Final-Ashwini-Arts-Competency-Based-HRM-Performance-Management-munotes

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1 1
CONCEPT, DEFINITION, ROLE OF
COMPETENCY
Unit Structure
1.0 Learning Objectives
1.1 Concept and definition of Competency
1.2 History of competency
1.3 Types of competencies – generic/specific
1.4 Designing competency dictionary
1.5 Why to promote a compet ency culture
1.6 Context and Relevance of competencies in modern organizations
1.7 Evolution of Competency based HRM
1.8 Competency Selection; Competency based Training & Development
1.9 Competency Based Performance Management
1.10 Competency Based Career & Succession Planning
1.11 Linking HR processes to organizational strategy
1.12 Competency framework – development of personal competency
framework
1.13 Developing Competency Models
1.14 Issue s relating to Competency models
1.15 Self-Assessment Questions
1.0 LEARNING OBJECTIVES
At the end of this chapter, you will be able to:
 Understand the history and concept of competency
 Describe competency based selection and training and development
 Analyse the development of competency models
 Examine the relevance of competencies in modern organisations

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2 1.1 CONCEPT AND DEFINITION
The knowledge, skills, abilities, and attitudes that support both individual
and organisational performance are referred to as competencies.
Knowledge is information that is acquired by exp erimentation, research,
or experience. Applying knowledge repeatedly leads to skill. Depending
on the role a person has and the demands of the business, a different
expertise level for each skill of an employee will be required to work
efficiently in the o rganisation.
One of the biggest challenges a company might face in recruitment is
identifying employee competencies. It can be difficult to categorise what
employees need to have in order to make them successful.
Competency is a concept that aids the empl oyee about the areas and levels
of perfor mance that he would be expected to do. It shows the employee
the kind of behaviour that would be valued, recognized and appreciated in
organizations.
Competency is a set of related knowledge, skill, and attitude th at affects a
major part of one’s job and correlates with the performance on the job. It
can be measured against pre -defined standards, and can be further
improved through training and development.It is the behaviour that
employees must have or acquire as i nput for a situation in order to achieve
high levels of performance, whereas competence relates to a system of
minimum standards of an organization or is demonstrated by its
performance and outputs.
Competencies usually fall into three categories:
1. Behaviou ral Competencies – such as soft skills involved in an
employee’s performance.
2. Technical Competencies – the effective use of technological systems
and computers, or any hard skills necessary for a job.
3. Leadership Competencies –personality traits that make a good leader,
that could be evaluated as measurable behaviours.
1.2 HISTORY
The study of competencies began in the early 1970’s. In 1973 David Mc
Clelland, an American psychologist published an article demonstrating
that behavioural traits and characteris tics are much more effective than
aptitude tests in determining who is and is not successful in job
performance. Good performers did things like exercise good judgment,
notice problems and take action to address them, and set challenging
goals. These were behaviours independent of aptitude, skill proficiency,
and experience level.
This research has resulted in hundreds of job studies that attempt to
answer one basic question: What is it that differentiates good performers munotes.in

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Concept, Definition, Role of Competency
3 from average performers? If we know what these differentiators are and
can measure them, they can be used to help hire better employees, assess
and appraise employees, and help them improve their performance.
These various characteristics have come to be called competencies.
Competencies ar e traits or characteristics that help determine job
performance.
In the business world today, there is some ambiguity over the definition of
a competency. The biggest confusion is between competencies and skills.
Skills generally refer to the mastery of t echnique and knowledge that
applies to a specific area or profession. Sales skills include prospecting,
handling objections, and closing. Drafting skills include measuring and
drawing. Managerial skills include writing and forecasting. Some
companies use t he word competency to mean skills. But there are so many
skills in every position in an organization that management of a skills
database is a time -consuming and difficult activity. Another problem is
that the focus on skills distracts people from the use and assessment of
competencies, which play a much bigger role in determining performance.
For instance, among chief financial officers, some have a better grasp and
knowledge of the financial structure of organizations than others. Being
able to understand a balance sheet involves knowledge. It could be easily
said that superior CFOs do not necessarily understand balance sheets or
other aspects of finance better than average CFOs. More importantly, what
they possess is the ability to partner with CEOs, to u nderstand business
issues, and to impact and influence the organization using their financial
acumen as a tool. They are able to help reduce costs in manufacturing
operations by working with the manufacturing personnel to come up with
better ways to do thi ngs. In short, it is competencies, not knowledge or
skills, that differentiate superior performers.
In some of the largest accounting and manufacturing firms, senior
managers and top professionals have spent hundreds of hours attempting
to develop a list o f skills important to different positions. However having
the greatest knowledge and skill on the planet won’t make any difference
if people have no desire and no drive to use that skill and knowledge.
It is not that skills are unimportant. A basic level of skill is necessary to a
job. If you are hiring an electrical engineer to work at a nuclear power
plant, you need someone who knows electrical engineering. But having
only technical ability alone does not determine successful performance.
People with bas ic skills who are strong in the important competencies for
a position will succeed, because they’re strong in those competencies, and
they acquire whatever knowledge and skills they need to become a
superior performer in that job. If people strong in Initi ative do not know
the answer to a problem, they’ll use their Initiative to find it. Keeping the
focus on competencies is keeping your eye on the ball. It is paying
attention to what matters, paying attention to the things that actually
determine the differ ence between strong and weak performance.
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4 1.3 TYPES OF COMPETENCIES
Generic and specific competency:
There are some competencies that are essentially required by all human
beings irrespective of the type of the organization, position in the
organization al hierarchy, nature of products and services, whether it is
operating in mild or tough competition, national or multinational,
functioning in different environment, and so on. These are generic
competencies which are also termed as ‘skeleton competencies’ .
Generic competencies include ambition, career aspirations, creativity,
originality, compassion, peer relationship, organizing ability, personal
learning, self -knowledge, self -development, time management etc.
An individual cannot suc ceed in his/her prof essional career without having
the generic or skeleton competencies.Research scholars have expressed
their views and have defined competency, top competency, core
competence, and competency mapping from different angles.
Generic competencies are applicable to a wide range of positions, for
example, for all managers across different organizations and industries,
whereas specific compe tencies in contrast are applicable only for a
particular position in a given industry, for example, general manager
(material s) for a com pany belonging to the FMCG industry.Specific
competencies would vary from industry to industry. The general manager
(materials) from an FMCG company will not fit into a similar role in the
steel industry. The specific competencies are differen t for different
positions, so the general manager (materials) will not be able to fit into die
role of general manager (sales) in the same company.
Behavioural and Functional Competencies:
Competencies which are connected with behaviour are termed as
behav ioural competencies, whereas competencies connected to technical,
functional or domain expertise, which are essentially cognitive in nature,
are termed as functional competencies.Functional competencies are
specific to a particular department or a type of job. Today’s business
scenario is very demanding and considers competency mapping very
important for its survival and growth.
Technical Competencies:
This category includes the underlying knowledge and skills described in
observable and measurable terms th at are necessary in order to perform a
particular task assigned to a person achieving quantitative target and
conforming to qualita tive requirement.
These competencies include the following:
 Competency identification skill
 Computer competencies munotes.in

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Concept, Definition, Role of Competency
5  Electronic system skill
 Objectives preparation skill
 Training and development skill
Business Competencies:
Business competencies include knowledge and skills essentially required
for decision -making and to run a business.Some business competencies
are:
business unde rstanding skill, Cost benefit analysis skill, Delegation skill,
Organization behaviour understanding to name a few.
Interpersonal Competencies:
The interpersonal competencies comprise of knowledge and skills to
develop the workforce, maintain relationship, understand others, and to
communicate effectively.
Intellectual Competencies:
These competencies need to be possessed by the organizational leaders for
survival, and growth of the business in the complex and turbulent business
environment. Attributes such as Performance management skills, model
building skills intellectual versatility are competencies with regards to
intellectual abilities.
1.4 COMPETENCY DESCRIPTION, COMPETENCY
LEVELS, DESIGNING COMPETENCY
DICTIONARY,
Competency Levels
Competencies fall into three main categories: Core, Cross -functional and
Functional.
Core Competencies
Core competencies are considered mandatory competencies. They align
with and are central to an organization’s ability to achieve its strategic
goal, that is, those functi onal areas that create competitive advantage when
executed accurately.
They include such things as decision -making skills, team effectiveness,
individual reliability, motivation and commitment to task, adaptability and
flexibility, demonstration of the ski lls required to solve complex problems,
individual integrity, superior written and verbal communication skills,
initiative, determination, the demonstration of perseverance required to
achieve a desired goal.
All employees in the organization should demons trate these competencies.
Many HR organizations rely on such indicators of employee being a good
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6 Cross -functional Competencies
Cross -functional competencies are useful across a broad matrix of
organizations an d organizational silos. They support the organization’s
ability to reduce or eliminate individual thinking and management
practices. Instead, they transform such valuable qualities within the
organization as knowledge -sharing across organizational entities .
Cross -functional competencies include financial acumen, demonstrable
computer application skills, market awareness and enhanced research
skills, among many other such skills
Functional Competencies
Functional competencies, sometimes called technical comp etencies. They
define the specific skills that professionals in a given field or position
require on a daily basis. They are job -specific and relatively easy to
identify in terms of the elements of success they require in that particular
field.
1.5 PROMOT ING A COMPETENCY CULTURE
As discussed above, competencies are essential for an employee to
succeed in an organisation, especially in the long run. Organisations look
for specific skills in candidates during the selection process. Once the
candidate is sele cted into the organisation, he is trained and developed
gradually to enhance his skills which will in turn enhance his productivity
at the organisation. Hence it is important that organisations breed a culture
where competencies are acknowledged and nurtur ed.
Promoting a competency culture is also important for the following
reasons.
Performance and Productivity
Competency development can help individuals perform better on the job
by giving them the skills they need to do their jobs effectively. It also
helps them identify their strengths and weaknesses so that they can focus
on improving those areas where they need more training or experience.
Career progression
People who participate in competency development programs are more
likely to be promoted becaus e they have demonstrated their ability to
expand their skill set beyond what was initially required for their position.
This gives them more opportunities for career advancement within their
organization or elsewhere.
Employee retention
Employees who have access to competency development programs are
more engaged with their work because they are likely to make progress
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Concept, Definition, Role of Competency
7 doing the same thing over and over again without any progression in the
near future.
Organizational effectiveness
When employees have been identified as having the right skills and
abilities for their positions, they can be matched with other employees
with complementary skills for maximum effectiveness within teams a nd
departments. In this manner, organizations can improve overall
performance by aligning their human resources with the strategic needs of
the organization.
1.6 CONTEXT AND RELEVANCE OF COMPETENCIES
IN MODERN ORGANIZATIONS
In today’s modern environment, just skills and capabilities does not seem
sufficient for a bright professional future for an individual as well as for an
organisation. Businesses have come to realise the importance of
competencies that enhance not only employee’s growth but also the
organisations growth although indirectly. Multiple research have shown
that further mapping and monitoring such attributes plays a very crucial
role in the success of an entity and its stakeholders.
Further, the relevance of such attributes is explained below in detail.
Identification of Skills Gaps
In an organization, skills gaps are the difference between the skills
employers require, and the skills that are available from the existing
workforce. With a competency model and assessment tools in place,
organiz ations can easily define the skills that are required for each role as
well as track and identify the skills gaps within their workforce, allowing
the company to run more efficiently.
Superior HR policies
According to a survey, 48% employers acknowledge th at talent shortages
have a medium to high impact on their business, but few of these
employers are actually putting talent strategies in place to address the
problem. When an organization understands exactly what skills are
required for a position, the rec ruiting and hiring process becomes more
efficient. Also, for many organizations, an employee’s tasks may change
over time while a written job description stays the same. By implementing
a competency model, HR can better understand the skills needed for the
job and thus, have the opportunity to bring in the best candidates for the
required positions.
Training for corporate goals.
Organisations have specific goals but if its workforce is not in sync with
those goals it becomes difficult to attain them. Compet ency assessments
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8 workforce. By regularly assessing, tracking and measuring competencies,
organization can make intentional decisions to stay on path. Whether it’s
matching lower level employees with mentors to build skill sets or
bridging skill gaps by training upper -level employees through an e -
learning solution, creating goals and timelines through competency
management is an essential element of an organization’s progression.
Effect ive management
According to a study, companies that manage people right will outperform
companies that don’t by 30% to 40%. When leadership understands what
their subordinates need to succeed in their jobs, they can manage people to
the best of their abili ties. Knowing the skills needed to carry out the tasks
required of each job makes it possible for leadership to create efficient
teams and match employees with those that complement each other’s core
competencies, as well as intervene when skills gaps are perceived.
Succession Planning
Understanding a workforce’s skill sets makes filling key business
leadership positions and succession planning and promotion easy. By
making use of a competency model, leadership can begin to phase out
those who plan to exit the organisation and groom the existing employees
to take over crucial positions. Through competency assessments and
individual employee career goals, leadership can better identify which
employees display the capacity to lead and create better futures for the
organisation.
Organizational Growth
Numerous studies have demonstrated that organizations that have
competency management initiatives in place exceed those that don’t have
such processes in place, in areas such as revenue per employee, customer
satisf action and efficiency. A proactive approach can build organizational
capacity and trust. Understanding and evaluating the workforce allows for
businesses to recognize what needs to be improved to reach corporate
goals and to develop a competitive advantage .
Market Opportunities
When an organization’s leadership knows their workforce’s skill sets and
capabilities, they can better respond to market demands or trends. Through
the use of competency models and assessment tools, organizations can
better plan for and take advantage of opportunities within their industry.
1.7 EVOLUTION OF COMPETENCY BASED HRM
Competency based assessment has originated from the traditional method
of Job analysis where a detailed description explained how a job is done. It
was used as a decision tool for a number of HR processes like hiring,
promotions etc. Job Analysis however had minimal or no reference to the
knowledge, skills and attitudes required for doing a job. To respond to the munotes.in

