Performance Management

BY.TEAM FUSION
 TEAM LOGO

Gitanjali

Prithwiraj
Sahana
deb

FUSION

Ratish Bharath
babu ram
What is a performance
management?
 Performance management is the process of
assessing progress toward achieving predetermined
goals. It involves building on that process, adding
the relevant communication and action on the
progress achieved against these predetermined goals
helping organizations achieve their strategic goals.
 TOPICS COVERED

 Introduction
 Basic Principles
 Developing PM as integrated Process
 Objectives
 Focus
 Appraisal
 Feedback
 Latest /current trends in PM
 Introduction

 Definition
 Purpose
 Essence
Definition

A strategic and integrated process that delivers

sustained success to organizations by
• Improving the performance of the
employees

• Developing the capabilities of individual

contributors and teams
Purpose
§Getting better results from the whole
organization

§Process for establishing shared

understanding for achieving goal

§Owned and driven by line management

Essence

§A shared process between managers and

the team members
§The agreement of
•Objectives
•Knowledge
•Skill and Capability (competence)
•Requirements
•Performance Improvement
•Personal Development Plans
Basic Principles
Basic Principles
§Translates corporate goals into Individual, Team,
Department and Divisional goals

§Helps to clarify corporate goals

§Continuous and evolutionary process, in which

performance improves over time

§Relies on consensus and co-operation rather than

control or coercion
Basic Principles (contd.)
§Creates a shared understanding of what is
required to improve performance and how this will
be achieved

§Encourages self-management of individual

performance

§Measures and assesses all performance against

jointly agreed goals

§Feedback loops enable the experiences and

knowledge gained on the job by individuals to
modify corporate objectives
PM as Integrative
Process
PM as an Integrative Process

Is a force for both vertical and horizontal integration

VERTICAL Integration of:

§Business strategic plans and goals with
individual and team objectives
§Core values and capabilities of the organization
§Values adopted and level of capability achieved
by individuals
Performance Management as
an Integrative Process (contd.)

HORIZONTAL Integration of:

§Performance management strategies with other
HR strategies concerned with
•valuing,
•paying,
•Involving, and
•developing people
 Focus of PM
Valuing
People

Paying Performance Developing

People Management People

Involving
People
Focus of Performance
Management

§Performance improvement

§Employee development

§Satisfying the needs and expectations

of organization's stakeholders

§Communication and involvement

Factors Influencing
Performance
Perf = f (A,M,E)and team work
Ability Motivation Environment
§Technical skills §Career ambition §Equipment/materials
§Interpersonal skills §Employee conflict §Job design
§Problem-solving §Frustration §Economic
skills conditions
§Fairness/satisfaction
§Analytical skills §Unions
§Goals/expectations
§Communication §Rules & policies
skills
§Management
§Physical limitations support
§Laws & regulations
PM Objectives
Objectives
 Why do we measure performance?

 How do we measure performance?

 How to devise an effective performance

appraisal system

 Giving appropriate feedback

Why is Performance
Measured?
 Developmental reasons
• How might a performance
appraisal
contribute to an individual’s
development?
 Administrative reasons
• How might a performance
appraisal
serve administrative functions?
How is Performance
Measured?
 Results based

 Behavioural based

 Trait based
 Objective based

 Subjective based

 360- Degree Feedback

 Types of Performance
Parameters
ØResults-based (results-oriented):
measure the results produced by the
employee

ØUses
Use it where results matter

ØChallenges
1. results arrived may not be obvious for all jobs.
2. Some results may not be under the employee’s
control
3. May introduce ‘results at all cost’ mentality.
4. May interfere with teamwork
5. Effective feedback difficult.
 Types of Performance
Parameters
ØBehavior-based (behavior-oriented):
measure the employee’s behaviors making it
easier to provide detailed feedback

ØUses
Use it where how the employee produces results
matters
Types of Performance
Parameters
 Behavior-based (cont’d.):

 Challenges
Difficult to capture the full range of relevant behaviors
Different behaviors can lead to the same results — do
we always care which behaviors were used?
 Types of Performance
Parameters

 Trait-based (trait-oriented): measure the employee’s

abilities and other personal characteristics

 Challenges
Poor reliability & validity
Weak linkages with job effectiveness
Measurement subject to biases (racism, sexism)
Difficult to provide effective feedback
PM Appraisal Methods
Objective Measures
 Objective Measures: measure
performance in terms of things we can see
and count
◦ Production measures: count units produced
◦ Sales measures: count sales
◦ Personnel data: count things in the employee’s
personnel file, such as:
Number of times late to work
Number of times absent
Number of disciplinary actions taken
Objective Measures (cont’d.)

