Performance Management System
HUMAN RESOURCE DEVELOPMENT
PERFORMANCE MANAGEMENT SYSTEM
XAVIER INSTITUTE OF SOCIAL SERVICE
RANCHI
Submitted by:
Submitted to:
Group: VI
Personnel Management-II
2010-2012
Prof. Sajeet Lakra
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Performance Management System
GROUP CONSTITUTION
Members
Ashutosh Sharma
Aditi Gupta
Kumar Pratik
Divyendu Shekhar
Utkarsh
Shashank Shekhar Rai
Roll No.
06
15
28
38
52
66
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Performance Management System
ACKNOWLEDGEMENT
Success of a project depends on the endeavor put behind it. Encouragement and
patronization perfect an endeavor.
We take this opportunity to express our heartfelt gratitude to our faculty
Prof. Sajeet Lakra, for providing us with the opportunity of preparing the study
material for the of the HRD curriculum and give presentation in the class. The
group’s involvement and team work helped us understand the chapter in a lucid
manner. The group’s cohesiveness and team work helped us to make this task a
success. We thank all the team members and also all our colleagues for their
unconditional support.
Thank You
Group VI
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Performance Management System
CONTENTS
S.No.
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
Topics
Introduction
Need of PMS in Organizations
Objectives of PMS
Steps of PMS
Performance Appraisal an Important Tool of PMS
Reasons Employee dislike Appraisals
Benefits of Performance Appraisal
Feedback Communication Channels in an
Organization
Counseling
Case Study
Bibliography
Pg. No.
05
06
07
08
10
11
15
21
22
26
29
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INTRODUCTION
An organization’s long term success in meeting its strategic objectives rests with its ability to
manage employee performance and ensure that performance measures are consistent with the
organizations needs. Performance evaluation, performance appraisal, performance measurement
is becoming more of a strategic issue for organizations than in past. Performance management is
a method of evaluating the behavior of employees in the work spot, normally including both
quantitative and qualitative aspects of job performance. It is a strategic tool for the organization.
On the other hand, the terms performance appraisal and evaluation imply a one sided judgmental
approach to performance management where employees have little involvement in the process.
Effective PMS require employees and supervisors to work together to set performance
expectations, review results, access organizational and individual needs and plan for the future.
PERFORMANCE
MANAGEMENT
TIMELINE:
FUTURE :
PRESENT :
Allows work
plans, goals and
development
PAST :
opportunities to
Data related to be set
past
performance
Resulting in the
achievement of
strategic
objectives
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Performance Management System
NEED OF PERFORMANCE
THE ORGANISATIONS:
MANAGEMENT
SYSTEM
IN
•
Performance deficiencies are addressed in a timely manner through employee
development programs that meet the changing needs of the organization and its markets,
•
Employee behaviors are being channeled in the appropriate direction towards
performance of specific objectives that are consistent with the work unit and the
organization's strategy
•
Employees are provided with appropriate and specific feedback to assist with their career
development
OBJECTIVES OF PERFORMANCE MANAGEMENT SYSTEM
Human Resource Planning:
Performance appraisal information provides a valuable input for skills inventories and human
resource planning. By providing information about the human resource strengths and weaknesses
of the organization, the performance appraisal system helps determine the promotability and
potential of all the employees. It, therefore, constitutes an important information base for
developing succession plans, replacement charts and creating new positions in the organization.
Recruitment and selection:
Performance appraisals can be used to validate or evaluate decisions related to employee
recruitment and selection. By comparing employee’s performance appraisal with their test scores
as job applicants, it is possible to determine the effectiveness of the recruitment and the selection
system. For instance, employees who received about the same scores on the selection tests
should perform similarly on the job. However, if these employees show a significant difference
in their job performance after one year on the job, then the selection system is not considered
successful.
Personnel decisions:
Apart from validating selection procedures, performance appraisals also serve as a guide for
