PERFORMANCE MANAGEMENT SYSTEM

An Online Treasure Hunt

INTRODUCTION
As a student, one way or another you participated in a performance
evaluation. You take tests to measure your performance on course standard,
you provide performance appraisal information every time you answer
Teachers’ Evaluation.

In this session, we will find out about performance management, its process,
importance and its linked to organization performance. We will learn the
different performance appraisal methods and the conduct of performance
appraisal meetings.

The rules for this session are simple. You will work in a group of four, find the
answers to the following questions on the performance management system.
The answers are to be found in the websites listed below. Click on the URL or
address to be able to open a website. Read each website carefully. Write your
answers to the questions on a document file with the name of members on it.

QUESTIONS:

1. What is performance management? What is its purpose?

Performance Management is a systematic and continuous process to
measure, track, and consistently improve the performance of the department
and employees that are aligned to the organization's goals, objectives, and
mission. This management aims to establish goals and objectives aligned with
the organization, motivate the employees to enhance their skills and
performance, and receive positive feedback/comments from their employees.

2. Enumerate and describe the different activities in a performance

management process.

What is the Performance Appraisal Process?

It is defined as a process under which periodic assessment is
undertaken to evaluate the performance of an employee, or it is a technique
 of assessing as impartial as possible, the attributes, the strengths,
weaknesses, capacity and attitudes of an individual employee in relation to
his/her roles in the company or organization. The input by an employee is
compared with the output as per pre-defined performance goals.
Additionally, it is the process of evaluating the performance of an employee
in an organization.

The Purpose of the Performance Appraisal Process is to:

● Identifying the strength and weakness of an employee
● Opening communications between employees and managers
● Strengthening the relationship of an employee with his superior
● Offering clarity in terms of expectations and organizational goals
● Encouraging superior performance
● To assess the potential for growth and development in an employee
● Identify whether the employees need further training
● Encouraging employees to take part in coaching
● To offer constructive feedback to the employees
● Counseling average and poor performers
● Identify performance gaps if any
● To obtain the necessary information that will help the company in
allocating organizational rewards, compensation packages, salary raise,
and wage structure
● Supporting manpower planning
● Improving the overall performance of an organization
● Reducing the grievances of an employee
The steps in Performance Appraisal/Management Process are:

1. Establishing Performance Standards - in this step, the performance

criteria for an employee needs to be established using Job Analysis.
Criteria must be match and accurate the the Job position of the said
employee, and it should also be clear and objective in nature.

2. Communicating standards and expectations - in this step, we need to

make sure that performance standards should be communicated to all
employees, and they should be modified based on the employee feedback,
for having effective communication helps to avoid or lessen the chance of
conflict, confusions, and misunderstanding.
3. Measuring the actual performance - in this step, it involves the
employees actual performance, and here, frequently used techniques to
measure the actual performance are observation, oral report, written
reports, and more.

4. Comparing performance with standards - in this step, the actual

performance of the employee is compared with the sets of standards to
determine the deviators. It is also the time where employees are being
graded, assessed and being observed about their performance. Results
are being determined and it might be positive or negative deviation, where
positive deviations means the employees performance exceeds the set
standards, and for the negative deviation means, employees actual
performance is below the set standards.

5. Discussing results (Providing feedback) - the appraisal result and

deviations observed are being communicated to the said employees.
Additionally, employees' strengths and weaknesses are being discussed
and explained to the employees for them to assess their level or current
performance in the organization which will help them as their basis for
them to improve future performances.

6. Decision making-taking corrective action - lastly, in this step,

corrective measures are taken in consultation with the employee to
improve their performance. Based on the findings and measures, the
steps required to improve performance are being identified, given and
initiated.

Source: https://www.youtube.com/watch?v=pTPefFdP5gg
Advantages and Disadvantages of Performance Appraisal

Advantages:

1. It becomes easier to maintain a record of individual performance over

some time, and this helps the company to make proper evaluations
2. The performance appraisal process includes comparative ratings, and this
helps the company to reward its better workers
3. It helps the management to decide about important issues like transfers,
raise and promotions
4. The statistics derived from performance appraisal process helps the
company to screen its recruitment process
5. The performance appraisal process helps the company in identifying the
right talent for specific jobs so that they can place the employees in
particular areas depending on their know-how
6. It becomes easier for a business entity to find those employees who are
working above the set standards and also those who are unable to find
their rhythm
7. The performance appraisal process acts as an opportunity for the
management to hold discussions with its employees about their
 performances
8. It is also an opportunity for the employee to discuss and clarify issues and
expectations with his manager
9. The performance appraisal process determines the effectiveness of a
training period and whether it has proved successful or not
10. The feedback helps the employee to know whether they have completed
their goals or not
11. A performance appraisal process is a motivational tool that can prompt the
employee to make viable changes so that he can do better in the coming
days.
12. It encourages healthy competition between the employees as they try to
garner better scores than their co-workers

