CIVIL SERVICE INSTITUTE
Department of Human
Resource Management
Semester 1th 2024
Chapter 7 Performance
Management
Lecturer: Khadar Dholayare
Lecturer Khadar Abdi Hassan 1
(Dholayare)
Objectives
At end of this chapter, learners should be able to
Define performance management
Understand performance measurement criteria
Define performance appraisal
Discuss purpose of performance Appraisal
Understand who appraises employee?
Explain steps of performance appraisal
Compare methods of performance appraisal
List problems of performance appraisal
Understand solution of performance appraisal
Lecturer Khadar Abdi Hassan 2
(Dholayare)
Definition of Performance
Management
Performance management is a corporate management tool
that helps managers monitor and evaluate employees' work.
Performance management is defined as the process of
continuous communication and feedback between a manager
and employee towards the achievement of organizational
objectives.
Lecturer Khadar Abdi Hassan 3
(Dholayare)
Performance Measurement Criteria
Once the company has determined, through job
analysis and design, what kind of performance it
expects from its employees, it needs to develop
ways to measure that
performance
Strategic congruence
Validity
Reliability
Acceptability
Specificity
Lecturer Khadar Abdi Hassan 4
(Dholayare)
Approaches to Measuring
Performance
1. Comparative approach
The comparative approach to performance
measurement requires the rater to compare an
individual’s performance with that of others.
At least three techniques fall under the comparative
approach: ranking, forced distribution, and paired
comparison
Lecturer Khadar Abdi Hassan 5
(Dholayare)
2. Attribute Approach
The attribute approach to performance management
focuses on the extent to which individuals have
certain attributes (Characteristics or traits) believed
desirable for the company’s success.
The techniques that use this approach define a set
of traits- such as initiative, leadership, and
competitiveness and evaluate individuals on them.
Two techniques fall under this approach: Graphic
Rating Scales and Mixed-Standard Scales
Lecturer Khadar Abdi Hassan 6
(Dholayare)
3. Behavioral Approach
The behavioral approach to performance management
attempts to define the behaviors an employee must
exhibit to be effective in the job.
The various techniques define those behaviours and
then require managers to assess the extent to which
employees exhibit them.
We discuss five techniques that rely on the behavioral
approach: Critical Incidents, Behaviorally Anchored
Rating Scales (BARS), and Behavioral Observation
Sales (BOS), Organizational Behavior Modification, and
Assessment centers.
Lecturer Khadar Abdi Hassan 7
(Dholayare)
4. The results Approach
The results approach focuses on managing the
objective, measurable results of a job or work
group.
This approach assumes that subjectivity can be
eliminated from the measurement process and that
results are the closet indicator of one’s contribution
to organizational effectiveness. We will examine
two performance management system that
use results: management by objectives and the
productivity measurement and evaluation system.
Lecturer Khadar Abdi Hassan 8
(Dholayare)
5. Quality Approach
Thus far we have examined the traditional
approaches to measuring and evaluating employee
performance. Two fundamental characteristics of
the quality approach are a customer orientation
and a prevention approach to errors.
Improving customer satisfaction is the primary goal
of the quality approach.
Lecturer Khadar Abdi Hassan 9
(Dholayare)
Performance Appraisal
Performance appraisal can be defined as a human
resource activity that is used to determine
the extent to which an employee is performing his
job effectively.
Performance is said to be a result of employee’s
efforts abilities and role perception.
Performance appraisal is the process of
determining and communicating to an employee
how he or she is performing the job and, ideally,
establishing plan of improvement .
Lecturer Khadar Abdi Hassan 10
(Dholayare)
Purposes of Performance Appraisal
To provide information towards strength and
weakness of employees in their job performance .
To provide data for management for judging future
job assignment, promotion, and compensation
To supply general information on training needs of
the organisation or departments
To provide legally defensible reason for
promotions, transfer, reward and discharge
Lecturer Khadar Abdi Hassan 11
(Dholayare)
Who Appraises Employee Performance?
Immediate supervisor
Employee’s Peers (Co-workers)
Employee self-appraisal
Subordinate Appraisal
Lecturer Khadar Abdi Hassan 12
(Dholayare)
Performance appraisal Process (steps)
1. Establishing performance standards for each
position and the criteria for evaluation.
2. Establishing evaluation policies on when to rate,
how to rate and who should rate.
3. Have ratters gather data on employees
performance
4. Have ratters (and employees in some systems)
evaluate employee’s performance.
5. Discuss the evaluation with the employee
6. Make decisions and file the evaluation.
Lecturer Khadar Abdi Hassan 13
(Dholayare)
Performance Appraisal
Methods
1. Graphic rating scale method
This method is the simplest and the most popular
technique of appraising performance. A graphic rating
scale lists traits (factors) such as quality of work,
job knowledge, attendance, accuracy of work and
cooperativeness.
2. Alternation ranking method
This method involves ranking employees form best
to worst on a factor or factors traits.
Lecturer Khadar Abdi Hassan 14
(Dholayare)
3. Paired comparison method
This method helps to make the ranking more
precise. For every factor (quality of work,
quantity of work etc.), you pair and compare every
subordinate with every other
subordinate.
4. Critical Incident Method
With this method the supervisor keeps a log of
positive and negative examples (critical
incidents) of a subordinates work related behaviour.
Lecturer Khadar Abdi Hassan 15
(Dholayare)
Appraising performance: Problems and
Solutions
Problems
Unclear standards of evaluation
Hello effect
Central tendency
Recency of events error
Contrast effects
Personal bias error
How to Avoid Appraisal Problems
Improving validity and reliability of performance
criteria
Adopting multiple appraisal and different timing
Providing better feedback
Lecturer Khadar Abdi Hassan 16
(Dholayare)
End Chapter Seven
Lecturer Khadar Abdi Hassan 17
(Dholayare)