Republic of the Philippines
MAILA ROSARIO COLLEGE
Diversion Road, San Gabriel Village, Tuguegarao City, Cagayan Valley
Contact No. (078) 377 – 249
COLLEGE OF BUSINESS ADMINISTRATION
MAJOR IN FINANCIAL MANAGEMENT
1st SEMESTER, S.Y. 2021 – 2022
MID-TERM COVERAGE
Module in
HUMAN RESOURCE MANAGEMENT
MODULE NO.: 05
NAME OF STUDENT: ___________________________________________________
YEAR / SECTION: ______________________________________________________
DATE RECEIVED: ______________________________________________________
INSTRUCTOR: ELEINE T. ALVAREZ
NOTE: Please be cautious in following the given instructions in each activity. Correspondingly, observe
punctuality in accomplishing this module. God bless and happy learning! – INSTRUCTOR
Republic of the Philippines
MAILA ROSARIO COLLEGE
Diversion Road, San Gabriel Village, Tuguegarao City, Cagayan Valley
Contact No. (078) 377 – 249
I. OVERVIEW
This module focus is to develop the learner’s skills in understanding, analyzing,
evaluating and applying the concepts, underlying principles, and processes about
human resource management relating to performance management.
II. GUIDE QUESTIONS
1. What is performance management?
2. What are its objectives in an organization or firm?
3. How can performance management help in the achievement of firm’s goals?
III. LEARNING OBJECTIVES
In this learning module, the learner is expected to:
a. Identify the major parts of an effective performance management process.
b. Identify the five criteria for effective performance management systems.
c. Discuss the five approaches to performance management, the specific techniques
used in each approach, and the way these approaches compare with the criteria
for effective performance management systems.
d. Choose the most effective approach to performance measurement for a given
situation.
e. Discuss the advantages and disadvantages of the different sources of
performance information.
f. Choose the most effective source(s) for performance information for any situation
g. Conduct an effective performance feedback session.
IV. LESSON PROPER
INTRODUCTION
One of the most important activities of an HR manager is maintaining and enhancing the
workforce. With all the efforts and costs that recruiting and selection entail. It is important
to develop employees for them to use their fullest capabilities, thus, improving the
effectiveness of the organization. Performance review is the ongoing process of
evaluating and improving employees’ performance. It is a process by which an individual’s
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work performance is assessed and evaluated. It answers the question, “How well has the
employee performed during the period of time in question?”
It also entails determining and communicating to an employee how he/she is performing
the job and ideally, establishing a plan of improvement. Performance is often confused
with the effort that refers to energy expended.
Performance is measured in terms of result. Performance may be defined then as the
accomplishment of an employee or manager’s assigned duties and outcomes produced
on a specified job function or activity during a specified time period.
Performance review or evaluation, on the other hand, refers to a systematic description
and review of an individual’s job performance. The major contribution of performance
management is its focus on achieving results- useful products and services for customers
inside and outside the organization. Performance management redirects efforts away
from business toward effectiveness. It is an HRM activity where the individual worker’s
efficiency is observed and appraised during a given period on the basis of a systematic
uniform performance standard. It helps in identifying, collecting, sharing, and using
information about the performance of people at work.
Performance management is an ongoing communication process, undertaken in
partnership between an employee and his/her immediate supervisor. It involves
establishing clear expectations and understanding about the following:
a. The essential job functions the employee is expected to do
b. How the employee’s job contributes to the goals of the organization
c. What “doing the job well” means in concrete terms
d. How the employee and supervisor will work together to sustain, improve, or build
on existing employee performance
e. How job performance will be measured
f. Identifying barriers to performance and removing them
g. Refers to the total system gathering information, the review and feedback to the
individual, and storing information to improve organization effectiveness
The primary goal of performance management is to improve organizational performance.
But one must take note that performance appraisal is not performance management.
Evaluating performance is just one part of performance management system.
Companies that seek competitive advantage through employees must be able to manage
the behavior and results of all employees. Traditionally, the formal performance appraisal
system was viewed as the primary means for managing employee performance.
Performance appraisal was an administrative duty performed by managers and was
primarily the responsibility of the human resource function.
We believe that performance appraisal is only one part of the broader process of
performance management. We define Performance Management as the process through
which managers ensure that employees’ activities and outputs are congruent with the
organization’s goals.
