FOREIGN TRADE UNIVERSITY HO

CHI MINH CITY CAMPUS

COURSE: HUMAN RESOURCE MANAGEMENT

ASSGINMENT

Student’s name: Lê Bá Thành Phú

ID: 1805025214
Class: K56-BFB

HO CHI MINH CITY, 2019

1. Define performance management and discuss how it differs from
performance appraisal
Performance management:

It is the process of managing and developing employee performance throughout the

organization. It aims at planning, tracking and assessing employee performance for a
specific period. The end result of performance management is to motivate employees
and further increase their efficiency and effectiveness.

Performance appraisal:
The process of evaluating employee performance on a regular basis is called as
performance appraisal. Although, unlike performance management, it is restricted to
evaluating past performance and conducted once or twice a year, depending upon the
organization’s policies.
Thus essentially, performance appraisal is an integral part of a comprehensive
performance management approach.
Performance Appraisal Performance Management
Evaluating the performance and Managing and developing employee
potential of employees typically to performance to foster growth within the
determine compensation organisation
Once or twice year Ongoing process
Conducted by HR department along Multiple stakeholders are involved as the
with direct managers process is ongoing
Corrections are made retrospectively It is a forward looking process
Performance appraisal is a system Performance management is a process
Typically inflexible Completely flexible
More of an individualistic approach Can adopt according to the team’s values

Considered as an operational tool to Primarily considered as a strategic tool

improve the employee efficiency

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2. Set effective performance appraisal standards
Quality of Work
Develop standards that reflect the qualitative content and characteristics of
employee performance. This includes what a staff person is doing well and what
needs to be improved. Key aspects are utility, effectiveness, precision and
appearance. For example, say a local grocery store rates these aspects of employee
performance in such areas as customer service, merchandise displays and internal
communication. Subjective criteria are common in quality-of-work standards. For
instance, performance review standards to rate might include: “schedules
merchandisers effectively from backlog inventory reports” or “holds frontline
employees accountable for results.”
Quantity of Production
Incorporate performance evaluation standards that quantitatively address
productivity. One approach is to measure rates of error. An example of a performance
standard for a local heating and cooling appliance company might be: “Installs
appliances and provides related services to client with a recall rate of 5 percent or
less.” This approach targets a desired performance result. Another might be:
“Achieves an overall installation and service rate of 80 client visits per month.” Set
quantity-based production standards that are ambitious, but achievable.
Timeliness of Efforts
Time-based standards regard the rate of production -- including meeting
established deadlines. For a beauty salon, performance standards might be set for
timeliness, such as “total appointment time beats quoted appointment length” and
“total time to complete appointments meets or is under lead times by other stylists.”
It’s important to set realistic time-based standards for employee performance that
leave a margin for error, given other processes that need to take place in your
company and that also impact productivity.
Cost Effectiveness of Performance
A small business’s activities can be measured in dollars and cents -- and each
of your employees contributes to this reality. Identify performance evaluation

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standards that save your company money. Target specific organizational resources -
- such as money or staff time -- that can be tracked in your operating budget or other
documentation. A small Internet marketing firm might designate this cost-
effectiveness performance measure: “Decrease the amount of staff time devoted to
sales calls without reducing the number of closed sales.” Alternatively, a community
law practice might set the following goal: “Brainstorm and implement at least one
cost-reducing concept per operating quarter.”
3. Describe the appraisal process
What constitutes the Performance Appraisal process ?
The performance appraisal process, simply put, is the time of the year when
the employees are evaluated on their performance during the last six months or
one year depending upon the timeframe that is set for the same. The performance
appraisal process is conducted between the employee and his or her manager for
the first round and subsequently between the manager and the manager’s manager
before going into the third round which involves the above people excluding the
employee but involving the HR manager as well. The various rounds that
comprise the appraisal cycle correspond to the different stages of the process
culminating in the final grading of the employee.
Appraise and Appraiser
The most important round is the appraisal interview itself (we will discuss
more about this in a separate article) between the employee and his or her
manager. The employee who is being evaluated is called the appraise and the
person (usually the manager) who is doing the evaluation is called the appraiser.
The appraiser and appraise prepare themselves for this round by doing a self
evaluation (by the appraise) and an objective evaluation (by the appraiser). This
is the round in which the most important achievements as well as glaring failures
on the part of the appraise are discussed threadbare and usually the employee’s
role in the process is limited to this round.
What is the outcome of the Appraisal Process ?

