JIMMA UNIVERSITY

INSTITUTE OF EDUCATION AND PROFESSIONAL

DEVELOPMENT STUDIES
DEPARTMENT OF EDUCATIONAL PLANNING AND
MANAGEMENT

PERFORMANCE MANAGEMENT( EDPM -442)

PREPARED BY: MEBRATU TAFESSE

EDITED BY: ABEBE HUNDE

TADESSE ABERA

JIMMA UNIVERSITY
February,2011

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 Table of contents Page
Table of contents------------------------------------------------------------------------------------i
Module introduction--------------------------------------------------------------------------------iii
Module objectives----------------------------------------------------------------------------------iv
CHAPTER ONE: The Essence of Performance Management-------------------------------1
1.1. Concepts of Performance Management----------------------------------------------------1
1.2. Historical Development of Performance Management----------------------------------5
1.3. Purpose of Performance Management-----------------------------------------------------6
1.4. Scope of Performance Management--------------------------------------------------------7
1.5. Principles of Performance Management---------------------------------------------------8
1.6. Benefits of Performance Management-----------------------------------------------------9
CHAPTER TWO: Performance Management in Action-------------------------------------12
2.1. Performance Management Process--------------------------------------------------------12
2.2. Performance Management and Job Evaluation-------------------------------------------25
2.2.1 Job Evaluation--------------------------------------------------------------------------25
[Link] Concept of Job Evaluation---------------------------------------------------25
[Link]. Principles of Job Evaluation------------------------------------------------26
.[Link] Steps in Job Evaluation------------------------------------------------------27
2.3. Performance Coaching----------------------------------------------------------------------31
2.3.1. Concept of Coaching----------------------------------------------------------------31
2.3.2 Benefits of Coaching-----------------------------------------------------------------32
2.3.3 Coaching Styles-----------------------------------------------------------------------33
CHAPTER THREE: Operational Performance Management------------------------------38
3.1. Performance Measures----------------------------------------------------------------------38
3.1.1 Principles of Performance Measurement--------------------------------------------39
3.1.2 The Benefits of Performance Measurement-----------------------------------------40
3.2. Types of Measures--------------------------------------------------------------------------41
3.3. Purpose of Measuring Performance------------------------------------------------------43
3.4. Competency related performance---------------------------------------------------------44
3.5. Competence and competence analysis----------------------------------------------------45

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CHAPTER FOUR: Framework of Performance Management-----------------------------48
4.1 Issues of think- tank group---------------------------------------------------------------- 48
4.2. Monitoring and Evaluation----------------------------------------------------------------49
4.2.1 Performance Evaluation----------------------------------------------------------------50
4.2.2 Need for Monitoring and Evaluation------------------------------------------------ 52
4.3. Developing Integrated Performance Management System----------------------------53
4.4. Empowering Institutions-------------------------------------------------------------------56
CHAPTER FIVE: Factors for successful Implementation of Performance
Management system-----------------------------------------------------------------------------60
5.1. Team Performance Management---------------------------------------------------------60
5.2 Types of Teams------------------------------------------------------------------------------62
5.3. Feedbacking---------------------------------------------------------------------------------64
5.3.1. Dealing with feedback--------------------------------------------------------------65
[Link] Delivering feedback---------------------------------------------------------------66
[Link] Receiving Feedback---------------------------------------------------------------67
5.4. Reward System-----------------------------------------------------------------------------68
5.4.1. Purpose of rewarding-----------------------------------------------------------------69
5.4.2. Principles of Reward system---------------------------------------------------------69
5.4.3. Incentives and Rewards--------------------------------------------------------------70
5.5. Performance Problem Solving-----------------------------------------------------------72
5.6. Conducting Performance and Development Reviews--------------------------------79
CHAPTER SIX: Current performance Management Issues in Ethiopia----------------83
6.1. Result Oriented Performance Management--------------------------------------------83
6.2. Concept of Management by Objective-------------------------------------------------85
6.3. Definition of Business Process Reengineering(BPR)-------------------------------89
6.3.1 Specific goals of reengineering--------------------------------------------------90
6.3.2 Principles of Business Process Reengineering---------------------------------92
6.3.3 Characteristics OF business process reengineering---------------------------93
References---------------------------------------------------------------------------------------98

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Module Introduction
The module “Performance Management” has six units. The first unit deals with the
essence of performance management. It focuses on the definition, origin, purpose and
principle of performance management.

Unit two focuses on performance management in action. It discusses performance

management process which involves approaches to defining performance, importance of
diagnosis and some factors which influences management of performance as well as
concepts and ways of job evaluation and performance coaching.

Unit three focuses on operational performance management. It introduces the concept,

types and purposes of performance measures. Competency related performance,
competence and competency analysis also treated under this unit.

Unit four focuses on the framework of performance management. It deals with issues of
think-thank groups, definition, benefits of monitoring and evaluation to improve
organizational as well as employee’s performance.

Unit five emphasized on factors that contribute for successful implementation of

performance management system. It discusses the concept and types of team performance
management, way of providing and receiving feedback, the contribution of reward system
to enhance performance and mechanisms that may help to improve individuals and
organizational performance.

The last unit deals with current performance management issues in Ethiopia. It emphasizes
on concepts and importance of result oriented performance management, definitions,

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advantages and problems of management by objective and the concept of business process
reengineering.

Module Objectives
After the successful completion of this module, students will be able to:
 Define performance and performance management
 Distinguish the distinction between performance management and performance
appraisal
 Explain performance management process
 Apply performance management principle in educational organizations
 Identify factors that influence employees and organizational performances
 Suggest ways of improving individual and organizational performance
 Explain the concept of monitoring, evaluation and feedback
 Explain the difference between competency and result oriented performance
management
 Explain the concept of business process reengineering

CHAPTER ONE

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 The Essence of Performance Management
Unit introduction
This unit deals with the concept of performance management. It introduces the learners
with the concept, origin, purpose and principles of performance management. More over it
explains the difference and similarity that exist between performance management and
performance appraisal.

Objectives
At the end of this unit learners should be able to
 Define performance management and performance appraisal
 Explain the origin/historical development of performance management
 Distinguish the difference between performance management and performance
appraisal
 State the purposes of performance management
 List the principles of performance management

1.1 Concepts of Performance Management

Dear learners! What is performance management? Write its definition before you read the
material using your own words.
________________________________________________________________________
________________________________________________________________________
_______________________________________________________________
Good!
Performance management can be defined as working in partnership with workers or
teams of workers to improve future performance (Cardy, 2004) .Future improvement
requires accurate assessment of past and current performance. However, effective
performance management involves more than simply assessing the performance of
workers. It involves providing meaningful feedback, collaborating with workers to solve
performance problems and developing improved level of performance. Therefore,
performance management is considered as a comprehensive, integrated, continuous and

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flexible approach to the management of organizations, teams and individuals to enhance
their performance.

Performance management is also defined as the process of creating a work environment or

setting in which people are enabled to perform to the best of their abilities. It emphasizes
on the whole work system that begins when a job is defined as needed and ends when an
employee leaves the organization.

Performance management may be seen as a process that consolidates goal setting,

performance appraisal and development in to a single, common system to ensure the
employee’s performance in supporting the organizations strategic goals. The process
includes the practices through which the manager defines the employee’s goals and work,
develops the employees’ capabilities, and evaluates and rewards the person’s effort all
within the frame work of how the employee’s performance should be contributing to
achieving the organization’s goals.

Performance Appraisal
Dear learners! What is performance Appraisal? Explain its concept using your own words.
________________________________________________________________________
________________________________________________________________________
_______________________________________________________________

All organizations have some formal or informal means of appraising their employees’
performance. Performance appraisal means evaluating an employees’ current and/or past
performance relative to his or her performance standards. It assumes that the employee
understood what his or her performance standards were, and that the supervisor also
provides the employee with the feedback, development and incentives required to help the
person eliminate performance deficiencies or to continue to perform better(Dessler, 2005).

Performance appraisal is a system of review and evaluation of an individual or team job

performance. It is a systematic evaluation of the individual with respect to his or her
performance on the job and his or her potential for development. Performance appraisal is
a formal, structured system of measuring and evaluating an employee’s job related

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behaviors and outcomes to discover how and why the employee is presently performing
on the job and how the employee can perform more effectively in the future so that the
employee, organization and society can benefit.

Distinction between Performance Management and Performance

Appraisal

Dear learners! Please write the difference between performance management and
performance appraisal.
________________________________________________________________________
________________________________________________________________________
_______________________________________________________________

The term performance management and performance appraisal are some times used
synonymously, but they are different. Performance management is a comprehensive,
continuous and flexible approach to the management of organizations, teams and
individuals which involves the maximum amount of dialogue between those concerned.
Performance appraisal is a more limited approach which involves managers making top-
down assessments and rating the performance of their subordinates at an annual
performance appraisal meeting.

Performance management as a process involves giving feedback to employees on a more

consistent basis than the average annual review. Instead, an employee’s ability to exceed
or failure to meet goals may be monitored on a monthly basis. This provides the employee
with either the opportunity to receive compliments and rewards fairly regularly or to make
behavior changes sooner if performance is not up to the standard set.

When properly designed, performance management therefore never just entails meeting
with a subordinate once or twice a year to review employees’ performance. It means
setting goals that make sense in terms of the organization’s strategic needs. It is daily or
weekly interactions to ensure continuous improvement in the employee’s capacity and
performance. And involves continuously ensuring employee training and development

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needs to perform the job. An effective performance management system provides enough
guidance so that people understand what is expected of them. It provides enough
flexibility to individual creativity and strengths are nurtured. It also provides enough
control so that people understand what the organization is trying to accomplish.

The following table summarizes the difference between performance appraisal and
performance Management
Performance Appraisal Performance Management
Top-down assessment Joint process through dialogue
Annual appraisal meeting continuous review with one or more formal review
Use of rating Ratings less common
Monolithic system Flexible process
Focus on quantified objectives Focus on values and behaviors as well as objectives
Often linked to pay Less likely to be directly linked to pay
Bureaucratic –complex paperwork Documentation kept to a minimum
Owned by the human resource department Owned by line managers

Source: (Armstrong and Baron, 2005).

1.2. Historical Development of Performance Management

? Activity 1
1. Explain the concept of performance management?
2. What is performance appraisal?
3. Discuss the similarities and difference between performance management and
performance appraisal?

No one knows precisely when formal methods of reviewing performance were first
introduced. However, it was said that the first formal monitoring system evolved out of
the work of Frederic Taylor and his followers before world war I. Rating for officers in
the US armed services was introduced in the 1920s and this then spread to the UK, as
did some the factory-based American systems. Merit rating came to the force in the USA

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and the UK in the 1950s, and 1960s, when it was sometimes rechristened “performance
Appraisal.” Management by Objective then came in the 1960s and 1970s and experiments
were made simultaneously with the critical incident technique and behaviorally anchored
rating scales. A revised form of result –oriented performance appraisal emerged in the
1970s.

The concept of performance management has been one of the most important and positive
development in the sphere of human resource management in recent years. The origins of
human performance systems analysis can be traced from the late 1950’s and early 1960’s.
These were times of activism and social reform in the United States. In the early 1960’s a
number of behavioral scientists and their graduate students made the decision to take what
they had learned in their learning laboratories and apply those lessons to real world issues
of learning and performance.

The term ‘Performance Management” was first used in the 1970s by Beer and Ruh.
However, it did not become a recognized process until the latter half of the [Link]
term first came in to wide use of in the human resource in early 1990s. Although objective
setting, assessment and review and performance related pay were becoming common prior
to that period, it was not until the late 1980s that organizations started to be concerned
with the management of individual performance in a holistic way. The principles that are
central to performance management are derived from the science of behavior analysis.
This term performance management is often thought to refer to structures and processes of
human resources management (compensation, appraisal, selection, retention,
competencies, and so on).

1.3. Purpose of Performance Management

Dear learners! Write what you think about the purpose of performance management.
________________________________________________________________________
________________________________________________________________________
_______________________________________________________________

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The overall purpose of performance management is to contribute to the achievement of
high performance by the whole organization, team and employees with in it, by
understanding and managing performance with in an agreed framework of planned goals,
standards and competence required. This means reaching and exceeding stretching targets
for the delivery of productivity, quality, customer service, growth, profit and shared value
(Armstrong and Baron, 2005). More specifically, performance management aims to make
the good better, share understanding about what is to be achieved, develop the capacity of
people to achieve it and provide the support and guidance people need to deliver high
performance and achieve their full potential to the benefit themselves and the
organization. In general, performance management has the following specific purposes for
employees:
 Know their achievement level against the goals set;
 Become more effective in their job;
 Understand their own strengths and weaknesses with respect to the job;
 To identify the areas of development;
 To facilitate an agreement between the appraiser and the appraise about the
work expectations right at the beginning of the year which enables them to
jointly try to achieve individual and organizational objectives;
 To prepare every employee for higher-level jobs by continuous developments
in terms of various skills required;
 An instrument for creating a positive and healthy climate within the
organization that motivates people to give in their best.; and
 To provide inputs to the system of reward such as salary increments,
additional responsibilities and promotions.

In short, managing performance has the dual purpose of arranging situations

(environment) so that employees can do their best and growing the employees by
educating, enlightening, and appreciating them. It also enables employees to achieve
specific and defined results so that the organizations can improve their performance and
achieve their goals. The overall goal of performance management is to ensure that the
organization and all of its subsystems (processes, departments, teams, employees, etc.) are
working together in an optimum fashion to achieve the results desired by the organization.

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1.4. Scope of Performance Management
Performance management is about managing an organization as a whole. It is managing
the organization with in the context of internal and external environment. Performance
management concerns everyone in the organization not just managers. It rejects the idea
that traditional assumption that only managers are accountable for the performance of the
teams and replaces it with the belief that responsibility is shared between managers and
team members. Managers and their teams are jointly accountable for the results and are
jointly involved in agreeing what they need to do and how they need to do it in monitoring
performance and in taking action.

Performance management process is part of a holistic approach to managing for

performance which is the concern of every one in the organization. Holistic means being
all embracing, covering every aspect of a subject. In the case of the performance
management, this concerns the whole organization. It takes a comprehensive view of the
constituents of performance, how these contribute to desired outcomes at the
organizational, departmental, team and individual levels and what needs to be done to
improve these outcomes. It includes activities to ensure that goals are consistently being
met in an effective and efficient manner.

Performance management can focus on the performance of an organization, a department,

employee, or even the processes to build a product or service, as well as many other areas.
The domain of the performance management effort is the entire organization, a process,
subsystem or an employee. A subsystem could be departments, programs, projects, or
teams or groups organized to accomplish a result for an internal or external customer.

? Activity 2

1. Explain the purposes of performance management.

2. Performance management is holistic approach of managing performance. Briefly
discuss the concept.
3. Explain the scope of the performance management.

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1.5. Principles of Performance Management
Performance management has the following guiding principles
 It translates corporate goals in to individual, team, department and divisional
goals.
 It helps to clarify corporate goals
 It is a continuous and evolutionary process in which performance improves
over time.
 It relies on consensus and cooperation rather than control and coercion
 It creates a shared understanding of what is required to improve
performance and how it will be achieved
 It encourages self-management of individuals performance
 It requires a management style that is open and honest and encourages two-
way communication between superiors and subordinates
 It requires continuous feedback
 It measures and assesses all performance against jointly agreed goals
 It should apply to all staff
 It is not primarily concerned with linking performance to financial rewards

1.6. Benefits of Performance Management

Performance Management has many benefits both for the organization and for employee
working with in the organization. The following are some of the major benefits that
effective performance management contributes:
 Helps to think what results needed
 Depersonalizes issues by focusing on behaviors and results rather than
personalities
 Validates expectations
 Ensure equitable treatment of employees
 Optimizes operations in the organization because goals and results are more
closely aligned

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  Performance reviews focused on contributions to the organizational goals
 Supports ongoing communication and feedback about organizational goals
 Performance is seen as an ongoing process, rather than a one-time shot
event.
 Provokes focus on the needs of customers, whether internal or external.
? Activity 3
1. List at least five guiding principles of performance management.
2. Discuss the benefit of performance management for employees and the organization.

