Human Resource Management

Documentation of Performance Management system

Submitted To: Respected Maam Saher Imtaiz Submitted By:

Amana Habib Anum Ameer Saba Khalid Sonam Arshad Sagheer Sadiq Sohail Yousaf

(11022720-037) (11022720-127) (11022720-026) (11022720-047) (11022720-021) (11022720-074)

Performance Management
Performance Management Systems Three Purpose of Performance of Management System Difficulties in Performance Management Systems Performance Management and EEO The Appraisal Process Appraisal Method Factor that can Distort Appraisal Creating more Effective Performance Management Systems The Performance Appraisal Meeting International Performance Appraisal

Introduction;
Performance management (PM) includes activities that ensure that goals are consistently being met in an effective and efficient manner. Performance management can focus on the performance of an organization, a department, employee, or even the processes to build a product or service, as well as many other areas. 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 system;

The performance management systems is the process of creating a work environment or setting in which people are enable to perform the best of their abilities. Performance management is the whole system that beings when a job is defined as needed. It end when any employee leave the organization.

Purpose Performance Management system:

Performance Management links people to performance and profit. It starts by understanding what success looks like for an organization, and then ensures that everyone in an organization works effectively to achieve that success.

Feedback;
Every method of gathering employee feedback depends on what challenges you need to address as a business. Consider: Is your employee base growing or downsizing? Are you preparing for a merger or staying level? Professionals in the industry of employee research say offering general feedback opportunities are important open-office policies or meeting with managers but specific targeting of issues can help guide your company through difficult times. Common questions managers seek input on include: how engaged are my employees? How satisfied are they working for the company? What is the communication like with management? Do they have the right tools to do the job? How secure do they feel in the job?

Development
"Employee Development" was seen as too evocative of the master-slave relationship between employer and employee for those who refer to their employees as "partners" or "associates" to be comfortable with. ". This activity focuses upon the activities that the organization employing the individual, or that the individual is part of, may partake in the future, and is almost impossible to evaluate

Documentation
Managing people is one of the most time-consuming and difficult aspects of any job. Whether you have one direct report or 20, the responsibilities loom large and finding the time to follow sound management practices in everything you do as a supervisor can be challenging. Documentation of performance and conduct issues often feels like one of the most burdensome duties, and unfortunately it is the one that usually gets put off the longest. How many managers actually take the time, either during a meeting with an employee or immediately after, to write notes about the conversation and put it in his or her manager's file? Most managers will say that they do not document everything they should and even if they do, they admit it may not get done until several days, weeks, or months have passed and it's time for annual performance reviews. They also acknowledge later, if the employee's performance or conduct has not improved, that the notes they wrote were not a complete representation of what was actually discussed.

Employee Decision;Employee involvement is creating an environment in which people have an impact on decisions and actions that affect their jobs. Employee involvement is not the goal nor is it a tool, as practiced in many organizations. Rather, employee involvement is a management and leadership philosophy about how people are most enabled to contribute to continuous improvement and the ongoing success of their work organization.

Difficulties in Performance Management System:There are two types of difficulties in performance management system these are given below.

Focus on the individual:and may generate Discussions of performance may elicit strong emotions conflicts when subordinates and supervisors do not agree.

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: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 process:The performance appraisal process consists of six steps. A performance appraisal is a review and discussion of an employee's performance of assigned duties and responsibilities. The appraisal is based on results obtained by the employee in his/her job, not on the employee's personality characteristics. The appraisal measures skills and accomplishments with reasonable accuracy and uniformity. It provides a way to help identify areas for performance enhancement and to help promote professional growth. It should not, however, be considered the supervisor's only communication tool. Open lines of communication throughout the year help to make effective working relationships. Each employee is entitled to a thoughtful and careful appraisal. The success of the process depends on the supervisor's willingness to complete a constructive and objective appraisal and on the employee's willingness to respond to constructive suggestions and to work with the supervisor to reach future goals. 1. 2. 3. 4. 5. Establish performance standards Communicate expectations Measure actual performance Compare actual performance with standards Discuss the appraisal with the employees 6. Initiate corrective action if necessary

Establishment of performance standards:Performance expectations are the basis for appraising employee performance. Written performance standards let you compare the employee's performance with mutually understood expectations and minimize ambiguity in providing feedback.

Communication Expectation:Once performance standards are establish it is necessary to communicate these standards to the employees to get better performance.

