3. Performance Management
• Armstrong and Baron define Performance Management as “ a
Process which contributes to the effective management of
individuals and teams in order to achieve high level of
• In other words PM Should be:
– Strategic- it is about broader issues and long-term goals.
– Integrated- it should link various aspects of the business, people
management ,individuals and teams.
4. Performance Management
It should incorporate:
• Performance improvement- throughout the organization, for
individuals, teams and organizational effectiveness.
• Development- unless there is continuous development of
individuals and teams, performance will not improve.
• Managing Behaviour-ensuring that individuals are
encouraged to behave in a way that allow better working
5. Why Manage Performance?
• Encourage and reward behaviors that are
aligned with organizational mission and
•People want to feel what they do adds value
and understand their contribution to the
•Curb or redirect non-productive activities.
PURPOSE To improve organizational performance
HOW Regular interactions between managers and employees
WHERE At the work- place
WHEN Continuously, often half yearly
BY WHOM Immediate supervisor and the employees.
9. Performance Appraisal
• Performance Appraisal is the systematic evaluation of the
individual with respect to his/her performance on the job and
his or her potential for development.
• It is a formal, structured system of measuring and evaluating
an employee’s job, related behaviors and outcomes to
discover how and why the employee is presently performing
on the job and how the employee can perform more
effectively in the future so that the employee, organization
and society all benefit.
10. Performance Appraisal
• Performance Appraisal is a process that consolidates goal
setting, performance appraisal, and development into a
single, common system, the aim of which is to ensure that the
employees performance is supporting the company’s
• PA aims directly to link together individual goals,
departmental purposes and organizational objectives.
12. Relationship between job analysis and
Job analysis performance Appraisal
Of a particular
Into levels of
13. Issues in Appraisal System
Formal and Informal
Who are the raters?
When to evaluate?
What to evaluate?
How to Solve?
15. Who are Raters?
• Immediate Supervisor
• Specialist from the HR department
• Self appraisal
• Combination of several
16. Why PM & PA’s?
• Increased competitive pressures which put an
emphasis on performance improvement.
• Attempts to achieve a clearer correlation between
organizational goals and individual targets.
• The shift from collectivism to individualism, which
has allowed for a more rigorous specification of
individual performance standard and measure.
• It is a step by step process
• It examine the employee strengths and weaknesses
• Ongoing and continuous process
• Secure information for making correct decisions on employees
• Clarify and help to translate corporate goals into individual
team, department and divisional goals.
• Provide regular communication about business plans and
progress in achieving objectives.
• Create a shared understanding of what is required to improve
performance and how it is to be achieved.
• Encourage self-management of individual performance.
• Systematically measure all performance against jointly agreed
• Ensure that people are placed in the most suitable position.
• Indentify employees ambitions regarding personal career
• Identify training needs.
• To increase motivation.
• HR Planning
• To improve performance.
19. Purpose / Objective
• Establishing job/performance targets for the coming year
and clarifying expectations.
• Assessing performance achievement of past year and
providing performance feedback: strengths, weaknesses,
future improvements – effectiveness, efficiency, timely
• Identifying development needs
• Awarding of performance based incentive – salary
• Awarding of level upgrade and/or promotion
• Grievance and discipline programmes
• HR planning
20. Purpose / Objective
• Performance Feedback
• Reward Management
• Training and Development Decision
• Facilitate career and succession planning
• Supervisory Understanding
• Promotion , Transfer , Separation Decision
• Diagnose the S & W of individuals
• Provide coaching, counseling, career planning to subordinates
• Develop positive relation and reduce grievance
23. Benefits of Performance Appraisal
For the Appraisee
• Better understanding of their role in the organization- what is
expected and what needs to be done to meet those
• Clear understanding of their strengths and weakness to
develop themself into a better performer in future.
• Increased motivation, job satisfaction, and self-esteem.
• Opportunity to discuss work problems and how they can be
• Improved working relationship with supervisors.
24. For the Management
• Identification of performers and non-performers and their
development towards better performance.