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 As outlined above, the outcome of the appraisal process is the grade that is
decided for the employee as well as the salary hike or the bonus potential that is
awarded to the employee. Typically, organizations divide the year in which the
employee’s performance is evaluated into two cycles, one for deciding the salary
hike and the other for deciding how much bonus he or she gets for the cycle. In
this way, organizations ensure that there is no overlap in grading the employee
and a fair and balanced evaluation is the desired outcome though this does not
always happen in reality.
Shortcomings of the Appraisal Process
The successful completion of the appraisal process hinges on all the
participants approaching the same with an intention to contribute positively
instead of bringing personal biases and prejudices to the table. Management
experts usually prescribe a set of do’s and don’ts to the participants in order to
have an harmonious process. However, as has been pointed out above, the process
itself is not without its shortcomings and the expecting the participants to be
rational and objective at all times is indeed difficult. Further, since most
organizations decide the grades in a way similar to the b-school equivalent of
Relative Grading instead of absolute ratings, an element of competitive rivalry
creeps into the process making some employees unhappy.
4. Develop, evaluate, and administer at least four performance appraisal tools
Following are the tools used by the organizations for Performance Appraisals
of their employees:
Ranking
Paired Comparison
Forced Distribution
Confidential Report
Essay Evaluation
Critical Incident
Checklists
Graphic Rating Scale

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BARS
Forced Choice Method
MBO
Field Review Technique
Performance Test
1. Ranking Method
The ranking system requires the rater to rank his subordinates on overall
performance. This consists in simply putting a man in a rank order. Under this
method, the ranking of an employee in a work group is done against that of
another employee. The relative position of each employee is tested in terms of
his numerical rank. It may also be done by ranking a person on his job
performance against another member of the competitive group.
Advantages of Ranking Method
i. Employees are ranked according to their performance levels.
ii. It is easier to rank the best and the worst employee.
Limitations of Ranking Method
iii. The “whole man” is compared with another “whole man” in this
method. In practice, it is very difficult to compare individuals
possessing various individual traits.
iv. This method speaks only of the position where an employee stands in
his group. It does not test anything about how much better or how much
worse an employee is when compared to another employee.
v. When a large number of employees are working, ranking of individuals
become a difficult issue.
vi. There is no systematic procedure for ranking individuals in the
organization. The ranking system does not eliminate the possibility of
snap judgements.
2. Forced Distribution method
This is a ranking technique where raters are required to allocate a certain
percentage of rates to certain categories (eg: superior, above average, average) or

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percentiles (eg: top 10 percent, bottom 20 percent etc). Both the number of
categories and percentage of employees to be allotted to each category are a
function of performance appraisal design and format. The workers of outstanding
merit may be placed at top 10 percent of the scale, the rest may be placed as 20
% good, 40 % outstanding, 20 % fair and 10 % fair.
Advantages of Forced Distribution
i. This method tends to eliminate raters bias
ii. By forcing the distribution according to pre-determined percentages,
the problem of making use of different raters with different scales is
avoided.
Limitations of Forced Distribution
iii. The limitation of using this method in salary administration, however,
is that it may lead low morale, low productivity and high absenteeism.

Employees who feel that they are productive, but find themselves in
lower grade(than expected) feel frustrated and exhibit over a period of
time reluctance to work.
3. Critical Incident techniques
Under this method, the manager prepares lists of statements of very effective and
ineffective behaviour of an employee. These critical incidents or events represent
the outstanding or poor behaviour of employees or the job. The manager
maintains logs of each employee, whereby he periodically records critical
incidents of the workers behaviour. At the end of the rating period, these recorded
critical incidents are used in the evaluation of the worker’s performance. Example
of a good critical incident of a Customer Relations Officer is : March 12 - The
Officer patiently attended to a customers complaint. He was very polite and
prompt in attending the customers problem.
Advantages of Critical Incident techniques
i. This method provides an objective basis for conducting a thorough
discussion of an employees performance.

