perils of Poorly-implemented PM System

For Organization

• Wasted time and money

• Unclear rating system

• Emerging biases

• Increased risk of litigation

 PERFORMANCE APPRAISAL

Nature of Performance Appraisals

 Used to assess an employee’s performance and provide a
platform for feedback about past, current, and future
performance expectations, and searching for ways to improve
their performance.

 Must be carefully developed to fully capitalize on the talents

and efforts of employees and to minimize the gap between
actual job performance and the ratings of the work.
PERFORMANCE APPRAISAL

Reasons for Ineffective Evaluations

Superior not
Unclear taking PA Lack
performance seriously appraisal
criteria skills
Unprepared
Dishonest
Superior
Superior
Poor working
Lack of on-
relationship w/
going
superior
feedback
Superior
Bad rating
Lacks
instrument
Information
 PERFORMANCE APPRAISAL

Conflicting Uses of Performance Appraisal

 PERFORMANCE APPRAISAL

Decisions Concerning PA Process

Appraisal Responsibilities
 PERFORMANCE APPRAISAL

Decisions Concerning PA Process

Informal vs. Systematic Appraisal Processes

 Informal Appraisal
Day-to-day contacts, largely undocumented

 Systematic Appraisal
Formal contact at regular time intervals, usually documented
Timing of Appraisals

Probationary (60-90 days), six months and annually

 PERFORMANCE APPRAISAL

Legal Concerns and Performance Appraisals

Legally Defensible PA System:

• Objective performance appraisal criteria based on job analysis

• Absence of disparate impact and evidence of validity

• Formal evaluation criteria that limit managerial discretion

• A rating instrument linked to job duties and responsibilities

• Documentation of the appraisal activities

 PERFORMANCE MANAGEMENT

Legal Concerns and Performance Appraisals

Legally Defensible PA System:

• Personal knowledge of and contact with the appraised individual

• Training of supervisors in conducting appraisals

• Review process to prevent undue control of careers

• Counseling to help poor performers improve

 QUESTION # 1

It is the process of determining how well

employees do their jobs relative to a standard
and communicating that information to them.

33 PTS
 ANSWER

PERFORMANCE APPRAISAL
 QUESTION # 2

These are important elements in a given job.

18 pts
 ANSWER

JOB DUTIES
 QUESTION # 3

These define the expected levels of employee

performance.

29 pts
 ANSWER

PERFORMANCE STANDARD
 QUESTION # 4

A series of activities designed to ensure that the

organization gets the performance it needs
from its employees.

35 pts
 ANSWER

PERFORMANCE MANAGEMENT
 QUESTION # 5

Occurs when a rater’s values or prejudices

distort the rating.

11 pts
 ANSWER

RATER BIAS
 QUESTION # 6

Occurs when a rater gives greater weight to

recent events when appraising an individual’s
performance.

28 pts
 ANSWER

RECENCY EFFECT
 QUESTION # 7

Occurs when a rater gives greater weight to

information received first when appraising
and individual’s performance.

30 pts
 ANSWER

PRIMACY EFFECT
 QUESTION # 8

A technique for distributing ratings that are

generated with any of the other appraisal
methods and comparing the ratings of people
in a work group. The ratings are distributed
along a bell-shaped curve.

27 pts
 ANSWER

FORCED DISTRIBUTION
 QUESTION # 9

A technique that allows the rater to mark an

employee’s performance on a continuum
indicating low to high levels of a particular
characteristic.

29 pts
 ANSWER

GRAPHIC RATING SCALE

 QUESTION # 10

Occurs when ratings of all employees fall at the

high end of the scale.

18 pts
 ANSWER

LENIENCY ERROR