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Objective. Chapter 8 (Chapter 10) Establishing the performance Management System. Presenter: Sayed Moammer Mazhary BBA (Marketing & Finance) MBA (HRM) HR Manager KIHE. Outline. Introduction Performance Management System Performance Appraisal Process Appraisal Methods

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objective

Objective

Chapter 8 (Chapter 10)

Establishing the performance Management System

Presenter:

Sayed Moammer Mazhary

BBA (Marketing & Finance)

MBA (HRM)

HR Manager KIHE

outline
Outline
  • Introduction
  • Performance Management System
  • Performance Appraisal Process
  • Appraisal Methods
  • Factors That Can Distort Appraisals
  • Creating More Effective Performance Management System
introduction
Introduction
  • Employees generally see performance evaluations as having a direct effect on their work lives.
  • The performance management systems need to include:
    • decisions about who should evaluate performance
    • what format should be used
    • how the results should be utilized
performance management systems
Performance Management Systems

Purposes of a Performance Management System

  • Feedback - let employees know how well they have done and allow for employee input.
  • Development – identify areas in which employees have deficiencies or weaknesses.
  • Documentation - to meet legal requirements.
performance management systems1
Performance Management Systems

Difficulties in Performance Management Systems

  • Focus on the individual: Discussions of performance may elicit strong emotions and may generate conflicts when subordinates and supervisors do not agree.
performance management systems2
Performance Management Systems

Difficulties in Performance Management Systems

  • Focus on the process: Company policies and procedures may present barriers to a properly functioning appraisal process.
  • Additionally, appraisers may be poorly trained.
performance management and eeo
Performance Management and EEO
  • HRM practices must be bias free, objective and job-related.
  • Valid performance appraisals are conducted at established intervals and are done by trained appraisers.
the appraisal process1
The Appraisal Process
  • Establishment of performance standards
    • Derived from company’s strategic goals.
    • Based on job analysis and job description.
  • Communication of performance standards to employee.
the appraisal process2
The Appraisal Process
  • Measurement of performance using information from:
    • personal observation
    • statistical reports
    • oral reports
    • written reports
  • Comparison of actual performance with standards.
the appraisal process3
The Appraisal Process
  • Discussion of appraisal with employee.
  • Identification of corrective action where necessary.
    • Immediate action deals with symptoms.
    • Basic corrective action deals with causes.
appraisal methods
Appraisal Methods

Three approaches:

  • Absolute standards
  • Relative standards
  • Objectives
appraisal methods1
Appraisal Methods

Evaluating absolute standards:

  • An employee’s performance is measured against established standards.
  • Evaluation is independent of any other employee.
appraisal methods2
Appraisal Methods

Evaluating absolute standards:

  • Essay Appraisal: Appraiser writes narrative describing employee performance & suggestions.
  • Critical Incident Appraisal: Based on key behavior anecdotes illustrating effective or ineffective job performance.
appraisal methods3
Appraisal Methods

Evaluating absolute standards:

  • Checklist Appraisal: Appraiser checks off behaviors that apply to the employee by selecting yes/no.
  • Adjective Rating Scale Appraisal: Appraiser rates employee on a number of job-related factors scaling from low to high.
appraisal methods4
Appraisal Methods

Evaluating absolute standards:

  • Forced-Choice Appraisal:Appraisers choose from sets of statements which appear to be equally favorable, the statement which best describes the employee.
appraisal methods5
Appraisal Methods

Evaluating absolute standards:

  • Behaviorally Anchored Rating Scales (BARS):Appraiser rates employee on factors which are defined by behavioral descriptions illustrating various dimensions along each rating scale.
appraisal methods6
Appraisal Methods

Relative standards:

  • Employees are evaluated by comparing their performance to the performance of other employees.
appraisal methods7
Appraisal Methods

Relative standards:

  • Group Order Ranking: Employees are placed in a classification reflecting their relative performance, such as “top one-fifth.”
appraisal methods8
Appraisal Methods

Relative standards:

