Performance Management

Contents Outline Performance management Performance Plan Performance Monitoring Performance Appraisal Performance appraisal tool and techniques Issues and challenges of performance appraisal NASC 2016

Objectives Familiarize with the concepts of Performance Planning, Performance Monitoring and performance appraisal. Analyze the issues and challenges of performance appraisal Use performance appraisal tool NASC 2016

Introduction Performance = Ability x Willingness Experiences - Desire, Skill - Commitment Knowledge - Confidence Attitude

What is Performance? Measurement of the result or effectiveness of the job is called performance. Result of the efforts including the resources for the defined job. Systematic and objective oriented achievement of the individual or group regarding the job.

Performance Management Performance Management (PM) is a way of systematically managing all the HR at the organization It is a goal congruent win-win plan. PM is an unending spiral and linking processes. PM is a realism that an organization does nothing if it doesn’t manage performance. PM is a holistic – largely participatory and goal congruent process of managing and supervising employees at work.

PM is an integrated process… It affects four types of integration: Vertical aligning Functional focusing Human Resources- linking different HRM sub- systems Goals: attempting congruence between individual needs and goals of the organization.

Purposes of PM Strategic Administrative Link individual goals with organization’s goals Communicate most crucial business strategic initiatives Administrative Salary adjustments, promotions, retention or termination Recognition of individual performance Layoffs (dismiss) Informational-communicate to employee Developmental Performance feedback/coaching Identification of individual strengths and weaknesses Tailor development of individual career path Organizational maintenance- workforce planning, training etc Documentational- to take decision, legal, validate

It is concerned with: What is to be achieved ? What quality is required ? How is it to be achieved ? By when is it to be achieved / How will success be evaluated ? What training and development are required ?

Performance management Performance management is, “a continuous process of identifying, measuring and developing the performance of individuals and teams and aligning performance with the strategic goals of the organization.” - Aguinis, 2005 Aguinis (2005) defines performance management as, “a continuous process of identifying, measuring and developing the performance of individuals and teams and aligning performance with the strategic goals of the organization.”

Performance management- not “A system that involves employee evaluations once a year without an ongoing effort to provide feedback and coaching so that performance can be improved is not a true performance management system.” Aguinis, 2005 He contends that, “a system that involves employee evaluations once a year without an ongoing effort to provide feedback and coaching so that performance can be improved is not a true performance management system.” He describes this rather, as only a performance appraisal system.

Characteristics: Connected with behavior Linked with skill and willingness, Related with physical as well as mental Environment bounded, Connected with cost, productivity and time, Represented by concrete, measurable terms.

Performance Management

Need of Performance Management Systems Administer Salary & Wages Correct Performance/Behavior Plan for Future (promotion, transfer, career dev) Facilitate Decision-Making (counseling, terminations) Facilitate Human Resource Planning Create Culture Building Good Relationships Increase Organizational Loyalty Determine Effectiveness of Selection and Placement Methods

Contribution of performance management- Employee Clarify definitions of Job Key result areas KRA, Key performance area, Indicators Success criteria Performance plan Increase motivation to perform Increase self-esteem Enhance self-insight and development

Exercise SN Activity KRA KPA KPI 1 Traffic management in Kathmandu valley 2 Crime control in Kathmandu NASC 2016

The performance management cycle Performance agreement Performance review Action Performance plan Monitor feedback and review

HRM component AQUISITION HR Planning Recruitment Employee socialization MAINTENANCE Safety and Health Employee/Labor Relations EXTERNAL INFLUENCES DEVELOPMENT Employee Training Management Development Career Development UTILIZATION Job Design Performance Evaluation Rewards/Job evaluation Compensation/Benefits Discipline

What is Performance Appraisal What is Performance Appraisal? “concerned with the process of valuing a person’s worth to an organization with a view to increasing it” Performance appraisal is the process of obtaining, analyzing and recording information about the relative worth of an employee. The focus of the performance appraisal is measuring and improving the actual performance of the employee, and Also the future potential of the employee. Its aim is to measure what an employee does.

Performance Appraisal in Organization To review the performance of the employees over a given period of time. To judge the gap between the actual and the desired performance.  To help the management in exercising organizational control.  Helps to strengthen the relationship and communication between superior – subordinates and management – employees.  To diagnose the strengths and weaknesses of the individuals so as to identify the training and development needs of the future. 

Performance Appraisal in organization To provide feedback to the employees regarding their past performance. Provide information to assist in the other decisions in the organization. Provide clarity of the expectations and responsibilities of the functions to be performed by the employees. To judge the effectiveness of the other human resource functions of the organization such as recruitment, selection, training and development. To reduce the grievances of the employees.

Primary uses of Performance Appraisal www.performanceappraisal.com Small Organizations Large Organizations All Organizations Compensation 80.2% 66.7% 74.9% Performance improvement 46.3% 53.3% 48.4% Feedback 40.3% 40.6% 40.4% Documentation 29.0% 32.2% 30.2% Promotion 26.1% 22.8% 24.8% Training 5.1% 9.4% 7.3% Transfer 8.1% 6.1% Discharge 4.9% 6.7% 5.6% Layoff 2.1% 2.8% 2.4% Personnel research 1.8% 2.2% Manpower planning 0.7% 1.5%

Measurement Tools – Trait Appraisal Instruments/ graphic rating scale Focuses on the person rather than on the performance Employee is rated on factors such as initiative, dependability, cooperativeness, and quality of work Supervisors tend to evaluate everyone Method provides same information on all employees ( inexpensive to develop)

Graphic Rating Scale How courteous is this front desk representative towards the customers? 1 2 3 4 5 Very Discourteous Neither Courteous Courteous Very Discourteous nor Discourteous Courteous

Behaviorally Anchored Rating Scale (BARS) 1 2 3 4 5 6 7 Ignores customer who needs help Keeps customer waiting unnecessarily Fails to thank customer for purchases Answers customers questions promptly Completes transactions in a timely manner Greets customers pleasantly and offers assistance Always tries to sincerely help customers locate items to suit their needs

Case NASC 2016

Who appraises performance? Discussion

Who Appraises Performance? Supervisors Self-appraisals Peer appraisals Subordinate appraisals Customer/client appraisals Multiple raters 360-degree appraisal

Issues and challenges Lack of objectivity Stereotype Halo error (Rate employees the same on every trait) Stereotype Leniency/strictness Central tendency Recency effect (Focus on recent behavior and impression) Similarity (similar values and interest to the reviewer) Personal bias Manipulating the evaluation

Some insights of PFM Transparency Employee development Mutual respect Fairness and equity Organizational climate Effective management towards reducing external obstacles and constraints to performance

…Some insights of PFM In addition, Clear organizational goals Translating organizational goals into individual, team, unit, section, departmental and divisional goals Improving performance over time through a continuous and evolutionary process Encouraging self-management of individual performance Ensuring continuous feedback Applying to all employees Not limiting linking performance only to financial reward.

Key Learning Points PM can have significant impact upon the operations and success of the organization. People make genuine efforts to relate their goals and aspirations to the achievement of organizational goals. Establish link between performance management policy, other HR policies and the business activities. Create a shared vision of performance, generate commitment from employees and create an environment where it is “OK to perform”. NASC 2016

Key Learning Points If badly managed can present a dichotomy for the employee between team and individual goals. The real sense of ownership and commitment from the side of line manager is required Line manager should be involved in setting objectives and making the reviews Both extrinsic and intrinsic motivation are to be taken into considerations NASC 2016

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