Our performance management system has three parts: defining performance,
measuring performance, and feeding back performance information
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First, a performance management system specifies which aspects of performance are
relevant to the organization, primarily through job analysis.
Second, it measures those aspects of performance through Performance Appraisal,
which is only one method for managing employee performance.
Third, it provides feedback to employees through Performance Feedback sessions so
they can adjust their performance to the organization‘s goals. Performance feedback is
also fulfilled through tying rewards to performance via the compensation system (such as
through merit increases or bonuses).
THE PROCESS OF PERFORMANCE MANAGEMENT
Figure 1: Model of the Effective Performance Management Process
As you may have already figured out from the chapter introduction and your own
experiences, many employees and managers dislike the annual performance review.
Although performance management does include the once or twice a year formal
appraisal or evaluation meeting, effective performance management is a process, not an
event. Figure 1 shows the performance management process.
The first two steps of the performance management process involve identifying what the
company is trying to accomplish (goals or objectives), a set of key performance
dimensions that represent critical factors or drivers that influence the goals or objectives,
and then develop performance measures for the key performance dimensions.
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The first step in the performance management process starts with understanding and
identifying important performance outcomes or results. Typically, these outcomes or
results benefit customers, the employees’ peers or team, and the organization itself.
The second step of the process involves understanding the process (or how) to achieve
the goals established in the first step. This includes identifying measurable goals,
behaviors, and activities that will help the employee achieve the performance results. The
goals, behaviors, and activities should be measurable so that the manager and employee
can determine if they have been achieved.
Step three in the process, organizational support, involves providing employees with
training, necessary resources and tools, and frequent feedback communication between
the employee and manager focusing on accomplishments as well as issues and
challenges influencing performance.
Step four involves performance evaluation, that is, when the manager and employee
discuss and compare the targeted performance goal and supporting behaviors with the
actual results. This typically involves the annual or biannual formal performance review.
The final steps of the performance management cycle involve the employee and manager
identifying what the employee (with help from the manager) can do to capitalize on
performance strengths and address weaknesses (step 5) and providing consequences
for achieving (or failing to achieve) performance outcomes (step 6).
Finally, it is important to realize that what employees accomplish (or fail to accomplish)
and their consequences help shape changes in the organizational business strategy and
performance goals and the ongoing performance management process. Evaluating the
effectiveness of the performance management system is necessary to determine needed
changes.
This could include gathering comments about the managers’ and employees’ concerns
about the system, analyzing rating data to determine if they are being affected by rating
errors, reviewing objectives for their quality, and studying the relationship between
employees meeting objectives and department and organizational results.
PURPOSES OF PERFORMANCE MANAGEMENT
STRATEGIC PURPOSE
First and foremost, a performance management system should link employee activities
with the organization’s goals. One of the primary ways strategies are implemented is
through defining the results, behaviors, and, to some extent, employee characteristics
that are necessary for carrying out those strategies, and then developing measurement
and feedback systems that will maximize the extent to which employees exhibit the
characteristics, engage in the behaviors, and produce the results. Performance
management is critical for companies to execute their talent management strategy, that
is, to identify employees’ strengths and weaknesses, drive employee engagement, link
employees to appropriate training and development activity, and reward good
performance with pay and other incentives. Also, performance management practices
can relate positively to companies’ financial success.
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ADMINISTRATIVE PURPOSE
Organizations use performance management information (performance appraisals) in
many administrative decisions: salary administration (pay raises), promotions, retention–
termination, layoffs, and recognition of individual performance. Despite the importance of
these decisions, however, many managers, who are the source of the information, see
the performance appraisal process only as a necessary evil they must go through to fulfill
their job requirements. They feel uncomfortable evaluating others and feeding those
evaluations back to the employees. Thus, they tend to rate everyone high or at least rate
them the same, making the performance appraisal information relatively useless.
DEVELOPMENTAL PURPOSE
A third purpose of performance management is to develop employees. When employees
are not performing as well as they should, performance management seeks to improve
their performance. The feedback given during a performance evaluation process often
pinpoints the employee’s weaknesses. Managers are often uncomfortable confronting
employees with their performance weaknesses. Such confrontations, although necessary
to the effectiveness of the work group, often strain everyday working relationships.
PERFORMANCE MEASURES CRITERIA
This section presents the criteria underlying job performance measures. Later sections
discuss approaches to performance measurement, sources of information, and errors.