  • Individual Ranking: Employees are ranked from highest to lowest.
  • Paired Comparison:
    • Each individual is compared to every other.
    • Final ranking is based on number of times the individual is preferred member in a pair.
appraisal methods9
Appraisal Methods

Using Achieved Outcomes to Evaluate Employees

Management by Objectives (MBO)

  • includes mutual objective setting and evaluation based on the attainment of the specific objectives
appraisal methods10
Appraisal Methods

Using Achieved Outcomes to Evaluate Employees

  • Common elements in an MBO program are:
    • goal specificity
    • participative decision making
    • an explicit time period
    • performance feedback
  • Effectively increases employee performance and organizational productivity.
factors that can distort appraisals1
Factors that can Distort Appraisals
  • Leniency error
    • Each evaluator has his/her own value system.
    • Some evaluate high (positive leniency) and others, low (negative leniency).
  • Halo error: Evaluator lets an assessment of an individual on one trait influence evaluation on all traits.
factors that can distort appraisals2
Factors that can Distort Appraisals
  • Similarity error: Evaluator rates others in the same way that the evaluator perceives him or herself.
  • Low appraiser motivation:Evaluators may be reluctant to be accurate if important rewards for the employee depend on the results.
factors that can distort appraisals3
Factors that can Distort Appraisals
  • Central tendency: The reluctance to use the extremes of a rating scale and to adequately distinguish among employees being rated.
  • Inflationary pressures: Pressures for equality and fear of retribution for low ratings leads to less differentiation among rated employees.
  • Inappropriate substitutes for performance: Effort, enthusiasm, appearance, etc. are less relevant for some jobs than others.
factors that can distort appraisals4
Factors that can Distort Appraisals

Attribution Theory

  • Evaluations are affected based on whether someone’s performance is due to
    • internal factors they can control
    • external factors which they cannot
  • If poor performance is attributed to internal control, the judgment is harsher than when it is attributed to external control.
factors that can distort appraisals5
Factors that can Distort Appraisals
  • Impression management:
  • If employee positively influences the relationship with the supervisor, he/she is likely to receive a higher rating.
creating more effective performance management systems
Creating More Effective Performance Management Systems

Use Behavior-Based Measures:

  • Measures based on specific descriptions of behavior are more job-related and elicit more inter-rater agreement than traits, such as “loyalty” or “friendliness”.
creating more effective performance management systems1
Creating More Effective Performance Management Systems

Combine Absolute and Relative Standards:

  • Absolute standards tend to be positively lenient; relative standards suffer when there is little variability.
  • Combining the standards tends to offset the weaknesses of each.
creating more effective performance management systems2
Creating More Effective Performance Management Systems

Provide Ongoing Feedback:

  • Expectations and disappointments should be shared with employees on a frequent basis.
creating more effective performance management systems3
Creating More Effective Performance Management Systems

Use Multiple Raters:

  • Increasing the number of raters leads to more reliable and valid ratings.
    • Use peer evaluations: Coworkers offer constructive insights and more specific evaluations.
    • Upward appraisals allow employees to give their managers feedback.
    • 360-Degree appraisals: Supervisors, peers, employees, team members, customers and others with relevant information evaluate the employee.
creating more effective performance management systems4
Creating More Effective Performance Management Systems

Rate Selectively

  • Appraisers only evaluate in those areas about which they have sufficient knowledge.
  • Appraisers should be organizationally as close as possible to the individual being evaluated.
  • More effective raters are asked to do the appraisals.
creating more effective performance management systems5
Creating More Effective Performance Management Systems

Train Appraisers:

  • Untrained appraisers who do poor appraisals can demoralize employees and increase legal liabilities.
international performance appraisal
International Performance Appraisal
  • Who performs the evaluation?
    • Different cultural perspectives and expectations between the parent and local country may make evaluation difficult.
    • Evaluation forms may not be translated accurately.
    • Quantitative measures may be misleading.
international performance appraisal1
International Performance Appraisal
  • Evaluation Formats
    • May make sense to use different forms for parent-country nationals and host-country nationals.
    • Performance criteria for a particular position should be modified to fit the overseas position and site.
    • Include a current expatriate’s insights as part of the evaluation.