• Opportunity to prepare employees for assuming higher
• Identification of training and development needs
• Generations of ideas for improvements
• Better identification of potential and formulation of career
• Opportunity to improve communication between the
employees and management.
25. For the Organization:
• Improved performance throughout the organization.
• Creation of a culture of continuous improvements
• Conveying the message that people are valued.
26. Why Appraisal are Important?
• Recognize Accomplishments
• Guide Progress
• Improve Performance
• Review Performance
• Set Goals
• Identify Problems
• Discuss career development
28. PERFORMANCE ASSESSMENT GUIDE
Job Standards are
Are job standards
Worksheet may be
developed or modified
Are job standards
31. Performance Evaluation Problems
• Lack of standards (leads to only a subjective guess or feeling about
• Irrelevant or subjective standards (non job related standards)
• Unrealistic standards (reasonable but challenging standards have the
potential to motivate)
• Poor measures of performance
• Rater errors (biases, prejudices)
• Poor feedback to employee (less tactful, threatening)
• Negative communications (communication of negative attitudes such
as inflexibility, defensiveness and non-developmental approach)
• Failure to apply evaluation data
32. Performance Criteria
• Job Descriptions should be prepared and provided to
respective staff members; it should be upgraded/modified as
and when the nature of job/responsibilities change
• Mutual expectations/targets should be discussed and agreed
• Evaluation should be primarily based on actual work done and
targets achieved, not on other unrelated issues
33. Performance Rating / Process ..
• Direct supervisors are to be responsible for evaluating their
subordinates and, if warranted, held accountable for ratings
provided; evaluations done by the supervisor should not be
unilaterally changed at higher levels without a transparent
• Additional motivational factor must also be linked to the level
of effort; it should not be rigidly pegged to forecasted
revenue generation expectations of the company.
35. Methods of Rating
• Rating scales
Several numerical scales each representing a job related performance
criterion such as dependability, initiative, output, attendance, attitude,
cooperation and the like.
• Checklist Method
Tick the column- Yes or No- Total score is arrived at.
Weighted Checklist if weighted
• Forced Choice Method
Description given and the rater indicates which statements is most or least
descriptive of the employee…..HR
• Forced Distribution Method
15% high performers
20% high –average performers
30% average performers
20% low-average performers
15% low performers
36. Methods of Rating
• Critical Incident Method
Focuses on certain critical behaviour of an employee that make all the difference
between effective and non effective performance of the job. Such incidents are
recorded by the superiors as and when they occur
• Field Review Method
This is an appraisal by someone outside the assessee’s own department usually
someone from the HR department or corporate office.
• Performance Test and Observations
Paper-and-pencil test or an actual demonstration of skills
37. Methods of Rating
• Confidential Reports
• Essay Method
It can be used independently but it is combined with other methods.
Comparison Evaluation Approaches
• Ranking Method
Starting from best to worst- no explanations or questioning on ‘how’ and
38. Checklist method
•Simple checklist method
•Weighted checklist method
•Forced choice method
Simple checklist method:
Is employee regular Y/N
Is employee respected by subordinate Y/N
Is employee helpful Y/N
Does he follow instruction Y/N
Does he keep the equipment in order Y/N
40. Forced choice method
1.Regularity on the job Most Least
•Inform in advance for delay
•Neither regular nor irregular
41. Graphic Rating Scale
Name_____________________________ Dept.___________________________ Date_______________
Outstanding Good Satisfactory Fair Unsatisfactory
Quantity Volume of acceptable
of work work under normal conditions ___ ___ ___ ___ ___
Quality Thoroughness, neatness, and ___ ___ ___ ___ ___
of work accuracy of work
Knowledge Clear understanding of the facts ___ ___ ___ ___ ___
of job or factors pertinent to the job
qualities Personality, appearance, ___ ___ ___ ___ ___
sociability, leadership, integrity
42. Key Points to Remember
• You must conduct objective appraisals on a
• Appraisals tell employees how they’re doing and
how they can improve.
• Appraisals help create a system of motivation and
rewards based on performance.