Performance Evaluation

1. 1
Performance ManagementPerformance Management
Sutapa Bhattacharjee, GPHR
Assistant Professor
IBA, DU
1
PERFORMANCE MANAGEMENTPERFORMANCE MANAGEMENT
• Performance management is an ongoing process
of communication between a supervisor and an
employee that occurs throughout the year, in
support of accomplishing the strategic objectives of
the organization.
2

2. 2
What PAS entail?What PAS entail?
@ Individual level:
o Give feedback on performance
o Identify training as well as growth potential
o Help improve, not simply evaluate past
performance
(cont.)
3
@ Administrative level:
o sound basis for validation and
evaluation
o accountability and obligations can be
met
o objective, job related standards
4

3. 3
Performance ReviewPerformance Review GOALSGOALS
• Assessment of past performance
• Feedback
• Management of subordinates
• Identifying potential for promotion or
transfer
• Improvement of managers’
motivation
5
• Training and development needs
assessment
• Strengthening of relationships
• Assist and encourage employee
initiative
• Maintenance of performance levels
6

4. 4
• Wage and salary administration
• Grievance communication
• Checking effectiveness of other HRM
policies
• Identification and removal of obstacles
• Establishment and development of job
competencies
7
The Appraisal ProcessThe Appraisal Process
8

5. 5
The Goal Setting ProcessThe Goal Setting Process
PERFORMANCE PLANNING
Performance planning fixes
accountability, sets role boundaries,
helps better time management and
requires time at least once a year.
It also helps a manager to understand
and analyse his contributions and
increase his responsibility for continuous
performance.
9
Dimensions of PMSDimensions of PMS
The challenges within the framework:
 In the context of organization, performance
management is time bound as well as role
specific.
 Maximum output is a relative term.
 Appraisal score is affected by the
performance of comparable individuals. (the
input-output relationship).
 Extraneous factors affect individual
performance (Dyadic performance,
technical guidance, resource allocation,
autonomy etc).
10

6. 6
Provides a
framework
for
performin
g the role.
11
PERFORMANCE PLANNING
Performance planningPerformance planning
12
In the absence of an upper echelon guideline,
managers set new goals for the dept.
 How did we perform last year?
 What influenced our performance?
 How can we improve?
 What new challenges can we undertake?
 What will be different this year?
 How do we improve our quality?
 What new process, technology or system do we
introduce?

7. 7
KPAKPA
The idea behind KPA is to inculcate
a planning orientation and role
clarity.
13
1. Do the identified KPAs indicate what the
incumbent is expected to do (as opposed to
dept)?
2. Do these include all significant contributions
expected form his role?
3. Do these indicate the priority areas of work?
4. If all KPAs are well done, can the appraisee be
labeled a good performer?
5. Are the targets set challenging? Do these
stretch the incumbent’s capabilities
moderately (than being routine)?
14

8. 8
6. Are these comprehensive?
7. Do these specify the standards of
performance?
8. Do these take into consideration realistically
the conditions under which the appraisee is
expected to function?
9. Do these satisfy both appraiser and appraisee?
10. Has adequate time been spent on the process
of identifying KPAs and gaining role clarity?
15
A major challenge in designing KPAs
for a job includes: the CONTEXT.
The ‘role’ is affected by the dynamic
changes in business process and growth in
response to environmental challenges.
The role changes with time.
The role is affected by stakeholders
expectations.
16

9. 9
•Main activities?
•Exactly what he does?
•Time spent?
•Unique contribution of the post?
•Rating vs performance
•LM & incumbent
•Context of
position holders
Job - KPAs
List of
tasks
Weights Appraisal
•Weights on
priorities
•Actual perf.
challenges
KPA-SETTING PROCESS
17
The outcome?
KPAs serve as anchors with the help of which
individual employee may gain insights into
his own performance – capabilities and
developmental needs.
18

