PERFORMANCE MANAGEMENT

 Performance management is the process of creating a work environment of setting in which people are enabled to perform to the best of their abilities. Performance management system that beging when a job is defined as needed. It ends when an employee leaves your organization. Many writers and consultans are using the term “performance management” as substitution for the traditional appraisal system. I encourage you to think of the term in theis broader work system context. A performance management system included the following actions.

l Develop clear job descriptions.

l Select appropriate people with an appropriate selection process.

 l Negotiate requirements and accomplishments performance standards, outcomes, and measures.

l Provide effectiveness orientation, education, and training. l Provide ongoing coaching and feedback.

l Design effective compensation and recognition systems that reward people for their contributions.

 l Provide promotional/career development opportunities for staff.

 l Assist with exit interviews to understand WHY valued employees leave the organization.

SYSTEMS THEORY AND HUMAN PERFORMANCE

One of the first people to generate interest in management systems was Frederick W. Taylor. His interest in the field evolved from his observations of laborers. He noted they use the same standardizes shovel size to work with no matter what type of material they were carrying.

What he developed as a result was a method of work improvement and greatly increased productivity. With success under his belt, he was prompted to investigate whether his methods might not be applied by supervisors in a variety of work settings.

 Several things resulted.

First, his experiments gave rise to intensified interest and increasing efficiency of workers. Industrial engineering, for example, is a direct result of Taylor’s work.

 Second, these studied prompted people to begin to look at the practice of management itself and to recognize that a manager’s activity is distinct from the activity of subordinate workers.

Third, these studies led to further developments in the examination of organization from a systems point of view.

General systems theory suggests that the most useful model for examining organizations from a systems point of view is a living or adaptive system.

Living systems must be capable of adapting to their environment as well as influencing their environment.

Likewise with organizations; if organizations are not adaptive, then they die out like the brontosaurus, a dinosaur that became extinct because it was unable to adapt to change in its environment.

A more useful kind of system in the organizational settings is the guided system.

The guided system has a built-in method for evaluating output and feeding back that evaluation so that inputs and outputs are connected.

 The guided missile and the thermostat are guided systems. Both have a built-in system that regulates performance and corrects course. But they still suffer the disadvantage of not being able to change their goals or seek new targets.

BEHAVIOUR & ITS IMPACT

ANALYSING HUMAN PERFORMANCE

The manager needs a scientific technology for dealing with human performance problems. The characteristic of such a technology include the following:

1) Predictability. We can say in advance what will occur if certain conditions are present in the job situation.

2) Measurability. We can not only predict what will happen but we can also measure change in operational results or changes in employee behaviour as the result of instituting change in the job.

3) Understandability. We know the cause-and-effect relationships between the behavioral events we are examining.

4) Controllability. We have the ability to change the conditions under which behaviour is taking place and to produce the outcomes we predict.”

THE ABC’S OF BEHAVIOUR AND PERFORMANCE

 If we are to develop a technology for analyzing behaviors, there are some basic principles worth knowing about. In school we learn our ABC’s; it is not oversimplifying matters to suggest that there are ABC’s of behavior as well.

1) Antecedent. The antecedent is what happens before the behaviour occurs. It is a stimulus that provokes the behaviour and is often in the form of cues from the environment including, but not limited to, something that someone else says or does, the job routing cards, standards or objectives, notices on the employee bulletin board, machinery or equipment – any cues for employees suggesting they behave in certain manner.

2) Behaviour. This is something that the employee says or does on the job. It is usually an overt action such as filing a report, stamping a piece of paper, painting a part, coming to work on time-any one of a multitude of behaviors in which an employee engages in getting a job done.

3) Consequence. This is what happens after the employee behaves in a certain manner on the job. Consequences of behaviour include bonuses, overtime pay, reprimands for excessive scrap, compliments for high-quality work, derision or compliments from fellow employees, or even attending a sales meeting in Honolulu.

Antecedent

1) Does the employee know what is expected? Are the standards clear? Have they been communicated? Are the realistic?

Behaviour

2) Can the behavior be performed? Could the employee do it if his or her life depends upon it? Does something prevent its occurrence?

 Consequence

 3) Are the consequences weighted in favor of performance?

4) Is there feedback about the consequences in relation to job performance? If yes, is the feedback immediate, specific, positive?

5) Are improvements being reinforced? Do we note improvements even though the improvement may still leave the employee below company standards? Is reinforcement specific?

PERFORMANCE MANAGEMENT CEN TRE

 “In surveys of 700,000 people, Gallup found that the longer people stay with an organization, the less engaged they become So, what’s an organization to do to manage performance and keep employees engaged? Gallup’s research suggests that you need to hire people who have the talents, skills, behavioral characteristics and drive that you need because “a person’s talents do now change much after he is hired, and that a person will improve the most in his areas of greatest talent.”