Summary
Performance management is the process through which organizations deliver lasting
improvement. It does this by ensuring individuals, teams, and ultimately the organization,
know what they should be doing, how they should be doing it and take responsibility for
what they achieve. It is about placing the emphasis on managing, supporting and
developing staff at all levels within the organization. An integral part of this is the need to
monitor performance, reward staff that perform well, and challenge those who do not.
Performance management is different from performance appraisal. It is more than simply
the evaluation of performance of employees. It is working in partnership with workers or
teams of workers in order to improve future performance. Effective performance
management involves far more than simply assessing the performance of workers. It
involves providing meaningful feedback, collaborating with workers to solve performance
problems, and developing improved levels of performance.

Performance management should involve the manager diagnosing the sources of

performance difficulties and in helping to find the solutions to those problems. Managing
performance requires understanding of factors that influence performance, from ability
and motivation to factors external to the worker. A manager also needs to understand the
various options that might be employed as potential means to improve performance.

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 Chapter One
Self Test Exercise
Part One: True or False Items
1. Performance management is a collaborative activity which focuses on the improvement
of future performance of employees.
2. Performance appraisal is the process of evaluating past and current performance of
employees.
3. Performance management concern all employees with in the organization.
4. Performance management is a reactive activity.
5. Performance management does not concern the environment in which the employees
are working for the improvement of performance.
Part Two: Multiple Choice
1. One of the statement is false about performance appraisal
A. It is a review of past or current performance of employees
B. It aimed at improving performance of employees
C. Its result serve for administrative and developmental purposes
D. All of the above E. None of the above
2. Identify the incorrect statement about performance management
A. It is a holistic approach which concern all employees with in the organization
B. It is future oriented
C. It focuses only on the improvement of past and current performance of employees
D. All of the above E. None of the above
3. One of the following is not considered as a benefit of performance management
A. Ensure equal treatment of employees
B. Helps to focus on performance related behavior
C. Helps to focus on the needs of customers
D. All of the above E. None of the above
4. Identify the incorrect statement
A. Performance management relies on consensus and cooperation rather than control and
coercion to improve performance
B. Performance management requires continuous feedback

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C. Performance management applied to only employees at management position
D. All of the above E. None of the above
Part Three: Give short answer
1. Explain the difference between performance management and performance appraisal
________________________________________________________________________
________________________________________________________________________
_______________________________________________________________
2. Discuss the advantages of performance management for the organization and
employees
________________________________________________________________________
________________________________________________________________________
_______________________________________________________________

CHAPTER TWO
Performance Management in Action
Unit introduction
This unit deals with performance management in action. It discusses performance
management process which defines performance from behavioral and outcome point of
views. It also explains the concept and different ways of job evaluation and employee
performance coaching.

Objectives
At the end of this unit learners should be able to
 State the process of performance management
 Define performance from behavioral and outcome dimensions
 Explain ways of job evaluation
 Explain the benefits of performance coaching

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Dear learners! In your opinion what activities are involved in the process of performance
management process?
________________________________________________________________________
________________________________________________________________________
_______________________________________________________________

2.1. Performance Management Process

Performance management is a continuous and flexible process that involves managers and
those whom they manage acting as a partners with in a framework that sets out how they
can best work together to achieve the required results. It focuses on future performance
planning and improvement rather than on retrospective performance appraisal. It provides
the basis for regular and frequent dialogues between managers and individuals about
performance and development needs.

Performance management is a critical and necessary component for individual and

organizational effectiveness. It is a process needed for improvement to occur. Without
assessment and feedback, supervisors have no basis to focus to improve employees’
efforts and performance.

Performance management is the systematic process by which an organization involves its

employees, as individuals and members of a group, in improving organizational
effectiveness in the accomplishment of organizational mission and goals. Employee
performance management process includes performance planning, monitoring,
developing, rating and rewarding.

Planning: an effective organization, work is planned out in advance. Planning in the

performance management process refers to setting performance expectations and goals for
groups and individuals to channel their efforts toward achieving organizational objectives.
Getting employees involved in the planning process will help them understand the goals of
the organization, what needs to be done, why it needs to be done, and how well it should
be done.

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The regulatory requirements for planning employees' performance include establishing the
elements and standards of their performance appraisal plans. Performance elements and
standards should be measurable, understandable, verifiable, equitable, and achievable.
Through critical elements, employees are held accountable as individuals for work
assignments or responsibilities. Employee performance plans should be flexible so that
they can be adjusted for changing program objectives and work requirements.

Monitoring: is another activity in the process of performance management process.

Monitoring means consistently measuring performance and providing ongoing feedback to
employees and work groups on their progress toward reaching their goals.

Monitoring performance include conducting progress reviews with employees where their
performance is compared against their elements and standards. Ongoing monitoring
provides the opportunity to check how well employees are meeting predetermined
standards and to make changes to unrealistic or problematic standards. And by monitoring
continually, unacceptable performance can be identified at any time during the appraisal
period and assistance provided to address such performance rather than wait until the end
of the period when summary rating levels are assigned.

Developing is another important component of in the performance management process;

employee developmental needs are evaluated and addressed. Developing in this instance
means increasing the capacity to perform through training, giving assignments that
introduce new skills or higher levels of responsibility, improving work processes, or other
methods. Providing employees with training and developmental opportunities encourages
good performance, strengthens job-related skills and competencies, and helps employees
keep up with changes in the workplace.

Rating refers to evaluating employee or group performance against the elements and
standards in an employee's performance plan and assigning a summary rating of record.
The rating of record is assigned according to procedures included in the organization's

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appraisal program. It is based on work performed during an entire appraisal period. The
rating of record has a bearing on various other personnel actions, such as granting within-
grade pay increases and determining additional retention service credit in a reduction in
force. Although group performance may have an impact on an employee's summary
rating, a rating of record is assigned only to an individual, not to a group.

In an effective organization, rewards are used well. Rewarding means recognizing

employees, individually and as members of groups, for their performance and
acknowledging their contributions to the organization mission. A basic principle of
effective management is that all behavior is controlled by its consequences. Those
consequences can and should be both formal and informal and both positive and negative.

Good performance is recognized without waiting for formal awards. Recognition is an

ongoing, natural part of day-to-day experience. There are a lot of actions that reward good
performance — like saying "Thank you”.

Dear learners! What activities do you think are performed in the process of performance
management?
________________________________________________________________________
________________________________________________________________________
_______________________________________________________________

Cardy (2004) suggests a model of performance management process that will lead to
improved performance of the organization. The model helps to make explicit each of the
critical parts of the performance management process. In reality, the process of
performance management flows through the following steps, so blocking the process in to
discrete steps may seem artificial. However, breaking down the process in to each of these
steps can help to improve the skill level at each stage. Further, recognizing each of the
discrete steps can help immeasurably when there are performance management problems.
The model provides a map for diagnosing and resolving problems in the performance
management process.

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According to Cardy (2004) the performance management process involves
 Defining performance
 Diagnosis
 Monitoring and evaluation
 Provision and dealing with feed back
 Performance Improvement

Concept of performances
Dear learners! How do you define performance? Try to explain the concept by using your
own words.
________________________________________________________________________
________________________________________________________________________
_______________________________________________________________
Good!
The term Performance Management was used for managing behavior and results, the two
critical elements of what is known as performance. Performance is the sum of behavior
and results, and cannot be viewed as independent of either component. It is an outcome of
effective management.

The process starts with defining performance. Workers with in the organization exhibit
behaviors (achieves or do not achieves) or outcomes that are considered to be important in
the work place. Of course, not all behaviors or achievements are relevant to the person’s
job or to the workplace in general. In other words, it is critical to determine what
constitutes “performance” in the workplace. From the worker’s perspective, determining
what exactly constitutes performance is an important effort that can direct and clarify what
should be done. From the perspective of management, the definition of performance
considers both behavioral and outcome approaches to define performance and will
consider the pros and cons of each type of criteria.

20
The skill of defining performance in behavioral or outcome terms is needed any time a job
is created or changed or when someone is unclear as to what comprises performance. The
effective management of performance first requires a solid understanding of the
performance domain. That is what are the duty areas and tasks that are part of the job?

The technique used to identify what a job consists is called job analysis. Job analysis can
involve a number of approaches, ranging from a time and motion study using a stopwatch
to measure the length of time it takes to complete different parts of a job to a questionnaire
asking for workers to judge the importance of aspects of their jobs. Whatever the
particular method used, the overriding goal of a typical job analysis is the creation of job
description information. A job description identity what the job consists of, usually in
terms of duty areas and task. Job descriptions are not only the bases for defining
performance on a job, but they also derive salary and merit pay levels.

Job analysis is a systematic means for describing what constitutes a job. There are many
approaches to job analysis, but whatever method might be used, the goal is to capture the
major dimensions of the job.

Job analysis provides a rational basis for determining how to select workers for a job with
out knowing the requirements of a job, it would be virtually impossible to select people
who will be the best performer on that job. The job analysis should be the principal basis
on which hiring criteria are developed and hiring decisions are made. Further, job analysis
is, or at least should be, the basis for the assessment of job performance. The performance
appraisal system should be directly tied to the job analysis. For example, the dimensions
on which workers are assessed should come directly from job analysis. Job analysis is also
used as the major basis for determining pay levels for jobs in organizations. Last, and
certainly not least, job analysis should be the basis for training programs that might be
instituted as a means of improving performance. It is little wonder that job analysis has
been referred to as the bedrock of managing people in organizations.

21
Job analysis typically describes a job in terms of duty areas and tasks. Duty areas or
performance dimensions are broad categories of performance while tasks are more
specific items that fit with in one duty area or another. Some factors influencing the
description of jobs are:
 history/ tradition
 organization characteristics(size, type, strategy)
 Who defines
 Technology
 Type of job analysis
How narrowly or broadly a duty area is defined has a lot to do with the history or
traditions in the organization. Some how, a job gets described as consisting of, say four
major categories of performance. No one in the organization may remember how the duty
area classification came about, but it persists in how people think about the job. The nature
of the organization also influences how jobs are described and thought about.

It is important to recognize that how a job is defined is also strongly influenced by who is
responsible for defining the job. Who decides what performance aspects are important?
Who decides how performance should be described and categorized? The nature of the job
description can be fundamentally different depending on who is responsible for the
description. Workers, customers, managers and subordinates may all have unique and
some what differing perspectives on what a job is and should be.

Technology and the type of job analysis also influence how performance is defined.
Technology can radically change or even eliminate tasks and duty areas. The amount and
sophistication of technology in an organization can have an important influence on the
content of jobs and how performance is defined. The type of job analysis also plays a
critical role in determining how performance is defined. In short, the method of analysis
can influence the results that are found. For example, a detailed approach to job analysis ,
that focuses on the work process would likely lead to more narrowly defined performance
than would a broader approach that focuses on major outcomes of the work.

22
 ? Activity 2
1. What is job analysis?
2, Discuss the importance of job analysis to define performance.
3. Explain the factors that influence job description and their impact on the definition
of performance.

Approaches to Defining Performance

There are two major approaches of defining performance. These are behavioral and
outcome approaches. Behavioral approaches describe job performance in terms of
behaviors that the worker should and should not do. An outcome approach describes job
performance in terms of outcomes or results achieved. Both the behavioral and outcomes
approaches for analyzing and describing job performance have their advantages and
disadvantages. Both approaches can signal to workers what is important and what needs to
be done. However, the behavioral approach emphasizes what should be accomplished. The
two approaches essentially emphasize means or ends. The emphasis on behaviors can
assure that every one is aligned in terms of how the work should be carried out. Like wise,
the emphasis on outcomes can assure that everyone is working toward achieving
important business results.

The behavioral and outcome approaches have their advantages and disadvantages and
there is no a clear superiority that always favor one approach over the other. The
description of a job, the result of a job analysis, may not be that important in and of it self.
Something that makes job analysis critically important is that it is used to develop
standards of performance. That is, what is good/poor performance? What is important and
what is not so important? These types of questions are addressed with measures of
performance called criteria.

Criteria

23
Criteria define performance. They are the measures by which outcomes or behaviors are
judged to be good, average or poor. Criteria are the yardsticks by which performance is
judged. These yardsticks should be based on a systematic consideration of the job. In other
words, performance criteria should be clearly job related. Unless definitive job related
criteria are strongly promoted in an organization, people can, perhaps un-knowingly, use
other criteria for judging performance criteria such as age, race and gender, although not
job related, can creep in to the process of how performance is judged. These factors can
operate as private mental yardsticks, particularly when criteria for job performance are
unclear. It is important that job related criteria be clearly and strongly promoted in the
organization.

Performance as Behavior
From the perspective of employees, what job performance consists is essentially
behaviors. It is what workers do day in and day out on the job. Ask many workers what
they do on their jobs and they will describe their activities on various tasks. From this
perspective, performance consists of behaviors and how well those behaviors are executed
is a critical performance criterion.

Performance as outcomes
From the perspective of managers, performance on job often consists of outcomes. It is the
goals or action achieved not the activities that are important. What is achieved is the
critical performance criterion from an outcome perspective.

Dear learners! Explain the advantages and disadvantages of behavioral and outcome
criteria in defining performance.
________________________________________________________________________
________________________________________________________________________
_______________________________________________________________

Advantages and disadvantages of behavioral and outcome criteria

Behavioral criteria:

24
 Advantages:
 provide a clear map on how to maximize performance
 under the control of workers
 provide directive feedback to workers
Disadvantages:
 Engaging in all of the correct behaviors may not lead to the desired outcomes
 Can be costly to develop the criteria
Outcome criteria
Advantages:
 Easily and objectively measured
 Can lead to increased productivity and bottom-line performance of an
organization
Disadvantages:-
 May not be under the control of workers
 May not provide directive feedback to workers

Behaviors versus outcomes

What is most important, behavior or outcomes? This question is tantamount to asking
whether process or results are most important. Of course, both are important, but
organizations often choose to emphasize one approach over the other in their performance
appraisal systems. There is no one approach that is best in all cases and which emphasis is
chosen should depend on the situation and on the philosophy of management. Both
behaviors and outcomes have advantages and disadvantages as measures of performance
and one approach does not stand out as the criterion of choice over the other.

Behaviors as criteria offer the advantage of providing a clear route that a worker may
follow to achieve superior performance. As a basis for performance evaluation, behaviors
offer the advantage of providing direction to a worker to improve performance. Behavioral
criteria offer clear examples of how workers can act to improve performance. On the other
side, behavioral criteria do not necessarily lead to increased productivity and profit.

25
In contrast, outcomes as criteria offer clear standards by which performance can be
assessed. However, outcomes offer little in terms of developmental feedback. Further,
while behaviors would be expected to be under the control of a worker, outcome may not
be. Outcomes can be influenced by factors beyond the control of a worker, such as
equipment, economic factors, coworkers, and soon.

? Activity 3
1. What are the approaches used to define performance?
2, Discuss the difference between ultimate, conceptual and operational criteria.
3. Criteria should focus on the performance rather than the performer. What does
it mean? Discuss.

Diagnosis
Dear learners what is diagnosis? And how can it contribute for the improvement of
performance?
________________________________________________________________________
________________________________________________________________________
_______________________________________________________________
Diagnosis is determining the cause of performance. It is a critical and absolutely necessary
activity in the performance management process. Diagnosis should be made in a conscious
and explicit fashion to identify performance problems. If done without careful and
thoughtful attention diagnosis is open to error and bias. Even though we may not be aware
of it, we are always diagnosing and looking for causes of what we have observed. For
instance, why was the project is not completed on time? Was there a problem with
resources? Was it the team’s fault or the fault of someone on the team?

Diagnosis is important if it done carefully and systematically. Perhaps most important,

diagnosis drives the remedy that a person implements to address a performance problem.
For example, a manager’s diagnosis of a performance problem might be that it is due to
poor ability, lack of motivation, or problems with equipment or materials.
Why is diagnosis is important because it
 Drives remedies

26
  Influence evaluations
 Underlies conflict
Each of these causal inferences implies a unique remedy. The remedy chosen by a manger
is driven by the causal diagnosis he or she makes. A diagnosis of poor ability, for instance,
might lead to training as a remedy whereas a motivation diagnosis might lead to the design
and implementation of different incentive program. In contrast, diagnosis of equipment
or materials problems would lead to very different remedies, such as changing or altering
equipments or materials.