Measurement of performance using information from:

The third step in the appraisal process in performance measurement. To determine what actual performance is, we need information about it. We should be concerned with how we measure and what we measure.

Comparison of Actual Performance with standards;In this step actual performance is compared with standard performance. This step notes deviation between standard performance and actual performance. The performance appraisal from should include a list and explanation of the performance standards. It should also include a list and explanation of the different levels of performance and their degree of acceptability against the performance standard.

Discussion of appraisal with employee;In this step you will discuss the employee behaviour with employee and tell about what are the positive point of the employee and what the negative point of the employee is during the working. You also suggest the employee how you will remove his negative point which may occurs the hurdle in the performance of the employee.

Identification of corrective action where necessary;The final step of the performance appraisal is the identification of corrective action where necessary. Corrective action can be two types; one is immediate and deals predominantly with symptom, and other is basic and delves into cause. Immediate corrective action is often describe as putting out fires where as basic corrective actions touches the source of deviation and seeks to adjust the different permanently.

Appraisal Methods:HRM can actually establish performance standards and devise instruments to measure and appraise an employees performance. There are three types of appraisal method which is used by the HRM to evaluate the employees performance. 1. Absolute Standards 2. Relative Standards 3. Outcomes Methods. No one Approach is always best; each has its strength and weakness. Mostly organization uses the combination of these methods. 1. Absolute Standards:This means that employees are compared to a standard ,and their evaluation is independent of any other employee in a work group. This process assesses employee job traits and/or behaviors. This method has further sub method in it. These are given below
1. 2. 3. 4. 5. The critical incident appraisal. The Check list. The Graphic Rating Scale. Force Choice. Behaviorally Anchored Rating Scales.

Critical Incident Appraisal:The critical incident method of performance appraisal involved identifying and describing specific events (or incidents) where the employee did something really well or something that needs improvement. It's a technique based on the description of the event, and does not rely on the assignment of ratings or rankings, although it is occasionally coupled with a ratings type system.

Checklist Appraisal:This is the simplest way of evaluation wherein the rater is given a checklist containing a description of the employee behaviour on the job. The duty of the superior is to find out which description best suits the employee. The checklist contains many statements which might be appropriate in describing the employees on the job performance. The flaw the checklist might not contain a certain statement which best describes the employee and is not free of the raters bias. However, this system is widely used and accepted.

Graphic rating scale;This is one of the oldest and the most commonly used methods for appraisal used alongside Essay Appraisal Method. In this method, a printed form is used for measuring both the quality and the quantity of work done by an employee. The form has a graphic scale, indicating the various degrees of a particular trait. The factors taken into consideration are both personal and the professional ones in nature. It is an easy to understand and easy to use method where rating is done in a tabular form. But then, this method is also not bias free as the supervisor may plot the graph depending on the rapport with the employee rather than objectively marking performance..

Forced-Choice Appraisal:Appraisers choose from sets of statements which appear to be equally favorable, the statement which best describes the employee. Appraisal is based on a choice from a number of pre-written statements. There is no provision for a rating that you think falls between two choices. This is the reason why it is called forced choice. The end result is a "bell-shaped" evaluation results. The majority of employees will fall around the middle range. There are very few people in the non-performance and outstanding performance ranges of the scale. This method does not truly reflect actual performance level of employees. One of the risks is that superiors may rate all their people within the middle range. This does not serve any purpose. But it can lead to dissatisfaction. Behaviorally Anchored Rating Scales (BARS):Appraiser rates employee on factors which are defined by behavioral descriptions illustrating various dimensions along each rating scale. It is combination of the critical incident technique and the rating scale method. This method identifies behaviors that demonstrate high performance. But it requires the preparation of detailed performance levels ranging from1 for very poor to 5 for very good or from 1 for extremely poor to 7 for extremely good. How good is "good" and how poor is "poor" is something that every assessor must understand well. If not the results may not reflect actual performance.

2. Relative Standards:Evaluating an employees performance by comparing the employee with other employees. Relative Standards are further categories into three categories.
1. Group Order Ranking. 2. Individual Ranking. 3. Paired Comparison.

Group Order Ranking:

Employees are placed in a classification reflecting their relative performance, such as top one-fifth. The ranking system requires the rater to rank his subordinates on overall performance. This consists in simply putting a man in a rank order. Under this method, the ranking of an employee in a work group is done against that of another employee. The relative position of each employee is tested in terms of his numerical rank. It may also be done by ranking a person on his job performance against another member of the competitive group.

