Performance Management Systems



Performance Management Systems
• Performance Management
– Continuous process of identifying, measuring and developing the performance of individuals and teams and aligning the performance with the strategic goals of the organizations

Performance Management Systems in Context
• Purpose of PMS
– Strategic purpose (To help achieve objectives) – Administrative purpose (To decide) – Informational purpose (For employees) – Developmental purpose (To improve) – Org. maintenance purpose (To replenish) – Documentation purpose (For record)

change is facilitated .Performance Management Systems in Context • Advantages of a Good PMS – Increased motivation. self-esteem – Performance-Reward link made clear – Goal Achievement clarified – Managers gain insight – Self-insight and development enhanced – Supervisors’ views communicated more clearly – Org.

unsatisfied demands on resources . unclear rating systems) – Lowered self-esteem.Performance Management Systems in Context • Disadvantages of badly administrated PMS (Unfair standards and ratings. emerging biases. wasted time and money – Damaged relationships. job dissatisfaction – Increased risk of litigation. use of misleading info. decreased motivation to perform – Increased turnover. – Employee burnout.

Ethicality -.Performance Management Systems in Context • Characteristics of PMS – Strategic congruence – Practicality – Specificity – Reliability – Acceptability – Openness – Standardized -.Fairness.Validity -.Meaningfulness -.Thoroughness -.Correctability . Inclusiveness -.

PMS: Relevant Theories • • • • Adams Equity Theory Vroom’s Expectancy Theory McClelland's Achievement Motivation Theory Holland’s Job Characteristics Model .


Performance Management Process • Process Prerequisites Performance Planning Performance Assessment Performance Appraisal/ Review Performance Renewal & Recontracting Feedback Prerequisites of PMS Knowledge of strategic goals Knowledge of jobs in question .

Strategic Planning Linking Performance Management to Strategic Plan Unit Strategic Plan • Mission • Vision • Goals • Strategies Individual and Team Performance • Results • Behaviors • Developmental Plan Org.PMS . Strategic Plan • Mission • Vision • Goals • Strategies Job Description • Tasks • Knowledge • Skills • Abilities .

Development Plan • Performance Execution Employees Commitment to goal achievement Ongoing performance feedback and coaching Managers Observation and documentation Updates Communication with supervisor Collecting and Sharing supervisor data Preparing for performance reviews Feedback Resources Reinforcement . Behaviors.Performance Management Process • Performance Planning – Results.

Performance Management Process • Performance Assessment – Both employees and managers are responsible for evaluating the extent to which desired behaviors have been displayed/desired results achieved • Performance Appraisal/Review – Performance Appraisal/Review is systematic description of employee’s strengths and weaknesses and is developmental in nature • Performance Renewal and Re-contracting – Acts as feedback and sets goals for next cycle .



principles.Defining performance and choosing a measurement • Defining performance – About behavior and what employees need to do • Determinants of performance – Declarative Knowledge (Info about facts and things: task requirements. choice to persist) . level of effort. physical . interpersonal skills) – Motivation (Choice to expend effort. goals) – Participative Knowledge (Info of knowing what to do and how to do it: cognitive.

Used when allocation of personnel based on traits needs to be done Behavior Approach Results Approach What employees do on the job Results on the job Link between behavior and results not clear.Defining performance and choosing a measurement • Performance Dimensions – Task performance (Basic requirement) – Contextual performance (Additional/Peripheral) • Approaches to performance management Approach Trait Approach What is measured Traits of employees When is it used Less used. results show improvement over time. Poor results due to uncontrollable factor Skilled workers. behaviors and results related. Outcomes distant. many ways to do the job correctly .

Measuring Results and Behaviors • Measuring Results (The results approach) – Need to ask the questions • Where all should the person focus? • What are the expected objectives in each area? • How do you measure the results’ success? – Determining accountabilities • How is time divided across accountabilities? • The importance of each accountability? .

objectives need to be: Specific and Clear Agreed Upon Prioritized Achievable Flexible Challenging Significant Time-bound Fully communicated Limited in number .Measuring Results and Behaviors – Determining objectives • Accomplishment of objectives will ensure success for accountabilities • To be useful.

