PERFORMANCE MANAGEMENT
WHAT IS PERFORMANCE MANAGEMENT
WHAT IS PERFORMANCE MANAGEMENT (2)
WHAT IS PERFORMANCE MANAGEMENT (3)
THE PERFORMANCE MANAGEMENT
PROCESS
THE PERFORMANCE MANAGEMENT
PROCESS (2)
THE PERFORMANCE MANAGEMENT
PROCESS (3)
CRITICAL DECISION 1:
WHAT WILL BE MEASURED
• Performance can be measured with respect to
results and/or behavior.
• If performance is to be measured with respect
to results, it is important to determine:
o Key Accountabilities – The broad areas of the job for which
the employee is to be held responsible for producing results.
o Performance Objectives – Specific performance targets
within each area of accountability.
o Performance Standards - The level of performance that is
considered acceptable, unacceptable or ideal.
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9–8
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CRITICAL DECISION 1:
WHAT WILL BE MEASURED (2) –
EXAMPLE FOR IT SPECIALIST
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9–9
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CRITICAL DECISION 1:
WHAT WILL BE MEASURED (3)
• If performance is to be measured with respect to behavior, it
is important to determine:
o Competencies – These are sets of knowledge, skills, and abilities
that are critical in determining how results will be achieved.
o Indicators – Descriptions of specific behavioral indicators that are
likely to be observed when someone demonstrates a competency
effectively.
• Measuring performance with respect to results is objective;
but it prioritizes the ends over the means and may unduly
blame/reward employees for things beyond their control.
• Measuring performance with respect to behavior gives a
more holistic picture; but it is subjective as behavior
cannot be quantified.
• It is therefore best to use a combination of both results
and behavior when measuring performance.
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9–10
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CRITICAL DECISION 1:
WHAT WILL BE MEASURED (4)
EXAMPLE FOR IT SPECIALIST
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9–11
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CRITICAL DECISION 2:
HOW TO MEASURE COMPETENCIES
Comparative Methods Absolute Standards
Methods
Simple Rank Order Checklists
Alternation Rank Order Graphic Rating Scales
Paired Comparison Critical Incidents
Relative Percentile Behaviorally Anchored Rating
Scales
Forced Distribution
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9–12
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CRITICAL DECISION 2:
HOW TO MEASURE COMPETENCIES (2)
• Comparison based methods
o Simple Ranking – Requires managers to rank
employees from highest to lowest performer,
typically within a particular department.
o Forced distribution – Requires managers to
put certain percentages of employees into
predetermined categories based on
performance. For example, 20% may be
classified as exceeding expectations, 70%
may be classified as meeting expectations,
and 10% must be classified as not meeting
expectations. © 2005 Prentice Hall Inc. All
9–13
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CRITICAL DECISION 2:
HOW TO MEASURE COMPETENCIES (2)
• Comparison based methods
o Relative Percentile – Requires raters to
consider all ratees together and rate them on
a 100-point scale. The 50-point mark on this
scale (50th percentile) represents an average
employee. Somebody who is placed on the
80-point mark (80th percentile) is better than
80% of other employees.
o Paired Comparison – Requires raters to
compare each ratee, one by one, to every
other ratee on all performance criteria
(example on next slide). © 2005 Prentice Hall Inc. All
9–14
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CRITICAL DECISION 2:
HOW TO MEASURE COMPETENCIES (3)
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9–15
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CRITICAL DECISION 2:
HOW TO MEASURE COMPETENCIES (4)
• Absolute standards methods
o Graphic rating scales - Lists several job
dimensions/traits and requires managers to choose
from a range of performance values for each (see slide
18).
o Critical incident appraisals – Requires managers to
keep specific records of effective and ineffective
performance by each employee (see slide 19).
o Behaviorally anchored rating scales – Combines the
graphic rating scale and critical incident method. It is
designed to specifically define performance dimensions
by developing behavioral anchors associated with
different levels of performance (see slide 20).
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9–16
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CRITICAL DECISION 2:
HOW TO MEASURE COMPETENCIES (5)
• How to develop BARS
Develop performance dimensions
Ask supervisors or subject matter experts to
describe critical incidents pertaining to each
dimension.
Scale the critical incidents
Recheck
Develop the final instrument
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9–17
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CRITICAL DECISION 2:
HOW TO MEASURE COMPETENCIES (6)
Pros and Cons of Comparison Based Methods
Pros Cons
Simple to use and explain Only overall performance may
be compared which is not
holistic enough
Strong differentiation between Rank may depend more on
high performers and mediocre quality of peer group than on
performers own performance
Motivating for star performers No information on relative
distance between employees
Competition can foster Competition can undermine
performance collaboration
Tighter budgetary control May be demotivating for
everybody other than star
9–21
performers © 2005 Prentice Hall Inc. All
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CRITICAL DECISION 2:
HOW TO MEASURE COMPETENCIES (7)
Pros and Cons of Absolute Standards Methods
Pros Cons
Rating depends on one’s own Subject to biases, particularly
performance and not the central tendency, leniency, and
performance of the peer group severity
Does not put a restriction on Budgetary control might be
the number of people who can more difficult as too many
obtain high ratings people may qualify for rewards
Often utilizes multiple criteria
for assessment
Does not lead to toxic
competition
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9–22
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COMMON ERRORS & SOLUTIONS
Error Solutions
Halo Effect – The tendency to Use specific, well-defined
base the overall appraisal on criteria and scoring system
evaluation of a single factor. Cluster separate
competencies/skills under
separate headings
Use methods such as BARS
Recency Effect – The tendency Encourage use of critical
to give more weightage to incidents
recent events in the appraisal.
Leniency/Strictness – The Specify the desired mean
tendency for some evaluators rating, Use ranking based
to be extra strict/lenient. appraisal
Central Tendency – The Specify expected level of
tendency to give everyone an deviation around mean
average
9–23 rating and to avoid Use specific criteria and
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extremes. scoring system
CRITICAL DECISION 3:
WHO WILL DO THE APPRAISAL
• Typical appraisers include:
o Supervisors
o Peers
o Subordinates
o Self
o Rating-committees
o 360 Degree / 720 Degree appraisal
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