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PERFORMANANCE
MANAGEMENT
Objective
-Definition of perfomance management
Identify the major determinants of
individual
performance
-Method of perfoemance management
-Tool of performance management.
Discuss the three general purposes of
performance management.
Identify the five criteria for (pm)
OBJECTIVES
Discuss the four approaches to
performance
management.
Discuss the pros and cons of the
different sources
of performance information.
Identify the cause of a performance
problem
Performance management helps organisations
become more successful and stay ahead of the
competition. It essentially involves measuring,
reporting and managing progress in order to
improve performance, both at an individual level,
and at a corporate level
WHAT IS PERFORMANCE
MANAGEMENT?
Employees’ outputs and activities
= Company’s
goals
Management by objectives (MBO)
MBO is the process of defining specific objectives
and then setting out how to achieve each
individual objective.
It’s particularly powerful for specific work that
needs to be done one step at a time, and is a great
way to create a culture of working towards common
goals.
1 PIs
used
by
othe
rs to
judg
e
your
perf
orm
ance
from
their
point
s of
view
.
2 PIs
used
by
your
self
to
judg
e
your
perf
orm
ance
with
resp
ect
to
activ
ities
you
are
exec
uting
your
self.
3 PIs
used
by
you
to
judg
e the
perf
orm
ance
of
othe
rs
exec
uting
activ
ities
for
you.
Errors Managers Make on Performance
Appraisals
Halo Effect is when a rater’s overall positive or negative
impression of an individual employee leads to rating him
or her the same across all rating dimensions.
This is when a manager really likes or dislikes an employee
and allows their personal feelings about this employee to
influence their performance ratings of them.
1-Halo effect
2. Leniency Error
Leniency error is when a raters’ tendency is to rate
all employees at the positive end of the scale
(positive leniency) or at the low end of the scale
(negative leniency).
This can happen when a manager over-emphasizes
either positive or negative behaviors.
3. Central Tendency Error
Central tendency error is the raters’ tendency to avoid making
“extreme” judgments of employee performance resulting in rating
all employees in the middle part of a scale.
This can happen either when a manager is not comfortable with
conflict and avoids low marks to avoid dealing with behavioral
issues or when a manager intentionally forces all employees to the
middle of the scale.
4. First Impression Error
First impression error is the rater’s tendency to let their first
impression of an employee’s performance carry too much weight in
evaluation of performance over an entire rating period.
An example of this would be a new employee joining the
organization and performing at high levels during their
“honeymoon” period and then possibly losing some of that initial
momentum.
Similar-to-me error is when the rater’s tendency is biased in
performance evaluation toward those employees seen as similar to
the raters themselves. We can all relate to people who are like us
but cannot let our ability to relate to someone influence our rating
of their employee performance.
Since human biases can easily influence the rating process, it is
important to create objective measures for rating
performance. Observing behaviors and using available technology
to help track performance can take some of the biases out of the
rating process.
5-Similar- to- me error
SUMMARY
Performance management is one of the key
factors in gaining competitive advantage.
These systems serve strategic, administrative,
and developmental purposes.
Deciding on which approach and which source of
performance information are best depends on the
job in question.
Performance information has to be sent back to
employees in a way that results in improved
performance rather than defensiveness and
decreased motivation.
References1..Wisner, J.D. and Fawcett, S.E., “Linking firm strategy to
operating decisions through performance measurement”, Production
and Inventory Management Journal, Vol. 32 No. 3, 1991, pp. 5‐11.
2..Doumeingts, G., Clave, F. and Ducq, Y., “ECOGRAI: a method to
design and to implement performance indicators systems using GRAI
approach”, in Proceedings International Dedicated Conference on
Lean/Agile Manufacturing in the Automotive
Industries, Aachen, 1994, pp. 389‐96.
3..Andersson, P., Aronsson, H. and Storhagen, N.G., “Measuring
logistics performance”, Engineering Costs and Production
Economics, Vol. 17, 1989, pp. 253‐62.
4..Kaplan, R.S., “Measuring manufacturing performance: a new challenge for
managerial accounting research”, The Accounting Review, Vol. 58 No. 4, 1983,
pp. 686‐705. [Google Scholar] [Infotrieve]
5..Kaydos, W., “Key performance factors”, in Measuring,
Managing, and Maximizing Performance, Productivity Press, Cambridge,
MA, 1991. [Google Scholar]
6..Keegan, D.P., Eiler, R.G. and Jones, C.S., “Are your performance measures
obsolete?”, Management Accounting (USA), June 1989, pp. 45‐50. [Google Scholar]
7..McNair, C.J., Lynch, R.L. and Cross, K.F., “Do financial and non‐financial
performance measures have to agree?”, Management Accounting(USA), November
1990, pp. 28‐36. [Google Scholar]
8..Edson, N.W., “Performance measurement: key to world class
manufacturing”, APICS Conference Proceedings, 1988, pp. 629‐32. [Google Scholar]
Performance managment

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Performance managment

  • 2. Objective -Definition of perfomance management Identify the major determinants of individual performance -Method of perfoemance management -Tool of performance management. Discuss the three general purposes of performance management. Identify the five criteria for (pm)
  • 3. OBJECTIVES Discuss the four approaches to performance management. Discuss the pros and cons of the different sources of performance information. Identify the cause of a performance problem
  • 4.