other personnel decisions such as promotions, layoffs, etc. Performance data helps make rational
personnel decisions. In the absence of this information, personnel decisions become subjective.
Performance data also helps defend promotion decisions once the decision is made.
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Performance Management System
Training and development:
Appraisal data helps an organization determine specific training and development needs based on
an assessment of the deficiencies in performance levels and skills. It helps to identify employees
and departments in need of training. However, not all performance deficiencies may be
overcome through training. Performance appraisal should clearly determine whether the reasons
for performance deficiency are due to the lack of skills or because of low morale.
Feedback, motivation and personal development:
Performance appraisals help provide performance feedback to employees. They also help in the
development of action plans for individual performance improvement and facilitate learning of
new behavior. All employees want to know how they are performing on the job, what their
manager thinks of their performance, and where they need to improve. Performance feedback is
a primary developmental need and serves to motivate employees. Performance appraisals help
determine employee strengths, weaknesses, potentials, and training needs. When providing
feedback to employees, the manager can inform employees about their performance, discuss
what aspects need improvement, and also identify what direction employees should take to
improve performance.
Career Planning and Development:
Appraisal data also helps in identifying employee potential and in planning future growth
opportunities for the employee. Information about the strengths, weaknesses and potential of
employees can be used to counsel and assist them in developing and implementing realistic
career plans.
Compensation and Reward:
A fair and objective performance appraisal system helps in making differential reward decisions,
such that the most productive workers and teams are rewarded accordingly. In the absence of
performance data, everyone gets the same bonus is rewarded equally, or rewards are subjectively
distributed. Such a situation results in perception of inequity on the part of high performers.
When rewards and compensation are linked to performance, it reinforces the belief that pay
raises should be linked to performance rather than seniority. Performance data provides a basis
for rational decisions about pay and rewards.
Internal employee relations:
Performance appraisals can serve to maintain a positive organizational culture. Dissatisfaction
over promotions or reward decisions can be managed by using performance data.
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STEPS OF PERFORMANCE MANAGEMENT SYSTEM
Setting Up a Performance Management System
Setting up a good performance management system doesn't happen overnight or by accident.
You need to consider its design and carefully plan how it will work before managers begin using
it to evaluate employees.
A performance management system should provide employees with these four basic benefits:
1.
2.
3.
4.
A clear understanding of job expectations
Regular feedback about performance
Advice and steps for improving performance
Rewards for good performance
The goal of a performance management system is to help boost employee performance and,
ultimately, the productivity of the business. For it to be effective, a performance management
system should incorporate the following critical elements:
Updated Job Descriptions:
Job descriptions should clearly describe the employee's current duties and performance
expectations. Position descriptions should be specific, clearly defining the job function, required
skills, deadlines and goals, and should delineate expectations for the employee's relations with
peers and customers.
Keep job descriptions current, especially during times of organizational change. Rapid growth
and downsizing inevitably add new responsibilities and shift employees' workloads.
Performance Measures and Standards:
Once you have job descriptions in place, you need to establish performance standards that
describe what constitutes below-average, average, and above-average performance. Start by
thinking about the best- and worst-case scenarios until you reach realistic standards for
measuring performance.
Next, determine how you're going to measure the expectations outlined in the job description.
This requires both objective and subjective methods of assessment. In some situations it's easy to