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Concept, Definition, Role of Competency
9 changing business needs and to enhance the perfor mance of the Human
Resources, the concept of competencies came into existence and over the
years integrated into almost all aspects of HR processes. Hence,
assessments processes used in organizations to make strategic decisions
were also influenced and in tegrated with the competencies. The benefits
seen were a very specific and objective evaluation of employees for
purposes like selection and hiring, performance and potential appraisal,
role change and succession planning etc.
Since, job analysis provided very limited and restricted information
regarding one particular job, with the changing times its usage for strategic
decisions started becoming more and more obsolete. The new trend was to
select and hire candidates who possessed more than one skill and w ould be
able to contribute in the organization both horizontally and vertically as
and when required. To achieve it, assessing the competencies identified as
critical for the organization, became the preferred choice.
Competency based assessment emerged as a tool which streamlined and
integrated the HR processes of the organization to yield concrete long
term benefits. Some critical and cost intensive processes like Recruitment
benefited hugely from this approach. Along -with understanding the
technical know how a job requirement possessed for a given role, it also
provided helpful insights into the organizational fit of the prospective
profile holder. This in turn helps in managing the attrition level in the
organization which emerged as the single biggest p roblem in certain
sectors.
It also transformed the trends in talent management and capability
building of the employees. With clearly defined competencies and clear
understanding of desired behaviours to be displayed within the
organizations, the managemen t had a clear perspective regarding the skill
gaps and measures to identify and leverage the strengths. For the
employees, it provided an opportunity to direct and redirect their self -
learning appropriately to achieve tangible results desired by the
organi zation. A clear interpretation of organizational goals in one’s day to
day working became possible because of the core competencies and
frameworks adopted by the organization while competency based
assessment paved the roadmap for charting out one’s own ca reer track for
the employees in the organization.
The other important role that the competency based assessment played is
that of pay based on competencies, replacing the old ladder growth
concept which depended on experience gained over long years. The mo re
competencies one acquires which contribute to the organizational values,
the more rewarding is the pay for such an employee. This provides greater
flexibility to the employees to plan their growth in the organization at their
own pace.
While the compete ncy based assessment has become quite popular in the
corporate world, it also requires certain careful considerations before it is
implemented. While opting for a competency based assessment all the munotes.in

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10 stakeholders of the organization need to be in complete s ync with the
objectives, methods and desired results of such a system. Any method
created for competency based assessment has to be relevant to the short
and long term organizational goals and business objectives. Naturally this
new process would face a lo t of resistant and flak from the employees
before it is understood and embraced by them to become a high
performing organization.
1.8 COMPETENCY SELECTION
During the hiring process looking at the competencies of a candidate can
help the talent management s trategies. Look ing at job -related
competencies helps with selection, promotion, training and development,
performance management, career planning, and succession planning. By
utilizing competency -based interviewing in the hiring processes, it
becomes fair ly easy to determine the behaviours, knowledge, and
motivations required to achieve certain objectives related to the different
job requirements. Competency -based selection decisions can also be made
more quickly and accurately. Interviewers are able to ev aluate detailed
information because they have a set list of competencies to search for.
There is less margin for error because the interviewer has clear
competency targets
Below are a few sample competency -based interviewing questions:
 Can you tell me abou t a situation where you identified a new solution
to a work -related problem?
(This question is designed to test problem -solving and analytical
skills.)
 Give me an example of an instance in which you handled workplace
conflict.
(This will help assess mul tiple competencies such as problem solving,
communication, and initiative.)
 What process of brainstorming do you follow?
(This will help identify the candidate’s ability to strategic -thinking,
motivation, and judgment.)
Organizations that use a competenc y-based recruitment process focus on
candidates’ ability to draw parallels from their professional experiences
that show that such employees possess a given trait. For employers, the
process involves establishing profiles for specific positions and job gro ups
and then using those profiles as standards against which candidates are
assessed throughout the application, interview and selection process.
The idea of measuring competencies in the workforce started to gain
momentum in the United States in the early 1970s with the work of
psychologist David McClelland at Harvard University. He found that munotes.in

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11 competencies would help more than traditional hiring methods to
determine on -the-job success. McClelland’s process focused on the
behavioural qualities employees nee ded to become top performers as well
as on an individual’s proven abilities and technical skills.
In assessing competencies in the communications area, for example, an
organization might evaluate a candidate’s proficiency at asking questions
effectively, confronting conflict, telling stories, paraphrasing, presenting
ideas with clarity. Assessing the competency of political understanding
might require evaluating candidates on the basis of their understanding of
people relationships, the dynamics of an orga nization and other factors.
Competencies can be measured throughout an employee’s life cycle from
the time someone answers a job posting through the interviewing and
hiring phase, to annual performance reviews and job promotions.
1.9 COMPETENCY BASED TRAINING &
DEVELOPMENT
Competenc y-based training is a training focused on specific competencies
or skills. Competency -based training is broken down into much smaller
units that are focused on one particular skill. The learner must demonstrate
his understanding of that skill or competency before continuing to the next
segment of training. The skills are put together into modules and typically
at the end the learner receives some form of qualification or certification.
This type of training may also be called outcome -based learning/training
or skills -based learning/training.
It is a learning model in which the required level of knowledge and skill
must be demonstrated before advancing to the next task. Competencies
can be divided into two groups within an organization’s competency
framework: core and job role competencies. This framework gives
employees a comprehensive understanding of what skills and knowledge
are needed for their job, with required outcomes and targets clearly stated
so that the learner knows exactly what is expected of the m, and where
exactly they are on a training track toward achieving those targets.
Participants must master one skill or competency before continuing to the
next portion of the training.
Benefits of a Competency -Based Training Program
The advantages to suc h a training is far and wide with most organisations
turning to such a type of training in order to equip their employees with
better capabilities to perform their tasks and achieve the organisation’s
objective in an efficient manner.
Personalised training
Modules can be completed at the user’s pace. Training programs can be
personalized to meet the interests, skills, and needs of employees. People
have unique learning styles and a competency -based training program can munotes.in

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12 be customized in order to create a mor e effective and targeted
development program.
Workplace productivity
The modules can be broken down into small units which makes training
programs more manageable. Units can be completed in a phased manner.
They need not be completed all at once.. This is a huge advantage when
balancing training with already busy work schedules.
Improved employee performance
Employees are more motivated and confident when they are competent in
their position, know exactly what their performance expectations are, and
receive recognition for it. This improves the overall productivity of
employees and the organization. Managers in an organization can create
teams of employees with complementary skills. Career progression and
promotional paths can be outlined. Employees thus h ave the opportunity
to learn more competencies beyond their roles.
Efficiency in skills and knowledge
The training and assessment conducted in a competency -based training
program are relevant to the job expectations. This allows for a smooth and
efficient transfer of knowledge and skills. Competency is achieved and
work performance improves. Employees can be provided the training they
need, which will lead to decreased errors. Valuable skills and knowledge
stay within an organization with clearly defined core competencies. The
training is focused on identified areas requiring performance
improvement. Custom -designed training enables specific performance -
related outcomes. Individuals’ gaps and strengths are defined and talent is
measured. This allows trainin g to become motivational and empowering.
Cost -effective
The training, development, and assessment can occur on the job, which
makes it more cost -effective for employers. Since the training programs
are goal -oriented and personalized, money is not wasted o n unnecessary
training. The professional development of the employees is the focus of
competency -based training. Planning and collaboration are required and
there must be clarity about the company’s vision and business goals. In
order for training to be mo tivational and empowering, employees must not
feel burdened by these training sessions.
1.10 COMPETENCY BASED PERFORMANCE
MANAGEMENT
Competency management systems allow employers to evaluate
employees' performance. Use of these systems allows managers and
supervisors to identify gaps, conduct remedial training, recruit staff and
compensate current employees appropriately. Developing competency -
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13 competency models for all jobs and assessing employees against those
models during annual performance reviews.
Development is one of the most important functions of performance
management. Performance Management System is concerned with
outputs, achievements of results; and with outcomes, the impact made on
performance. It is also concerned with the process required to achieve
these results and the inputs in terms of capabilities, that is knowledge,
skills and competencies that are expected from the teams and the
individuals. For high -performing orga nizations, a competency -based
performance management system is an essential part of an overall
competency management plan. With a competency -based performance
management system in place, organisations can motivate the staff better,
align training with comp any goals, clearly define roles and the skills
needed to perform each job well, as well as optimize the hiring process.
Below are some key components to optimize a competency -based
performance management plan.
Goal setting
Having set goals allows everyone involved to have something to strive
toward, measure and be accountable for. By planning out specific goals
and setting expectations, employees get motivated to work effectively,
help management to communicate clearly and allow tasks to be completed
in an efficient manner. Whether goals are set individually or at a team
level, they should be geared towards developing the core competencies of
the company and supporting the organization’s mission, vision and values.
Communication
One of the most important el ements of a performance management plan is
communication. By clearly communicating the plan and the goals
employees can get on board and motivated to participate in such a
program. The purpose should be communicated clearly, and often. If
employees don’t s ee the point, they may not do their best to progress
toward the goals. It’s also important to set clear expectations. If deadlines
need to be set for individuals or teams to complete training or to give
feedback, the employees need to know that it is expec ted out of them to
complete the activity at that time and not just aa a suggestion. One great
benefit of performance management is that the feedback gives HR better
clarity when recruiting, which saves time and resources.
Defining Job profiles
Great employ ees want to excel in their positions and understand what is
needed to move up. Defining the skills needed to perform tasks to the best
of their ability will make it easier for them. By understanding job
responsibilities and expectations, employees can be m ore confident in
their position, as well as their future, within the company. Additionally, it
is also important to plan for the subsequent workforce. With the munotes.in

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14 organization’s core competencies in mind, organisations can define what
job types can be hired f or in the future.
Gap identification
Once the organisation has outlined the skills needed for each job type, The
managers can better understand where the skill gaps exist. Whether it’s
through surveys, interviews, performance reviews, or coaching sessions,
learning what the employees need to know in order to perform well in
their position is invaluable. Additionally, by identifying skill gaps
managers can begin to see a clearer picture of where there may be job
related gaps in the workforce.
Development pro grams
After the managers are able to identify the skill gaps, the managers need to
nurture the staff and bring them up -to-speed. Whether it’s by way of
company -wide training days or management meetings or weekly one -on-
ones, the best way to encourage conti nued learning is by setting up a
coaching development program.
With a coaching and development plan, an organization can accomplish
multiple goals like bridging skill gaps, vetting employees for future
positions and putting them on track for a planned care er path
Assessments
Key elements of all successful evaluation programs are monitoring,
documenting and assessments.
 Monitoring continued learning activities, helps to understand where to
make changes,
 Diligent documentation will make it easier to make data -backed
decisions moving forward, and
 Assessments allows to better understand what is working and what
needs to be changed.
While some feel that conventional, annual assessments are tiresome,
anxiety -inducing and many times, fruitless, it’s still important to have
some kind of progress areas in order to set up the workforce for success. A
process of continuous coaching and improvement with actionable,
constructive criticism can position the workforce to perform to the best of
their ability. For some organiz ations, creating a unique performance
management system is in order. Depending on the organization, a
performance management program may mean a great process is
implemented or it could mean virtually zero. The more organized and
planned out your program is , the less face to face time will be required.
We’re experts at mapping out successful competency -based performance
management plans. With the data gathered through defining job types,
evaluating skill gaps and the results of continued learning activities, munotes.in

