Performance Management

Performance Management is the process of

obtaining, analyzing and recording information
about the relative worth of an employee.
 Definitions
• Flippo: “Performance appraisal is the systematic, periodic and an
impartial rating of an employee’s excellence in the matters pertaining
to his present job and his potential for a better job.”
• Scoot, Clothier and Spriegel: “Performance appraisal is the process of
evaluating the employee’s performance on the job in terms of
requirement of the job.”
• Yoder: “Performance appraisal refers to all formal procedures used in
working organizations to evaluate personalities and contributions and
potential of group members.”
Need for Performance Management
To achieve organization’s goals, employees must
work hard in perfection. Therefore, reviewing the
performance of the employees becomes a necessity.
 Objectives
• To facilitate relationship between management and employees.
• To assess employees’ performance.
• To give feedback about employees.
• To analyze the actual and desired performance of employees.
• To clarify employees’ responsibilities.
• To analyze strengths and weaknesses.
• To plan career development.
• To reduce grievances of employees.
Process of Performance Management
Approaches to Performance Management

Traditional approach Modern approach

• Past oriented approach
• Judges based on the past
performances
• Does not consider the
developmental aspects such as
training
• Includes a feedback process
• Strengthens communication
throughout the organization
• Results in decisions like
promotions, transfers etc.
Methods of Performance Management
Traditional methods
Essay Appraisal Method
• Known as “free essay method”.
• Supervisor plays the role of appraiser and writes the feedback
• Appraisal based on the past performance
• Benefit:
Easy and done without any adequate preparation.
• Limitation:
Inseparability of the bias of the evaluator.
Straight Ranking Method
• Appraisal based on a ranking from the best to the
poorest
• Appraiser considers the whole contribution of the
employees.
• Benefit:
Differentiates efficient from less efficient.
• Limitations:
Difficult to rank large number of employees.
Does not identify how much better or worse
he/she is than others.
Paired Comparison Method
• Individual is compared based on every trait with
other individuals.
• Rankings are given after relative comparisons.
• Benefit:
Judgement becomes easier and simple.
• Limitation:
Not applicable to large number of individuals.
Paired Comparison Method
Checklist Method
• Checklist contains statements describing the employee performance.
• Appraiser checks the fidelity of the statements.
• Benefit:
Final rating is done by the personnel department.
• Limitations:
Personal bias on the part of appraiser.
Difficult to develop checklist for different classes of job.
Checklist Method
Critical Incident Method
• Employee performance checked on certain critical
events
• Rating the employee based on how he/she responds
to critical events.
• Benefit:
A written record of events is maintained that
can be recalled.
• Limitation:
Supervisor may forget to record employee
behavior.
Critical Incident Method
Field Review
• A training officer interviews the appraisers.
• The appraiser shares his view on the performance,
progress, weakness and ability of each employee.
• Benefit:
Reduces supervisor biasing.
Graphic Rating Scale
• Quality and quantity of work assessed on a graphic scale
indicating different degrees of a particular factor.
• Factors can be personal characteristics or on-the-job
performance.
• Example:
Job Knowledge can be judged on the range of
Unsatisfactory
Average
Good
Graphic Rating Scale
Group Appraisal Method
• Done by a group of assessors.
• Supervisors explain employees’ duties and responsibilities.
• The group evaluates actual performance with the standards.
• Benefit:
Simple and useful without any bias.
• Limitation:
Time consuming.
Modern Methods
Human Resource Accounting Method
• Appraisal based on cost and contribution of employees.
• Cost includes expenses incurred on employees.
• Contribution includes the total value added in monetary terms.
• Difference between cost and contribution is the performance.
• Ideal condition:
Contribution should be greater.
BARS
• Behaviourally Anchored Rating Scales.
• Combines critical incidents method and graphic rating scale method.
• Critical incidents are set up and appraisal is done on graphical scale.
• Limitation:
Developing and practicing BARS requires expert knowledge.
BARS
Management By Objectives(MBO)
360 degree performance appraisal
Assessment Centre
• Testing candidates in a social situation
• Simulation and assessment.
• Paper-pencil test, Interview, business games, psychometric tests and
simulation exercises.
 Thank you for your patience
God will shower with full of blossoms and
happiness to my students through out their
life………….