HUMAN RESOURCE

MANAGEMENT

Module 3: Part 2
Topic: Development Function
Dr. Shreya Mishra, BIMTECH
For employees to develop, the organizations as well as
employees rely on performance appraisals, as unless
the performance is evaluated one won’t know where
development and training is needed

The performance appraisal is often confused with

performance management….but they are different
Performance management is the process of identifying,
measuring, managing, and developing the performance
of the human resources in an organization.

Performance appraisal, on the other hand, is the

ongoing process of evaluating employee performance.

It is an objective assessment of an individual’s

performance against well defined benchmarks.
Performance Appraisal
 Other Names of
Performance Appraisal

Performance rating, employee assessment, employee

performance review, personnel appraisal, performance
evaluation, employee evaluation and merit rating
Relationship of Performance Appraisal and Job Analysis
Performance Appraisal and Competitive Advantage

Improving
Performance

Informed
Values and
Decision-
Behaviour
Making

Competitive
Advantage

Strategic
Legal
Alignment of
Compliance
Behaviour

Minimizing
Turnover
Performance appraisal
process
Performance Appraisal Process
 Four Main Objectives of
Performance Approval

(i) Developmental uses,

(ii) Administrative uses/decisions,
(iii) Organisational maintenance/objectives
(iv) Documentation purposes.
 If we have to jot down some objective of the
performance appraisal, they may include

- To effect promotions based on competence and performance.

- To confirm the services of probationary employees upon their completing the probationary
period satisfactorily.

- To assess the training and development needs of employees.

- To decide upon a pay raise where regular pay scales have not been fixed.

- To let the employees know where they stand insofar as their performance is concerned and
to assist them with constructive criticism and guidance for the purpose of their development.

- To improve communication. Performance appraisal provides a format for dialogue between

the superior and the subordinate and improves understanding of personal goals and
concerns. This can also have the effect of increasing the trust between the rater and ratee.

- Finally, performance appraisal can be used to determine whether HR programmes such as

selection, training, and transfers have been effective or not.
Establish Job Expectations
Appraisal Design
Ensuring Accuracy of Performance Appraisal
Measurement Tools

Based on the Mission and Objectives

Valid and Reliable

Acceptable and Feasible

Specific
 Since the overall objective of job performance is to
evaluate performance and assess an employees growth
in the organization based on it. It is imperative to have
accurate performance measures, thus ensuring that…

Valid and Reliable: The former suggests that the measure is actually measuring what
it is meant to measure and the later suggests that the measure gives consistent
results
Acceptable and Feasible: The former suggests the use of the measure is satisfactory
or appropriate to the people who must use it and the later suggest that it is not be too
difficult or expensive to use it.
Specific: It suggests that the measure should be precise and understandable to the
people using is

Based on the Mission and Objectives of the entire process… well that is
obvious
Performance appraisal
Measurement Methods
 Performance Appraisal Measurement
Methods
Critical Incidents

Management by Objective

Behaviourly Anchored Rating Scale

360 degree and 720 degree feedback

Ranking Method
 Performance Appraisal Measurement
Methods
Psychological Appraisals

Assessment Centers
 SO what are the Measurement Methods that can be
used?
Critical Incidences: A performance appraisal method in which a manager keeps a
written record of
the positive and negative performance of employees throughout the performance
period
Management by Objectives (MBO) Method: a process in which managers and
employees jointly set objectives for the employees, periodically evaluate performance,
and reward employees according to the results.
Behaviorally Anchored Rating Scale (BARS) Form: is a performance appraisal that
provides
a description of each assessment along a continuum.
360 degree and 720 degree feedback: 360-degree feedback or multi-source
feedback is an appraisal or performance assessment tool that incorporates
feedback from all who observe and are affected by the performance of a
candidate. Manager, employee himself, subordinates, peers, customers. While
720 degree is when 360 feedback is taken while setting the target and after
the evaluation
Ranking period
Method: is over.
is a performance appraisal method that is used to evaluate
employee performance from best to worst
 SO what are the Measurement Methods that can be
used?