Disadvantages:

1. The performance appraisal process is time-consuming as the evaluation

process is an ongoing one
2. If not conducted in an appropriate manner it can prove a negative
experience for the employee
3. As the process is dependent on human assessment, it is subjected to bias
and errors and thus lacks reliability
4. It proves stressful if the results are not in your favor
5. The performance appraisal process should be conducted with the help of
pre-designed guidelines otherwise it will prove a complete waste of time
and effort
6. Employees resistance in case of unfavorable appraisal
7. Lack of rewards for appraisers
8. Appraisal Politics
9. Poorly drafted and vague appraisal forms
10. Poor perception of the manager owing to low employee rating

Types of Performance Appraisal Process

- Critical incident method

- The paired comparison analysis method
- Weighted checklist method
 - Essay evaluation method
- Graphic rating scales method
- Management by objectives method
- Behaviourally anchored rating scales method
- 360-degree performance appraisal method
- Performance ranking method
- Forced ranking method

3. What are the elements of effective performance management standards?

a. Planning and expectation setting - For a successful performance management,
goals must be set and it should be evaluated. Thus, it requires a clear goal
setting.
b. Monitoring - monitoring the performance of employees especially on their
quality of their work and behavior.
c. Development and Improvement -Encourage ways to assist the employee in
exceeding and going above their indicated goal, even if the individual is on
track to accomplish their goal, because great performance management always
aims for more and finds additional ways to expand the capacity and potential
of the workforce.
d. Periodic Rating - Provide some form of feedback or rating to assist the
employee in determining whether or not they are on track to accomplish that
future goal. Given that some employees might not recognize until the last
minute that they will not achieve or perform what they have been assigned to
do.
e. Rewards and Compensation - It is the most crucial factor in achieving
performance management success because good employees need to be
recognized and appreciated in order to continue to accomplish and improve.

Source:https://www.linkedin.com/pulse/5-elements-performance-management-
success-margaret

4. What are the different performance evaluation methods?

The following are the tools used by the organizations for Performance
Appraisals of their employees.
 a. Ranking Method - Ranking employees from best to worst on a
particular trait, choosing highest, then lowest, until all ranked.
b. Graphic Rating Scales - A scale that lists a number of traits and a
range of performance for each, the employee is then rated by
identifying the score that best describes his or her performance
for each trait.
c. Critical Incident - Keeping a record of uncommonly good or
undesirable examples of an employee‟s work related behavior and
reviewing it with the employee at predetermined times
d. Narrative Essays - Evaluator writes an explanation about employee ‟s
strength and weakness points, previous performance, positional and
suggestion for his (her) improvement at the end of evaluation time.
e. Management by Objectives - Employees are evaluated on how well
they accomplished a specific set of objectives that have been
determined to be critical in the successful completion of the job.
f. Behaviorally Anchored Rating Scale - BARS combines elements from
critical incident and graphic rating scale approaches. The supervisor
rates employees‟ according to items on a numerical scale.
g. Human Resource Accounting (HRA) - The people are valuable
resources of an organization or enterprise, Information on
investment and value of human resource is useful for decision
making in the organization
h. Assessment Centers - Employees are evaluated over a period of time;
say one or three days, by observing their behaviors across a series
of selected exercises or work samples
i. 360 Degree - It relies on the input of an employee ‟s superior,
colleagues, subordinates, sometimes customers, suppliers and/or
spouses.
j. 720 Degree - 360 degree appraisal method is practiced twice. When
360-degree appraisal is done, then the performance of the
employee is evaluated and having a good feedback mechanism, the
boss sits down with the employee again a second time and gives him
feedback and tips on achieving the set targets

