Performance Management

1. Performance
Management &
Appraisal
Chapter 9
Presented by: FSZ

2. Learning Objectives
 Define performance management and discuss how it differs from performance appraisal
 Describe the appraisal process
 Set effective performance appraisal standards
 Develop, evaluate, and administer performance appraisal tools
 Explain and illustrate the problems to avoid in appraising performance
 Discuss the pros and cons of using different raters to appraise a person’s performance
 Perform an effective appraisal interview
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3. The Performance Appraisal
Process
 Performance appraisal means evaluating an employee’s current and/or past performance
relative to his/her performance standards
 supervisor set performance standards in case of effective appraisal; also requires that
the employee receives the training, feedback, and incentives required to eliminate
performance deficiencies
 effective appraisals begin before the actual appraisal, with the supervisor defining the
employee’s jobs and performance criteria
 defining job means making sure that the supervisor and subordinate agree on the job
duties, job standards, and appraisal method to be used
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4. The Performance Appraisal
Process
 involves the 3-step performance appraisal process
 (i)setting work standards
 (ii)assessing the employee’s actual job performance relative to those
standards
 (iii)providing feedback to the employee with the aim of helping in order to
eliminate performance deficiencies or continue to perform similarly
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5. Why Appraise Performance?
 make the decisions regarding pay, promotion, retention
 play an important role in the performance management process
 lets to plan for correcting any deficiencies and to reinforce the noteworthy
performances
 facilitates career planning while exhibiting strengths and weaknesses of the
employees
 identify the employees’ training and development needs
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6. Defining Employee Goals &
Performance Standards
 performance appraisal should compare “what should be” with “what it is”
 managers use one of these 3 bases to establish performance standards for
employees: goals, job dimensions (team work/communication),
competencies/behaviors (skills)
 what extent the employee is attaining his/her numerical goals (derived from
company goals)
 ex: a companywide goal of reducing costs by 10% should translate into goals
for how individual employees and/or teams will cut costs
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7. Defining Employee Goals &
Performance Standards
 Effective goals are SMART
 Specific- clearly state the desired results
 Measurable-“how much?”
 Attainable
 Relevant- derived from company goals
 Timely- reflect deadlines and milestones
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8. Who Should do the Appraising?
 Supervisor Appraisals
- straight forward and makes sense
- in best position to observe and evaluate the subordinates
 Peer Appraisals
- one supervisor and three to four peers for appraisal are chosen
- immediate positive impact on improving perception of open communication,
task motivation, social loafing, group viability, cohesion, & satisfaction
- use of social media
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9. Who Should do the Appraising?
 Rating Committees
- composed of the employee’s immediate supervisor and 3-4 other supervisors
- help cancelling out problems, such as individual raters’ bias
- include different facets of an employee’s performance by different
appraisers
 Self-Ratings
- in conjunction with supervisor’s ratings
- employees usually rate themselves higher than do their supervisors or peers
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10. Who Should do the Appraising?
 Subordinate Appraisals
- used usually for developmental purpose rather than pay
- subordinates prefer giving anonymous responses; otherwise the rating is
inflated
- evidence suggests that upward feedback can improve performance
 360-Degree Feedback
- collects performance information all around an employee- supervisors,
subordinates, peers, internal and external customers
- used usually for developmental purpose rather than pay 10

