Performance Management Definitionthe process that consolidates goal setting

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Performance Management Definition-the process that consolidates goal setting, performance appraisal, and development into a

Performance Management Definition-the process that consolidates goal setting, performance appraisal, and development into a single common system, the aim of which is to ensure that the employee’s performance is supporting the company’s strategic aims.

3 features of performance management 1. 2. a. b. Goal setting- goals be SMART

3 features of performance management 1. 2. a. b. Goal setting- goals be SMART Performance Appraisal. Setting standards Assessing performance of employee relative to set standards c. Providing feedback to the employee with the aim to motivate him to eliminate deficiencies or to continue to perform above par. 3. Common system to ensure that employee’s performance is supporting company’s strategic goals.

Objectives of Performance Management 1. Total quality- employees performance is a function of things

Objectives of Performance Management 1. Total quality- employees performance is a function of things like training, communication, tools, and supervision that of his or her own motivation. 2. Issues of traditional performance appraisal- appraisals are sometimes tense and counterproductive. 3. Strategic Focus- PM recognizes globally competitive environment, every employee’s competencies and efforts must focus on helping the company achieve its strategic goals. Continuously setting and meeting ever -higher quality, low cost, in time delivery and ensure availability goals.

Difficulties in Performance Management system There are two categories of difficulties: 1. Focus on

Difficulties in Performance Management system There are two categories of difficulties: 1. Focus on Individual- evaluation of some one comes to eye-to-eye see each other – employee perceives that performance is in outstanding fashion but supervisor feel it is below standard(emotions are included so it is difficult). 2. Focus on Process – performance evaluations are conducted in a structured way, attached with pay increases, supervisor tries to identify problems in process that sometimes create emotional encounters in people in that process.

Building Blocks of Effective Performance Management System 1. Direction sharing- communicating organizational goals (vision,

Building Blocks of Effective Performance Management System 1. Direction sharing- communicating organizational goals (vision, mission, values, and strategy) throughout the organization and translating into doable departmental goals. 2. Role Clarification – day to day work of employees is properly clarified. 3. Goal setting and planning- translating organizational and departmental goals into specific goals of each employee. 4. Goal Alignment- to ensure that organizational goals and employees goals are linked with each other. 5. Departmental goal setting- everyone knows- what I have to do achieve my goals.

Building Blocks of PMS 6. Ongoing performance monitoring- conveying employees what progress they have

Building Blocks of PMS 6. Ongoing performance monitoring- conveying employees what progress they have to make to achieve their goals. 7. Coaching and support should be an integral part of feedback process. 8. Performance assessment- to plan how employee performance produces improved company results. 9. Rewards and recognition and compensation- play a vital role in goal-oriented performance track. 10. workflow, process control, and return on investmentmanagement make sure that performance of employees is meaningfully linked with overall company’s measureable performance.

Performance Appraisal The setting of standards, assessing the performance of employees relative to set

Performance Appraisal The setting of standards, assessing the performance of employees relative to set standards and providing feedback to the employee with the aim to motivate him to eliminate deficiencies or to continue to perform above par.

Objectives of Performance Appraisal 1. Decisions are made on the basis of PA: a.

Objectives of Performance Appraisal 1. Decisions are made on the basis of PA: a. Pay enhancement b. Promotion to higher posts. c. Increase or renew the tenure of employment 2. Translation of strategic goals into: a. Organizational goals b. Departmental goals c. Employee goals

Appraisal Process The appraisal process evaluates employee performance by measuring progress towards goals. 1.

Appraisal Process The appraisal process evaluates employee performance by measuring progress towards goals. 1. Establish performance standards with employees. 2. Communicate expectations. 3. Measure actual performance. 4. Compare actual performance with standards. 5. Discuss the appraisal with the employee. 6. If necessary, initiate corrective action.

Appraisal Methods Three approaches exist for doing appraisals: employees can be appraised against 1.

Appraisal Methods Three approaches exist for doing appraisals: employees can be appraised against 1. Absolute Standards. 2. Relative standards. 3. Outcomes.

