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Outline
Introduction to Performance Management Distinction between Performance & Performance Appraisal Performance Planning for Clarity Accountability & Effectiveness Performance Management System- Stages 360 degrees or MAFS Implementing PMS Potential Appraisal
Introduction
Systematic process for improving organizational performance by developing the performance of individuals and teams
Strategic and integrated approach to delivering sustained success to organizations by improving the performance of the people who work in them and by developing the capabilities of teams and individual contributors (Armstrong and Baron, 4)
The process of Directing and supporting employees to work as effectively and efficiently as possible in line with the needs of the organization (Walters, 3)
Provide for expectations to be defined and agreed in terms of role responsibilities and accountabilities, skills and behaviors
To develop the capacity of people to meet and exceed expectations and to achieve their full potential
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Planned, continuous and flexible process Concerned with measuring outputs in the shape of delivered performance compared with expectations expressed as objectives It is based on the agreement of role requirements, objectives and performance improvement and personal development plans
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Involves the joint and continuing review of achievements against objectives, requirements and plans
It is based on the principle of management by contract and agreement rather than management by command.
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Achieve future success Defining expectations expressed as objectives and in business plans
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Measurement of results
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Striving to reach higher and higher standards in organization will provide a series of incremental gains that will build superior performance
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Establishing a culture in which managers, individuals and groups take responsibility for the continuous improvement of business processes and of their own skills, competencies and contribution.
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Integration of learning and work so that everyone learns from the successes and challenges inherent in their day-to-day activities
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Creating a climate in which a continuing dialogue between managers and the members of their teams takes place
Establishes mutual understanding of what is to be achieved and a framework for managing and developing people to ensure that it will be achieved
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Satisfying the needs and expectations of all the organizations stakeholders owners, management, employees, customers, suppliers and the general public
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respect for the individual mutual respect procedural fairness transparency of decision making
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Formal assessment and rating of individuals by their managers at, usually, an annual review meeting
In contrast performance management is a continuous and much wider, more comprehensive and more natural process of management
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Performance appraisal
Top-down assessment Annual appraisal meeting Use of ratings Monolithic system
Performance management
Joint process through dialogue Continuous review with one or more formal reviews Ratings less common Flexible process
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Focus on quantified Focus on values and objectives behaviors as well as objectives Often linked to pay Less likely to be a direct link to pay Bureaucratic Documentation kept complex paperwork to a minimum Owned by the HR department Owned by line managers
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Performance Planning is the systematic definition of activities that an employee is expected to undertake and goals that he is expected to achieve in order to contribute to the overall growth of the organization It is the first step in the Performance management process
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Performance Appraisal being focused on past performance, planning gives employees a clear vision of the have to perform in the near future.
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Objectives
Clarifying employees roles & performance expectations Ensuring that optimum efforts are put in by employees Gives employees a sense of direction Ensures the business & individual objectives are effectively aligned
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Provides clear instrumentality, expectancy & valence to the employee with respect to his performance, thereby motivating the employee. Saving the organisation the costs it would incur due to ineffective performance.
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Helps employees realize self worth. Induces a sense of accountability & time management within the employees Defines indicators of performance
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Elements to be considered
Past performance Influencers of past performance Areas of improvement Techniques for improvement Differences between the past & current year.