Gallup suggests these two criteria “serve as the blueprint for a new kind of organization. It will be an organization that selects for talent, holds people accountable for performance outcomes, challenges people to reach these outcomes by capitalizing on their greatest talents, and uproots the Peter Principle by offering people a way to build their careers by building on their greatest talents. Based on their research, the Gallup organization suggests there are four disciplines necessary for effective performance management.

l “Hold all employees accountable for their local performance outcomes.

l Teach all employees to identify, deploy, and develop their strengths.

 l Align all performance appraisal and review systems around identifying, deploying, and developing employee strengths.

l Design and build each role to create world-class performers in the role.”

PERFORMANCE APPRAISAL

People differ in their abilities and aptitudes. Therefore, it is necessary for management to know these differences so that the employees having better abilities may be rewarded and the wrong placements of employees may be rectified through transfers.

The individual employee may also like to know the level of his performance in comparison to his fellow employees so that he may improve upon it. Thus, there is a great need to have suitable performance appraisal system to measure the relative merit of each employee.

The basic purpose of performance appraisal is to facilitate orderly determination of an employee’s worth to the organization of which he is a part.

However, a fair determination of the worth of an employee can take place only by appraising numerous factors, some of which are highly objective, as for instance, attendance; while others are highly subjective; as for instance, attitude and personality.

The objective factors can be assessed accurately on the basis of records maintained by the Human Resource or Personnel Department, but there are no device to measure the subjective factors precisely. Notwithstanding this, appraisal of these factors must be done to achieve the full appreciation of every employee’s merit. Performance appraisal goes by various names, such as performance evaluation, progress rating, merit rating, merit evaluation.

Need for Performance Appraisal

Now we will discuss the need for performance appraisal which can be classified as follows:

1) Employee's Performance: Appraisal act as an aid to create and maintain a satisfactory level of performance by the employees in their present jobs. The process can be used as a channel for open discussion of performance.

2) Employee’s Development: The appraisal may highlight the needs and opportunities for growth and development of a person. Growth may be accomplished by self-study, training courses, special assignments etc.

3) Supervisory Understanding: A periodic appraisal encourages the supervisors to observe the'behaviour of their sub-ordinates. If carried out properly, the appraisal can facilitate mutual understanding between them.

4) Guide to Job Changes: Appraisal aids the decisions for promotions and transfers, discharges etc.

 5) Wage-Salary Administration: Performance appraisal helps to remunerate the employees in a suitable way. Also special increments andlor merit increments are given on the basis of an~raisal.

6) Coaching and Counselling: Appraisal serves as a base for coaching and counselling of individual by the supervisor. Strengths and weaknesses of the individual can be found through appraisals and necessary coaching and/or counselling can be done.

7) Removing Discontent and Dissatisfaction: Appraisals when done systematically, are found to remove discontent amongst employees. 8) Validating Personnel Programmes: Any training programme can be analyzed for its usefulness through appraisal of the employees after the training has been imparted.

Methods of Appraisal

 There are various methods of merit rating which may be classified into:

 – Traditional Methods

– Modern Methods

These are shown as hereunder:

Traditional Methods

Traditional methods are very old techniques of performance appraisal. They are discussed below.

 (i) Unstructured Appraisal:

Under this, the appraiser is required to write down his impression about the person being appraised in an unstructured way. However, in some organizations, comments are required to be grouped under specific headings, such as quality of job performance, reasons for specific job behaviour, personality traits, and development needs. This system is highly subjective and has got its merit in its simplicity and is still in use, especially in the small firms.

 (ii) Ranking Method:

This is the simplest of all methods. The appraisal consists of ranking employees as more or less efficient by interpersonal comparison of overall qualities. This method may be conveniently adopted if the number of employees is small and work performance is measurable. The ranking thus made involves subjective appraisal of employees without any common standards. A variant of the ranking method is the paired-comparison method, in which employees are compared and ranked in pairs. Each employee is compared with the other employees in a group, one at a time. The results of these paired comparisons are tabulated and a rank is assigned to each employee.

 (iii) Forced Distribution Method:

 The basic assumption made for using this method is that employees are distinguishable as outstanding, above average, average, below average or poor; and their number conforms to a normal frequency distribution, e.g., 10% each in the highest and lowest categories, 20% each in the above average and below average categories, and 40% in the average category. The rater is required to distribute the employees in the five categories on the basis of their overall performance and attributes.