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 ii. This method avoids recency bias (most recent incidents are too much
emphasized)
Limitations of Critical Incident techniques
iii. Negative incidents may be more noticeable than positive incidents.
iv. The supervisors have a tendency to unload a series of complaints about
the incidents during an annual performance review sessions.
v. It results in very close supervision which may not be liked by an
employee.
vi. The recording of incidents may be a chore for the manager concerned,
who may be too busy or may forget to do it.
4. Checklists and Weighted Checklists
In this system, a large number of statements that describe a specific job are given.
Each statement has a weight or scale value attached to it. While rating an
employee the supervisor checks all those statements that most closely describe
the behaviour of the individual under assessment. The rating sheet is then scored
by averaging the weights of all the statements checked by the rater. A checklist
is constructed for each job by having persons who are quite familiar with the jobs.
These statements are then categorized by the judges and weights are assigned to
the statements in accordance with the value attached by the judges.
Advantages of Checklists and Weighted Checklists
i. Most frequently used method in evaluation of the employees
performance.
Limitations of Checklists and Weighted Checklists
ii. This method is very expensive and time consuming
iii. Rater may be biased in distinguishing the positive and negative
questions.
iv. It becomes difficult for the manager to assemble, analyze and weigh a
number of statements about the employees characteristics,
contributions and behaviours.

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5. Explain and illustrate the problems to avoid appraising performance.
Incomplete, inaccurate, vague, and subjective performance evaluations are
common fare in many organizations. Unfortunately, they are also the
incriminating evidence in any resulting wrongful termination or
discrimination case. While no supervisor or manager should give an
unproductive employee ambiguous feedback simply to avoid a possible
lawsuit, managers must be mindful of the legalities of their performance
management practices.
Should a former employee file charges against your company, your
performance management reports can either make or break your defense. With
that in mind, are your supervisors and managers keeping accurate and detailed
performance appraisals for every employee? Would the reports you have on
file adequately defend your decision to terminate, transfer, or demote an
employee?

The fact is that many evaluators unknowingly distort performance reviews,

which could ultimately hurt the company in a legal battle. When you know
why such distortions occur, you can take the necessary steps to rectify the
situation, practices, and procedures.

1. Inadequate preparation: Supervisors often feel that they have too much to
do and insufficient time. Since performance appraisals are neither
intellectually challenging nor enjoyable, many supervisors procrastinate doing
the paperwork. As a result, the appraisals lack attention to important details
such as language and consistency, and they are often void of complete
descriptions of the employees’ work performance. Supervisors should plan
ahead and take the necessary time to perform and document appraisals.

2. Lack of clear standards: Clear, measurable performance standards are

essential for accurate and legally defensible performance appraisals. Objective

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standards, communicated clearly and consistently to employees, are the only
way to ensure that employees understand what is expected of them. Clear
standards apply to specific and significant tasks of the position, reflect
acceptable or satisfactory levels of performance, are expressed precisely, focus
on critical and specific aspects or features of performance, and address both
measurable performance criteria (such as production goals) and elements of
judgment and initiative.

3. Inconsistency in ratings among supervisors: Employees frequently allege

employment discrimination when supervisors reprimand or discipline them for
infractions that other employees routinely get away with. Sometimes this
occurs with the same supervisor, but more often it is the result of different
perceptions among supervisors about what constitutes acceptable
performance. Supervisors should clarify performance standards for like jobs
to achieve a consensus regarding performance-rating definitions.

4. Rating personality rather than performance: Supervisors may respond

quickly or strongly to personality traits, such as aggressiveness, that prevent
them from objectively evaluating performance. The appraisal should focus
only on actions, accomplishments, and specific instances of unacceptable
performance.