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Employees must be highly involved in the goal setting process. Goals must be the result of a consensus as opposed to an imposition Goals & expected behaviours must be clearly communicated to employees Goals must be measurable &
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Goals must be time-bound. Goals must achievable & realistic for employees to able to achieve them No bias should be involved whilst setting goals External factors must be considered while setting goals Goals should be simple
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Process
Define organizational goals & objectives
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Expectancy
Individua l effort
Individual performance
Motivation Valence
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This theory is very applicable whilst planning and individuals performance. The message that more efforts will lead to higher levels of performance must be communicated clearly That performance must be fairly & clearly linked to rewards Rewards must be substantial & add value to the appraisee
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Joint process of listing down competencies & behaviours to be exhibited by an employee to achieve set targets & goals It is a basis for communicating about performance It creates awareness amongst employees regarding expectations thereby increasing job awareneness
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Minimum standards should be indentified Assume that people are trustworthy & want to perform well Encourage & motivate employees to give their best There should be no imposition of rules, employees must be given principles to follow
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It should be comprehensive and not generate unnecessarily large amounts of data It should be designed by line management with employees involvement, the HR function should be able to provide support It should be applicable to different parts of the organization
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Techniques
The techniques used for performance planning also form a part of performance appraisal. They are:
Task analysis
Detailed listing, analysis & review of all the tasks undertaken in the previous year
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Competency Mapping
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KPAs
KPAs are used to set priority areas for an employee KPAs are said to be effective if they:
Emphasize the appraisees individual goals as opposed to the teams/ departments goals. Significantly represent the expnanse of the appraisees job roles Prioritise clearly the activities of the appraisee
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Are challenging & require substantial efforts from appraisee. Enable the appraisee to be called a good performer of the KPAs are achieved
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Must consist of some members who will perform the role & some who have already performed it
A detailed list of all the tasks that the incumbent of the role is expected to carry out must be formulated
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After identifying PAs weights must be assigned to each Performance Area with respect to the importance it carries for the role in discussion KPAs for various roles must be compiled in the form of guidelines for employees
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KRAs
Key result areas are general areas of outcomes or outputs for which a role is responsible KRAs encompass a major part of a work role KRAs make it easier to assess current performance Areas such as innovation, customer response time and employee development are included rather than
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It provides for:
Clarification of roles Aligning appraisees roles & goals to organizational strategies & plans Focus on activities results rather than
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Competency Mapping
It provides structured and documented procedures which aid in recruitment of competent personnel with desired skill sets, attributes and training thereby reducing cost and time of subsequent performance failures
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It facilitates reduction of the cost of performance development programs as the organization will have a ready inventory of required skill sets It helps in benchmarking higher levels of performance
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It helps in creating individual learning plans It helps in the assignment of right job to the right person for better performance as the employees with required skills sets and training shall be handling it It provides the management inputs for gap analysis for improving performance of the employees in the requisite business area
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1. 2. 3. 4. 5. 6.
Prerequisites. Performance planning. Performanceexecution. Performance assessment. Performancereview. Performance renewal andrecontracting
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prerequisites
Using up to date job description and job specification data Effective selection and process for person-job fit placement on and
Establishing and agreeing performance contract Providing effective induction training to employees
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and HR
Establishing performance linked reward and compensation mechanism Providing career advancement and skill development opportunities Making managers responsible turnovers of their employees for
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Performance planning
Employees must have thorough knowledge ofthe performance management system. Meeting between employeeand manager. Set SMART goals and measurement standards: Results Behavior
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Performance Execution
Shared responsibility Employee responsibility: Commitmentto established goals. Communicationand update with manager.
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Manager responsibility: Feedback, coaching and reinforcement. Resourcesupport. Accurate observation and documentation
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Whoshould appraise? Supervisors. Peers and team members. Subordinates. 360 degree feedback
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Explain thepurpose ofthe interview. Discuss self-appraisal. Share ratingsand explain rationale. Discussdevelopmentplans. Employeesummary.
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Readjustbasedoninsight fromcompletedprocess.
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A process which enables an employee to receive feedback from a number of people around him, who actually deal with the employee each day.
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Introduction
In recent years the 360 degree appraisal has become very popular because has been felt for long that one persons assessment of another cannot be free of biases. The 360 degree appraisal is a multirater assessment and feedback system (MAFS) Almost every Fortune 500 company is using this in some form or the other.
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Focus on customers (both internal and external) Emphasis on softer dimensions of performance (leadership, innovation, team work, initiative, emotional intelligence, etc.) It has become necessary to get multiple assessments for a more objective assessment.
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Candidate is assessed periodically (once in a year and sometimes even half yearly) by a number of assessors including his boss, immediate subordinates, colleagues and internal and external customers. The assessment is made on a questionnaire specially designed to measure behavior considered critical for performance.
