1. Unit III- Performance
management system
Richa Shroff

2. It is a broader term than performance appraisal, evaluation or
assessment
It is an integrated process
Its aim is to ensure that employee performance supports the strategic
goals of the organization
Its emphasis is on integrating organizational team and individual
objectives
It is a continuous process and not an annual event
It involves performance reviews focusing on future rather than on the
past
It is owned by line management
Performance management system Integrated process To achieve
goals of organization

3. Human Resource Planning
Recruitment and Selection
Personnel Decisions
Training and Development
Feedback motivation and personnel development
Career planning and development
Compensation and reward

4. •It is a method of evaluating the behavior of employees in the work
spot
•It is systematic description of an employees jobs relevant strengths
and weaknesses
•It is a systematic process for evaluating the performance of each
employee
•It helps to determine the relative worth of the employee
qualitatively and quantitatively on the job in comparison to other
fellow workers

5. •To provide information about the performance ranks
•To prevent grievances' and in disciplinary activities
•To diagnose deficiency in the employee regarding skill, knowledge etc
•To provide information which helps to counsel the subordinate

6. •To maintain a satisfactory level of performance
•To help the superiors to have a proper understanding about their
subordinates
•To guide the job changes with the help to continuous ranking
•To facilitate fair and equitable compensation based on performance
•To facilitate for testing and validating selection tests, interview techniques
through comparing their scores with performance appraisal ranks
•To provide information for making decisions, regarding layoff, retrenchment
etc

7. •It helps in the evaluation of capability of different personnel
•It helps in evaluating the relevancy of training programs being organized for
workforce development. It also helps in estimating the need of improvement in the
training programmers
•It helps in the promotion of personal
•It keeps the personnel aware of their duties in the enterprise
•It provides an opportunity to the personnel to develop themselves so that they
may be promoted to higher levels. Thus it offers a challenge to the personal at
different level for development
•It helps the feeling of loyalty among the personals towards the enterprise which
increase their morale

8. •Halo effect
•Criterion problem
•Frustration
•Lack of Co-Operation

9. Traditional Methods Modern Methods
 Graphic rating scale
 Ranking method
 Paired comparison method
 Forced distribution method
 Checklists method
1. Simple checklist
2. Weighted checklist
3. Critical incident
 Essay or free form
 Group appraisal
 Confidential reports
 Behavioral anchored rating
scale
 Assessment centre
 Human Resource accounting
 Management by objectives
(MBO)
 Behavior observation scales
 Psychological appraisals
 Results method
 Productivity measures
 Balance scorecard
 360 degree feedback
appraisal

10. Graphic Rating
scale
•Oldest simplest and widest
used method
•Compares individual
performance to absolute
standard
•It is also know as linear
rating scale or simple rating
scale
•It provides numerical score
for performance
•Allows comparison of scores
between individuals
•Each point on the scale have
different meaning for
different raters
Ranking method
•Oldest and simplest
method
•Man is compared
•Under this method
employees are ranked
from best to worst on
some characteristics
•In simple language
employees are ranked
from highest to lowest
rank
•It is simple and
complicated
•It is difficult to use with
large group of
employees
Paired comparison
method
•Under this method
employee is ranked by
appraiser by comparing
one employee with all
in the group one at a
time
•Paired comparison
method can be
employed fairly when
the number of
employees are less

11. Forced distribution
method
•It is developed to
prevent the raters from
rating too high or too
low
•It eliminates central
tendency and leniency
biases
•It is based on
questionable
assumption that all
group of employees will
have the same
distribution of
excellent, average and
poor performers
Essay or free form
appraisal
•Under this appraiser
writes an essay or brief
narrative that describes
the performance of
employees
•Sometimes it may use
prepared questions that
must be answered by
the manager or
appraiser
•It is a time consuming
method
•Quality of performance
is influenced by the
writing skills of
managers
Group appraisal
•Under this method the
employee is appraised
by group of appraisers
•This method is widely
used for purpose of
promotion, demotion
and retrenchment
capital

12. Confidential
Reports
•Under this superior
appraises the
performance of his
subordinated based
on his observations,
intuitions and
judgments
•The superior keeps
his judgment and
report confidentially
•Confidential report is
the traditional
method of most of
the public sector
organisations
Critical Incident
method
•This theory on which
this approach rests
is that there are
certain acts of
behavior of
employee that make
the difference
between success and
failure on job
•Incidents may be
became upset or
angry, refused to
help the fellow
worker
•These incidents are
collected and rated
•There is much scope
of biased decision
Checklists
method
•It is a simple rating
technique in which
the supervisor is
given a list of
statement or words
and asked to check
statements
representing the
characteristics and
performance of each
employee
•There are three
checklists method
•Simple
•Weighted
•Force choice

13. Behaviorally anchored
rating scale
•Combination of
traditional rating scales
and critical incidents
method
•Using bars job
behaviors from critical
incidents effective and
ineffective behaviors are
described more
objectively
•Bar is very useful for
providing
developmental feedback
and identifying training
needs
Assessment center
• It is a system or
organization where
assessment of
several individuals
is done by various
experts using
various techniques
Human Resource
accounting
• It deals with cost of
distribution of
human resources to
the organization
• Cost of employee
includes cost of
manpower planning,
recruitment,
selection, induction
etc

14. Management by
objectives
• MBO focuses attention
on participative process
where objectives are time
bound and set by
employees in
consultation with their
superiors
•It suggests that
objectives should not be
imposed on subordinates
but should be decided
collectively by a
concerned with the
management
•It is a time consuming
method
Psychological appraisals
•Are conducted to assess
the employees potential
•It consist of in-depth
interview, psychological
tests, consultations and
discussions with the
employee,
•Evaluation is conducted
in the areas of employees
intellectual abilities,
emotional stability, etc
•Psychological appraisal
results are useful for
decision making about
employee placement,
career planning and
development and
training and
development
Results method
•Less subjectivity
•Less open to bias
•Assign clear
responsibility to
employees
•Freedom to the
employees in using
methods
•Empowering employees
•Organizations of the
contemporary periods
evaluate employee
performance based on
accomplishments they
achieve rather than
based on the
behavioral traits

15. Productivity measures
•Under the productivity
measures of
performance appraisal
employees are
appraised based on the
ratio output they turned
out to the input they
used
•Example Sales to
employee salary and
benefits, number of
clients served per day
Balance scorecard
•This method brings
linkages among
financial, customer,
processes and learning
•Learning and people
management contribute
to the enhancement of
internal processes
•Balanced scorecard is a
continuous loop process
•It provides performance
feedback based on
measures
•It empowers employees
for performance
improvements
360 degree feedback
appraisal method
•Also known as multi
rater feedback
•Most comprehensive
appraisal
•These sources include
superior, subordinates,
peers, team members,
customers and suppliers
apart from the employee
himself who can provide
feedback on the
employees’ job
performance
•Evaluation by one and
all is a 360-degree
review and feedback is
considered to be one of
the most credible

16. 1) Rating biases
•Halo effect
•Error of central tendency
•Leniency and strictness biases
•Personal prejudice
•The recency effect
System design and implementation problems
Poorly trained managers