February 28, 2009 1 By Aamir Baig

Human Resources Management CourseKarachi University Business School

Lecture #8, Performance Management

By: Aamir Baig

February 28, 2009 2 By Aamir Baig

Performance management is defined as a systematic approach to improving and developing the performance of individuals and teams, in-order to increase overall organization’s effectiveness and achieve its objectives.

It involves the identification, measurement and management of human performance in organizations.

Performance Management

February 28, 2009 3 By Aamir Baig

• Informational

• Motivational

• Developmental

• Administrative

Purposes of Performance Appraisals

February 28, 2009 4 By Aamir Baig

• Goals/Objectives• Traits• Behaviors (exhibits certain traits including values)• Competencies • Results/Outcomes/Key performance indicators

Identifying Performance Dimensions

February 28, 2009 5 By Aamir Baig

The formats for measuring performance can be classified in two ways:1. Relative and Absolute Judgments; whether the type of judgment being called for is relative or absolute.

2. Trait, Behavioral and Outcome Data; The performance measurement system can also be classified by the type of performance data on which they focus: trait data, behavioral

data, or outcome data.

Measurement Tools

February 28, 2009 6 By Aamir Baig

Relative JudgmentAn appraisal format that asks supervisors to compare an employee’s performance to the performance of other employees doing the same job.

Advantages of Relative Judgment ScalesIt forces managers to differentiate among employees, otherwise they may be reluctant to do so.

Disadvantages of Relative Judgment Scales• Doesn’t make it clear, how big or small the differences between the employees are?• Doesn’t provide any absolute information, so the managers cannot determine, how good or bad the employees at the extreme ratings are?• It forces, managers to identify differences among workers, where none may truly exist. It could cause conflicts among employees/between employee and manager.

Relative and Absolute Judgment

February 28, 2009 7 By Aamir Baig

Absolute JudgmentAn appraisal format that asks supervisors to make judgments about an employee’s performance based solely on performance standards.

Advantages of Absolute Judgment Scales• Theoretically, absolute formats allow employees from different groups to be compared. The feedback to employees performance can be more specific and helpful.

• It avoids creating conflicts among employees/between employee and manager.

Disadvantages of Absolute Judgment Scales•Raters errors can distort the ratings of employees, if one supervisor is a strict rater, while another is a lenient rater. All employees can receive same ratings.

Relative and Absolute Judgment

February 28, 2009 8 By Aamir Baig

Trait Appraisal Instrument; An appraisal tool that asks a manager to make judgments about an employee characteristics that tends to be consistent and enduring.

• Trait based scales are easy to develop and use. • Trait ratings are considered too ambiguous and subjective.• Focus is on the person, not on the performance.

Trait, Behavioral and Outcome Data

February 28, 2009 9 By Aamir Baig

Behavioral Appraisal Instrument; An appraisal tool that asks a Manager to assess an employees behaviors.

Advantages

Performance Standards are concrete, behaviors across the range of dimensions are included in the behavioral scale like Behavioral Anchored Rating Scale (BARS).

It provide employees specific examples what type of behavior to engage.

Managers/Supervisors should be involved in developing behavioral scales.

Disadvantages

Time consuming and difficult to prepare.

Many managers feel that it is unnatural way to assessing employees.

Trait, Behavioral and Outcome Data

February 28, 2009 10 By Aamir Baig

Outcome Appraisal Instrument; An appraisal tool to assess the actual results/outcome achieved by employees.

Advantages

More objective, a clear and unambiguous criteria by which an employees performance can be evaluated.

More flexible, targets can be adjusted due to any organizational changes.

Disadvantages

Can give distorted view of employee’s performance.

Achieving the targets/results at any cost mentality.

Trait, Behavioral and Outcome Data