Performance Management

Rajesh Mokale

1
NATURE OF PERFORMANCE APPRAISAL
• Performance Appraisal
• Assessment of an individual’s performance in a systematic way
• An objective assessment of an individual’s performance against well defined standards.

• Performance Management
• The entire process of appraising performance, giving feedback to the employees, and offering
rewards

• Measured against various factors

• job knowledge, quality and quantity of output, initiative, leadership abilities, supervision,
dependability, co- operation, judgement, versatility, health, etc.

• Based on past performance and future performance

• Linked to job analysis
• Job analysis sets out requirements, which are translated into performance standards
Relationship of Performance Appraisal and Job Analysis

Doing Job Analysis Setting Performance

• Describes Work and Performance Appraisal
Personnel Standards • Describes job
Requirements of a relevant
• Translate job
particular job strengths and
requirements
into levels of weaknesses of
acceptable each individual
performance
Paradigm Shift in Performance Management Outlook
From To
Merit Rating Performance Management
Routine Activity Strategic Importance
System thinking Process thinking
Appraisal by top management Joint Review
Top Down 360°
Directive Supportive
Owned by HR Owned by users
Confidential Reporting Transparent Reporting
Actual Performance Potential Performance
Outputs Outputs/ Inputs
Objectives of Performance Appraisal
• To confirm the services of probationary employees upon completing the probationary
period satisfactorily
• To assess the training and development needs of employees
• To let the employees know where they stand insofar as their performance is concerned
• To decide upon a pay raise and increments
• To effect promotions based on competence and performance
• To improve communication
• provides a format for dialogue between the superior and the subordinate, and improves
understanding of personal goals and concerns

• To determine effectiveness of HR programs such as selection, training, and transfers

Principles of Performance Appraisal
• Corporate goals are translated in • Transparency is needed at every
to individual, team, stage
departmental and divisional • Simple and easy to understand
goals and respond
• It should not be linked with only • Consensus and co-operation
financial rewards needed, not control and coercion
• Performance improvement is an • Involvement of all stakeholders
ongoing process and improves in designing formats, policies and
over time procedures is needed
• Continuous feedback is essential • It should cover all employees
 Usage of Performance Appraisal
Organizational
Developmental Uses Administrative Use Documentation Process
Maintenance

Identification of individual
Recognition of individual
strengths and developmental HR planning Documentation for HR decisions
performance
needs

Determining organisation training

Performance feedback Salary Helping to meet legal requirement
needs

Identifying Criteria for validation

Determining transfers and job Reinforcement of organisational research
Promotion
assignments development needs

Evaluation of organisational goal

Retention or termination
achievement

Evaluation of HR systems
Lay-offs Information for Future goal
identification
The Performance Appraisal Process
Deciding Objectives of Performance Appraisal
• Contributing to HR Functions
• Measuring individual level performance
• Effecting promotions and transfers,
• Assessing training needs,
• Awarding pay increases etc.

• Understanding systemic factors that may contribute to the improvement and

development of individual
• The physical environment such as noise, ventilation and lightings
• Available resources such as human and computer assistance
• Social processes such as leadership effectiveness
Establish Job Expectations
• Informing the employee what is expected of him or her on the job
• A discussion is held with his or her superior to review the major duties
contained in the job description
• Individuals can begin the job when they understand what is expected of them
• A formal or informal assessment of a new career takes place between the
first six to 12 weeks of joining
• Thereafter, performance assessment begins on a regular basis
Steps to Design Appraisal Programme
1. Identifying form of appraisal process - Formal versus informal
2. Whose performance is to be assessed?
3. Who are the raters?
4. What should be evaluated?
5. When to evaluate?
6. What methods of appraisal are to be used?
Formal vs Informal Appraisal
• Formal Appraisal
• Used as primary mechanism of performance evaluation
• Purpose - employee evaluation
• Occur at specified time periods—once or twice a year

• Informal appraisal
• Purpose - Whenever the supervisor feels the need for communication
• If the employee has been consistently meeting or executing standards
• Discussion can take place to recognize the facts in working

• Organisations encourage a mixture of both formal and informal appraisals.

Whose Performance Should be Rated?
• Rater (Senior) rates the ratee (subordinate)
• The ratee can be defined at multiple levels
• The ratee may be defined as the individual, work group, division, or
organization.
• Appraisal at the work- group level for merit-pay increases
• Reason - Group Cohesiveness (shared feeling among work-team members) and Difficulty
in assessing individual performance may lead to development of work-group level
analysis

• At the individual level to assess training needs

Who are the Raters?
• Immediate supervisor
• Subordinates
• Peers
• Clients
• 360-degree appraisal covers all the raters – started by General Electric
What should be Rated?
• Seven criteria
• Objective - Quality, Quantity, Timeliness, Cost Effectiveness,
• Subjective - Need for Supervision, Interpersonal Impact, and Community Service.
• Community service is becoming an important criterion to assess performance.
• Mind Tree Consulting has a system in place where social activities are considered in
assessing performance.
• Every employee is evaluated on 100 points.
• While 60 of these come from his/her job performance

• 40 points are given to how an employee is performing with respect to CLASS (caring, learning,
achieving, sharing, and social conscience).
Appraise the Performance
• An assessment should focus on
• Individual traits,
• Behaviours exhibited by the assessees,
• Knowledge/skills possessed,
• Results achieved

• Timing of Evaluation
• Once in a year
• At the end of respective program –
• Frequent evaluation gives constant feedback to the ratee, thus enabling him or her to improve
performance if there is any deficiency

• Newly hired employees are appraised more than older ones

Performance Interview
• The raters should discuss and review the performance with the ratees
• Objective – To receive feedback about where they stand in the eyes of
superiors.
• Three Goals of Performance Interview:
• To change behaviour of employees to meet organisational requirements or their own
personal goals
• To maintain the behaviour of employees Who perform in an acceptable manner
• To recognise superior performance behaviours so that they will be continued.

• Emphasis on counselling and development and not on criticism and buck

passing (shifting the responsibility)
Archiving Performance
• The information can be retrieved and used at any point in future
• if an employee has been told that he or she was not promoted because of
below average performance.
• Later when performance improves he or she would be considered
favourably for a jump in status and remuneration provided.

• To decide on other issues like

• Pay hike, confirmation of probationary services, non-discrimination policies
and the like deserve reference to the past information
Use Appraisal Data
• Used by the HR department
• To decide most significant rewards to offer - Money to purchase goods and
services required
• Opportunities to interact with other people in a favourable working
environment
• Opportunities to learn, grow, and make full use of their potential
• A sense of performance and stability through the continuing existence of the
organisation and the job
• To protect and promote physiological, emotional and psychological health
Edward Deming’s Views of Performance Appraisal
• Opposed to Performance Appraisal
• Appraisal rewards people for manipulating the system rather than improving it
• Often self-defeating
• Consistent with team work
• Acts as substitute for management

• Alternatives to Performance Appraisal

• Meticulous selection of leaders
• Educating worker, improved training and development
• Making leaders to function as colleagues
• Three to four hours of interview interaction with subordinated annually aimed at support and
encouragement
Thank
You