Mppm assignment
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This document summarizes an assignment on managing employee performance through effective appraisal systems. It discusses the definition of performance management and factors that affect performance. It then reviews the history of different performance appraisal tools used over time, including their strengths and weaknesses. These tools include merit-rating systems, management by objectives, and behaviorally anchored rating scales. Finally, it compares management by objectives, performance appraisal, and performance management and concludes that performance management aims to continuously improve business effectiveness and individual performance through frequent review.
Mppm assignment
- 1. BM036-3.5-3-MPPM Chan Chee Mang TP021569 Executive Summary This assignment is to answer the question given for Managing People and Performance. The question is about the challenges and trend in managing employees’ performance through effective appraisal system. In Chapter 1, the definition of managing employee performance (Performance Management) is given with the content of the concerns in business trend and the scope of the performance management. In Chapter 2, I have shared some information on the history background of the previous performance appraisals and tolls which are Merit-rating System, Management-by-Objectives and Behaviourally-anchored rating scale. Also, explained in details the founder, how it was developed, improved and later the other researchers or author criticism about the existed performance appraisal practiced and the influence till nowadays. In Chapter 3 and Chapter 4, I have ended the assignment title by summarising the conclusion with the comparisons in table form of Management-by-Objectives, Performance Appraisal and Performance Management. Asia Pacific Institution of Technology and Innovation (APIIT UCTI) 1
- 2. BM036-3.5-3-MPPM Chan Chee Mang TP021569 Table of Contents No Contents 1.0 Managing Employee Performance (Performance Management) 1.1 Important feature of effective organisation 1.2 Factors affecting Performance 2.0 Antecedents of Performance Management using different Performance Appraisals or Tools (Types of performance appraisals) 2.1 Managing Performance through Merit-rating System 2.1.1 Attacks on Merit-rating Systems 2.2 Managing Performance through Management-by-Objectives 2.2.1 Criticisms of MBO 2.3 Managing Performance using Behaviourally-anchored rating scales 2.3.1 Weakness of BARS 2.3.2 Recommendation for BARS 3.0 Comparisons between Management-by-Objectives (MBO), Performance Appraisal (PA) and Performance Management (PM) 4.0 Conclusion 5.0 References 6.0 Appendixes Asia Pacific Institution of Technology and Innovation (APIIT UCTI) 2
- 3. BM036-3.5-3-MPPM Chan Chee Mang TP021569 1.0 Managing Employee Performance (Performance Management) Abbreviations Definition Managing Employee Managing Employee Performance is always referred as Performance Performance Management. Performance Management is a fairly imprecise term, and performance-management processes which are the systems, as some people persist in calling them, manifest themselves in many different forms. There is no one right way of managing performance. The approach must depend on the context of the organisations’ culture, structure, technology, the views of stakeholders and the type of people involved. Performance Performance management is a strategic and integrated approach to Management delivering sustained success to organisations by improving the performance of the people who work in them and by developing the capabilities of the teams and individual contributors. Thus, Performance Management is: In strategic, it is concerned with the broader issues facing the business if it is to function effectively in its environment, and with the general direction in which it intends to go to achieve longer-term goals. In integrated, it had 4 senses which are vertical integration ( linking or aligning business), functional integration (linking functional strategies in different parts of the business), human resource integration (linking different aspects of human resource management, on organizational development and human resource development, reward, to achieve coherent approach to the management and development of people), last but not least, the integration of individual needs (for those in the organization). Asia Pacific Institution of Technology and Innovation (APIIT UCTI) 3
- 4. BM036-3.5-3-MPPM Chan Chee Mang TP021569 Concern in performance To achieve organizational, team or individual effectiveness, as stated improvement by Lawson (1995), organisation must get the right things done successfully. Performance is not only about what to achieve, but it is more concern about how to achieve? Management involved in direction, measurement and control but the exclusive concerns which a manager supposes are more on the participation of teams and individuals as stakeholders. Concern in development Performance improvement is not achievable unless there is effective of performance process of continuous development. The core competences of the management organisation and the capabilities of individual and team. ‘The real concept of performance management is associated within the