Introduction
Performance Management
Performance
management is the methodical and organized system for monitoring the results of
work activities, collecting information and evaluating performance, and
determining the achievement of goals.
Properly using performance information can assist leaders in making
staffing decisions, allocating resources and communicating whether department
or organizational objectives have been met. The process includes performance
plans, goal setting, performance evaluations, recognition and coaching.
Performance
management is an ongoing organizational process that is conducted to maximize
the productivity of employees with the overall intention of improving the
organization’s effectiveness. It is strategic in nature and involves every
person and all HR processes in the organization. All are directly tied to
achieving the organization’s goals.
The
performance management process involves all levels in an organization.
Strategic goals set by the organization filter through the organization and
affect the goals and activities of each employee. In addition, the performance
management process gathers and updates current employee data to maintain the
human resource information system (HRIS). The HRIS contains a skill bank of
employee information that enables the HR department to determine if the
organization has the right mix of skills and people to achieve the
organization’s goals in an ever-changing world. This information is used in all
areas of HR decision-making.
Employee
performance management includes:
·
Planning work and
setting expectations,
·
Continually
monitoring performance,
·
Developing the
capacity to perform,
·
Periodically rating
performance in a summary fashion, and
·
Rewarding good
performance.
Performance Appraisal
According
to Dale Beach, “Appraisal is the systematic evaluation of the individual with regards
to his or her performance on the job and his potential for development.”
“It is formal, structured system of
measuring, evaluating job related behaviours and outcomes to discover reasons
of performance and how to perform effectively in future so that employee,
organization and society all benefits.”
Objectives of Performance Appraisal
1.
Work Related Objectives
- To provide a control for
work done
- To improve efficiency
- To help in assigning
work and plan future work assignment; and
- To carry out job
evaluation
2.
Career Development Objectives
·
To identify strong and weak points and encourage finding remedies for
weak points through training;
·
To determine career potential;
·
To plan developmental( promotional or lateral) assignments; and
·
To plan career goals
3.
Objective Of Communication
·
To provide adequate feedback on performance;
·
To clearly establish goals, i.e what is expected of the staff members in
terms of performance and future work assignments;
·
To provide counseling and job satisfaction through open discussion on
performance and
·
To let employees assess where they stand within the organization in
terms of their performance.
4.
Organisational Objectives
·
To serve as a basis for promotion or demotion
·
To serve as a basis for allocating incentives
·
To serve as a basis for determining transfers
·
To serve as a basis for termination in case of reduction of staff.
Performance
Appraisal Process
1. Objectives definition of
appraisal
2. Job expectations
establishment
3. Design an appraisal
program
4. Appraise the performance
5. Performance Interviews
6. Use data for appropriate
purposes
7. Identify opportunities
variables
8. Using social processes,
physical processes, human and computer assistance
Advantages of Performance Appraisal
It is said that performance appraisal is an
investment for the company which can be justified by following advantages:
Promotion: Performance Appraisal helps the
supervisors to chalk out the promotion programmes for efficient employees. In
this regards, inefficient workers can be dismissed or demoted in case.
Compensation: Performance Appraisal
helps in chalking out compensation packages for employees. Merit rating is
possible through performance appraisal. Performance Appraisal tries to give
worth to a performance. Compensation packages which includes bonus, high salary
rates, extra benefits, allowances and pre-requisites are dependent on
performance appraisal. The criteria should be merit rather than seniority.
Employees Development: The systematic
procedure of performance appraisal helps the supervisors to frame training
policies and programmes. It helps to analyse strengths and weaknesses of
employees so that new jobs can be designed for efficient employees. It also
helps in framing future development programmes.
Selection Validation: Performance Appraisal
helps the supervisors to understand the validity and importance of the
selection procedure. The supervisors come to know the validity and thereby the
strengths and weaknesses of selection procedure. Future changes in selection
methods can be made in this regard.
Communication: For an organization,
effective communication between employees and employers is very important.
Through performance appraisal, communication can be sought for in the following
ways:
·
Through performance appraisal, the employers can understand and accept
skills of subordinates.
·
The subordinates can also understand and create a trust and confidence
in superiors.
·
It also helps in maintaining cordial and congenial labour management
relationship.
·
It develops the spirit of work and boosts the morale of employees.
·
All the above factors ensure effective communication.