gauge performance by looking at the numbers: for example, how many new accounts an
employee brought in or how many products an employee assembled.
Quantifying an employee's coping skills, customer service skills or attitude is much more
difficult. Some managers also have biases or poor evaluation skills. Establish clear guidelines
and measures that eliminate potential bias and prevent evaluators from subjectively determining
what constitutes excellent and unacceptable behavior.
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Evaluator Training:
Research shows that managers with poor communication or interpersonal skills are often the
downfall of a company's otherwise sound performance management program. All managers need
training on how to communicate and how to conduct fair, nonjudgmental and consistent
appraisals. An effective performance management system will administer training to managers
before they conduct their first reviews.
Guidelines for Improvement:
Institute basic policies to cope with employee weaknesses and poor performance. Decide if you'll
provide training or mentoring for employees exhibiting subpar performance. Set guidelines that
outline how long it should it take an employee to improve and what steps will be taken if the
employee fails to show improvement.
Employee Input:
Solicit and evaluate staff suggestions for your performance management program. Incorporate
employee input into your program or system as needed.
Compensation and Rewards:
When your employees perform well they should be compensated. Rewards keep morale high,
generate loyalty and foster additional improvement. But closely linking pay hikes and
promotions to performance appraisals is a contested issue. Critics say that too close a tie between
performance evaluation and compensation may be punishing or unfair to employees who don't
overachieve.
Regardless of how and when you choose to compensate your employees, an above-average
appraisal deserves acknowledgment. Make sure you consistently reward employees for their hard
work.
Basic Steps in Developing an Effective PMS
 Define the purpose of the job, job duties, and responsibilities.
 Define performance goals with measurable outcomes.
 Define the priority of each job responsibility and goal.
 Define performance standards for key components of the job.
 Hold interim discussions and provide feedback about employee performance, preferably
daily, summarized and discussed, at least, quarterly. (Provide positive and constructive
feedback.)
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 Maintain a record of performance through critical incident reports. (Jot notes about
contributions or problems throughout the quarter, in an employee file.)
 Provide the opportunity for broader feedback. Use a 360 degree performance feedback
system that incorporates feedback from the employee's peers, customers, and people who
may report to him.
 Develop and administer a coaching and improvement plan if the employee is not meeting
expectations.
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PERFORMANCE APPRAISAL AN IMPORTANT TOOL OF PMS
Introduction:
Most large companies have a formal procedure for reviewing the performance of employees. It
typically consists of a performance review form completed by a supervisor, which then becomes
the focal point of an appraisal interview between the supervisor and the employee. Most are
intended to document performance quality so that future decisions about promotion, salary, or
job functions might be justified. More importantly, the goal of the performance review is used to
improve/enhance the performance of those being reviewed.
Meaning of Performance Appraisal:
Performance appraisal is a systematic and orderly evaluation of performance at work by their
superiors or others who are familiar with the techniques of performance appraisal. Performance
appraisal is useful in guiding the employees for self-improvement and self-development.
Performance appraisal is an important component of management information and control
system. Performance appraisal is different from personal appraisal. An impartial system of
performance appraisal is not against employees but is actually beneficial to them in the long run.
Definitions of Performance Appraisal:
According to Scott, Clothier and Spriegal, “Performance appraisal is a process of evaluating an
employee’s performance for a job in terms of its requirements.”
According to Dale Beach performance appraisal means “the systematic evaluation of the
individual with respect to his performance on the job and his or her potential for development.”
Purpose of Performance Appraisal:
(A) Administrative Purposes:




Promotion and Placement of Employees: Performance Appraisal is used to promote
employees as per their competence and performance in the previous period. Performance
appraisal is useful for the selection of right person for the right type of promotion.
Transfers and Demotions: Performance appraisal reports can be used for taking final
decisions on transfers and demotions. Various personnel decisions can be taken correctly
when based on impartial performance appraisal.
Wage and Salary Payment: Wage increase is based on the performance appraisal reports.
Along with other factors that decides wage, performance appraisal is given due weightage.
Personnel Research: Performance appraisal serves as a feedback to the management in the
field of personnel research. It serves as a base for the conduct of research activities in
personnel management.
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(B) Self Improvement of Employees:





To know the strengths and weaknesses and the areas of improvement.
To evaluate and compare the performance of an employee in contrast to other employees.
To discover hidden skills and talent.
To assess whether the employee is on the right job or not.
To know about the career opportunities that should be provided to an employee.
Process of Performance Appraisal:
Plan
ESTABLISHING PERFORMANCE STANDARDS:
The first step in the process of performance appraisal is the setting up of the standards which
will be used to as the base to compare the actual performance of the employees. This step
requires setting the criteria to judge the performance of the employees as successful or
unsuccessful and the degrees of their contribution to the organizational goals and objectives. The
standards set should be clear, easily understandable and in measurable terms. In case the
performance of the employee cannot be measured, great care should be taken to describe the
standards.
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Performance Management System
Develop
COMMUNICATING THE STANDARDS
Once set, it is the responsibility of the management to communicate the standards to all the
employees of the organization. The employees should be informed and the standards should be
clearly explained. This will help them to understand their roles and to know what exactly is
expected from them. The standards should also be communicated to the appraisers or the
evaluators and if required, the standards can also be modified at this stage itself according to the
relevant feedback from the employees or the evaluators.
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Perform
MEASURING THE ACTUAL PERFORMANCE:
The most difficult part of the Performance appraisal process is measuring the actual performance
of the employees that is the work done by the employees during the specified period of time. It is
a continuous process which involves monitoring the performance throughout the year. This stage
requires the careful selection of the appropriate techniques of measurement, taking care that
personal bias does not affect the outcome of the process and providing assistance rather than
interfering in an employees work.
Assess
COMPARING THE ACTUAL WITH THE DESIRED PERFORMANCE:
The actual performance is compared with the desired or the standard performance. The
comparison tells the deviations in the performance of the employees from the standards set. The
result can show the actual performance being more than the desired performance or, the actual
performance being less than the desired performance depicting a negative deviation in the
organizational performance. It includes recalling, evaluating and analysis of data related to the
employees’ performance.
Review
DISCUSSING RESULTS:
The result of the appraisal is communicated and discussed with the employees on one-to-one
basis. The focus of this discussion is on communication and listening. The results, the problems
and the possible solutions are discussed with the aim of problem solving and reaching consensus.
The feedback should be given with a positive attitude as this can have an effect on the
employees’ future performance. The purpose of the meeting should be to solve the problems
faced and motivate the employees to perform better.
DECISION MAKING:
The last step of the process is to take decisions which can be taken either to improve the
performance of the employees, take the required corrective actions, or the related HR decisions
like rewards, promotions, demotions, transfers etc.
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REASONS EMPLOYEE DISLIKE PERFORMANCE
APPRAISALS
Performance appraisal is a yearly rite of passage in organizations that triggers dread and
apprehension in the most experienced, battle-hardened manager. Employees on the receiving end
of appraisals do not always look forward to them. In fact, research and practice demonstrate that
employees enjoy performance appraisal about as much as a trip to the dentist, but at least the
dentist gives them something for the pain! Consider the reasons why employees dislike
performance appraisals.
Rating Bias
Employees dislike performance appraisal because managers do not always rate them on objective
criteria. Experts call this problem rater bias. When managers include nonperformance factors like
race, gender, hair color, etc. into an appraisal, the contaminated appraisal ratings produce fruit of
perceived and genuine unfairness in the rating process and its outcomes. Employees react with
reduced job satisfaction and turnover. These various forms of appraisal bias serve as a major
source of EEO complaints and court cases.
Rating bias occurs with the contamination of appraisal ratings by non-performance related
factors. Prime examples include person characteristic bias (race, gender and age), personal
relationship contamination (liking or disliking), and failing to gather a representative sample of
performance.
Recent research suggests other well-known sources of bias include the negative affect of
employee and rater impression management. Managers often feel resentment toward the
pandering employee, affecting their ability to rate fairly.
Another factor confirmed by research is the influence of mood on performance appraisal ratings.
When the manager or supervisor is in a bad mood, he or she is a much more conscientious
performance rater and more attuned to employee mistakes and problems. When in a good mood,
the manager is more likely to overlook poor employee performance. Given that the manager’s
frame of mind is often beyond the employee’s control, it adds another frustrating uncertainty to
