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Performance Management & Appraisal

Topic Outline

Defining performance management & appraisal Performance appraisal objectives Benefits of performance appraisal Pitfalls & Problems with performance reviews Styles of appraisal interviewing Guidelines for conducting PA interview: Before, during & after Summary of performance management and appraisal issues
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Performance Management
Performance management involves: The establishment of performance standards (organisational, group and individual) Monitoring of actual performance & The construction of action plans to review standards, deal with problem areas and take appropriate steps to improve performance.
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PART - I Performance Appraisal


Definition
Systematic approach to evaluate employee performance, characteristics and/or potential With a view to assisting decisions in a wide range of areas such as pay, promotion, employee development and motivation.
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Performance Appraisal Objectives


To review past performance
To facilitate career counselling/development

To improve future performance


To set performance objectives

To identify training needs

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Performance Appraisal Objectives (contd)


To aid salary review
To improve communications To assist manpower planning/recruitment To assess potential To provide feedback

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Performance Appraisal Benefits


Organisational level: Vertical integration - linking and aligning business, team and individual objectives Functional integration - linking functional strategies in different parts of the business HR integration - linking different aspects of HRM e.g. organisational development, human resource development, compensation and benefits, manpower planning
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Performance Appraisal Benefits


Management (supervisor) level:
Opportunity to learn about employees future intentions in the organisation (i.e. career expectations Opportunity to clarify and reinforce important goals and priorities Opportunity to motivate staff

Opportunity to receive feedback about his/her ability as a manager and the employees concerns, ideas etc. about the job
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Performance Appraisal Benefits


Individual (employee) level:
Translates corporate objectives into individual goals Allows individual to receive feedback on how his/her performance measure against expected performance Encourages the generation of an individual development plan Two-way communication and involvement
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Problems & Pitfalls


Halo Effect Opposite of Halo Effect Central Tendency A tendency to rate high on one quality which may influence a higher than deserved rating on another quality, such as rating someone high because you personally like him/her. A rating of unsatisfactory on one quality may influence a lower than deserved rating elsewhere, such as rating someone low because you do not like his personal style. Rating performance as average or around the midpoint. This is the most common and serious of the rater tendencies. Basing the rating on recent performance on a project rather than overall performance throughout the past year. Allowing past performance appraisals to unjustly influence current ratings. Over-rating employees in jobs held in high esteem and under-rating employees in lower level jobs or those held in low esteem. Rating an employee higher than deserved because of similar personality characteristics as the rater.

Recent Behaviour
Spill over effect Status Effect Same as me Different from me Personal bias/ prejudice

Rating an employee lower than deserved because of dissimilar personality characteristics from the rater.
Rating affected by national origin, age, sex, race, religion, physical characteristics, manner of speech, etc.

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Problems & Pitfalls

Subjectivity Lack of two-way Communication

Mutually agreed outcomes?


Pre-determined rating?

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Styles of appraisal interviewing


Tell & sell
Appraiser is directive and acts as judge who communicates evaluation and instructs steps for improvement

Tell & listen


Appraiser is consultative and acts as a judge/counsellor who communicates evaluation, listens to response and deals with reactions
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Styles of appraisal interviewing


(contd)

Joint problem-solving Appraiser is participative, facilitating two-way discussion, jointly tackles problems and jointly agrees remedial action.

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Conducting performance appraisal interviews The following section outlines the key issues which result in effective performance appraisal interviews: Before During After

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Before the Appraisal


Reflect on purpose What do you want to achieve? Your objectivity?

Mutually agree time and place (interruptions, seating etc.)


Joint preparation past performance, future objectives Plan interview structure
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During the Appraisal


Establish rapport, ice-breaker Outline interview objective and structure invite input

Clear note-taking
Self-reflection synopsis

Start with positives


Active listening, questioning, body language etc.
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During the Appraisal (contd)


Facts vs. personality Address each issue as per appraisal form Identify training needs & agree development plan Keep objectives SMART S - specific M - measurable A - agreed R - realistic T - time-bound
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After the Appraisal

Follow-up on action items Self-reflection to see where you can improve

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Performance Evaluation & Documentation


Criteria for Evaluation
Accuracy
Behaviour Completeness Consistency

Individualized
Measurable Results Timeliness

Efforts

Overall rating

Once the evaluation form is completed, it is recommended that you review it with your immediate higher-up before meeting with the employee to ensure both levels of management are in agreement regarding the employees performance.
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PART - II Potential Appraisal


(To be done in by the HOD/Unit Head with the reporting authority of the appraised & Not to be shown to the assessed)

Definition
Process of assessing Managerial potential of the employee, Deals with the question of Whether or not they have the ability to Higher Positions in the future & More responsibility

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Potential Appraisal Objectives


Identify high potential employees, Determine the promotability of an individual to a higher position

Chalk out his career plan


Build an organizational competency model and Design human resource processes to retain them
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Dealing with workhorses


Too Tricky
Some can perform very well on routine tasks but have limited potential. Hence, their promotability is difficult and this creates frustrations for the employees. If promoted, they are unable to perform higher-level jobs and this too creates problems both for the individuals and the organization and we may end-up losing a good worker. Potential appraisal is more intricate and complex vis--vis Performance appraisal.
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Appraising the Potential


Areas of Focus
A. Rate employee according to his past achievements on the following grid.

Low Performance

High Performance

Low Potential

High Potential

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Appraising the Potential


Areas of Focus
B. C. Rate him/her according to his overall perceived potential Is he/she capable of being promoted to higher Position?
i. If Yes, to which position & when ____________________________________________________ ii. If No, why not? ____________________________________________________
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Appraising the Potential


Areas of Focus

D. Could he/she handle more responsibilities at the same/higher position?


i. If yes, what kind of responsibilities he/she can handle ____________________________________________________ ii. If No, why not? ____________________________________________________

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Appraising the Potential


Areas of Focus
E. What are the training needs of the employee? How do you plan to train him/her? What support do you expect from Human Resource Department?
________________________________________________ ________________________________________________

F. What would be his/her Career Path?


________________________________________________ ________________________________________________

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To summarise
PA = The evaluation of actual job performance against
previously set and agreed performance goals should take place at agreed time intervals.

It requires careful preparation by the appraiser which should facilitate a constructive dialogue between appraiser and appraisee. Actual performance is evaluated in terms of targets set, strengths and weaknesses and action plans.

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To summarise (contd)
The communication flow should be two-way. Interviewee/appraisee should have plenty opportunity to discuss issues The approach should be participative, with praise and criticism given as appropriate. Performance targets for the future should be agreed.

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