11. Traditional Tools for Appraising Performance
 Graphic Rating Scale Method
- the simplest and most popular method
- lists traits or performance dimensions (communication/teamwork) and a
range of performance values (from “unsatisfactory” to “outstanding”)
- supervisor rates subordinate by checking the score that best describes the
subordinate’s performance for each trait
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12. Traditional Tools for Appraising
Performance
 Alternation Ranking Method
- lists all subordinates to be rated
- crosses out the names of any not well known enough to rank
- indicates the employee who is the highest on the performance dimension
being measured and the lowest one
- then chooses the next highest and next lowest, and goes on till all have been
ranked
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13. Traditional Tools for Appraising
Performance
 Paired Comparison Method
- makes the ranking method more precise
- ranking employees by making a chart of all possible pairs of the employees
for each trait and indicating which is the better employee of the pair
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15. Traditional Tools for Appraising
Performance
 Forced Distribution Method
- similar to grading on a curve
- predetermined percentages of ratees are placed into several categories
- proportions in each category are not necessarily symmetrical
- top 20%, middle 70%, bottom 10%
- some call it “Rank & Yank”
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16. Traditional Tools for Appraising
Performance
 Critical Incident Method
- supervisor keeps a log of positive and negative examples of a subordinate’s
work-related behavior
- supervisor and subordinate meet to discuss the latter’s performance
- provides good and poor performance examples
- rating just not reflect the employee’s most recent performance
- how the subordinate can eliminate deficiencies
- not useful for comparing employees or for salary decisions as there is no
numerical rating
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17. Traditional Tools for Appraising
Performance
 Narrative Forms
- supervisor assesses the employee’s past performance and required areas of
improvement
- narrative assessment helps the employee understand his/her performance
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18. Traditional Tools for Appraising
Performance
 Behaviorally Anchored Rating Scales (BARS)
- appraisal method that aims at combining the benefits of narrative
critical incidents and quantified ratings by anchoring a quantified
scale with specific narrative examples of good and poor performance
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19. Traditional Tools for Appraising
Performance
 Management By Objectives (MBO)
- multistep companywide goal-setting and appraisal program
- required the manager to set specific, measurable, organizationally
relevant goals with each employee, and then periodically discuss the
latter’s progress toward these goals
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20. Electronic Performance
Monitoring (EPM)
- use computer network technology to allow
managers to monitor their employees’
computers
- allows to monitor employees’ rate,
accuracy, and time spent working online
- can improve productivity, but can also
backfire by increasing stress
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21. Appraisal in Practice
 the best appraisal forms merge several approaches
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22. Potential Appraisal Errors
 Unclear Standards
- appraisal that is too open to interpretation
- traits and degrees of merit are ambiguous
 Halo Effect
- the problem that occurs when a supervisor’s rating of a subordinate on one
trait biases the rating of that person on other traits
 Central tendency
- rating almost all the employees average
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23. Potential Appraisal Errors
 Strictness or Leniency
- supervisors tendency to rate all subordinates either low or high
 Recency Effects
- letting the recent performance blind the supervisor to what his/her
performance has been over the year
 Bias
- tendency to allow personal differences to affect the appraisal ratings
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24. Types of Appraisal Interview
Situations
 Satisfactory-Promotable: easiest interview; objective is to discuss employee’s
career plans and to develop a specific professional developmental plan
 Satisfactory-Not promotable: objective is to maintain satisfactory
performance; need to find best incentives that are important to the employee
(small bonus, extra time off, acknowledgement)
 Unsatisfactory-correctable: objective is to lay out an action plan for correcting
performance
 Unsatisfactory-uncorrectable: the most difficult one; dismissal is often the
usual option 24

25. Conducting Appraisal Interview
 Talk in terms of objectives work data (absence, quality records, orders
processed, productivity records)
 Don’t get personal (you’re too slow)
 Encourage the person to talk (open-ended questions)
 Get agreement (getting to know what has been done in right or wrong way)
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26. Criticizing a Subordinate
 let the employee maintain his/her dignity
 criticize in private and constructively
 provide examples of critical incidents and specific suggestions of what to do
and why
 avoid once-a-year critical broadsides; rather give periodical feedback
 never say the employee is always wrong
 should be objective and bias-free
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27. Handling Formal Written
Warning
 serves two purposes
 may serve to shake employee out of his/her bad habits
 may help to defend rating (to boss and court)
 should identify the employee’s standards, making it clear that the employee
was aware of the standard
 also specify any deficiencies related to the standard, showing the employee
had an opportunity to correct performance
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28. Performance Management
 Performance management is the process of identifying, measuring,
and developing the performance of individuals and teams and
aligning their performance with the organization’s goals
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29. Basic Elements of Performance
Management
 Direction sharing – communicating the company’s goals throughout the
company and then translating these into doable departmental, team, and
individual goals
 Goal alignment – having a method that enables managers and employees see
the link between employees’ goals and those of their department and
company
 Ongoing performance monitoring – includes using computerized systems that
measure and then email progress and exception reports based on the
person’s progress toward meeting his/her performance goals
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30. Basic Elements of Performance
Management
 Ongoing feedback – both face-to-face and computerized feedback regarding
progress towards goals
 Coaching and developmental support should be an integral part of the
feedback process
 Recognition and rewards provide the consequences needed to keep the
employee’s goal-directed performance on track
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Thanks!
Any questions?
You can find me at
faseeha.zabir@northsouth.edu

32. Reference
Dessler, G. (2012). Human Resource Management (13th
Edition). New York: Pearson.
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