10. 10
Appraisal MethodsAppraisal Methods
Three approaches:
• Relative standards
• Absolute standards
• Objectives
19
Relative standards:
• Employees are evaluated by comparing
their performance to the performance of
other employees.
20

11. 11
Evaluating absolute standards:
• An employee’s performance is measured
against established standards.
• Evaluation is independent of any other
employee.
21
22

12. 12
Evaluating absolute standards:
• Behaviorally Anchored Rating Scales
(BARS): Appraiser rates employee on
factors which are defined by behavioral
descriptions illustrating various dimensions
along each rating scale.
23
Observation & DataObservation & Data
Collection for AppraisalCollection for Appraisal
• Measurement of performance using
information from:
o personal observation
o statistical reports
o oral reports
o written reports
• Comparison of actual performance with
standards.
24

13. 13
Performance AnalysisPerformance Analysis –– for Counseling &for Counseling &
development needs Identificationdevelopment needs Identification
Increasing self awareness.
Appraiser / appraisee… understanding
each other’s expectations, difficulties and
perceptions, and grow close in the
process of planning for improving
performance.
Identifying development needs.
 Some needs attended by training division (job rotation, training
programs etc)
 Other needs by appraisers – more guidance, on-the-job training and
discussion with appraisee
 Lastly, by appraisee himself – self-study etc
25
FactorsFactors that canthat can DistortDistort
PMSPMS
26

14. 14
• Leniency error
• Each evaluator has his/her own value
system.
• Some evaluate high (positive leniency) and
others, low (negative leniency).
• Halo error: Evaluator lets an assessment of
an individual on one trait influence evaluation
on all traits.
27
• Similarity error: Evaluator rates others in
the same way that the evaluator perceives
him or herself.
• Central tendency: The reluctance to use
the extremes of a rating scale and to
adequately distinguish among employees
being rated.
28

15. 15
• Inflationary pressures: Pressures for
equality and fear of retribution for low ratings
leads to less differentiation among rated
employees.
• Inappropriate substitutes for performance:
Effort, enthusiasm, appearance, etc. are less
relevant for some jobs than others.
• Recency error: The recent performance
events become overriding factors of
consideration for the entire year.
29
• Impression management:
• If employee positively influences the
relationship with the supervisor, he/she is
likely to receive a higher rating.
30

16. 16
Attribution Theory (and Error)
• Evaluations are affected based on whether
someone’s performance is due to
 internal factors they can control
 external factors which they cannot
• If poor performance is attributed to internal
control, the judgment is harsher than when it
is attributed to external control.
31
Creating an EffectiveCreating an Effective
Performance AppraisalPerformance Appraisal
SystemSystem
32

17. 17
Creating An Effective PerformanceCreating An Effective Performance
Management SystemManagement System
Use Behavior-Based Measures:
• Measures based on specific descriptions of
behavior are more job-related and elicit more
inter-rater agreement than traits, such as
“loyalty” or “friendliness”.
33
Combine Absolute and Relative Standards:
• Absolute standards tend to be positively
lenient; relative standards suffer when there is
little variability.
• Combining the standards tends to offset the
weaknesses of each.
34

18. 18
Provide Ongoing Feedback:
• Expectations and disappointments should
be shared with employees on a frequent
basis.
• Coaching is an integral part of performance
management. Feedback need not be
formal and annual!
35
Use Multiple Raters:
• Increasing the number leads to more reliable
and valid ratings.
o Peer evaluations.
o Upward appraisals.
o 360-Degree appraisals.
36

19. 19
Train Appraisers:
• Untrained appraisers who do poor
appraisals can demoralize employees and
increase legal liabilities.
37
Why performance appraisalWhy performance appraisal
programs failprograms fail
• Lack of top management support
• Lack of skill in conducting
• Role conflict
• Lack of commitment and ownership of
employee
• Lack of supervisor interest
• Ritual
• Perceived fairness and organisational politics
38