In addition, diagnosis is important because it significantly influences evaluation. How you

judge the performance of someone is strongly determined by your diagnosis of the
performance situation. For instance, if you think that a worker is at fault for an episode of
poor performance, you might be particularly harsh in your evaluation of that worker.
However, if your diagnosis is that fault lies with equipment or materials, you are likely to
be much more lenient in your evaluation of the worker.

Diagnosis is also important because it can underlie conflict between management and
workers. This impact of diagnosis may not be immediately apparent, but the possible
contribution to conflict underscores the far-reaching importance of diagnosis. That is
because; people seldom discuss their perceptions about the causes of performance with
their immediate supervisors. Differences in perception about causes for performance are
quite common between managers and workers, with managers tending to blame workers
and workers tending to blame factors in the work situation. This difference in perception is
termed as actor/observer bias.

It is important to be systematic about diagnosis because so much is at risk. As discussed

about, remedies, evaluations and conflict with workers may be at stake. Considering these
outcomes, it is obviously important that diagnosis be accurate. The important thing to
understand is that when diagnosis is not done consciously, systematically and carefully, it
is still done. We often determine causes for performance levels or incidents in an
automatic and virtually unconscious fashion. We can reach conclusions about causes

27
quickly and seemingly without thought, certainly without a formal and thorough
consideration of data. Most of the time, we are right in our subjective diagnosis. However,
our automatic judgment process can be full of error and biased that can lead us to wrong
conclusions.

Diagnosis requires observation. An accurate diagnosis must begin with observing the
performance situation. Inadequate observation can lead to inaccurate diagnosis. To be
adequate, observation does not need to be constant. Constant surveillance can be
dysfunctional and can send the message to workers that they are not trusted. However,
observation does need to occur with sufficient frequency so that everyone involved would
agree that there has been adequate and representative observation. More specifically,
observation should occur across workers and across multiple tasks so that the manager has
a substantial basis for making judgment. It would be difficult to make an accurate
diagnosis and judgment of a worker based on your observation of his performance on only
one of many tasks for which he is responsible. Even if your diagnosis and judgment were
correct to reach this conclusion based on observation of one task would be perceived by
others as being based on deficient observation and an indication that you tend to make
judgment and take action with out thorough consideration of the fact. Adequate
observation is needed to make the correct judgments and to justify them. Observation
should not be conceived of or approached as a passive step of data collection. Rather for
the purposes such as safety and performance improvement observation should be
considered as an active and participative component that can lead to immediate
intervention and improvement of organizations performance.
? Activity 4
1. Explain the importance of diagnosis.
2. Diagnosis should be done consciously, systematically and carefully. Discuss the reason.
3. Discuss the concept and importance of observation.

Causes of Performance
Dear learners! Explain the major causes of poor performance on the space provided using
your own words.

28
________________________________________________________________________
________________________________________________________________________
_______________________________________________________________

A fundamental determination that needs to be made concerning the possible causes for
observed performance is whether the causes reside in the person or in the system Cardy
and Dobbins, 1994 cited in (Cardy, 2004). This distinction may seem simple but it is
critically important and the source of many management mistakes if not done carefully
and consciously. Person causes are reasons for observed levels of performance that resides
inside of a person. Specifically, person causes consist of either ability or motivation. In
contrast, system causes are factors that influence performance that are external to a person.
For example, influences such as poor quality of materials and equipment, poor
communication, uncooperative workers and negative organizational climate and culture,
etc which are external to workers. A primary task for managers is to make a determination
as to whether the causes for the performance observed are in the person or system
category. If judgments are made automatically and subjectively we may end up with a
biased diagnosis that does not lead to improved performance and may cause conflict with
workers. Thus, it is important that judgment about cause be made carefully and
systematically.

? Activity 5
1. What are person causes of observed performance?
2. What are system factors that influence performance?
3. Discuss how person factors and system factors can influence each other.

2.2. Performance Management and Job Evaluation

2.2.1 Job Evaluation
[Link] Concept of Job Evaluation
Dear learners! What is job evaluation? Write the concept on the space below using your
own words.

29
________________________________________________________________________
________________________________________________________________________
_______________________________________________________________
Job evaluation is the process of determining the worth of one job in relation to that of the
other jobs in an organization so that a fair and equitable wage and salary system can be
established. It is the process by which the relative contribution of various jobs in the
organization is determined for pay purpose. Essentially it attempts to relate the
compensation paid for the job to the extent that the job contributes to the organizational
effectiveness. Job evaluation is the process of systematically determining a relative
internal value of a job in an organization. In all cases the idea is to evaluate the job, not the
person doing it.

Job evaluation as a function of human resource management has several advantages. As

far as wage and salary administration is concerned, an effective job evaluation program
helps to:
 Develop a fair and equitable scale of salaries and wages, especially for new
employees
 Determine the relative value of each job to the organization as a basis for
determining wage increases for existing employees and
 Provide information for determining the qualifications needed in making
selections, promotions, demotions job changes or transfers.

[Link]. Principles of Job Evaluation

 Clearly defined and identifiable jobs must exist. These jobs will be accurately
described in an agreed job description.
 All jobs in an organization will be evaluated using an agreed job evaluation
scheme.
 Job evaluators will need to gain a thorough understanding of the job
 Job evaluation is concerned with jobs, not people. It is not the person that is
being evaluated.

30
  The job is assessed as if it were being carried out in a fully competent and
acceptable manner. .
 It is possible to make a judgment about a job's contribution relative to other
jobs in an organization.
 The real test of the evaluation results is their acceptability to all participants.
 Job evaluation can aid organizational problem solving as it highlights
duplication of tasks and gaps between jobs and functions.

As organizations constantly evolve and new organizations emerge there will be challenges
to existing principles of job evaluation. Whether existing job evaluation techniques and
accompanying schemes remain relevant in a faster moving and constantly changing world,
where new jobs and roles are invented on a regular basis, remains to be seen. Sticking
rigidly to an existing scheme may impose barriers to change. Constantly updating and
writing new jobs together with the time that has to be spent administering the job
evaluation schemes may become too cumbersome and time consuming for the benefits
that are derived.

Job evaluation evaluates selected job factors, which are regarded as important for the
effective performance of the job, according to one of several alternative methods. The
resulting numerical grading can form the basis of an equitable structure of job grading.
The job grades may or may not be used for status or payment purposes.

[Link] Steps in Job Evaluation

Four steps are usually involved in the process of job evaluation: job analysis, job grading,
job pricing and employee classification.
Step 1. Job Analysis
Job analysis is the process of obtaining job facts. It describes the duties, responsibilities
and working conditions of a job and the interrelationships between the job as it is and the
other jobs with which it is associated. This analysis of the job results in a job description,
which is a written statement describing the content, duties and essential requirements of
the job or position. When the detailed statement is modified to include the personal

31
requirements needed in a person to perform the job satisfactorily, it is called job
specification.
Step 2. Job Grading
After the job specifications are determined the actual process of grading, rating or
evaluating begins. A job is graded or rated in order to determine its value relative to the
other jobs in the organization that are subject to evaluation. There are many evaluation
methods used in grading jobs. The most popular ones are job ranking and job
classification, which are non-quantitative methods and factor comparison and point system
which are quantitative methods.
Non-Quantitative methods
Job Ranking: This is the simplest and least precise method of grading jobs. After job
analysis information for each jobs is reviewed, jobs are simply arranged in descending
order of importance followed by assigning numeric values to each job. Raters of the jobs
may consider the responsibility, skill, effort and working condition of each job, but they
do not use such devices as points scores or any other objective quality in the evaluation
process.
In the ranking method of job evaluation, it is quite possible that important elements of
some jobs may be overlooked while unimportant items are unnecessarily weighted
heavily. What is even more damaging, the ranking method does not differentiate the
relative importance of jobs and hence pay scales determined based on such broad ranking
do not ensure that more important jobs are paid more. In short, since the rankings lack
precision, the resulting pay levels may be inaccurate.
Job classification: The second non-quantitative method of job evaluation. it involves
dividing up the job hierarchy in to a number classes or grades, developing written
definitions for each classification and assigning every job to a particular grade. Job
classification is a slightly more sophisticated method than job ranking, but it also lacks
precise measuring device in evaluating and differentiating job.

Quantitative Methods

32
In order to use quantitative methods of job evaluation, the selection and development of
certain job factors is necessary. The most widely used job factors are responsibility, skill,
mental effort, physical effort and working conditions.
Factor comparison Method: This is a method of job evaluation that consists of preparing
a list of key jobs which represent the different levels of job factors and comparing each
job factor by factor.

A key job is defined as one whose content has become stabilized over time, whose wage
rate is considered by management as correct and which is considered as important to the
organization. Key jobs serve as a standard against which all jobs are compared with. When
the preliminary work of selecting and defining job factors is completed, the key jobs are
compared factor by factor. The process of comparing jobs factor by factor result in rating
all key job factors and ranking them. Then monetary scales are allocated to each key job
factor accordingly. Thus, the most important elements in factor comparison method of job
evaluation are selecting of key jobs, determining job factors, ranking factors and applying
to monetary scale.

The point system: The point system is used more than the other method of job evaluation.
It evaluates the factors of each job, but instead of using wages as the factor comparison
method does, points are used. Although it is difficult to develop initially, it is more precise
than the factor comparison method because it can handle critical factors in more details.

In the point factors method, once key jobs are established, they are assigned total points
first and all other jobs are compared with the key jobs. One main feature of the point
system is that the factors common to all jobs are weighted to reflect their relative
importance. Once the factors are weighted and defined, they are broken down in to points
which reflect their value. All jobs evaluated factor by factor and the weight assigned to
each sub factor is determined to enable the evaluators to assign the total number of points
for that job. The number of points assigned to each factor of the job is added to determine
the total points for a particular job. By definition, the higher the total point value of a job,

33
the higher will be the relative importance of the job. After the total points for each job are
known, the jobs are ranked.

A conversion chart must be prepared in order to relate, in monetary terms, the other jobs
in the organization to the key jobs. By using a wage survey, the organization can
determine the market price of key jobs and convert the number of points assigned to each
key job to a monetary scale. Once the organization has determined the money value and
points of a key job, a conversion chart can be used to determine a relative value of other
jobs in the organization.

Step III: Job Pricing

Following job evaluation, the pay structure is completed by establishing a system of
pricing jobs. Job pricing involves converting the relative job values (contribution of jobs)
in to specific monetary values(job price or pay), or translating the job classes in to salary
or wage rate ranges. Job pricing is a process by which the organization’s overall wage rate
is applied to each of the job job grades in order to convert the job values through the
grading processes in to specific rates of job pay. Job pricing includes two activates:
establishing the appropriate pay level for each job and grouping the different pay levels in
to a structure that can be managed effectively. The appropriate pay level to any job
reflects its relative and absolute values. A job’s relative value is determined by its ranking
through the job evaluation process. The absolute value of a job is determined by what the
labor market pay similar jobs. To set right pay level means combining the job evaluation
rankings and the survey wage rates.

Step IV: Employee Classification:

After the salary or wage range for each job is established, the specific salary or wage rate
within the range must be determined for each employee. The advantage of giving a range
(minimum and maximum pay level) of salary or wage rates is that the skill, abilities,
length of service etc. of different employees on each job determines how much money
should they receive as a compensation for contributions they provide to the organization.

? Activity 6

34
 1. Explain the concept of job evaluation.
2. Discuss the difference between qualitative and quantitative methods of job evaluation.
3. Discuss the steps of job evaluation.

2.3. Performance Coaching

2.3.1. Concept of Coaching
Dear learners! Define the term coaching using your own words on the space provided
________________________________________________________________________
________________________________________________________________________
_______________________________________________________________
Good !
Coaching is the first step in any effort to improve employee performance . It is part of the
day-to-day interaction between a supervisor and an employee. Coaching is a method of
strengthening communication between supervisor and the employee. It helps to shape
performance and increase the likelihood that the employee's results will meet expectations.
The goal of coaching is to work with the employee to solve performance problems and
improve the work of the employee, the team, and the department

In organizations today, coaching refers to a method of personal development or human

resource development . This field of coaching is becoming a distinct area of practice for
individuals and in organizations. Once performance objectives and standards are
established and clearly communicated, supervisors should observe employees'
performance and provide feedback. Supervisors have a responsibility to recognize and
reinforce strong performance by an employee and identify and encourage improvement
where it is needed. Moreover they have to provide informal feedback almost every day.
Coaching often provides positive feedback about employee contributions. At the same
time, regular coaching brings performance issues to an employee's attention when they are
minor, and assists the employee to correct them.

35
Coaching is also defined as the art and practice of inspiring, energizing, and facilitating
the performance, learning and development of the employee. Coaching is about
improving the individual's capacity to focus, learn, and innovate.

Coaching is the key to unlocking the potential of employees and organization. It is based
on the concept that individuals learn most from the everyday application of skills and by
trying things out in practice. The coaching is all about helping others to identify and
define their specific goals, and then organize themselves to attain these goals. Coaching
deals with building an individual's personal skills, from setting the goals, to
communication, to management style; to decision making and problem solving. Coaches
draw upon a client's inner knowledge, resources and creativity to help him or her be more
effective.

2.3.2 Benefits of Coaching

Coaching is a long-term strategy, but the benefits of managerial coaching are two-way:
For employees: improved performance, greater enthusiasm, and greater job satisfaction.
For managers: improved communication, motivation, delegation, employee
empowerment, planning, and monitoring skills

Coaching brings more humanity into the workplace. Effective coaching in the workplace
delivers achievement, fulfillment and joy from which both the individual and organization
benefit.

Key Elements of coaching session

To make the coaching session more effective, the coach must understand the key elements
of coaching:
 Coach when you want to focus attention on any specific aspect of the
employee's performance.
 Observe the employee's work and solicit feedback from others.
 When performance is successful, take the time to understand why.
 Advise the employee ahead of time on issues to be discussed.

36
  Discuss alternative solutions.
 Agree on action to be taken.
 Schedule follow-up meeting(s) to measure results.
 Recognize successes and improvements.
 Document key elements of coaching session.

2.3.3 Coaching Styles

There are many forms of coaching. The appropriate style will depend on the particular
needs of the person to be coached (the coachee).

Directive vs. Non-Directive Coaching Styles

Directive coaching : focuses on instructing, giving feedback, demonstrating skills, dealing
with key performance issues, advising or recommending solutions to the coachee.
Non-directive: coaching focuses on supporting the coachee to examine and self-discover
solutions, opportunities and pathways to success.
Specific vs. Holistic Coaching Styles
Specific coaching interactions focus on particular requirements, be the achievement of
clearly defined performance goals or the acquisition of particular skills, they tend to relate
purely to the coachee’s work life. Specific coaching programs tend to be of short to
medium-term duration.
Holistic coaching relationships tend to be longer-term and focus on whole-of –life issues.
The process here looks at the whole person and their overall growth and development in
life.

Formal vs. Circumstantial Coaching Styles

Formal coaching uses a set process/program while
Circumstantial coaching is flexible and adapted to the needs of the coachee at any point
of time.

Coaching in general is the act of providing positive support and positive feedback while
offering occasional advice to an individual or group in order to help them recognize ways
in which they can improve the effectiveness of their organization. Coaching is an excellent

37
way to attain a certain work behavior that will improve leadership, employee
accountability, teamwork, sales, communication, goal setting, strategic planning and more.
It can be provided in a number of ways, including one-on-one, group coaching sessions
and large scale organizational work.

Coaching is not a practice restricted to external experts or providers. Many organizations

expect their senior leaders and middle managers to coach their team members toward
higher levels of performance, increased job satisfaction, personal growth, and career
development. This method of coaching is either individual or group-based and helps the
client gain fulfillment, success and a sense of identity in the areas that are coached.

? Activity 7
1. Explain the concept of coaching.
2. Discuss the benefits of coaching for the organization and individuals.
3. Discuss the difference exist between the types of coaching.

Summary
Performance management is a continuous and flexible process that involves managers and
those whom they manage acting as a partners with in a framework that sets out how they
can best work together to achieve the required results. It focuses on future performance
planning and improvement rather than on retrospective performance appraisal. It provides
the basis for regular and frequent dialogues between managers and individuals about
performance and development needs.

Performance can be defined from behavioral and outcome point of view. From the
perspective of employees, what job performance consists is essentially behaviors. It is
what workers do day in and day out on the job. It consists of behaviors and how well those
behaviors are executed is a critical performance criterion. From the perspective of
managers, performance on job often consists of outcomes. It is the goals or action
achieved not the activities that are important. What is achieved is the critical performance
criterion from an outcome perspective.

