Human Resource Management

PRE-FINAL

Chapter 8: MANAGEMENT OF PERFORMANCE APPRAISAL SYSTEM

Performance appraisal- basis for determining who should be promoted to a higher position.
-process of evaluating an individual in order to arrive in an objective human resource decision.

The purpose of Performance Appraisal

1. Strategic Purpose- PMS should link employee activities with the organizational, goals and objective.
-are implemented through determining the result, behavior and to some extent employee
characteristics.

2. Administrative Purpose- usually hampered by the human element of compassion and many times supervisors
and managers see the process as a necessary evil to fulfill their job requirements.

3. Developmental Purpose- develop employees who are effective in their jobs.

-the feedback given during the performance evaluation process often pinpoints the employee’s
weakness.

The Criteria in the Development of a Measuring Instrument

1. Validity/content validity- is the extent to which the performance measure assess all the relevant aspects of the
performance .

2. Reliability- Rating may be considered reliable if they are consistent

3. Acceptability- refers to whether the people who use the performance measure accept it.

4. Specifity- extent to which the performance measure gives specific guidelines to employees what is expected of
them and how they can meet those expectations
-relevant to both the strategic and developmental purposes of performance management.

Approaches to Performance Management

1. Comparative Approach- consists of techniques that require the rater to compare the individual’s performance
with that others.
- Uses overall assessment of individual’s performance or worth, and seek to develop some ranking of the
individual within a given work group.

a. Ranking- this method provides a comparison of the relative qualities of performance among all the
employees in a group or unit.
b. Forced Distribution Technique- system use a five point job performance scale in rating that a normal
group or workers doing similar jobs fall into some such levels Superior, Above Average, Average, Below
Average and Poor.
c. Paired Comparison Method- under this method the name of the employee who is to be rated is written
on the card.

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Human Resource Management
PRE-FINAL

d. The Checklist Method- the rating method provides a number of traits or factors with corresponding
definitions for evaluating the employees written in the left hand column of the form such as quantity of
work done, quality of work, attitude towards work, judgement, reliability, cooperation, punctuality and
others.

2. Behavioral Approach- attempts to define the behavior an employee exhibits to be effective in the job.
a. Critical Incident- requires a manger to keep a record of specific examples of effective and ineffective
performances on the part of each employee.
-it is a narrative report of incidents or occurrences that involve the employee.

b. Behavioral Anchored Rating Scale- build in critical incident approach

-design to specifically define performance dimension be developing behavioral anchors
associated with different levels of performance.

c. Organizational Behavior Modification- entails managing the behavior of the employees through formal
system of behavioral feedback and reinforcement.
-Builds in the behavior view of motivation, which holds that the individuals’ future behavior is
determined by past behaviors that have been positively reinforced.

3. Result Approach- focuses on managing the objectives, measurable results of a job or work group.
-Assumes the subjectivity can be eliminated from the measurement process and that results are
the closest indicators of one’s contribution to the organizational effectiveness.

a. Management by Objectives (MBO)- used in most companies who believe in results as bases of performance
management. Under this system, the top management defines the company’s strategic goals and objectives
and passes it on the next level of management and down the line.