1. Absolute Standards Evaluating employee’s performance against established standards. The following 5 methods are

1. Absolute Standards Evaluating employee’s performance against established standards. The following 5 methods are used under absolute standards. 1. Critical Incident Appraisal 2. The check list – 3. The graphic rating scale 4. Forced choice 5. Behaviorally anchored rating scales

1. Absolute Standards 1. Critical Incident Appraisal- A performance evaluation that focuses on key

1. Absolute Standards 1. Critical Incident Appraisal- A performance evaluation that focuses on key behaviors that differentiates between doing a job effectively or ineffectively. 2. Checklist Appraisal – A performance appraisal method in which a rater checks off applicable employee attributes. 3. Graphic Rating Scale – A performance appraisal method that lists traits and a range of performance for each.

Absolute standards (cont. ) 4. Forced-choice Appraisal – A performance appraisal in which the

Absolute standards (cont. ) 4. Forced-choice Appraisal – A performance appraisal in which the rater must choose between two specific statements about an employee’s work behavior. Ex- yes or no 5. Behaviorally Anchored Rating Scales- A performance appraisal technique that generates critical incidents and develops behavioral dimensions of performance. The evaluator appraises behaviors rather than traits.

2. Relative Standards Evaluating an employee’s performance by comparing the employee with other employees.

2. Relative Standards Evaluating an employee’s performance by comparing the employee with other employees. There are three method most popular in relative standards: 1. Group Order Ranking- top 20%, top 5% or so 2. Individual Ranking- Ranking employees’ performance from highest to lowest. 3. Paired Comparison- Ranking individuals’ performance by counting the times any one individual is the preferred member when compared with all other employees.

Outcomes based Appraisal or Management by Objective (MBO) The employees are evaluated what they

Outcomes based Appraisal or Management by Objective (MBO) The employees are evaluated what they have accomplished a specific set of objectives determined as critical in the successful completion of their jobs. MBO- A performance appraisal method that includes mutual objectives setting and evaluation based on the attainment of the specific objectives.

Common Elements in MBO 1. 2. 3. 4. There are four elements in MBO

Common Elements in MBO 1. 2. 3. 4. There are four elements in MBO Specific goals- to cut departmental costs by 10% Participative Decision Making- goals are set with participation of boss and employee Specific Time Period- concise time duration like 3 months, 6 months or One year. Performance Feedback- continuous on performance and goals to monitor and correct their own actions.

Factors Distorting Appraisals There are 7 factors that may distort the appraisal will be

Factors Distorting Appraisals There are 7 factors that may distort the appraisal will be meaningless and useless exercise and wastage of resources (time and money). Sometimes there are no standard measures to evaluate the employee and in this way the whole appraisal process remains in vain because every evaluator has his own standard. The people like teachers, engineers, consultant or auditors have different connotations to measure the performance.

7 Factors distorting appraisals 1. Leniency Error- Performance appraisal distortion caused by evaluating employees

7 Factors distorting appraisals 1. Leniency Error- Performance appraisal distortion caused by evaluating employees against one’s own value system. 2. Hallo Effect- the tendency to let our assessment of an individual on one trait influence our evaluation of that person on other specific traits. 3. Similarity Error- Evaluating employees based on the way an evaluator perceives himself or herself.

7. Factors distorting appraisals (cont. ) 4. Central Tendency- giving average ratings to all

7. Factors distorting appraisals (cont. ) 4. Central Tendency- giving average ratings to all employees irrespective of their performance. 5. Inflationary Pressures- increasing performance in coming periods but it may be the highest level of possible performance. 6. Inappropriate Substitute for Performance- what is known as “good Job” if there is no performance substitute then difficult to appraise fairly and justifiably. 7. Low Appraiser’s Motivation- if evaluator knows that poor appraisal may hurt in shape of promotion, firing, or any other then he will not give realistic appraisal.

Attribution Theory PMS The theory attempts to differentiate who is in control of performance.