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15 managers can put together the evaluation program that works for their
organisation.
Program review
With feedback from management and staff, it’s important to regularly
revise the performance management plan. Managers should tie all
activities back to reac hing company goals and company core
competencies. He should get management and staff feedback and make
changes to the plan accordingly. It is important to motivate the staff by
putting an emphasis on career path while recognising and rewarding them.
Perfor mance Management Software
In order to keep everything organized across the organization,
performance management software is a must because even the most
comprehensive plan won’t be effective if it can’t easily give access and
feedback to everyone involved.
While creating a competency -based performance management plan can
sometimes be a difficult task. However such a software can help keep
managers organized and on track to meet their goals. Not only does
performance management software help to identify, ana lyse and manage
skills gaps within the workforce, but also provides an overview of
progress, an opportunity to compare continued learning techniques and the
ability for leadership to analyse a large amount of data in a comprehensive
way. When evaluating th e various skills and competencies of an
employee, a wide range of attributes can be considered. Physical
and mental characteristics can be accompanied by a range of other
abilities related to different skill sets, working in various
combinations depending on the requirements of the role.This
combination of skills and competencies can then be brought
together to form a competency framework. Since each role
requires different skills, these competency frameworks can vary
greatly from one employee to another, w ith a member of staff
working in sales likely to have a distinct framework from a person
working on a production line.
As HR managers build up a database of desired competencies and
the frameworks associated with different roles, performance
management so ftware can be used to track and analyse existing
human resources and future requirements. This helps make
informed decisions about new hires, as well as development plans
for existing employees to improve existing competencies or
introduce new ones as requ ired.
1.11 COMPETENCY BASED CAREER & SUCCESSION
PLANNING
Competency -based Career Development is a planned system created to
link individual career needs with the organization’s workforce
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16 opportunities that address their strengths, support development, provide
challenges and match personal interests, values and preferred working
styles. The organization on the other hand is looking to have employees
develop themselves in a way the addr esses the organizational needs.
Therefore, putting career development tools and processes in place to
highlight the options and career paths available to employees is in the
interest of both, the organization’s as well as the employee’s.
CAREER DEVELOPMEN T
Competencies and Career Development
From the employee’s perspective, they define the key requirements for
successful performance within jobs. They support the identification of
potential career paths within and across job families, while also allowing
employees to plan their careers, based on their interests as well as
strengths and gaps in their personal competency inventory. Competencies
support employees in determining and implementing targeted learning and
development programs in line with their int erests and competency gaps.
They also Increase engagement and a sense of empowerment, due to their
ability to more effectively plan and manage their careers
From the organization’s perspective, competencies serve as a foundation
for developing tools and pr ograms to support employee career
development by using assessment tools and processes to support employee
/ job matching. Career development self -help guides and resources for
learning and development. By conducting coaching and mentoring
programs and prov iding career resource centres and counselling facilities..
They can use collaborative learning, knowledge sharing, communities of
practice through social networking tools, wikis, etc. Formal structured
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17 remote on -line learning, mentoring, are also crucial tool to employee
development.
The major steps in developing a competency -based system are:
 Putting together a resource panel of experts on the target jobs who
will set direction and specif y the expected job performance criteria.

 Define tasks and characteristics, through the resource panel, and
survey job profile to obtain their perceptions of which job tasks and
personal characteristics contribute to success in the said jobs.

 Identify top performers using performance criteria specified by the
panel.

 Conduct in -depth interviews with both superior and average
incumbents in those jobs to find out what they do and how they do it.

 Based on the outcome of stage 4, develop a competency model of
people in those jobs by identifying those competencies that make the
biggest contribution to outstanding performance as opposed to the
competencies that all job holders need.

 Analyse career paths by combining the survey and the interview stage
results.

 Implement the career path system throug h a number of options such
as
 computer -based tasks and competency programs
 performance and potential assessment lin ked to new job
opportunities;
 systematic counselling career development and related training
programs.
Succession planning has the greatest impact when it is part of an overall
competency management plan. Competency management includes
everything from skills management to performance management and a
learning management system with e -learning objecti ves and assessments.
Through competency management, managers can decide on the best way
to pass on important knowledge, making inevitable transitions smooth and
painless.
Measurable Goals:
When leaders need to appoint their successors, it’s important tha t they
create a timeline and give key staff measurable goals. With performance
and skills management software, leadership can see where staff are skills -
wise and, if necessary, recommend appropriate training to get them on
track.
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18 Skills Management Softwa re:
Skills management software is the most comprehensive way to identify,
track, measure, and manage employee skill sets. When every level of the
organization has access to the data, it makes the decision making process
easier and more efficient. With ski lls management software, existing
leadership can make succession planning decisions based on clear,
quantitative data.
Learning Management System:
Implementing a learning management system allows staff to nurture their
skills through e -learning assessment s and courses. With a focus on the
next generation of leaders, this system can include leadership development
courses to supplement coaching and mentoring initiatives. An LMS can
also help bridge skill gaps that can’t always be done via on the job
training .
Future requirements:
Having a succession planning initiative in place will allow organizations
to look toward the future rather than constantly focusing on the present.
Taking into account potential future growth and industry changes ahead of
time will give organisations more flexibility when industry turbulence
occurs. Every company needs to put a competency management system in
place to plan for workforce changes that are sure to occur. Doing so
ensures a steadfast workforce, a positive company culture , and workforce
sustainability.
1.12 LINKING HR PROCESSES TO ORGANIZATIONAL
STRATEGY, COMPETENCY FRAMEWORK –
DEVELOPMENT OF PERSONAL COMPETENCY
FRAMEWORK
A good competency framework can increase clarity around performance
expectations and establish a clear link between individual and
organisational performance. A competency framework is a structure that
defines each individual competency such as problem -solving or people
management required by individuals working in an organisation or part of
that organis ation.
Earlier HR professionals used to draw a clear distinction between
'competences' and 'competencies'. The term ‘competence’ (competences)
was used to describe what people need to do to perform a job and was
concerned with effect and output rather than e ffort and input.
‘Competency’ (competencies) described the behaviour that lies behind
competent performance, such as critical thinking or analytical skills, and
described what people bring to the job. However, there's been growing
awareness that job perfor mance requires a mix of behaviour, attitude and
skill, and the terms are now more often used interchangeably.
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19 In designing a competency framework, managers should include only
measurable components. It's important to restrict the number and
complexity of competencies, typically aiming for no more than 12 for any
particular job role and arranging them into clusters to make the framework
more accessible for users. The framework should contain definitions of
each competency, particularly where it deals with d ifferent levels of
performance for each of the expected behaviours. It should also outline the
negative indicators for that competency, all those behaviours deemed
unacceptable.
If a framework is too broad and containing only general statements about
indiv idual competencies, it will fail to provide adequate guidance either
for employees as to what is expected of them or to managers who have to
assess their staff against these terms. If, on the other hand, it is too
detailed, the entire process becomes very time-consuming and could
become less credible
Employer competency frameworks may include different types such as
core competencies that support the organisation’s values and mission.
They will usually apply to all jobs in the organisation. Common
competenc ies are those that relate to certain jobs. For example, in
management roles common competencies may include strategic
awareness, leading a team and managing team performance.
Technical or job specific competencies apply to certain roles within the
organisa tion. They outline any technical expertise required and assess the
depth and breadth of that skill and knowledge. Leadership competencies
include skills and behaviours that contribute to leadership performance.
By using a competency -based approach to lead ership, organisations can
better identify and develop their next generation of leaders. Essential
leadership competencies and global competencies have been defined by
researchers. However, future business trends and strategy should drive the
development of new leadership competencies. While some leadership
competencies are essential to all, an organisation should also define which
leadership attributes are distinctive to it to create competitive advantage.
When preparing a framework, it's important to take account the legal
background to ensure that none of the competencies discriminate against
any particular group of employees or potential employees. It's also
important that when frameworks are used to assess competence, they
recognise an individual’s poten tial to develop and don't just collect
evidence of a certain behaviour as historical data.
1.13 DEVELOPING COMPETENCY MODELS
Competency models can be extremely useful to all organization for a
variety of reasons. First, they can summarize the expertise of people who
know what success in leadership or a role looks like, so that it can be
easily communicated with others. This can be extremely helpful when
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20 These benefits rest o n whether or not the organization is leveraging
competency models correctly. If not, the result can be disastrous.
1.14 ISSUES RELATING TO COMPETENCY MODELS
Sometimes, competency models are based on subjective opinion.
Decision -makers may sit in a room and pronounce, “I believe this is what
makes a top performer in the role” or, “I believe this current employee
has it, let’s base a competency model on it.” “It” refers to a “secret sauce”
that makes up a top performer, but often, these decision -makers are un able
to define what it is.
Not only is this process not very predictive of future on -the-job success,
but it can actually be quite biased. When organizations hire and promote
people based on subjective opinions that include likeability, organizations
are g oing to get more of the same type of people, without giving diversity
any chance.
Expensive to develop
If an organization wants to go from a subjective competency model to a
data-driven one, they would require to hire a consultant. Whether they are
hiring a consultant or hiring a senior organizational development
consultant as an internal full -time position, consultants who develop
competency models often have niche skills in their fields. The process is
also very time consuming. It can take weeks even mont hs for consultants
to observe and study roles within an organization and develop a predictive
competency model based on that research, additionally it also costs a large
amount to work on such a process.
As a result, the competency models informed by the e xpertise are reserved
for companies with large monetary resources, who also have the resources
to allocate to such research. Even then, these expensive competency
models are usually only developed for a select few roles at the mid or high
level.
Competency management is treated as an HR process, rather than a
business strategy. On average, 88 percent of organizations identified better
leader and employee performance as important or critical to the business.
When asked about the single most important call to action to improve
performance, interviewees said, “Tell employees what is expected of them
to excel.” Performance excellence, then, means clear communication of
the competencies for which an employee is accountable. Until competency
management is apprecia ted as a crucial part of business, employee
performance will continue to languish.
Additionally Identification of critical competencies is difficult. Without an
assessment strategy and the ability to predict the skills needed by the
business going forward , organizations are left clueless as to what skills
exist and are needed. Some 74 percent of organizations say that definition
of essential competencies by talent segment and job role is critical, or
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21 means to predict the essential skills required. Alignment of competency
development with business goals is weak. Some 61 percent of
organizations have only somewhat effectively, or not at all, identified
critical talent segments and key job roles. Hence, it goes without saying
that most have yet to define critical job responsibilities and success
criteria. In the absence of these competency procedures, it is no surprise
that 72 percent of organizations indicate that employee and leader sk ill
building is only somewhat, or not at all, focused on developing
competencies requisite for achieving business goals.
1.14 SELF -ASSESSMENT QUESTIONS
Q1. Competencies is referred as
a. Physical attributes
b. Skills capabilities and knowledge.
c. Educational qual ifications
d. Demographic characteristics
Q2. Which of the following is a type of competency
a. Technical
b. Advanced
c. Physical
d. Logical
Q3. Why is it important to promote a competency culture?
a. For business expansion
b. For improved employee productivity
c. To be sustainable
d. To compete in the market
Q4. Explain the steps to plan a competency based system
Q5. Discuss the development of a competency framework.
Q6. What are some issues relating to competency models?