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The appraisal is done anonymously by others and the assessment is collected by an external agent (consultant) or specially designated internal agent (for example the HRD department). The assessment is consolidated; feedback profiles are prepared and given to the participant after a workshop or directly by his boss or the HRD department in a performance review discussion session.
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Providing insights into the strong and weak areas of the candidate in terms of the effective performance of roles, activities, styles, traits, qualities, competencies (knowledge, attitudes and skills) and impact on others. Reinforcing other change management efforts and organization effectiveness directed interventions.
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Identification of developmental needs and preparing development plans more objectively in relation to the current or future roles and performance improvements for an individual or a group of individuals. Generating data to serve a more objective basis for rewards and other personal decisions.
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Serving as a basis for performance linked pay or performance rewards. Aligning individual and group goals with organizational vision, values and goals. Culture building. Leadership development Potential appraisal and development.
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Career planning and development. Succession planning and development. Team building. Planning internal customer satisfaction improvement measures. Role clarity and increased accountabilities.
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Internal Customers Supervisors, Subordinates, Top Management, Co-workers and External Customers Representatives from other Clients, Suppliers, departments Consultants and Community Officials
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Develop questionnaire to measure different dimensions of job performance ( communication, leadership etc) Ensure confidentiality of feedback results. Provide training/ Orientation to all employees to make them understand why it is being implemented.
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Administer feedback through printed forms or post to the company website. Analyze the data performance dimensions summary , actual performance vs. expected performance summary, highest/ lowest rated items. Develop and distribute results feedback should be shared with employees in order to help them
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It provides scope for the candidate to get multiple inputs to improve his role, performance, styles and ideas and enhances acceptability of the individual. It is more participative and enhances the quality of HR decisions.
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It is a good tool to enhance customer service and quality of inputs and service to internal customers. It has the potential of pointing out the supervisory biases in the traditional appraisal systems.
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The top management of the organization is committed to developing the competencies of the employees on a continuous basis. There are a number of HRD systems operating in the organization and they are being seriously implemented.
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The top management is serious about creating opportunities for employees to learn from each other and learn from their mistakes. The top management is willing to invest time and effort in giving feedback to their own subordinates.
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The top management and senior managers take the current appraisal system seriously and do all that they are required to ensure its effective implementation. The top management and senior managers conduct their performance review and counseling sessions regularly.
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The top management is committed to competency building through multi-rater feedback. The top management is willing to subject themselves to an assessment by their subordinates and colleagues. There are not too many status barriers and ego problems in the organization.
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People take feedback supportively and use it for development. The organization already is or is in the process of becoming a customer driven organization. There is a good degree of emphasis on team work in the organization. The HRD department has a high level of credibility.
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Top management interventions are not looked at with suspicion by the employees. Managers are interested in learning about themselves. There is a high degree of process orientation in the organization. The organization is value driven. Softer issues of management like managing people, professionalism, development, etc. are emphasized in the organization.
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Managers take their jobs seriously and learn. There is a high degree of emphasis on competency building. The organization has a history of taking all change management tools seriously and implementing them till the end. People in the organization take feedback seriously and try to benefit
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The candidate is keen to know about himself through the eyes of others. He is willing to receive feedback from others and does not become over defensive. The candidate desires to be better. The candidate is open to and known to respect the view of others.
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The candidate is a learning oriented individual. The candidate has an attitude to healthy competition. The candidate should have at least one and a half years of experience (except in the case of management trainees) He should have direct working relations with at least six individuals
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TVRLS has developed a model for the top and senior management in terms of managerial and leadership competencies needed which is termed as the RSDQ model (roles, styles, delegations, and qualities) This model of leadership and managerial effectiveness views effective management and leadership as a combination of four sets of variables.
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RSDQ - Roles
The extent to which the individual plays various leadership and managerial roles and activities. These are both transformation roles (leadership roles) and transactional roles (managerial) some of these are:
Articulating and communication vision and values. Formulating long term policies and strategies. Introducing and managing new technology and systems.
