Introduction. Learning Outcomes. Week 8: Managing and Appraising Performance

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1 Week 8: Managing and Appraising Performance Introduction You learned in the introduction to this module that employee development is one of the critical HRM activities. Managing and appraising performance is a key element of this. It is important that you understand the nature of performance management and the key issues to consider when conducting a performance appraisal. You also need to be familiar with the different methods of performance appraisal available to HR Managers and the strengths and weaknesses of these techniques. This document guides you through a Power Point presentation and the relevant sections of the textbook chapters in your core textbook Human Resource Management in Ireland. It is intended as a guide to study materials and not a comprehensive overview of the topic. Learning Outcomes When you have successfully completed this lecture, you will be able to: Describe the nature of performance management and outline the core objectives of performance management Outline the performance management cycle and identify and explain the key stages of this cycle Differentiate between performance management and performance appraisal Identify the different performance appraisal techniques that can be used by organisations Evaluate the advantages and disadvantages of different performance appraisal techniques Kemmy Business School Human Resource Management 1

2 Key Points The Nature of Performance Management The management of performance in organisations is clearly a key variable in organisational effectiveness and growth (Gunnigle et al, 2006:186). Performance management is concerned with the performance of teams and individuals against the organisations strategies and objectives. As with other key concepts of HRM you have studied, performance management is linked to business strategy. The aim is to achieve the business objectives through individual goals, actions, performance appraisal and rewards through a defined process. (See slides 4-8) The Performance Management Cycle The performance management cycle or loop is a framework within which systematic appraisal can take place. The emphasis is on the continuous or cyclical nature of performance management and key elements include: agreeing and communicating objectives and standards; evaluating performance; comparing performance with objectives and standards; deciding on appropriate action; taking corrective action, or reviewing standards and objectives or continuing unchanged and communicating decisions and results. (See slide 6 on Performance Management system and Gunnigle et al, 2011: ) Performance Appraisal Performance appraisal is one element of the performance management cycle. Kemmy Business School Human Resource Management 2

3 Gunnigle and Flood (1990) describe performance appraisal as a systematic approach to evaluating employee performance, characteristics and/or potential, with a view to assisting decisions in a wide range of areas such as pay, promotion, employee development and motivation. Methods of Performance Appraisal There are a number of methods of performance appraisal (or performance appraisal techniques) available to organisations. Each of these has a number of strengths and weaknesses. (See slide 14 on methods and Gunnigle et al, 2011:195) Example: The free form appraisal technique is one option open to organisations (or HR Managers) when evaluating employees performance. While this is a very flexible form of appraisal, it is also very subjective and makes comparisons between employees difficult. 360-Degree Feedback One appraisal technique that has grown in popularity in recent years is the idea of 360-Degree Feedback, also known as multi-rater or multi-sourced assessment. The key concept behind this technique is that it provides a multi-dimensional overview of an employee s performance. Employees are rated by a number of different stakeholders including work colleagues, superiors, subordinates, customers and themselves. This is different to traditional appraisal techniques where the opinions of the immediate manager are the only source of evaluation. (See slides 17-19) Kemmy Business School Human Resource Management 3

4 Readings Essential Reading Your main textbook, Human Resource Management in Ireland contains a number of sections in Chapter 8, which are essential reading for this topic. Chapter 8 P describes the nature of performance management. You will also benefit from reading the introduction on p189 to help set performance management in context. P193 presents a diagram of the performance management loop or cycle P takes you through performance appraisal and why it is important P outlines the different performance appraisal techniques and their strengths and weaknesses. On p you will find examples of extracts from performance appraisal forms for both managers and employees P outlines the key issues associated with the use of 360-Degree Feedback P looks at common errors in the performance appraisal process Recommended Reading You may also find the following chapters of the additional recommended texts useful: Armstrong, M. (2001) A Handbook of Human Resource Management Practice, 8 th ed, London: Kogan Page. Chapters 33 & 34 Torrington, D. Hall, L. and Taylor, S. (2004) Human Resource Management, 6 th ed., Harlow: Financial Times Prentice Hall Chapter 13 Kemmy Business School Human Resource Management 4

5 You could also access other chapters from any other HRM books that you feel are of use to you. Activities Performance Appraisal: Mini Case Study Fabio Capello and David Beckham Available online. Watch the performance mis-management video in the Youtube link to see how not to carry out a performance appraisal. Kemmy Business School Human Resource Management 5