approach to create a shared vision of the purpose and aims of the organisation, helping each employee understand and recognize their part of contribution, and in so doing, manage, enhance the performance of both individuals and the organisation’ (Fletcher, 1993a). Concern in the planning Performance management is also concern with planning ahead to achieve future success. Meaning that defining expectations expressed as objectives and in business plans. Concern in measurement Performance management is concerned with the measurement of and review results and the reviewing progress towards achieving objectives as basis of action. Scope of Performance Performance management is about managing the organisation. It is a Management natural process of management, not a system or technique (Fowler, 1990). Furthermore, it is also about managing within the context of business with its internal and external environment issues, which Asia Pacific Institution of Technology and Innovation (APIIT UCTI) 4
- 5. BM036-3.5-3-MPPM Chan Chee Mang TP021569 will affect how it is developed, what it will set out to be, and how it operates as to say ‘manage context not performance’ (Jones, 1995). Not just only managers, performance management concerns of everyone in the organisation. It rejects the cultural assumption that only managers are accountable for the performance of their teams and replaces with belief and responsibility that shared between them. Guile and Fonda (1998) stated that managers and their teams are jointly accountable for results and they are jointly involved in agreeing what they need to do and how they need to do (in monitoring performance and taking action)? 1.1 Important feature of effective organisation Richard Boyatzis (1982) suggested in The Competent Manager, stated that ‘you may view competency as the key that unlocks the door to individuals in realizing their maximum potential, developing ethical organisational systems, and providing maximum growth opportunities for personnel.’ Meaning that by developing competence will pursuit the high performance for an effective organisation. 1.2 Factors affecting Performance The definition of performance leads to the conclusion that when one is managing the performance of teams and individuals, both inputs (behavior) and output (results) should be considered. Performance is about how things are done as well as what is done (Hartle, 1995). Cardy and Dobbins (1994) points out that Performance are affected by a few factors which should be taking into account which is enforced by Deming (1986). Factors Explanations Leadership The quality of encouragement, guidance and support provided by managers or team leaders. Asia Pacific Institution of Technology and Innovation (APIIT UCTI) 5
- 6. BM036-3.5-3-MPPM Chan Chee Mang TP021569 Team The quality of support provided by colleagues. Systems The system of work and facilities provided by the organisation. Contextual Also known as the situational factor which is internal and external environmental pressures and changes. 2.0 Antecedents of Performance Management using different Performance Appraisals or Tools (Types of performance appraisals) 2.1 Managing Performance through Merit-rating System An American named WD Scott- the 1st person who introduced the rating abilities of workers in industry in World War I. He was influenced by Taylor and invented the ‘man to man comparison scale, which was Taylorism in action which is possible to argue that many of the developments in this area followed even nowadays which is much influenced by Taylor. WD Scott rating scale was modified and used to rate the efficiency of US Army which it is said to have supplanted the seniority system of promotion in the army and initiated an era of this system itself on the basis of meriting. The perceived success of this system is later adopted by British Army. The pioneering efforts of Scott were developed in the 1920s and 1930s into what was termed the graphic rating scale, used for reports on workers and for rating the managers and supervisors. For example, A typical manager’s or supervisor’s scale included assessments of various qualities of considering his/her success in winning confidence and respect through his/her personality. Below is the sample. inspiring favourable indifferent unfavarouble repellent Times have changed. The justification made for the use of this sort of rating scale was that they were educational. They ensure that those who are making the reports analysed the subordinated Asia Pacific Institution of Technology and Innovation (APIIT UCTI) 6