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Inspiring, developing and motivating juniors. Managing juniors, colleagues and seniors. Culture building. Internal customer management. External customer management. Managing union and associations.
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RSDQ - Styles
Effective managers recognize that it is not only the roles or activities that determine the effectiveness but also the way in which they are played.
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RSDQ Delegation
The RSQD model considers the level of delegation as an important part of senior executives effectiveness. Most senior managers seem to have difficulty in delegating, especially the effective managers who get promotions fast in their career.
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In view of these experiences, delegation has been isolated as an important variable of leadership. Those who delegate release their time to perform higher level tasks. Those who dont continue to do lower level tasks and suppress their leadership qualities and managerial effectiveness.
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RSDQ Qualities
Managers should exhibit qualities of leaders (e.g. pro-action, listening, communication, positive approach, participative nature and quality orientation). Such qualities not only affect effectiveness with which top level managers perform various roles but also has an impact on the leadership style and hence are very critical.
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More focus on Leadership Roles Articulating vision Spending more time on communicating vision and goal setting. Being more developmental as against benevolent or critical. Giving attention to the needs of other individuals rather than remain preoccupied with oneself.
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Better interaction with colleagues and subordinates. Learning from colleagues and benefiting from their experience. Rapport with seniors.
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Setting high goals for the team; Participative management Conflict management Developing mutuality; Sensitivity to others feelings; Collaborative culture; Cross-functional review mechanism.
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Empowering subordinates to take higher responsibilities. Leaving routine decisions to lower levels. Not interfering in matters being handled by subordinates. Encouraging subordinates to learn from their mistakes and being very patient with them.
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Begin with Development Link with company goal Train everyone Follow Up
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Prepare the participants. Make the top management visible players. Tie feedback data to a larger programme. Clarify ownership of data. Insist upon integrity. Commit to 100% accuracy. Make administration as soon as possible.
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Ensure that there is always a human contact involved. Time it well. Ensure confidentiality and anonymity. There should be a shelf life for the report data. Anticipate what will go wrong. Start with a small pilot group. Integrate with other interventions.
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It can serve all the purposes served by the traditional appraisal system like identifying developmental needs, reward management and performance development.
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Having no clear purpose. Using it as a substitute manage poor performance. Not conducting pilot tests. Not involving key stakeholders. Having communication. insufficient to
Compromising confidentiality.
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Negative feedback may create insecurity, defensiveness which may damage self efficacy Subordinates may not provide proper feedback Accuracy, credibility and fairness of feedback is dictated by personal experiences Resistance to feedback The higher ones in the organization are less likely to receive quality feedback
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Low self esteem, self efficacy recipients do not seek feedback Lack of managerial skills on soft and behavioral issues Self ratings higher are consistently
Peer ratings may prove counter productive for pay, promotions or job rotations
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Johnson & Johnson Advanced Behavioral Technology General Electric India Reliance Industries
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Implementing PMS
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Introduction
Implementation of the process is critical to the success of the performance management The way in which it is implemented will determine its the response it garners from employees & the faith it will inspire.
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Effective communication & Transparency Employee participation & buy-in toward the process. Timely commencement & completion of the process.
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Any bias or personal intervention must be kept at bay. All factors- external as well as internal must be taken to consideration Raters errors must be avoided. Prioritization as well as relevance must be understood clearly by appraisers.
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Implementation must be easy & comprehensive along with covering all the important aspects. Continuous interaction & discussions between appraiser & appraisee is a must. Both appraiser & appraisee must be trained effectively in the process of implementation
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Components
Performance Appraisal Job Analysis Performance Interview Post performance interview Performance coaching Performance counseling
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Ranking Method Rating Method Graphic Rating Method Checklist Method Critical Incident Confidential Report Grading Method
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Behaviorally Anchored Rating Scales Essay Method 360 degrees Feedback method or MAFS Management by Objectives Forced Choice Method Field Review Method Group Appraisal
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Horn Effect
The tendency of a rater to focus only on the negative aspects of an appraisees performance, sidelining any positivity
Halo effect
It is the reverse of the Halo effect where the appraiser completely ignores any negative aspect of the appraisee.