5. The “halo effect”: A halo effect occurs when a supervisor gives an excellent
employee top ratings in all areas or gives an unsatisfactory employee low
ratings in all areas. The halo effect results from the supervisor’s tendency to
let a strong judgment in one area color his or her judgment of other behaviors.
In reality, poor employees usually have some strengths, just as high achievers
have some weaknesses. Job-specific performance standards can minimize the
halo effect.

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6. Inappropriate time span: Performance appraisals should cover the entire
rating period and the employee’s progress from one rating period to the next.
Supervisors should address each element of performance, including
improvement from the immediately preceding appraisal. Supervisors who
refer back to incidents that occurred before the last appraisal are potentially
unfair to the employee and risk letting subjectivity into their analysis.

7. The “contrast effect”: The exceptionally good (or bad) performance of one
or more employees may greatly distort the evaluations that others receive.
While contrasting the relative contributions of a group of employees
contributes constructively to the appraisal performance process, the rating of
one employee should not shift the ratings for others except in extraordinary
circumstances (such as a limited bonus pool).

8. Inadequate observation: Supervisors who are not thoroughly familiar with

all aspects of an employee’s performance may feel compelled to complete
standardized forms completely. Such supervisors should not conduct the
appraisal, as they are often unable to arrange for a sufficient number of
observations or to completely review written reports or other work the
employee produces. Let supervisors know they can ask for help with appraisals
when needed to reduce the risk of subjectivity that is not job-related and
assumptions about the employee that are based upon personal characteristics.

9. Overemphasis on uncharacteristic performance: Unusual behavior is often

more memorable than typical behavior. Supervisors observing behavior that
seems uncharacteristic should make an effort to determine whether it is part of
a pattern or is related to a medical problem or disability.

10. Unduly negative ratings: Sometimes supervisors deflate an employee’s

performance rating because they believe the employee will benefit from a

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“push.” Other times they are attempting to subdue a troublesome employee, to
use fear as a motivation to improve, to encourage a problem or marginal
employee to leave, to develop a pretextual reason for dismissal or discipline,
to create a record to justify a discharge, or to “cover up” performance problems
of other employees or problems within the supervisor’s department.

11. Inflated ratings: When supervisors are uncomfortable being candid with an
employee for fear of discrimination charges, they may inflate the employee’s
performance rating. To make the appraisal easier, keep a file of work samples,
reports, or information that reflects performance results during the rating
period. Other reasons for inflating ratings include: to boost an employee’s
spirits or encourage a marginal employee to work harder, to avoid
confrontation with a hostile employee or to avoid claims of discrimination, to
get difficult employees transferred out of the department, to boost the relative
rankings of their subordinates or department vis-a-vis other departments, to
keep from revealing the department’s problems to management, or to save
time and avoid the level of documentation required to support performance
appraisals that might trigger discipline and/or discharge.

12. Subjective language in written appraisals: Even carefully constructed

written appraisals may contain language that the courts could misconstrue
during a trial. Sometimes assumptions about people based on their personal
characteristics invade the appraisal process. Even when the comment is
“positive,” if it references gender, age, or other characteristics, it may reveal a
mixed motive. Some examples include:

Age —

Too set in his/her ways;

Can’t teach an old dog new tricks;

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Lacks “energy” or “drive.”
Gender —

Brings a welcome woman’s touch to her work;

Uses “unladylike” language;
“Effeminate mannerisms” make exercise of authority difficult.
Disability —

Lacks front office appearance;

May be embarrassed by negative reactions of other employees and/or
customers, suppliers, or vendors.
Race/ethnicity —

The “chemistry” isn’t right;

Communication difficulties due to “detectable accent”;
Not a team player.
When you’re aware of the common performance appraisal distortions, you can
implement corrective measures to prevent them from occurring in the future.
Educate your supervisors and managers about the legal liabilities their
performance management practices could provoke so you can lessen your
company’s chances of being sued. The less time your company’s supervisors
and managers spend in the courtroom, the more productive they’ll be.

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