  • 5. Performance management helps organisations become more successful and stay ahead of the competition. It essentially involves measuring, reporting and managing progress in order to improve performance, both at an individual level, and at a corporate level
  • 6. WHAT IS PERFORMANCE MANAGEMENT? Employees’ outputs and activities = Company’s goals
  • 7.
  • 8.
  • 9.
  • 10.
  • 11.
  • 12.
  • 13.
  • 14.
  • 15.
  • 16.
  • 17.
  • 18. Management by objectives (MBO) MBO is the process of defining specific objectives and then setting out how to achieve each individual objective. It’s particularly powerful for specific work that needs to be done one step at a time, and is a great way to create a culture of working towards common goals.
  • 19.
  • 20.
  • 21.
  • 22.
  • 23.
  • 24.
  • 25.
  • 26.
  • 27. 1 PIs used by othe rs to judg e your perf orm ance from their point s of view . 2 PIs used by your self to judg e your perf orm ance with resp ect to activ ities you are exec uting your self. 3 PIs used by you to judg e the perf orm ance of othe rs exec uting activ ities for you.
  • 28.
  • 29.
  • 30.
  • 31.
  • 32.
  • 33.
  • 34.
  • 35.
  • 36.
  • 37.
  • 38.
  • 39.
  • 40.
  • 41.
  • 42.
  • 43.
  • 44.
  • 45.
  • 46.
  • 47.
  • 48.
  • 49.
  • 50.
  • 51.
  • 52.
  • 53. Errors Managers Make on Performance Appraisals
  • 54. Halo Effect is when a rater’s overall positive or negative impression of an individual employee leads to rating him or her the same across all rating dimensions. This is when a manager really likes or dislikes an employee and allows their personal feelings about this employee to influence their performance ratings of them. 1-Halo effect
  • 55. 2. Leniency Error Leniency error is when a raters’ tendency is to rate all employees at the positive end of the scale (positive leniency) or at the low end of the scale (negative leniency). This can happen when a manager over-emphasizes either positive or negative behaviors.
  • 56. 3. Central Tendency Error Central tendency error is the raters’ tendency to avoid making “extreme” judgments of employee performance resulting in rating all employees in the middle part of a scale. This can happen either when a manager is not comfortable with conflict and avoids low marks to avoid dealing with behavioral issues or when a manager intentionally forces all employees to the middle of the scale.
  • 57. 4. First Impression Error First impression error is the rater’s tendency to let their first impression of an employee’s performance carry too much weight in evaluation of performance over an entire rating period. An example of this would be a new employee joining the organization and performing at high levels during their “honeymoon” period and then possibly losing some of that initial momentum.
  • 58. Similar-to-me error is when the rater’s tendency is biased in performance evaluation toward those employees seen as similar to the raters themselves. We can all relate to people who are like us but cannot let our ability to relate to someone influence our rating of their employee performance. Since human biases can easily influence the rating process, it is important to create objective measures for rating performance. Observing behaviors and using available technology to help track performance can take some of the biases out of the rating process. 5-Similar- to- me error
  • 59.
  • 60.
  • 61.
  • 62.
  • 63.
  • 64.
  • 65.
  • 66. SUMMARY Performance management is one of the key factors in gaining competitive advantage. These systems serve strategic, administrative, and developmental purposes. Deciding on which approach and which source of performance information are best depends on the job in question. Performance information has to be sent back to employees in a way that results in improved performance rather than defensiveness and decreased motivation.
  • 67. References1..Wisner, J.D. and Fawcett, S.E., “Linking firm strategy to operating decisions through performance measurement”, Production and Inventory Management Journal, Vol. 32 No. 3, 1991, pp. 5‐11. 2..Doumeingts, G., Clave, F. and Ducq, Y., “ECOGRAI: a method to design and to implement performance indicators systems using GRAI approach”, in Proceedings International Dedicated Conference on Lean/Agile Manufacturing in the Automotive Industries, Aachen, 1994, pp. 389‐96. 3..Andersson, P., Aronsson, H. and Storhagen, N.G., “Measuring logistics performance”, Engineering Costs and Production Economics, Vol. 17, 1989, pp. 253‐62.
  • 68. 4..Kaplan, R.S., “Measuring manufacturing performance: a new challenge for managerial accounting research”, The Accounting Review, Vol. 58 No. 4, 1983, pp. 686‐705. [Google Scholar] [Infotrieve] 5..Kaydos, W., “Key performance factors”, in Measuring, Managing, and Maximizing Performance, Productivity Press, Cambridge, MA, 1991. [Google Scholar] 6..Keegan, D.P., Eiler, R.G. and Jones, C.S., “Are your performance measures obsolete?”, Management Accounting (USA), June 1989, pp. 45‐50. [Google Scholar] 7..McNair, C.J., Lynch, R.L. and Cross, K.F., “Do financial and non‐financial performance measures have to agree?”, Management Accounting(USA), November 1990, pp. 28‐36. [Google Scholar] 8..Edson, N.W., “Performance measurement: key to world class manufacturing”, APICS Conference Proceedings, 1988, pp. 629‐32. [Google Scholar]