the appraisal process.
Hypocrisy
When managers do not follow stated policies and procedures – when they don’t practice what is
preached in the organization – the visible contradiction generates disappointment, distrust and
cynicism among their subordinates. It reduces the employee motivation and organizational
citizenship behaviors that contribute to vibrant, productive and healthy work environments.
Employees will not go out of their way to provide the extra effort and creativity needed to solve
problems and make necessary changes when they lack trust in the integrity of management.
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The most problematic situation occurs when raters manipulate feedback to game the performance
appraisal process to support their favorite employees (in-group) and punish the least favored
(out-group). At times managers promote employee participation through self-appraisals, but then
ignore that input and instead, adopt the proverbial tell and sell approach employees rightly
perceive that traditional command and control values dominate. This managerial hypocrisy
occurs frequently among least favored employees contributing to higher levels of appraisal
unfairness.
Poor Informal Feedback
In general, employees like to receive feedback; they want to know how they are doing! Quality
performance feedback on an ongoing basis is the lifeblood of the performance appraisal process.
Research and practice demonstrate a consistent disconnect between employee and manager
perspectives about the degree and nature of performance feedback. As servant leaders,
communication is the building block of trust. Employee surveys consistently show that
employees desire more frequent, specific and timely feedback than the typical manager provides.
Olivia felt misled and betrayed when she did not receive direct feedback regarding her alleged
shortcomings. In fact, research indicates a large number of employees do not believe that
managers have the requisite skills to provide appropriate feedback. More so, employees can be
aggravated when feedback sessions are superficial, rushed or even interrupted. Employees seek
direct feedback, not the sandwich approach managers try to hide the negative feedback in
between a couple of slices of general compliments.
Poor Communication during Formal Feedback Sessions
With competing priorities, managers can be unprepared or insufficiently trained for the inherent
challenges to providing candid informal and formal performance feedback. For example,
employees are often victims of the report card syndrome. This occurs when managers save up
examples of poor performance for the performance appraisal interview and surprise employees
with poor ratings.
This type of rater behavior diminishes employee satisfaction with the appraisal process, creating
the opposite effect of eroding the appraisal system’s intended benefit of motivational and
productivity improvement. Conversely, the report card syndrome is the absence of performance
documentation. When this occurs, low performance ratings, unsupported by clear and specific
performance evidence, frustrates the employee and creates a perception of unfairness, a prime
motivation for grievances and lawsuits.
Rater Errors
Employees often realize when managers are not giving them accurate ratings. Many managers
don’t want to deal with conflict, so they often give employees undeserved high ratings
(researchers call this leniency tendency). Another mistake managers make is to give employees
average ratings (central tendency). Sometimes managers impose unreasonably high performance
standards, which can demoralize and discourage employees. So, while consistently high ratings
rob employees of the intrinsic achievement and satisfaction for a job well done, harsh ratings
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reduce motivation by setting impossible performance standards. The major cause of these rater
errors is a lack of training. Untrained raters are more likely to commit more performance
appraisal mistakes, thereby eroding employee confidence in the performance appraisal system.
Rater Appraisal – Self-appraisal Mismatch
Before a manager sits down with an employee to discuss the performance appraisal, there is a
good chance that the employee has rated his or her own performance already. One of the most
damaging rating systems to employee morale is the forced distribution or grading on a curve
system. This approach requires managers to rate a percentage of their employees as below
average.
Research demonstrates that employees, on average, rate their comparative job performance at the
78th percentile; that is, better than 78 percent of the other people in the office. Therefore, an
average performance rating conflicts with the supervisor’s assessment, creating a serious
discrepancy. When employees face a performance difference like this, most cope by discounting
or dismissing the feedback and its source (i.e., the manager). Others become demoralized and
withdrawn. In either case, grading on a curve lowers overall satisfaction with the performance
appraisal process.
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BENEFITS OF PERFORMANCE APPRAISAL
For the Appraise:
 Better understanding of his role in the organization—what is expected and what needs to
be done to meet those expectations.
 Clear understanding of his strengths and weaknesses to develop himself into a better
performer in future.
 Increased motivation, job satisfaction, and self-esteem.
 Opportunity to discuss work problems and how they can be overcome.
 Opportunity to discuss aspirations and any guidance, support or training needed to fulfill
those aspirations.
 Improved working relationships with supervisors
For the Management:
 Identification of performers and non-performers and their development towards better
performance.
 Opportunity to prepare employees for assuming higher responsibilities.
 Opportunity to improve communication between the employees and management.
 Identification of training and development needs.
 Generation of ideas for improvements.
 Better identification of potential and formulation of career plans.
 Improved performance throughout the organization.
 Creation of a culture of continuous improvement and success.
 Conveying the message that people are valued
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FEEDBACK COMMUNICATION CHANNELS IN AN
ORGANIZATION
Therefore, On the part of the person receiving the feedback, the following points are important to
be taken care of:

The employee should have a positive attitude towards the feedback process

He should listen to the suggestions of the appraiser calmly and try to incorporate them in
his plans.

He should not hesitate to ask for the help of his superiors.

Should have a co-operative attitude during the feedback meeting.

Don’t judge the appraiser as a person.

Should take the feedback objectively.

Should not judge the appraiser as a person on the basis of the feedback.
On the part of the appraiser or the manager / person giving the feedback, the following points are
to be taken care of:
 The appraiser should make the receiver feel comfortable during the feedback meeting.
 The appraiser should make it a two – way conversation i.e. let the employee speak.
 Listen to the employee and note his points, suggestions, problems etc.
 The appraiser should not adopt a confrontational approach towards the meeting. The goal
is not to criticize the employee.
 Provide a constructive feedback to the employee i.e. in a way which will motivate him to
perform better.
 Have a positive attitude towards the process
 Try to understand the reasons of his failure.
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 Be fair and objective
 Prepare yourself for what to say and how to say.
 Make the appraisal feedback meeting useful and productive for the organization and the
employee.
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Types of Information channels
Information Channels
Information Richness
Face to Face Conversation
High
Videoconferencing
High
Telephone Conversations
High
Emails
Medium
Handheld Devices
Medium
Blogs
Medium
Written Letters and Memos
Medium
Formal written Documents
Low
Spreadsheets
Low
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Ten common feedback mistakes
1. Speaking out only when things are wrong. "Praise to a human being represents what sunlight,
water and soil are to a plant - the climate in which one grows best." - Earl Nightingale
2. "Drive-by" praise without specifics or an honest underpinning. - "Great job!"
3. Waiting until performance or behavior is substantially below expectations before acting on it.
4. Giving positive or negative feedback long after the event has occurred.
5. Not taking responsibility for your thoughts, feelings and reactions. "This comes straight from
the boss."
6. Giving feedback through e-mail messages, notes, or over the telephone.
7. Giving negative feedback in public.
8. Criticizing performance without giving suggestions for improvement.
9. No follow up afterwards.
10. Not having regularly scheduled performance review meetings.
Four tips on how to do right
1. Be proactive: Nip issues in the bud and avoid the messy interpersonal tangles that result
from neglected communication. Meeting with employees on a monthly or quarterly basis
instead of annually.
2. Be specific: It’s never easy to provide negative feedback regarding someone’s work, but
as a leader you can’t avoid it. Be as clear as possible when providing feedback (both
positive and negative).
3. Develop a progress plan: Be clear about the specific changes in behavior that you expect
in a specific period of time, and follow up as scheduled.
4. Link employees’ performance to organizational goals: Reinforce the value of your
employees’ contributions by giving specific examples of how their work and positive
behaviors serve the organization and its customers.
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PERFORMANCE COUNSELLING
Counselling
COUNSELLING is a formal process, initiated when a person has not responded to advice and
assistance you have provided on a less formal basis, and will usually involve your taking the
following steps:
Advise the person in advance that a discussion about his or her work performance is to be held at
a given time and place, with sufficient notice to enable you both to come to the discussion
prepared;
Arrange for the meeting to be held in private, although a support person for the person being
counselled may be present, as well as someone you may have asked to attend as an observer; and
Keep a brief record of the meeting—this could be a diary note.
When to Counsel?

It is not always easy to decide when to move from providing informal comments on a
person’s work to a more formal approach.

By intervening at an early stage you can often prevent a problem escalating and
requiring more serious and possibly disruptive action further down the track.

If you encourage a free flow of information in the workplace and open, two-way
communication is the norm, it will be easier for you to identify performance problems
when and if they do arise, and deal with them promptly.
Who should give the Counselling?
 In most cases it is your responsibility as a manager to provide counselling to your
staff in relation to work performance.
 However, in circumstances where performance is affected by factors outside the
workplace, for example if a person has a problem with drugs or alcohol or has
difficulties in their private life, it may be appropriate, after an initial discussion, to
refer the person to a staff counsellor or counsellor from an Employee Assistance
Program (EAP).
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Performance Management System
 For instance, if you are faced with having to give a person critical feedback about
their performance and you feel uncertain about your approach, you may wish to
contact the EAP to obtain advice on how to best frame the discussion.
 You may also wish to consult a more senior manager or contact your human
resources area for advice.
 In some cases it may be appropriate to involve a professionally qualified counsellor
outside your agency.
 A referral should be arranged only with the person’s consent.
Where should you Counsel?
 Generally, people should be praised in public and criticized in private.
 It is advisable first to let a person know they have done a good job and then, for
example, to tell them that you intend to mention this at the next meeting.
 Where formal counselling is to be done, the discussion should ideally be held in a
place which is private and free from distractions.
 Your office, if you have one, may be appropriate but, in some situations, a more
neutral meeting place away from the immediate work area may be preferable.
 Where possible, a suitable time for the discussion should be agreed in advance and
sufficient notice given to allow both yourself and the staff member to prepare
adequately.
The importance of agreed outcomes

To achieve the best results, counselling, like feedback, should be based on open, twoway communication.

You should work with a person to generate an agreed plan of action, establishing and
articulating the needs of both the manager and the staff member.

