Performance Management

GUIDEBOOK
 CONTENTS
Page

1 Why Performance Appraisals 3

1.1 Definition 3
1.2 Aims 3

2 Schedule for Performance Appraisals 5

3 Conducting the Performance Appraisal 6

4 Common Rating Errors 4

5 Using the Appraisal Form 9

5.1 Elements of the Appraisal Form 9

5.2 Completing the Appraisal 9

6 Writing Performance Targets/Goals 13

6.1 Objectives of Writing Performance Targets 13

and Goals
6.2 Steps in Writing Performance Targets and 13
Goals
6.3 Checklist 14
6.4 Examples of targets and goals 15

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1. Why Performance Appraisal

1.1 Definition

The performance appraisal is part of a larger system known as the performance

management system. This system is the approach to the management of people using
performance, planned goals and objectives, measurement, feedback and recognition to
motivate people to realize their maximum potential. Performance appraisal involves the
setting of clear quantifiable goals and objectives and assessing individual performance
against these measures.

1.2 Aims

Performance appraisals are a way to give feedback to staff regarding their performance.
The appraisal can be used to encourage good work as well as point out opportunities for
improvement. Appraisals can also be used to set measurable targets and objectives to
continually spur performance improvement.

Increasing Role Clarity

Performance appraisal is a tool for communicating the skills, knowledge and attitudes
required for the different job roles. The appraisal criteria acts as a guide to the attitudes
and behaviors that OUR COMPANY would like their staff in their various capacities to
have.

Training and Development

Performance appraisals measure an individual’s performance and can identify

opportunities for improvement or learning through training.

Compensation and Reward

As OUR COMPANY bonuses and annual increments are linked to performance, a system
for measuring performance in an equitable way is necessary. The performance appraisal
encourages the use of objective, quantifiable criteria to measure performance which will be
known to all staff. This system improves fair judgement and the perception of equity
among staff.

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Career Planning

Performance appraisals will allow OUR COMPANY to assess the skill set of their existing
staff to ascertain the career path for each individual.

Enhance Corporate Values

OUR COMPANY’s corporate value is the pursuit of innovative quality in the areas of
Customers, Employees, Society, Products, Technology, Management and Fairness. These
values are translated to performance measures that are used in the appraisal. This enhances
awareness of corporate values and promotes behaviors that are in line with OUR
COMPANY’s values.

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2. Schedule for Performance Appraisals

STAGES OF THE PERFORMANCE MANAGEMENT SYSTEM

1st week of July • Appraisers to schedule

Schedule interviews 1hr sessions for each
Schedule interviews employee

1st week of July • Appraisers to inform

Inform Employees employees at least one
Inform Employees week before the
scheduled interview

2nd week of July

Preparation for Review • HR Dept to identify
Preparation for Review Appraisers for each
department,
particularly for
departments with more
3rd and 4th week of July than one appraiser
• Conduct performance appraisal
interview Performance Review • HR Dept to provide
Performance Review Appraiser with
• All Execs and Managers will and
and appraisal forms
undergo the appraisal interview Agreement
Agreement
including setting performance • Appraiser to complete
targets and goals for the next time forms for respective
period staff

4th week of July

Management • Appraisers to submit
Management completed form to respective
Review
Review superiors for review and
countersigning
• Appraisers to submit form to
1st week of August HR Dept
HR Dept Review
HR Dept Review
• HR Dept to confirm
recommendations on salary
increments and promotions
with Managing Director
• HR Dept to prepare letters to
staff accordingly
• HR Dept to file appraisals in
personnel forms

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3. Conducting the Performance Appraisal

Keep good Both praise and criticism are most meaningful when supported by
records factual examples

Review Use previous goals to evaluate progress

previous goals
BEFORE THE APPRAISAL

Get input from Seek feedback from others who work with the appraise in areas they will
others have objective knowledge of and get examples where available

Prepare Prepare in advance so that you can deliver the message that you intend
carefully to

Prepare  Agree on a time - set aside at least one hour. Avoid postponing the
administrative appointment, and give the employee full attention.
details  Select a location - office or conference room is best.
 Ask employee to prepare - ask the employee to review his/her goals,
and come prepared with questions.