Psychological Appraisals: a performance appraisal method that evaluates an

employee's potential for future success by assessing their mental and emotional
attributes. This method involves a qualified psychologist conducting in-depth
interviews, psychological tests, and private conversations with the employee
Assessment Centers: Generally done for executive level employees this method uses
a series of exercises and simulations to evaluate an employee's skills, competencies,
and performance. These exercises can include role-playing, informal discussions,
and decision-making problems. Written tests are also used to evaluate an
employee's ability
Critical Incident Method Sample
BARS
 When Performance
appraisal process Fail
 Which option is best?

Obviously a combination of different methods.

Please note that the Ranking, Grading, 360 and 720 degree
feedbacks are appropriate for evaluation of the performance,

While MBO, Critical Incidences and Bars are taken into

consideration for the growth and development of the employee as
it provides insights into both behavior and technical performance
 All that is fine but performance appraisals
aren’t straight forward. If not done correctly
they may result into conflicts and demotivated
employees.

So what could be the mistakes and errors that

are made in performance appraisals
 Performance Appraisal Fails When…
- Appraiser lacks information concerning an employee’s actual performance

- Standards by which to evaluate an employee’s performance are unclear

- Appraiser does not take appraisal seriously.

- Appraiser is not prepared for the appraisal review with the employee

- Appraiser is not honest/sincere during the evaluation, they become too lenient or too critical

- Appraiser lacks appropriate skills, like lack of knowledge about the measurement techniques,
lack of interpersonal skills to communicate empathetically.

- Not providing ongoing feedback before the formal appraisals.

- Insufficient resources to reward adequately

- Lack of discussion on employee development – this because the discussion and feedback is not
action oriented, i.e the employee doesn’t what actions to take to improve performance

- Appraiser uses unclear/ambiguous language in evaluation process

 Performance Appraisal Succeeds….
- When the appraisal process is robust and systematic

- When the appraiser knows exactly what is do be done and has clear knowledge about the employees job and
KRAs.

- When the appraiser is prepared with the specific points to be discussed and with the specific feedback to be
given

- When the measurement tools used are actually capturing the intended employee performance, i.e. the
measurements are valid, reliable, acceptable, feasible, specific, and based on the mission and objective of the
organization

- When the appraiser does not bring in his bias in the evaluation and discussion of the appraisal

- When the employee is clearly communicated about his job, expectations from him/her.

- When the evaluation of the performance doesn’t come as a shock to the employee, hence regular feedbacks are
good.

- When the feedback includes growth and development opportunities. Hence, the feedback should be action
oriented.

- When the performance of the employee is increased over a period of time.

 Hence to ensure that the employees develop the HR
needs to ensure the performance appraisal process is
systematically designed and is taken seriously by the
appraiser and the appraisee

For better understanding a performance

dashboard after the appraisal looks as shown in
the next slide
 When Employee doesn’t
Perform they are put on
Performance Improvement
Plan (PIP)
 Performance Improvement Plan

A performance improvement plan (PIP), also known as a

performance action plan, is a tool to give an employee with
performance deficiencies the opportunity to succeed. It may be
used to address failures to meet specific job goals or to
ameliorate behavior-related concerns.
 Steps for PIP
Determine if a PIP is appropriate

Develop a Draft Plan

Review the Plan

Implement the Plan

Monitor Plan Progression

Plan Conclusion
 Determine if a PIP is appropriate
- Is there an actual performance or behavioral issue that can be substantiated? Ask the manager to
create a list of the performance deficiencies, including dates, specific data or detailed explanations,
and any previous guidance given to the employee. Review the most recent performance appraisal to
see if the issue is new or ongoing. Has the manager met expectations to prevent the need for a PIP?
- Do you feel the manager is committed to helping the employee succeed, or is his or her intention
focused on terminating the employee? This can be tricky to assess, but listen for whether the
manager is concerned about the employee and wants to help, or if he or she is at the end of their
rope and no longer able to manage the situation. Insecure managers may feel threatened by some
employee's behaviors or may not understand that managing includes supporting and developing
employees. If the manager doesn't want employees to succeed, there is little point in starting a PIP.
- Is it likely that the issue can be "fixed" through a formal improvement plan? Problems with sales
goals, quality ratings, quantity objectives and similar issues may be well-suited to a structured plan
that helps identify why the deficiencies occur. Insubordinate and insolent behaviors, on the other
hand, might not lend themselves to improvement using the goal-oriented process of a PIP.
- Does it appear the employee has received proper training to succeed at the task? A leave of
absence or other time off may have resulted in missed training or informative meetings that were
not later made available to the employee. Additional training may be warranted to correct the
oversight.
- Is there a known personal issue that may be affecting the employee's performance? When personal
difficulties strike, employees may have a dip in performance that employers often accommodate. If
the reasonable time frame for accommodation has ended, a PIP may serve to help a capable
 Develop a Draft Plan with Manager
Information on what acceptable performance levels are and how the employee's current performance
is deficient. Specifics regarding the unacceptable performance should be given, including dates, data
and detailed explanations. Attach the job description and any relevant employer policies to further
clarify expectations.
Specific and measurable objectives that are achievable, relevant and time-bound (otherwise known
as SMART goals). PIPs usually last 30, 60 or 90 days, depending on how long it would reasonably take
to improve the specific issue. Examples might be:

In May, June and July, Jane Smith's quality errors must not exceed 3 percent each month, and she
must produce at least 150 units each month.
During this 90-day performance evaluation, John Smith must have perfect attendance, with the
exception of approved medical or family absences. This means that he must clock in and be
ready for work by the start of each scheduled shift, return from all scheduled breaks on time and
remain at work for his entire shift.

Guidance on what management will do or provide to assist the employee in achieving these goals,
such as additional resources, training or coaching.
Details on how often the manager and employee will meet to discuss progress. This is often done
once a week, but may vary depending on the circumstances.
Clearly stated consequences for not meeting the objectives of the plan. Options may include
demotion, transfer to a different position or termination.
 HR should Review the Plan

HR should review the plan with a focus on removing any bias against the
employee. Is the performance issue clearly stated and well-substantiated? Are the
objectives fair and the time frames reasonable? For example, is a salesperson given a
sales goal that far surpasses the projected sales of the clients assigned? Is the employee
being given the proper tools and training needed to improve? If it's a relatively new
employee, was an adequate onboarding effort in place to help the employee become
acclimated? If HR has a role in making those provisions, that process should start
immediately. The key to this step is to ensure that the plan is attainable and fair and not
just a means to terminate an employee.
 Implement the Plan

It's time to meet with the employee to discuss the plan and
expectations. While not the most pleasant of meetings, it helps if the
manager conveys his or her own commitment to the plan and to the
employee's success. Employee feedback should be encouraged to help
identify areas of confusion and to help foster ownership. Be open to
changes based on the employee's input; the perspective of a valued
employee (one worth the time and effort of a PIP), is no less valuable here
and may lead to a more-effective plan.
After fully discussing the plan, the manager may make modifications based
on employee feedback. Once HR has reviewed any changes, the final plan
should be signed by both manager and employee and forwarded to HR for
approval.

If the employee is unable to commit to the PIP process at this point, the
employer will need to determine whether termination, demotion or another
 Monitor Plan Progression

The manager should ensure all progress meetings are scheduled

and occur on time. Cancelling meetings or showing up late would convey
a lack of importance and commitment on the manager's part. Progress
toward goals should be documented and discussed, seeking to identify why
improvements have or have not been made. If gaps in training or required
tools become apparent, provide those as soon as possible. Encourage
employees to lead these meetings, to self-report on how they believe they
are doing and what realizations they might have made, or what else they
feel they need to succeed.

Successful progress made toward the goal should be recognized as a

means of motivating the employee to continued improvement.
 Plan Conclusion

When the employee has responded positively by meeting plan

objectives, possibly before the expiration date of the plan, the employer
should formally close the PIP, recognize the employee's success and allow
the employee to continue employment. While a positive occasion for the
employee, the manager must be sure the employee understands that
continued good performance is expected.
If an employee is unable to improve or if his or her performance worsens,
the PIP should be closed, and a possible reassignment, demotion or
termination should be considered, based on the specific circumstances.
When the employee is committed to improvement, but falls short of the
objectives within the established timeline, it may be worthwhile to extend
the plan to give him or her a bit more time to succeed. Additionally, if
objectives were found, in retrospect, to not be realistic or fully within the
employee's control, the plan might be ended successfully, based on the
improvements achieved.
 So in this video we covered…..

What is Performance Management and Appraisal

Objectives

Process of Performance Appraisal

Performance Appraisal Measures

Reasons for Failures and Success of Performance

Appraisal
PIP Steps