38
Job evaluation is the process of determining the worth of one job in relation to that of the
other jobs in an organization so that a fair and equitable wage and salary system can be
established.

Coaching is the first step in any effort to improve employee performance . It is part of the
day-to-day interaction between a supervisor and an employee. Coaching is a method of
strengthening communication between supervisor and the employee. Coaching in general
is the act of providing positive support and positive feedback while offering occasional
advice to an individual or group in order to help them recognize ways in which they can
improve the effectiveness of their organization

In general, in effective organizations, managers and employees have been practicing good
performance management naturally all their lives, executing each key component process
well. Goals are set and work is planned routinely. Progress toward those goals is measured
and employees get feedback. High standards are set, but care is also taken to develop the
skills needed to reach them. Formal and informal rewards are used to recognize the
behavior and results that accomplish the mission and for effective management of
performance.

Chapter Two
Self Test Exercise
Part One: True or False Item
1. Performance of employee can be viewed as the sum of behaviors and results.
2. Diagnosis helps to determine the causes of poor or good performance.
3. Job pricing involves converting the relative job values in to specific monetary values.
4. Coaching is a day to day interaction between a supervisor and employees.
5. System factors are those causes that are external to a person which influences the
performance of employees.
Part Two: Multiple Choice

39
1. Identify the one which is considered as a component in the process of performance
management
A. Developing employees B. Rewarding employees
C. Rating the performance of employees D. All of the above
E. None of the above
2. The behavioral approach defines performance as
A. Outcome B. Means C. End
D. All of the above E. None of the above
3. Identify the correct statement about operational criteria
A. Translates concepts in to concrete measures
B. Derived from ultimate criteria
C. Focuses on strategic issues of the organization
D. All of the above E. None of the above
4. Which one of the following is true about the outcome criteria
A. Easily and objectively measured
B. Under the control of workers
C. Provides directive feedback for workers
D. All of the above E. None of the above
5. Select the one which is considered as personal causes of performance
A. Ability B. Motivation
C. Organizational culture D. A and B E. All of the above
6. One of the following is true about directive coaching
A. Focuses on instructing or giving feedback to the coachee
B. Focuses on supporting the coachee to examine a self discover the solution
C. Focuses on the achievement of clearly defined performance goal
D. All of the above E. None of the above
Part Three: Give short answer
1. Explain the distinction between qualitative and quantitative method of job evaluation
________________________________________________________________________
________________________________________________________________________
______

40
2. Define performance from behavioral and outcome point of view
________________________________________________________________________
________________________________________________________________________
______
3. Discuss how personal factor and system factor influence performance
________________________________________________________________________
________________________________________________________________________
______

CHAPTER THREE
Operational Performance Management
Unit Introduction
This unit deals with operational performance management. It emphasizes on the definition
and concept of performance measures, principles, benefits, types and purpose of
performance measurement, competence related performance, competence and competence
analysis.

Objectives
At the end of this unit the students will be able to:
 Explain the concept of performance measure

41
  List principles of performance measurement
 Explain the benefits of performance measurement
 Differentiate the different types of performance measurement
 State the different purposes of performance measurement
 Explain the concept of competency and techniques of competency analysis

3.1. Performance Measures

Dear learners! You are advised to answer the following pre reading question before you
go through the material. What is performance measurement?
________________________________________________________________________
________________________________________________________________________
_______________________________________________________________
Performance measurement is the process whereby an organization establishes the
parameters within which programs, investments, and acquisitions are reaching the desired
results. This process of measuring performance often requires the use of statistical
evidence to determine progress toward specific defined organizational objectives.

Performance Measures are quantitative or qualitative ways to characterize and define

performance. They provide a tool for organizations to manage progress towards achieving
predetermined goals, defining key indicators of organizational performance and customer
satisfaction. It is the process of assessing the progress made (actual) towards achieving the
predetermined performance goals (baseline). Measures provide specific information used
to assess the extent of accomplishment of results, provide information to evaluate
accomplishment of results. Measures are usually specified in terms of quantity, quality,
timeliness or cost.

Performance measures quantitatively tell us something important about our products,

services, and the processes that produce them. They are a tool to help us understand,
manage, and improve what our organizations do. Performance measures let us know how
well we are doing. They provide us with the information necessary to make intelligent
decisions about what we do.

42
A performance measure is composed of a number and a unit of measure. The number
gives us a magnitude (how much) and the unit gives the number a meaning (what).
Performance measures are always tied to a goal or an objective (the target). Ideally,
performance measures should be expressed in units of measure that are the most
meaningful to those who must use or make decisions based on those measures.

3.1.1 Principles of Performance Measurement

For effective improvement of performance of the organizations and employees there
should be a system of continuously measuring the actual performance against the desired
one. In the course of measuring the progress there should be some guiding principles that
guide the process of performance measurement. Some of the major principles for
performance measurement are discussed hereunder. For its effectiveness all significant
work activity must be measured.
 Work that is not measured or assessed cannot be managed because there is no
objective information to determine its value. Therefore it is assumed that this work
is inherently valuable regardless of its outcomes. The best that can be
accomplished with this type of activity is to supervise a level of effort.
 Unmeasured work should be minimized
 Desired performance outcomes must be established for all measured work.
 Outcomes provide the basis for establishing accountability for results rather than
just requiring a level of effort.
 Desired outcomes are necessary for work evaluation and meaningful performance
appraisal.
 Defining performance in terms of desired results is how managers and supervisors
make their work assignments operational.
 Performance reporting and variance analyses must be accomplished frequently.
 Frequent reporting enables timely corrective action.
 Timely corrective action is needed for effective management control.

43
Dear learner! Do you think performance measurement can benefit organization and
individuals? Good, please write some of the major benefits you think using your own
words.
________________________________________________________________________
________________________________________________________________________
_______________________________________________________________

3.1.2 The Benefits of Performance Measurement

Performance measurement has many benefits both for the organization and
employees with in the organization. Some of the benefits are the following:
1. Performance measurement enhances decision-making. The process of developing
performance measures allows an organization to determine its mission, set goals for
desired results, and identify methods of measuring how well the results are achieved.
2. Performance measurement improves internal accountability. Measuring performance
gives decision makers a significant tool to achieve accountability. Employees at all levels
are accountable to upper level managers for their performance, and upper level managers
are accountable to executives. This relationship becomes much clearer when outcomes and
outputs are measured by a commonly accepted standard.
3. Performance measurement supports strategic planning and goal setting. Without the
ability to measure performance and progress, the process of developing strategic plans and
goals is less meaningful. While there is clearly some benefit to thinking and planning
strategically, the evaluation of such plans and goals cannot be objective without measuring
performance and achievement. Organizations involved in strategic planning can develop
measures of performance in the production of goods and services and in meeting the
organization's most important objectives.

Strategic performance measures monitor the implementation and effectiveness of an

organization's strategies, determine the gap between actual and targeted performance
and determine organization effectiveness and operational efficiency.

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3.2. Types of Measures
Dear learners, please list the types or the major categories that are commonly used to
measure performance.
________________________________________________________________________
________________________________________________________________________
_______________________________________________________________
Most performance measures can be grouped into one of the following six general
categories. However, certain organizations may develop their own categories as
appropriate depending on the organization's mission:
1. Effectiveness: A process characteristic indicating the degree to which the process
output (work product) conforms to requirements (Are we doing the right things?).
2. Efficiency: A process characteristic indicating the degree to which the process
produces the required output at minimum resource cost (Are we doing things right?).
3. Quality: The degree to which a product or service meets customer requirements and
expectations.

4. Timeliness: Measures whether a unit of work was done correctly and on time.
Criteria must be established to define what constitutes timeliness for a given unit of
work. The criterion is usually based on customer requirements.
5. Productivity: The value added by the process divided by the value of the labor and
capital consumed.
[Link]: Measures the overall health of the organization and the working environment
of its employees.
Generally, performance measures are divided into five types. These are:
 Input Measures: used to understand the human and capital resources used to
produce the outputs and outcomes.
 Process Measures: used to measure and understand the intermediate steps in
producing a product or service. In the area of training for example, a process
measure could be the number of training courses completed as scheduled.

45
  Output Measures: used to measure the product or service provided by the system
or organization and delivered to customers. An example of a training output would
be the number of people trained.
 Outcome Measures: evaluate the expected, desired, or actual result(s) to which the
outputs of the activities of a service or organization have an intended effect. For
example, the outcome of safety training might be improved safety performance as
reflected in a reduced number of injuries and illnesses in the workforce. In some
instances, such as the training example above, establishing a direct cause and effect
relationship between the output of the activity and its intended outcome, can be
difficult.
 Impact Measures: measure the direct or indirect effects or consequences resulting
from achieving program goals. An example of an impact is the comparison of
actual program outcomes with estimates of the outcomes that would have occurred
in the absence of the program.

3.3. Purpose of Measuring Performance

Dear learner! What purposes performance measurements can serve?
________________________________________________________________________
________________________________________________________________________
_______________________________________________________________
Fundamental purpose behind measures is to improve performance; number of measures
that are not directly connected to improving performance (like measures that are directed
at communicating better with public to build trust) are measures that are means to
achieving that ultimate purpose. Performance measurement is important for the following
reasons:
1. To Evaluate performance: to evaluate performance, managers need to determine what
organizations supposed to accomplish. This requires standards to compare its actual
performance against past performance/ from performance of similar agencies/ industry
standard/political expectations.

46
2. To Control: performance measures help managers to ensure their subordinates are
doing the right thing. Today managers do not control their workforce mechanically
(measurement of time-and-motion for control as during Taylor). However, managers still
use measures to control, while allowing some space for freedom in the workforce.
3. To Budget: budgets are crude tools in improving performance. Poor performance not
always may change after applying budgets cuts as a disciplinary action. Sometimes
budgets increase could be the answer to improving performance.
4. To Motivate :giving people significant goals to achieve and then use performance
measures- including interim targets- to focus people’s thinking and work, and to provide
periodic sense of accomplishment.
Performance targets may also encourage creativity in developing better ways to achieve
the goal. Thus, measure to motivate improvements may also motivate learning.
5. To Promote: how can public managers convince political superiors, legislators,
stakeholders, journalists, and citizens that their organization is doing a good job.
Performance measures can be used to: validate success; justifying additional resources;
earn customers, stakeholder, and staff loyalty by showing results; and win recognition
inside and outside the organization.
6. To Learn: learning is involved with some process of analysis information provided
from evaluating organizational performance (identifying what works and what does not).
By analyzing the information, organizations able to learn reasons behind their poor or
good performance
7. To Improve : what exactly should who- do differently to improve performance? In
order for organization to measure what it wants to improve it first need to identify what it
will improve and develop processes to accomplish performance.
Feedback loop also needed to assess compliance with plans to achieve improvements and
to determine if those processes created forecasted results (improvements). Improvement
process also related to learning process in identifying places that are need improvements.

47
 ? Activity 1
1. Explain the concept of performance measurement.
2. Discuss the benefits of performance measurement for the organization and individuals.
3. Explain the types of performance measurement.

3.4. Competency related performance

Dear learners! What is competency? Explain its relation with performance of employees.
________________________________________________________________________
________________________________________________________________________
_______________________________________________________________

Competency is demonstrable characteristics of the person including knowledge, skills and

behaviors that enable performance (Dessler, 2005).It is the knowledge, skills or abilities
required to do the job. Competency is more precisely defined as the behaviors’ that
employees must have or must acquire, to input into a situation in order to achieve high
levels of performance.

Competencies are a signal from the organization to the individual of the expected areas
and levels of performance. They provide the individual with a map or indication of the
behaviors’ that will be valued, recognized and in some organizations rewarded.
Competencies can be understood to represent the language of performance in an
organization, articulating both the expected outcomes of an individual’s efforts and the
manner in which these activities are carried out. Competencies are typically used to define
the behaviors’ that an employer values and believes will help to achieve its long-term
goals.

3.5. Competence and Competence Analysis

A competency is an ability that may be subject to measurement and that is necessary to do
a job efficiently, that is, to produce the results expected by the organization. Competency
analysis has the aim of identifying the knowledge, skills, abilities and enabling behaviors’

48
that employees are supposed to demonstrate for the organization to fulfill its goals and
objectives. To have a competency, it may just be necessary one type of knowledge, skill,
ability or behavior, or it may require a combination of all of them.
 An underlying characteristic of the individual, which is causally related to an
effective or high-level performance in a working situation and defined by a
certain criterion.
 Groups of knowledge, abilities, aptitudes and behaviors’ that a person possesses
and that enable him to carry out an activity successfully.

? Activity 2
1. Define competency.
2. What is competency analysis?
3. Discuss how competency and competency analysis contribute for improved performance.

 A skill or a personal attribute of an individual’s conduct, which may be defined

as a characteristic of his behaviors, and, according to which the task-oriented
behaviors may be classified in a logical and reliable manner.
Summary
Performance Measures are quantitative or qualitative ways to characterize and define
performance. They provide a tool for organizations to manage progress towards achieving
predetermined goals, defining key indicators of organizational performance and customer
satisfaction. It is the process of assessing the progress made towards achieving the
predetermined performance goals.

Performance Measurement has a lot benefits for the individuals and the organization. It
enhances decision making by allowing an organization to determine its mission, set
goals for desired results, and identify methods of measuring how well the results are
achieved. Performance measurement improves internal accountability. Employees at all
levels are accountable to upper level managers for their performance, and upper level
managers are accountable to executives. It also supports strategic planning and goal
setting.

49
Competency is the knowledge, skills or abilities required to do the job. Competency
analysis has the aim of identifying the knowledge, skills, abilities and enabling behaviors’
that employees are supposed to demonstrate for the organization to fulfill its goals and
objectives.

Chapter Three
Self test Exercise
Part One: True or False Items
1. Performance measures can be expressed in terms of number and unit of measures.
2. Impact measures helps to understand the human, material and financial resources used
to produced the out puts.
3. Competency is the knowledge, skill or ability required of an employee to do the job.
4. Performance measurement improves internal accountability.
5. Performance Measure is the process of assessing the progress made towards achieving
the predetermined performance goals.

Part Two: Multiple Choice

1. One of the following is wrong about the principle of performance measurement
A. Increasing un-measureable work B. Setting desired performance outcome
C. Defining performance D. Taking timely corrective actions
E. All of the above
2. An outcome measures focuses on
A. Count of output B. Actual impact
C. Time of work D. Resource costs E .All of the above
3. Performance measures has one of the following benefits
A. Enhance decisions B. Improve internal accountability
C. Support strategic planning and goal setting D. All of the above
E. None of the above
4. Performance measures should be
A. Objective B. Accurate
C. Motivating D. All of the above E. None of the above

50
5. The performance measure which focuses on the degree to which product or service
meets customer requirements and expectations is
A. Quality measures B. Efficiency measures
C. Effectiveness measures D. Outcome measures
E. All of the above
Part Three: Give short answer
1. Explain the benefits of performance measures in improving the performance of
individuals
________________________________________________________________________
__________________________________________________________________
2. Discuss how individuals competency influence organizational performance
________________________________________________________________________
__________________________________________________________________

CHAPTER FOUR
Framework of Performance Management
Unit introduction
Unit four deals with framework of performance management. It discusses the issues of
think-thank group and how to contribute for the performance of the organization,
definition and concepts of monitoring and evaluation which discusses the benefits, types
and similarities and differences of monitoring and evaluation. It also deals with integrated
performance management system and the concept of empowering individuals and
organizations to enhance the performance.

Objectives
At the end this unit the students will be able to
 Explain the contributions of think-tank group for improvement of performance
 Define monitoring and evaluation

51
  Discusses the benefits of performance evaluation and monitoring
 List types of evaluation
 Explain the similarities and differences between monitoring and evaluation
 Define the term empowerment
 Explain the importance of integrated performance management system
 Explain the benefits of individual and organizational empowerment

4.1 Issues of think- tank group

Dear learners! Please write what you know about the think-tank group and their
contribution on the performance of the organization and individuals.
________________________________________________________________________
________________________________________________________________________
_______________________________________________________________
A think tank (or policy institute) is an organization or individual that conducts research
and engages in advocacy in areas such as social policy, political strategy, economy,
science or technology issues, industrial or business policies, or military advice. Many
think tanks are non-profit organizations. Other think tanks are funded by governments,
advocacy groups, or businesses, or derive revenue from consulting or research work
related to their projects.

