Performance

Management

Shane Mariel Gliane Mary Lyrhynne Anne Araza Rocharmaine Jerusalem

Performance
Management
is an integrated process of defining,
assessing, and reinforcing employee work
behaviors and outcomes.
Performance Management
involves...

Goal Setting Performance Reward

Appraisal Systems
it describes the interaction it involves collecting and are concerned with
between managers and disseminating eliciting and reinforcing
employees in jointly performance data to desired behaviors and
defining member work improve work outcomes. work outcomes through
behaviors and outcomes. compensation and other
forms of recognition.
A
Performance
Management
Model
Goal Setting
Goal Setting
involves managers and subordinates in
jointly establishing and clarifying
employee goals.
The process of establishing challenging
goals involves managing the level of
participation and goal difficulty. Once
goals have been established, the way
they are measured is an important
determinant of member performance.
goal setting can:

influences what people think and do by focusing

their behavior in the direction of the goals, rather
than elsewhere.
energize behavior, motivating people to put forth
the effort to reach difficult goals that are accepted,
and when goals are difficult but achievable, goal
setting prompts persistence overtime.
Characteristics
establishment of
of Goal Setting challenging goals

Two Major Processes

that Affect Positive
Outcomes
clarification of goal
measurement
 Establishing Challenging
Goals
The first element of goal setting
concerns establishing goals that are
perceived as challenging but realistic
and to which there is a high level of
commitment.
Increasing the difficulty of employee
goals, also known as stretch goals, can
increase their perceived challenge and
enhance the amount of effort expended
to achieve them. Thus, more difficult
goals tend to lead to increased effort and
performance, as long as they are seen as
feasible.
An important method for increasing the
acceptance of a challenging goal is to
collect benchmarks or best-practice
referents.

Another aspect of establishing

challenging goals is to vary the amount
of participation in the goal-setting
process.
All three contextual factors play an important role in
establishing challenging goals.

First, there must be a clear “line of sight”.

Second, employee participation in goal setting.

Third, when tasks are highly interdependent and

work is designed for groups, group-oriented
participative goal setting tends to increase
commitment.
 Clarifying
Goal Measurement

When given specific goals, workers

perform higher than when they are
simply told to “do their best” or when they
receive no guidance at all.
To clarify goal measurement, objectives should be
operationally defined.

Contextual factors also play an important role in

the clarifying process.
Application 1 . Diagnosis

Stages 2 . Preparation for Goal Setting

3 . Setting of Goals
Based on these features of the
goal-setting process, OD
practitioners have developed 4 . Review
specific approaches to goal
setting. The following steps
characterize those
applications:
 Management by
Objectives
A common form of goal setting used in
organizations is management by objectives
(MBO). This method is chiefly an attempt to align
personal goals with business strategy by
increasing communications and shared
perceptions between the manager and
subordinates, either individually or as a group,
and by reconciling conflict where it exists.
MBO originated from
two key Organizational
backgrounds:

Developmental
ORGANIZATIONAL

Peter Drucker emphasized setting clear objectives in

eight areas such as “market standing; innovation;
productivity; physical and financial resources;
profitability; manager performance and
development; worker performance and attitude;
and public responsibility”. Odiome later expanded
this with a focus on measurable, quantitative goals.
DEVELOPMENTAL

Douglas McGregor and Levinson highlighted the

qualitative and developmental aspects of MBO,
focusing on employee growth, self-appraisal, and
mutual goal setting. This approach encourages
participative decision-making, reduces role
ambiguity, and transforms supervisors from judgers
into helpers.
 1 . Work-group
involvement.
2 . Joint manager-
6 Basic Steps in subordinate goal setting.
Implementing an
3 . Establishment of action
MBO PROCESS plans for goals.
4 . Establishment of criteria,
or yardsticks, of success.
5 . Review and recycle.
6 . Maintenance of records.
Performance
Appraisal
Performance
Appraisal
is a feedback system that involves the
direct evaluation of individual or work-
group performance by a supervisor,
manager, or peers.
The Performance Appraisal Process

Performance appraisals are conducted for a variety

of purposes, including affirmative action, pay and
promotion decisions, and human resources
planning and development.
Application Stages
The process of designing and implementing a performance appraisal system
has received increasing attention. OD practitioners have recommended the
following six steps:

[Link] the 2. Diagnose 3. Establish

Right the Current the System’s
People. Situation. Purpose and
Objectives.
Application Stages
The process of designing and implementing a performance appraisal system
has received increasing attention. OD practitioners have recommended the
following six steps:

4. Design the 5. Experiment 6. Evaluate and

Performance with Monitor the
Appraisal Implementation. System.
System.
Reward
Systems
Reward Systems

A reward system is an important part of

an organization’s design and must be
aligned with the strategy, structure,
employee involvement, and work.
Value Expectancy Model

– posits that employees will expend effort

to achieve performance goals that they
believe will lead to outcomes that they
value.
 Availability
Based on value
expectancy theory, Timeliness
the ability of
rewards to motivate Performance Contingency
desired behavior
depends on these Durability
five factors:
Visibility
 Reward Systems
Intervention
– are used to elicit and maintain
desired levels of performance.
 4 Types of Rewards

Skill- and Knowledge- Gain-Sharing Systems

Based Pay Systems

Performance-Based Promotion Systems

Pay Systems
 Gain-Sharing Systems

– involves paying employees a bonus

based on improvements in the
operating results of an organization.
 [Link] of Design
Developing a gain-
[Link] Unit
sharing plan
Covered
requires making
choices about the [Link] Formula
following design [Link] Process
elements: [Link] of Bonus
[Link] Management
[Link] Participative
Systems
Thank
You !!