Explain the Outline what is about to happen for the session

meeting agenda

Encourage  listen
DURING THE APPRAISAL

communication  encourage two-way communication

 ask for ideas on how they can improve their performance
 ask for how they feel you can help them
 ask for feedback on the appraisal section

Stay focused Keep the session focussed on past and future performance, summaries
discussion issues often to ensure agreement

Communicating The employee expects and should know what he/she needs to improve
shortcomings

Be open Be versatile and open-minded if you hear things that cause you to
change your opinion

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 Evaluation  Begin with the positive things that were well done
process  Follow this with areas that need improvement and a plan on how to
DURING THE APPRAISAL

address them
 Conclude with a reinforcement of your desire to help the person grow
and improve

Making Don’t make promises you do not have control over (e.g. salary
promises increments, promotions, transfers etc)

Review goals Concentrate on a few areas- things that make a difference. Try to
encourage continuation and growth in the areas of strength. Set up
“smart” goals that will build strength in areas needing attention

Administration  Complete the paperwork required for the results of the appraisal
AFTER THE APPRAISAL

 Make sure the appraise signs on the bottom line

 Mark the calendar on when your next appraisal session with the
person will be

Follow-up Follow-up on agreements made during the appraisal

Learning Review what you have learnt about the employee, your records and
systems, yourself, the appraisal process and your management style

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4. Common Rating Errors

Whilst completing the appraisal form, the appraiser is advised to exercise caution, as there
may be several pitfalls which may skew the assessment:

Halo Effect
A person outstanding in one area tends to receive outstanding or better than average
ratings in other areas as well, even when such a rating is undeserved

Negative Effect
A low rating in one area yields lower than deserved ratings for other accomplishments

Central Tendency
Assigning an average rating for all qualities

Confrontation Avoidance
Discomfort with giving negative feedback

Initial Performance
Rating an employee based solely on initial impressions of performance

Rating an employee based solely on most recent performance which overshadows the
entire year’s performance

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5. Using the Appraisal Form

5.1 Elements of the Appraisal Form

The appraisal form covers the following key areas:

 Assessment of performance
 Employee’s growth and development - strengths and areas for improvement
 Training requirements
 Achievements
 Goals and targets (for managers and executives)
 Review with staff (for managers and executives)
 Recommendations
 Management review- Review by Countersigning Authority

5.2 Completing the Appraisal Form

5.2.1 Key Performance Indicators

Core Values Manager Executive Staff

Customers Customer Focus

 Maintains high priority in achieving customer satisfaction (both internal and external
customers) by quickly and accurately identifying and responding to customers actual needs
 Is effective in dealing and negotiating with internal and external customers

Employees Staff Training and Welfare

 Actively provides guidance and helps staff in their career
development

Interpersonal/ Facilitation of Teamwork

 Promotes and develops good working relationships with other staff

Communication Skill
 Speaks, listens and writes clearly and logically to share information and skills

Society Cost Consciousness

 Demonstrates concern for the society through practices that save company’s resources and
reduce wastage

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Core Values Manager Executive Staff

Products and Job Knowledge/ Technical Skills

Services  Demonstrates good knowledge and skill in job area

Work Attitude
 Displays commitment, planning and organisational skill, initiative and a sense of urgency
toward work and a willingness to learn

Quality Mindset
 Maintains high standards for how work is done in terms of accuracy and consistency

Safety
 Ensures careful work habits that comply with the safety requirements

Quantity of Work
 Ability to handle a
reasonable volume of
work

Technology Process Improvement

 Recognizes the need for continuous improvement

Management Problem Solving

(to be completed  Identifies issues and problems, secures relevant information from different sources and resolves
for appraises problems effectively
with supervisory
duties) Leadership/ Supervision & Motivation of Staff
 Sets a good example for subordinates and effectively controls and leads them