Think- tanks are policy-oriented research organizations that provide expertise to

government. Although think tanks are seemingly nonpartisan, in many instances they
function as extensions of state power, gaining and losing influence with changes in
governments and shifts in the ideological climate of the country. In other cases, think
tanks function more independently, questioning and monitoring state strategies and
structures. According to the National Institute for Research Advancement, think tanks are
"one of the main policy actors in democratic societies ..., assuring a pluralistic, open and
accountable process of policy analysis, research, decision-making and evaluation.

? Activity 1
1. What is think-tank group?
2. Explain how the think-tank groups contribute for the organizational
performance.
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4.2. Monitoring and Evaluation
Dear learner! Before you read the material try to define the term monitoring and
evaluation separately and write their differences using your own words.
________________________________________________________________________
________________________________________________________________________
_______________________________________________________________
Monitoring is a systematic process of collecting and analyzing information to track the
efficiency of the organization in achieving its goals. Monitoring is the regular observation
and recording of activities. It provides regular feedback that helps an organization track
costs, personnel, implementation of time, organizational development, and economic and
financial results to compare what was planned to the ensuing actual events. In essence,
monitoring entails the collection and analysis of information to track what is going on.

Evaluation on the other hand is defined as a systematic process of collecting and analyzing
information to assess the effectiveness of the organization in achieving its goals.
Evaluation provides regular feedback that helps an organization analyze the consequences,
outcomes and results of its actions. Evaluation also provides regular feedback that helps
organizations assess their relevance, scope and sustainability. In essence, evaluation
entails the collection and analysis of information to assess the impact of a work program
by addressing the question of whether or not the program made a difference.

4.2.1 Performance Evaluation

Dear learner! What is performance evaluation?
________________________________________________________________________
________________________________________________________________________
_______________________________________________________________Performanc
e evaluation is a process of judging the worth of observed performance .How good or bad
was the performance that was observed? What number should be assigned to the level of
performance exhibited by a worker?

53
Performance evaluation is a process of judging value of what have been achieved in
relation to planned activities and overall objectives. It involves value judgment and hence
it is different from monitoring.

Evaluation is important to identify the constraints that hinder in achieving its objectives. It
also enables managers and implementers to assess the benefits and costs that incurred by
the organization. Evaluation is essential for drawing lessons from the implementation
experience and using the lessons in planning to improve the organizational effectiveness.
It also provides a clear picture of the extent to which the intended organizational
objectives have been realized.

Evaluating performance is a subjective process. However, performance evaluation can be

surprisingly important to people. A numbers of outcomes that can have a very high value
to people are often directly linked to performance evaluations. For example, merit pay or
bonus, promotion, layoff and termination are just some of the outcomes linked to
performance evaluations. The evaluations can be symbolic to people, representing how
much their contributions are valued by the organization. For many people, performance
evaluations can be a central factor in their sense of self-worth. Performance evaluation is a
source for endless and costly grievances and a cause of employee dissatisfaction.

The typical approach to evaluation performance begins with first observing a worker. The
person doing the rating then judges the worth of what has been observed using mental
yardstick as a measure for the value of what was observed. There are some potentially
serious problems with this approach of evaluating performance. First, just what
characteristics of a worker is a manager focusing on? Certainly, we would hope that the
characteristics consist of relevant performance. However, it is possible that a manager
might focus on characteristics such as gender, age, race, national origin and so on that are
not only irrelevant but also legally indefensible. A second but related issue has to do with
the type of yardstick that the manager is using. Is it the same yardstick everyone is using?
In a typical situation, some people may be harsh while others are not.

54
The above two problems may lead to evaluations that are not based on the same factors
and that may be made using differing internal standards. If workers are not being
evaluated on relevant performance characteristics, the resulting decisions such as pay
raises, promotion and termination can not contribute to maximizing organizational
effectiveness. Further, if workers perceive that they are being evaluated on performance
irrelevant characteristics, they will mistrust the appraisal system, be dissatisfied with it,
and not view it as useful or fair. Second, evaluations being based on different standards
results in judgments that lack comparability. The comparability problem in performance
evaluation can not or at least should not be compared. However, organizations often
ignore the comparability problem and treat performance evaluations as though they were
made on the same scale (Cardy, 2004).

4.2.2 Need for Monitoring and Evaluation

Evaluation and monitoring go hand in hand. Monitoring provides the raw data while
evaluation puts those data for use and thus giving them value. Evaluation is where the
learning occurs, questions answered, recommendations made, and improvements
suggested. Yet without monitoring, evaluation would have no foundation, have no raw
material to work with and be limited to the realm of speculation. Monitoring is thus a
means of checking on progress as well as a tool for improvement. Without it, there is no
way of knowing if our management actions are working and how they should be changed
to be more effective.

Monitoring aimed at improving the efficiency and effectiveness of organization. It is

based on targets set and activities planned during the planning phases of work. It helps to
keep the work on track, and can let management know when things are going wrong. If
done properly, it is an invaluable tool for good management and it provides a useful base
for evaluation. It enables to determine whether the available resources are sufficient and
are being well used.

Evaluation is the comparison of actual impacts against the agreed strategic plans. It looks
at what you set out to do, at what you have accomplished, and how you accomplished it. It

55
can be formative (taking place during the life of organization, with the intention of
improving the strategy or way of functioning of the organization).It can also be summative
(drawing learning from a completed project or an organization that is no longer
functioning).
Monitoring involves
 Establishing indicators of efficiency, effectiveness and impact;
 Setting up systems to collect information relating to these indicators;
 Collecting and recording the information;
 Analyzing the information;
 Using the information to inform day-to-day management.
Monitoring is an internal function in any organization.
Evaluation involves:
 Looking at what the organization intended to
 Assessing its progress towards what it wanted to achieve.
 Looking at the strategy of the organization.
 Looking at how it worked. Was there an efficient use of resources? What were the
opportunity costs of the way it chose to work? How sustainable is the way in
which the project or organization works? What are the implications for the various
stakeholders in the way the organization works?

? Activity 2
1. What is monitoring and evaluation?
2. Explain the similarities and differences of monitoring and evaluation.
3. Discuss the importance of monitoring and evaluation.

4.3. Developing Integrated Performance Management System

Dear learner! What is an integrated performance management system?
________________________________________________________________________
________________________________________________________________________
_______________________________________________________________

56
An integrated performance management system always aligns itself to the organization
strategic plan and the system encourages and inspires employees to perform in those job
activities they are supposed to excel in, according to their strategic derived job
descriptions. Performance of each job is also aligned to the hierarchical differentiation of
management roles, functions and tasks.

The "integrated" part of the description in "the integrated performance management

system" means it integrates or merges the existing organization infrastructures like the
specific organization strategic planning process, the job commitment declarations, the job
descriptions, the performance measurement, the organization planning, organizing,
controlling, reporting, directing, budgeting and management meeting processes, into one
unified, coherent, streamlined, management system of the organization.

The integrated performance management system also encourages short interval self-
control by each employee on each hierarchical level, to minimize the control function and
control frequency, by each consecutive higher-level manager, so that supervision and
control over subordinates become almost self-regulatory and self managed.

The integrated performance management system was designed to make organization

improvement. Any organization can implement an integrated performance management
system to improve clarity of vision, job purpose, employee motivation and morale,
productivity and profitability of employees and organizations.

Benefits of an Integrated Performance Management System

An integrated performance management system has direct and indirect benefits for the
individuals and organizations.

The direct benefits are creating an opportunity for employees to rotate their attitudes 360
degree around; better co-operation between employees and between departments; job
descriptions stay current; performance measurement becomes transparent; merit ratings
and merit increases become transparent; individual and organization productivity and

57
performance increase; the management functions become more automated and self-
regulatory; organization efficiency and effectiveness increase.

There are also indirect benefits of the integrated performance management system. Some
of them are: less employee frustrations, less employee stress, less in-fighting, less arguing,
less political jostling, less supervision, less worries, higher employee motivation,
continuous growth in employee self-improvement and higher employee morale that
ultimately enhance the performance of individuals and organizations.

Benefits for subordinates:

 They know exactly what goals to achieve and strive for.
 They know first of deviations, which call for corrective actions.
 They can take remedial action before they have to report on performance progress.
 They know exactly, which performance factors will be measured for possible
bonuses and merit increase evaluations.
 They are better equipped with updated information to control their immediate job
 environments themselves.

Benefits for Supervisors and Managers:

 They spend less time on supervision over subordinates.
 They have more time for exploring the environment and for planning
improvements.
 They have more time for development of subordinates.
 They have more time for improvement of section and departmental
performance.
 They are better equipped with the latest figures to report upwards on
performance progress.

Benefits for the Organization:

 The remuneration and promotion practices become more transparent and
justifiable.
 Higher employee morale, dedication and motivation.

58
  Higher organization productivity and profits.
? Activity 3
1. Explain the concept of an integrated performance management system.
2. Discuss the benefits of an integrated performance management system for workers,
managers and organization.
3. Discuss how an integrated performance management system can bring organizational
productivity.

4.4. Empowering Institutions

Dear learners! What is Empowerment? Please write what you know about empowerment
on the space provided.
________________________________________________________________________
________________________________________________________________________
_______________________________________________________________
Empowerment is a ‘catch-all’ term for many ideas on employee power and responsibility;
but as a broad definition, it means giving employees the power to do their job. This can
mean giving some authority to front line staff, encouraging employee feedback, or simply
showing employees more trust.

Empowerment is the process of enabling or authorizing an individual to think, behaves,

take action, and control work and decision making in autonomous ways. It is the state of
feeling self-empowered to take control of one's own destiny. Empowerment comes from
the individual.

Benefits of Empowerment
Empowering employees with in the organization to manage their own job has a lot of
benefits for employees and the organization. It helps to build a sense of loyalty, energizes,
motivates and achieves better result. There are numerous benefits of empowering others
and these include:
Building loyalty: Empowering employees enables workers to be loyal to themselves, their
team and their organization. When a manager or leader gives people the opportunity to

59
grow and develop, staff become incredibly loyal. They know that managers trust them and
will go extra mile when things are tough.
Energizing others: It also energizes workers. When people are energized, they find new
ways of breaking down what might have been viewed as obstacles in the past and look for
different ways to perform their job in more efficient ways.
Motivation: Providing responsibility often motivates employees. When you empower
someone you are essentially saying to them that you know they can do it and trust them to
deliver.
Learning and development: Empowering creates opportunity to learn new skills and
develop their potential to effectively discharge their responsibility. When you empower,
you take some risk and allow others to learn and develop from doing a task.
Performance: Empowering improves performance. You might have heard the saying
practice makes perfect. Changes in performance happen more quickly when people get
into action and start doing. Empowering is a great way of improving performance.
Achieving results: All managers and leaders are at the end of the day judged on the results
they achieve. Empowering others and leveraging the full range of skills, knowledge,
experience and personal attributes at your disposal helps achieve results.
Recruitment and retention: Attracting and retaining good people is a major challenge for
many organizations. If you are known as a manager or leader who empowers others, you
will start to attract the best and they will stay longer
Succession planning: Managers and leaders are ambitious and like to keep climbing the
career ladder. Many managers and leaders want to ensure that when the time comes for
them to move on, there is a batch of people ready to step into their role.
? Activity 4
1. Define the term empowerment.
2. Discuss the benefits of empowering employees.
3. Explain how empowering workers can contribute for organizational effectiveness.

Summary

60
A think- tank is an organization or individual that conducts research and engages in
advocacy in different areas. They are policy-oriented research organizations that provide
expertise to government.

Monitoring is defined as a systematic process of collecting and analyzing information to

track the efficiency of the organization in achieving its goals. It is the regular observation
and recording of activities to provide regular feedback that helps an organization track the
activities of employees. Evaluation on the other hand, is defined as a systematic process of
collecting and analyzing information to assess the effectiveness of the organization in
achieving its goals. It provides regular feedback that helps an organization analyze the
consequences, outcomes and results of its actions and judges the value of what have been
achieved in relation to planned activities and overall objectives.

An integrated performance management system is a means which integrates or merges

the existing organization infrastructures like the specific organization strategic planning
process, the job commitment declarations, the job descriptions, the performance
measurement, the organization planning, organizing, controlling, reporting, directing,
budgeting and management meeting processes, into one unified, coherent, streamlined,
management system of the organization.

Empowerment can be seen as the process of enabling or authorizing an individual to think,

behaves, take action, and control work and decision making in autonomous ways. It is the
state of feeling self-empowered to take control of one's own destiny. The organization has
the responsibility to create a work environment which helps foster the ability and desire of
employees to act in empowered ways and to remove barriers that limit the ability of staff
to act in empowered ways. It helps to building a sense of loyalty, energizing, motivating,
learning and development and achieving better result are some of the major benefits of
empowerment.

Chapter Four
Self-Test Exercise

61
Part One: True or False Items
1. Monitoring is the regular observation and recording of activities to guide the
performance of employees.
2. Performance evaluation is the process of judging the worth of observed performance.
3. Empowering is the process of denying an individual or organizations to make decisions
in an autonomous way.
4. An integrated performance management system can be used only at organizational
level.
5. Monitoring is an internal function in any organization.
Part Two: Multiple Choice
1. Monitoring performance involves
A. Conducting performance review B. Providing ongoing feedback to employees
C. Comparing the actual performance with the desired one
D. All of the above E. None of the above
2. Integrated performance management
A. Decreases employee frustration
B. Increases the transparency of performance measures
C. Increases individual and organization productivity
D. All of the above E. None of the above
3. One of the following is considered as the benefit of empowering employees
A. Builds loyalty B. Motivates employees
C. Improves performance D. All of the above E. None of the above
4. Identify the incorrect statement about evaluation
A. It is a subjective process B. It involves value judgment
C. It helps to compare the actual impacts against the agreed strategic plans
D. All of the above E. None of the above

CHAPTER FIVE
Factors for successful Implementation of Performance
Management system

62
Unit Introduction
This unit deals with factors that contribute for the successful implementation of
performance management system. It focuses on team management that discusses the
concept of team, essentials of team building and types of team. Feed backing is another
focus of the unit. The concept, benefits and different ways of delivering and receiving
feedback were discussed in detail. The unit also addresses the reward system; performance
problem solving which emphasizes on improving individuals performance and
organizational effectiveness and performance and development reviews.

Objectives
 Explain the concept of team performance management
 List different types of teams
 Explain the benefits of providing feedback
 Explain the importance of reward system to motivate employees
 Identify personal and system factors that contribute for improved performance
 Conduct performance and development reviews

5.1. Team Performance Management

Dear learner! What is team and team performance management?
________________________________________________________________________
________________________________________________________________________
_______________________________________________________________

A team is a collection of individuals organized to accomplish a common purpose, who are

interdependent, and who can be identified by themselves as a team. Teams exist within a
larger organization and interact with other teams and with the organization. Teams are one
way for organizations to gather input from members and to provide organization members
with a sense of involvement in the pursuit of organizational goals.

A team comprises a group of people linked in a common purpose. Teams are especially
appropriate for conducting tasks that are high in complexity and have many

63
interdependent sub tasks. Group in itself does not necessarily constitute a team. Teams
normally have members with complementary skills and generate synergy through a
coordinated effort which allows each member to maximize his or her strengths and
minimize his or her weaknesses. Team members need to learn how to help one another,
help other team members realize their true potential, and create an environment that allows
everyone to go beyond their limitations.

Team management refers to techniques, processes and tools for organizing and
coordinating a group of individuals working towards a common goal. Team performance
management is the concept of adjusting the composition, context or direction of a team or
work group in order to increase the effectiveness of the team or group.

Team size and composition affect the team processes and outcomes. The optimal size (and
composition) of teams is debated and will vary depending on the task at hand.
Regarding composition, all teams will have an element of homogeneity and heterogeneity.
The more homogeneous the group, the more cohesive it will be. The more heterogeneous
the group is, the greater the differences in their perspective and increased potential for
creativity, but also the greater potential for conflict.

Teams can also be developed through team building activities - which can also be used
simply to build relationships where team members lack cohesion due to organizational
structure or physical distance.