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22 2
METHODS OF DATA COLLECTION
FOR MAPPING
Unit Structure
2.0 Learning Objectives
2.1 Methods of Data Collection for Mapping:
a. Observation
b. Repertory Grid
c. Critical Incidence Technique
d. Expert Panels
e. Surveys, Job Task Analysis
h. Behavioral Event Interview,
i. Use of technology.
2.2 Developing Competency Models from Raw Data:
a. Data Recording
b. Analyzing the Data
c. Content Analysis of Verbal Expression
d. Validating the Competency Models
2.3 Self-assessment questions
2.0 LEARNING OBJECTIVES
At the end of this chapter, you will be able to:
 Understand the concept of data collection.
 Analyze appropriate methods of data collection.
 Apply the methods of data collection for different purposes.
 Prepare competency models from various data.
2.1 METHODS OF DATA COLLECTION FOR
MAPPING:
What is data collection?
Data is collected when we gather and analyse valuable information such
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23 etc. from a variety of sources to build efficient marketing campaigns,
learn more about the customers, or create financial budgets.
Effective data collection can help solve a number of problem.
Additionally it can also measure brand awareness, identify trends, and
spark new ideas.
Primary data
When the party conducting the research whether that’s a person or an
organization collects the data themselves, it’s considered primary data.
Some of the primary data -collection methods are quantitative, dealing
with data that can be counted and measu red. Others are qualitative,
meaning that they consider factors other than numerical values.
Generally, questionnaires, surveys, documents, and records are
quantitative, while interviews, focus groups, observations, and oral
histories are qualitative. Ther e can also be a combination of the two
methods.
Secondary data
Secondary data to any data collected by any person other than the one
using it. Secondary data sources are extremely useful. They allow
researchers and data analysts to build large, high -qualit y databases that
help solve business problems. By expanding their datasets with secondary
data, analysts can enhance the quality and accuracy of their insights. Most
secondary data comes from external organizations.
Frequent sources of secondary data incl ude:
 Government departments
 Public sector organizations
 Industry associations
 Trade and industry bodies
 Educational institutions
 Private companies
 Market research providers
While all these organizations provide secondary data, government sources
are perha ps the most freely accessible. They are legally required to keep
records when registering people, providing services, and so on. This type
of secondary data is known as administrative data. It’s especially useful
for creating detailed segment profiles, whe re analysts concentrate on a
particular region, trend, market, or other demographic.
Observation
Observation is a primary method of data collection. It is a qualitative
mode of collection data. Observation involves collecting information
without asking que stions. This method is more subjective, as it requires
the researcher, or observer, to add their judgment to the data. But in some
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24 the number of people in a restaurant at a given time, unless the observer
counts incorrectly, the data should be reasonably reliable.
Variables that require the observer to make distinctions, such as how many
millennials visit a restaurant in a given period, can introduce potential
problems.
In general , observation can determine the dynamics of a situation, which
generally cannot be measured through other data collection techniques.
Observation also can be combined with additional information, such as
video filming, recorded video etc.
Repertory Grid
The repertory grid is a technique for identifying the ways that a person
interprets or gives meaning to his or her experience. It provides
information from which inferences about personality can be made, but it is
not a personality test in the true sense.
The main components of the repertory grid are:
The topic - What the interview is about.
Elements - They can be people, objects, experiences, events, according to
the topic. The elements can either be chosen by the interviewee, or they
can be selected on a p rior basis. For example, on students' views of
lecturers, the topic would be "What makes a good lecturer?" and the
elements would be particular lecturers known to the interviewee. If a
number of students were being interviewed, with different backgrounds,
the lecturers/elements would not necessarily be the same.
Constructs – This the most important component of the repertory grid.
This is where the elements are compared with one another to produce a
series of statements which describe what the interviewee thinks about the
topic. These statements will form the eventual unit of analysis. In other
words, every statement will be presented as opposite ends of a pole. The
students being interviewed about lecturers might say that Lecturer A, as
opposed to Lecturer s B and C, explains things clearly whereas B and C are
hard to follow. So, one set of constructs would be "explains things clearly"
as opposed to "hard to follow".
Ratings - Once the main constructs and elements are in place, they are
entered on a grid wit h the elements on top and the constructs down the
side. The interviewee then rates each element against each construct
according to a rating scale, usually of 1 -5.
Uses of repertory grid
Because of its ability to capture good data, the repertory grid is us ed in a
wide range of contexts. For example, In human resources performance
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25 In psychology for example, psychological tests or counselling type
interviews, brand analys is and consumer behaviour, In team development
and organisational studies, information retrieval studies and systems
analysis, for example mental modelling.
It is particularly good in circumstances where it is important to understand
how people think, for bringing out knowledge which is implicit rather than
explicit, and for establishing mental maps. It can be used by both
practitioners and researchers among others.
Critical Incidence Technique
Researching an incident and its outcomes to obtain qualitative information
is termed as critical incident technique. In the research, the participants are
asked to share their first -hand experience about the behaviour, occurrence
of a particular situation, and its outcomes. John Flanagan introduced the
method in 1954 through the Psychological Bulletin. The Critical Incident
technique is often used in user interviews.
Let us take an example to understand the Critical Incident Technique
clearly:
Situation: The participant is being asked about a tool that she has used.
Q1. Describe the time when you used the tool - Normal Question
Q2. Describe the time when you used the tool last - Specific Question
Q3. Describe the time when you use the tool for your work, and it helped
in making your job easier. - Critical Incident Questi on
The Critical Incident Technique involves a lot of follow -up questions. For
example, the follow -up questions of the above question would be:
Q1. When have you used the tool last?
Q2. How did you use the tool?
Q3. What are the things you do with the tool?
Q4. Why did you choose this particular tool?
The participant is usually asked for both positive and negative feedback.
The questions can be asked together or separately. Generally, if the
positive and negative questions are asked together, the participant answers
the positive questions first. One participant can give many incidents.
Hundreds and even thousands of incidents are collected with the help of
many such interviews. When the codes with the incidents are saturated, it
can be understood that the doc umentation required to fulfil the criteria is
met.

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26 Advantages and Disadvantages of Critical Incident Technique:
Critical incident technique like all methods has some advantages and
disadvantages.
 If Critical Incident Technique is used, it reveals the err ors and issues fast.
There is no time frame for taking incidents. The participant can take how
much time he wants to evaluate and answer questions.
 If there is some information that is uncommon and rare and cannot be found
easily with standard sets of ques tions, CIT can very effectively evaluate and
analyze them.
 CIT gives more importance to the more critical errors and issues.
 CIT is very flexible and can be applied in focus groups and surveys as well as
general interviews.
The disadvantages of the method are
 CIT is dependent on human memory; Therefore, if a participant forgets a part
of the Incident or interprets it in the wrong way, the process can get stressful
and time -consuming.
 Sometimes the participants give details of monumental events but forget t o
mention smaller intricate details. Hence it is up to the researcher to decide
whether or not to use CIT based on the process’s goal. He can also use other
tools like usability test if that caters more to his needs.
Asking the right questions
The steps th at can be followed for asking the right questions are:
 Look for the right person from the particular department.
Question to ask the expert:
If a new person for the role of Manager is being hired, what roles would
he be expected to fulfil or how many hour s would he be expected to work
a day?
Then there are questions which are built specifically for a particular
situation.
An example of questions concerning the event that happened could be
like:
Where did it occur?
How did it occur?
What was done after it happened?
 Ask for the solution like what works, what does not work, and what might be
useful for future situations. This helps in understanding what should be done
and what should not be done.

 Repeat the same steps with other divisional heads to evaluate whether or not
the desired result is achieved. If the same method is applied for various heads,
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27  Evaluate the situations and make questions out of them and the examples to
analyse the behaviour.
If for exam ple Critical Incident Technique was used to find information
about a particular job it would be like: the information about the job is
taken by various ways like questionnaires. These surveys can be used for
market research.
The participant is asked about his feeling and perspectives of the Incident.
The actions were taken during the situation, how the activities altered the
situation and what can be done to better it. He is asked about the
description of the roles that the job entails. He is intricately as ked about
details.
The little information that might be missed by tools like user interviews
can be extracted by Critical Incident Technique. The job description is
evaluated when the participant describes various incidents and his feelings
towards those i ncidents. Usually, more than one participant is used to see
different perspectives of the same situation.
Expert Panels
The expert panel method is based on the idea of extracting expert
knowledge. The panels are typically groups of 12 -20 individuals who a re
given 3 -18 months to deliberate upon the future of a given topic area,
whether it is on technology, an application area or an economic
sector. Generally, a variety of experts are engaged based on various fields
of expertise to debate and discuss various courses of action and make
recommendations. They can be useful at different stages of an evaluation.
This tool is useful when an issue is complex and contentious. Also where
conflict exists to provide opinions that may have more credibility, and
hence may assist in resolving the conflict. When a variety of opinions are
present, to provide a credible alternative opinion, based on credible
expertise.
Some of the benefits of expert panels include:
 Availability of expert judgement at the centre of an exercise, which can be
particularly important when dealing with the uncertainties associated with the
future
 In-depth and meaningful interaction and networking between different
scientific disciplines and areas of expertise that would otherwise be difficult
to orga nise
 The ease with which panels can complement other methods used. With some
methods, panels are a near necessity for the generation of inputs, the
interpretation of outputs, and/or the overall conduct of the method
 There is significant reductions in time allocations as the recommendations
from the experts can be directly implemented without further deliberations.
 It is comparatively a cost effective method to apply.
 There is immense credibility of the conclusions as it comes from experts
holding ample amou nt of knowledge.
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28 However there are also few disadvantages
 Because the panel must come up with consensus -based conclusions, its
organisation tends to eliminate minority points of view and tone down
conclusions
 The point of view of a dominant expert can be over-influential within the
panel
 Experts could have a tendency to go beyond their field of competence
Adaptability to a variety of situations encountered in evaluation.
Expert panels have the following functions:
1. Gathering relevant information and know ledge
2. Synthesising the information gathered
3. Stimulating new insights and creative views and providing a vision of
future possibilities, as well as creating new networks
There are a number of approaches for actually identifying potential
participants. These once they are established they are the main actors
carrying out the process throughout the exercise. The Panels can be given
very specific tasks within a much wider process, for example, commenting
upon the organisation’s strategy with respect to ad aptation of a specific
technology or a process.
Once the panel’s remit has been formulated, the task of assembling
members can begin. The first step is to develop a profile of the panel, i.e.
to identify the sorts of expertise and/or stakeholders that shou ld be
represented in light of the panel’s responsibility. There are two interrelated
considerations to take into account when profiling panels:
1. Composition: What mix of knowledge is required to address the panels
role?
2. Balance: What mix of views, pos itions, value judgements and scientific
disciplines should be represented on the panel to ensure even -handed
analysis and conclusions?
It can be divided into:
1. Personal contacts: Using names known to those already involved in the
project.
2. Stakeholders : Identifying major stakeholders in the areas of concern and
asking them to put forward names.
3. Formal process: Involves more systematic search processes. Types of
expertise and stakeholders are identified; a first set of names suggested;
these are asked to nominate key people then a final selection is made of
the people who are to be invited to take part. The initial aim is to
generate a long list of candidates for panel membership which will then
need to be cut down to a short list of primary nominees a nd alternates.
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29 procedural design of expert panels, which helps ensure that those
stakeholders will find the panel’s results credible.
Surveys, Job Task Analysis
Survey is defined as the act of examining a process or questioning a
selected sample of individuals to obtain data about a service, product, or
process. Data collection surveys collect information from a targeted group
of people about their opinions, behaviour, or knowledge. Common types
of example surveys are written questionnaires, face -to-face or telephone
interviews, focus groups, and electronic (e -mail or website) surveys.
Surveys are a valuable data collection and analysis tool that are commonly
used with key stakeholders, especiall y customers and employees, to
discover needs or assess satisfaction.
There are two main types of survey:
 A questionnaire, where a list of questions is distributed by mail, online or in
person, and respondents fill it out themselves.
 An interview, where the researcher asks a set of questions by phone or in
person and records the responses
When to use surveys to collect data
It is helpful to use surveys when:
 Identifying customer requirements or preferences
 Assessing customer or employee satisfaction, such as identifying or
prioritizing problems to address
 Evaluating proposed changes
 Assessing whether a change was successful
 Monitoring changes in customer or employee satisfaction over time
How to administer a survey
 Determine what you want to learn from the su rvey and how you will use the
results.
 Determine who should be surveyed by identifying the population group. If
they are too large to permit surveying everyone, decide how to obtain a
sample.
 Decide what demographic information is needed to analyze and und erstand
the results.
 Determine the most appropriate type of survey.
 Determine whether the survey’s answers will be numerical rating, numerical
ranking, yes -no, multiple choice or open -ended, or a mixture.
 Brainstorm questions and, for multiple choice, the list of possible answers.
Narrow down the list of questions to the absolute minimum that you must
have in order to learn what you need to know.
 Print the questionnaire or interviewer's question list.
 Administer the survey.
 Tabulate and analyse the data col lected.
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30 The below example explains how a survey can be conducted with the help
of the below questions
Q. How satisfied are you with the product?
Very
dissatisfied Somewhat
dissatisfied Somewhat
satisfied Very satisfied
Packaging
Size of the
product
Quality of the
product
Product utility