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Recency Effect
This is the tendency of the rater where he takes into consideration only the most recent performance of the appraisee, the period closes to the performance appraisal. Raters suffering from this tendency rate all the appraisees averagely irrespective of the quality of their performance simply to avoid conflict
Central Tendency
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Primacy effect
If during the initial period of association with the appraise, the appraisor sees positivity/negativity, he sticks with impression whilst appraising irrespective of any change in behavior or performance. The tendency of the rater to be either to strict or to liberal with giving ratings, mindless of actual
Leniency/Severity Effect
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Performance interview
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Performance interview
Performance Interview is one of the most crucial aspect of implementing Performance Management. It is misunderstood & ineffectively implemented widely
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Appraisers discomfort with giving not positive. Tendency to involve personal issues & biases in the interview. Tendency to dwell excessively on the past performance
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Tendency to turn into grounds for heated arguments based on performance. Tendency of appraisers to get accusatory while discussing performance Tendency of appraisee to get defensive while on the receiving end of negative feedback. Tendency of appraiser to withhold
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Steps
1. 2. 3.
Start with an icebreaker. Explain the purpose of the interview. Work through the Performance Measures (agreed Actual Performance, Ratings etc.) Agree Performance Measures and Standards for the next performance period. Close on a positive note
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5.
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An atmosphere of positivity must be maintained throughout the span of the interview. The appraisee must not feel attacked. Accusations, insults, etc. should be kept at bay Negative feedback should be given clearly with no attempt at underplaying but must be treated with tact
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Generous positive feedback must be given. The employee must not feel like the purpose of the interview is to put him/her down. The focus should be on what can be done in the future to improve performance as opposed to what went wrong in the past Views & inputs from the appraisee must be actively encouraged; the communication process must be two way.
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Plan of action with specific set of actions must be formulated. A follow up meeting must be organized so as to keep with the appraisees progress
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Get to the root cause of poor performance Provide feedback Explain consequences of poor performance Set clear objectives for the coming time period Provide training if appropriate
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Coaching
Coaching is a person to person technique designed to develop individual knowledge, skills and attitudes. It is more effective if it takes place informally as a part of the normal process of management or team leadership
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Steps
1.
Observation
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Active Coaching
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Follow-up
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Counseling
Counseling is any activity in the workplace where one individual uses a set of skills and techniques to help another individual to take responsibility for and to manage their own decision making whether it is work related or personal
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Recognition and understanding of the problem Empowering and enabling employees Deciding if any further help is required Follow up
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Complete buy in & ownership of Line Managers. Sufficient time is spent for performance planning (group planning or individual planning), identifying developmental needs, etc The goals of clarifying objectives, roles & deciding time frames & performance standards for departments as well individuals have been achieved.
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The Performance Management system is received well & is supported across the organization including the top level management The system helps in generating the atmosphere of a performance driven organization.
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Incorrect purpose Ineffectively designed format Too many objectives Over Criticism Lack of support from employees
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Lack of support from Top Management Inabilities in the HR department Perceived ownership of HR department; lack of buy in by line managers.
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Potential Appraisal
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Promotions
An assumption is being made that competence in performing the present role is a sufficient indicator of competence to perform a higher and different role in the organization.
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Evaluation
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Definition
Potential appraisal is concerned with identifying the potential of an employee for future development and promotion in the organization. A process of determining an employees strengths and weaknesses with a view to use this as a predictor of his future.
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Objective
To identify the potential of a given employee to occupy higher positions in the organizational hierarchy and undertake higher responsibility.