- 7. BM036-3.5-3-MPPM Chan Chee Mang TP021569 in terms of the traits essential for success in their work. The educational impact on employees was described as imparting their knowledge that they were being judged periodically on essential traits considered vital and important. Merit-rating scale often involved and still involves under the disguise of performance appraisal with the quantification of judgements against each factor which is in the belief that the quantification of subjective judgements used makes them more objective. Some organisations use the total merit score as the basis for ranking employees and this is later translated into a forced distribution for performance-pay purposes. For example, the top 10% in the ranking get a 5% increase, the next 20% get a 4% increase and so on. Later on, an average score was calculated for the whole company and the allocation of points in each department was equated to the company average. 2.1.1 Attacks on Merit-rating Systems A strong attack done by McGregor (1957) in Harvard Business Review article stated ‘An uneasy look at the performance appraisal’. He suggested that the emphasis should be shifted from appraisal to analysis. In summary, the main factor in the management of performance should be the analysis if the behavior required achieving agreed results, not the assessment of personality. The later Rowe (1964) has broaden the discussion and ended up with 3 major weakness of the Merit-rating Systems: 1) Appraisers were reluctant to appraise. 2) The follow-up was inadequate. 3) No attempt should be made to clarify or categorise performance in terms of grades. The difficulty of achieving common standards and the reluctance of appraisers to use the whole scale. 2.2 Managing Performance through Management-by-Objectives The management-by-objectives (MBO) claimed that it has overcome the discredited problems if traits rating. MBO was introduced by Peter Brucker (1955) which he emphasise that ‘an effective management must direct the vision and efforts of all managers towards a common goal’. This Asia Pacific Institution of Technology and Innovation (APIIT UCTI) 7
- 8. BM036-3.5-3-MPPM Chan Chee Mang TP021569 would ensure that individual and corporate objectives were integrated and would also make it possible for managers to control their own performance such as self-control means stronger motivation to desire to do their best rather than just. In 1972, MBO was later defined by John Humble as a continuous process of: Reviewing critically and restarting the company’s strategic and tactical plans Clarifying with each manager the key results and performance standards he must achieve, and gaining his contribution and commitment to these, individually and as a team member Agreeing with each manager a job improvement plan which makes a measurable and realistic contribution to the unit and company plans for better performance Providing conditions, an organisation structure and management information in which it is possible to achieve the key results and improvement plan Using systematic performance review to measure and discuss progress towards results Developing management training plans to build on strengths, to help managers to overcome their weaknesses and to get them to accept responsibility for self-development Strengthening the motivation of managers by effective selection, salary and succession plans The MBO cycles Strategic Plan Review & Control Tactical Plan Key results & improvement plan Asia Pacific Institution of Technology and Innovation (APIIT UCTI) 8
- 9. BM036-3.5-3-MPPM Chan Chee Mang TP021569 2.2.1 Criticisms of MBO Levinson (1970) criticized MBO weakness, stated that: 1) Every organisation is a social system, a network of inter-personal relationships. A person doing an excellent job by objective standards of measurement may fail miserably as a partner, superior, subordinate or colleague. 2) The greater the emphasis on the measurement and quantification, the more likely the subtle, non-measurable elements of the task will be sacrificed. Quality of performance frequently loses out to quantification. 3) MBO leaves out the individual’s personal needs and objectives, bearing in mind that the most powerful driving force for individuals comprises their needs, wishes and personal objectives. 2.3 Managing Performance using Behaviourally-anchored rating scales Behaviourally-anchored rating scale (BARS) are designed to reduce the rating errors that is assumed are typical of conventional scales which include a number of performance dimensions such as teamwork, and manager rates each dimension on a scale. For example: Grades Descriptions A Continuous contributions on new ideas and recommendations. Holding a leader’s role in group meetings and tolerant attitude on supporting the colleagues and respects other’s opinions. Keeps everyone updated about own activities and well aware of what other team members are doing. B High commitment in group meetings and useful contribution of ideas. Listen to colleagues and keeps them well informed with own activities while monitoring their work. C Able to deliver opinion and suggestion in group meeting from time-to-time but not paying as the major contributor on new ideas or planning. A receptive of other’s opinion in general but willing to change own plans to fit in. Not always keep others Asia Pacific Institution of Technology and Innovation (APIIT UCTI) 9
