Performance Management

Worku Mekonnen (PhD)

 Definition of performance management

It is the systematic evaluation of the individual

with respect to his or her performance on the job
and his or her potential for development. It is a
formal, structured system of measuring and
evaluating an employee’s job related behaviors
and outcomes to discover how and why the
employee can perform more effectively in the
future so that the employee, organization and
society all benefit.
• “Performance management is a process
which is designed to improve organisation,
team and individual performance, and
which is owned and driven by line
managers”
PM
Strategic business considerations
Ongoing feedback
So employee can improve performance
Driven by line manager
Performance appraisal
Assesses employee
Strengths &
Weaknesses
Once a year
Lacks ongoing feedback
Driven by HR
Purposes of Performance Appraisal
1. Administrative Purpose.
Organizations use performance appraisal
information in many administrative decisions:
• salary administration
• promotions
• retention/termination
• rotation
• layoffs
2. Developmental Purposes
• Performance management seeks to improve
performance of the employees.
• The feedback given during a performance
evaluation process identifies the employee’s
strengths and weaknesses, that enables the
managers to plan for removing the
weaknesses through various HRD
interventions.
3. Organizational Maintenance/ objectives

To check the status of the organization

against the stated objectives.
4) Documentation Purpose

The employee’s performance reports shows

the history of employee work related
activities.
 Phases of Performance Appraisal
1. Preparing Phase
2. Writing Phase
3. Delivering Phase
4. Producing Phase
 Preparing Phase
The preparation process comprises:
1. Reviewing own observation by going
through the employee work record of the
current review cycle vis-à-vis the employee
JD and the goals set.
2. Gathering information from different
sources.
 Writing Phase
• The writing phase of the performance
appraisal process comprises completing the
Performance Appraisal Form.
• Before filling the form, the appraiser should
be sure that s/he has got proper training in
that regard
 Delivering Phase
 Delivery phase involves exposing the appraisal report
to the employee through a one-to-one private
meeting. It involves:
1. meeting the employee in private;

2. discussing the employee's strengths first, covering

each point in detail in order to set a positive tone to
start the discussion.

3. apprising the employee of the weaknesses surfaced

during the review period and discussing with
her/him their reasons and proposing the strategy for
improvement with keen interest;
4. making necessary changes in the report, if
felt appropriate, during the discussion;
5. allowing the employee to read the final
report through ample time offered to do so.
 Producing Phase
This phase comprises:
1. Asking the employee to sign the
Performance Appraisal Form;
2. Assure the employee that his or her
signature indicates that he or she has read
the appraisal and that a discussion has taken
place, and does not signify that the
employee agrees with the appraisal
4. The employee may take a few days before
signing the appraisal form. However, if after
a reasonable period of time the employee
still refuses to sign the form, the appraiser
may note on the form that the employee has
refused to sign.
5. A copy of the final signed performance
appraisal should be given to the employee
for his or her record.
Performance Appraisal Approaches
• Trait Approach
• Behavioral Approach
• Results Approach
 Trait Approach
(Qualitative)
• The trait approach to performance
management focuses on the extent to which
individuals have certain attributes /
characteristics / traits believed to be desirable
for the company’s success; such as:
intelligence, cleverness, initiative taking,
leadership, and competitiveness----and
evaluate individuals on these basis.
• Merits of Trait Approach

Traits are quite easy to develop and are

generalizable across a variety of jobs,
strategies, and organizations.
• Demerits of Trait Approach
1. Appraisals based on Trait Approach are
highly subjective. Performance standards
based on this approach are extremely vague
that are open to different raters for
providing substantially different ratings and
rankings.
 The Behavioral Approach
(Qualitative)
This approach attempts to define the behaviors
an employee must exhibit to be effective on the
job, and requires the managers to assess the
extent to which employees exhibit them.

For instance, regularity, punctuality and

conformity with the norms and values of the
organization are the desired behaviors against
which the managers may be assessing the
employees.
Merits of Behavioral Approach
• The behavioral approach can link the
company’s strategy to the specific types of
behavior necessary for implementing that
strategy.

• It provides specific guidance and feedback

for employees about the performance
expected of them
Demerits of Behavioral Approach
• But, this approach assumes that there is “one
best way” to do the job and that the behaviors
that constitute this best way can be identified.
• So it allows little leeway and latitude to the
employees to use their own discretion in
adopting the suitable method of doing the job
according to the situation.
• Above all, display of certain desired behavior
does not necessarily result into high
performance.
 The Results Approach
(Quantitative)
• The results approach focuses on measuring
the measurable results of a job.
• It assumes that:
– results are the closest indicator of one’s
contribution to organizational effectiveness and
not the traits and behaviors; and
– only focusing on results can minimize
subjectivity from the performance appraisal
Merits of Result Approach
1. It minimizes subjectivity, relying on
objective, quantifiable indicators of
performance, making the performance
appraisal more transparent.
2. It links individual’s performance with the
company strategy and goals
Demerits of Results Approach
1. Objective measurements can be contaminated
because they are affected by things that are not
under the employee’s control.

2. Individuals may focus only on those aspects of

their performance that are measured by the
seniors, neglecting those that are not; like
objective performance goals may lead to higher
performance but mostly they lead to less
helping the co-workers.