Although people differ about criteria to use to evaluate performance management
systems, we believe that five stand out: strategic congruence, validity, reliability,
acceptability, and specificity.
STRATEGIC CONGRUENCE
It is the level to which the performance management system extracts job
performance that is matching with the organization’s aims, strategy and culture. For
example, if a company accentuates innovation, then the company’s performance
management system would assess how well are the employees are being innovative with
the products and services. This criterion emphasizes that the company’s performance
management system provides training and assistance to the employees for them to
contribute to the organizations’ achievements which in turn indicates that the system
needs to be bendable enough to be able to dynamically change with the company’s
changing strategic posture. The system, known as a balanced scorecard, is a way of
developing strategic congruence. It is one-way organizations can link their long-term
strategy to short-term actions and provide a means for the organization to continuously
improve and learn which can be achieved by having a spotlight on number of departments
of the organization, such as financial, internal business processes, learning and growth
and translating the vision. The balance scorecard is one way of signaling to the member
of staff what the organizations’ aims are for customers and shareholders. Every employee
performance can be associated with the overall strategy by connected in three activities
which are communicating and educating, setting goals and linking rewards to
performance measures.
VALIDITY
Validity is the extent to which a performance measure assesses all the relevant—and only
the relevant—aspects of performance. This is often referred to as “content validity”. For
a performance measure to be valid, it must not be deficient or contaminated.
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Validity is concerned with maximizing the overlap between actual job performance and
the measure of job performance (the green portion in the figure).
Figure 2: Contamination and Deficiency of a Job Performance Measure
RELIABILITY
Reliability refers to the consistency of a performance measure. One important type of
reliability is interrater reliability: the consistency among the individuals who evaluate the
employee’s performance. Some measures, the extent to which all the items rated are
internally consistent is important (internal consistency reliability). The measure should be
reliable over time (test–retest reliability). A measure that results in drastically different
ratings depending on when the measures are taken lacks test–retest reliability.
ACCEPTABILITY
Acceptability refers to whether the people who use a performance measure accept it.
Many elaborate performance measures are extremely valid and reliable, but they
consume so much of managers’ time that they refuse to use it. Alternatively, those being
evaluated by a measure may not accept it.
SPECIFICITY
Specificity is the extent to which a performance measure tells employees what is expected
of them and how they can meet these expectations. Specificity is relevant to both the
strategic and developmental purposes of performance management. If a measure does
not specify what an employee must do to help the company achieve its strategic goals, it
does not achieve its strategic purpose.
The team leaders were chosen as the raters because they were in the best position to
see the performance of team members and in their role must make subjective judgments.
The questions were used after they were tested to see if they differentiated ineffective
from effective team members and were correlated with other performance outcomes
measured in other ways such as engagement surveys. For short-term projects, team
member evaluations occur at the end of each project and longer-term project evaluations
occur quarterly. To ensure that the evaluations are driving team performance and are
accepted by team members, every team leader has to check in with each team member
once each week.
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APPROACHES TO MEASURING PERFORMANCE
An important part of effective performance management is establishing how we evaluate
performance. This is difficult to do because performance is complex—it includes how
employees perform their individual work tasks as well as contribute to teams and behave
in ways that support their peers and the company.
In this section we explore different ways to evaluate performance: the comparative
approach, the attribute approach, the behavioral approach, the results approach,
and the quality approach. We also evaluate these approaches against the criteria of
strategic congruence, validity, reliability, acceptability, and specificity.
As you will see, all of these approaches have strengths 80 and weaknesses. As a result,
many companies’ performance evaluations use a combination of approaches. There is
no one best approach for measuring performance. But to effectively contribute to
organizational business strategy and goals, effective performance evaluation systems
should measure both what gets accomplished (objectives) and how it gets accomplished
(behaviors).
1. THE COMPARATIVE APPROACH
The comparative approach to performance measurement requires the rater to
compare an individual’s performance with that of others. This approach usually
uses some overall assessment of an individual’s performance or worth and seeks
to develop some ranking of the individuals within a work group. At least three
techniques fall under the comparative approach: ranking, forced distribution, and
paired comparison.
a. Ranking
• Simple Ranking requires managers to rank employees within their
departments from highest performer to poorest performer (or best to worst).