Essentials of team building

Team requires a shared purpose: All the members in the team should have a common
mission or a goal.
A Team requires a team leader: Leadership is not about control or power; it is about
accepting responsibility for helping the team achieve its purpose.
Team requires clear roles: Teams have many and varied makeup’s, in order to ensure that
responsibilities are carried out with greatest effect and least confusion each team member
should understand and be able to articulate what their role is.

64
Team requires clear boundaries (what don’t we do): Clear boundaries say where our
team won't go, and what our team won't do. This is important as the team tries to stay
focused on its primary purpose.
Team requires relationship: Relationship is the oil that keeps the team working smoothly.

5.2 Types of Teams

There are various types of teams which serve different purposes. The major one’s are:
Self Managed Work Teams: Self managed work teams are groups of employees who
perform highly related or interdependent jobs and take on many of the responsibilities of
their former supervisors. Fully self managed work teams even select their own members
and have the members evaluate each other’s performance.
Cross Functional Teams: Cross functional teams are group of employees who are from
the same hierarchical level but from different work areas who come together to
accomplish a task.
Problem Solving Teams: In problem solving teams members share ideas or offer
suggestions on how work process and methods can be improved, they rarely have the
authority to unilaterally implement any of their suggested actions.
Virtual Teams: Virtual teams use computer technology to tie together physically
dispersed members in order to achieve a common goal.
Project Teams: A team used only for a defined period of time and for a separate,
concretely definable purpose, often becomes known as a project team. Members of these
teams might belong to different groups, but receive assignment to activities for the same
project, thereby allowing outsiders to view them as a single unit.
Informal Teams: Informal teams are generally formed for social purposes. They can help
to facilitate employee pursuits of common concerns, such as improving work conditions.
More frequently however, these teams form out of a set of common concerns and
interests, which may or may not be the same as the organizations. Leaders of these teams
generally emerge from the membership and are not appointed by anyone in the
organization.

In general, in any organization two or more people working together harmoniously is a

major factor towards achieving success. It is the duty of a leader to monitor the

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performance of his or her team; bring out the best among his or her subordinates; and
determine the weaknesses, strengths, and potential development of each team member.
Team performance management is the major key in increasing productivity within a
group. Team performance management is important to the success of an organization.
Without it, it is difficult to determine whether a team is headed in the right direction

Effective team management motivates workers to take responsibility for their job
performance and produce superior outputs. Managing the performance of a team is a real
challenge because it requires a lot of diplomacy, tact, and discipline. Building a team and
maintaining good working relationships may be difficult to do, however. In team
performance management, team members undergo a number of development phases to
work together effectively. Rewards are given to well-performing individuals.
? Activity 1
1. Discuss the concept of team and team performance management.
2. List the different types of teams.
3. Explain how teams or team performance management can improve the performance of
individuals and effectiveness of the organization.

5.3. Feed backing

Dear learner! Write what you know about feedback using your own words before you
read the material on the space provided.
________________________________________________________________________
________________________________________________________________________
_______________________________________________________________
Good!
Feed back is an ongoing, consistent activity that addresses both the strengths and the
weakness areas of employees’ performance. Effective feedback focuses more intensely on
helping people build on their strengths. Feedback is a two-way process that encourages the
employee to seek help.

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Feedback helps to improve employees’ performance. Employees need feedback to correct
and refine their performance to understand what their strengths and weaknesses are or to
simply have an idea of how they are doing. People do not necessarily know how they are
doing. Certainly, workers can sometimes receive feedback from the task itself.
Performance evaluation usually involves subjective human judgment. Even if the
objective characteristics of performance are known, it is the subjective assessment of
evaluators that has the real feedback value for workers. In other word, people want a sense
of how they are doing. They want to know what their boss, coworkers and subordinates
think of them. Objective indicators of performance are not usually enough. People want to
know how their performance is subjectively valued. Obtaining feedback regarding
subjective evaluation is a natural human motive.

Feedback is usually more effective when requested and it is important, particularly when it
is based on careful human judgment. The content of feedback is absolutely critical. A
worker might embrace feedback as an opportunity to improve his or her performance.
What can make the difference between having a positive or negative influence on
performance is the focus in the content of the feedback. The focus of feedback is on
performance rather than on performer’s personal characteristics. Focusing feedback on
performance separates any performance difficulties form the worth of the person. A focus
on performance provides a clear path to improvement.

In addition to the content, timeliness and frequency are important features of feedback.
Feedback can act as reinforcement because it lowers uncertainty. Feedback is information
and provides people with the opportunity to improve. As a reward and directive
information, it is important that feedback follow performance as quickly as possible. If
feedback is not provided timely it can not be expected to be as powerful as it would be.
Immediate feedback can alter performance while it is occurring.

In addition to timeliness, frequency is other important characteristics of feedback.

Feedback need to be frequent. The more frequent the feedback, the better it improves the

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performance of workers. More frequent feedback provides more opportunities to discuss
performance and take steps to improve it. However, the frequency of performance
feedback should not be so great that interferes with performance which takes attention
away from actually performing the work.

5.3.1. Dealing with feedback

Delivering and receiving feedback can involve more than rational assessment and
discussion of plans for improvement. When performance feedback is done for the first
time or when it is not part of the regular pattern of events, it is only natural that emotions
occur. Even when it is part of the normal routine, emotion can play a role in the process
and both on the part of the worker and the evaluator in providing and receiving feedback
to improve performance. Non affective tasks are those that are considered to be free of
emotion and involve only rational and cognitive judgment.

In contrast, affect is considered to be emotion and to be a process separate from but

influencing the rational and cognitive judgment process. The person delivering
performance feedback might be seen as being in control and in a more powerful position
in the exchange but affect can still be an important issue for the evaluator. The worker,
who is the recipient of the feedback, may experience a variety of emotional reactions that
can get in a way of effectively dealing with the feedback. Considering either evaluator or
worker role in performance feedback is more than rational content, affect is often
interwoven in the feedback process which influence the performance of employees.

It is assumed that emotional reactions may sometimes be unavoidable. What is important

is not that emotional reactions occur, but that we anticipate, recognize and humanely and
effectively managing emotional reactions. Providing evaluative and directive comments
about performance typically involves more than a cold and analytical assessment of the
gap between present performance levels and desired performance levels.

[Link] Delivering feedback

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The role of delivering feedback might seem to bring with it little cause for affect.
However, being responsible for evaluating performance and for providing feedback that
will be accepted by the worker and that can lead to performance improvement and
development can be difficult.
Providing performance feedback can lead to affective reactions. The emotional reactions
can range from simple and passing anxiety to serious questioning of self-confidence in the
ability to provide feedback and manage performance. In some situations, the emotional
difficulty may be so great that it leads the evaluator to change his /her evaluations and
feedback. People consider performance evaluation and feedback as an accurate assessment
of strengths and weakness. It is a basis for decisions such as additional training needs,
staying with an organization, or reinforcement that a job has been done well or poorly.
Inaccuracy in evaluation and feedback may occur due to emotional issues on the part of
the evaluator that can invalidate the potential usefulness of the feedback, the performance
management system and change its utility from positive contribution to a cost to the
organization.

Evaluator affect can influence even the initial performance management steps of
observation and diagnosis. For example, affect in the form of liking and disliking has been
found to bias observation and diagnosis. In addition, emotion can certainly influence
performance evaluation. It decreases the accuracy of performance judgments.

Managers or evaluators can use different mechanisms to manage the effect of emotional
reactions. The major techniques that help them for managing the influence of affect are:
 Generating clearly define criteria
 Developing common evaluative standards
 Keeping worker performance records
 Establishing a means for workers to voice their concern self awareness
 Held evaluators accountable for their feedback and development efforts.

[Link] Receiving Feedback

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Receiving performance feedback is not necessarily a passive and non affective task. It can
produce a very active internal emotional state. Emotional reaction tends to happen very
quickly and unfortunately can then make hearing and rationally considering and
responding to additional feedback become very difficult.

A variety of emotional reactions to performance feedback are possible and some of the
major reactions are, for example, Surprise it used to convey the positive emotional state
that can occur when the evaluative comments received are more positive than anticipated.
Defensiveness on the other hand, can occur when someone feels he or she is being
attacked and needs to defend him or herself. This can happen when feedback is perceived
to be too personal or unfair. The remaining emotional reactions can happen singly, but as a
set they might be considered as the defensiveness syndrome. The syndrome starts with
shock at the negativity of the evaluation and feedback. After the initial shock reaction, the
person may become angry at the initial shock reaction; the person may become angry at
the feedback and the person delivering it. Rejection may then quickly follow with the
worker deciding that the feedback must be wrong and that there is no reason to listen to
any more inaccuracies. As a syndrome, this set of emotional reactions ends up with the
worker not listening the person delivering the feedback. This outcome is certainly not
compatible with the desired end state of a mutually agreed on plan to further improve
performance.

? Activity 2
1. What is feedback? Discuss its concept briefly.
2. Discuss the emotional reactions likely to occur during providing and
receiving feedback.
1. Explain the mechanisms that helps managers and workers to manage their
emotional reactions.

5.4. Reward System

Dear learners! What is reward?
________________________________________________________________________

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________________________________________________________________________
_______________________________________________________________

Reward is a facet of performance management that aims to encourage a particular

behavior or outcome. It includes anything that employees value such as pay increase,
bonus, promotion etc. reward should be aligned with organizational goal.

The reward or compensation people receive for their contribution to an organization

includes monetary and non-monetary components. Remuneration does not simply
compensate employees for their efforts - it also has an impact on the recruitment and
retention of talented people. One of the important attributes of work in organization is its
ability to give rewards to their members. Pay, promotions, fringe benefits, and status
symbols are perhaps the most important rewards. Because these rewards are important and
the way they are distributed have a profound effect on the quality of work life as well as
on the effectiveness of organizations.

Organizations typically rely on reward systems to do four things:

 motivate employees to perform effectively,
 motivate employees to join the organization,
 motivate employees to come to work, and
 motivate individuals by indicating their position in the organization structure

5.4.1. Purpose of Rewarding

The main purpose of rewarding strategy is to support organizational goals and to recruit
and retain high performers. Compensation and rewarding is important. A recognition
program can be arranged anytime and it does not have to be expensive. All it needs is
fairness, high visibility and consistency. To be fair, a program must not favor one
employee over another. Making certain that a program is highly visible will help to ensure
consistent implementation .The reward should just be part of the process.
.
5.4.2. Principles of Reward System

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There are several principles for setting up an effective reward system in an organization:
 Give value to the reward system. Employees must have a preference for the types
of rewards being offered. Some employees may prefer cash awards while others
like recognition or other.
 Make the reward system simple to understand. The system must be easy to
understand if it is to be used effectively.
 Lay down performance standards within the control of the team.
 Make the reward system fair and effective.
 Ensure participation in the reward system.
 Involve people in the reward process and empower them to do the needful.

Most organizations use different types of rewards. The most common are wages or salary,
incentive systems, benefits and perquisites and awards. For majority of people, the most
important reward for work is the pay they receive. For one thing, an effectively planned
and administered pay system can improve motivation and performance. Money may not
actually motivate people. Surprisingly, there is no clear evidence that increased earnings
will necessarily lead to higher performance. A great deal of research has been done on
what determines whether an individual will be satisfied with the rewards he or she
receives from a situation.

An effective reward system should link reward to performance. Workers who work hard
and produce more or give better quality results should receive greater rewards than poor
performers. Also, criteria for receiving rewards should be clear and employees should
know whether they are going to receive rewards for quality performance, innovation,
effort or attendance. Management must ensure that workers perceive distribution of
rewards as equitable. Furthermore, for organizations to attract, motivate and retain
qualified and competent employees, they must offer rewards comparable to their
competitors.

5.4.3. Incentives and Rewards

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A distinction may be drawn between incentives and rewards. Incentives are forward
looking while rewards are retrospective. Financial incentives are designed to provide
direct motivation – ‘do this and you will get that’. Financial rewards provide a tangible
form of recognition and can therefore serve as indirect motivators, as long as people
expect that further achievements will produce worthwhile rewards.

Financial incentives aim to motivate people to achieve their objectives, improve their
performance or enhance their competence or skills by focusing on specific targets and
priorities. Financial rewards provide financial recognition to employees for their
achievements in the shape of attaining or exceeding their performance targets or
reaching certain levels of competence or skill.

Organizations provide incentives and rewards based on different bases for their
employees. Some of them are:

Membership and seniority based rewards

A benefit an employee receives depends on the organizations, which he/she joins. In the
same organization, a senior employee receives more benefits than his or her junior
employee. Advancement, pay raises, retirement benefits and perquisites depend on
seniority of an employee.

Job status based rewards

Every organization rewards employees for the status of the job they are holding.
Organizations use job evaluation system, which helps establish differentials are status of
the job

Competency related rewards

Increasingly organizations are linking rewards to competencies reflected through skill,
knowledge and traits that lead to desirable behavior. Competence-related pay is a method
of rewarding people wholly or partly by reference to the level of competence they
demonstrate in carrying out their roles. This definition has two important points: (1) pay is

73
related to competence, and (2) people may be rewarded with reference to their level of
competence. Competence-related pay is not about the acquisition of competence. It is
about the effective use of competence to generate added value. Competence-related pay
works through the processes of competence analysis of individual competences and levels
of competence.

Performance based rewards

The trend that is emerging recently is to link pay to performance. Performance based
rewards are many and the most common are organizational rewards (profit sharing, stock
options), team rewards (gain sharing, special bonuses), individual rewards (piece rate,
commission, merit pay, bonus)

Profit sharing: Profit sharing is associated with participative management theories. Profit
sharing is a group-based organization plan. The fundamental objectives of profit sharing
are:
 to encourage employees to identify themselves more closely with the organization by
developing a common concern for its progress;
 to stimulate a greater interest among employees in the affairs of the organization as a
whole;
 to encourage better cooperation between management and employees.

The logic behind profit sharing seems to be twofold. First, it is seen as a way to encourage
employees to think more like owners or at least be concerned with the success of the
organization as a whole. Individual oriented plans often place little emphasis on these
broader goals. Second, it permits labor costs to vary with the organization’s ability to pay.
The most important advantage of profit sharing is that it makes labor costs of an
organization variable and adjusts them to the organization’s ability to pay.

Team-based rewards: Team-based rewards are payments or other forms of non-

financial rewards provided to members of a formally established team, which are linked
to the performance of that team. Team based rewards are shared amongst the members

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of teams in accordance with a scheme or ad hoc basis for exceptional achievements.
Rewards for individuals may also be influenced by assessments of their contribution to
team results. To develop and manage team rewards it is necessary to understand the
nature of teams and how they function. Team-based rewards are not always easy to
design or manage.
? Activity 3
1. Discuss the contribution of reward for the organization, team and individual performance.
2. Explain the difference between incentive and reward.
3. Explain the distinction between monetary and non monetary rewards and/or intrinsic
and extrinsic rewards.

5.5. Performance Problem Solving

Dear learners! Explain how individuals and organizations can improve their performance?
________________________________________________________________________
________________________________________________________________________
_______________________________________________________________

Performance improvement is the concept of measuring the output of a particular process

or procedure, then modifying the process or procedure to increase the output, increase
efficiency, or increase the effectiveness of the process or procedure. The concept of
performance improvement can be applied to either individual performance or
organizational performance. The primary goals of organizational improvement are to
increase organizational effectiveness and efficiency to improve the ability of the
organization to deliver goods and or services.

Improving performance is the goal of performance management. Effective performance

management involves more than simply evaluating the past. The emphasis needs to be
forward looking and focused on how performance can be even better in the future..

Performance improvement efforts would be expected to be effective only when it is based

on solid diagnosis of the problem. Causal consideration of the performance management

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process would lead to the conclusion that diagnosis should be directly and intimately tied
to performance improvement efforts. The diagnosis stage identifies the factors that should
be the focus of performance improvement efforts.

Diagnosis of the major determinants of performance that is system factors, ability and
motivation leads to very different remedies to performance difficulties. Assuming that an
organization has an adequate hiring and training program, ability would not be a frequent
barrier to performance. For years, ability and motivation were accepted as the primary
determinants of performance. The human resources management field commonly relied on
the following multiplicative formula to capture performance (Gomez-Mejia, Balkin and
Cardy, 2003).
Performance = Ability X Motivation
According to this function, performance is a function of ability and motivation, and if
either ability or motivation is low, the resulting performance will be low. Given the
multiplicative conceptualization, lack of ability cannot overcome with a high level of
motivation. Likewise, low performance will result despite a high ability level if motivation
is lacking.