Measuring Results and Behaviors – Determining performance standards • Standards need to be set • Can be set according to quantity. time • Good performance standards need to be: – – – – – – – – – Related to the position Concrete Specific Measureable Practical to measure Meaningful Realistic Achievable Reviewed regularly . quality.

Measuring Results and Behaviors • Measuring Behaviors (The behavior approach) – Need to assess competencies – Indicators prove whether competency is present or not – Two types of systems: Comparative and Absolute Absolute Essays Behavior Checklists Critical Incidents Graphic Rating Scales Comparative Simple Rank Order Alternation Rank Order Paired Comparisons Forced Distribution .

feedback is usually less useful .Measuring Results and Behaviors • Measuring Behaviors (The behavior approach) – Comparative Systems: – Mostly compare with others and with standards – Easy to explain. resulting data easy to interpret – Employees usually compared on overall scores rather than in specific categories – Hence.

BARS is an off-shoot • Graphic Rating Scales: Most frequently used. can be timeconsuming.Measuring Results and Behaviors • Measuring Behaviors (The behavior approach) – Absolute Systems: • Essays: Difficult to quantify. rendering same point differences nonconsistent across the scale • Critical incidents: Allows supervisors to focus on actual job behaviors rather than on vaguely defined traits. produce useful and detailed feedback • Behavior Checklists: Easy to use and understand. dimension should be defined clearly. individual should be able to tell what response was intended . scale points are arbitrary. requirement: meaning of each response category should be clear.

subjectivity and failure to identify the essential functions of the job.Objectives of BARS • Assess performance in terms of specific behaviors that are critical to the job. . • Reduce rater bias and error by anchoring the rating with specific behavioral examples based on job analysis information. • Minimize evaluators' impreciseness. rather than in terms of general traits or abstract constructs. • Eliminate the use of potentially misleading numerical and volume measures that are not readily interpretable.

BARS Scale : Communication Skills .

plans and goals – Stakeholder input – Employee comments – Signatures . needs.Gathering Performance Information • Appraisal forms – Basic employee info – Accountabilities. objectives and standards – Competencies and indicators – Major achievements and contributions – Developmental achievements.

it should be decided as to which source should rate what dimension .Gathering Performance Information • Determining Overall Rating – Judgmental (Subjective) : Consider all aspects and using essay type summary – Mechanical (Objective): Uses weightages and scores related on goal/performance dimensions • Sources of information – – – – – – Supervisors Peers Subordinates Self Customers To ensure objectivity.

put it in writing.• Planning a Performance Management System – Communication Plan • Information regarding PMS is widely disseminated across organization • Answers FAQs about the PMS. use multiple channels of communication. understand their needs. how it works. be quick. credible communicators Implementing a Performance Management System – Appeals Process • Important for addressing disagreements in ratings or decisions • Increases perceived fairness • Possible issues: Judgmental (Based on validity of rating) and administrative (Whether policies and procedures were followed) . how is it linked to other initiatives • To remove biases. such as how it fits into the strategy. one should: involve employees. provide facts.

• Planning a Performance Management System – Training Programs Areas for including in training programs How to minimize rating errors How to conduct an appraisal interview How to train. counsel and coach Reasons for implementing training programs Info on appraisal form and system mechanics How to identify and rank job activities How to observe. record and measure performance Implementing a Performance Management System • • • • • Unintentional errors occur due to the complexity of task Rater error training Frame of reference training Behavioral observation training Self-leadership training .