Figure 1.1 survey questionnaire with a rating scale.
Survey considerations
Conducting a survey creates expectations for change in those asked to
answer it. Do not administer a survey if action will no t, or cannot, be taken
as a result. Satisfaction surveys should be compared to objective indicators
of satisfaction, such as buying patterns for customers or attendance for
employees, and to objective measures of performance, such as warranty
data in manuf acturing or re -admission rates in hospitals. If survey results
do not correlate with the other measures, work to understand whether the
survey is unreliable or whether perceptions are being modified by the
organization’s actions. Surveys of customer and em ployee satisfaction
should be ongoing processes rather than one -time events.
What is a job task analysis?
A job task analysis evaluates a job, rather than the person doing the job, to
understand the larger work responsibilities associated with each positio n.
This data -driven process seeks to develop an overview of the knowledge,
job tasks, and responsibilities that an employee must master to be
successful in a specific role. By performing job task analyses, companies
can begin to understand skill gaps, iden tify training needs, write a job
description that attracts more candidates to apply, and develop fair hiring
practices. Notably, this process does not seek to identify the ideal
candidate, rather, job task analyses help the company document each part
of the job to comply with professional and legal guidelines
Following is the process to conduct a job task analysis.
Identify and interview subject matter experts
A subject matter expert is an employee in the company who has been in
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31 performing at a high level. This person might be the current employee in
the role, the employee’s manager, or someone who started in the role and
advanced to a higher position successfully.
Observing the job rol e
The next step of the job task analysis is to observe the role. If this role is
currently filled, the employee can be shadowed for a day to get a sense of
their activities with regards to what job tasks does the person do during
working hours. This step m ay not be possible if the company is working
remotely. If physically observing a job role is not possible, the employee
can share their calendar or some of their virtual meetings of the employee
can be attended. Watch for tasks or activities that an employ ee is
performing that they may not be aware are part of the job duties. For
instance, if you see someone taking notes in a meeting, but that’s not listed
in their job description, record that observation for future reference.
Enlisting fixed duties of the role
Responsibilities are broad categories of essential duties that a role
requires. Responsibilities can be broken down into job tasks. For instance,
“Fulfilling customer orders” is a responsibility; critical tasks within that
category include things lik e printing out shipping labels or packaging
orders for shipment. Get as granular as possible to listing job tasks,
keeping statements clear and concise. Highlighting these specific tasks
makes it easier to identify knowledge requirements, specify any physi cal
demands, and create a clear picture later on in the job description.
Creating questionnaires for employees
Create a structured questionnaire for employees to complete. These
questionnaires can be used to find out how often someone performs a task,
or to assess if there is something in the job description that is irrelevant.
Alternately, existing employees should complete a skill assessment. Skill
assessments are typically used to screen candidates.
Interviewing specific workers
Review previous job de scriptions, onboarding materials, and similar roles
advertised at other competitive businesses. This gives some perspective as
to what questions to ask.
The following can be asked to the subject matter expert
 What are your main 3 -5 job responsibilities?
 How would you describe the successful completion of your daily duties?
 Tell me about the opportunities for advancement in this role.
 Do you perform duties that aren’t listed in your job description?
 How does management support you in this job?
 Which departm ents do you regularly communicate with for your duties?
Often, interviews provide a snapshot in time: if the subject matter expert is
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32 they’re reporting a specific task more frequently than they would the rest
of the year.
Defining tasks and responsibilities
Finalize the position’s job tasks and responsibilities. Use the job analysis
data from the questionnaires as well as qualitative data from the first -hand
observation and interviews . Refer to existing documentation. The goal is
to evolve the job descriptions and provide more detail than a candidate
would typically see in an employer -branded job posting.
Verifying findings
Review the findings with the hiring managers to ensure that e veryone is
aware of how the role has evolved over time. Some managers may not
realize, for instance, that in the past an employee in this role took on more
responsibility than they should have. What may have originally started as
an entry -level role in the job descriptions may have since become a more
technical one. Additionally, the job analysis may show that more than one
person is needed to complete all the duties and responsibilities assigned to
the role.
Finalising the job task analysis
The final step is to take the information and begin to translate it into
meaningful action. Define the employee selection criteria and refine the
job descriptions. Review the compensation and performance evaluation
benchmarks to ensure people are being paid fairly for th e work
performed.
A job task analysis can also illuminate new ways to hire. For instance, a
skill assessment can be a better predictor of success when task analysis has
been completed. Questions in the skill assessment can be designed to
replicate specifi c tasks and responsibilities listed in job descriptions,
evaluating whether a candidate is truly capable of doing the job.
Behavioral Event Interview
Behavioural -based interviewing is a technique which focuses on a
candidate's past experiences, behaviours, knowledge, skills and abilities by
asking the candidate to provide specific examples of when they have
demonstrated certain behaviours or skills in the past as a means of
predicting future behaviour and performance. It is a technique that asks the
candida te to describe a situation or an experience they had in a previous
job. Responses may not be as polished as the traditional type of question
because they cannot be rehearsed ahead of time. Nonetheless, the
interviewer gathers valuable information from expe riential responses
because past performance predicts future performance.
Why is it useful?
It’s important to assess whether the candidate demonstrates traits that fit
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33 responses that prov ide a way to evaluate skills, knowledge, and behaviours
as opposed to philosophical views. The candidate’s responses are a true
indication of how the candidate will behave and perform in future work -
related situations. Behavioural competency assessment is an integral part
of the performance management process in high performing organizations.
Who should use it?
Behavioural Event Interviewing is helpful for anyone conducting an
interview, particularly the hiring manager. The technique works well in a
multi ple- interviewer scenario. Various questions can be assigned to
members of the interview team, or the hiring manager can seek multiple
perspectives if the same questions are asked by more than one member.
When is it used? Behavioural Event Interviewing ca n be used to evaluate
candidates for any open position. A critical success factor in selecting the
best candidate is seeking adequate information to assess whether the
candidate’s skills, education, experience, and behavioural traits are a good
match with the key job requirements and the organization’s culture.
One method of developing the competencies described by Mr. D. C.
McClelland is by conducting Behavioural Event Interviews. The objective
of a Behavioural Event Interview (BEI) is to get very detailed behavioural
descriptions of how a person goes about doing his or her work. The
interviewer's job is to get complete stories that describe the interviewee's
specific behaviours, thoughts, and actions in actual situations.BEIs are
very focused, clinical -type, recorded interviews which can take from 2 -2
1/2 hours to complete. They require working with a candidate to develop a
series of "behavioural events." After each interview, the recording is
analysed for evidence of competencies. The total process of reco rding the
interview, creating transcripts and analysing them for competencies can be
a really long process.
The major step in the BEI is to elicit behavioural events. The interviewee
is asked to describe, in detail, the five or six most important situation s he
or she has experienced in a specific job. The situations should include two
or three high points, or major successes, and two or three low points, or
key failures. The candidate is asked to answer five key questions. For
example, interviewees can be a sked the following questions such as:
"What was the situation? What events led up to it?"
"Who was involved?"
"What did you think, feel, or want to do in the situation?"
Here the person conducting the behavioural event interviewing process
should be partic ularly interested in the person's perceptions and feelings
about the situation and people involved in it.

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34 Follow up questions should include:
How was the person thinking about others (e.g., positively or negatively)
or about the situation (e.g., problem -solving thoughts)?
What was the person feeling (e.g., scared, confident, excited)?
What did the person want to do - what motivated him or her in the
situation (e.g., to do something better, to impress the boss)?
"What did you actually do or say?" Here you are interested in the skills
that the person showed.
"What was the outcome? What happened?"
Trained specialists analyse the BEI transcripts to identify competencies
that appear in the Behavioural Events. If the goal is to build a competency
model, the pro cess must be repeated with 8 -12 superior performers and 8 -
12 average performers, each providing five or six events. This means that
80-144 events must be generated and analysed for each job. In today's
busy, lean organizations, few interviewers have the ti me or resources for
the level of individual analysis of each candidate using the Behavioural
Event Interviewing methodology.
Use of technology
The challenges of competency assessment, and how technology helps
Assessment is subjective and one -sided It is ha rdly possible to assess an
employee’s skills on one’s own. HR managers usually can assess some
general competencies such as active listening skills or stress tolerance. In
addition to it, line managers can evaluate some specific technical skills
such using job-related software and observe how efficiently an employee
collaborates with his/her colleagues, among other important criteria.But,
as humans, even talented and experienced managers can sometimes miss
some valuable capabilities or draw wrong conclusion s about their people’s
behaviours.
Hence Productively engaging relevant feedback gives for evaluation
purposes, using automated or semi -automated assessment and retrieving
relevant data from other enterprise systems can help to avoid subjectivity
and one -sided view.
In particular, the intranet can include a collaboration space for manager’s
feedback surveys. Answers marked by them can be automatically
processed and all results stored in a single directory.
Tests linked to specific competencies such for eign language proficiency or
using some software can be developed and sent out to different job holders
automatically and regularly. Once a test is completed, its results are
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35 CRM can provide details about a salesperson’s communication with
customers; the accounting system, about employee -related costs; the
intranet, about an employee’s social activities.
To make assessment as unbiased as possible, managers tend to turn to the
360-degree feedback approach. However, getting feedback from all
engaged stakeholders especially from those located remotely takes time
and efforts.
However It is possible to save HR personnel’s time and cut the
organization’s costs by taking advantage of data processing capabilities of
the competency assessment solution. The software can take care of many
routine operations such as creating and processing tailored appraisal forms
based on job profiles with relevant competencies
Competency assessment is often c arried out irregularly or only during
annual or biannual performance reviews. Since significant changes can
happen within the enterprise and/or the market even in 6 months, such
information can be not timely enough. To ensure continuous evaluation of
work skills, the HR manager can schedule assessment events periodically
and configure the system so it sends to the staff automatic reminders about
upcoming appraisals or competency tests to be taken; employees can be
automatically notified about the test resul ts and provided with follow -up
action plans.
By the time of assessment, it can be complicated for people to remember
why they made a certain conclusion about their colleague’s competencies.
In addition, assessment results which are not supported by facts c an be
perceived as biased by employees, especially when it comes to promotion
or bonus distributions. Therefore to make the assessment process more
transparent, all relevant data like employees’ performance dynamics,
competency development based on test re sults can be displayed in
dedicated dashboards per employee and, if needed, tracked. Located in a
single place, the assessment results become more visible for employees,
which facilitates competency -related discussions between employees and
their managers. Also, employees can look up their competency -based job
profiles at any time in a central competency repository in which
competencies are linked with specific roles. It can help them to understand
exactly the management’s expectations regarding their skill s and
behaviour. Managers can take advantage of automatically generated
reports, such as personal development reports or aggregated views of
competencies and gaps.
A basic competency structure within the enterprise is a prerequisite for
implementing compet ency assessment software. It implies the
organization has previously developed its competency map like a list of
well-defined competencies and has a tested and documented
assessment process in place.

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36 Mapping competencies
Competencies are usually divided into general and key job ones; for
higher job levels, they can be added with leadership skills and behaviours.
They can be defined either by HR staff or adapted from standardised
models. 4 -6 competencies of each type usually can be enough for a job
profil e.
Defining and structuring competencies can seem too complicated and
labour -intensive. Yet, for a pilot version of a competency management
program it is enough that just some part of the organization’s job positions
is described in detail.
Assessment crit eria
Competencies are normally evaluated based on assessment criteria for
which some benchmarked levels like proficiency levels, rating scales etc.
are set. These levels can differ significantly depending on specific jobs
and job levels. For example, a sal es manager is expected to demonstrate
excellent communication skills whereas it is not a “must” for an engineer;
a manager is expected to focus on strategic matters much more than
his/her team members.
Even though competency management applications can’t t otally replace
humans in the skills evaluation process, they can facilitate this task by
providing the managers with:
a. automated tools for receiving, processing and assessing data about
employees’ skills
b. a comprehensive view of these data in dedicated empl oyee dashboards
and automatically generated reports
c. the possibility to ensure continuous competency assessment with timely
schedules and notifications
d. performance tracking and a more transparent assessment process.
2.2 DEVELOPING COMPETENCY MODELS FROM
RAW DATA:
a. Data Recording
This is the main part of the framework. Generally, the better the data
collected, the more accurate the framework will be. For this reason, it's a
good idea to consider which techniques to use to collect information about
the rol es, and the work involved in each one. The following can be used.
 Observe – Watch people while they're performing their roles. This
is especially useful for jobs that involve hands -on labour that can be
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37  Interview people – Talking to ev ery person individually while
choosing a sample of people to interview, or conduct a group interview.
Managers can interview the supervisor of the job they are assessing. This
helps to learn what a wide variety of people believe is needed for the role's
success.
 Create a questionnaire – A survey is an efficient way to gather
data. Spend time making sure to ask the right questions, and consider the
issues of reliability and validity. There are standardized job analysis
questionnaires available to managers th at can be administered to the
employees.
b. Analyzing the Data
Analyse the work – The behaviours are used to perform the jobs covered
by the framework. The following can be considered:
· Business plans, strategies, and objectives.
· Organiza tional principles.
· Job descriptions.
· Regulatory or other compliance issues.
· Predictions for the future of the organization or industry.
· Customer and supplier requirements.
Job analysis that includes a variety of techniqu es and considerations will
give the most comprehensive and accurate results. While creating a
framework for the entire organization, a sample of roles from across the
company can be used. This will help to capture the widest range of
competencies that are still relevant to the whole business.
As managers gather information about each role, recording what they
learn in separate behavioural statements is important. For example, if they
learn that Paul from accounting is involved in bookkeeping, they can
break that down into these behavioural statements: handles petty cash,
maintains floats, pays vendors according to policy, and analyses cash
books each month. Other roles also have similar tasks and therefore
bookkeeping will be a competency within that framewo rk.
c. Content Analysis of Verbal Expression
 Group the statements – the team members should read through the
behaviour statements, and group them into piles. The goal is to have
three or four piles at first – for instance, manual skills, decision -
making a nd judgment skills, and interpersonal skills.
 Create subgroups – Break down each of the larger piles into
subcategories of related behaviours. Typically, there will be three or
four sub groupings for each larger category. This provides the basic
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38  Refine the subgroups – For each of the larger categories, define the
subgroups even further. Managers should question why and how the
behaviours relate, or don't relate, to one another, and the groupings
can ne revised as neces sary.
 Identify and name the competencies – The team can identify a
specific competency to represent each of the smaller subgroups of
behaviours, subsequently they can also name the larger category.
d. Validating the Competency Models
 Validate and revise th e competencies as necessary – For each item,
ask these questions:
 Is this behaviour demonstrated by people who perform the work most
effectively? In other words, are people who don't demonstrate this
behavior ineffective in the role?
 Is this behaviour rele vant and necessary for effective work
performance?
These questions are often asked in the form of a survey. It's important to
look for consensus among the people doing the job, as well as areas where
there's little agreement. Managers should look for possi ble issues with
language, or the way the competencies are described, and refine those as
well.

