How performance is appraised, what are common practices today

1. Performance Management And Performance
Related Pay
Rohit chawla l Student | 11503
Aakash Budhrani l Student | 11723
Sonia Mumtaz l Student | 11666
Anna Noorali l Student | 12106
Neelam Karim l Student | 11483
CBM | Institute of Business Management | Karachi
BBA Class | Human Resource Management
Spring Semester 2014

2. Definition
Thorough practice of managing people
Armstrong and Baron view:
- Effective people and team management

3. Decomposition Performance Management
-Strategic
-Integrated
Ingredients of Performance Management
-Performance Improvement
-Development
-Managing Behavior

4. What Performance Management Will Do?
1) Establishing a culture
2) Sharing expectation
3) Maintaining and improving the quality of relationships
4) Planning, through defining expectations
5) Measurement

5. How Performance Management Works
Corporate
Strategies
Business and
departmental
goals
Agreement on
performance
priorities
Plans between
individuals and
managers

7. Shepherd Leadership

8. Performance Appraisal

9. Appraisal Methods
1) The 360-Degree Appraisal
2) General Performance Appraisal
3) Technological/Administrative
Performance Appraisal
4) Manager Performance
Appraisal
5) Management by Objectives
(MBO)
6) Employee Self-Assessment

10. General Performance Appraisal

11. 360 Degree Appraisal

12. Management By Objective

13. Technology

14. Performance Appraisal Uses
1) Raises, Merit Pay, Bonuses
2) Personal Decisions (Promotion, Transfer, Dismissal)
3) Identification of training needs
4) Research purposes (e.g. assessing the worth of selection
tests.

15. Performance Management at Google

16. Performance Management at Apple
Apple focuses on building a
performance culture. A
performance culture requires
significant differentiation
based on performance, and
it’s clear that in this culture,
the top performers and those
who are working on mission-
critical products are treated
significantly differently. In
fact, current and former
employees frequently
complained about the special
treatment given to those
designated as the “top 100
most important employees.”

17. Comparison

18. Failure of Performance Management
In a
large survey
conducted by
WorldatWork,
58% of
organizations
rated their
performance
management
systems as “C
Grade or
below.”

19. Reasons of failure of Performance
appraisal
Due to missing the following aspects
performance appraisal are failing
• Transparency
• Impersonal
• Reliability
• Open and participatory
• Noticeable and timely

20. CIPD View
• Ensuring individuals posses skills, and they
comprehend what input they need to give in, to
achieve expected performance.
• Encouraging relationship between line managers,
individuals and teams by keeping communication.
• Success of Organization depends on clarity of
what is meant of Performance and where
organization needs to be in performance culture.

21. Performance Related Pay
1) Encouraging high performance levels by linking performance
to pay.
2) Embedding an entrepreneurial or high-performance culture
across an organization.
3) The notion of equity or fairness

23. Measuring Performance

24. Coverage And Trends in PRP
PRP in Public Sector
1) Individual PRP is more prevalent in private than other
sector.
2) In Public Sector, Employees provide for a basic % increase.
3) Merit pay covers managerial and other white-collar staff.
4) There are differences in coverage of PRP internationally.

25. Measuring Trends in Merit Awards
1) Pay review process may provide for either
A. All-merit awards.
B. Basic-plus-merit awards.
2) Trends in performance pay are commonly measured via the
pay review budget.
3) The scope for any merit element of pay tends to be reduced
during times of low pay award levels.

26. Criticism on Performance related pay
• Decentralized process of appraisals
• Biasness issues
• Potential for negatively affecting motivation
factor as in case bonus are proclaimed,
• Equal distribution of bonus, weakens
purpose.
• Employees live in company for short term
• Subjective measures

27. Current Trends
• Establishing a performance oriented culture.
• Treating employees not only because of their
services, but valuing their efforts in
Organization.
• linking career of staff with Strategic goals.
• Focus is on the spirit of mutuality.
• Valuing not only highest, but smallest
contributions

28. Alternative of PRP
• Appraise only competent employees (help
them in nurturing skills, and ways to advance
in the company)
•

29. CIPD View
1) Encouraging high performance, effective performance
management and appraisal systems, and only then on pay as
an incentive.
2) To create a sustainable high-performing workplace.