Human Resource Management (MGT302)

Dr Silvia Pirrioni

Thursday, April 5

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Learning outcomes, 5th April 2023

• Discuss the purpose of performance management

• Describe the steps in the performance management process
• Review the factors influencing the performance management cycle

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Performance management
Performance management is the process that aims to maintain
and improve employee performance in line with an
organisation's objectives.
It aligns individual contributions towards the objectives of the
organisation
Assumptions:
- It is both strategic and operational
- Employees as human capital: value creation
- Unitaristic view of HRM
(CIPD, 2018)

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Performance management
Performance management is an activity that:
- Establishes objectives so that individuals and teams can understand
how they contribute to the organisation’s strategy and mission
- Improves performance amongst individuals, teams and organisations
- Holds people to account for performance by linking it to rewards,
career progression and termination

(CIPD, 2018)

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Performance management
Performance management should be:

- Strategically aligned with organization’s mission and long-term goals

(corporate goals should inform department goals – team goals – individual
goals)
- Integrated with other HR activities (i.e. pay and rewards; training &
development)
- Managed holistically: it is not had hoc, but it involves formally planned
activities (i.e. performance appraisal) along with informal processes (i.e.
regular feedback)
- Unique to the context and culture of the organisation (no single best
approach)
(CIPD, 2018)

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Performance management
Performance management is a cycle, not an isolated event (CIPD, 2018)

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Performance management
• A clear job description documenting roles and responsibilities
• The job description sets the framework for goals and objectives
• The induction should communicate clear expectation and behaviours
• Performance management is ongoing: continuous monitoring and
evaluation to address issues with poor performance and to record
positive and negative events (PM systems to log information)

(Mitchell and Gamlem, 2012)

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Performance management
As a process performance management involves 3 steps:

1. Performance planning: the preparation step

The line manager reviews the job description and the job requirements.
He/she reviews past performance and relevant documentation.
He/she reviews performance expected for the year ahead.

This step involves gathering information about past performance (for evaluation
purposes) and about future performance (for communicating expectations).
This step allows the manager to prepare the feedback: related to both performance
improvement needs and developmental needs

(Mitchell and Gamlem, 2012)

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Performance management
2. Performance assessment: the analytical step

Based on the information collected in step 1, the manager analyses

performance against objectives and expectations.
This step involves measuring employees performance against set
criteria.
For example: sales employees are evaluated against sales targets;
customer service employees are evaluated against customer
satisfaction rates; had hoc tasks to be completed by specified dates.
(Mitchell and Gamlem, 2012)

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Performance management
Example: Communication – behavioural expectation
Effective written communication skills: basic writing skills and proof reading ability
(Mitchell & Gamlem, 2012, pp. 190)

Performance standards

Below expectations Meets expectations Exceeds expectations

Even with guidance, fails With guidance prepares Independently prepares
to prepare straightforward straightforward communications in a
communications in a communications in a timely, clear and accurate
timely and accurate timely and accurate manner; work products
manner; work products manner; work products require few, if any,
require moderate to require minimal corrections and revisions.
extensive revisions corrections and revisions

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Performance management
3. Performance feedback: the delivery step

What?
• What is the behavior that is not working/is working?
• What is the expectation that is not being met/is being met?
So what?
• What is the impact?
• Why is it a problem?
Now what?
• What can the individual do differently to achieve the desired results?
• If not, what is the consequence?
(Mitchell and Gamlem, 2012)

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Performance management
3. Performance feedback: the delivery step

- Should be ongoing
- Two-way communication process
- The manager should ensure constructive, regular and timely
feedback
- The employee should seek feedback whenever required and
react positively to feedback

(Mitchell and Gamlem, 2012)

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Performance management
Performance objectives are outcome-focused:
• Specific and challenging (i.e. sales levels; tasks to be completed by a
certain deadline)
• “do your best” (vague objectives are suitable in complex jobs
involving ambiguous, unfamiliar tasks and requiring analysis-based
decisions)
• focus on behaviour (i.e. collegiate and collaborative behaviours)
• focus on learning (consider employees’ need to develop in order to
improve performance)
(CIPD, 2018)

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Performance management
Performance ratings can be used for:
- Administrative purposes (i.e. pay decisions, terminations)
- Developmental purposes (i.e. training & development)

Performance judgement is prone to bias (as in selection)

Employee reactions are shaped by:

- Personality (i.e. self-esteem, openness, learning goal orientation)
- Perceptions (i.e. is the appraisal fair? Involving?)
(CIPD, 2018)

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Performance appraisal
• Performance appraisals, or performance reviews, is one performance
management tool
• The performance appraisal event is part of the performance
management cycle – the last stage
• It is usually conducted annually
• It is a mean for managers and employees to review the employee
performance and set objectives
• It is centred on providing feedback
• See Sample on Moodle
(Mitchell and Gamlem, 2012)

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Performance appraisal
Critiques of PA:
• Appraisals are traditionally not frequent enough
• They focus on past performance with little attention for future
development
• Feedback often comes from a single source (the line manager); does
not account for the experiences of peers, customers, and the
individuals themselves
• The amount of effort associated with paperwork and overseeing
process of appraisals is excessive.
(CIPD, 2018)
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Performance appraisal
Tips:
• Have different meetings for developmental (learning & development
purpose) and administrative (pay and promotion) appraisals
The two purposes are distinctive (developmental is future-oriented;
administrative is past-oriented) so it is best to consider them
separately.

