human resource management lecture 7 and 8

• Performance Management


  • Aligning individual objectives to organisational objectives and encouraging individuals to uphold corporate core values
  • Enabling expectations to be defined and agreed in terms of role responsibilities and accountabilities, skills and behaviours
  • Providing opportunities for individuals to identify their own goals and develop skills and competencies
• Content of Performance Management

  • Regularity of Attendance
  • Ability to work individually or in group
  • Leadership skills
  • Initiative
  • Technical skills
  • Ability to grasp new things
  • Area of interest
  • Attitude
  • Job Knowledge
  • Judgmental Skills
  • Area of improvement
  • Past Achievement
  • Honesty and sincerity
  • Innovativeness
  • Cost & Time consciousness
  • Communication
• Objective of Performance Management

  • To develop the capacity of people to meet and exceed expectations and to achieve their full potential to the benefit of themselves and the organisation
  • To provide the basis for self-development and ensure that the support and guidance people need to develop and improve is readily available
• Performance Appraisal


  The regular, formalized and recorded review of the way an employee is performing on his/her job, normally carried out by the job-holder's immediate supervisor
• Appraisal Strategy


  • Assesses individual and team performance so that there is a link between individual innovation and company profitability
  • Includes encouraging risk taking, demanding innovation, generating or adopting new tasks, peer evaluation, frequent evaluations, and auditing innovation processes
• When to conduct a Performance Appraisal

  The performance review must occur at least once in a year, but can be done twice a year as part of the ongoing Performance Management process
• Who are involved in Performance Appraisal


  • The Appraisee
  • The Appraiser
  • HR Department
• Approaches to Appraisals


  • Trait-oriented Approach
  • Results-oriented Approach
  • Job Behaviour-oriented Approach
• Open vs Closed Appraisal Systems

  • Open system - Appraisee has opportunity to discuss performance with supervisor and contribute to the record
  • Closed system - Supervisor assesses and records without employee involvement or discussion
• The trend is towards more openness in appraisal as pressures increase for more employee participation and a more open approach to management
• Choosing the Right Appraisal Approach

  • Results-oriented approaches are the most common as they are more objective, focusing on significant aspects of the employee's job and achievement of performance targets
  • Job behaviour-oriented and trait-oriented approaches are more subjective and tend to be controversial and deficient
• Importance of Appraisal (Appraisal Information)

  • Identifying Training Needs
  • Improving Present Performance
  • Improving Communication
  • Improving Motivation
  • Determining Pay & Rewards
  • Disciplinary Documentation
• Importance of Appraisal (Appraisal Information)

  • Determining Pay & Rewards
  • Disciplinary Documentation
• The link between performance appraisal and pay has long been a bone of contention
• Where it is the quality of overall performance which determines that Peter receives more pay than Paul for doing the same job, there must be some means of assessing merit as fairly as possible
• The performance appraisal scheme might seem the obvious answer. Most organisations use appraisal information as a basis to reward employees either by way of bonuses or promotion
• Appraisals are used to review rewards. By this the extent to which an employee is deserving of performance related bonuses or pay increases is measured using various performance assessment scales
• Performance appraisal is not, in itself, a disciplinary device. What is important is that the appraisal should reflect consistently the individual's standard of performance and behaviour
• If and when you have to dismiss one of your employees for misconduct or poor performance, it will be important that you have documentary evidence to support your assertion, perhaps before an Industrial Tribunal
• Why Appraisals Fail


  • Administrative Problems
  • Assessment Problems
  • Implementation Problems
  • Appraiser's relationship with the Appraisee
  • External Factors
  • The 'recency effect'
  • Appraiser's Expertise
  • Poor Record Keeping
• It takes time and money to develop and administer an appraisal system. Those who are required to appraise others must be trained and should spend much time planning the appraisals
• Appraisal interviews could mean time away from the job for both appraiser and appraisee, and in a large department the manager can be tied up with appraisals for days or even weeks
• This has led to organisations doing appraisals anyhow; this certainly affects the quality of the process and makes the information inadequate and unreliable for proper decision making
• To assess an employee's performance necessarily involves some form of assessment against predetermined standards or behaviours
• In both situations there will be an element of human judgement which, as we know, suffers from problems of reliability, validity and bias
• Arbitrary assessment is contrary to good employment practice. Because of the human factor, bias can creep in, even to well-organized systems. Halo effects and stereotyping and an over-emphasis on negative information, can also play a part. Leniency too may be a problem
• These problems have the tendency of making the system practically ineffective as the results of the process may significantly deviate from that which is scientifically assessed
• There is always the danger that the system will not be used for the purpose intended – perhaps because people have lost sight of its original objectives
• Systems which create expectations of promotion, for instance, will lead to frustration and disillusion if the organization stops growing or if promotion blockages occur
• Many appraisal systems have been used as a punitive tool; appraisees see it as a form of punishment
• Appraisers may find it difficult to identify and measure, the distinct contribution of each individual
• This may be because the appraiser doesn't really know the appraisee or because employees are constantly moving from one project to another
• There are also instances where employees have bad relationship with their superiors or the people appraising them
• Appraisers may thus favor employees they have good relationship with and poorly assess the people they have bad relationship with
• This may however be reduced if the results-oriented approach is used
• There may be many external factors such as resources, processes, technology, corporate and HR strategy, working environment, external business context and management which are beyond the control of the individual employee but affects his/her performance
• These factors may therefore affect how well or bad an employee may perform on the job. These factors have the tendency of giving results that will not reflect the actual performance of the employees
• Using the results that may be ascertained from the appraisal process in this instance to make decisions about the employee may be unreliable
• The appraisal process might be skewed because if there is a long time span between appraisals, managers may place greater importance on more recent performance
• The tendency for appraisers to focus on more recent activities, thereby possibly ignoring incidents that had occurred earlier is referred to as the 'recency effect'