- 10. BM036-3.5-3-MPPM Chan Chee Mang TP021569 informed. D Average tendency to comply and passively with other’s suggestions. A minority attendance for group meeting shows personal antagonism to others. Not showing interest on informing others’ activities or operations. E Tendency to go own way without taking much concern of the need to make contribution towards the team. Sometimes uncooperative and unwilling to share information. F Uncooperative in common sense. Goes as in own way, completely ignores other team members’ wishes and totally no interest in the achievement of team objectives. 2.3.1 Weakness of BARS It is said that the BARS behavioural descriptions in such scales discourage the tendency to rate on the basis of generalized assumptions about the personality traits which were probably highly subjective by focusing attention on specific work behaviours. 2.3.2 Recommendation for BARS There is still room for making subjective judgements based on different interpretations of the definitions of levels of behaviours. BARS takes time and probably trouble to develop and are not in common use except in a modified forms of dimensions in a differentiating competence framework. 3.0 Comparisons between Management-by-Objectives (MBO), Performance Appraisal (PA) and Performance Management (PM) MBO PA PM Packaged System Usually tailor made Tailor made Applied to Managers Applied to all staff Applied to all staff Emphasis on individual Individual objectives may be Emphasis on integrating objectives included corporate, team and individual Asia Pacific Institution of Technology and Innovation (APIIT UCTI) 10
- 11. BM036-3.5-3-MPPM Chan Chee Mang TP021569 objectives Emphasis on quantified Some qualitative performance Competence requirements performance measures indicators may also be often included as well as included quantified measures Annual appraisal Annual Appraisal Continuous review with one or more formal reviews Top-down system with ratings Top-down system with ratings Joint process, ratings less common May not be a direct link to Often linked to payment May not be direct link to payment payment Monolithic system Monolithic system Flexible process Complex paper work Complex paper work Documentation often minimized Owned by line managers and Owned by personnel Owned by line management personnel department department (Fowler, 1990) 4.0 Conclusion To conclude this, Performance management is believed to be a continuous process on aiming to increase business effectiveness not only on productivity by improving the performance of individuals. The annual planning, development and evaluation of performance require frequent review between persons involved to monitor targets, discuss achievements and development progress. From the review session of PM, it helps the organisation to explore how reward in its widest sense can be used in reinforcement of performance. 5.0 References- Journals, Articles, Magazines Antonioni D. (1994), ‘Improve the performance management process before discontinuing performance appraisals’ Compensation for Benefits Review, May-June, pp 29-37 Argyris C. (1992), On Organisational Learning, Cambridge Mass., Blackwell Asia Pacific Institution of Technology and Innovation (APIIT UCTI) 11
- 12. BM036-3.5-3-MPPM Chan Chee Mang TP021569 Armstrong M. (1976), A Handbook of Personnel Management Practise, 1st edn., London, Kogan Page Armstrong M. (1996b), Employee Reward, London, Institute of Personnel and Development Audit Commission (1987), Performance Review in Local Government, London, Audit Commission Baguley P. (1994), Improving Organisational Performance, Maidenhead, McGrawhill Bailey R. T. (1983), Measurement of Performance. Aldershot, Gower Bandura A. (1989), ‘Deficiencies and perpetuation of power: latent functions in performance appraisal’, Journal of management studies, pp 499-517 Bones C. (1996) ‘Performance management: the HR contribution’, address at the Annual Conference of the Institute of Personnel and Development, Harrogate Boyatzis R. (1982), The Competent Manager, New Yorok, Wiley Boyett J. H. and Conn H. P. (1995), Maximum Performance Management, Oxford, Glenbridge Publishing Cave A. (1994), Organisational Change in the Workplace, London, Kogan Page Deming W. E. (1986), Out of Crisis, Cambridge, Mass., Massachusetts Institute of Technology, Centre for Advanced Engineering Studies Drucker P. (1955), The Practice of Management, London, Heinemann Engelmann and Roesch (1996), American Compensation Association Fletcher C. (1993a), ‘Appraisal: Routes to improved performance’, London, Institute of Personnel and Development Fletcher C. (1993b), ‘Appraisal: An idea whose time gone?’, Personnel Management, pp 34-37 Asia Pacific Institution of Technology and Innovation (APIIT UCTI) 12
- 13. BM036-3.5-3-MPPM Chan Chee Mang TP021569 Fowler A. (1990), ‘Performance Management: MBO of the ‘90s?’, Personnel Management, pp 47-54 Guile E D. and Fonda N. (1998) Performance Management through Capability, Issues in People Management No.25, London, Institute of Personnel and Development Handy C. (1989), The Age of Unreason, London, Business Books Herzberg F. (1968), ‘ One more time: how do you motivate your employees?’ Harvard Business Review (Jan-Feb), pp 109-120 Jones P., Palmer J., Whitehead D. and Neeham P. (1995), ‘Prism of Performance’, The Ashridge Journal, pp 10-14 Jones T. W. (1995), ‘Performance management in changing context’, Human Resource Management, Fall, pp 425-442 Levinson H. (1970), ‘Management by whose objectives?’, Harvard Business Review (Jul-Aug), pp 125-134 Levinson H. (1976), ‘Appraisal of what performance?’ Harvard Business Review (Jul-Aug), pp 30-46 McGregor D. (1957), ‘An uneasy look at performance appraisal’, Harvard Business Review (May-June), pp 89-94 Watermann R. (1994), The Frontiers of Excellence, London, Nicholas Breadley Asia Pacific Institution of Technology and Innovation (APIIT UCTI) 13