Performance Management

Performance Management

• What is performance management?

• The employers want employees who perform their jobs well and contribute to the mission and objectives of the organization.

• Performance management is the process through which managers ensure that employees’ activities and outputs are congruent with organizational goals. It’s an ongoing process, not an event that happens just on one occasion and it includes the performance appraisal as well as the performance feedback.

• Performance appraisal is the process through which an organization gets information on how well employees do their jobs relative to performance standards.

• Performance feedback is the process of providing employees information regarding their performance. It refers to communicating the results of the performance appraisal to the employees so they can adjust their performance to meet the organization’s goals.

• During the year, managers :

- set clear, measurable goals to communicate to the employees what is expected of them.

- evaluate the performance of the employees based on the goals set (performance appraisal)

- communicate the appraisal results to the employees and agree on plans for the future (performance feedback).

• Why companies have Performance management?

• Performance management serves three purposes in organizations:

• Strategic purpose: Companies use the performance management system to link employee activities with organization’s goals. The strategic purpose is only achieved when performance measures are truly linked to the organization’s goals.

• Administrative purpose:

• Performance management results are used for administrative decisions such as salary increase, promotions, retention-termination, layoffs, and recognition of individual performance.

• Developmental purpose:

• Performance management can be used to identify high performing employees and develop them. It can also improve the performance of employees who perform poorly as well as identify the causes of their deficiencies.

• What is a 360-degree appraisal?

• Traditionally the managers evaluate the performance of their employees. The 360° appraisal consists of having more raters (managers, peers, subordinates, customers and self-evaluation) providing for the employee.

• Advantage: in this system employees receive the widest possible range of feedback and the appraisal is less likely to be skewed by one person in the event of a personality clash or favouritism.

• Disadvantage: Many raters are involved, therefore the system becomes costly and time-consuming to administer.

• Most organizations have settled with systems somewhere in the middle, not as extensive as a 360 degree feedback but not simply one appraisal from the supervisor.

• What methods are used to do Performance appraisal?

• These are variety of performance appraisal methods available to organizations. Using a combination of methods may offset some of the advantages and disadvantages of individual methods. Here are two examples of performance appraisal methods.

• Comparative methods = Forced distribution method

• Trait or attribute method = graphic rating scale method

• Trait methods are easy to use, but they do little to measure strategic accomplishments

• Comparative methods are useful for administrative such as determining pay rises. But they do a poor job of linking performance to organizational goals, and do not provide feedback for improvement.

• What methods are used to Performance appraisal?

• 1. Forced distribution

• The forced distribution method requires the managers to put certain percentages of employees into predetermined groups.

• Most commonly employees are separated into 3,4, or 5 groups of unequal size indicating the best employees, the worst, and one or more groups in between.

• The employees ranked

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