Validate and revise the competencies as necessary – For each item, ask
these questions:
 Is this behaviour demonstrated by people who perform the work most
effec tively? In other words, are people who don't demonstrate this
behaviour ineffective in the role?
 Is this behaviour relevant and necessary for effective work
performance?
These questions are often asked in the form of a survey. It's important to
look for co nsensus among the people doing the job, as well as areas where
there's little agreement. Also, managers look for possible issues with
language, or the way the competencies are described, and these can be
refined as well.
2.3 SELF -ASSESSMENT QUESTIONS
Q1. P rimary data is collected
a. Through an agency
b. Directly
c. From the government

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39 Q2. In critical incident technique, importance is given to
a. Incident
b. Employee
c. Job profile
Q3. What are some questions you can ask in survey conducted to evaluate
employee welfare?
Q4. Explain behavioral event interview.
Q5 How has technology helped review competencies?
Q6. While developing competency models, How is data recorded?

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COMPETENCY MAPPING AND
ASSESSMENT

Unit Structure
3.0 Learning Objectives
3.1 Competency Mapping and Assessment – Meaning, purpose and
Benefits
3.2 Measuring and mapping competencies
3.3 Steps in Competency Mapping
a. BEI
b. Assessment Centre
c. Conduc ting and operating assessment Centre
d. Role of assessors in an assessment Centre
e. Designing tools in an assessment Centre
f. Integration of data
g. Report Writing
h. Feedback mechanism
3.4 Approaches to Mapping
3.5 Self-Assessment Questions
3.0 LEARNING OBJECTIVES
At the end of this chapter, you will be able to:
 Understand the meaning and purpose of competency.
 Examine the process of measuring and mapping competencies.
 Identify the various aspects in the competency process.



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41 3.1 COMPETENCY MAPPING AND ASSESSMENT –
MEANING, PURPOSE AND BENEFITS
Meaning
Competency is defined as the application of knowledge, skills and
behaviours used in performing specific job tasks. It is a system for
measuring and documenting personnel competency. The goal of
competenc y assessment is to identify problems with employee
performance and to correct these issues. An initial competency assessment
may reveal the need for specific training of the employee. Competency
assessment should be conducted at regular intervals during th e employee’s
tenure. Competency assessments conducted either initially or periodically
help to identify or prevent performance problems that may be solved
through task -specific training.
Purpose:
The main purpose of competency mapping is to ensure effectiv eness of an
organization in terms of having a clear idea regarding the outline of the
required competencies.
This may further help in:
1. Gap analysis in competencies
2. Role clarity
3. Selection, potential identification, growth plans
4. Succession planni ng
5. Restructuring
6. Inventory of competencies for future planning
Competencies enable the staff of an organization to have a clear
understanding of the behaviours to be exhibited and the levels of
performance expected in order to achieve organizational results. They
provide the individual with an indication of the behaviours and actions
that will be valued, recognized and rewarded. Using a competency
framework enables an organization to successfully align the skills,
capabilities and knowledge of employe es with organizational priorities,
resulting in business improvement and efficiencies.
A well -structured and well defined competency framework plays a key
role in accomplishing an organization’s goals in line with its mission.
Competencies ensure that a cl ear expectations are set and staff members
are guided as to how they can assume and reinforce behaviours in line
with the organization’s mission, culture and goals. A shared language is
created to describe what is needed and expected in the work environmen t,
thereby providing reliable and high quality performance. The various
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42 consistency in human resources planning, recruitment, learning and
development, and performance management, and thereb y contributing to
the streamlining of human resources operations and ultimately to
efficiency gains. Skills gaps are addressed, strengths are further developed
and requirements for career progression are clarified. Staff mobility,
organizational change and shaping of the organizational culture are also
nurtured.
Benefits of Mapping Competencies
Competency mapping creates standards for employee training and
development specifically tailored to the organizational needs. Creating
a competency map helps to dril l down to the skills, knowledge, abilities,
and behaviour required for the work. Competency mapping involves
finding out the key skills and behaviours which are required for a
particular position in an organization. It can be used for establishing the
work ing culture of the organization, strategies and goals of the
organization and for benchmarking the goals of the employees.
The purpose of implementing competency mapping is for ensuring the
competitiveness, efficiency and effectiveness inside the organizat ion. It is
these standards in competency marking that sets the benchmark for
employees. Performance appraisal forms are duly filled based on the level
of skills of employees which makes them suited for a particular role in the
company. After assigning the employees based on their competency it is
the responsibility of HR to do an analysis of the strong and weak points of
employees.
Below are few advantages of competency mapping for organizations
 Establishes expectations for performance excellence
 Improved j ob satisfaction and better employee retention
 Increase in the effectiveness of training and professional development
programs
 Provides a common understanding of scope and requirements of a
specific role.
 Help teams and individuals align their behaviours w ith key
organizational strategies
 Identify performance criteria to improve the accuracy in selection
process.
 Provide a clear foundation between the managers and employees and
performance, development, and career -oriented issues
On the other hand, the adv antages of competency mapping for the
employees can be described below.
 Helps Identify the behavioural standards of performance
excellence
 Provides a more specific and objective assessment of their strengths
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43  Helps individuals understand how to achieve expectations
3.2 MEASURING AND MAPPING COMPETENCIES
Competency mapping is a continuous process. It must be administered in a
systematic manner. But before actuall y implementing the process, the
need identification along with the steps to conduct it should be well
drafted.
Competency mapping involves the evaluation of current employees which
helps in identifying existing strengths and weaknesses in the organization.
This information allows to optimize employees' potential by assigning
them to tasks where they have the highest chances of success.
Additionally, understanding employee weaknesses allows the organization
to create new training opportunities and identify o ther areas where they
can better support their staff.
It defines roles within an organization with utmost clarity. This ensures
employees can focus their talents on the most relevant tasks and rely on
peers for support related to their expertise. As a resu lt, organizations tend
to experience outcomes like improved productivity and increased profits.
An organization with clearly defined roles experience a streamlined hiring
process. It can use its competency mapping to attract talented employees
with the app ropriate qualifications. As a result, hiring managers may have
fewer resumes to review and can spend time interviewing candidates who
are a good fit for the position.
3.3 STEPS IN COMPETENCY MAPPING
Identify the organization's goals
An organization can b egin the competency mapping process by
identifying its goals. It can review its mission statement or meet with
senior executives to understand the larger goals that employees are trying
to achieve. This step allows the process to build a good foundation,
identify smaller goals that employees strive for daily and clarify any
confusion about the organization's objectives.
Analyse competencies of existing employees
By analysing the skills of existing employees, an organization can create
outlines for competenc y maps and identify opportunities for improvement.
One useful analysis method is self -evaluation, as employees have a unique
perspective on their skills and can highlight them as they relate to their
roles. Organizations also implement supervisor evaluatio ns to obtain a
more unbiased perspective of employee performance and are specific to
each department or role.
While implementing evaluations, reviewing employee work history is
important to improve the accuracy of results. These reports can reveal
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44 For instance, work history might demonstrate a steady development of
leadership skills that improved an employee's ability to delegate tasks. If
an employee's work history shows proficiency in a skill that a current
evaluation doesn't reflect, it might indicate a weak test and encourage the
organization to reevaluate its evaluation standards.
Define competencies
Once an organization understands what employee goals are and what skills
are necess ary for achieving them, it can define competencies for each job
role. Listing important skills and relating them to essential duties would be
crucial. For instance, the competencies of a product designer might
include communication and negotiation to facil itate positive client
relationships. These professionals also rely on analytical thinking skills to
develop prototypes and conduct user testing that effectively analyzes
consumer preferences.
Deterrmine metrics
An organization can more clearly define compe tencies by assigning
metrics to them. A common example of a metric is a sales criteria that
indicates an employee's performance expectations. While a sales criteria is
just a number, it closely relates to competencies like interpersonal skills,
negotiation and active listening. If an employee reaches their figure or
comes close, the employer can better understand the employee's ability to
perform their job.
Provide additional resources
Throughout the process of competency mapping, organizations may
recogniz e employee demand for additional resources. Departments might
require more training or upgraded equipment to adequately perform their
duties. By allocating these additional resources, organizations can boost
morale and demonstrate their ability to set real istic expectations.
Implement results of competency mapping
After an organization clearly defines roles through competency mapping,
it can share results internally and externally. Additionally it could
incorporate the findings into job descriptions to attr act suitable candidates.
Organizations can also share the results with employees so that they can
prepare for performance evaluations.
Behavioral Event Interview
Behavioural Event Interview (BEI) is a way of conducting an interview in
a structured form an d is widely used in selection processes for new
employees to identify certain behavioural aspects. The method was
devised in the 1970s by American psychologist McClelland. The
technique is based on the assumption that predicting future behaviour
should bes t be based on the knowledge about the candidate’s past
behaviour. This explains why the word ‘behaviour’ plays a prominent role
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45 and behaviour from the past play a crucial role in how s omeone will
behave in the present as well as in the future.
The aim of Behavioural Event Interview (BEI) is to receive extremely
detailed behavioural descriptions from the candidate on the other side of
the table during the job interview. It is about gaini ng insight into how
someone performs their work and underlying reasons for their approach.
The person conducting the interview needs to gain a clear view of the
applicant and challenge them to tell a complete story, which is specifically
about their behavi our, thoughts, and actions and describes current
situations. A Behavioural Event Interview (BEI) sometimes can take long
hours to complete It is also convenient to prepare a number of questions in
advance, with which sufficient information can be retrieved . When
speaking to multiple candidates, the prepared questions can help safeguard
continuity and allow all candidates to profile themselves in the same way.
The questions are mostly open and provide the candidate with the
opportunity to describe certain si tuations well.
Behavioural Event Interview is all about attaining behavioural aspects
from an applicant. The candidate is asked to name approximately five
important situations and subsequently describe how they reacted. It is
important that they tell the i nterviewer what their specific tasks were.
Moreover, these situations must contain at least two highlights or major
successes and two to three setbacks. The latter are also referred to as key
weaknesses.
The five main questions as described below are also referred to as the
STAR method. STAR is an acronym for Situation, Task, Action, and
Result. In addition, a second R —referring to ‘Reflection’ —may also be
added, resulting in the question: ‘what are your thoughts on your own
course of action?’ The five main questions according to the STAR method
are as follows:
1. Situation – What was the situation?
When a selection board is looking for a commercially minded person who
is particularly well versed in handling complaints, the candidate may be
asked whether the y already have enough experience and, if so, whether
they can describe a situation that demonstrates their skills.
2. Task – Who was involved in the situation / What was your task in
the situation?
By discovering the exact task of the candidate in the situ ation described,
the interviewer finds out what perspective the candidate took on and how
they felt at that time.
What were your thoughts and emotions in this situation?
This task -oriented question is the follow -up to the second question. By
asking this qu estion, the interviewer discovers the candidate’s reasoning in
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46 negative sense. The candidate’s emotions at the time could provide
important information.
3. Action – What did you ultimatel y do and say in this situation?
By asking this question, the BEI interviewer finds out what the candidate’s
competencies are. In case of information of particular note, the interviewer
may also ask further questions within the Behavioural Event Interview
(BEI). For example, if the candidate says he carefully listened to the
dissatisfied customer, then the interviewer may ask for examples. These
are also referred to as ‘follow -up questions’. They are about figuring out
what the candidate’s intrinsic motivati ons were and why he decided to
take a certain action.
4. Result – What was the result of all the actions taken by the
candidate?
After the candidate’s competences have been addressed in the fourth
question, the interviewer may use the ‘result question’ to find out whether
the desired effect had been achieved. This is not just about the result from
the perspective of the candidate, but also from other stakeholders, such as
the customer, colleagues, and managers.
Assessment Centre
An assessment centre is a method that many organizations use to identify
management potential and determine candidate's suitability for higher
functional positions. It is often used in manager development process as a
tool to evaluate candidates' personality traits and abilities.
The process is done under standardized conditions and puts candidates
through a combination of group and individual exercises which simulate
the conditions of a given job. The assessors judge candidate’s behaviour
which can then serve as the basis for valua ble predictions of a candidate’s
potential.
Benefits of assessment centres
• They focus more on measuring job -related behaviours and skills.
• They have a potential to measure broader range of skills and knowledge
than traditional tests and interviews.
• They ar e standardized and provide equal treatment in candidate
assessment.
• They provide no discrimination of any kind regardless of gender, race
or age.
• They are a great learning opportunity for both the candidate and the
assessor.
• They rate candidates more accur ately.
Assessment can be held anywhere from the employer's offices to a hotel or
training facility. Employees could work both individually and as part of a
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47  case studies
 group discussions
 presentations
 psychometri c tests
 role play
 social events
 written tests
The duration of an assessment centre may be anywhere from a few hours
to a few days. This depends on the position or role in the specific
organization that the candidates are applying to. Generally, the higher the
position in an organization, the more candidates will be subject to different
types of tests to measure suitability. An assessment centre may be
conducted in the office of the company itself, or at the premises of the
professional assessment consulting firm hired or at an external venue.
The number of candidates that might appear in an assessment centre will
be modest. Often the assessment centre is the next step in the recruitment
process, after the e -assessment. The e -assessment is performed at home o r
at an office location, generally to screen large amounts of candidates. The
candidates who performed best on the e -assessment are invited to the next
round and assessment centre.
While aptitude tests are standardized tests, assessment centre exercises
such as interviews, presentation - and role play exercises are assessed by
professional assessors. Some centres may involve a behaviour analyst or a
psychologist to study the body language of the candidates. In interviews,
the assessors might use different in terview techniques while in
presentation - or role play exercises, they may be spectators observing the
candidates quietly. The different types of tests may have different
assessors.
Assessment centres usually start with a briefing of the candidates. The
assessors or representatives of the company may brief the candidates about
what the day will look like and what they can expect. Any required
documents may be submitted and attendances marked. Detailed
instructions will be provided at the start of each of t he tests, and any
queries of candidates will then be answered. After addressing the
questions and/or any uncertainties the test or exercise will commence.
The types of tests, difficulty level, and duration differs and depends on the
job position for which the assessment centre is being conducted. It is also
dependent on the area of expertise related to it. For instance, an
assessment for sales and marketing positions might require more verbal,
presentation and situational skill tests and exercises, while an analyst
position requires more numerical and case -study types of tests and
exercises. Generally, the written or computer tests, if any, are conducted
first; followed by communication and verbal exercises, such as group and
role play exercises; and a direc t interview in the end.
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48 Commonly used assessment centre exercises are:
Psychometric tests:
It may be used to analyse the skills and abilities of a candidate and match
these with the requirement of the job position. These tests are designed to
filter out t he right candidate for the specific job opening. Psychometric
tests are conducted either in written form or online may help companies
find out the right candidate for the job. The medium used for conducting
these tests may be online or written. We can divi de the psychometric test
part into two categories:
Aptitude and ability tests:
Aptitude and ability tests are designed to measure logical reasoning or
thinking performance. They are standardized tests consisting of multiple
choice questions that are admini stered under strict exam conditions. There
are hundreds, if not thousands of aptitude and ability tests on the market.
Popular test areas are verbal ability, numerical ability, abstract reasoning,
spatial reasoning, mechanical reasoning and error/data chec king tests.
Personality tests:
These tests are standardized questionnaires to reveal the aspects of a
candidate’s character. It is used to determine typical reactions of a
candidate to various situations. Employers look at several factors during
the recrui tment process, such as how well you get on with others, your
reaction to stressful situations and other forms of attitude towards work -
and non -work -related situations.
Role play exercises
During a role play exercise, candidates are expected to act out a s cenario
with either a group of peers or just one or more interviewers/observers.
Usually, these types of simulation exercises are situations they may
encounter while performing the job they are applying for, but this does not
necessarily have to be the cas e. Common example scenarios might include
dealing with a customer complaint or marketing a new brand. Candidates
may be asked to analyse a situation, propose/discuss solutions or fulfil the
objective considering various elements included in the simulated
environment. Prioritization and decision making skills are key during this
exercise.
Group exercises
These types of exercises are commonly used during assessment centres
and are similar in nature to a panel interview. Group exercises are assessed
discussion s that usually involve a small group of job candidates (usually
between 6 and 10 people), following a question/statement posed by an
assessor or recruiter. Group exercises are conducted in assigned and
unassigned roles, depending on the job role. Performan ce of each of the
candidates is assessed and rated in relation to the performance criteria
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49 Presentation exercises
Presentation exercises are used to analyse the communication,
presentation and persuasion skills of the candidates. Candidates might, for
instance, be provided with a report and asked to present their views
regarding the material. A question -round at the end of the presentation is
common.
Panel interviews
Panel interviews are similar in nature to regular in terviews, only rather
than facing just a recruiter or team member, there may be anywhere from
three to six people on the panel. The people on the panel depend on the
business in which the recruiting organization is active. This might be HR
people, consulta nts/team members and/or partners. At the start of the
interview, the panel members will introduce themselves and explain how
the interview will be structured.
Role of assessors in an assessment Centre
The primary role of the assessor is to assess candidat es’ performance and
related knowledge in a range of tasks and to ensure that the competence
and knowledge demonstrated meets the required standards and learning
objectives. Assessors therefore need to have occupational expertise in the
areas to be assessed . They will be required to update their expertise by
being involved in continuous professional development activities.
 Assessors are responsible for making initial contact with the candidate
and maintaining regular contact throughout the programme.

