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Basic Concepts in Performance

Management and Appraisal


Comparing
Performance Appraisal
and
Performance Management

Performance Appraisal: Performance Management:


Setting work standards, assessing An integrated approach to
performance, and providing ensuring that an employee’s
feedback to employees to performance supports and
motivate, correct, and continue contributes to the organization’s
their performance. strategic aims.

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Performance Appraisal Methods
Appraisal Methodologies

1 Graphic Rating Scale Method 6 Narrative Forms

Behaviorally Anchored Rating


2 Alternation Ranking Method 7
Scales (BARS)
Management by Objectives
3 Paired Comparison Method 8
(MBO)
Computerized and Web-Based
4 Forced Distribution Method 9
Performance Appraisal

5 Critical Incident Method 10 Merged Methods

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Behaviorally Anchored Rating Scale
(BARS)
Developing a BARS Advantages of BARS
1. Generate critical • A more accurate gauge
incidents • Clearer standards
2. Develop performance • Feedback
dimensions
• Independent
3. Reallocate incidents dimensions
4. Scale the incidents • Consistency
5. Develop a final
instrument

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Management by Objectives (MBO)
• A comprehensive and formal organizationwide goal-setting and
appraisal program requiring:
1. Setting of organization’s goals.
2. Setting of departmental goals.
3. Discussion of departmental goals.
4. Defining expected results (setting individual goals).
5. Conducting periodic performance reviews.
6. Providing performance feedback.

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Using MBO
Setting unclear Time-consuming
objectives appraisal process

Problems with
MBO

Conflict with
subordinates over
objectives

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Important Advantages and Disadvantages of Appraisal Tools

Tool Advantages Disadvantages


Graphic rating Simple to use; provides a Standards may be unclear; halo
scale quantitative rating for each effect, central tendency, leniency,
employee. bias can also be problems.

BARS Provides behavioral “anchors.” Difficult to develop.


BARS is very accurate.

Alternation ranking Simple to use (but not as simple as Can cause disagreements among
graphic rating scales). Avoids central employees and may be unfair if all
tendency and other problems of employees are, in fact, excellent.
rating scales.

Forced distribution End up with a predetermined number Employees’ appraisal results depend
method or % of people in each group. on your choice of cutoff points.

Critical incident Helps specify what is “right” and Difficult to rate or rank employees
method “wrong” about the employee’s relative to one another.
performance; forces supervisor to
evaluate subordinates on an ongoing
basis.

MBO Tied to jointly agreed-upon Time-consuming.


performance objectives.

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The Collective Bargaining Process
• What Is Collective Bargaining?
• Both management and labor are required by law to negotiate
wages, hours, and terms and conditions of employment “in good
faith.”
• What Is Good Faith Bargaining?
• Both parties communicate and negotiate.
• They match proposals with counterproposals
in a reasonable effort to arrive at an agreement.
• Neither party can compel the other to agree to
a proposal or to make any specific concessions.

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Key Components of International
Compensation
The area of international compensation is complex,
primarily because multinationals must cater to three
categories of employees:
• PCNs, TCNs and HCNs
• Key Components:
 Base salary
 Foreign services inducement
 Hardship premium
 Allowances
 Benefits

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Allowances
• Multinationals generally pay allowances in order to encourage
employees to take international assignments and to keep
employees ‘whole’ relative to home standards.
• Establishing an overall compensation policy can be very
challenging, partly because of the various forms of allowances,
such as:
• Cost-of-living allowance
• Housing allowance
• Relocation allowance
• Education allowance
• Home leave allowance
• Hardship allowance

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Benefits
• In addition to the already discussed benefits, multinationals
also provide vacations and special leave.
• Annual home leave usually provides airfares for families to return to
their home countries.
• Rest and rehabilitation leave, based on the conditions of the host
country, may provide the employee’s family with airfares to a more
comfortable location near the host country.
• Emergency provisions are available in case of a death or illness in
the family.
• Employees in hardship locations often receive additional leave
expense payments or rest and rehabilitation periods.

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Approaches to International
Compensation
There are two main options in the area of
international compensation
• Going Rate Approach (also referred to as the
Market Rate Approach)
• Balance Sheet Approach (also known as the
Build-up Approach).

