Performance management system
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The document discusses performance management systems and performance appraisal methods. It provides definitions and purposes of performance management systems, noting that they are integrated processes aimed at supporting organizational goals. Various traditional and modern performance appraisal methods are outlined, such as graphic rating scales, forced distribution, behavioral anchored rating scales, assessment centers, and 360 degree feedback. Challenges with performance appraisal like rating biases are also mentioned.
Performance management system
- 1. Unit III- Performance management system Richa Shroff
- 2. It is a broader term than performance appraisal, evaluation or assessment It is an integrated process Its aim is to ensure that employee performance supports the strategic goals of the organization Its emphasis is on integrating organizational team and individual objectives It is a continuous process and not an annual event It involves performance reviews focusing on future rather than on the past It is owned by line management Performance management system Integrated process To achieve goals of organization
- 3. Human Resource Planning Recruitment and Selection Personnel Decisions Training and Development Feedback motivation and personnel development Career planning and development Compensation and reward
- 4. •It is a method of evaluating the behavior of employees in the work spot •It is systematic description of an employees jobs relevant strengths and weaknesses •It is a systematic process for evaluating the performance of each employee •It helps to determine the relative worth of the employee qualitatively and quantitatively on the job in comparison to other fellow workers
- 5. •To provide information about the performance ranks •To prevent grievances' and in disciplinary activities •To diagnose deficiency in the employee regarding skill, knowledge etc •To provide information which helps to counsel the subordinate
- 6. •To maintain a satisfactory level of performance •To help the superiors to have a proper understanding about their subordinates •To guide the job changes with the help to continuous ranking •To facilitate fair and equitable compensation based on performance •To facilitate for testing and validating selection tests, interview techniques through comparing their scores with performance appraisal ranks •To provide information for making decisions, regarding layoff, retrenchment etc
- 7. •It helps in the evaluation of capability of different personnel •It helps in evaluating the relevancy of training programs being organized for workforce development. It also helps in estimating the need of improvement in the training programmers •It helps in the promotion of personal •It keeps the personnel aware of their duties in the enterprise •It provides an opportunity to the personnel to develop themselves so that they may be promoted to higher levels. Thus it offers a challenge to the personal at different level for development •It helps the feeling of loyalty among the personals towards the enterprise which increase their morale
- 8. •Halo effect •Criterion problem •Frustration •Lack of Co-Operation
- 9. Traditional Methods Modern Methods Graphic rating scale Ranking method Paired comparison method Forced distribution method Checklists method 1. Simple checklist 2. Weighted checklist 3. Critical incident Essay or free form Group appraisal Confidential reports Behavioral anchored rating scale Assessment centre Human Resource accounting Management by objectives (MBO) Behavior observation scales Psychological appraisals Results method Productivity measures Balance scorecard 360 degree feedback appraisal
- 10. Graphic Rating scale •Oldest simplest and widest used method •Compares individual performance to absolute standard •It is also know as linear rating scale or simple rating scale •It provides numerical score for performance •Allows comparison of scores between individuals •Each point on the scale have different meaning for different raters Ranking method •Oldest and simplest method •Man is compared •Under this method employees are ranked from best to worst on some characteristics •In simple language employees are ranked from highest to lowest rank •It is simple and complicated •It is difficult to use with large group of employees Paired comparison method •Under this method employee is ranked by appraiser by comparing one employee with all in the group one at a time •Paired comparison method can be employed fairly when the number of employees are less
- 11. Forced distribution method •It is developed to prevent the raters from rating too high or too low •It eliminates central tendency and leniency biases •It is based on questionable assumption that all group of employees will have the same distribution of excellent, average and poor performers Essay or free form appraisal •Under this appraiser writes an essay or brief narrative that describes the performance of employees •Sometimes it may use prepared questions that must be answered by the manager or appraiser •It is a time consuming method •Quality of performance is influenced by the writing skills of managers Group appraisal •Under this method the employee is appraised by group of appraisers •This method is widely used for purpose of promotion, demotion and retrenchment capital
- 12. Confidential Reports •Under this superior appraises the performance of his subordinated based on his observations, intuitions and judgments •The superior keeps his judgment and report confidentially •Confidential report is the traditional method of most of the public sector organisations Critical Incident method •This theory on which this approach rests is that there are certain acts of behavior of employee that make the difference between success and failure on job •Incidents may be became upset or angry, refused to help the fellow worker •These incidents are collected and rated •There is much scope of biased decision Checklists method •It is a simple rating technique in which the supervisor is given a list of statement or words and asked to check statements representing the characteristics and performance of each employee •There are three checklists method •Simple •Weighted •Force choice
- 13. Behaviorally anchored rating scale •Combination of traditional rating scales and critical incidents method •Using bars job behaviors from critical incidents effective and ineffective behaviors are described more objectively •Bar is very useful for providing developmental feedback and identifying training needs Assessment center • It is a system or organization where assessment of several individuals is done by various experts using various techniques Human Resource accounting • It deals with cost of distribution of human resources to the organization • Cost of employee includes cost of manpower planning, recruitment, selection, induction etc
- 14. Management by objectives • MBO focuses attention on participative process where objectives are time bound and set by employees in consultation with their superiors •It suggests that objectives should not be imposed on subordinates but should be decided collectively by a concerned with the management •It is a time consuming method Psychological appraisals •Are conducted to assess the employees potential •It consist of in-depth interview, psychological tests, consultations and discussions with the employee, •Evaluation is conducted in the areas of employees intellectual abilities, emotional stability, etc •Psychological appraisal results are useful for decision making about employee placement, career planning and development and training and development Results method •Less subjectivity •Less open to bias •Assign clear responsibility to employees •Freedom to the employees in using methods •Empowering employees •Organizations of the contemporary periods evaluate employee performance based on accomplishments they achieve rather than based on the behavioral traits
- 15. Productivity measures •Under the productivity measures of performance appraisal employees are appraised based on the ratio output they turned out to the input they used •Example Sales to employee salary and benefits, number of clients served per day Balance scorecard •This method brings linkages among financial, customer, processes and learning •Learning and people management contribute to the enhancement of internal processes •Balanced scorecard is a continuous loop process •It provides performance feedback based on measures •It empowers employees for performance improvements 360 degree feedback appraisal method •Also known as multi rater feedback •Most comprehensive appraisal •These sources include superior, subordinates, peers, team members, customers and suppliers apart from the employee himself who can provide feedback on the employees’ job performance •Evaluation by one and all is a 360-degree review and feedback is considered to be one of the most credible
- 16. 1) Rating biases •Halo effect •Error of central tendency •Leniency and strictness biases •Personal prejudice •The recency effect System design and implementation problems Poorly trained managers