Focus on future outcomes rather than dwelling too much on what has happened in the
past.
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Performance Management System

Your aim is to produce an improvement in the person’s performance and for this to
happen you should, first, agree that an improvement is required and, secondly, agree
on the steps which should be taken to achieve it.

It is also important that you establish a time frame to achieve your agreed goals and to
review the success of your strategy.
What are the options if Counselling doesn’t achieve the expected outcome?
The expected outcome of counselling is in most circumstances an improvement in work
performance.
If a person’s work performance does not improve in response to counselling there are a number
of options available. These include:
 re-arranging the person’s duties;
 movement to an area where a person’s skills may be better utilized.
 procedures for dealing with underperformance
Counselling for poor performance
Good practice suggests that, before any written warning is issued to a person about
underperformance, Counselling should take place, observing the following points:
o You should discuss the work standards expected of the person and provide
appropriate assistance to enable the person to meet those standards;
o You should make clear to the person where their work is below standard and set goals
for improvement over an agreed period;
o You should make records of counselling sessions, signed by both parties; and
o You should give the person the opportunity to explain any reasons for
underperformance.
o You must use your own judgment to determine the length of time allowed for
improvement once you have identified a performance problem but it is best to deal
with the issue in a proactive way.
o There needs to be a balance between the need to treat people fairly and equitably and
your responsibility for maintaining the effectiveness of your workplace, bearing in
mind the impact one person’s underperformance may have on other members of your
staff.
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CASE STUDY: PERFORMANCE APPRAISAL AND ITS NEGATIVE
FEEDBACK
A performance appraisal system had been established in that firm several years ago. The
management, with the help of consultants, conducted several innovative experiments and
introduced many improvements in their existing system. The company believes that the system
of performance appraisal is a strong tool and if it is wrongly rated, the results may mar. It printed
on the format, a flowchart with full details mentioning dates and months for execution. At first,
it would go to the appraisee who would write down, if any, all his non-routine and excellent
achievements in the self-appraisal column. Then the rater, his immediate boss would, put his
remarks on this and would rate the appraisee by ticking ‘outstanding, good, fair and
unsatisfactory’ on the columns of quality of output, job knowledge, decision making,
communication skills, quality of work, human relations, planning and organizing, creativity and
initiative, development of sub-ordinates and team members, leadership and motivational skill,
reliability under pressure, time management, etc. The reviewer would thoroughly review column
by column and would give his own opinion. Before it was sent to the top management for better
transparency the signature of the appraisee was obtained. Clear guidelines for filling up the form
were also given. This system was in vogue and satisfied all levels of executive and above. The
management took pride in this system, which resulted in retention of employees.
The blank form was given to SD Mehra, Manager (HR), a very sincere and highly dedicated
employee, who had achieved ‘outstanding’ rank for the last six years, for writing in the selfappraisal column. He did certain critical jobs during the year and wrote three. One, the industry
suffered a shortage of water during summer, which affected their industrial canteen also. Mehra,
who was also the in-charge of the canteen, went to the dam from where they receive the water.
He found the pipeline supplying water to the industry’s main pump during the night time every
day. One night, he went along with his assistant and observed to his surprise that an employee of
the dam had closed the valve of their pipeline and had opened another valve for supply of water
to another company. They caught hold of that person who confessed that he was doing this for
some illegal gratification from that company. He stopped this malpractice and continued to visit
that place during nights for more than a week. The problem of artificial scarcity of water was
solved with his initiative. Two, there was an accident just outside the factory’s gate where one of
the employees was killed by a speeding lorry. It was about 2:15pm when Mehra received this sad
news. He rushed to the spot and identified the employee. The doctor of their first-aid was
brought who declared the employee dead. He took the responsibility of breaking the news to his
family staying at a village at a distance of 12kms. He did this job very cautiously and delicately.
He met the police, who had already reached the accident spot and completely involved himself in
the whole job of police formalities, post-mortem of the body, etc. Due to some politicians
interference, the family members refused to accept the body till the management promised a job
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for one of the family members of the deceased. Mehra made successful negotiations with the
