Managing

Employee
Performanc
e and
Performanc
e Appraisal
Chapter 4
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  The main components in a performance
management system.
 The benefits of having an effective performance
appraisal system.

Preview  The factors to consider when designing an

appraisal system.
 The requirements for implementing an
appraisal system.
 The types of follow-up action which may be
taken after an employee’s performance has
been appraised.

Copyright © 2023 by McGraw Hill Malaysia. All rights reserved.

 What is a
An employee performance management
Performanc system is a means to ensure that every
e employee works in a manner which is
aligned with organizational goals and
Managemen which ensures that the employee reaches
t System? his maximum potential on the job.

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HR Systems
Related to Recruitment of workers
Performanc Training
e Compensation and reward systems
Managemen Managing the performance of
individual employees
t

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Performanc An organization’s performance
management system is designed by
e HR specialists.
Managemen The performance management
t Systems system is implemented by heads of
departments and all managers.

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 Factors
Affecting
Employee
Performanc
e

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 Organizational plans, including the setting
Component of objectives which are established for all
s of a levels down to the individual worker.
Implementation of the work by the
Performanc individual worker, accompanied by
e appropriate forms of monitoring by the
worker’s manager or supervisor.
Managemen Appraisal of the work of the individual
t Systems workers.
Follow-up action taken after the appraisal.

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Performanc
e
Managemen
t

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 If employees are to perform well,
Objective they must:

s KNOW WHAT they are supposed to

do, and
KNOW HOW to do the work.

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 The objectives/targets/key result areas/key
performance indicators established for
each employee must be:
Objective Capable of achievement by the
s (cont.) employee
Measurable
Accepted by the employee
Time-bound

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 Performance objectives may relate to:

Objective Quantity of output

s (cont.) Quality of output

Behaviour of employee
Development of employee

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 While the work is being carried out by the
Implementatio employee, the manager must:
n of Work by Monitor;
the Employee Give feedback regularly; and
Coach, if necessary.

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 Encourages quality performance by
rewarding those who do well.
Benefits of a Improves current performance by giving
workers feedback.
Performance Assists in identifying training needs.
Appraisal Provides documentation if disciplinary
System proceedings are needed.
Provides a channel of communication
between managers and their
subordinates.

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 Are integrated into a performance
management system.
Effective Receive top management support.
Appraisal Are customized to the needs of the
organization.
Systems Are acceptable and understandable.
Are reliable and unbiased as far as
possible.

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 Potential Recency effect
Bias in Halo effect
Performance Central tendency
Appraisal Prejudice and stereotyping
Fatigue

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 Who Gives
Input into an
Appraisal?

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 Comparative methods
Appraisal
Method Trait rating scales
Essay technique

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 Skills
Needed for Observation of performance
Effective Coaching
Performance Counselling
Management

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 Follow-up???
After the Set objectives for next time period
Appraisal Give rewards
Discussion Provide retraining
Institute disciplinary action

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 Prior to dismissing an employee for
poor performance, an employer must:
Dismissal for
Give warnings to the employee
Poor Provide assistance so that he or she
Performance can improve
Give sufficient time for the
employee to improve

Copyright © 2023 by McGraw Hill Malaysia. All rights reserved.

  The main components in a performance
management system.
 The benefits of having an effective
performance appraisal system.

Review  The factors to consider when designing

an appraisal system.
 The requirements for implementing an
appraisal system.
 The types of follow-up action which may
be taken after an employee’s
performance has been appraised.

Copyright © 2023 by McGraw Hill Malaysia. All rights reserved.