UNIT IV-Managing Performance-Managing

Note by- A.K. Manav

Performance
1. System of performance appraisal
2. Performance review- Feedback and counseling
3. Developing Person- Job Fit through competence and capacity building
4. Role and Job Designing
5. Mentoring
6. Reward and Salary Management

System of Performance Appraisal

Definition & Concept:

Performance appraisal is the process of obtaining, analyzing and recording information about the relative worth of
an employee. The focus of the performance appraisal is measuring and improving the actual performance of the
employee and also the future potential of the employee. Its aim is to measure what an employee does.

According to Flippo, a prominent personality in the field of Human resources, "performance appraisal is the
systematic, periodic and an impartial rating of an employee’s excellence in the matters pertaining to his present job
and his potential for a better job." Performance appraisal is a systematic way of reviewing and assessing the
performance of an employee during a given period of time and planning for his future.

It is a powerful tool to calibrate, refine and reward the performance of the employee. It helps to analyze his
achievements and evaluate his contribution towards the achievements of the overall organizational goals.

By focusing the attention on performance, performance appraisal goes to the heart of personnel management and
reflects the management's interest in the progress of the employees.

Objectives:
 To review the performance of the employees over a given period of time.
 To judge the gap between the actual and the desired performance.
 To help the management in exercising organizational control.
 Helps to strengthen the relationship and communication between superior – subordinates and
management – employees.
 To diagnose the strengths and weaknesses of the individuals so as to identify the training and development
needs of the future.
 To provide feedback to the employees regarding their past performance.
 Provide information to assist in the other personal decisions in the organization.
 Provide clarity of the expectations and responsibilities of the functions to be performed by the employees.
 To judge the effectiveness of the other human resource functions of the organization such as recruitment,
selection, training and development.
 To reduce the grievances of the employees.

Process of Performance Appraisal:

There is several following process of performance appraisal:

1. ESTABLISHING PERFORMANCE STANDARDS

The first step in the process of performance appraisal is the setting up of the standards which will be used to as
 the base to compare the actual performance of the employees. This step requires setting the criteria to judge the
performance of the employees as successful or unsuccessful and the degrees of their contribution to the
organizational goals and objectives. The standards set should be clear, easily understandable and in measurable
terms. In case the performance of the employee cannot be measured, great care should be taken to describe the
standards.
2. COMMUNICATING THE STANDARDS
once set, it is the responsibility of the management to communicate the standards to all the employees of the
organization.

The employees should be informed and the standards should be clearly explained to the. This will help them to
understand their roles and to know what exactly is expected from them. The standards should also be
communicated to the appraisers or the evaluators and if required, the standards can also be modified at this stage
itself according to the relevant feedback from the employees or the evaluators.

3. MEASURING THE ACTUAL PERFORMANCE

The most difficult part of the Performance appraisal process is measuring the actual performance of the employees
that is the work done by the employees during the specified period of time. It is a continuous process which
involves monitoring the performance throughout the year. This stage requires the careful selection of the
appropriate techniques of measurement, taking care that personal bias does not affect the outcome of the process
and providing assistance rather than interfering in an employees work.

4. COMPARING THE ACTUAL WITH THE DESIRED PERFORMANCE

The actual performance is compared with the desired or the standard performance. The comparison tells the
deviations in the performance of the employees from the standards set. The result can show the actual
performance being more than the desired performance or, the actual performance being less than the desired
performance depicting a negative deviation in the organizational performance. It includes recalling, evaluating and
analysis of data related to the employees’ performance.

5. DISCUSSING RESULTS

The result of the appraisal is communicated and discussed with the employees on one-to-one basis. The focus of
this discussion is on communication and listening. The results, the problems and the possible solutions are
discussed with the aim of problem solving and reaching consensus. The feedback should be given with a positive
attitude as this can have an effect on the employees’ future performance. The purpose of the meeting should be to
solve the problems faced and motivate the employees to perform better.

6. DECISION MAKING

The last step of the process is to take decisions which can be taken either to improve the performance of the
employees, take the required corrective actions, or the related HR decisions like rewards, promotions, demotions,
transfers etc.

Purpose of Performance Appraisal:

Performance Appraisal is being practiced in 90% of the organizations worldwide. Self-appraisal and
potential appraisal also form a part of the performance appraisal processes.

Typically, Performance Appraisal is aimed at:

• To review the performance of the employees over a given period of time.
• To judge the gap between the actual and the desired performance.
• To help the management in exercising organizational control.
• To diagnose the training and development needs of the future.

 Provide information to assist in the HR decisions like promotions, transfers etc.

 Provide clarity of the expectations and responsibilities of the functions to be performed by the employees.
 To judge the effectiveness of the other human resource functions of the organization such as recruitment,
selection, training and development.
 To reduce the grievances of the employees.

Challenges of Performance Appraisal:

An organization comes across various problems and challenges Of Performance Appraisal in order to
make a performance appraisal system effective and successful. The main Performance Appraisal
challenges involved in the performance appraisal process are:

Determining the evaluation criteria

Identification of the appraisal criteria is one of the biggest problems faced by the top management. The
performance data to be considered for evaluation should be carefully selected. For the purpose of
evaluation, the criteria selected should be in quantifiable or measurable terms

Create a rating instrument

The purpose of the Performance appraisal process is to judge the performance of the employees rather
than the employee. The focus of the system should be on the development of the employees of the
organization.
Lack of competence
Top management should choose the raters or the evaluators carefully. They should have the required
expertise and the knowledge to decide the criteria accurately. They should have the experience and the
necessary training to carry out the appraisal process objectively.

