2. Chapter 4
MANAGING EMPLOYEE PERFORMANCE AND
PERFORMANCE APPRAISAL

3. PREVIEW The main components in a performance management system.
The benefits of having an effective performance appraisal system.
The factors to consider when designing an appraisal system.
The requirements for implementing an appraisal system.
The types of follow-up action which may be taken after an employee’s performance has been appraised.

4. WHAT IS PERFORMANCE MANAGEMENT SYSTEM?
An employee performance management system is a means to ensure that every employee works in a manner which is aligned with organizational goals and which ensures that the employee reaches his maximum potential on the job.

5. HR SYSTEMS RELATED TO PERFORMANCE MANAGEMENT
Recruitment of workers
Training
Compensation and reward systems
Managing the performance of individual employees

6. PERFORMANCE MANAGEMENT SYSTEMS
An organization’s performance management system is designed by HR specialists.
The performance management system is implemented by heads of departments and all managers.

7. FACTORS AFFECTING EMPLOYEE PERFORMANCE
EMPLOYEE’S
PERFORMANCE
EMPLOYEE’S
KNOWLEDGE
EMPLOYEE’S
SKILL
EMPLOYEE’S
MOTIVATION
WORK
ENVIRONMENT

8. COMPONENTS OF A PERFORMANCE MANAGEMENT SYSTEM
Organizational plans, including the setting of objectives which are established for all levels down to the individual worker.
Implementation of the work by the individual worker, accompanied by appropriate forms of monitoring by the worker’s manager or supervisor.
Appraisal of the work of the individual workers.
Follow-up action taken after the appraisal.

9. Decide on Training Needs
PERFORMANCE MANAGEMENT
Objectives Set
Work
Implemented
Ongoing
Monitoring
Coaching
Decide on Training Needs
Reward
Employees
Performance Review
Take Remedial Action

10. OBJECTIVES If employees are to perform well, they must:
KNOW WHAT they are supposed to do, and
KNOW HOW to do the work.

11. OBJECTIVES (cont.)
The objectives/targets/key result areas/key performance indicators established for each employee must be:
Capable of achievement by the employee
Measurable
Accepted by the employee
Time-bound

12. OBJECTIVES (cont.) Performance objectives may relate to:
Quantity of output
Quality of output
Behaviour of employee
Development of employee

13. IMPLEMENTATION OF WORK BY THE EMPLOYEE
While the work is being carried out by the employee, the manager must:
Monitor;
Give feedback regularly; and
Coach, if necessary.

14. BENEFITS OF A PERFORMANCE APPRAISAL SYSTEM
Encourages quality performance by rewarding those who do well.
Improves current performance by giving workers feedback.
Assists in identifying training needs.
Provides documentation if disciplinary proceedings are needed.
Provides a channel of communication between managers and their subordinates.

15. EFFECTIVE APPRAISAL SYSTEMS
Are integrated into a performance management system.
Receive top management support.
Are customized to the needs of the organization.
Are acceptable and understandable.
Are reliable and unbiased as far as possible.

16. POTENTIAL BIAS IN PERFORMANCE APPRAISAL
Recency effect
Halo effect
Central tendency
Prejudice and stereotyping
Fatigue

17. WHO GIVES INPUT INTO AN APPRAISAL?
THE MANAGER
OTHER PARTIES
THE EMPLOYEE
COLLEAGUES
SUBORDINATES

18. APPRAISAL METHODS Comparative methods Trait rating scales
Essay technique

19. SKILLS NEEDED FOR EFFECTIVE PERFORMANCE MANAGEMENT
Observation of performance
Coaching
Counselling

20. AFTER THE APPRAISAL DISCUSSION
Follow-up???
Set objectives for next time period
Give rewards
Provide retraining
Institute disciplinary action

21. DISMISSAL FOR POOR PERFORMANCE
Prior to dismissing an employee for poor performance, an employer must:
Give warnings to the employee
Provide assistance so that he or she can improve
Give sufficient time for the employee to improve

22. REVIEW The main components in a performance management system.
The benefits of having an effective performance appraisal system.
The factors to consider when designing an appraisal system.
The requirements for implementing an appraisal system.
The types of follow-up action which may be taken after an employee’s performance has been appraised.