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Advantages and Disadvantages of
the Going Rate Approach
• Advantages • Disadvantages
• Equity withy local • Variation between
nationals assignments for same
• Simplicity employee
• Identification with • Variation between
host country expatriates of same
• Equity among nationality in
different nationalities different countries
• Potential re-entry
problems

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Advantages and Disadvantages of
the Balance Sheet Approach
• Advantages: • Disadvantages:
• Equity • Can result in great
 Between assignments disparities
 Between Expatriates of • Between expatriates of
the same nationality different nationalities
• Facilitate re-entry • Between expatriates
and local nationals
• Easy to communicate to
employees • Can be complex to
administer
• May entail difficulty to
attract human capital

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Mc Gregor’s Red Hot Stove Rule

Disciplinary process to follow what is popularly known as red hot stove


rule
Corrective action should be
• Immediate – no ambiguity of cause & effect.
• Impersonal – reflect the offense & not the person.
• Consistent – enforced & ensured across every employee & every
situation.
• Foreseeable – employees to be aware that poor conduct or indiscipline
will result in specific , pre-determined consequences.
Positive Discipline
• Approach where unsatisfactory behavior of employee is corrected through
the support & positive attitude of the managers.
Steps in the process of positive discipline
1. Responsibility for ensuring discipline
• Supervisor- authority to administer less severe disciplinary actions like written &
verbal warnings.
• HR – suspension & dismissal
• Ensures supervisor control & consistency in administration of discipline.
2. Communicating organizational policies , procedures & rules
• Methods – employee handbook , orientation programs , union contracts, rules &
regulations distributed in writing , posted on bulletin boards.
3. Communicate the performance expected & penalties
• Mgmt to clearly define standards of discipline & good performance.
4. Collecting concrete data about any disciplinary violation
• Valid info , clearly indicating an employees wrong doing makes disciplinary
procedure effective & easier.

5. Administering progressive discipline


Important characteristics
• Appropriate penalty for the offence.
• Series of increasing serious penalties for continued unsatisfactory performance.

6. Administering corrective counseling


• Positive disciplinary action is not to rule out punishment but to correct an
employee’s undesirable behavior at the right time.
• Corrective counseling different from traditional counseling – the supervisor avoids
telling the employee how to solve his problem , instead he helps him find solution
by himself thus making himself responsible fro the problem.
Positive Discipline
• Approach where unsatisfactory behavior of employee is corrected through
the support & positive attitude of the managers.
Steps in the process of positive discipline
1. Responsibility for ensuring discipline
• Supervisor- authority to administer less severe disciplinary actions like written &
verbal warnings.
• HR – suspension & dismissal
• Ensures supervisor control & consistency in administration of discipline.
2. Communicating organizational policies , procedures & rules
• Methods – employee handbook , orientation programs , union contracts, rules &
regulations distributed in writing , posted on bulletin boards.
3. Communicate the performance expected & penalties
• Mgmt to clearly define standards of discipline & good performance.
4. Collecting concrete data about any disciplinary violation
• Valid info , clearly indicating an employees wrong doing makes disciplinary
procedure effective & easier.

5. Administering progressive discipline


Important characteristics
• Appropriate penalty for the offence.
• Series of increasing serious penalties for continued unsatisfactory performance.

6. Administering corrective counseling


• Positive disciplinary action is not to rule out punishment but to correct an
employee’s undesirable behavior at the right time.
• Corrective counseling different from traditional counseling – the supervisor avoids
telling the employee how to solve his problem , instead he helps him find solution
by himself thus making himself responsible fro the problem.
Cameroon Downsizing Definitions
• Workforce reduction - a short-term strategy to
cut the number of employees through attrition,
early retirement or voluntary severance
packages, and layoffs or terminations
• Work redesign - a medium-term strategy in
which organizations focus on work processes
and assess whether specific functions,
products, and/or services should be changed or
eliminated
• Systematic change - a long-term strategy that
changes the organization’s culture, attitudes,
and employees’ values with the goal of
reducing costs and enhancing quality

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Five Factors Important in International Assignee Success and Their Components

