PERFORMANCE

MANAGEMENT SYSTEM

AND PEOPLE STRATEGY

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 MEANING OF PERFORMANCE
APPRAISAL

 It is a method of evaluating the behaviour of

employees in the workspot

 It includes the quantitative and qualitative

aspects of job performance.

 It refers to the degree of accomplishment of

the tasks that make up an individuals job.

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 NEED FOR PERFORMANCE
APPRAISAL
Provides
 Information about the performance ranks, based on
which decision regarding salary fixation, confirmation,
promotion, and demotion is taken
 Feedback information about the level of achievement and

behaviour of subordinates.
 Information which helps to counsel the subordinates

 Provides information to diagnose deficiency in employee

regarding skill, knowledge, determine training and

development needs etc.
 To prevent grievances and indiscipline activities

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 CONTENTS TO BE APPRAISED
FOR AN OFFICER’S JOB
1. Regularity of attendance 11. Creative skills
2. Self expression : Written / 12. Area of interest
oral 13. Area of suitability
3. Ability to work with others 14. Judgement skills
4. Leadership styles and abilities 15. Integrity
5. Initiative 16. Capability of assuming
responsibility
6. Technical skills 17. Level of acceptance by
7. Technical ability / knowledge subordinates
8. Ability to grasp new things 18. Honesty and sincerity
9. Ability to reason 19. Thoroughness in job and
organisational knowledge
10. Originality and resourcefulness
20. Knowledge of systems and
procedures
21. Quality of suggestions offered
for improvement
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PERFORMANCE MANAGEMENT
SYSTEM
Performance Management System is an integrated
system of linking business objectives / goals with key
result areas of managers .

Performance Management System process

includes
 Goal setting

 Key result areas

 Actions

 Self-appraisal

 Joint review

 Management action

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 Goal setting
 Before goals are set, it is necessary to make SWOT
analysis. While settings goals the following guidelines
will be of help. Discussing, Guiding, Developing,
Delivering.
 Top management, in consultation with middle / lower
management, should determine more important goals
for the enterprise to achieve in a given period ahead.
 In setting of goals Manager also establishes measures
of what will indicate goal accomplishment. The
measure can be in terms of sales or profits,
percentage, cost levels or programme execution.
 There are three distinct advantages
• Better management
• Elicit commitment
• Develop effective controls
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 Key Result Areas:
 KRA is a component of a goal to be achieved by a
person within a time frame. KRA is the expected end
result of the goal.

Example
Expected end result Major Actions
Re – allocation of manpower - Rationalisation of jobs
- Job rotations
- Voluntary
- Retaining experts

The message should be

“ Plan Your Work and Work Your Plan”7
 Actions
 While working on actions, employees will have a lot of
problems to face.

 Important precaution will be

“ Think before you Act”

 In the process of actions, one can anticipate some events

which were not thought of earlier. This is like a smoke
signal. Take care if it is going to result into a fire. Even if
something goes wrong, the best quality of a manager is to
keep informed the boss. Rectification action can be taken
well-in-advance.
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 Self – appraisal
 The purpose is to assess performance
against result areas and to find out gaps in
performance
 This will enable to analyse the constraints,
support needs, development needs, etc.
 The greatest advantage of self – appraisal
method is that it makes it possible for a
manager to control his own performance.

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 Joint Review
 Self appraisal reports should be submitted
to functional heads.
 They will study and analyse the reports.
 There will be a joint review between
functional heads and employees.
 Review will be with reference to
achievements or non-achievements of Key
Result Areas.

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 Management Action
 Top management executives should get a very
clear picture so that action plan will be given for
execution.
 What training facilities can be provided, how
development needs will be taken care of these
will be the major issues.
 Policies will have to be changed accordingly and
communicated to all executives / officers
indicating the transparency in goal setting and
HR potential utilisation.
 Suitable management action will guarantee
sustainable performance.
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 TEAM PERFORMANCE
Teams should be well organised. Teams need not be a series of
individuals linked together mechanically. Individuals have work relations,
teams have personal relations as well.
The work should be organised such that the ability and performance of
one man result to the benefit of both himself and the whole group / team
as also result in greater individual and group performance.

Success Failure
- Nobody scored a century - Individual century and still
- Low scoring match a low team score.
- Taking every catch - Dropping of difficult catches
- Contribution of every player - Contribution of one or two only
- TEAM wins - TERM will be defeated but individual
may get ‘ man of the match award’
- Big Win - Small Win
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 MOTIVATION IN TEAM PERFORMANCE
 Every member to be motivated for peak performance
 Role of leader will be of paramount importance
 Leader is like engine of the train. The speed of the
engine will be the speed of the bogie.
 If the team work has to sustain, then, continuously there
should be stream of high motivation.