Implementing a Performance Management System • Reasons for rating distortion (done on purpose) Rating Inflation Rating Deflation Maximize the merit rewards Encourage employees Avoid creating a written record Avoid a confrontation Promote undesirable out of department Make manager look good Shock employees Teach rebellious employee a lesson Send a message to make the employee leave Build a record of poor performance • Such grievances can be cause of attrition or degenerative conflicts leading to loss of productivity • Transparency and Openness should be there in the system to identify issues and rectify them .

quality of information gathered.Implementing a Performance Management System • Planning a Performance Management System – Pilot Testing • Used to remove potential glitches • Corrective action to be taken • Results are not recorded to employees’ records – Monitoring and Evaluation • Measurement system needed for evaluation • Measures such as confidential employee surveys • Other measures such as: Quantity of individuals evaluated. user satisfaction with system. cost/benefit ratio .

Normalization • Normalization using forced distribution curve – To differentiate clearly between different levels of performance – To control the compensation budgets • Normalization across raters – Different raters in the organizations may rate same performance differently (some give higher scores. some less) .

– – – – Rating 1 .20% • It can be the responsibility of either the department manager or the HR or both to moderate the initial ratings of appraisal and redistribute the ratings to get the decided normal distribution • Redistribution or moderation is done by thorough reevaluation of the candidates and the ratings given .10% of employees Rating 2 .g.Example of Normalization using forced distribution • First step is determination of the distribution • E.30% Rating 3 – 40% Rating 4 .

3.33/2.75 Overall Average=30/9=3.42. 3.33/3. 2.876 Normalization factor for B=(3.Example of Normalization across raters • Say there are 2 teams.80 Rating Average of B = 11/4=2.63. 4.68. other by B • A rates 5 people below him as : 3.75)=1. 3.84 . 5.38. 4 • B rates 4 people below him as : 2.68.80)=0. 3.42.33 Normalization factor for A=(3. 4.5. 2.211 Normalized ratings for team A : 2. 4. one rated by A. 4 Rater Normalization Process: Rating Average of A = 19/5=3.5 Normalized ratings for team B : 2. 3. 2.


description of steps to be taken.PMS: Feedback and Employee Development • Personal Developmental Plans – Specify course of action to improve performance – Developmental Plan Objectives • • • • Improve performance in current job Sustain performance in current job Prepare employees for advancement Enrich employee’s work-ex – Content of Plan • Specific objectives to be reached. duration. how supervisor will know – Developmental Activities Summary list of developmental activities Courses Mentoring Getting a degree Temporary assignments OJT training Self-guided reading Attending a conference Job rotation Membership/leadership roles .

PMS: Feedback and Employee Development • 360-Degree Feedback Systems Advantages Decreased possibility of biases Increased commitment to improve Improved performance Increased awareness of expectations Improved self-perceptions of performance Reduces “undiscussables” Employees are enabled to take control of their careers Disadvantages Negative feedback may hurt feelings Anonymity may be compromised in case of small no. of raters Only once will not work Characteristics of a good system Anonymity Observation of performance Feedback of interpretation Follow-up Used for developmental purposes only Avoidance of survey fatigue Emphasis on behaviors Raters go beyond ratings Raters are trained System requires user comfort Raters may be overloaded .

ongoing process – Involves directing. Amiable and Analyzer Major functions Give advice Give support Promote greater competence Provide guidance Give confidence Key behaviors Establish objectives Document performance Give feedback Develop employees Communicate effectively Motivate employees Diagnose performance problems . motivating and rewarding employee behavior – Coaching Styles: Driver.PMS: Coaching • Coaching – Collaborative. Persuader.

• Coaching process Set Developmental goals Identify Developmental Resources and Strategies Implement Strategies Observe and Document Developmental behavior Feedback Recommendations for documentation Be specific Use adjectives and adverbs Balance positives Focus on job-related info Be comprehensive Standardize procedures Frequent Private Describe observable behavior Feedback should be Specific Consequential Verifiable Descriptive. then evaluative Timely Consistent Related to performance continuum Based on identifiable patterns of performance Confidence builder Tool for generating advice and ideas .

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