 (iv) Graphic Rating Scales:

This method is similar to the Rating- scale Method, except that the degrees of qualities or attributes on which employees are to be appraised are indicated on a graph or chart. The scale of attributes may be numerical-alphabetical or descriptive-adjective. Thus different degrees of an attribute may be stated as exceptional, above average, below average, or poor and assigned numbers as 5, 4, 3, 2, 1.

(v) Check List:

Employee appraisal under this method involves listing of a number of statements about the performance and behaviour of the employee and the rater checks these statements indicating whether a statement applies or does not apply to the employee or there is a doubt. Afterwards, values (or weights) are assigned to the statements depending upon their respective importance. The final rating of the employee is taken as the average of the scale value of all statements that the rater has checked.

 (vi) Critical Incident Method:

This method involves employee appraisal on the basis of events or incidents and the employee’s reactions to them reflecting positive or negative aspects of his behaviour. A continuous record of incidents is maintained by the supervisors and numerical scores are assigned according to the nature of employee’s reaction to the particular events.

(vii) Field Review Method:

Under this method, the supervisors are interviewed by an expert from the personnel department. The expert questions the supervisors to obtain all the pertinent information on each employee and takes notes in his note book. Thus, there is no rating form with factors or degrees, but overall ratings are obtained. The workers are usually classified into three categories: outstanding, satisfactory and unsatisfactory. The success of Field Review method depends upon the competence of the interviewer. If he knows his job, he can contribute significantly to accurate appraisals. Field Review method relieves the supervisors of the tedious writing work of filling in appraisal forms. It also ensures a greater likelihood that the supervisors will give adequate attention to the appraisals because the personnel department largely controls the process. Superficial judgement can be eliminated, if the appraiser probes deeply.

Modern Methods

 There are two important methods of performance appraisal which are used by the modern organizations. The first is Management by Objectives which represents result-oriented appraisal. The second is BehaviourallyAnchored Rating Scale which is based behaviour-rating, the behaviour of the subordinates.

(i) Management by Objectives

It was Peter Drucker who proposed goal setting approach to performance appraisal which he called ‘Management by Objectives and Self Control’. This approach was further strengthened by Douglas Mc.Gregor. McGregor was concerned with the fact that most traditional appraisal systems involved ratings of traits and personal qualities that he felt were highly unreliable. Besides, the use of such trait ratings produced two main difficulties:

 (1) The manager was uncomfortable about using them and resisted making appraisals, and

(2) it had a damaging effect on the motivation and development of the subordinate. Goal setting approach or “Management by Objectives” (MBO) is the same as behavioural-approach to subordinate appraisal, actually called “work planning and review” in case of General Electric Co., U.S.A. Under this approach, an employee is not appraised by his recognisable traits, but by his performance with respect to the agreed goals or objectives. Thus, the essential feature of this approach is mutual establishment of job goals. The application of goal setting approach to performance appraisal involves the following steps:

– The subordinate discusses his job descriptions with his superior and they agree on the contents of his job and the key results areas.

– The subordinate prepares a list of reasonable objectives for the coming period of six to twelve months. – He sits with his superior to discuss these targets and plans, and a final set is worked out.

– Check-points are established for the evaluation of progress, and the ways of measuring progress are selected.

 – The superior and the subordinate meet at the end of the period to discuss the results of the subordinate’s efforts to meet the targets mutually established.

Behaviourally Anchored Rating Scales

Behaviourally Anchored Rating Scales (BARS) are designed to identify the critical areas of performance for a job, and to describe the more effective and less effective job behaviour for getting results. Performance is evaluated by asking the rater to record specific observable job behaviour of an employee and then to compare the observations with a “behaviorally anchored rating scale”. As a result, the supervisor will be in a position to compare the employee’s actual behaviour with the behaviour that has been previously determined to be more or less effective. Proponents of BARS claim many advantages of this approach. They argue that such a system differentiates among behaviour, performance, and results, and consequently is able to provide a basis for setting developmental goals for the employee. Because it is job-specific and identifies observable and measurable behaviour, it is a more reliable and valid method for performance appraisal. Empirical studies of behaviourally anchored rating scales (BARS) have provided a fertile ground for study by both theorists and practitioners. The BARS experience has helped to clarify three major controversies of the appraisal process. One was the previously discussed issue of rating content (trait vs. job related). The second controversy involved the multidimensional nature of performance. The administrative uses of appraisal had encouraged rating systems to produce an overall measure of performance, which tended to mark differences in performance in the key result areas (“performance dimension”) critical to job results. The third controversy involved the issue of the most effective way to anchor the rating scales (numerical or behavioural). By anchoring the scales behaviourally, the BARS approach was expected to produce more valid and reliable results by reducing measurement errors (leniency, halo effect, central tendency, and so on).