HRM

CHAP 10: ESTABLISHING THE PERFORMANCE MANAGEMENT SYSTEM:

PERFORMANCE APPRAISAL VS PERFORMANCE MANAGEMENT:
 SCOPE AND FOCUS:
EVALUATING PERIODICALLY/ ONGOING GOALS, FEEDBACK.
 TIME ORIENTATION:
SPECIFIC INTERVAL. / CONTINOUS, NOT CONFIDE TO SPECIFIC TIME.
 PURPOSE:
EVALUATE PAST PERFORMANCE FOR DECISION LIKE PROMOTION. / ALIGN. INDIVIDUAL AND TEAM GOALS WITH
OBJECTIVES.
 COMPONENTS:
FORMAL REVIEW MEETING / CONTINOUS FEEDBACK, COACHING & DEVELOPMENT PLANNING.
 FEEDBACK & DEVELOPMENT:
EMPHASIZE HISTORICAL FEEDBACK. / PRIORITIZE CONTNOUS FEEDBACK AND DEVELOP FOR ONGOING
IMPROVEMENT.
INTRODUCTION:
 Purpose: Enhances employee performance and development.
 Goal Alignment: Links individual and team goals with organizational objectives.
 Performance Criteria: Establishes clear and measurable standards for evaluation.
 Feedback and Coaching: Provides regular feedback and support for improvement.
 Appraisal Process: Evaluates performance through self-assessment, manager assessments, and peer reviews.
 Development Planning: Shapes individual development plans based on performance appraisals.
 Recognition and Rewards: Recognizes and rewards high performers.
 Continuous Improvement: Regularly reviews and refines the system for effectiveness.

MAIN PURPOSE OF PERFORMANCE MANAGEMENT:

The three main purposes of performance management systems are typically:

 Performance Improvement: Enhancing individual and team performance by setting clear expectations,
providing feedback, and identifying opportunities for development.
 Goal Alignment: Aligning individual and team goals with the overall objectives of the organization to ensure
that everyone is working towards the same outcomes.
 Talent Development: Supporting employee growth and development by identifying strengths and areas for
improvement, and creating plans to foster professional development.

APPRAISAL PROCESS:
1. ESTABLISH PERFORMANCE STANDARDS WITH EMPLOYEES (Collaboratively define clear and measurable
performance expectations.)
2. COMMUNICATE EXPECTATIONS AND SET GOALS (Clearly convey performance objectives and individual or team
goals.)
3. MEASURE ACTUAL PERFORMANCE (Collect data to evaluate employees' performance against predetermined
standards.)
4. COMPARE ACTUAL PERFORMANCE WITH STANDARDS (Collect data to evaluate employees' performance
against predetermined standards.)
5. DISCUSS THE APPRAISAL WITH THE EMPLOYEES (Engage in a constructive dialogue to review the appraisal
results and provide feedback.)
6. IF NECESSAY, INITIATE CORRECTIVE ACTION. ( Implement improvements or address any performance issues
identified during the appraisal process.)
MISTAKES MANAGERS CAN MAKE IN GIVING PERFORMANCE REVIEW:
1. WAITING FOR THE PERFORMANCE APPRAISAL TO GIVE FEEDBACK
2. OVEREMPHASIZING RECENT PERFORMANCES
3. BEING TOO POSITIVE OR NEGATIVE
4. BEING CRITICAL WITHOUT BEING CONSTRUCTIVE
5. TALKING NOT LISTENING

APPRAISAL METHOD:
ABSOLUTE STANDARD:

CRITICAL INCIDENT APPRAISAL:

INVOLVE DOCUMENTING SPECIFIC EXAMPLES PF EXPECTIONAL OR POOR PERFORMANCE

THESE INCIDENTS SERVE AS THE BASIS FOR EVALUATING AN EMPLOYEES’S OVERALL PERFORMANCE.

EXAMPLE: AN EMPLOYEE DEMONSTRATING EXCEPTIONAL PROBLEM-SOLVING SKILLS DURING A CRITICAL

PROJECTS.

CHECKLIST APPRAISAL:

UTILIZES A CHECKLIST OF BEHAVIORAL DESCRIPTIONS FOR PERFORMANCE EVALUATION.

EXAMPLE:

PUNCTUALITY, QUALITY OF WORK, TEAM COLLABORATION.

GRAPHIC RATING SCALE APPRAISAL:

UTILIZES A PRE-DETERMINED SCALE OF RATE EMPLOYEES ON VARIOUS PERFORMANCE FACTORS.

EXAMPLE: JOB KNOWLEDGE, QUALITY OF WORK, INTERPERSONAL COMMUNICATION

FORCED CHOICE APPRAISAL:

 Evaluators choose statements that best describe an employee's performance.

 Helps reduce bias by presenting tough choices between positive or negative descriptors.
BEHAVIORALLY ANCHORED RATING:

1. Uses specific behavioral examples to define performance levels.

2. Combines descriptions and ratings for a clear view of employee performance.
RELATIVE STANDARD: involve comparing an employee's performance to that of their peers or colleagues.

1. Group Order Rank:

 Employees ranked based on their performance within their groups or teams.
 Comparison of employees in relation to their peers' performance.
2. Individual Ranking:
 Employees are individually ranked based on their performance.
 Comparison of each employee's performance against others in the organization.
3. Pair Comparison:
 Employees are evaluated in pairs with the rater selecting the better performer in
each pair.
 Comparison of each employee's performance against their colleagues'.
ACHIEVED OUTCOMES:

MANAGEMNET BY OBJECTIVES:
includes mutual objective-setting and evaluation based on the attainment of the specific objectives.
firm’s overall objectives translate into specific objectives at the divisional/departmental/ individual levels
COMMON ELEMENTS:

1. goal specific
2. participative decision making
3. a specific time period
4.performance feedback

DISTORTION:
1. Rater Bias: Personal opinions or stereotypes affecting the rating.
2. Leniency or Strictness: Raters consistently giving high or low ratings.
3. Recency Effect: Overemphasizing recent performance.
4. Halo Effect: Letting one positive trait influence the entire rating.
5. Central Tendency: Giving average ratings to all employees.
6. Similar-to-Me Bias: Preferring employees similar to the rater.
7. Contrast Effect: Comparing employees rather than assessing their individual
performance.
ATTRIBUTION THEORY:
evaluations are affected based on whether someone’s performance is due to:

internal factors they can control / external factors they cannot control

CREATE BETTER PERFORMANCE MANAGEMENT SYSTEM:

5. USE BEHAVIOR BASED MEASURES.
6. COMBINE ABSOLUTE AND RELATIVE STANDARDS
7. PROVIDE ONGOING FEEDBACK
8. USE MULTIPLE RATERS.
9. RATE SELECTIVELY.
10. TRAIN APPRAISERS.