PERFORMANCE MANAGEMENT PROCESS

Defining Performance Management (PM)

performance Management is seen as an approach to managing and developing people in a way
that increases the probability that goals will be achieved in the short and longer term.
PM can also be defined as a strategic and integrated approach to delivering sustained success to
organisations by improving the performance of the people who work in them and by developing
the capabilities of teams and individual contributors (Armstrong 2003).
Objectives/Purpose/concerns of performance management
Performance Assessment
Organisations use PM to measure the extent to which an employee’s performance meets the
performance standards set by the organization. This is done for achievement of
organizational goals, as input into the reward system, for promotion purposes and other
human resource management decisions.
Performance Improvement
An important objective of PM is to improve the performance of individuals, teams and
ultimately that of the entire organization. Improvement can arise from continually measuring
performance and correcting any deviations from the expected standard.
Employee Development
Employee Development involves learning that goes beyond the present job; it is any learning
activity which is directed towards future needs and is more concerned with career growth. An
objective of PM is to develop the capabilities of employees in doing their job duties.
Knowledge and skills gaps/needs revealed during the performance review are used as basis
for designing and implementation of the personal development plan of an individual
employee.
Improved Communication
Another purpose of Performance Management is the improvement of communication
between the supervisor and subordinate. The continuous interaction between the two as they
discuss the performance agreement, during the monitoring of actual performance and during
the performance review, can enhance the supervisor and subordinates’ understanding of their
respective roles in improving performance.
Employee Involvement
 This is the extent to which employees influence decisions collectively and individually at the
work place. Involvement is seen by many organisations as way of reducing worker alienation
and gaining their commitment. In PM employees get to make decisions on their work at the
performance agreement stage and as they develop their Personal Development Plan.
EMPLOYEE PERFORMANCE APPRAISAL
Performance appraisal (PA) is a systematic assessment of an employee’s performance in the job
and his potential for development.

What is Appraised?
Performance is essentially what an employee does or does not do. Appraisal systems can
measure a variety of things. They can be designed to measure:
 Personality
 Behavior
 Performance
 Achievement of goals
Mathis and Jackson (2001 ) have suggested the following elements of employee performance as
being common to most jobs:
 Quantity of output
 Quality of output
 Timeliness of output
 Presence at work
 Cooperativeness
Types of performance appraisal
Performance appraisal can be classified as Formal or Informal. Formal appraisal is that which
is deliberately planned and systematically carried out. It takes place periodically e.g. every six
months or one year. Informal appraisal is that which takes place continuously as the work is
being carried out. Performance is not recorded but reviewed to correct mistakes. It forms the
basis of the formal evaluation later on as it collects information needed in the formal process.
) Objectives of performance appraisal
The objectives of the formal system of appraisal are various. They include some of the
following:
 To identify an individual’s current level of job performance
 To identify employee strengths and weaknesses
 To identify training and development needs
 To assess future potential for promotion/advancement
 To provide information for succession planning
 To improve communication between Superiors and Subordinates
 To give employees feedback on their performance
 To encourage and motivate employees
 To counsel employees on current opportunities to develop
 To provide a basis for salary reviews.
b) Who should be appraised?
Appraisal is mostly applicable in managerial and supervisory roles but is also used for clerical
and technical staff.
c) Who should appraise?
1. Immediate Supervisor i.e. Manager
2. Joint appraisal by the appraisee. Member of staff with other copted from the other departments.
3. Self staff appraisal
What a supervisor should know during performance appraisal
The Supervisor should know the Subordinates’ problems, attitudes, success and ambitions. He
has to know the Subordinates tools and materials to conditions for training requirements,
financial records.
f) What subordinates should know during performance appraisal
The Subordinates must know the objectives of the organization or his/her department.
He should know what is expected of him that is:-
(a) How his tasks contribute to the organization
(b) What responsibility is expected to fulfill in the organization
(c) What authority he has in the organisation
(d) What target he is expected to achieve
g) Methods of appraisal
There are several methods and these are as follows:-
i) Descriptive Report
 The Supervisor writes something unstructured about each of his staff. It is unstructured because
the Superior decides what to include and stress in his report.

Advantages
It is simple to make personal judgment on an employee whom you know
Disadvantages
It is time consuming since there are no guidelines to follow
ii) Ranking Method
In this method, the Superior ranks workers in order of merit. In it’s simplest form it means
making a list of workers with the best worker at the top of the list system is what is called the
Ranking grading system.
(a) 1 – 10 = workers = Top 100% = exceptional grade I
(b) 11 -30 = next above average - grade II
(c) 31 – 70 = middle average – grade III
(d) 71 -90 = below average – grade IV
(e) 91 – 100 = bottom very poor – grade V
Advantages
It is simple.
Demerits
It is highly subjective in the sense that it has no convincing method if one asks how it was
arrived at.
iii) Rating Method
There are various degrees complex in the rating method. The aim is to bring out strengths and
weakness of each worker; this is achieved by asking the Supervisor to review the Subordinates
work in specific areas such as:
(1) Quality of work produced
(2) Quantity of work produced
(3) General level of technical knowledge
(4) Knowledge of the job being done
(5) Relationship with Subordinates, fellow workers and Supervisors
(6) Degree of cooperation with others
(7) Dependability
(8) Adaptability
(9) Initiative displayed
(10) Organizing
(11) Willingness to take responsibilities
(12) Leadership qualities
(13) Attitude to safety
(14) Oral and written communication
(15) Suitability to promotion

Each of the specific areas above is assessed on a scale. The simplest scale is the 3 point scale. It
can go up to 7.
I II III
Excellent Average Poor
Advantage
It is easy to compare the relationship with other attributes in terms of performance.
Disadvantages
It promotes subjectivity by managers.
iv) Management by Objectives (MBO)
MBO method of performance appraisal is result oriented. It is specific measurable and time
bound.
This method is used to measure individual performance by examining the extent to which
predetermined work objectives have been met. In short MBO attempts to relate behaviour to job
performance or MBO attempts to link individual goals and organizational objectives and it is
very common in the mining and manufacturing Industries. This method can be aligned to that or
Urwick’s view of making people ready to achieve goals. The procedure is as follows:-
 At the appraisal interview the Superior and Subordinate agree short term performance goals for
the latter to achieve
 At the next interview, the appraiser set, the extent to which they have been achieved. These steps
are continued year by year.
Merits
 The approach encourages a democratic participative style of leadership and avoids Autocratic
style of leadership where managers exercise their commands over employees.
 It provides a highly interactive feedback approach based on the willingness of the Superior to
allow Subordinate to make their own decisions and the willingness of Subordinates to do so.
 It encourages problem-solving in the part of the Subordinate.
Demerits
 Some Subordinates prefer to have decision made for them.
h) Characteristics of an Effective Performance Appraisal System
The basic purpose of a performance appraisal system is to improve performance of individuals,
teams and the entire organization. The system must objectively inform people how they are
performing and the following factors assist in achieving this purpose:
 Job relatedness criteria: this means an employee performance must be based on clear objective
criteria in relation to the job.
 Performance expectation; managers and subordinates must agree on performance expectation.
Employees must be clear on what they are being measured against.
 Standardization; employees in the same job category under the same superiors should be
appraised using the same evaluation instrument.
 Trained appraisers; managers and others in the organization responsible for appraising other
staff should be adequately trained in the use of the system in order to ensure accuracy and
consistency.
 Continuous open communication; all employees have a strong need to know how they are
performing. A good appraisal system provides desired feedback on a continuous basis.