◦ Performance tests: evaluate a sample of the

employee’s work
◦ Business unit performance measures:
Examples:
Stock price
Market share
Profit measures: profits, return on sales, return on assets,
return on equity
Uses
For managers with business unit responsibility
Subjective measures
 Measure performance using human
judgments
◦ Ranking: subjectively rank employees from best
to worst

◦ Paired Comparisons: in all possible pairs of

employees, subjectively rate which employee is
better
Subjective measures (cont’d.)

◦ Rating scale (graphic rating scale): subjectively

rate the employee’s performance on a labeled
numeric measuring scale

 Uses
◦ Used to rate overall job performance as well as
specific aspects of job performance

 Challenges
Forced distribution: evaluator must place a fixed
percentage of employees in each performance category
Performance Appraisal
Methods
 Subjective measures (cont’d.)
◦ Behavioral Observation Scales (BOS):
evaluators rate the frequency with which an
employee engages in specific behaviors
◦ Weighted checklist: from a list of possible employee
behaviors, check off the ones that apply to the
employee
Management By Objectives
(MBO)

ØInvolves employee in setting goals

ØMeasurable goals
ØChallenging but realistic, difficult but achievable
ØAt the end of period, review if the goal has been
achieved
Sources of Performance
Appraisal
 Manager and/or Supervisor Appraisal
 Self-Appraisal
 Subordinate Appraisal
 Peer Appraisal
 Team Appraisal
 Customer Appraisal
PM Feedback
360-Degree Feedback

Manager

Peers Individual Customers

Direct
Reports
360-Degree Feedback
 Integrity safeguards:
• Assure anonymity
• Make respondents accountable
• Prevent “gaming” of the system
• Use statistical procedures
• Identify and quantify biases
360-Degree Feedback (…contd.)
Uses
 Personal Development

 Appraisal

 Payments
Effective Performance
Appraisals
 Clear anchors and standards of
performance
 Comply with the law
 Decide who should appraise
 Trains appraiser
Sources of error
 Management attitude
 Rater errors
• Halo effect
• Central tendency
• Leniency/strictness bias
• Prejudice
• Recency effect
• Subjective factors
Reasons Appraisal Programs
Fail
 Lackof top-management information and
support

 Unclear performance standards

 Rater bias

 Too many forms to complete

 Useof the appraisal program for conflicting
purposes
Latest/recent trends in PM
Recent research reveals that the majority of
organizations are utilizing performance
management systems / performance management
software and many are in the process of revamping
their first generation systems. According to
Development Dimensions International (DDI),
performance management systems are active in
91% of 3,600+ organizations .

Performance Management - Current Trends:-

Strategic HR - The Link Between Employee

Performance Management and Organizational
Performance
Link between [EPM] and
[CPM]
Increasingly companies are focusing on "strategic HR," aligning human
resources initiatives with the overall goals of the organization to improve
business success. Aligning Employee Performance Management (EPM) with
Corporate Performance Management (CPM)
The following are the effects :-
1)*90% of companies surveyed, perceive improved management of their
workforce as key to gaining competitive advantage.
2)Organizations are aligning their employee performance goals with corporate
performance goals through technology solutions.
HUMAN CAPITAL MANAGEMENT
* Aligning employee goals with corporate goals
* Linking reward and recognition programs to performance
* Targeting learning and development toward performance gaps
* Identifying skills and competencies of top performers for retention and
succession
* Increased Automation of Performance Management and HR Functions
Thank You
Any Suggestions and questions