• Alternation Ranking, on the other hand, consists of a manager looking at
a list of employees, deciding who the best employee is, and crossing that
person’s name off the list. From the remaining names, the manager decides
who the worst employee is and crosses that name off the list—and so forth.
b. Forced Distribution
The forced distribution method also uses a ranking format, but employees are
ranked in groups. This technique requires the manager to put certain
percentages of employees into predetermined categories. Most commonly,
employees are grouped into three, four, or five categories usually of unequal
size indicating the best workers, the worst workers, and one or more categories
in between.
A forced distribution system helps managers tailor development activities to
employees based on their performance. For example, poor performers are
given specific feedback about what they need to improve in their job and a
timetable is set for their improvement. If they do not improve their performance,
they are dismissed.
c. Paired Comparison
The paired comparison method requires managers to compare every employee
with every other employee in the work group, giving an employee a score of 1
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every time he or she is considered the higher performer. Once all the pairs have
been compared, the manager computes the number of times each employee
received the favorable decision (i.e., counts up the points), and this becomes
the employee’s performance score.
Evaluating the Comparative Approach
The comparative approach to performance measurement is an effective tool in
differentiating employee performance; it virtually eliminates problems of leniency, central
tendency, and strictness. This is especially valuable if the results of the measures are to
be used in making administrative decisions such as pay raises and promotions. One
problem with these techniques, however, is their common failure to be linked to the
strategic goals of the organization. Although raters can evaluate the extent to which
individuals’ performances support the strategy, this link is seldom made explicit.
2. THE ATTRIBUTE APPROACH
The attribute approach to performance management focuses on the extent to which
individuals have certain attributes (characteristics or traits) believed desirable for the
company’s success. The techniques that use this approach define a set of traits—
such as initiative, leadership, and competitiveness—and evaluate individuals on them.
a. Graphic Rating Scales
The most common form that the attribute approach to performance
management takes is the graphic rating scale. Graphic rating scales can
provide a number of different points (a discrete scale) or a continuum along
which the rater simply places a check mark (a continuous scale).
b. Mixed-Standard Scales
Mixed-standard scales were developed to get around some of the problems
with graphic rating scales. To create a mixed-standard scale, we define the
relevant performance dimensions and then develop statements representing
good, average, and poor performance along each dimension. These
statements are then mixed with the statements from other dimensions on the
actual rating instrument.
Evaluating the Attribute Approach
Attribute-based performance methods are the most popular methods in organizations.
They are quite easy to develop and are generalizable across a variety of jobs, strategies,
and organizations. However, these techniques fall short on several of the criteria for
effective performance management. There is usually little congruence between the
techniques and the company’s strategy. These methods are used because of the ease in
developing them and because the same method (list of traits, comparisons) is
generalizable across any organization and any strategy.
3. BEHAVIORAL APPROACH
The behavioral approach to performance management attempts to define the
behaviors an employee must exhibit to be effective in the job. The various techniques
define those behaviors 83 and then require managers to assess the extent to which
employees exhibit them. We discuss five techniques that rely on the behavioral
approach.
a. Behaviorally Anchored Rating Scales
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A behaviorally anchored rating scale (BARS) is designed to specifically define
performance dimensions by developing behavioral anchors associated with
different levels of performance.
To develop a BARS, we first gather a large number of critical incidents that
represent effective and ineffective performance on the job. These incidents are
classified into performance dimensions, and the ones that experts agree clearly
represent a particular level of performance are used as behavioral examples
(or anchors) to guide the rater.
Behavioral anchors have advantages and disadvantages. They can increase
interrater reliability by providing a precise and complete definition of the
performance dimension. A disadvantage is that they can bias information
recall—that is, behavior that closely approximates the anchor is more easily
recalled than other behavior.
b. Behavioral Observation Scales
A behavioral observation scale (BOS) is a variation of a BARS. Like a BARS,
a BOS is developed from critical incidents. However, a BOS differs from a
BARS in two basic ways. First, rather than discarding a large number of the
behaviors that exemplify effective or ineffective performance, a BOS uses many
of them to more specifically define all the behaviors that are necessary for
effective performance (or that would be considered ineffective performance).
Instead of using, say, 4 behaviors to define 4 levels of performance on a
particular dimension, a BOS may use 15 behaviors.