Individual Ranking:Individual ranking: In this type of appraisal, individuals are ranked from highest to lowest. It is assumed that the difference between the first and second employee is equal to difference between 21 and 22 employees. In this method, the manager compares each person with others than work standards.

Paired Comparison:This is a method of comparison where each employee is first compared with the peers, one at a time, and when all the comparisons are done, the employees are given the final rankings.

3. Using Achieved Outcomes to Evaluate Employees:Employees are evaluated on how well they accomplished a specific set of a objectives determined as a critical in the successful completion of their job. This approach may be referred to as goal setting but is more commonly referred to as management by objective (MBO). The organization overall objectives are translated into specific objectives for each succeeding level, divisional, departmental and individuals in the organization.

Management by Objectives (MBO):A performance appraisal method that includes mutual objective setting and evaluation based on the attainment of the specific objectives. Management by Objectives (MBO) is one of the more popular performance appraisal methods among organizations. MBO requires you to establish the objectives of the job. The questions asked in performance appraisal are whether these objectives are achieved by employees and to what extent.

Common Element in MBO Programs:There are four ingredients are common in the MBO Programs. Specific Goals. Participative Decision Making. Specific Time Period. Performance Feed Back.

Effectively increases employee performance and organizational productivity. In MBO, the objectives are not unilaterally set by the boss and assigned to employees, as is characteristic of traditional objective setting. Rather, MBO replaces these imposed goals with anticipatively determined goals. The manager and employee jointly choose the goals and agree on how they will be achieved. Each objective also has a concise time period in which it is to be completed. Typically the time period is three months, six months, or a year.

Factors that can Distort Appraisals;The appraisal process can be distorted by many factors. Leaving the resulting appraisal meaningless. Evaluators need to be aware of the factors that can cause can problems with the process and take care to eliminate their influences. A completely error free performance appraisal is only and idle HRM professional can aim far. In reality, most appraisal for short, open through one or more action that can significantly impede objective evaluation.

Leniency error;Leniency error is defined as the tendency for a raters overall positive impression of an individual to influence performance ratings. Hence, the positive impression impacts the ratings provided by the rater. When a ratee receives this feedback, he/she has no reason or motivation to improve or develop performance. Raters should focus on each goal, objective, responsibility, or competency separately and identify independent areas of both strengths and development needs.

Halo error:Evaluator lets an assessment of an individual on one trait influence evaluation on all traits. A mistake or bias that can occur in evaluating an individual's performance where they are consistently rated based on the evaluator's overall impression, rather than on their actual performance in various categories. Human resource professionals evaluating employees of a business need to be aware of the halo error and correct for it.

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.

Attribution Theory;Evaluations are affected based on whether someones 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.

Impression management;If employee positively influences the relationship with the supervisor, he/she is likely to receive a higher rating.

Creating more Effective PMS:Managers can strive to make performance appraisals more effective by making these steps.

1. 2. 3. 4. 5. 6.

Used behaviors-based measures. Combine absolute and Relative standard. Provide ongoing feedback. Have multiple raters. Rate selectively. Train appraises.

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.

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.

Provide Ongoing Feedback:Expectations and disappointments should be shared with employees on a frequent basis.

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:Several parties are required to assess the same employee. These include the employee himself / herself, working colleagues as internal customers, the superior, outside parties such as customers and suppliers. There are some organizations that use this appraisal method. It is yet to gain wide acceptance. Most organizations are not yet ready to implement this far-reaching evaluation method. .

Train Appraisers:Untrained appraisers who do poor appraisals can demoralize Employees and increase legal liabilities.

The Performance Appraisal Meeting:HRM spent all the time in doing that Linking goals to jobs. Developing assessment criteria of employment. Creating forms (Appraisal or etc) observing the employees And completing appraisal process. There are some steps should be in mind while preparing effective appraisal meeting. Prepare Appraisal schedule in Advance. Explain the purpose of meeting. Describe the purpose of PA to employee. Involve employee in the Appraisal discussion. Focus on work behavior not on employee. Support your Evaluation with example. Give the positive and Negative feedback. Ensure that employees understand discussion of PA Generate Development Plan.

Prepare Appraisal schedule in Advance;-

Before meeting with any employees you must review, the job description, period of goals attain, any performance data you have about the employee. You also comment on the last appraisal of employee which motivates them.