I. Job Knowledge and Motivation III. Flexibility/Adaptability


Managerial ability Resourcefulness
Organizational ability Ability to deal with stress
Imagination Flexibility
Creativity Emotional stability
Administrative skills Willingness to change
Alertness Tolerance for ambiguity
Responsibility Adaptability
Industriousness Independence
Initiative and energy Dependability
High motivation Political sensitivity
Frankness Positive self-image
Belief in mission and job IV. Extracultural Openness
Perseverance Variety of outside interests
II. Relational Skills Interest in foreign cultures
Respect Openness
Courtesy Knowledge of local language(s)
Display of respect Outgoingness and extraversion
Kindness Overseas experience
Empathy V. Family Situation
Nonjudgmental Adaptability of spouse and family
Integrity Spouse’s positive opinion
Confidence Willingness of spouse to live abroad
Stable marriage
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Managerial Functions
• Planning • Planning • Leading/Directing
• Staffing
• Goals and standards • Getting the job
• Organizing • Hiring
• Rules and procedures • Recruiting done-towards
• Staffing • Plans and forecasting. • Selecting
organizational goals
• • Morale
• Leading • Organizing Performance
• Motivation
standards
• Tasks
• Controlling • Compensation • Controlling
• Departments • Evaluating
• Delegating performance
• Setting standards
• Authority and • Counseling • Comparing actual
performance to
communication • Training and standards
• Coordinating developing
• Corrective action
The Basics of Job Analysis: Terms
• Job Analysis
• The procedure for determining the duties and skill requirements of a job and the
kind of person who should be hired for it. Done by interviews, questionnaires,
observation, diary/logs
• Role analysis (also known as job evaluation) is a systematic approach used to determine
the relative value (or size) of roles within an organisation by measuring the demands and
responsibilities of the role (but not the performance of the individual undertaking the
role)
• Job Description
• A list of a job’s duties, responsibilities, reporting relationships, working conditions,
and supervisory responsibilities—one product of a job analysis.
• Job Specifications
• A list of a job’s “human requirements,” that is, the requisite education, skills,
personality, and so on—another product of a job analysis.

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The Job Description
• Job Identification • Responsibilities and Duties
• Job title • Major responsibilities and
• FLSA status section duties (essential functions)
• Preparation date • Decision-making authority
• Preparer
• Direct supervision
• Job Summary
• Budgetary limitations
• General nature of the job
• Major functions/activities • Standards of Performance
• Relationships and Working Conditions
• Reports to: • What it takes to do the job
• Supervises: successfully
• Works with:
• Outside the company:

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Job specification
• The job specification focuses on the person in answering Job Design:
the question, “What human traits and experience are From Specialized
required to do this job effectively?” to Enriched Jobs
• It shows what kind of person to recruit and for what
qualities you should test that person. The job specification
may be a section of the job description, or a separate • Job enlargement attempts to make work more
document. motivating by assigning workers additional same-
• Job specifications for trained employees focus on traits level activities.
like length of previous service, quality of relevant training,
and previous job performance. • Job rotation involves systematically moving workers
from one job to another.
• Job specifications can be based on the best judgments of
the common-sense experiences of supervisors and human • Job enrichment involves redesigning jobs in a way
resource managers. The basic procedure here is to ask, that increases the opportunities for the worker to
“What does it take in terms of education, intelligence, experience feelings of responsibility, achievement,
training, and the like to do this job well?” growth, and recognition.
• Basing job specifications on statistical analysis is more
defensible than the judgmental approach because equal
rights legislation forbids using traits that can’t be proved
to distinguish between high and low job performers.
Recruitment
• Employment or Personnel Planning
• The process of deciding what positions
the firm will have to fill, and how to fill
them.
• Succession Planning
• The process of deciding how to fill the
company’s most important executive
jobs.
• Career planning is the ongoing process where
you: Explore your interests and abilities;
Strategically plan your career goals; and.
Create your future work success by designing
learning and action plans to help you achieve
your goals.
Finding Internal Outside Sources of
Candidates Candidates

Hiring-from-Within
Tasks

Posting open Rehiring former Succession


job positions employees planning (HRIS)

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COMPARISON OF TRADITIONAL CAREER
AND INCONSISTENT CAREER
Dimension Traditional Career Protean Career
Goal Promotions Psychological success
Salary increase
Psychological contract Security for commitment Employability for flexibility

