2. How performance management is
strategically important to firms
Performance management is a formal, structured process used to
measure,evaluate, and influence employees’ job-related attitudes,
behaviours, and performance results.
Performance management serves many purposes in organizations:
1-Enhancing Motivation and Productivity:
An employee’s motivation to perform well is determined by how
responds to three key questions:
• The expectancy question(‘If I make an effort, will I be able to
perform as intended?’)
• The instrumentality question(‘What consequences, if any, will
follow from my decision to perform?’)
• The valence question(‘How much do I value the consequences
associated with the intended behavour?’)
3. How performance management is
strategically important to firms
2-Supporting Strategic Goals
Defining goals and their measures is an important part of the perfomance management
process.When goals have a direct and obvious link to strategic goals and to the firm’s
success factors, two benefits occur:
• Employees better understand their organization’s strategic focus and how their jobs fit
with it.
• The goals direct employee behaviours toward activites that are consistent and
supportive of the organization’s strategy.
3-Strategic Planning, Alignment and Change
Performance measures provide valuable information for use in strategic planning and
organizational change.
• Detecting Problems :for example; declining sales performance may point to a
deficiency in training.
• Evaluating Change: Employee performance measures should be a key component of
a plan for evaluating the success of a change initiative.
4. How performance management fits
within an integrated HRM system
HR Activities
Performance Management Practices
External Performance Measurement
Environment
Legal
Labor market
National Culture Feedback and Follow up
Internal
Environment Objectives of Performance
Strategy
Culture
Measurement And Feedback
Technology
If no improvement
make adjustments
5. The responsibilities of the HR Triad for
performance management
LINE MANAGERS HR PROFESSIONALS EMPLOYEES
Work with 2+3 to develop Work with 1 providing job analysis Work with 1+2 to set performance
valid performance measures data expectations
Understanding of errors Train everyone Appraise the work of others
Measure and keep records Coordination and feedback Participation
Feedback to employees Train 1 for feedback Seek and accept feedback
Feedback own performance Train self-managing teams for Learn to give feedback
feedback
Decision making Monitor managerial decisions Understand performance expectation
Diagnose deficiencies Train self-managing teams for Learn to diagnose causes of
deficiencies deficiencies
Work with 3 to develop Ensure 1+3 to deal with deficiencies Work with 1 to develop
Strategies improvement strategies
Provide resources Provide personal assistance to 3. Develop goal setting and self-
management skills
6. Several ways to measure
performance
• Performance criteria: are the dimensions against which the performance
of an incumbent, a team or a work unit is evaluated.
organizations can use three types of criteria:
Personal Traits focus on personal characteristics, such as loyalty, dependability,
communication ability and leadership
Behavioral Criteria focus on how work is performed.
Objective Results focus on what was produced rather than how it was produced.
• Weightning the criteria: Job analysis
7. The timing of the performance
measurement and feedback
The timing of performance measurement should reflect
strategic considerations. But often the timing of performance
measurement and feedback is driven by convenience and
tradition.The three most common approaches:
1-Focal Point:Performance measurement for all employees
occurs at approximately the same time.
Advantage:Comparison-everyone-same time
Disadvantage:Too much work –same time-artificial
productivity
2-Anniversary Approach:distributes the task of reviewing
performance and providing feedback over the year.
Disadvantage:Individual-team performance,comparison.
3-Natural Time Span of the Job
8. The participants in performance
measurement and feedback
To compensate for the disadvantages of gathering data
from any single source, most large organizations involve
multiple participants when measuring performance and
providing feedback.
• Supervisors
• Self-Appraisal
• Peers
• Subordinates
• Customers
• 360 – Degree Appraisals
9. Appraisal formats
Involves evaluating performance based on the judgemets and
opinions of subordinates, peers, supervisors, other managers
and even the employees themselves.
Norm-Referenced
1.Straight Ranking
2.Forced Distribution.
Absolute Standards Formats
1.Graphic Rating Scales
2.Behaviourally Anchored Rating Scales
3.Behavioural Observation Scales
Result-Based Formats.
1.Direct Index Approach
2.Management by Objectives
10. The rating process
Common Performance Rating Errors
Halo and Horn :sex,age,race
Leniency: high rated
Strictness: low rated
Central Tendency: ‘play –it- safe’ average rating
Primacy:Initial information to categorize
Recency:Recent results
Contrast Effects:Comparison of different levels.
Improving Rater Accuracy
Rating Scale Format:
•A single job activity
•Rate separately
•Do not use term ‘average’
Provide Memory Aids
Provide Rater Training
Reward Accurate and Timely Appraisals
Use Multiple Raters
11. Providing feedback
The feedback makes employees aware of any problems and should adress the
importance of change when applicable. Many managers feel uncomfortable
providing feedback to employees.
Different perspective,egos,defence,discussions...
Timing:Immediate feedback is most useful.Continous,from several sources and
as much info as reciever can use.
Preparation:Before the actual interview decision has to be taken is it one way or
interactive
Content of the Discussion:The most useful feedback sessions focus on
solving problems and planning for the future.Problem solving involves diagnosing
the causes of performance.
Diagnosis:The objective of diagnosis is to understand the factors that affect an
employee’s performance.Training in problem solving and in giving and receiving
feedback should be provided.
Removing Roadblocks: Action plan: Supervisor should adress lack of
resources,feedback,Subordinate should adress behavorial changes,career
development activities...
12. Two current issues related to
performance management
• Automated Performance Management
Technology can automate the process by tracking goals,scoring and approving
appraisals and processing the data for use in determining compensation, training
,planning and recruiting.Customer satisfaction,managers ratings etc..the technology
allows organizations to convert a great deal of data into usable
information.Efficiency,time saving,accuracy.
• Monitoring Through Technology
Handscanners-attendancy,GPS devices –location,softwares-emails,internet activities
It concerns privacy.Must find a balance between benefits and privacy.How ?
Communication and training.