Goal Orientation
 Sets realistic challenges and acts to achieve them

Decision Making
 Takes the right action at the
right time

Fairness Integrity
 Acts ethically and honestly in line with the company’s code of conduct

Dependability / Responsibility
 Is reliable in the discharging of duties and is willing and adaptable in taking on new
responsibilities

Attendance/ Punctuality
 Has good attendance and is punctual

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5.2.2 Evaluation

(a) Total Evaluation

The final score is the average score, calculated as follows

Total Scores X 100 %

Number of Questions Answered X 5

(b) Grading’s

The appraise is then graded according to the level of his/her performance in each
category according to the final score:

Outstanding
Performance is exceptional and far exceeds expectations. Consistently demonstrates
excellent standards in all job requirements.

Very Good
Performance is consistent, and exceeds expectations in all situations.

Good
Performance is consistent. Clearly meets essential requirements of job.

Fair
Performance is satisfactory. Meets requirements of the job.

Needs Improvement
Performance is inconsistent. Meets requirements of the job occasionally.
Supervision and training is required for most problem areas.

Unsatisfactory
Performance does not meet the minimum requirements of the job.

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Growth and Development

In this section, describe how the appraise demonstrates their strengths and areas for
improvement by providing specific examples.

Specific action plans can also be developed together with the appraise (for Executives and
Managers) to address these areas. In particular, training requirements can be identified for
the areas that can be enhanced or developed through training. Training requirements refer
to the skill set required by the employee to either successfully fulfil current job
responsibilities or to prepare the employee for greater responsibility.

Achievement

This section allows any additional responsibilities outside of the appraiser’s job scope (e.g.
ISO 9002 Steering Committee) to be acknowledged.

Goals Achievement

Appraisals for Executives and Managers, contain a section for goal setting and goal
achievement assessment. Goals are specific and measurable objectives that the individual
wishes to achieve by the end of the following appraisal period.

Recommendations

The appraiser provides recommendations for the career development for the employee.
These may include: confirmation, extension of probation, promotion, increments,
termination, etc.

Review by Director

The Managing Director will provide comments prior to filing with the Administration
Department.

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6. Writing Performance Targets and Goals (Managers and Executives only)

6.1 Objectives of Writing Performance Targets and Goals

 Specific and measurable targets and goals define what is expected from a job holder
 The performance targets and goals serve as standards by which performance can be
accurately measured

6.2 Steps in Writing Performance Targets and Goals

Examples
Step 1 Begin by writing down  Source new clients
the basic nature of the  Increase sales volume
task using only a verb  Reduce rejection rates
and a noun  Complete planning phase

Step 2 Include the quantity or  Source X number of qualified

quality that must be met clients within Y months
by the person  Increase sales volume by X% by
responsible for the task June
 Reduce rejection rates by 5% by
the end of the year
 Complete the planning phase
by 30 October

Step 3 If necessary, add any  Source X number of qualified

procedures or criteria clients within Y months by
that describe the action actively advertising services to
to be taken to achieve potential clients within the
the target or goal electronics industry

Step 4 Review and refine the

target or goal if
necessary

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6.3 Checklist

“SMART” Performance Goals:

S pecific
M easurable
A chievable
R esults-oriented
T ime-bound

To ensure that the objectives are properly defined, each of the following questions must be
answered positively:-

(i) Does the statement of performance targets/goals limit the results to one specific
area?

(ii) Are the results well defined in terms of what is expected of the job holder?

(iii) Are the objectives measurable and observable? Were objectives quantified
whenever possible?

(iv) Was a time frame specified?

(v) Are the performance targets/goals reasonable and within the reach of the job
holder?

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6.4 Example of Performance Targets

Position Performance Targets/Goals

Sales Manager Increase share of market of Product J from 15% to 20%

by December 31.

Warehouse Supervisor Reduce accident rate by 10%.

Reduce response time to internal customers by 10%.

Human Resource Manager Decrease turnover of clerical employees from 20%

to 15% by Dec 31

Complete planning and installation of supervisory

training programme.

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