New Global Vision

College
FUNDAMENTALS OF HUMAN RESOURCE MANAGEMENT

GROUP ASSIGNMENT
Prepared By :- FASIKA GETACHEW

EPHREM GETACHEW

ERMIAS TESFAYE

ERMIYAS TILAHUN

ENDALE ZEWEDE

ENDEG BEWKET

ENDRIS ASSEN

EYOBE REDE

DULA CHIMDESSA
 Chapter 6

Performance Management
6.1 Performance Management

Introduction
 “Maximizing performance is a priority for most organizations today.”
 However, satisfactory performance does not happen automatically; therefore,
it needs a good performance management system.
What is performance Management?

 It is a series of activities designed to ensure that the

organization gets the performance it needs from its employees.

 It consists a processes used to identify, encourage, measure,

evaluate, improve, and reward employee performance.

 PM can focus on the performance of an organization, a department,

an employee, or the processes in place to manage particular tasks.
Performance
Management
6.2. Performance Assessment
and Appraisal
Performance Assessment
 Performance assessment, also known as alternative or authentic
assessment, is a form of testing that requires students to perform a task
rather than select an answer from a ready-made list.
 Performance assessment: This assessment measures how well students
apply their knowledge, skills, and abilities to authentic problems. The
key feature is that it requires the student to produce something, such as a
report, experiment, or performance, which is scored against specific
criteria.
Performance Appraisal
 It is the process of evaluating how well employees perform their
jobs when compared to a set of standards, and then communicating
that information to those employees.
 “It is the process through which an organization gets information
on how well an employee is doing his or her job.
 It is the process of measuring employees 'performance and
contributions to their organization.
 It is an organized description of an employee’s strengths and
weaknesses
Why Conduct Performance
Appraisals?
Performance Appraisals provide:

 usefulinformation used for fulfilling the overall

purposes of performance management
 useful information that is needed to make informed
decisions regarding employee/career development.
a clear understanding of the differences between
current and expected performance.
Performance Appraisals provide:

 vitalinformation on the cause of performance

discrepancy
a structured format for feedback to be given
 accurate
performance history which is not
dependent upon memory.
Administrative uses

Performance Appraisal provides information

that is used in many administrative decisions
such as:

Promotions
Salaries/wages

Retention

Recognition Termination
 Developmental Purposes:

 This has to do with training and developing employees

so that they can do more challenging work and are
more flexible
 To correct weaknesses in their performance
 Giving the needed feedback so that they can be aware
of their level of performance.
A performance appraisal system is often the link between the
rewards of employees and their productivity.
productivity → performance appraisal → rewards
Performance Appraisal process
 Appraisal Process

1. Establish performance
appraisal standards

2. Mutually set measurable goals

3. Measure actual performance

AND….

12-17
 Appraisal Process cont…
4. Compare actual with
standard

5. Discuss appraisal with

employee

6. Corrective action
 Basic
 Immediate

12-18
Measurement Tools
 Focus of the measure
 Trait, behavior, or outcome

 Type of judgment required

 Relative, absolute, or outcome

12-6
Focus: Trait, Behavior, & Outcome 12-20

Trait
 An appraisal tool that asks a supervisor to make judgments about
worker characteristics that tend to be consistent and enduring.
Ex. Dependable, confident, loyal

Behavior
 An appraisal tool that asks managers to assess a worker’s behaviors.
 Ex. Average number of sales calls

Outcome
 An appraisal tool that asks managers to assess the results achieved by
workers.
 Ex. Overall sales volume, new accounts
 Judgment: Absolute, Relative, or Objective
 Absolute
“Supervisors make judgments about an employee’s performance based solely on
performance standards”
 Relative
“Compares an employee's performance to the performance of other
employees doing the same job”
 Objective
“Measurement against a goal established between the supervisor and
employee”
Appraisal criteria, methods, and documentation must be job related!!!
Types of Performance Appraisal
 Trait Appraisals
 Assessing subordinates on personal characteristics that are
relevant to job performance.
 Behavior Appraisals
 Assesses how workers perform their jobs—the actual actions and
behaviors that exhibit on the job.
 Focuses on what a worker does right and wrong and provides good
feedback for employees to change their behaviors.
 Results appraisals
 Managers appraise performance by the results or the actual outcomes
of work behaviors
Performance Appraisal methods
 Objective appraisals
 Assesses performance based on facts (e.g., sales figures).
 Subjective appraisals
 Assessments based on a manager’s perceptions of traits, behavior, or
results.
Graphic rating scales
Behaviorally anchored rating scales (BARS)
Behavior observation scales (BOS)
Forced ranking systems
6.3 Modal of Performance Management