 ORGANISATION AS A TEAM
 Organisations have different functional heads. They must
join hands and look like an entity. Some amount of ego is
essential, as it is a driving motivation. However, too much
of it will de-link the cycle.
 Whole society will look at the organisation's performance.
Individual will have only identity, organisational team will
win recognition and rewards. “keep it up”, “keep in touch”,
“keep up the spirit” will be the thought for every day for
every manager.
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PERFORMANCE PARAMETERS
a) TECHNICAL KNOWLEDGE
Employee can be technical, administrative or financial
Officer. He has to possess certain level of experience in his
area of specialisation. Your expertise area can be very narrow
or thin, in that small area you should be the king. He has to
share this information with his subordinates and bosses. The
result is best output, quantitative output to meet organisation’s
objectives
b) SELF-MANAGEMENT
First manage the self then manage others. Only one superb
quality needs attention i.e. flexibility. In many world class
organisations, a common feature is unexpected / changing
demands. These features are temporary in nature. This needs
the quality of flexibility in approach. You should be able to respond
positively towards such changes. 14
c) PRODUCTIVITY
An executive should be able to emphasise a standard
of excellence in all work areas. One of the ways of excelling
is by elimination of waste. What is waste? “Identifying activities
and eliminating those that add no value to the organisation.
Where you are successful do not become a complacent
person.

d) DECISION MAKING
Decisions are taken by juniors, Seniors or Super level. But
decisions must be taken and not given. It is better to take
wrong decision than not to take a decision at all. A person
should be able to anticipate problem, identify a problem,
evaluate relevant facts, generate alternative solutions and
then reach a sound decision. In the process he should know
when to stop collecting data and still decide in the matter.
Analysis is important but he should not reach the stage
of paralysis of analysis
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e) INNOVATION
Peter Drucker has indicated “every manager has

to be an Opportunity seeker”. An executive should see

beyond the current problems or situation and generate new
ideas / Practices. Encourage thinking process. Produce
improvements. Emphasis should be on Research and not
Re-search. Every staff member is creative. Try to get ideas
from them. Criticise ideas not the people.
Have brain storming sessions. List ideas. Take trials.
Get feed back. If successful, reward the ideas. Important
aspect is to encourage, to boost morale and make better
organisational culture. Nobody likes steady water. It must
move . It must flow. Knowledge sharing should be the key
word. 16
f) COMMUNICATIONAL SKILLS

Having knowledge is one side, delivering the same is

another. Every effective executive has to deal with
bosses, peers, subordinates, vendors, social people.
Hence he should be able to speak, write clearly, concisely
and Accurately to recognize and match diverse audience
needs. He should be also able to demonstrate effective
presentation, planning and delivery skills. Your speech
and facial expressions should go together. In any case do
not forget one very important statement “ unless your
speech is better than silence do not speak”.

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g. PEOPLE DEVELOPMENT

You are going to work with people. Men behind machines

are important. It is called HR Development. Treat human
as resource i.e. with respect and dignity. Make every
effort to develop people, so that they will be able to
shoulder future responsibilities of the organisation.
People is an asset which never depreciates. H.R. is
the oxygen of the industry. People need due respect an
recognition..
.

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h) INITIATION

Proactive is initiative plus. Such person is called “Self –

Starter”. He is a man of limitation. He is a fast forward
Person. He demonstrates positive influence within the
Group an team. He is able to identify and mobiles
resources necessary for achieving results.
These people attend to people , job, machines with priority
and that to with a smile. It is not just extension of two lips.
They mean what they say.

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i) DIVERSIFICATION:
As people bring variety of problems to the work place, similarly, they bring
variety of skills along with them. Appreciate to value these skills, they will
be helpful to take care of diversification of business activity.

j) CUSTOMER ATTRACTION
Customer brings business. Have a heart to pay attention to them. Create
an atmosphere of win-win relationship with customers. Actively search for
ways to increase Customer Satisfaction.

k) TEAM WORK
Individual performance is not enough. An executive should be able to
work effectively and comparatively with others to achieve win-win results.
He must ask for or give feed-back to team management.

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 PERFORMANCE APPRAISAL
METHODS
 RANKING METHOD
 RATING SCALE METHOD
 CHECK LIST METHOD
 FORCED CHOICE METHOD
 CRITICAL INCIDENT TECHNIQUE
 CONFIDENTIAL REPORTS (C.R.)
 ASSESSMENT CENTRES
 ROLE PLAY METHOD
 TRAINING INSTRUMENT METHOD
 PERSONNEL INTERVIEW / DISCUSSION METHOD
 MANAGEMENT BY OBJECTIVES
 360 DEGREES PERFORMANCE APPRAISAL
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a) RANKING METHOD
This is a very simple method. If in one section, there are ten employees.
They are working under one boss. He will rank them in the order of
performance and merit i.e. number one to ten. He will have his own
criterion which is likely to be highly subjective. He will indicate the best
and the worst person. Perhaps at junior level, it may work. In a very
competitive environment it will have severe limitations. This method is
not full-proof.

b) RATING SCALE METHOD

Very popular method. Provides a scale for measuring absolute
differences between individuals. Even different bosses can use
the method for one employed.

