There

Will be a Quiz
No. 3 Today
HA Ha ha ha
Hoodoo
Assignment No.3 Due
also today

Chapter 10
Establishing the Performance
Management System

Performance Management Systems

An iterative process of
goal-setting,
communication,
observation and
evaluation to support,
retain and develop
exceptional employees for
organizational success .

Performance Management systems

Set Goals

Communicate

Evaluate

Observe

Why Manage
Performance ?
To reach organizational
mission and goals
Encourage and reward
behaviors aligned with
organizational mission
and goals
Curb or redirect nonproductive activities

Difficulties in Performance Management

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

Focus on the process -:

Company policies &
procedures may present
barriers to a properly
functioning appraisal process.

Performance Management by EEO

What are the EEO issues in performance
management?
All staff members are entitled to fair access to appropriate
training and development opportunities.
Assessments of all staff members must be based on evidence
of their ability to carry out the stated duties of their particular
jobs .
All staff must be given the information and resources to enable
them to carry out the tasks of their position .

Appraisal
The act of estimating or
judging the nature or value
of something or someone.

Comparing options to
deliver an objective .

The Appraisal Process

Establishing performance
standards
Communicating standards and
Expectations
Measuring the actual
performance
Comparing with
Standards
Discussing Results(Providing
feedback)
Decision Making Taking
Corrective actions

Appraisal Methods
Evaluating Absolute Standards
1.
2.
3.
4.
5.

Critical Incident Appraisal

Checklist Appraisal
Adjective Rating Scale
Forced-Choice
Behaviorally Anchored Rating
Scales ( BARS )

. Relative standards Methods

1.
2.
3.

Group Order Ranking

Individual Ranking
Paired Comparison

. Outcomes-Based or MBO
methods

Evaluating Absolute Standards :Measuring an employees performance against

established standards

Critical incident method :The critical incidents for performance appraisal is a

method in which the manager writes down positive
and negative performance behavior of employees
throughout the performance period

 Checklist Appraisal :This method describe a performance appraisal method where

rater familiar with the jobs being evaluated prepared a large
list of descriptive statements about effective and ineffective
behavior on jobs .

Adjective Rating Scale Appraisal :Rate employee on job-related factors & attributes such as
cooperation, communications ability, initiative, punctuality
and technical (work skills) competence.

 Forced-Choice Appraisal :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.

Behaviorally Anchored Rating Scales ( BARS ) :This method used to describe a performance rating that focused on
specific behaviors or sets as indicators of effective or ineffective
performance. It is a combination of the rating scale and critical
incident techniques of employee performance evaluation.

 Relative Standard Method :Evaluating an employees performance by comparing

the employee with other employees

1. Group Order Ranking

2. Individual Ranking
3. Paired Comparison

Outcomes-Based or MBO methods

Management by objectives (
MBO ) :MBO is a process in which
managers / employees set
objectives for the employee,
periodically evaluate the
performance, and reward
according to the result.
MBO focuses attention on
what must be accomplished
(goals) rather than how it is to
be accomplished (methods) .

Factors that can distort Appraisals

Distortions

Leniency Error

Inappropriate
substitutes

Inflationary
pressures

HALO Error

Similarity
Error

Central
Tendency

Factors that can distort Appraisals

Leniency error :Performance appraisal or interview
bias which occurs when a manager
or interviewer rate an employee or
the interviewee too positively.
Opposite of strictness error.
HALO error :-

An effect whereby the perception

of positive qualities in one thing
or part gives rise to the
perception of similar qualities in
related things or in the whole.

 Similarity error :-.

More than fair rating given to an applicant or employee
due to his or her personal or professional similarity to the
interviewer or evaluator is called similarity error.

Low Appraiser Motivation

Evaluators may be reluctant to be accurate if important

rewards for the employee depend on the results.

 Central tendency :Central tendency error is a trend exhibited by raters

who assign average ratings to avoid the evaluation of
all employees at the extreme ends of the scale.

Inflationary pressures :Pressures for equality and fear of retribution for low
ratings leads to less differentiation among rated
employees.

 Inappropriate Substitutes :During the appraisal process sometimes

managers consider substitutes for appraisal ,
which might not be appropriate all the time ,
this leads to an error in appraisal process .

Attribution Theory
How individuals interpret causes of
behavior based on their past
knowledge and experiences. They can
attribute behavior either to internal
factors such as ability, skill or effort,
or to external factors such as rules,
policies or environment.
This is known as our locus of control
and
can influence our behavior at work.

Creating more Effective

Performance
Management Systems

Succes
s=
Train
Appraisers
+
Rate selectively
+
Have multiple raters
+
Provide ongoing feedback
+
Combine Absolute Standards
+
Use Behavior-based measures

International Performance Appraisal

IPA creates an incentive system that can ensure
international employees and overseas subsidiaries are
acting in accordance with the home companys
interests.
Who performs the evaluation ?
Evaluation formats .

Videos

Assignment No. 3 Due Today

Possible

Questions

Question No. 1
No Appraisal system is perfect for evaluating the
performance of employees . Why ?
Question No. 2
How can we overcome the difficulties which
have been faced during performance
management system ?
Quiz No. 3
Which method you think would be best for
Appraisal and why ?

Question No. 4
Is the internal use of performance management &
continuous improvement a major objective ?

Question No. 5
What are the consequences of poor communication
about performance ?

Question No. 6
What could be the reasons for the failure of
performance management system ?

Question No. 7
Why do managers generally dislike performance
appraisal programs ?
Question No. 8
Why do subordinates dislike performance
appraisal programs ?
Question No. 9
Can an organization use more then one appraisal
method , if yes , how ?

Question No. 10
What changes are there in performance
appraisal when teams rather then individuals
are evaluated ?