 Carrying out an Induction which includes an initial assessment with
the candidate before commencing the programme and establishing the
correct award and level to be undertaken.

 Ensuring that the candidate is aware of current rules and regulation
relating to them and all concerned with their assessment especially
equal opportunities and health and safety.

 Ensuring that the candidate is aware of their own responsibility with
regards to the collecting evidence and taking into account any
certification of prior learning or achievement.

 Explaining the assessment process fully to the candidate and others
involved

 Following the guidance issued by the organisation with regards to
assessment practice and completion of all assessment documentation
and records.

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50  Ensuring that all evidence towards meeting the learning objectives
and standards of the particular qualification is recorded and
maintained in line with requirements

 Assessing evidence of candidate’s competence against the standards
and learning objectives within the qualification

 Making sure that assessment decisions are matched against the
appropriate level Providing candidates with prompt, accurate and
constructive w ritten and verbal feedback.

 Managing the assessment procedure from planning through to making
and recording assessment decisions.

 Maintaining accurate candidate assessment and achievement records
which can then be subjected to internal verification

 Keeping the respective manager of the department up to date with
regards to candidate progress

 Confirming with the candidate when they have demonstrated
competence and completing the required documentation

 Agreeing new assessment plans when evidence is in sufficient to meet
competence. Making themselves available for discussion with those
involved in the assessment process.

 Demonstrating commitment to equality of opportunity and any other
anti-discriminatory practice.

 Ensuring that anyone involved in the assessment process gives their
consent, especially where this may mean intrusion into areas of
privacy and confidentiality of sensitive information.
Designing tools in an assessment centre
There are a lot of things to consider when designing an assessment centre.
Managers need to be mindful that the assessment centre reflects the
visions and goals of the organisation. It must reflect the brand’s
recruitment culture and company culture and must portray the role and the
skills needed to fulfil the role while providing a fair selection process that
allows candidates to showcase a range of their skills.
In order to design an assessment centre, the following steps need to be
followed.
Step 1: Identify competencies
The first thing is to identify competencies, whi ch are the abilities, skills,
knowledge, and behaviours that are vital for the candidate to successfully
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51 looking to be filled. Analysis can be done by reviewing some of the
questions below:
 What does the role consist of?
 What are the requirements, skills, and qualifications that the candidate
needs to have?
 What are the essential and the desirable skills for the role?
Using a comparative list of the essential and desirable requirements for the
role can narrow down the competencies that the managers want to
evaluate at the assessment centre. Managers need to narrow these down
because otherwise, the process would take too long. So, managers need to
concentrate on the competencies that rea lly matter. The amount and level
of competencies that managers choose to evaluate at the assessment centre
will wholly depend on the role’s duties and responsibilities.
Step 2: Design relevant tasks and activities
Once the managers have established the com petencies, they can identify
and design relevant tasks and activities that will allow to measure each
candidate’s skills and knowledge. A good way to assess and predict a
candidate’s success in the business, and overall future job performance, is
by design ing tasks that determine their current job skills, in relation to the
role. There are a whole range of tasks and activities that can be chosen
from to test the candidate’s competencies.
These tasks may include activities such as:
 Presentations
 Interviews
 Role play
 Group discussions
 Written tests
 Psychometric tests
 Reference checks
Managers must compare the competencies they are looking for and decide
which tasks and activities are best. Not all the tasks are relevant for the
assessment process. For example , presentations can help identify a
candidate’s existing knowledge, skills, and capabilities. Psychometric tests
help to measure the individual’s mental capabilities and reveal the
individual’s behavioural style.
Step 3: Select interviewers to monitor perf ormance
Managers need to find assessors who can measure and monitor the
performance of the applicants. And if necessary, provide them with
training regarding the assessment centre and its procedures and policies.
Organisations must choose a selection of HR representatives and
managers from different departments of the business. One such advantage
is that they are familiar with the business and know what the candidate
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52 provide a fai rer assessment and are less likely to be prejudice or biased.
Both internal and external assessors can have advantages and
disadvantages, due to which some businesses choose to have a mix of
internal and external interviewers at their assessment centres.
Providing training for the assessors is critical because then they can make
informed decisions on how to evaluate candidates and choose an
individual who is the best fit for the role and business.
Step 4: Create a timetable and work out the logistics
In ord er to design a successful assessment centre, Managers need to plan
the format, work out the timetable and sort out the logistics. Scheduling a
timetable and working out the logistics of the assessment centre is very
important. Managers need to decide where the assessment centre will be
held, how long it will take, how many applicants they want to invite, the
dates upon a timing schedule for the assessment
Once the relevant information is collected, managers need to provide the
details to the applicants who will be attending the assessment centre. It is
vital to follow the schedule because it will ensure professionalism to the
candidates and will avoid wasting time and resources.
Step 5: Provide feedback
Managers need to devise ways in which they will provid e feedback to the
applicants. It is good practice to provide feedback to all applicants,
including unsuccessful candidates, where possible. Providing quality
feedback to applicants ensures that the company’s reputation is upheld and
offers valuable insight for the unsuccessful candidates in their future
employment endeavours.
The organisation should aim to create feedback that correlates to the role,
and the strengths and weaknesses that the candidate showed during the
assessment. Focus should be on how to produce constructive feedback, as
opposed to negative criticisms of candidate’s performance.
Report generation
At the end of the assessment centre exercise, candidates’ scores are
collated to generate a report. These scores are arrived at based on the
usage of specially built assessment simulations, observations of
behaviours and candidate performances by independent assessors. The
comparison and analysis of these reports will determine which of the
candidates will be selected by the organisation.
Feedb ack mechanism
Feedback must be given to those that have been selected. But feedback
must also be provided even to the unsuccessful candidates. Not only is it a
common courtesy, it will also add credibility and transparency to the
assessment centre, and to the company as a whole. It will improve the
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53 aid the unsuccessful applicants in their other attempts of being recruited in
other companies. Deciding on which person should perform a specific job
is not something that should be done randomly. Hence hiring the best
people will help pave the way towards the achievement of the business
goals.
3.4 APPROACHES TO MAPPING
There are various approaches to mapping. Each of this approach will le ad
to understanding the skills and abilities of employees in a more accurate
manner. An organization has the flexibility to adopt an approach most
fitting to it while also arriving at the desired result.
There are 6 approaches to competence analysis:
1. Ex pert Opinion
2. Structured Interviews
3. Workshops
4. Critical Incident Techniques
5. Repertory Grid Analysis
6. Job Competency Assessment
1. Expert Opinion:
This method involves an expert member of the HR department while
discussing with the other experts and referring to the published list to
finalise the important criteria’s. The major drawback of this method is that
it lacks detailed analysis and the line managers have not been involved at
any step so it may be unacceptable.
2. Structured Interviews:
In this approach, we require the list of competences prepared by experts
and the job -holders. The key result areas are identified to analyse the
behavioural characteristics, which distinguish performers at different
levels of competence. The positive and neg ative indicators required for
achieving high levels of performance can be analysed as:
 Personal drive/ motivation
 Analytical power
 Creative thinking
 Team Management
 Interpersonal skills
 Communication skills