family, which gave up its agitation and accepted the body for cremation. He received the
appreciation letters from MD for those two successful achievements. Three, once Mehra
arranged a meeting for finalizing a three-day in-house training programme at one of their group
companies, 73 kms. away. He was to go there along with his three colleagues. The driver was
told to make the jeep ready. At that time, Mehra could guess from the driver’s language that he
was not interested going there. Next morning, they were to start by 7 a.m. and all four were
present. The driver phoned saying that his daughter was sick and he could not come to duty.
Mehra was firm in his resolve that ‘Our programme goes on as usual and there shall be no
postponement. I shall drive the jeep”. Others said that long drive on a rough road could be
tiresome and advised him to postpone the meeting. But Mehra was firm and said, “One employee
cannot disturb any of our scheduled programmes”. He drove the jeep to and fro and finished the
job successfully. Having written these three achievements in the self-appraisal column, he
handed them over to his immediate boss, KM Singh, Sr. Manager (HR), in a confidential
envelope.
KM Singh, who is known to be a procrastinator and lethargic, kept pending all appraisal forms
till last day. Further, he had three enquiry reports for study and comments. Out of these, one was
a case of suspension pending enquiry. He had kept pending all these reports and appraisals,
which had now become urgent. His boss was pressurizing him to complete these jobs
immediately. KM Singh had decided the priorities and took up the suspension pending enquiry
case first. It took more than a day. He then began rating nine appraisals hurriedly and completed
the job haphazardly without any concern for the consequences.
The form, with comments of the rater and reviewer, came back to Mehra for his signature. He
was shocked and reacted very sharply. It was an ‘unsatisfactory’ appraisal which he had seen for
the first time. The cool and gentle Mehra lost his patience. He now began thinking. KM Singh
wanted to promote his junior, Srikant, and had deliberately spoiled his appraisal. He wondered
whether he had read the three achievements and the appreciation letters of MD. ‘Outstanding’
continuously for six years and now ‘Unsatisfactory’! He understood the ulterior motive
interiority of his boss who had developed an inferiority complex of late. He thought, KM Singh
cannot be called a true representative of management.
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QUESTIONS FOR DISCUSSION
1. In this case study, what should Mehra do now?
2. Mehra wrote three points that he considered as critical jobs, would you agree?
3. What could be the reasons for KM Singh’s bad attitude towards Mehra?
4. We have seen the negative feedback in this case. What is the positive feedback?
SUGGESTED SOLUTIONS
1. In this case study, what should Mehra do now?
A: The best alternative left for Mehra would be to bring to the notice of his MD, by giving
an authentic letter mentioning all his ‘outstanding’ achievements in the past successive years
and highlighting the three crucial jobs he undertook recently on his own initiative. Or, he
should take an appointment with the MD and narrate all his achievements. He should not
accept the ranking of KM Singh. In fact, at the first instance, he should meet KM Singh and
put forward his point of view to get justice, if his achievements were all genuine.
2. Mehra wrote three points that he considered as critical jobs, would you agree?
A: I agree that all those were critical jobs. He completed all the three jobs successfully. He
took initiative to find out solutions to those situations and brought positive results.
3. What could be the reasons for KM Singh’s bad attitude towards Mehra?
A: Probably, KM Singh knew Mehra and his abilities. But he developed a dislike for Mehra
to promote his junior, Srivastav. He had also developed an inferiority complex, probably in
comparison with the knowledge possessed by Mehra. This attitude was unethical. These
types of prejudices in any organization would lead to awful industrial relations. The top
management should take immediate action to curb this type of attitude.
4. We have seen the negative feedback in this case. What is the positive feedback?
A: in the first paragraph of this case study, it was clearly mentioned that a flowchart with
full details was printed on the format introduced by the company for appraisal system. Every
aspect was clear. The rater and reviewer should thoroughly know their responsibilities and
should believe that this system, if it was done without any personal prejudice, would bring
positive feedback. One should strictly follow the objectives and guidelines of the
performance appraisal system and should sincerely fill up the columns without any bias.
Personal biases should not have any place.
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BIBLIOGRAPHY
Websites:

Http://managementhelp.org/trng_dev/evaluate/evaluate.htm

http://en.wikipedia.org/wiki/Performance_measurement

http://smallbusiness.dnb.com/human-resources/workforce-management/1384-1.html

Http://www.ifets.info/journals/5_2/eseryel.html

www.exlorehr.com

www.performancemanagement.naukrihub.com

http://www.orau.gov/pbm/documents/overview/doe-nv.html
Books:

Armstrong, Michael, Performance Management, Kogan Page Publication.
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