To what extent do organizations need to involve employees in decision-making processes? Base your answer on a country of your choice.
tinykitt
148hrm_-_performance_management_0.pptx
Module 148HRM
Performance Management – Performance Appraisals
Today’s session
Performance management – definition and the process
Performance appraisal
Strengths and weaknesses of appraisals
Overview
2
Performance management
A process that enables the organization to evaluate and continuously improve individual, subsidiary unit, and corporate performance, against clearly defined, pre-set goals and targets
We’re looking at the level of individual performance – what is the potential of HR to improve this?
PM is strategic HR
3
PM as a Management tool
According to Armstrong & Baron (2005) Performance Management can assist in managing the performance of staff, if :
Employees know and understand what is expected of them
Have skills and ability to deliver
Are supported by the organisation to develop
Are given feedback on their performance
Have an opportunity to discuss and contribute to individual and team aims and objectives.
The performance management process
5
Defining performance
Induction
Facilitating performance
Training
Encouraging performance
Rewards
Motivation
Set clear goals
Both individual and organisational
Coaching
Mentoring
Infrastructure
Developmental VS judgemental approaches
Defining performance
Setting performance targets
Specific
Measurable
Achievable
Realistic SMART
Time-bound
Measuring performance
Assessment of the achievement of goals: regular, timely, culture sensitive
Specific, Measurable, Achievable, Realistic, Time-bound
6
Facilitating performance
Provide tools, infrastructure, training, coaching and support necessary for achieving performance targets
7
Encouraging performance
Reward system
Performance Appraisals
P.A. involves a formal process of collecting information about an individual’s performance from and about staff of an organization which may be used for a variety of decision making purposes (training, pay, promotion, re-assignment, etc.)
8
Goals and objective
Corporate level
Divisional level
Team level
Agreement
Individual and team performance criteria agreed with line management
Agreed Action Plan
Include self development plans
Monitoring
Feedback
Coaching
Performance
Review Feed back Report (appraisal)
Comparison between expected and actual performance
The performance
management system cycle
Performance Appraisal
What organisational motivations are there for implementing PA systems?
PA is a ubiquitous but often unpopular aspect of organisational life.
10
Purposes of performance appraisal
Improve motivation and morale
Clarify performance expectations, communicate goals
Control behaviours, set norms and values
Foster productivity
Improve communications
Manage careers, aid HR planning
Encourage employee growth and development
Help solve work-related performance problems
Identify training/development needs
Weed out under-performers
Provide a systematic basis for (reward-focused) decisions on
pay, promotion, discipline, transfer, termination
11
What kind of approach?
12
Control reward
Promotion
Pay
Discipline
Role: Judge
Improvement
Development
Training Development
Counselling
Developmental approach
Judgemental Approach
Role: Helper
What is appraised …
Appraising the person: Assessment of traits or attributes such as loyalty, stability, decisiveness...;
Appraising behaviour: measuring application of competences associated with effective performance; rating key job-related behaviours;
Evaluating performance against set objectives: not always easy. Think of politically sensitive services such as education and health; or jobs with very low individual discretion.
Appraising the person – what are issues here?
Measuring performance against objectives – what are issues here?
Any system based on targets runs risk that employees focus on those aspects of job at expense of others that are less measurable.
13
.. and how?
Methods vary …
Forced ranking (http:// www.youtube.com/watch?v=Sx1Oa9j4YGs)
Electronic monitoring;
Mixed approaches;
Usually appraisal completed by means of an interview, once or twice a year between an employee and his/her line manager.
Forced ranking seems to be getting quite popular – ‘weeding out’
14
Who appraises? Advantages and problems of different approaches (I)
Superior (downward) appraisal by immediate manager - still most common form in use
Some problems:
Avoidance;
Inconsistency;
Bias;
Manipulative ratings;
Paper exercises – mere bureaucracy;
Lack of follow up – disillusionment.
If (or when) you are an HR manager, how might you feel about conducting PAs?
Types of rater bias: recency effects, ‘Veblen effects’ (unable to discern differences and rate everyone the same), Doppelganger effect (appraiser gives better ratings to people they see as similar to themselves), central tendency, etc.
15
Are there solutions?
More careful design
Senior management leadership
Clear communication of objectives
Transparency
Better training of appraisers
But appraisal a political and social process
Why might managers prefer to remain biased?
Reward loyalty or maintain team morale
Goals of system may be in conflict with goals of managers
Process of target and goal-setting is a political one – managers and employees may try to make their lives easier by negotiating easy-to-meet targets
Answer to whether targets have been met is not always clear – leaves space for politicking
16
Who appraises? Advantages and problems of different approaches (II)
Alternatives or additions to downward appraisal:
- Self - increasing use of self-appraisal;
- Peer (appraisal by colleagues, team);
- Subordinate (upward appraisal, managers appraised by subordinates);
- Client (internal and external customers);
Multiple appraisers - 360-degree appraisal
CIPD 2009 only 25% of companies used 360-degree feedback, from 14% in 2005)
managers, peers, subordinates, customers, suppliers, independent consultants
17
Multi-rater appraisal / “360 degree appraisal”
18
Advantages
Fairness
Multiple perspective
Disadvantages
Manipulate feedback
Appraisers may not have the information or competence to judge fairly
Reduce single rater bias
Equity (perceptions of)
Inefficient / expensive
Extent of performance appraisals
Source: WERS 2011
19
Extent of performance appraisals
Use increasing yet……
‘Rarely in the history of business can such a system have promised so much and delivered so little’
(K Grint, Human Resource Management Journal 3, 3)
CIPD survey in 2009: 90% of 500 companies in the UK agreed PM is important; only 20% agreed PM has a positive impact on individual performance
http:// www.cipd.co.uk/nr/rdonlyres/ac5b3f1d-ca83-4cb2-ad97-9b2333411133/0/performance_management_in_action.pdf
20
Problems with performance appraisals
Lawler (1994) - managers not good at it; says its an ‘unnatural act’. Managers are insufficiently prepared and the interview is poorly structured
Fine & Fontaine (1993) managers make judgements on ‘gut feelings’
Snape et al (1994) managers play organisational games with performance ratings
Wright (1991) – objective measurement is difficult
Barlow (1989) – little more than a ‘routinised recording of trivialities’
Performance management - critique
As little as 20% of all human performance problems is attributable to individual employees: as much as 80% of all such problems is attributable to the work environment or systems in which employees work
Rothwell (1996)
Continuing use anyway...
HRM/high commitment approaches require internalised control;
Flatter organisations – motivational tool;
Lever for cultural and behavioural change (linked to corporate values);
Underpins both development and reward strategies (appraisal linked pay);
23
Summary
Appraisals considered to be a crucial aspect of people management
For some commentators, if managed correctly, companies that adopt appraisal systems will result in improved performance
Other commentators are however critical of this view and see use of performance appraisal as just another way of controlling the workforce