5. What are factors that affect performance management systems?

Factors that affect the performance of Management System are:
● Don’t Assess actual performance- Managers focus on assessing the
 performance must be the volume, dollar value, responsiveness, and
quality of the output rather than the personality traits and behaviors
to evaluate the actual performance.
● Infrequent feedback- Feedback must be consistent(quarterly) to
identify and resolve the performance issues.
● Non-data-based assessments- most processes depend 100% on the
memory in finishing the assessment they’ve given. These will result in
difficulties for assessing and will affect the performance of the
management system.
● Lack of effectiveness metrics- Managers or owners must be able to
measure the processes and contributions of the employees that align
with its goals, such as showing a percentage of the completed related
to their performance appraisal.
● Lack of accountability- Managers must be able to measure and handle
its accountability effectively and efficiently
● Assessments are kept secret- Assessing the performance appraisals is
often kept secret. This will show discrimination and biases to the
employees in assessing. Through that assessment must not be kept
secret to evaluate the performance of the employees fairly.
● No process goals- The overall process must be measurable with its
goals and comprehensible.
● Managers are not trained- Managers must be well trained in assessing
and giving honest feedback to their employees/co-workers to
determine how or what ways can help them improve in their career
path.
● One-way communication- Managers should communicate and give
feedback to their employees to understand and communicate well,
especially to the things needed to discuss and improvise.
● Time-consuming process- The given form must not be too long because
it will take them much time to answer. And also, HR will consume more
time to evaluate and assess the results

6. Who are involved in performance appraisal?

A formal interaction between an employee and his manager happens
during the performance appraisal process. In most cases, the appraisal process
is led by the employee's supervisor. Other individuals may be involved as well,
such as the human resources manager, coworkers, and customers.
7. What is a performance appraisal meeting?
An employee performance appraisal is a critical business meeting that
educates all parties involved about objectives, results, and overall workplace
performance. Depending on the organizational structure and the type of
performance appraisal being done, an appraisal meeting may include the
employee and his manager, as well as a human resources representative or
additional supervisors.

8. What are the preparations and steps in a successful performance appraisal

meeting?
Here are some things to consider to effectively manage the process:
a. Provide a job description for each employee to each manager. Each
job title's expectations should be highlighted in the job description,
which will serve as a solid foundation for evaluation.
b. Give each manager the essential paperwork, such as the job
description's requirements and rating sheets.
c. Provide directions and ground rules for filling out the documents to
the management.
d. If your company has opted to attach performance assessments to
pay increases, work with the manager on compensation increases for
each employee.
e. If necessary, provide coaching support for the establishment of
targets and improvement strategies.
f. Give the manager deadlines for each performance review he or she is
in charge of composing

Most HR professionals will keep a spreadsheet or other document that

includes all employees, their managers, and the dates on which performance
evaluations must be completed. This makes it easier to remember when
performance reviews are due. Regardless of how the system is administered,
it must be managed and developed in order to achieve the ultimate aim of
employee growth.

RESOURCES:
1. Performance Management System Definition and Purpose.
https://www.hrhelpboard.com/performance-management/performance-management-system.htm
2. The performance management system process.
https://www.marketing91.com/process-of-performance-appraisal/
3. Elements of effective performance management standards.
https://books.google.com.ph/books?
id=J1MgADAhyr8C&pg=PA367&lpg=PA367&dq=four+basic+elemen ts+of+establishing+performan
ce+standards&source=bl&ots=0zYh9pZR2_&sig=ACfU3U2g7T0Vj0pgxqEYlI XpL
VrIo3g&hl=en&sa=X&ved=2ahUKEwiJn_2YnpnpAhVQG6YKHZGbDDsQ6AEwD3oECAsQAQ#v=onepage&q
=four%20basic%20elements%20of%20establishing%20performance%20standards&f=false
4. Performance evaluation methods/ tools.
https://www.researchgate.net/publication/264458875_Techniques_of_Performance_Appraisal-
A_Review
5. Factors that make performance management system fails.
https://www.tlnt.com/the-top-50-problems-with-performance-appraisals/
6. Biases in performance appraisal.
https://www.hrbartender.com/2013/training/overcoming-5-common-performance-appraisal-biases/
https://www.managementstudyguide.com/performance-appraisal-bias.htm
7. Conducting Performance appraisal.
https://www.tuturself.com/posts/view?menuId=116&postId=1445
https://www.managementstudyguide.com/performance-appraisal-tools.htm
8. Definition of performance appraisal meeting.
https://open.lib.umn.edu/humanresourcemanagement/chapter/11-3-completing-and-conducting-the-
appraisal/
9. Steps of Successful performance appraisal meeting.
https://www.iidmglobal.com/expert_talk/expert-talk-categories/managing-
people/performance_reviews/id20124.html

