Human Resource Management

Lecture 10

Dr Fatima Ashraf
Performance
Management
Agenda points:
• Performance Management
• Appraisal process steps
• MBO
• Performance appraisal distortions
 Introduction
- PA may be a five-minute informal discussion
between employees and their supervisors or a
several-week process.
- Employees generally see PA as having some
direct effect on their work lives….it may lead to
increased pay, a promotion, or assistance in
personal development areas/ training.
- Many factors go into PA….why evaluate, who
should benefit from the evaluation, what type
of evaluation to use, what problems might be
encountered.
- No PA system is perfect due to…. poor
appraisal training/ obsolete measures/ the
- Some jobs change so frequently that it’s
impossible to clearly define what an
employee should do over the next twelve
months.
- Performance management systems are
expected to survive in some format…..
understanding the foundations of
performance management systems, the way
appraisals might be constructed, potential
problems that one may encounter – benefits
anyone involved in contemporary
organizations.
- It helps executives know precisely how well
the organization is progressing on meeting
 Performance Management Systems (PMS) involves
many activities, not simply work review.
- Purposes of a PMS:
- Convey to employees how well they have performed on
established goals (mutually set by employee & supervisor).
Without two-way feedback, the risk of negatively
impacting employee motivation is there.
- Development….areas in which an employee has a
deficiency or weakness/ an area that may be improved
through performance enhancement.
- Documentation…. legal aspects of employee
performance…incase of termination or poor job
assignments (for refusing a supervisor’s advances,) existing
documentation can show that action was inappropriate.
The Appraisal Process
Appraisal Methods
Using Achieved Outcomes to Evaluate
Employees….
- Employees are evaluated on how well they
accomplish a specific set of objectives
determined as critical in the successful
completion of their job, referred to as MBO.
- Appeal…emphasis on converting overall
objectives into specific objectives for
organizational units and individual members.
-MBO makes objectives operational by a process
in which they cascade down through the
organization.
- As lower-unit managers participate in setting
their own goals, MBO works from the bottom
- For the individual employee, MBO
provides specific personal performance
objectives, so each person has an
identified specific contribution to unit’s
performance.
- If all the individuals achieve their goals,
the unit will meet its goals….
organization’s overall objectives will
become a reality.
• Specific goals
• Participative decision making
• Specific time period
• Performance feedback
Factors That Can Distort Appraisals
Leniency Error…PA distortion caused by evaluating
employees against one’s own value system…positive
leniency error (overstated PA) and negative leniency error
(understated PA).
Halo Error….The tendency to let assessment on one trait
influence evaluation on other traits; to rate either extremely
high or low on all factors based on rating of one or two
factors.
Similarity Error….Evaluating employees based on the way
an evaluator perceives himself or herself; projection of self-
perceptions onto others.
Low Appraiser Motivation…accurate appraisals are
difficult to obtain if rewards depend on the results.
Central Tendency….the tendency of a rater to give
average ratings.
Inflationary Pressure… low differentiation within
the upper range of the rating choices. Negative
repercussions from evaluation are reduced by
inflating or upgrading appraisals.
Attribution Theory….. A theory of performance
evaluation based on the perception of who is in
control of an employee’s performance….. attempts
to differentiate between elements the employee
controls (internal) versus those the employee
cannot control (external).
Assignment 7
Class discussion