Motivation: Performance appraisal serves as a motivation
tool. Through evaluating performance of employees, a person’s efficiency can be
determined if the targets are achieved. This very well motivates a person for
better job and helps him to improve his performance in the future
Methods
of Performance Appraisal
There are a number of methods that are used to evaluate
employee's performance. It may be evaluated on the basis of his traits and
attributes as well as on the basis of his work or results and objectives
achieved by him. Thus his performance may be measured in terms of standards of
his traits and general behaviour on the job or in terms of results and goals.
Some of the common techniques are given below. Each method has its merits and
demerits but one thing is clear that the technique employed has to evaluate
mainly his job related performance. The appraisal methods can be classified as
follows:
(a) Traditional methods
(b) Modern methods
Performance Appraisal Process
The starting point for the PA process is identifying
specific performance goals. An appraisal system probably cannot effectively
serve every desired purpose, so management should select the specific goals it
believes to be most important and realistically achievable. For example, some
firms may want to stress employee development, whereas other organizations may
want to focus on pay adjustments. Too many PA systems fail because management
expects too much from one method and does not determine specifically what it wants
the system to accomplish. The next step in this ongoing cycle continues with
establishing performance criteria (standards) and communicating these
performance expectations to those concerned. Then the work is performed and the
supervisor appraises the performance. At the end of the appraisal period, the
appraiser and the employee together review work performance and evaluate it against
established performance standards. This review helps determine how well
employees have met these standards, determines reasons for deficiencies, and
develops a plan to correct the problems. At this meeting, goals are set for the
next evaluation period, and the cycle repeats.
Assess
Performance
·
Become familiar
enough with a staff member’s performance to provide an objective and
constructive assessment. Observation will be your best source of information,
along with the staff member’s own assessment and feedback from those served by
the staff member’s work and other supervisory staff. Many staff members work in
teams making input from team members another source of valuable information.
·
Meet with the Staff
Member
·
Schedule time for a
formal performance review at least annually with each staff member you
supervise.
·
Conduct the review
at a time and place when you can give your undivided attention to the staff
member.Then, don’t limit performance feedback to an annual, formal meeting. The
performance development plan is an excellent tool for providing ongoing
coaching and performance assessment. Frequent, brief meetings can keep
performance focus fresh and allow for timely assessment and recognition.
·
Complete the
Process in a Timely Manner
·
Prepare the Staff
Performance Review Form normally within two week of meeting with the staff
member.
·
Keep Development in
Mind
·
Remember that the
hires the best possible individuals. Your first task is to help the new staff
member learn the job and successfully
meet the performance standards. The initial review period is
designed both as a learning time and
as the last step in the selection process. Once competency is
established, the focus shifts to
continued development of those skills and abilities to a consistently high level
of excel.
Global best Practices
Maximizing,
Innovation, Effectiveness and Efficiency
A Dozen Performance
Appraisal and Performance Management Best Practices
·
Think
of Performance Management as an entire system, starting in interviews with
potential employees and continuing through orientation, training, coaching and
counseling, and recognizing peak performance.
·
Stop communicating about performance
appraisals and performance management as if it is merely an annual event. The
only annual part of it is salary action and/or filing forms. Think of the
performance appraisal as an ongoing workplace conversation.
·
Train
managers and employees on giving and receiving positive and negative feedback
on an ongoing basis.
·
Hold
managers accountable for having ongoing conversations around work and goals.
·
Actively
seek to align individual goals with organizational goals.
·
Encourage employee participation and ownership
in the performance appraisal process. Create an environment where together the
manager and employee can question, challenge and discuss goals and objectives
to gain clarity.
·
Use the
performance management system, Armstrong advised, to link with the
organization’s values. Values should be reflected in the organization’s core
competencies and they should show up in interviewing as well as in performance
appraisals.
·
Link the performance management system with retention,
development, and succession planning initiatives. This linkage explains why
specific people advance.
·
Get
support at the senior level. If you don’t have support at the senior level,
Armstrong noted, you’re not going to have a robust, effective performance
management system . . . if you want a world-class performance management system
that really does retain talent and increase productivity, you’ve got to get the
c-suite onboard and they’ve got to talk it and walk it.
·
Openly communicate to all employees how your
compensation system works. If merit pools average 2 to 3 percent annually, for
example, let everyone know this. Manage expectations around annual increases to
control the rumor mill and misinformation.
·
Where
possible, have a second-level review of performance appraisals, either by HR or
second-tier management.
·
Understand
the legal pitfalls associated with performance management, such as penalizing
employees for taking legally-protected leave (e.g., FMLA leave), and allowing
unlawful bias to infect performance appraisals.