Create Suppotative Environment;To get constructive feedback from employee and create supportive environment (friendly).your non verbal communication is none treating the Employee?

Describe the purpose of PA to employee;Tell about Appraisal method .Make sure employee must understand the appraisal performance.

Involve employee in the Appraisal discussion;It means you also take chance to employee to evaluate himself honestly or get his opinion while evaluating his performance appraisal.

Focus on work behavior not on employee;Dont verbally attack on the employee your focus is on the working behavior of the employee while working hours.

Support your Evaluation with example;You convince your evaluation to employee with the help of some example .for e.g. you evaluate that employee working is bad may he hearted but if u ask your working is not good than he feel less.

Give the positive and Negative feedback;PA is not only concord with negative point of the employee it also highlight the positive working of the employees which encourage employees for working better.

Ensure that employees understand discussion of PA;Where he is week in his working and where he doing well and how to improve his working in future.

Generate Development Plan;PA revolves around feedback & documentation but it also need development efforts are encouraged. A Plan should be describe, what is to be done, when it to be done and how it to be done and who will supervise this plan.

International Performance Appraisal;International performance appraisal (IPA) is a strategic HRM process that enables the multinational corporation (MNC) to evaluate and improve continuously individual, subsidiary unit, and corporate performance against clearly defined, preset objectives. Effective IPA creates an incentive system that can ensure international employees and overseas subsidiaries are acting in accordance with the home companys interests. IPA is complex mainly due to information asymmetry and goal incongruence between the parent company and its subsidiaries. There are many approaches to IPAs for MNCs to choose from, and these approaches are affected by many host-contextual and firm-specific factors Evaluating employee performance in international environments brings other factors into play. For instance, cultural differences between the parent and the host country must be considered. Cultural differences between the United States and china, for example. Thus, hostility or friendliness of the cultural environment in which one manages should be considered when appraising employee performance.

Who performs the evaluation?

Companies must also consider who will be responsible for the evaluation; the host-country management or the parent country management. Although local managers would generally be considered a more accurate gauge, the typically evaluate expatriates from their own cultural perspectives and expectations, which may not reflect those of the parent country. For example, a participatory style of management is acceptable in some countries, and on other hierarchical values makes it a disgrace to ask employees for ideas. This could vastly alter a supervisors 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 expatriates insights as part of the evaluation. Other issue surrounds the question of selecting the best format to use in performance appraisals .if there is an overseas operation that includes both parent-country nationals (PCNs) and hostcountry nations (HCNs), management must determine if they will use the same forms for all employees. Employees in counties with collectivist cultures (Japan, china, Vietnam) that value the group more strongly than the individual will probably not react well to performance appraisal systems that evaluate the individual, raising suspicion and mistrust within group. Evaluation of the work group or division may be a better choice. Employees in countries with individualist cultures (Australia, France, and Italy) will react much better to individual evaluations, but may not see much direct connection to a group performance appraisal.

Explanation of Pak -Qatar Takaful insurance company

There are three types of appraisal method which is used by the HRM to evaluate the employees performance. 1. Absolute Standards 2. Relative Standards 3. Outcomes Methods. We have studied the performance appraisal form of the Pak-Qatar Takaful insurance company fir the practical understanding of the topic. The method used by this company is Graphic rating scale appraisal. This method falls in the absolute standard. Pak-Qatar Takaful insurance company appraisal consists of six sections of graphic rating. Each section contains different criteria or performance factors, for e.g. the firsts section has taken performance against key areas of responsibilities. The criteria than chosen then are weighted on a scale of 1 to 5. As total weighted is 100% here the section rating comes out to be 30% with average rating of 75%. Section A consists of the performance appraisal method that lists traits and range of the performance for each. Every rating has a key that shows whether the score meets exportations is below expectation or exceeds expectations. Its weighted is 40%. Sections B is about Job Effectiveness that shows the ratings against the quality of the work, organizing, Jon Knowledge, judgment, punctuality and dependability. In this way, the total section weighted comes out to be 30% Similarly, section C shows performance ratings against core company values with section weighted of 30%. Section D is to be filled by the supervisor, so its weighted is 0. A performance appraisal evaluation of Mr. Kashif Zafar who is Executive officer in the Brach operation of Pak-Qatar Takaful insurance company in region Gujranwala will also be attaching for a sample.