Attribution Theory PMS The theory attempts to differentiate who is in control of performance. 1. When appraisers attribute an employee’s poor performance to internal control, the judgment is harsher than when the same poor performance is attributed to external factors. 2. When an employee performs satisfactorily, appraisers will evaluate the employee more favorably if the performance is attributed to the employee’s own efforts than if the performance is attributed to outside forces.

Creating more Effective PMS (road to success) There are six factors that arithmetically added

Creating more Effective PMS (road to success) There are six factors that arithmetically added will create an effective performance management system. 1. Use behavior-Based Measures 2. Combine Absolute and Relative Standards 3. Provide Ongoing Feedback 4. Use Multiple Raters a. Use Peer Evaluation b. Use 360 -Degree Appraisals 5. Rate Selectivity 6. Train Appraisers

Creating more Effective PMS (road to success) 1. Use Behavior-Based Measures. Traits like: loyalty,

Creating more Effective PMS (road to success) 1. Use Behavior-Based Measures. Traits like: loyalty, courage, reliability, and self-expression are intuitively blessed with high performance but research evidence is sometimes in favor and sometimes against that, but. To rate employee on the basis of behaviors like: A – Assalam-o-Aleekum to customers and colleagues B - Assistance and advice to co-workers C - Always consolidates his office table (files and letters) at the end of the day. These are behaviors that should be considered in appraising the employee will enhance the performance of the workforce.

Creating more Effective PMS (road to success) 2. Combine Absolute and Relative Standards: Absolute

Creating more Effective PMS (road to success) 2. Combine Absolute and Relative Standards: Absolute measures are direct evaluation of performance while in relative to other coworkers. 3. Provide Ongoing Feedback: the best surprise is no surprise, not holding onto the end of the year but keep it ongoing through out the year.

Creating more Effective PMS (road to success) 4. Use Multiple Rater- not depending on

Creating more Effective PMS (road to success) 4. Use Multiple Rater- not depending on the one person’s evaluation but use it at different levels and by different people. a. Use Peer Evaluation- A performance assessment in which co-workers provide input into the employee’s performance. b. Upward Appraisal- Frank and constructive feedback for supervisors. c. 360 -Degree Appraisals-Performance evaluations in which supervisors, peers, employees, customers, and the like evaluate the individual

Creating more Effective PMS (road to success) 5. Rate Selectivity- Only that rater should

Creating more Effective PMS (road to success) 5. Rate Selectivity- Only that rater should evaluate the individual who knows the job behaviors personally and will give good evaluation in the area otherwise evaluation will become futile exercise and inaccurate feedback. 6. Train Appraisers- Evaluators should be fair enough to evaluate employees and having the job knowledge with proper methodology to measure the performance without any bias.

PA Meeting be Effective Big problem is employees are not provided constructive feedback with

PA Meeting be Effective Big problem is employees are not provided constructive feedback with proper meeting and appraisal process becomes useless. Steps to make PA meetings fruitful 1. Prepare for and schedule the appraisal- data of employees performance, comments and suggestions on last years’ appraisal. 2. Explain the purpose of PA and create environment of ease, ensure that your body language is not threatening.

PA Meeting be Effective 3. Make sure that employees knows the appraisal process and

PA Meeting be Effective 3. Make sure that employees knows the appraisal process and its consequences, its’ effect on pay raise. 4. Give the opportunity to employee to participate in appraisal discussion, and the appraiser should not speak more but also to listen the point view of subordinate. 5. Focus discussion on work behaviors only, not attack on employee.

PA Meeting be Effective 6. Support your Evaluation by examples. Give proper explanation and

PA Meeting be Effective 6. Support your Evaluation by examples. Give proper explanation and identification of mistakes and how these can be managed. 7. Give both positive and negative feedback, it gives the employee better understanding of the work. 8. Ensure that employee understands and ask him what is discussed in appraisal meeting. 9. Generate a development plan. Appraisal plan revolves around feedback and documentation but a plan should be developed for improvement in future.