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Need
Inform employees about their future prospects; Help the organization chalk out of a suitable succession plan; Updatetrainingefforts from time to time; Advise employees about what they must do to improve their career prospect
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- Rating by Others - Psychological Tests - Simulation Games and Exercises - Performance Appraisal Records
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Examples
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ASSESSMENT CENTER
An Assessment center is a comprehensive, standardized procedure in which multiple assessment techniques such as situational exercise and job simulation are used to evaluate the individual employee for a variety of decisions. Most frequently the approach has been used for individuals being considered for selection, promotion, placement or special training and development in management.
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The technique consists of a group of people undergoing a series of workrelated exercises and simulations along with some standard psychometric instruments. Theirbehavior while undergoing the exercises and simulations is observed by a set of trained and experienced observers. They record theirobservations and integrate these to arrive at a measurement of the competency of each of theparticipants.
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Assessment centers are wellintegrated sets of tests, exercises, simulations and instruments which are designed to cover all aspects of a group ofdimensions (personality qualities or competencies) so as to provide as valid apicture of the participant as possible
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Every organization wants people with the competencies that are inconsonance with the objectives of the Organization.
Therefore the organizations aim would be to find such people and ifnecessary, to develop the required competency in theexisting people.
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Added advantage ofmotivated people who would participate enthusiastically in the advancement of the organization, as this would inherently imply their own advancement too. Give rise to an internal need for development in the participants who undergo these assessment centers.
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Clear andStatedObjectives. Total Commitment on the part of the top management. Open Channels of Communication in the organization. Employee trust and faith inthe organization. Managementclarity abouttheobjectivesof the programme.
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The 9 Steps
Decision to set up an assessment centre. Identification ofCompetencies. Data Collection. Exercise and Assessment Centre Design.
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Exercise validation pilot assessment centre. AssessorsTraining. Design Assessment/Development Centers. Review ofDesign Follow-up Action. Plan Review Follow-up Action Plan.
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Intellectual Comprehension Analytical Ability Innovation Decision Making Planning & Organizing Strategic Perspective
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Dynamic
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Assessors Training
Assessor Attributes
Desire to be an assessor. Knowledge of target organization and job. An average or better manager in terms of normal managerial criteria. General high level of maturity. Interest in people A perspective observer who listens well. Ability to learn.
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Articulate in group and individual situations able to take aposition and defend it verbally. Independence - the ability to take a position in opposition to others. Generally free from biases. High personal work standards.
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Adaptability willingness to change position when appropriate and when the weight of evidence is such that a change should come about. Energy to work long days at a good speed. Has a track record of counseling and developing staff. Is able to spare himself for the time necessary.
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Duration:3-5days. Schedule:Introduction,Course&History.
Techniques, Competencies Behavior Classification & Generation Exercises, Instruments to be used, Observation & Recording Methods, Interviewing Skills, Integration Sessions, Report Writing, Feedback & Counseling Skills
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It isthe mostimportant outcome of theAssessment Centre. The report should contain the following elements: 1. BriefPersonalProfile 2. Summaryof General Performance & Behavior
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3. Description of Performance by each Competency 4. General Strengths and Weaknesses 5. DevelopmentalAdviceand ActionPlan 6. Organizational Actions.
Assessment Feedback
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Feedback is the process where the participants are made aware of theirobserved behavior in controlled circumstances and how they measure up to a set ofcompetencies, which are relevant to the organization.
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The organization receives feedback about the competency of the people The participant receives feedbackon his performance in theassessment centre.
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1. Covers Strengths and Development areas. 2. Behavioral observations and change ofbehavior 3. Explain theeffectiveness of thebehaviors. 4. Examplesofbehaviortobehighlig hted.
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5. Participant canalsocomment or elaborate. 6. Alternate orcorrective behavior to besuggested. 7. Theesteemandsecrecy abouttheparticipant mustbe maintained
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Follow-up is also very essential. The suggested changes in the participant should be maintained and therefore the Developmental Plan is necessary. A developmental plan for the participant consists of: Competency-based Workshops Job Rotation or Enrichment Project-based learning E-learning programmes Counseling for problem areas.
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Thank You!
Presented by:
Priya Joseph Saurav Bhattacharjee Anjali Ranjan Drishty Tanwar Sana Pardiwalla