The above formula directs attention to two categories of factors ability and motivation as
principal determinants of performance. Thus, ability and motivation have been viewed as
the major factors to focus on when attempting to improve performance and are the major
levers used by management to improve performance. In short, the causes of performance
become the means by which performance can be improved. However, the recently popular
quality management approach urges managers to expand their understanding of the causes
of management. Specifically, quality management advocates have argued that system
factors are the primary determinant of performance.

System factors refer to anything outside of the individual worker system or situational
factors would, of course, include the fairly obvious and direct factors of poor tools, shoddy
equipment, defective materials, organizational culture, leadership and team interaction, etc
that can have a dramatic influence on the level of performance.

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Performance as a function of personal and system factors

Personal
Ability Performance
Motivation Behavior
Outcomes

System
factors

The above figure shows the joint influence of person and system factors on performance.
As shown in the figure, both person and system factors influence performance, defined as
either behavior or outcomes. In addition, it can be noted in the figure that person and
system factors are portrayed as being capable of influencing each other. For instance,
people can influence and alter how a system works, such as the process to be followed and
the order in which tasks are to be carried out. Characteristics of the system may also
influence people. For instance, characteristics of a system may serve to motivate or de-
motivate workers and a change in a system may force workers to learn new skills.

Recognition of the possible role of system factors in determining performance leads to the
following expanded performance formula.
Performance = Ability X Motivation X System
As portrayed in this multiplicative function, even if motivation and ability are high, poor
system factors could lead to poor performance.
Some of system factors are:
 Poor coordination of work activities with others
 In adequate information, instructions, specifications needed to perform the job
 Lack of needed equipment
 Inability to obtain raw materials, parts, supplies
 Inadequate financial resources
 Uncooperative coworkers and /or poor relationship, among people

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  Failure to receive adequate training
 Insufficient time to produce the quantity of work required for the job
 Poor environmental conditions
 Unexpected equipment breakdown
 Economic conditions
 Organizational politics(Cardy,2004)

The above statement provides a general set of system factors that could be made more
specific and customized to your particular work setting. Certainly, performance
improvement efforts directed at system factors should be based on prior diagnosis of the
presence of system factors that inhibit performance.

Another way to think of performance improvement is to see it as improvement in four

potential areas. First, is the resource input requirements (e.g., reduced working capital,
material, replacement/reorder time, and set-up requirements). Second, is the throughput
requirements, often viewed as process efficiency; this is measured in terms of time, waste,
and resource utilization. Third, output requirements, often viewed from a cost/price,
quality, functionality perspective. Fourth, outcome requirements, did it end up making a
difference.

Dear learner! Write how system factors can be approached to improve performance.
________________________________________________________________________
________________________________________________________________________
_______________________________________________________________
Three major choices in terms of how to approach the performance improvement are
identified. These are unilateral, participative and empowered/ self managed approach.
System constraints on performance can be dealt with unilaterally. The unilateral approach
offers the advantage of speed but it can produce unexpected and unwanted results.

A participatory approach to improving system factor could be taken. The participatory

approach can length the time needed for making a change the work system but it offers a
variety of potential benefits. Perhaps most important, it is possible that worker input could

78
identify a different system factor as the actual constraint on performance. Thus, a different
solution may be generated.

Performance improvement efforts may also occur in an empowered or self- managed

setting. In an empowered environment workers are given broader decision-making
authority and increased responsibility for work processes and outcomes (Gomez-Mejia,
Balkin, and Cardy,2003). A self-managed team pushes the empowered notion further by
viewing employees as responsible for their own management.

Employees are primarily responsible for performance improvement activities in an

empowered/self-managed approach. The participative approach involves both
management and employee whereas; management has primary responsibility when
unilateral approach is taken to improve the performance of employees.

Dear learners! What is motivation? Where does it reside?

________________________________________________________________________
________________________________________________________________________
_______________________________________________________________
There is no single answer on which everyone would agree to these important philosophical
questions. These questions are important for more than philosophical reasons, the answers
drive the practical concern of how motivation should be managed and improved. At one
extreme, motivation lies within the individual. In the psychoanalytic approach, for
example, motivations are deep seated and largely determined by a person’s past
experiences. Sources of motivation are therefore, difficult to uncover, from this
perspective, resolving motivation problems or improving motivation may require time and
therapy. Given that motivation resides within the individual, it would seem far easier to be
highly selective when hiring and to screen out people who are not appropriately motivated
for the job than it would be to alter someone’s motivation. On the other extreme,
motivation resides solely outside of the worker. For example, the behavioral psychology
approach views motivation as determined by the contingencies that exist between
behaviors and their consequences.

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According to this view, the notion of motivation as internal characteristics of a person is
an unnecessary inference that people make. Behavior can be motivated in any desired
direction, so long as the appropriate contingencies are set up in the environment.

As with most things, the practical reality is probably a mix of the positions. No doubt,
some people are more energetic and motivated than others. However, there is no denying
the impact of contingencies on behavior. In most situations, motivation in a workplace is
probably due to a combination of internal and external factors. If motivation is entirely
internally driven, then responsibility for motivation can not reside with management.
However, if motivation is entirely externally driven, then the worker would bear no
responsibility for motivation, managers alone would be responsible because they can set
up and alter the external contingencies. In most workplace situations it would seem that
motivation issues typically involves some degree of responsibility on the part of both
workers and managers (Cardy, 2004).

Goal Setting
Goal setting is a straight forward and simple approach to motivation that has received
solid research support as an effective to increase performance .The essence of goal setting
is setting a performance objective, or goal, to strive for. It is a technique that associated
with viewing performance as outcomes. Goal setting is a technique at the heart of
management by objective system of management. It can be used as a separate technique
regardless of the over all management system. However, it is probably most effective if
goal setting is part of a compatible system that emphasizes goal achievement (e.g.,
compensation and recognition tied to goal achievement). In addition, while goal setting is
typically associated outcomes, it is possible to use goal setting with behaviors.

Expectancy Model

Expectancy is a model meant to capture how people make choices and was initially
developed by Victor Vroom (1964). Applied to the issue of motivation, the expectancy
model examines motivation as the level of effort someone chooses to put forth toward a

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task. The model provides a systematic and structured means by which motivation
problems can be considered. The model can identify sources of motivation problems.
According to the model, the effort expended on a task will be determined by the value the
person places on the task and on the belief that he/she can perform the task. The core
message of this model is that people will be motivated to perform well on a task only if
the task has value to them and if they believe they can be successful.
Components of Expectancy Model
Expectancy (E) is a person’s personal assessment as to the likelihood of success if a given
level of effort is put forth. It is the extent to which one believes he/she can succeed at a
task. System barriers, criteria, ability and self- efficiency are possible influences on
expectancy and all of these influences may be, at least to some extent, changeable by
mangers. Thus, poor motivation due to low expectancy can be addressed and improved
through external factors.

Valance and instrumentality in addition to expectancy, the other critical factor in

determining motivation is the value or valance that a person associates with the
performance of a task. According to the expectancy framework, the value placed on
performing a task (V1) depends on what the task performance is perceived as leading to
and the value the worker places on those outcomes. The link some one perceives between
task performance and outcomes, such a merit pay, promotion, recognition and so on, is
referred to as instrumentality (I). The valance of second level outcomes (V2) is determined
by the needs and preferences of the individual.

? Activity 4

1. Discuss how system factors and personal factors affect performance.

2. Explain how system factors and personal factors influence each other.
3. Explain the concept of expectancy model and discuss how this model influence the
performance of workers.

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5.6. Conducting Performance and Development Reviews
Although performance management is a continuous process, it is still necessary to have
formal review once or twice yearly. This provides a focal point for the consideration of
key motivational, performance and developmental issues. It is a means for considering the
future in the light of an understanding of the past and present. Reviewing gives managers
and the individual members of their teams the opportunity to reflect on key issues of
personal development and performance improvement. They enable dialogues involving
two-way communication on issues concerning work to take place and this provides the
basis for future work and development plans. Formal reviews do not replace informal but
they can complement and enhance them and therefore have an important part to play in
performance management

The Objectives of Performance Reviews

The objectives of performance reviews are:
Motivation: to provide positive feedback, recognition, praise and opportunities for growth;
to clarify expectations; to empower people by encouraging them to take control over their
own performance and development

Development: to provide a basis for developing and broadening abilities relevant to both
the current role and any future role the individual may have the potential to carryout. Note
that development can be focused on the current role, enabling people to enlarge and enrich
the range of their responsibilities and the skill they require and be rewarded accordingly.

Communication: To serve as a two-way channel for communication about roles,

expectations, relationships, work problems and aspirations.

Summary
A team is a collection of individuals organized to accomplish a common purpose, who are
interdependent and identified as a team by themselves and observers. Teams exist within
organization and interact with other teams and with the organization. Teams are especially
appropriate for conducting tasks that are high in complexity and have many

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interdependent sub tasks. Group in itself does not necessarily constitute a team. Teams
normally have members with complementary skills and generate synergy through a
coordinated effort that allows each member to maximize his or her strengths and minimize
his or her weaknesses.
Feedback is an ongoing, consistent activity that addresses both the strengths and the
weakness areas of employees’ performance. Effective feedback focuses more intensely on
helping people build on their strengths. Feedback is a two-way process that encourages the
employee to seek help. It helps to improve employees’ performance.

Reward is a facet of performance management that aims to encourage a particular

behavior or outcome. It includes anything that employees value such as pay increase,
bonus, promotion etc. Reward should be aligned with organizational goal. The reward
employees receive for their contribution to an organization includes monetary and non-
monetary components

Performance improvement is the concept of measuring the output of a particular process

or procedure, then modifying the process or procedure to increase the output, increase
efficiency, or increase the effectiveness of the process or procedure. The concept of
performance improvement can be applied to either individual performance or
organizational performance. The primary goals of organizational improvement are to
increase organizational effectiveness and efficiency to improve the ability of the
organization to deliver goods and or services.

Chapter Five
Self Test Exercise
Part One: True or False Items
1. Any collection of individuals or people can be seen as a team.
2. The task of the organization influences the size and composition of the team.
3. Objective performance evaluation is more important than subjective evaluation to
enhance the performance of the organization and employee.

83
4. For its effectiveness, feedback should be immediate and frequently provided to
employees.
5. Monetary rewards are the best to motivate and improves the performance of
employees.
6. Rewards are forward looking while incentives are retrospective.
7. Organizations should focus more on formal performance review than informal review
of employees progress.

Part Two: Multiple Choice

1. Identify the true statement about a team
A. Team has shared purposes C. Team requires clear roles and boundaries
B. Team requires a team leader D. All
2. Self managed work team
A. Perform highly related and interdependent jobs
B. Take the responsibilities of performing their jobs
C. Can select their members and evaluate the performance of each employees
D. All
3. One of the following techniques helps managers to influence their emotional reaction
A. Developing clearly defined criteria
B. Setting common evaluative standards
C. Keeping employees performance record D. All
4. Organizations provide incentive and rewards on one of the following bases
A. Seniority C. Competency
B. Job status D. All
5. One of the following is not considered as system a factor which affect employees and or
organization performance
A. Financial resources of the organization C. Economic conditions
B. Employees motivation D. All
Part Three: Short answer
1. Explain how personal and system factors affect the performance of employees

84
________________________________________________________________________
__________________________________________________________________2.
Discuss the different mechanisms that help to improve the performance of employee
________________________________________________________________________
_________________________________________________________________

CHAPTER SIX
Current performance Management Issues in Ethiopia
Unit Introduction
This unit deals with current performance management issues in Ethiopia. It focuses on the
theoretical aspects of result oriented management system, management by objective and
business process reengineering.

Objectives
At the end of the unit, the students will be able to:
 Explain the concept of result oriented management system
 Differentiate the difference and similarity between result oriented management and
management by objective
 Define management by objectives
 Define business process reengineering
 States principles of business process reengineering
 Evaluate the practice of business process reengineering in their respective
organization

6.1. Result Oriented Performance Management

Dear learners! What is result oriented performance management?
________________________________________________________________________
________________________________________________________________________
_______________________________________________________________

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The Result Oriented Management system aims to achieve maximum results based on clear
and measurable agreements made previously. Result Oriented Management is a
management style, based on the idea that people will work with more enthusiasm and fun,
if:
 People clearly know what is expected of them.
 People are involved in establishing these expectations.
 People are allowed to determine themselves how they are going to meet
these expectations.
 People obtain feedback about their performance.

In Result Oriented Management, the manager sets goals and determines priorities and
makes resources available that are needed: time, money and capacity. The employee
provides his time, knowledge and abilities and indicates under which conditions s/he can
deliver the required results. In doing so, s/he takes the personal responsibility for
achieving those results.

Result Oriented Management is a management system that works with so called Result
Oriented Agreements. All parties have the same expectations about their targets and may
talk to each other on results. All agreements must always be 'SMART': Specific,
Measurable, Accepted, Relevant and Traceable. Within the borders of the agreements that
are made, the employees are free to determine how they want to achieve their targets.

Steps in Result Oriented Management. Process

Result Oriented Management helps to translate corporate goals towards Strategic Business
Units goals and individual goals. The process of Result Oriented Management is
preferably top down and bottom up and consist of the following steps:
 Set the target. Long-term organizational goals;
 Translating the organizational goals towards Strategic units goals and individual
goals;
 Result Oriented Agreements about goals;
 Implementation, self steering and management reporting;

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  Periodic appraisals, progress control and adjustments;

? Activity 1
1. Explain the concepts of result oriented management.
2. What is the assumption behind result oriented management?
3. Explain the steps involved in result oriented management.

6.2. Concept of Management by Objective

Dear students! Explain the concept of management by objectives?
________________________________________________________________________
________________________________________________________________________
_______________________________________________________________

Management by Objectives (MBO) is a process of defining objectives within an

organization so that management and employees agree to the objectives and understand
what they are in the organization. It is process where the superior and subordinate
managers of an organization jointly identify common goals; define each individual major
areas of responsibilities in terms of the results expected of them, and use these measures as
guides for operating the unit and assessing the contribution of each of the members.

The essence of MBO is participative goal setting, choosing course of actions and decision-
making. An important part of the MBO is the measurement and the comparison of the
employee’s actual performance with the standards set. Ideally, when employees
themselves have been involved with the goal setting and choosing the course of action to
be followed by them, they are more likely to fulfill their responsibilities.

Purpose of Management by objective

The initial purpose of MBO was to eliminate or at least minimize some of the negative
effects of performance appraisal. Traditionally, performance appraisal program is carried
out by the manager completing a form designed for this purpose. The form contains
characteristics expected of the employee to be rated on a scale from high to low. The

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results of this evaluation (rating) are then discussed with the employee and suggestions are
made as to how to improve the low rated characteristics. This usually leads to the
development of conflicting feelings in both the manger and the employee. In addition,
suggestions are made as to how to improve the low rated characteristics. This usually
leads to the development of conflicting feelings in both the manager and the employee.
Employees want to be informed about the level of their contributions, but most of them
are not prepared to accept negative feedback. The manager too will not feel at ease when
passing judgment over the activities of other individual. As a result it becomes difficult to
bring about change in the employees behavior.

Traditional performance appraisal focuses on inputs, not on outputs. The rating sheet the
manager uses consists of personal characteristics of the employee. The assumption behind
is that these characteristics will lead to a greater condition. The problems stand out. On
one hand, the desired outputs are never clearly described. On the other hand, the employee
is not assessed by what is accomplished but rather by what he or she is contributing in
terms of personal inputs

Advantage and limitations of the management by objectives

The basic principle behind management by objectives is for employees to have clarity of
the roles and responsibilities expected of them. They can then understand how their
activities relate to the achievement of the organization. They also provide direction for the
personal goals of each employee.