Errors in rating and evaluation

Many errors based on the personal bias like stereotyping, halo effect (i.e. one trait influencing the
evaluator’s rating for all other traits) etc. may creep in the appraisal process. Therefore the rater should
exercise objectivity and fairness in evaluating and rating the performance of the employees.

Resistance
The appraisal process may face resistance from the employees and the trade unions for the fear of
negative ratings. Therefore, the employees should be communicated and clearly explained the purpose
as well the process of appraisal. The standards should be clearly communicated and every employee
should be made aware that what exactly is expected from him/her.  
 Performance review- Feedback and counseling

The purpose of both counseling and feedback is to provide your staff with the information, advice
and assistance they need to contribute fully to the achievement of your organization's objectives and,
where a person fails to make the required contribution, to demonstrate that you have made an
appropriate effort to assist them.

Situations where counseling and/or feedback may be appropriate:

 as part of a regular system of performance feedback;

 assessing the performance of a probationer;
 in the context of performance appraisal;
 assessing staff training and development needs;
 in connection with a referee's report;
 after a selection process;
 if a person is planning to retire or resign from the service;
 where there is a decline in work performance;
 where the standard of conduct is not being met;
 where there has been particularly good performance;
 where a difficulty has been overcome; or
 to maintain continuing good performance.

Objective:

 Helping him to realize his potential as a manager.

 Helping him to understand himself-his strengths and his weakness.
 Providing him an opportunity to acquire more insight into his behaviors and analyze the dynamics
of such behaviors.
 Helping him to have better understanding of the environment.
 Increasing his personal and inter-personal effectiveness by giving him feedback about his
behaviors and assisting him in analyzing his inter-personal competence.
 Encouraging him to set goals for further improvement.
 Encouraging him generate alternatives for dealing with various problems.
 Providing him empathic atmosphere for his sharing and discussing his tensions, conflicts, concerns
and problems.
 Helping him to develop various action plans for further improvement.
 Helping him to review in a non-threatening way his progress in achieving various objectives.

FEEDBACK:
Feedback is generally informal and involves you and your staff member exchanging information
in a broad range of situations about how you can best work together to achieve the goals of your
organization.
Feedback ranges from oral comments on a person’s performance to written reports, such as
probation, performance appraisal or referee reports.
Providing effective feedback:
To be fully effective, feedback should be:
 based on open, two-way communication;
 timely and regular;
 factual and specific;
 understood;
 constructive; and
 Followed up.

Feedback should be a two-way process:

 Firstly, a feedback discussion should also give a staff member the opportunity to express his or her
views on your performance.
 You need to receive ‘upwards’ feedback from your staff in order to accurately gauge how well you
are fulfilling your own responsibilities.
 Secondly, if you have a concern about a person’s work performance it is usually more effective to
work with the person to develop a solution rather than attempt to impose one from above.

Timely and regular

Feedback is more effective if given on a regular, continuing basis. It need not, and should not, be limited to
structured processes. Any concerns you have about a person's performance or conduct should be addressed
promptly. Early intervention can often prevent more serious problems developing. Similarly, good performance
should be promptly recognized.

Factual and specific

You should focus on measurable performance. Avoid making unsubstantiated judgments. Give tangible, specific
examples whenever possible rather than generalizing. You should also ensure that any information that you
provide, e.g. concerning entitlements, is accurate.

Understood

Your staff needs to understand why you are giving them feedback: that their individual performance is linked to the
achievement of corporate objectives. It is also important, if you identify an aspect of a person's performance that
requires improvement that you make the person clearly aware of the established standards and in what way you
consider that they are not being met. When you talk to staff about their performance you should clearly articulate
your reasons for doing so and outline possible action that may result if there is no improvement. Problems may
arise if managers and staff place differing interpretations on a discussion. In some cases a manager may feel that he
or she has counseled a person while that person is under the impression that nothing more than a routine
discussion has taken place.

Inform the staff member prior to any discussion as to what issues you wish to discuss with them and give them an
opportunity to discuss them immediately or make another time (although you should not allow the discussion to be
deferred for an unreasonable period).

Constructive
You should be honest, but not coercive or offensive. Frame the discussion around ways to improve performance
rather than focusing solely on problems or perceived shortcomings. In many cases, even when a person is
experiencing performance problems, there will be particular tasks which they still perform well. If you open the
discussion by touching upon these positives, and then move on to the areas which require improvement,
frequently a more constructive outcome can be achieved.

Follow up

Little will be achieved if feedback is not followed up. You need continually to monitor and evaluate the
performance of your staff. When, following a feedback discussion, you agree on a course of action to improve a
person's performance, e.g. to investigate the possibility of providing training or developmental opportunities, it is
important that you follow up your commitment. It is equally important for staff to be committed to improvement
and to follow up the actions to which they have agreed.

Counseling:
Counseling is a formal process, initiated when a person has not responded to advice and assistance you
have provided on a less formal basis, and will usually involve your taking the following steps:

 advise the person in advance that a discussion about his or her work performance or conduct is to be
held at a given time and place, with sufficient notice to enable you both to come to the discussion
prepared;
 arrange for the meeting to be held in private, although a support person for the person being
counseled may be present, as well as someone you may have asked to attend as an observer; and
 Keep a brief record of the meeting this could be a diary note.
Developing Person- Job Fit through competence and capacity building