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 RATING SCALE METHOD

Factor Excellent Above Just Below Poor

Acceptance Acceptance Acceptance
Level Level
Job Knowledge

Co-operation

Depend – ability

Decision Making

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c) CHECH LIST METHOD
This method has a list of statements related to a worker
And his behaviour. How to work out appropriate statements
is the job of an expert. Check list method should be done in
consultation with functional heads.

Statement Yes No Doubtful

1. He is very punctual
2. He uses safety gadgets
3. Willing to accept additional
responsibilities
4. Able to maintain machine
independently
5. Methodical problem solving
approach
6. Willing to travel, if necessary

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d) FORCED CHOICE METHOD
This is not an independent method, it is a sub-product of
other methods. In this method the evaluator is forced to
give his choice in terms of percentage.

Factors Excellent Above Just Below Poor

Job
Knowledge 10% 40% 30% 15% 5%

Technical
Skill

Maintenance

Service

Is a time consuming method. When items to be checked are many.

likely that evaluator may not be able to concentrate and do justice
to the job. 25
 Critical Incidental Technique
Example:
In the job of secretary following critical factors may be
identified
1. Excellent communication skills
2. Confidentiality of the business and reports
3. Updated P.C. knowledge
4. Ability to work under tremendous pressure
5. Pleasant manners and etiquettes
6. Quality of presence of mind.

This method is full proof. However since data-base is used for final
evaluation, it becomes a duplicate effort.

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f) CONFIDENTIAL REPORTS
This method is very popular in Government Agencies. The
factors are combination different methods of assessment.
Reports are generally used for promotions and transfer.

g) ASSESSMENT CENTRES
All organisations have to change or revise their objectives from time to
time. Appraisal method are directly linked with these objectives. There
should be full co-ordination between the HR department and the
executives who are going to evaluate the performance. This is through
the establishment of Assessment Centres. It would be useful Method
for internal promotion. The Assessment Center should consist of a
committee appointed by the top management. It should execute from
different functional heads to support the centre activities. The heads
are experienced and have a special knowledge about assessing people
Potential. The committee members should be given full information
about the expected / future roles the likely candidates will be required
to play.
The important aspect of the Assessment Centre activity is the way in
which the test are to be conducted.
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h) ROLE PLAY METHOD
This is an effective method. Candidates will have to
assume the future roles and play the same, as they are
doing the day-to days jobs. Special skill required by the
assessors is keen observation. Today video shots are
taken and subsequently observations are made.

i) TRAINING INSTRUMENT METHOD

Various instruments are developed. This is in the form of a
Questionnaire. Questions are to be answered in a given ‘
period of time. The answers are analyzed and interpreted
by a specialist. Normally, such a person has a good HR
background. The environment creation is a very subtle job.
Selection of an appropriate instrument is equally another
subtle job.
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j) PERSONNEL INTERVIEW / DISCUSSION METHOD
This will be the final stage to have a look at the candidate
and his performance. Easy atmosphere is expected. Very
Personnel skills, manners, habits are observed. Future
Course of action can be discussed. If it consists of a
Transfer, a tentative idea is given. Final recommendations
are worked out.

The whole idea is like a laboratory experimentation.

Subjective factors get eliminated automatically. It has the
effect of equalizing opportunity, improving morale and
widening the pool of possible / promotable candidates.

From candidates point of view it is very time consuming. It

is a choice for the best selection.
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 k) MANAGEMENT BY OBJECTIVES
 It was defined by Peter Drucker in the year 1954. Refinements brought out
by George Odione, Valentine, Humble and others have enriched the
concept and made it more acceptable all over the globe as an appraisal
technique. During the last decade about 50 organisations have adopted
MBO in their work settings.
 MOB is a process whereby the superior and subordinates manage of an
organisation jointly identifying its common goals, define each individual’s
major areas of responsibility in terms of results expected by him, and use
these measures of guides for operating the unit and assessing the
contribution of its members. The emphasis is on what must be
accomplished rather than how it is to be accomplished.
 The subordinates and superior jointly determine goals to be accomplished
during the appraisal period
 During the appraisal period the superior and subordinates update a alter goals as
necessary due to changes in the business environment.
 Both superior and subordinates jointly discuss whether the subordinate has
achieved the goals or not .
 New goals and performance objectives are determined by the superior and
employee for the next period based on performance levels.
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 l) 360 DEGREE
PERFORMANCE APPRAISAL
 The appraiser may be any person who has thorough
knowledge about the job content, contents to be
appraised, standards of contents, and who observes the
employee while performing a job.
 The appraiser should be capable of determining what is
more important and what is relatively less important. He
should prepare reports and make judgments without
bias.
 Typical appraisers are – Supervisor, Peers,
Subordinates, Employees themselves , users of service
and consultants.
 Performance appraisal by all these parties is called
“360 degree Appraisal”
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 LIMITATIONS OF APPRAISAL METHOD
 There are some limitations which are
inherent in the system itself .

 It is like having limitations in any quality

control system

 Two important qualities are required to be

possessed by the evaluator
 good understanding of the situation in
which the employee is working and
 what kind of inputs were given to the
employees
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