A second difference is that rather than assessing which behavior best reflects
an individual’s performance, a BOS requires managers to rate the frequency
with which the employee has exhibited each behavior during the rating period.
These ratings are then averaged to compute an overall performance rating.
The major drawback of a BOS is that it may require more information than most
managers can process or remember. A BOS can have 80 or more behaviors,
and the manager must remember how frequently an employee exhibited each
of these behaviors over a 6- or 12-month rating period.
c. Competency Models
Competencies are sets of skills, knowledge, abilities, and personal
characteristics that enable employees to successfully perform their jobs.
A Competency Model identifies and provides descriptions of competencies that
are common for an entire occupation, organization, job family, or a specific job.
Competency models can be used for performance management.
However, one of the strengths of competency models is that they are useful for
a variety of HR practices including recruiting, selection, training, and
development. Competency models can be used to help identify the best
employees to fill open positions, and as the foundation for development plans
that allow the employee and manager to target specific strengths and
development areas.
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The competency model includes leadership and managerial, functional, and
foundational competencies.
Evaluation of the Behavioral Approach
The behavioral approach can be very effective. It can link the company’s strategy to the
specific behavior necessary for implementing that strategy. It provides specific guidance
and feedback for employees about the performance expected of them. Most of the
techniques rely on in-depth job analysis, so the behaviors that are identified and
measured are valid. Because those who will use the system develop the measures, the
acceptability is also often high. Finally, with a substantial investment in training raters, the
techniques are reasonably reliable.
The major weaknesses have to do with the organizational context of the system. Although
the behavioral approach can be closely tied to a company’s strategy, the behaviors and
measures must be constantly monitored and revised to ensure that they are still linked to
the strategic focus. This approach also assumes that there is ―one best way‖ to do the
job and that the behaviors that constitute this best way can be identified
4. THE RESULTS APPROACH
The results approach focuses on managing the objective, measurable results of a job
or work group. This approach assumes that subjectivity can be eliminated from the
measurement process and that results are the closest indicator of one‘s contribution
to organizational effectiveness. We examine two performance management systems
that use results: the balanced scorecard and the productivity measurement and
evaluation system.
a. The Use of Objectives
The use of objectives is popular in both private and public organizations. In a
results-based system, the top management team first defines the company‘s
strategic goals for the coming year. These goals are passed on to the next layer
of management, and these managers define the goals they must achieve for
the company to reach its goals. These goals are used as the standards by
which an individual’s performance is evaluated.
Results-based systems have three common components. They require setting
effective goals. The most effective goals are SMART goals. That is, the goals
are specific (clearly stated, define the result to be achieved), measurable
(compared to a standard), attainable (difficult but achievable), relevant (link to
organizational success factors or goals), and timely (measured in deadline,
due dates, cycles, or schedules).
b. Balanced Scorecard
Some companies use the balanced scorecard to measure performance. The
balanced scorecard includes four perspectives of performance including
financial, customer, internal or operations, and learning and growth.
The financial perspective focuses on creating sustainable growth in
shareholder value, the customer perspective defines value for customers, the
internal or operations perspective focuses on processes that influence
customer satisfaction, and the learning and growth perspective focuses on
the company’s capacity to innovate and continuously improve. Each of these
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perspectives are used to translate the business strategy into organizational,
managerial, and employee objectives.
c. The performance management system is part of the company’s broader
People Development System (PDS) which is designed to ensure that learning
and development align with business strategy and drive business results while
ensuring employees have the skills to succeed in their current and future jobs.
The PDS includes the performance management process, learning and career
development processes, and succession planning process.
d. Kaizen refers to practices participated in by employees from all levels of the
company that focus on continuous improvement of business processes. Kaizen
involves considering a continuous cycle of activities including planning,
doing, checking, and acting (PDCA)
5. THE RESULTS APPROACH
Statistical process control techniques are very important in the quality approach.