 Oneof the earliest versions of a performance management model has

been published by Peter Drucker. In his 1954 book 
The Practice of Management, he proposed 
Management by Objectives (MBO).
 MBO proposes that individual goals should be aligned with
organizational goals. It is the responsibility of management to cascade
higher level, organizational goals into smaller, individual goals. This
way the employee is contributing towards realizing the goals of the
overall business. This alignment between individual and team
objectives and the organizational goals is not always easy to achieve
but a good goal to keep in mind.
The performance management cycle
model
 The performance management cycle model that we propose is a four-stage
model:
 The model starts with planning, which involves setting goals and defining
success metrics, usually at the beginning of the year. Once goals are set;
 The second stage involves monitoring the progress of these goals. If there is
potential for improvement, or performance is lacking;
 Employee development takes place;
 The employee is then rated and rewarded on their performance, and the
cycle starts again.
Performance management in four
stages:
6.4 Approaches to assessment and
appraisal
 Everything you need to know about the approaches to
performance appraisal.
 The concept of performance appraisal came to light with
the development of management. After industrialization
when competition crept in the market, the need for
effectiveness was felt.
 In past, the roots can be traced in the time and motion
study. For effective working the need for capable and
dedicated worker was felt.
 Newer methods are being tried out in industry and business to
assess the performance and potential of employees objectively and
with relevance to the performance, job nature, and skill
requirements of those being appraised.
 The approaches to performance appraisal can be studied under the
following heads:-
1. Old/Traditional Approach
2. Modern Approach
3. Competency-Based Approach
4. The 360-Degree Technique
5. The Assessment Center
6. MBO (Management by Obeject)
6.5 Employee Development
What is Employee Development ?
 Employee development is a joint initiative of the employee as well as the
employer to upgrade the existing skills and knowledge of an individual .
 It is of utmost importance for employees to keep themselves abreast with the
latest developments in the industry to survive the fierce competition.
 Believe me, if you are not aware of what is happening around you, even
before you realize you would be out of the game. As they say there is really
no age limit for education.
 Upgrading knowledge is essential to live with the changes of time. Employee
development goes a long way in training, sharpening the skills of an
employee and upgrading his/her existing knowledge and abilities.
Employee Development Methods
1. Training
This method includes developing employee skills through a combination of lectures, hands-on-
exercises, videos, podcasts, simulations, and individual/group-based assignments.
2. Task/job rotations
Employees could volunteer to rotate roles with colleagues on a shift/team, to put some of those new
skills into practice. Employers can also encourage job sharing as a method for employees, who have
indicated their desire to get practical experience, to develop some additional skills.
3. Coaching
When talking about various employee development methods and their benefits, we can’t stress the
importance of helping employees polish their skills through coaching.
This method of skills development typically involves senior staffers working one-on-one
with less experienced individuals.
Ways To Improve Employee Development
At Your Company

1. Offer professional training from the get-go

2. Help your managers become better coaches
3. Enhance cross-departmental collaboration
4. Invest in personal development
6.6 Performance rating technique
6.6 Performance rating technique
 Rating scales are used in performance management systems to indicate
an employee's level of performance or achievement. These scales are
commonly used because they provide quantitative assessments, are
relatively easy to administer and assist in differentiating between
employees.
 Although there is no consensus on which specific scale works best,
most performance rating scales used by employers share common
elements.
6.6 Performance rating technique

 Rating scales may be numeric (e.g., 3, 4, 5) or alphabetic

(e.g., a, b, c), with numbers or letters corresponding to an
adjective, such as "5 = excellent" or "c = satisfactory."
Rating scales also may be narrative. For example, one
element on a scale may be "unacceptable performance,"
described as "fails to meet basic requirements and
objectives." Scales that provide a positive message have
become more popular. For example, a scale may include
ratings such as "acceptable," "effective" and "very effective."
Performance Appraisal Tools and
Techniques 1. Ranking
2. Paired Comparison
3. Forced Distribution
4. Confidential Report
5. Essay Evaluation
6. Critical Incident
7. Checklists
8. Graphic Rating Scale
9. BARS
10. Forced Choice Method
11. MBO
12. Field Review Technique
13. Performance Test