This allows to provide meaningful feedback on past performance and

to engage in constructive developmental plans.
(CIPD, 2018; Mitchell & Gamlem, 2012)
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Performance appraisal
• Employees need to perceive the appraisal as fair and useful and feel
they have a voice in the process.
Employees’ reactions to feedback, more than how feedback is given
per se, are a critical influence on whether future performance is likely
to improve (CIPD, 2018).
Performance appraisal satisfaction is an important employee reaction.
Satisfaction with the appraisal depends on employees’ perceptions of
quality of feedback and perceptions of the appraisal as developmental
(Bednall et al., 2014; Kuvaas, 2006).

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Performance appraisal
Performance measurements:
• Objective metrics (i.e. number and duration of calls in a call centre;
sale levels in a sale team; project work)
• Measuring employees behaviours and attitudes (i.e. adaptability;
communication; initiative, drive and commitment; these should be
clearly described and measured against a scale; see Sample on
Moodle)

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Performance appraisal
Rating errors and bias:
• Halo effect: one positive or negative dimension becomes the basis for
the whole evaluation
• Critical incident: a single episode, positive or negative, is given undue
emphasis
• Contrast: employees are compared to other individuals, rather than
against the established standards. A good performer may suffer if
compared to an outstanding one.
• Similar-to-Me: employees similar to the manager receive more
positive evaluations
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Performance appraisal
• First impression/recency: employees are evaluated based on
performance early in the year/most recently rather than performance
throughout the year
• Past Anchory: the manager rates performance based on past year
evaluation instead of reassessing performance
• Central tendency: all employees are rated as average and there is no
distinction among performance levels
(Mitchell and Gamlem, 2012)

➢ training of line managers in conducting performance appraisal is

pivotal
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Performance appraisal
Intentional errors:
Supervisors deliberately inflate or deflate an employee’s rating for
political purposes.
• ratings are artificially deflated to show who is the boss; to prepare the
ground for termination; to punish a difficult and rebellious employee.
• a poor performer may be given an inflated (excellent) rating so that
they will be promoted up and out of the department. Managers may
inflate ratings to favourably reflect on them as responsible for such a
high-performing team.
(Brown & Redman, 2017)

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Performance appraisal
Impression management: employees engaging in behaviours to influence
the way they are perceived by their supervisor using a variety of techniques:
• self-promotion: exaggerating or highlighting one’s accomplishments and
abilities so as to be seen as competent (evidence: negative impact)
• ingratiation: doing favours and using flattery and opinion conformity to be
seen as likeable by the supervisor (evidence: positive impact)
• Intimidation: acting threateningly or intimidatingly to colleagues so they
will view you as forceful or dangerous;
• Supplication: broadcasting one’s shortcomings in an attempt to be viewed
as needy
(Brown & Redman, 2017)

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Performance appraisal
Performance conversation:
• How well the employee has performed and what they have achieved since
the last meeting.
• Factors that have helped or hindered performance and how employees can
become more effective now and in the future.
• What practical support and learning or development will help the
employee.
• How the employees’ current role and longer term career may be
developed.
• Objectives for the next review period and a plan for how they can be met.
(CIPD, 2018)

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Performance appraisal
Performance Appraisal is carried out by the line managers.

➢In your view, what skills are required to successfully deliver this
process?
➢As HR professional, how would you prepare line managers to conduct
performance appraisals?

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Performance appraisal
Setting performance objectives:
• Set clarity and direction for the future; establish expected results
• Align with team, departmental and organisational goals
Objectives should:
- Clearly state expected results and actions for accomplishing them
- Have quantifiable, observable and verifiable results
- Be within the employee’s control
- Set realistic yet challenging targets (between 3 and 5 objectives)
- Use timelines to assess progress
(Mitchell and Gamlem, 2012)

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Performance appraisal
Write objectives following the SMART technique:

S – specific
M- measurable
A- attainable
R- relevant
T – trackable

(Mitchell and Gamlem, 2012)

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References
• Bednall, T.C., Sanders, K. and Runhaar, P., 2014. Stimulating Informal Learning
Activities Through Perceptions of Performance Appraisal Quality and Human
Resource Management System Strength: A Two-Wave Study. Academy of
Management Learning & Education, 13 (1), 45-61.
• CIPD, 2018. Performance management: an introduction (uploaded on Moodle).
• CIPD, 2018: Performance appraisal (uploaded on Moodle).
• Kuvaas, B., 2006. Performance appraisal satisfaction and employee outcomes:
mediating and moderating roles of work motivation. The International Journal of
Human Resource Management, 17 (3), 504-52
• Mitchell, B. & Gamlem, C. 2012. The Big Book of HR. Pompton Plains, NJ: Career
Press.
• Brown, M. and Redman, T. 2017. Performance Appraisal. In Wilkinson, A.,
Redman, T., Dundon, T. (ed). Contemporary Human Resource Management, 5th
ed. Harlow, UK: Pearson, pp. 189-21. 29