These techniques provide employees with an objective tool to identify causes of
problems and potential solutions. These techniques include process-flow analysis,
cause-and-effect diagrams, Pareto charts, control charts, histograms, and
scattergrams.
a. Process-flow analysis identifies each action and decision necessary to
complete work, such as waiting on a customer or assembling a television set.
b. In cause-and-effect diagrams, events or causes that result in undesirable
outcomes are identified. Employees try to identify all possible causes of a
problem.
c. A Pareto chart highlights the most important cause of a problem. In a Pareto
chart, causes are listed in decreasing order of importance, where importance
is usually defined as the frequency with which that cause resulted in a problem.
d. Control charts involve collecting data at multiple points in time. By collecting
data at different times, employees can identify what factors contribute to an
outcome and when they tend to occur.
e. Histograms display distributions of large sets of data. Data are grouped into a
smaller number of categories or classes. Histograms are useful for
understanding the amount of variance between an outcome and the expected
value or average outcome.
f. Scattergrams show the relationship between two variables, events, or different
pieces of data. Scattergrams help employees determine whether the
relationship between two variables or events is positive, negative, or zero.
Evaluation of the Quality Approach
The quality approach relies primarily on a combination of the attribute and results
approaches to performance measurement. However, traditional performance appraisal
systems focus more on individual employee performance, while the quality approach
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adopts a systems-oriented focus. In summary, Organizations can take five approaches
to measuring performance: comparative, attribute, behavioral, results, and quality.
CHOOSING A SOURCE FOR PERFORMANCE INFORMATION
Whatever approach to performance management is used, it is necessary to decide whom
to use as the source of the performance measures. Each source has specific strengths
and weaknesses. We discuss five primary sources: managers, peers, subordinates, self,
and 88 customers. Many companies include manager and self-assessment of
performance. This helps facilitate a conversation about performance during the appraisal
meeting and on a more frequent basis.
• MANAGERS
Managers are the most frequently used source of performance information. It is
usually safe to assume that supervisors have extensive knowledge of the job
requirements and that they have had adequate opportunity to observe their
employees—in other words, that they have the ability to rate their employees.
Also, some supervisors may be so biased against a particular employee that to
use the supervisor as the sole source of information would result in less-than-
accurate measures for that individual. Favoritism is a fact of organizational life, but
it is one that must be minimized as much as possible in performance management.
Thus, the performance evaluation system should seek to minimize the
opportunities for favoritism to affect ratings. One way to do this is not to rely on
only a supervisor’s evaluation of an employee’s performance.
• PEERS
Another source of performance information is the employee’s co-workers. Peers
are an excellent source of information in a job such as law enforcement, where the
supervisor does not always observe the employee. Peers have expert knowledge
of job requirements, and they often have the most opportunity to observe the
employee in day-to-day activities. Also, peers are often in the best position to
praise and recognize each other’s performance on a daily basis. One disadvantage
of using peer ratings is the potential for friendship to bias ratings.
• SUBORDINATES
Subordinates are an especially valuable source of performance information when
managers are evaluated. Subordinates often have the best opportunity to evaluate
how well a manager treats employees.
Upward feedback refers to appraisals that involve collecting subordinates’
evaluations of manager’s behavior or skills.
• SELF
Although self-ratings are not often used as the sole source of performance
information, they can still be valuable. Obviously, individuals have extensive
opportunities to observe their own behavior, and they usually have access to
information regarding their results on the job.
Self-evaluations have lessened the fear and anxiety associated with the old
appraisal process. Employees feel they have a voice and the opportunity to
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influence the appraisal process. One problem with self-ratings, however, is a
tendency toward inflated assessments.
• CUSTOMERS
Many companies are involving customers in their evaluation systems. Because of
the unique nature of services— the product is often produced and consumed on
the spot—supervisors, peers, and subordinates often do not have the opportunity
to observe employee behavior. Instead, the customer is often the only person
present to observe the employee’s performance and thus is the best source of
performance information.
Using customer evaluations of employee performance is appropriate in two
situations. The first is when an employee’s job requires direct service to the
customer or linking the customer to other services within the company. Second,
customer evaluations are appropriate when the company is interested in gathering
information to determine what products and services the customer wants.
In conclusion, the best source of performance information often depends on the particular
job. One should choose the source or sources that provide the best opportunity to observe
employee behavior and results.
In fact, one recent popular trend in organizations is called 360-Degree Appraisal. This
technique consists of having multiple raters (boss, peers, subordinates, customers)
provide input into a manager’s evaluation. The major advantage of the technique is that
it provides a means for minimizing bias in an otherwise subjective evaluation technique.
360-Degree Appraisal is a performance appraisal process for managers that includes
evaluations from a wide range of persons who interact with the manager. The process
includes self-evaluation as well as evaluations from the manager’s boss, subordinates,
peers, and customers.