Mobility Vertical Lateral

Responsibility for Company Employee


Management
Pattern Linear and expert Spiral and transitory

Expertise Know how Learn how

Development Heavy reliance on formal Greater reliance on


training relationships and job
experiences
A MODEL OF CAREER DEVELOPMENT (continued)

Exploration Establishment Maintenance Disengagement

Developmental Identify interests, Advancement, Hold on to Retirement


tasks skills, fit between self growth, security, accomplishments, planning, change
and work develop life style update skills balance between
work and non-work

Activities Helping Making independent Training Phasing out of work


Learning contributions Sponsoring
Following directions Policy making

Relationships to Apprentice Colleague Mentor Sponsor


other employees

Typical age Less than 30 30 – 45 45 – 60 61+

Years on job Less than 2 years 2 – 10 years More than 10 years More than 10 years
THE CAREER MANAGEMENT PROCESS

Self- Reality Action


Goal Setting
Assessment Check Planning

• Use of information by Information • The process of Employees


employees to determine employees employees determining how
their career interests, receive about developing they will achieve
values, aptitudes, and how the company their short- and
short- and long-
behavioral tendencies.
evaluates their term career long-term career
• Often involves
psychological tests. skills and objectives. goals.
knowledge and • Usually
where they fit discussed with
into company the manager
plans. and written into
a development
plan.
The 6 Stages Of Modern Career Development

Assessment Stage Investigation Stage Preparation Stage Commitment Stage Retention Stage
Key characteristics: Key characteristics: Key characteristics: Key characteristics: Key characteristics:
• Taking • Researching the • Gaining • Conducting a job • Providing first-
assessment world of work knowledge and search class customer
instruments • Conducting experience • Negotiating and service skills
• Working with a informational • Setting goals and accepting a job • Building a
career counselor interviews with adopting a offer professional
or career coach people in your success-oriented network
chosen field mind-set. Transition Stage
Key characteristics:
• Making career
changes
Plateauing means that the likelihood of the employee receiving • Developing
future job assignments with increased responsibility is low resiliency
6 Steps of HRP 4 Strategies of HRP
Assess current HR capacity
Forecast HR requirements
• Analysing Organizational Objectives Develop talent strategies
• Inventory of Present Human Resources Review and evaluation
• Forecasting Demand and Supply of Human Resource
• Estimating Manpower Gaps Walmart Strategies
• Formulating the Human Resource Action Plan
• Monitoring, Control and Feedback Forecasting
-Bottom-up approach: HR needs starting at lowest level (frontline)
-Trend analysis: future HR needs based on current needs
BENEFITS LIMITATIONS -Delphi method- expert opinion
Future needs/vacancies future is uncertain
Prevent surpluses or shortages:
Cost effective Sense of insecurity
- Sales performance analysis
Employee development Time consuming
- Turnover rate analysis
Training programs Expensive
- Gap analysis
Strategic decisions
To balance HR supply and demand:
- Changes in recruitment
- Changes in compensation
Training is a systematic process through which an organization’s human resources gain knowledge and develop
skills by instruction and practical activities that result in improved corporate performance.

Internal Needs Analysis Nine Steps in the Training Process


Employee obsolescence/out-dated: Technical 1. Assessing training needs
advancements, cultural changes, new systems, 1. External approach (company, guests, society)
computerization 2. Internal approach – using a staff opinion survey
Career plateaus: Need for education and 2. Preparing training plan
training programs 3. Specifying training objectives
4. Designing the training program(s)
Employee Turnover: Development plan for new
5. Selecting the instructional methods *
employees 1. OJT: mentoring, coaching, intern, Job Rotation
2. OFT: Dist Learn/VC,Class, Simulation, Roleplays
6. Completing the training plan
1. Target Group
GAP can be separated Kirkpatrick’s Evaluation Criteria 2. Topic
into 3 main themes Level 1 – Reaction 3. Method
Did trainees like the training and feel it was useful 4. Time
Attitude Level 2 – Learning 5. Location
Skills Did trainees learn material stated in the objectives 7. Implementing the training program
Level 3 – Behavioral
Knowledge Are trainees using what was learned back on the job 8. Evaluating the training
Level 4 – Results 1. Immediate Feedback
Are benefits greater than costs 2. Post training test
3. Post training appraisals
9. Planning future training