Appraising and Managing performance HRM-5 Performance management Appraisal performance is only one part of the broader process of perormacnemanagement,which is defined as the process through which managers ensure that employees' activities and outputs are congruent with the organization’s goals The three parts of Performance Management 1. Defining performance: which aspects of perforce are relevant to the organization (job analysis) Measuring performance ( through appraisal) Feed backing performance information ( Performance feedback sessions to adjust their performance Performance Planning and Evaluation (PPE) This system seeks to tie the formal performance appraisal process to company’s strategies by specifying at the beginning of the evaluation period the types and level of performance that must be accomplished to achieve the strategy. Then at the end of the evaluation period the employees are evaluated based on how closely their actual performance met the What is an appraisal process? It is a process where the performance of an employee is being appraised (evaluated). It involves: Setting work standards Assessing employees’ actual performance relative to these standards Providing feedback to the employee with the aim of motivating that person to eliminate deficiencies or to continue to perform above par. Why should we appraise performance? 1. It provides information upon which to make promotion and salary decisions. 2. provide opportunity for you and your subordinate to review his/her work related behavior 3. it is part of the company’s career planning process 4. Appraisals help you better manage and improve your firm’s performance. Who conducts the appraisal? It is a supervisory skill. Thus supervisors must be familiar with basic appraisal techniques, understand and avoid problems that can cripple appraisals. The Hr dept. serves as a policy –making and advisory role. However final decisions on procedures are left to operating division heads. HRs’ responsibility To train supervisors to improve their appraisal skills. Also monitoring the appraisal system . Steps in Appraising Performance First: define the job: making sure that you and your subordinate agree on his or her duties and job standards. Second: Appraising performance: comparing your subordinate’s actual performance to the standard that has been set. Third: Provide feedback; the two discuss the subordinates’ performance and progress and make plans for any development required. A. The Attribute Approach The attribute approach to performance management focuses on the extent to which individuals have certain attributescharcteristics or traits) believed desirable for the company’s success. This technique defines a set of traits-such as intiative,leadership,and competitiveness-and evaluate individuals on them The Attribute approach Graphic rating scale: Is the simplest and most popular technique. It lists traits (quality, reliability) and a range of performance (from unsatisfactory to outstanding) for each trait. The rater rates each subordinate by circling or checking the score that best describes his or her performance for each trait. You then total the assigned values for the traits. Problems with Rating scales Unclear standards problem : Traits and degrees of merit are ambiguous because of the subjectivity of each supervisor, what may seem good for one rater may seem fair for another. Halo effect: a supervisor rates an employee as fair in all traits because the employee is unfriendly. Central tendency: rating most people in the middle ( average) Leniency or strictness: giving everyone a high( low) rate. Bias: (age, sex, race may affect the rating) B. The Comparative e Approach This approach to performance management requires the rater to compare an individual's performance with that of others. The comparative approach 1. Ranking: Requires managers to rank employees within their departments from highest to poorest performers (or best to worst). This method has received specific attention in the courts. The court actually stated that “there is no way of knowing precisely what criteria of job performance that supervisors were considering, whether each supervisor was considering he same criteria or not.”’ The comparative approach 2. Forced Distribution Method: You place predetermined percentages of ratee’s into performance categories: 15% high performers 20% high-average performers 30% average performers 20% low-average performers 15% low performers. Cont’d Many firms are adopting this practice if there is( i.e.10% in the bottom they get 90 days to improve if not they get a chance to resign. 3. The Behavioral Approach This approach to performance management attempts to define the behaviors an employee must exhibit to be effective in this job The Behavioral Approach 1. Critical Incident Method: The supervisor keeps a log of positive and negative examples (critical incidents) of a subordinate’s work related behavior. Every six months, the supervisor and subordinate meet to discuss the latter’s performance using the incidents. Advantages of the critical incident method It provides actual examples of good and poor performance the supervisor can use to explain the person’s rating. It ensures that the manager or supervisor thinks about the subordinate ‘s appraisal all during the year. The rating does not only reflect the employee’s most recent performance. The list provides examples of what specifically the subordinate can do to eliminate deficiencies (This method is not useful in making salary decisions) The Behavioral Approach 2. Behaviorally Anchored Rating Scales (BARS) combines between the benefits of graphic rating scale (traits) and critical incidents (positive and negative behavior). The Behavioral Approach 3. Organizational Behavior Modification: OBM-entails managing the behavior of employees through a formal system of behavioral feedback and reinforcement. This system builds on the behaviorist view of motivation, which holds that individuals' future behavior is determined by past behaviors that have been positively reinforced It best suited to les complex jobs 4. The results approach This approach relies heavily on managing by objectives, it assumes subjectivity can be eliminated from the measurement process. There are two performance management stems: the MBO and the productivity measurement The Results Approach Management By Objectives Requires the management to set specific measurable goals with each employee and then periodically discuss the latter’s progress toward these goals. Problems with the MBO approach 1. Setting unclear ,un-measurable objectives. 2. It is time consuming, setting objectives, measuring programs, and giving feedback can take several hours per employee per year. 3. Setting objectives with subordinates sometimes turns into a tug-a –war, you pushing for higher quotas and the subordinate pushing for lower ones. The Results Approach Productivity Measurement and Evaluation system (ProMES) The main goal is to motivate employees to higher levels of productivity. It is a means of measuring and feeding back productivity information to personnel. This depends on four steps: People identify the products, or sets of activities the organization expects to accomplish Then the staff defines indicators which measure how well it products are being generated by the organization 3. the staff establishes contingencies between the amount of the indicators and the level of evaluation associated with that amount 4. a feedback system is developed employees with specific level of performance on each indicator Who should do the appraising? The immediate supervisor: He should be in the best position to observe and evaluate the subordinate’s. Peer appraisal: self-managing teams, it can predict future management success. except for logrolling: when peers collude to rate each other highly. Who should do the appraising? Rating committees: By the immediate supervisor and three other supervisors . This eliminates halo effect or biases. If this committee can not be available it is advised that the manager of the supervisor makes the appraisal. Who should make the appraisal? Appraisal by subordinates: Appraising their supervisors in a process called :upward feedback. This helps top managers diagnose: Management styles Identify potential people problems Take corrective actions with individuals managers as required. This is essential for developmental rather than evaluative purposes. 360-Degree Feedback An employee Supervisor Subordinates Peers Internal and external customers. The survey will include skills like ”returns phone calls promptly” listens well”. A computer will gather the feedback into individualized reports that HR presents to the rate's . Then they meet with their supervisors to share information they feel is pertinent (considered essential) for the purpose of development Types of interviews Performance is satisfactory leading to employee promotion. Performance is satisfactory not leading to employee promotion( because of no positions available) Unsatisfactory performance leading to correctable action. Where does the problem lie? In the satisfactory performance with no positions for promotions. Companies overcome this by giving out bonuses, or incentives additional authority to handle a slightly enlarged job. Do you think this is satisfactory for the employee psychologically? And in the poor performer that needs correctable actions. They become defensive and usually deny the fact that they are poor performers. Do appraisals really help to improve performance? Shocking research results claims that: 32% of 300 managers rated that performance appraisals are “very ineffective” while 4% considered it” very effective”. Performance Management Companies are changing the way people view the HR functions they are concentrating on working backwards by using the term” Performance management” what kind of performance is required Based on this what kind of compensation is required for that job to be performed Based on this what kind of people will be selected and hired.
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