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USE OF TECHNOLOGY IN PERFORMANCE MANAGEMENT
Technology is influencing performance management systems in four ways.
First, many companies are moving to web-based online paperless performance
management systems. These systems help companies ensure that performance goals
across all levels of the organization are aligned, provide managers and employees with
greater access to performance information, and tools for understanding and use of the
performance management process.
Second, social media tools similar to Facebook and Twitter are increasingly being used
to deliver timely feedback. Social Performance Management refers to systems similar to
Facebook, LinkedIn, and Yammer that allow employees to quickly exchange information,
talk to each other, provide coaching, and receive recognition.
Third, companies are starting to use gamification in performance management.
Gamification means that game-based strategies are applied to performance management
to make it a fun, effective, transparent, and inclusive process for employees and
managers.
Fourth, companies are relying on electronic tracking and monitoring systems to ensure
that employees are working when and how they should be and to block access to visiting
certain websites (such as those containing pornographic images).
Some argue that electronic tracking systems are needlessly surveilling and tracking
employees when there is no reason to believe that anything is wrong. Good managers
know what their employees are doing, and electronic systems should not be a substitute
for good management. Critics also argue that such systems result in less productivity and
motivation, demoralize employees, and create unnecessary stress. These systems can
ensure that time is not abused, they improve scheduling, and they help motivate workers
and improve performance.
PERFORMANCE FEEDBACK
Once the expected performance has been defined and employees’ performances have
been measured, it is necessary to feed that performance information back to the
employees so they can correct any deficiencies. The performance feedback process is
complex and provokes anxiety for both the manager and the employee.
THE MANAGER’S ROLE IN AN EFFECTIVE PERFORMANCE FEEDBACK PROCESS
If employees are not made aware of how their performance is not meeting expectations,
their performance will almost certainly not improve. In fact, it may get worse. Effective
managers provide specific performance feedback to employees in a way that elicits
positive behavioral responses. Because of the importance of performance feedback for
an effective performance management system, many companies are training managers
on how to provide feedback. To contribute to the effectiveness of a performance
management system through providing effective feedback, managers should consider the
following recommendations.
1. Feedback Should Be Given Frequently, Not Once a Year
There are two reasons for this. First, managers have a responsibility to correct
performance deficiencies immediately on becoming aware of them. If performance is
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subpar in January, waiting until December to appraise the performance could mean
an 11-month productivity loss.
Second, a major determinant of the effectiveness of a feedback session is the degree
to which the subordinate is not surprised by the evaluation. An easy rule to follow is
that employees should receive such frequent performance feedback that they already
know almost exactly what their formal evaluation will be.
2. Create the Right Context for the Discussion
Managers should choose a neutral location for the feedback session. The manager’s
office may not be the best place for a constructive feedback session because the
employee may associate the office with unpleasant conversations.
3. Ask the Employee to Rate His or Her Performance before the Session
Having employees complete a self-assessment before the feedback session can be
very productive. It requires employees to think about their performance over the past
rating period, and it encourages them to think about their weaknesses. Although self-
ratings used for administrative decisions are often inflated, there is evidence that they
may actually be lower than supervisors’ ratings when done for developmental
purposes.
4. Encourage the Employee to Participate in the Session
Managers can take one of three approaches in performance feedback sessions. In
the ―tell-andsell‖ approach, managers tell the employees how they have rated them
and then justify these ratings. In the ―tell-and-listen‖ approach, managers tell
employees how they have rated them and then let the employees explain their side of
the story.
In the ―problem-solving‖ approach, managers and employees work together to solve
performance problems in an atmosphere of respect and encouragement. In spite of
the research demonstrating the superiority of the problem-solving approach, most
managers still rely on the tell-and-sell approach.
When employees participate in the feedback session, they are consistently satisfied
with the process.
5. Recognize Effective Performance through Praise
The purpose of the session is to give accurate performance feedback, which entails
recognizing effective performance as well as poor performance. Praising effective
performance provides reinforcement for that behavior. It also adds credibility to the
feedback by making it clear that the manager is not just identifying performance
problems.
6. Focus on Solving Problems
A common mistake that managers make in providing performance feedback is to try
to use the session as a chance to punish poorly performing employees by telling them
how utterly lousy their performance is.