BIG QUESTIONS:
1. What sources could be used to evaluate the performance of the people working in
the following jobs? Discuss how you would go about diagnosing an employee’s
performance problems. List several factors to consider. You might want to
represent your answers in the form of a table as illustrated below.
a. Sales Representative
b. Front Desk Officer
c. Head Nurse of a Hospital Ward
d. Payroll Officer
e. School Head/ Dean
f. HR Manager

Employee Sources Bias/es in Performance

appraisal Problem
of
Diagnosis
Performance
Sales Representative Customer Recency and Halo Previous Mistakes
- - If the sales Committed
representative
was given a
bad review
 from a
customer
their past
performance
might be
forgotten.
- If they have
received a
good review,
it doesn’t
mean that the
sales
representative
behaves in an
actual
workplace.
Manager/ Supervisor Contrast Absenteeism
- comparing
the employee
to his or her
fellow
coworker.
Vendor Leniency Sales
- the vendor Representative
might give Engagement
the employee
a good
review for the
purpose of
finishing it
quickly
because he or
she might be
busy.
Head Nurse of a Nursing Staff Strong Affinity, Resolving Concerns
Connection or
Hospital Ward Linkages to the
Appraiser.
Doctors Leniency Nurses Feedbacks
Patient Record Past Head Management
Misunderstanding
with the Appraiser.
 Payroll Org. Budgeting officers Horn Effect Non-compliance
Officer Staff Members Central Tendency Keeping up-to-date
School Head/ Parents Personal Bias Faculty discontent
School Faculty and Staff Lenience Student Issues
Dean
Students First Impression Curricular
Challenges
HR Manager Employees Personal Biases Recruitment and
Selection
Upper Level Managers Lenience Managing Skills
Department Officers Contrast Resolving Concerns

2. What are the different types of evaluation meetings? What are the skills required
for each type? What reactions can you expect from using the different types? How
can managers develop a skill for this type of meeting?

Type of Skills Required Reaction How to

Evaluation develop
Meeting the skill
Formative Evaluation ● Communicati Evaluating the One must be a
● Evaluability on skills employees for their communicator and
Assessments ● Evaluative performance and open to accept critics
● Needs skills giving some feedback or comments to allow
Assessments will allow them to improvements and
know or be aware of modifications to be
their mistakes to made especially
enable them to before full
correct, review, and implementation.
improve the
work/tasks they’ve
done.
Process Evaluation ● Priority- This evaluation helps Skills in this type of
● Program setting skills to know or monitor evaluation can be
Monitoring ● Cross-cutting how well the program developed through
skills (life plans and activities personal and
skills) are working. professional
Managers refine the experiences. The
work of the mistakes and
employees and ensure challenges that you or
that it is inline with the organization
the goal. Checking encountered in the
whether the program past should be a
is accessible and stepping stone to
acceptable to its make progress and
target. Early oversee improvements
or detect possible towards a specified
 problems and think of goal.
solutions.

Outcome Evaluation ● Good critical This type of This skill can be

● Objectives- thinking skills evaluation tells developed by
Based (stay as whether the program focusing on facts, and
Evaluation objective as is being effective in on evaluating the
possible) meeting its objectives information
or not. The program professionally.
or activities are being Practicing critical or
evaluated as well as objective thinking
the performance of and learning to keep
the employees and your emotions and
the manager. those of others from
affecting your
judgment.
Economic Evaluation ● Analytical Analyse every aspect Managers can
● Cost Analysis Skills of the program or develop the skills
● Cost-Effective ● Critical project at the needed through
Evaluation Thinking beginning, during the reading more, and
● Cost-Benefit Skills operation and at the being alert. Managers
Analysis ● Statistical end of the program. should
● Cost-Utility Skills Assess the resources deal with their biases
Analysis ● Financial that are being used and consider the
management and their cost and consequences of their
skills evaluate it with the options. They must
outcome to know if understand the basics
the program was and practice more.
effective and efficient Lastly, making and
with its goals. sticking to a budget is
important.
Impact Evaluation ● Goal Oriented The manager should The managers can
● Strategic make actions and develop skills needed
thinking skills assess the work by focusing on
● Problem during the operation reaching a specific
solving and of an existing objective or
decision- program and at the accomplishing a task.
making skills end of a program. They should also
Integrate solutions observe, reflect, and
and decisions if consider opposing
needed. Monitor the ideas. Anticipating
program’s impact if it outcomes and seeing
meets the overall logical consequences
ultimate goal. are also important to
navigate risk and
uncertainty and
eventually reach the
goal.
Source: https://www.cdc.gov/std/program/pupestd/types%20of%20evaluation.pdf