Some of the important features and advantages of Management by Objectives are:

 Motivation – Involving employees in the whole process of goal setting and
increasing employee empowerment increases employee job satisfaction and
commitment.
 Better communication and Coordination – Frequent reviews and interactions
between superiors and subordinates helps to maintain harmonious relationships
within the enterprise and also solve many problems faced during the period.
 Clarity of goals

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  Subordinates have a higher commitment to objectives that they set themselves than
those imposed on them by their managers. Managers can ensure that objectives of
the subordinates are linked to the organization 's objectives.
More over, management by objectives focuses on goals, participation and feed back.
Specifically,
 Management by objectives focuses on what is to be accomplished, that is, on
goals. In an MBO program, each person from the top to the bottom of the
organization has a set of goals to be accomplished over a specified time
interval. These goals are not be stated in vague terms but rather in a specific
(preferably quantitative) and measurable format. Further, goals are to be
challenging but clearly within the realm of attainment. This requirement takes
advantage of the aspiration levels of employees and their achievement derives.
 In MBO, goal formulation is a joint activity. This means that the managers and
the employee get together to reach at a set of mutually acceptable goals. The
purpose of participation is to heighten the understanding as well as acceptance
of goals. Goal setting must be mutual activity that takes into consideration the
needs of the employee as well as that of the organization.
 MBO requires that workers be provided with feed back regarding the outcomes
of their performance. Feedback directly forwarded to the individuals at the
level of operation is known for the battement of employee performance.

Limitations of Management by Objectives

There seems no doubt that MBO is theoretically sound and has resulted in all situations
and reluctance to accept it is in evidence from both managers and employees. Atchison
and Hill (1978) identify the following reasons for its failure in certain situations:
 From the outset, the attempt to make goals clear and explicit is a source of problems.
Not all situations lend themselves to precise goal statements. The emphasis on
measurable goals. Besides, individuals tend to direct their efforts toward meeting only
those objectives that have been clearly defined. Other less quantifiable goals might be
ignored even if they are important.

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 In order for the employees to wholeheartedly participate in the goal setting process,
mutual trust between the manager and the subordinate and horizontal power relations
are a pre-requisite. At best, the participation problem is substantial because of the
inherent difference in power between the manger and the employee. The employee has
a definite tendency to attempt to discover what is in the manager’s mind and reflect
back those objectives the boss wants to hear. On the other hand, some managers
become highly passive that the employees do not coordinate their objectives properly
with organizational objectives. Participation assumes that employees would like to
have share in designing their own goals. But many individuals still prefer to be
instructed what to do.
 The control system must be adjusted to give feedback information directly to the
employee. Information is often not available or may not be considered pertinent to the
employee..
 Work was seen earlier in terms of what is to be done and how it is to be done. MBO
concerns itself nearly totally on what is to be done. How work is to be accomplished is
significant although often neglected by MBO programs. The goals may be attained but
in a manner which is neither efficient nor effective. Nowadays, MBO programs have
faced serous criticism for their lack of consideration on how work is to be done.
? Activity 2
1. Discuss the role of superior and subordinates in the process of management by objective
2. Explain advantages and disadvantages of management by objective.
3. Explain the purpose of management by objectives.

In spite of these difficulties, successful MBO programs can be and have been designed.
Successful programs depend on a high level of trust within the organization and a definite
commitment by management to the program. In addition, managers and employees need
to have strictly defined notion of the complex nature of organizational objectives and
hence realistic expectations of their success.
6.3. Definition of Business Process Reengineering
Dear learner! What is business process reengineering?

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________________________________________________________________________
________________________________________________________________________
_______________________________________________________________

Ethiopia has been implementing business process reengineering in almost all of public
organizations. Even though, the implementation is at its initial stage and encounters
different problems, some organizations able to bring changes with in the organizations.
Basically, business process reengineering is not a one time activity and probably the result
may not be seen with in short period of time. It requires continuous effort and
commitment of all members of the organization to bring fundamental and radical change
with in the organization and throughout the country.

Business Process Reengineering is defined as the fundamental rethinking and radical

redesign of business processes to achieve dramatic improvements in critical contemporary
measures of performance, such as cost, quality, service, and speed. It encompasses the
envisioning of new work strategies, the actual process design activity, and the
implementation of the change in all its complex technological, human, and organizational
dimensions.

Reengineering is also defined as reinventing the organization by challenging its existing

doctrines, practices and activities and then innovatively redeploying its capital and human
resource in to cross-functional processes. This reinvention is intended to optimize the
organization’s competitive position, its value to stakeholders and its contribution to the
society.

From the above definition one can identify the following activities that characterizes
reengineering :
 Innovating
 Listening to customers
 Learning
 Generating ideas

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  Designing new paradigms
 Anticipating and eclipsing competitors
 Contributing to the quality of the workplace and the community
 Constructively challenging established management doctrine

6.3.1 Specific goals of reengineering

Reengineering has five goals:
 Increasing productivity
 Optimizing value to stakeholders
 Achieving quantum results
 Consolidating functions
 Eliminating unnecessary levels and work

Increasing productivity: Reengineering seeks to increase productivity by creating innovative

and seamless processes that have an uninterrupted flow and occur in a natural order with
natural velocity.

Optimizing value to shareholders. Reengineering strives to optimize value to shareholders

through doing things differently. Innovations in such functions as product design,
manufacturing and customer service. Reengineering produces benefits for shareholders in
these specific areas:
 Increased employee interest in and appreciation of the enterprise, its
leadership, its products and services and its customers
 Improved internal cooperation, communication, team work and understanding
of needs
 Increased employee knowledge of the organization’s direction, its role in the
market place, its competitors, and its identity.
 Improved matching of employee skills and empowerment to responsibilities
and processes.

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  New individual and group performance measures that are more closely
aligned with the marketplace, the value of the work performed and the
contribution made.
 Employees who are involved with reengineering recognize its benefits and
develop a profound sense of ownership that helps the organization to achieve
greater long-term growth and competitiveness

Achieving quantum result: Reengineering sets out to achieve at least 50 percent

improvement; if the yield is not at least 50 % ,then the achievement although it may be an
impressive one, is not reengineering.

Consolidating functions: Reengineering seeks to create an organization that is learner,

flatter and faster. The ability to rapidly assimilate innovations, market needs, technological
developments, customer trends and competitor initiatives is a trademark of reinvented
organization.

Eliminating unnecessary levels and work: Reengineering constructively challenges and

analyses the organizations hierarchy and activities in terms of their value, purpose and
content. Organizational levels and activities that represent little value to shareholders or
contribute little to competitiveness are either restructured or eliminated.

More over, when applying the business process reengineering management technique to a
business organization the implementation team effort is focused on the following
objectives:
Customer focus: Customer service oriented processes aiming to eliminate customer
complaints.
Speed: Dramatic compression of the time it takes to complete a task for key business
processes. For instance, if process before BPR had an average cycle time 5 hours, after
BPR the average cycle time should be cut down to half an hour.
Compression: Cutting major tasks of cost and capital, throughout the value chain.
Organizing the processes an organization develops transparency throughout the
operational level reducing cost.

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Flexibility: Adaptive processes and structures to changing conditions and competition.
Being closer to the customer the company can develop the awareness mechanisms to
rapidly spot the weak points and adapt to new requirements of the market.
Quality: Obsession with the superior service and value to the customers. The level of
quality is always the same controlled and monitored by the processes, and does not depend
mainly on the person, who servicing the customer.
Innovation: Leadership through imaginative change providing to organization
competitive advantage.
Productivity: Improve drastically effectiveness and efficiency.

6.3.2 Principles of Business Process Reengineering

There are principles of reengineering to streamline the work process and thereby achieve
significant levels of improvement in quality, time management, and cost:
1. Organize around outcomes, not tasks.
2. Identify all the processes in an organization and prioritize them in order of redesign
urgency.
3. Integrate information processing work into the real work that produces the information.
4. Treat geographically dispersed resources as though they were centralized.
5. Link parallel activities in the workflow instead of just integrating their results.
6. Put the decision point where the work is performed and build control into the process.
7. Capture information once and at the source.

Business Process Reengineering involves changes in structures and in processes within the
business environment. The analysis and design of workflows and processes within and
between an organizations a business process is a set of logically related tasks performed to
achieve a defined business outcome Re-engineering is the basis for many recent
developments in management. The cross-functional team, for example, has become
popular because of the desire to re-engineer separate functional tasks into complete cross-
functional processes.
Business process reengineering is one approach for redesigning the way work is done to
better support the organization's mission and reduce costs. Reengineering starts with a
high-level assessment of the organization's mission, strategic goals, and customer needs.

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Reengineering focuses on the organization's business processes—the steps and procedures
that govern how resources are used to create products and services that meet the needs of
particular customers or markets. As a structured ordering of work steps across time and
place, a business process can be decomposed into specific activities, measured, modeled,
and improved. It can also be completely redesigned or eliminated altogether.
Reengineering identifies, analyzes, and redesigns an organization's core business
processes with the aim of achieving dramatic improvements in critical performance
measures, such as cost, quality, service, and speed.

Reengineering maintains that optimizing the performance of sub processes can result in
some benefits, but cannot yield dramatic improvements if the process itself is
fundamentally inefficient and outmoded. For that reason, reengineering focuses on
redesigning the process as a whole in order to achieve the greatest possible benefits to the
organization and their customers. This drive for realizing dramatic improvements by
fundamentally rethinking how the organization's work should be done distinguishes
reengineering from process improvement efforts that focus on functional or incremental
improvement.

6.3.3 Characteristics Business Process Reengineering(BPR)

 Several jobs are combined into one.
 Decision-making becomes part of the job of employees (employee
empowerment).
 Steps in the processes are performed in natural order, and several jobs get done
simultaneously.
 Processes have multiple versions. This enables the economies of scale that
result from mass production, yet allows customization of products and
services.
 Work is performed where it makes the most sense.
 Controls and checks and other non-value-added work are minimized.

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  Reconciliation is minimized by cutting back the number of external contact
points and by creating business alliances.
 A single point of contact is provided to customers.
 A hybrid centralized/decentralized operation is used.

Business process reengineering is achieving dramatic performance improvements through

radical change in organizational processes, re-designing of business and management
processes. It involves the redrawing of organizational boundaries, the reconsideration of
jobs, tasks, and skills.

Methodology of business process reengineering implementation

Business process reengineering is world-wide applicable technique of business
restructuring focusing on business processes, providing vast improvements in a short
period of time. The technique implements organizational change based on the close
coordination of a methodology for rapid change, employee empowerment and training and
support by information technology. In order to implement business process reengineering
to an organization the followings key actions need to take place:
 Selection of the strategic processes for redesign.
 Simplify new processes
 Organize a team of employees for each process and assign a role for process
coordinator.
 Organize the workflow
 Assign responsibilities and roles for each process.
 Automate processes using IT
 Train the process team to efficiently manage and operate the new process
 Introduce the redesigned process into the business organizational structure

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 ? Activity 3
1. Discuss the concept of business process reengineering.
2. Explain the objectives and principles of business process reengineering.
3. Discuss the methods that help to effectively implement business process reengineering.

Summary
Result Oriented Management is a management system that works with result oriented
agreements. All parties have the same expectations about their targets. All agreements
must always be 'SMART'. Within the borders of the agreements that are made, the
employees are free to determine how they want to achieve their targets

Management by Objectives is a process of defining objectives within an organization so

that management and employees agree to the objectives and understand what they are in
the organization.

Reengineering is the fundamental rethinking and radical redesign of business processes to

achieve dramatic improvements in critical contemporary measures of performance, such
as cost, quality, service, and speed. It involves changes in structures and in processes
within the business environment. Business process reengineering is one approach for
redesigning the way work is done to better support the organization's mission and reduce
costs. Reengineering starts with a high-level assessment of the organization's mission,
strategic goals, and customer needs.

Chapter Six
Self test Exercise
Part One: True or False Items

97
1. Result oriented management focuses on how to achieve than what to be achieved.
2. In Management by objective process both supervisors and subordinates set objectives
jointly.
3. Management by objective focus on end than the means to achieve.
4. Business process reengineering is a gradual and piece meal process to improve the
Performance of the organization.
5. Enhancing customer satisfaction is central to the process of business process
reengineering
6. Business process reengineering is synonymous to automation of the process of the
Organization.
Part Two: Multiple Choice
1. Management by Objective has one of the following advantages
A. Increases employees job satisfaction
B. Encourages frequent review and interaction between supervisors and subordinates
C. Increases the commitment of subordinates
D. All
2. Business process reengineering is
A. Radical change of the organizational activities
B. Dramatic improvements of organizational out put
C. Designing the organizational process from the scratch
D. All
3. Identify the goal of business process reengineering
A. Increasing productivity
B. Eliminating unnecessary levels or work
C. Achieving quantum results
D. All

4. A process of setting specific and measurable goals with each employees and
periodically reviewing their progress is known as
A. Result oriented management C. Businesses process reengineering
B. Management by objective D. Performance Appraisal

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Part Three: Short answer
1. Explain the advantages and disadvantages of management by objective
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
________
2. Discuss the concept of result-oriented management
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
_________
3. Discuss the characteristics of business process reengineering
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
_________

References
Armstrong and Baron, A (1998). Performance Management: The New Realities.
London: Macmillan.
Armstrong, M and Baron, A (2005). Managing Performance: Performance

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 Management in Active. London: Institute of Personnel and
Development
Armstrong, M. (2000). Performance Management: key Strategies and Practical
Guidelines. London : Kogan Pall Limited
Bacal, R. (1999). Performance Management. London: Kogan Pall Limited.
Bernarding, H.J, and Beatty, R.W (1984). Performance Appraisal: Assessing
Human Behavior at Work. Boston: Kent Publishing.
Cardy, L (2004) Performance Management; Concepts, Skills and Exercises.
New Delhi :Prentice Hall of India Private Limited.
Dessler, G. (2005) Human Resource Management( 10th ed). India; Dorling
Kindersley Publishing Inc.
Enose, D. (2000). Performance Management: Making it [Link].
Ethiopian Management Institute (2004). Integrated Performance Management for
Ethiopian Public Enterprises. Addis Ababa (Unpublished Material).
Fletcher, C. (1993). Appraisal: Routes to Improve Performance. London
Institute of Personnel Development
GAO (2005). Performance Measurement and Evaluation: Definitions and
Relationships Retrieved in December,2010 from [Link].
Gomez. Mejia, L. R, Balkin, D.B., and Cardy, R.Z (2003) Managing Human
Resources (4th ed). New Jersey: Prentice- Hall
Hammer, M and Champy, J.(1993) Reengineering the corporation.
Luecke, et’al. (2006). Performance Management: Measure and Improve the
effectiveness of your employees. Boston:
Melaku Yiman (2000). Reading on Human Resource Management in Education
(Un Publisher Teaching Material). Addis Ababa University.
Robbins, (1984). Management: Concept and Practices. New Jersey: Prentice
[Link].
Answer Key for Self –Test Exercises

Chapter One Chapter Two Chapter Three

True/False Multiple True/False Multiple True/False Multiple

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 choice choice choice
[Link] 1.E 1. True 1.D 1. True 1.A
2. True 2.C 2. True 2.B [Link] 2.B
3. True 3.E 3. True 3.A 3. True 3.D
[Link] 4.C 4. True 4.A 4. True 4.D
[Link] 5. True 5.D 5. True 5.A
6.A

Chapter Four Chapter Five Chapter Six

True/False Multiple True/False Multiple True/False Multiple
choice choice choice
1. True 1.D [Link] 1.D [Link] 1.D
2. True 2.D 2. True 2.D 2. True 2.D
[Link] 3.D [Link] 3.D 3. True 3.D
[Link] 4.E 4. True 4.D [Link] 4.B
5. True [Link] 5.B 5. True
[Link] [Link]
[Link]

Jimma University
Continuing and Distance Education

101
 Institute of Education and professional Development Studies
Department of Educational Planning and Management
Assignment on Performance Management EdPM -442 (30%)
1. Compare and contrast performance management and performance appraisal
2. Discuss the benefit of performance management for employees and organization
3. Define performance from behavioral and outcome point of view
4. Discuss how person factors and system factors influence employees and organizational
performance
5. What is job evaluation? Briefly discuss the steps included in the process of job
evaluation.
6. Explain the benefits of performance coaching to enhance the performance of employees
and the organization
7. Compare the difference between performance monitoring and performance evaluation
8. Explain the types of team performance management
9. Discuss the advantages and disadvantages of management by objective
10. Select one of any organization in your locality and assess the practice and challenges
of the organization in the implementation of business process reengineering.

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