To improve poor performance, a manager must attempt to solve the problems causing
it. This entails working with the employee to determine the actual cause and then
agreeing on how to solve it.
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MAILA ROSARIO COLLEGE
Diversion Road, San Gabriel Village, Tuguegarao City, Cagayan Valley
Contact No. (078) 377 – 249
7. Focus Feedback on Behavior or Results, not on the Person
One of the most important things to do when giving negative feedback is to avoid
questioning the employee’s worth as a person. This is best accomplished by focusing
the discussion on the employee’s behaviors or results, not on the employee.
8. Minimize Criticism
An effective manager should resist the temptation to reel off a litany of offenses.
Having been confronted with the performance problem, an employee often agrees that
a change is in order. However, if the manager continues to come up with more and
more examples of low performance, the employee may get defensive.
9. Agree to Specific Goals and Set a Date to Review Progress
The importance of goal setting cannot be overemphasized. It is one of the most
effective motivators of performance. Besides setting goals, the manager must also set
a specific follow-up date to review the employee’s performance toward the goal. This
provides an added incentive for the employee to take the goal seriously and work
toward achieving it.
10. Diagnosing The Causes of Poor Performance
Many different reasons can cause an employee’s poor performance. For example,
poor performance can be due to lack of employee ability, misunderstanding of
performance expectations, lack of feedback, or the need for training an employee who
does not have the knowledge and skills needed to meet the performance standards.
V. EVALUATION
TASK
ACTIVITY 1 Restricted Essay:
1. In 7 sentences, in your own opinion, what is the most effective
approach to performance measurement. Cite a situational
example.
RUBRIC
Validity of Answer 6pts
Content Structure (spelling, grammar, punctuations) 2pts
Related Examples 2pts
TOTAL: 10pts
[Link]
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MAILA ROSARIO COLLEGE
Diversion Road, San Gabriel Village, Tuguegarao City, Cagayan Valley
Contact No. (078) 377 – 249
VI. REFERENCE/S
-Textbook
• Danny Araneta Cabulay and Christine Palafox Carpio, 2010, Human Resource
Management in the Tourism and Hospitality Industry, 856 Nicanor Reyes, Sr. St.,
Sampaloc, Manila, Rex Book Store, Inc.
• Crispina R. Corpuz, 2013, Human Resource Management, 856 Nicanor Reyes, Sr. St.,
Sampaloc, Manila, Rex Book Store, Inc.
- Online resources
• (PDF) Advanced Human Resource Management ? Subject: ADVANCED HUMAN
RESOURCE MANAGEMENT Credits: 4 SYLLABUS Introduction to Human Resource
Management | bolaji oluwadare - [Link]
• [Link] ([Link])
• HRMA_20013_HUMAN-RESOURCE-MANAGEMENT_PROF-ALFREDO-R-
SOLIMAN_FINAL.pdf - Republic of the Philippines POLYTECHNIC UNIVERSITY OF
THE PHILIPPINES Office of | Course Hero
• (PDF) E BOOK ON HUMAN RESOURCE MANAGEMENT (HRM).pdf | PRASANTH
VENPAKAL - [Link]
• MBA Human Resource Management Complete Notes Pdf – Download MBA 2nd Sem
Study Materials & Books - NCERT Books
• (PDF) HUMAN RESOUCE MANAGEMENT SYSTEMS, DYNAMIC CAPABILITIES AND
ENVIRONMENTAL DYNAMICS: A PRACTICE-THEORETICAL ANALYSIS | Nina Katrin
Hansen - [Link]
• Human_Resource_Management.pdf ([Link])
• (PDF) Human Resource Management Human Resource Management | Thu Huong
Pham - [Link]
• Human Resource Management Dec [Link] - Human Resource Management OUTLINE
I The process of human resource management A The scope of human resource |
Course Hero
• Performance Management System - Purpose, Criteria and Implementation - MBA
Knowledge Base ([Link])
COMPILED BY: CHECKED BY:
ELEINE T. ALVAREZ ____________________
BA Instructor BSBA Dean
General Education Coordinator
APPROVED BY:
ROMEO M. PASCUA, Ph.D.
Page 18 of 19
Republic of the Philippines
MAILA ROSARIO COLLEGE
Diversion Road, San Gabriel Village, Tuguegarao City, Cagayan Valley
Contact No. (078) 377 – 249
Vice-President of Academic Affairs
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