Performance Management

Performance Management

HRM3 - Performance Management 1

Performance Management – Learning

By the end of this unit you should be able to:

1.

Explain what is meant by performance management

2.

Describe the process of performance management

3.

Critically evaluate the appraisal process

4.

Explain what is meant by an appraisal interview and describe it’s benefits and drawbacks to the organisation, the manager and the employee

5.

Describe 3 performance appraisal techniques

6.

Evaluate the 360 degree feedback method of appraisal

7.

Describe three interview styles associated with appraisal

8.

Describe the key actions required to conduct an effective appraisal interview

9.

Discuss the ethical dilemmas associated with performance appraisal

10.

Describe 5 key errors associated with the appraisal process


Summary of Key Headings

• Performance Management

• Performance Appraisal

• The Appraisal Interview

• 360 degree feedback

• Ethical Dilemmas in appraisal


Factor influencing performance

According to Sparrow & Hiltrop (1994) the use of PMS is on the increase because of the following changes in the workplace

• Delayering

• Devolution of accountability & responsibility

• Changing career & job expectations

• Flexible working arrangements

• Individuation

• Competitive pressures


Performance Appraisal

Measuring a person’s job performance against predetermined work standards versus

Performance Management

A strategic management technique that links business objectives & strategies to individual goals, actions, performance appraisal & rewards thru a defined process. Incorporates appraisal, training & development, rewards, employee relations, individualism

(Sparrow & Hiltrop 1994)



Objectives of Performance

Management Systems

• Motivating performance

• Helping individuals develop their skills

• Building a performance culture

• Determining who should be promoted

• Eliminating individuals who are poor performers

• Helping implement business strategies

Performance Management

• Performance management is a management process of linking individual, group and organisation performance with the main strategic mission and values

• It is an organisation-wide activity concerned with the continuous assessment and review of performance against pre-determined strategic objectives

Principles of Performance

Management:

• Owned and driven by line managers

• Emphasis on shared goals and values

• Something that is developed specifically and individually for the particular company

• It should apply to all staff



Read CIPD Factsheet :

Performance Management

1.

What does the article mean when it says that performance management should be

•

Strategic

• Integrated

• About improvement

• About development

2.

What is the difference between an objective & a performance standard? Give an example of each from your own experience.

3.

Explain what is meant by 360-degree feedback.


Characteristics of GOOD P. Mgt System

• Tailored to the organisation

• Support the culture

• Support the mission

• Defines the critical success factors

• Clarifies the principal accountabilities

• Enables systematic review of performance

• Effective PRP system

• Integrated approach

Philpott & Sheppard (1993)


Characteristics of BAD P. Mgt System

• No clear objective

• Departmental rivalry

• Failure to meet objectives

• Lack of clear accountabilities

• Role ambiguity

• Absence & turnover

• Lack of training, development or career plans

• Resistance

• Loss of credibility

Philpott & Sheppard (1993)


Criticisms of Performance Management systems

• Form filling exercise

• Company goals only

• Means to set pay levels

• Does not identify future potential in employees

• Does not improve organisational performance

• A HR thing!!

• Dependent on your boss

• The 3 objectives conflicting objectives

• Subjective & unfair ratings


How to overcome these criticisms

• Training

• Involvement in design

• ‘Open’ system

• Visibly owned by senior management

• Ease administration

• Follow up on appraisal actions


Review Questions

1. Explain what performance management is both in writing and diagrammatic format

2. What makes a good performance management system?

3. What are the criticisms normally levelled at Performance Management Systems?

4. How might you minimise these criticisms?


Performance Appraisal

Systematic approach to evaluating employee’s performance, characteristics or potential with a view to assisting with decisions in a wide range of areas such as pay, promotion, employee development, and motivation.

(Gunnigle and Flood 1990)


Performance v’s

Performance

Appraisal Management

• Imposed on managers

• Individual focus on individual performance

• Owned and driven by line managers (Armstrong

1995)

• Organisation focus

• A beginning and an end

• Just one part of the performance management process

• Links individual , group and organisational performance

• Tied to the organisations strategy

• Continuous and integrated process


Appraisal

–

As an employee……….

As a manager …………

As the organisation…….


Why Appraise??

Employer

• Assess the performance of individuals

• Set individual objectives

• Assess how well objectives are being attained

• Confirm what jobs/tasks are actually being done

• Determine who should be promoted/transferred

• Determine who needs training

• Assess who should be considered for advancement

Employee

• A career development exercise

• A way of assessing needs and if organisation can meet them

• To clarify job, duties etc.

• To identify own potential and how to fulfill it

(Hunt 1992)


Perceived Benefits of P.A.

MANAGER

• Learn about employee now & future

• Goal clarification

• Measuring work performance

• Motivate employee

• Clarification

COMPANY

• Succession planning

• Facilitate HRP

• Link business and individual objectives

• Improve communications overall

• Improve performance both individual and organisational

HRM3 - Performance Management

Evenden & Anderson (1992)

21

Perceived benefits for employee

• Receive feedback

• Communicate views

• Career options

• Recognition

• Training & development needs



Performance Appraisal

3 principal objectives

1. To motivate staff and improve performance thru objective & target setting

2. To assess employee performance and distributing pay

3. To identify training & development needs as well as career aspirations

Fletcher (1993)


Methods (techniques) of Appraisal

1.

*Rating

2.

Ranking

3.

Paired comparison

4.

Critical incident

5.

*Free form

6.

*Performance or objective oriented systems

7.

Assessment centre

8.

Self-assessment

9.

*360º feedback


Rating

• Appraiser of appraise

• Against predetermined scale

• Uses a series of relatively standard headings

• Often part of a results oriented schemes

/objectives based scheme

• Armstrong (1995)convenient but ignore the complex set of variables that deter. Work performance. Very subjective


Rating continued

• Problems with consistency across managers

• Error of central tendency

• Forced distribution using the normal distribution curve

• Or

• Forced choice technique

• BARS – Behaviourally anchored rating scales


Free form

• Completely unstructured

• Allows for discretion

• Can create many inconsistencies

• Does not allow for effective comparisons

• Some managers like structure


Performance/Results/Objective Oriented

• MBO

• Measured against previously agreed KRA’s

• Jointly set

• Manager must understand the employee’s job

• Manager must be committed to observation, feedback, target setting etc.

• Difficult in a job that is subject to a lot of variation

• Dificult in a job where you are very dependent on other jobs

• Quantity versus quality issue


360 º Feedback/Multi Rater Assessment

• Relatively new

• To give a multi dimensional overview of an employee’s performance

• Structured questionnaires completed anonymously

• Can be done on computer

• May require more training


Article: Its time to appraise our methods of appraisal

Questions

What are some of the criticisms of appraisal interviews?

What does the article say about how to improve appraisal?


Difficulties with Appraisal

9 Common appraisal errors -Grote (1996)

1. Contrast effect

2. First impression

3. Halo/Horns

4. Similar to me

5. Central tendency

6. Negative & Positive skew

7. Attribution bias

8. Recency Effect

9. Stereotyping



Hunt (1992)

• Poorly designed

• Over-ambitious

• Inadequately resourced

• No training

• No guidelines



• Torrington & Hall (1995), Fletcher (1993) conflicting purposes of PA

• Line manager sees it as a HR thing (Grint,,

1993, Torrington & Hall 1995)


How to minimise these difficulties

4 Core Obligations of Management -

Longenecker & Ludwig (1990)

1. Sound procedure

2. Training

3. Top level support

4. Audit


Types of Appraisal Interview

1. Tell and sell

2. Tell and listen

3. Problem solve

4. Contingency approach

(Norman Maier 1958)


TASK

When would it be appropriate to use the different types of approach to the appraisal interview?

(Tips: think about the type of appraiser/appraisee, nature of the business/organisation, availability of resources/time, what the appraisal will be used for)


Interview Format:

Introduction

General discussion, present level of success

The body

• Self-criticism

• Self-help

Conclusion

– Confirm decisions, commitments, agreements, recommendations


Effective Appraisal Interviews

• Start with purpose

• Establish rapport

• Main tasks and responsibility discussion

• Focus on work targets and standards

• Encourage self analysis

• Career aspirations, training needs discussion

• Manage expectations

• Summary

• Notes

• Follow up



Guidelines for the Appraisal Interview

• Emphasize positive aspects

• Emphasize improvement

• Privacy/Confidentiality

• Regular basis

• Criticisms: specific & constructive

• Stay calm

• Identify specific actions which need to be taken

• Emphasize assistance

• End by stressing the positive aspects of performance


Read article: A lovely audience

1. Pick out key points from the article, about how to conduct the appraisal interview that have not been discussed on the previous slides.


Extra Reading – all in Moodle!

• Chapter 8 in core text book

• CIPD Factsheets:

– Performance Management

– Performance Appraisal

– 360 degree feedback

• Class handouts/articles

Human Resource Management 41

Typical Exam Questions

1.

Discuss the characteristics of good and bad performance management systems.

2.

Outline the steps to be taken to ensure a successful appraisal interview

3.

“Performance management is the same as performance appraisal.” Discuss.

4.

Describe any three methods of appraisal.

5.

Why is it important to manage & appraise performance? Discuss this from the employer, employee & company perspective.

6.

Evaluate the effectiveness of the appraisal interview in the context of performance appraisal.


Autumn Paper 04/05

•

Discuss the characteristics of good and bad performance management systems. (20 marks)

• Describe THREE key errors associated with appraisal interviewing.

(10 marks)

Summer Paper 04/05

•

Explain what a performance management system is.

(10 marks)

•

Discuss the criticisms of performance management systems and what an organization can do to overcome them.

(20 marks)


Performance Management

Performance Management

Summary of Key Headings

Objectives of Performance

Management Systems