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54 3. Workshops:
A team of experts, managers, job -holders along with a facilitator and a
consultant work together in a workshop. The activities of workshop
initiate with defining job related competence area. The members of the
group develop examples of effective and less effective behaviour recorded
on charts. The facilitators’ job is to help the group to analyse its findings
and assist generally to set competency dimensions which can be identified
by behaviour.
4. Critical Incident Technique:
Through this method, we can accrue data about effective or les s effective
behaviour related to actual events - critical incidents. The technique is used
with groups of job holders, their managers and expert in following ways:
 Explain the technique and its uses. This helps to gather the real
information regarding the b ehaviours constituting good or poor
performance
 Listing the key areas of responsibilities for a particular job.
 Discussing each area of job and relating to critical incidents
 Collect information about the critical incidents under the following
areas:
 What were the circumstances?
 What did an individual do?
 What was the outcome of the efforts of the individual?
 Same process is repeated for each area of responsibility and various
critical incidents are recorded.
 On referring to the chart, analysing the critica l incidents, the recorded
behaviour is marked on a scale from one to five.
 These ratings are discussed and re -discussed for reducing errors.
 Final analysis lists the desired competence, performance indicators for
each principal accountability or main task.
5. Repertory Grid:
Repertory grid can be used to identify the dimensions that distinguish
good from poor standards of performance. This technique is based on
George Kelly’s personal construct theory. George Kelly was a
psychologist best known for his cont ributions to personal construct
theory. This theory suggests that each person has their own mental
framework from which they see the world. People develop their own
constructs, or schema s, that they then use to interpret information and
experiences.
Personal constructs are the ways in which we view the world. They are
personal because they are highly individual and they influence the way we
behave or view other people’s behaviour. The as pects of the job to which
these ‘constructs’ or judgements apply are called ‘elements’. A group of
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55 and develop constructs for them. This helps to define the qualities which
indicate the essential requirements for successful performance.
The procedure involves following steps:
a. Identify the elements of the job to be analysed.
b. List out the tasks in question.
c. Draw three cards randomly from the pack of cards and ask the group
memb ers to select the odd one out from the point of view of the
qualities and characteristics needed to perform it.
d. Try to obtain more specific definitions of these qualities in the form of
expected behaviour.
e. Again draw three cards from the pack and rep eat step c&d. Repeat the
process unless all the cards have been analysed.
f. List all the constructs and ask the group members to rate each task on
every quality using a six or seven point scale.
g. Collect and analyse the scores in order to assess their r elative
importance.
The repertory -grid analysis helps people to articulate their views by
reference to specific examples. It is easier to identify behavioural
competences required in a job by limiting the area through this technique.
This method of analysi s is quite detailed and time - consuming.
6. Job Competency Assessment:
The job competency assessment method as described by Spencer &
Spencer (is based on David Mc Clelland’s research on what competency
under six clusters -
 Achievement Cluster
 Helping/Servi ce
 Influence
 Managerial
 Cognitive
 Personal Effectiveness
The competency assessment method is used to model the competencies for
a generic role i.e. for a position which is similar to many job holders and
basic accountabilities are same. The method begins w ith assembling a
panel of expert managers to express their vision of the job, its duties,
responsibilities, difficult job components, likely future changes to the role
and the criteria against which the job -holders performance is measured.
The members sele ct some members to be outstanding or satisfactory.
The next step is to conduct ‘behavioural event interview’ with nominated
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56 what a person actually does. This employs a structured prob e strategy
rather than a standard set of questions. This investigative interview helps
to gather most accurate performance data.
Following this analysis, differentiations can be made between superior and
average performers in the form of the following:
(a) Competencies possessed by superior performers.
(b) Activities undertaken by average performers.
(c) Competency and average criteria for both superior and average
performers.
3.5 SELF -ASSESSMENT QUESTIONS
Q1. Benefits of mapping competencies is
a. Job satisfa ction
b. Low morale
c. demotivation
Q2. What is the first step in competency mapping?
a. Analyze competencies
b. Identify organizational goals
c. Define competencies
Q3. Explain the meaning and purpose of competency mapping.
Q4. What is the role of assessors in an assess ment centre?
Q5. Describe the process of Behavioral Event Interview.
Q6. According to you, what are the important job role characteristics to
assess and why?

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57 4
CONCEPTUAL FRAMEWORK OF
PERFORMANCE MANAGEMENT
Unit Structure
4.0 Learning Objectives
4.1 Conceptual Framework of Performance Management
4.2 Performance Management process
4.3 Objectives of Performance Management system
4.4 Historical development i n India
4.5 Performance management and Performance appraisal
4.6 Linkage of Performance Management system with other HR practices
4.7 Components of Performance Management System : Performance
planning; Ongoing support and coaching; Performance measurement
and evaluation.
4.8 Self-Assessment Questions
4.0 LEARNING OBJECTIVES
By the end of this chapter, you will be able to:
 Understand the conceptual framework of performance management
 Examine the association between performance management and
performance app raisal.
 Analyse the relation between the performance management and other
HR practices.
 Highlighting the components of performance management system
4.1 CONCEPTUAL FRAMEWORK OF PERFORMANCE
MANAGEMENT
Performance management is a tool used by organisations to help monitor
and evaluate the performance of employees. The goal is to create an
environment where employees can perform to the best of their abilities
and produce the highest -quality work most efficiently and effectively. The
aim of performance managem ent is to view individuals with respect to the
entire workplace system. It focuses on accountability and transparency and
promotes a clear understanding of expectations.
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58 A formal performance -management program helps managers and
employees see eye -to-eye a bout expectations, goals, and career progress,
including how an individual's work aligns with the company's overall
vision. Generally speaking, performance management views individuals in
the context of the broader workplace system.
Performance -management programs use traditional tools such as creating
and measuring goals, objectives, and milestones. They also aim to define
what effective performance looks like and develop processes to measure
performance. However, instead of using the traditional method o f year -end
reviews, performance management turns every interaction with an
employee into an occasion to learn.
Managers can use performance management tools to adjust workflow,
recommend new courses of action, and make other decisions that will help
employ ees achieve their objectives. In turn, this helps the company reach
its goals and perform optimally. For example, the manager of a sales
department gives staff target revenue volumes that they must reach within
a set period. In a performance management sys tem, along with the
numbers, the manager would offer guidance gauged to help the
salespeople succeed.
Focusing on continuous accountability creates a healthier, more
transparent work environment, and emphasis on regular meetings can
improve overall commu nications. Because performance management
establishes concrete rules, everyone has a clearer understanding of the
expectations. When expectations are clear, the workplace is less stressful.
Input Process Output

Vision & Strategy Performance Business
of the Organization Management Performance

Performance Measurement
Figure 1.1: The conceptual framework of a performance management
system
4.2 PERFORMANCE MANAGEMENT PROCESS
Performance management is a communicat ion process by which managers
and employees work together to plan, monitor and review an employee’s
work objectives and overall contribution to the organization. More than
just an annual performance review, performance management is the
continuous process of setting objectives, assessing progress and providing
ongoing coaching and feedback to ensure that employees are meeting their
objectives and career goals. It is a continuous process of planning,
coaching and reviewing employee performance.
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59 The planning phase is a collaborative effort involving both managers and
employees during which they will:
 Review the employee’s job description to determine if it reflects the
work that the employee is currently doing.

 Identify and review the links between the emp loyee’s job description,
his or her work plan, and the organization’s goals, objectives and
strategic plan.

 Develop a work plan that outlines the tasks or deliverables to be
completed, the expected results and the measures or standards that
will be used to evaluate performance.

 Identify critical areas that will be key performance objectives for the
year. The choice of areas may be determined by the organization’s
strategic plan, by the employee’s desire to improve outcomes in a
certain part of his or he r job or by a need to emphasize a particular
aspect of the job.

 Identify training objectives that will help the employee grow his or
her skills, knowledge and competencies related to the work.

 Identify career development objectives that can be part of longer -term
career planning.
A successful coaching stage for performance consists of four main steps:
planning out goals, monitoring performance, reviewing results, and
rewarding success.
Planning: This step starts by establishing expectations and developi ng a
strategic plan for employees. Managers should set defining goals
determine deadlines, and make clear how they will impact the team and
the entire company.
Monitoring: Crucial to achieving goals is consistent monitoring of
progress. Managers should fre quently check in with employees to help
work through problems as they arise. Whether it’s weekly, bi -weekly, or
monthly, consistent check -ins keep employees and managers working
together and on the same page.
Reviewing: With frequent check -ins, performance reviews turn into more
of a formality rather than an intensive process. This is the official place for
employees and managers to share their view on how the year went and
look back on the progress and achievements.
Rewarding: Rewards play a big role in em ployee motivation. Rewarding
employees for their efforts and achievements throughout the year, not just
once at the end of it, lets them know their talents are appreciated and
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60 rewarding can leave them discouraged, unappreciated, and looking for a
new job.
Figure 2.1: The performance management process
4.3 OBJECTIVES OF PERFORMANCEMANAGEMENT
SYSTEM
Setting and Defining Goals
Goal setting are one of the most effective and consistent methods used to
improve performance among employees. Setting and defining clear goals
yields several key benefits, including, allowing employees to focus on
what’s important. Aligning individual objectives with business objectives.
Optimizing employees’ individua l performance. Identifying the key result
areas and work upon improving them.
Efficient performance management techniques and systems will always
place goal setting as one of its most critical requirements. It is the
manager’s responsibility to set goals that are mutually beneficial for both
employee performance and business performance.
Setting Expectations for Managers and Employees
Alongside distinct goals, a strong performance management system seeks
to establish clear expectations from managers an d employees alike. As a
manager, setting manageable expectations for employee is critical.
Managers should not expect a poor performer to start yielding great results
from the get -go, or an excelling performer to stay consistently at the top
every week. Si milarly, holding managers to unmanageable standards runs
the risk of bringing in poor management decisions.
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61
In order to set expectations that yield solid results, Define the expectations
in clear terms. Let employees know exactly what is expected from them
and provide clarification when needed. Explain how the expectations
established will help in fulfilling the overall business objectives; draw the
line of sight between their contribution and the business achieving those
objectives. Document the expect ations. Establish a process that clearly
defines and measures what to do and who is responsible for each task.
Only when employees and managers have a clear understanding of their
own roles, responsibilities, and accountabilities, that they are likely to be
more consistent in their results and productive in their work efforts.
Establishing Effective Communication
When so many workplace dynamics are shifting to meet new demands or
to respond to external circumstances, communication is essential. While
an organization has a culture dedicated to strong, effective
communication, it results in a workforce that is engaged and has aligned
its individual objectives with the overall business objectives. Part of
effective communication involves transparency . Team members should
have a clear understanding of what other active projects their teammates
are engaged in. A team that lacks communication, ultimately lacks the
coordination that is required for any high performing team. In order to
build a communica tion active environment, team leaders, or managers,
should take sufficient time to indulge in one -on-one interactions with their
team members They should build a workforce with varied skills, that
fosters further career development, continuous feedback and coaching.
This can be done through performance reviews, or 360-Feedback
resources. Managers should set and conduct regular team building
activities. Promote and encourage collaboration and communication
among team members, and as an essential part of the workplace culture.
Setting Performance Standards
Arguably one of the most critical objectives of performance management,
setting performance standards for employees can make or break the results
of the performance management system. Any good performance
management system should always have a set of performance standards,
and performance plans, that streamline employee performance evaluation
and improvement. Every role in a company has a certain performance
standard that comes along with it, and a failure to accomplish performance
standards can mean a lack of effort on the employees’ part. setting even
more unrealistic standards for the job that is failing to reach its existing
standards. Or not having enough resources to complete the new demands.
A failu re of cooperation or collaboration from the team and manager is
also possible.
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62 management systems highlight gaps in con tribution, while bringing
attention to the areas that note progress. One of the greatest objectives
of performance management is to identify the strengths and opportunity
areas of the organization, which become more evident and therefore easier
to identify and improve upon with the established performance standards
to measure against.
Establishing Individual Training and Performance Plans
This objective is to identify the training and development needs of
employees, and implement a well-designed developme nt plan.
Establishing personal development plans helps employees acquire
the necessary knowledge and skills to advance in their individual careers.
A well -executed performance plan builds improved competency and value
add to one’s position, and ultimately organizational value.
4.4 HISTORICAL DEVELOPMENT IN INDIA
Performance appraisals send their roots beyond the Industrial Revolution,
when technical advances, like the Spinning Jenny and the Steam Engine,
created a need for improved work methods and product ivity.
Ancient Hinduism believed in performance appraisals. They had an
automated process for it, which worked brilliantly, flawlessly and
beautifully, across lifetimes and centuries. It was called the law of cause
and effect, or karma. This process didn’ t need a manager, it was ingrained
into the fabric of the universe within which everyone operated, and hence
uncorrupted by personal biases. This system had only one flaw, called
memory. Humans could not remember what it was that they were being
appraised for, and so some Hindus became bitter, some became arrogant,
and almost all of them became passive. Also, the concept of karma
required immense faith in the process, which wasn’t easy at all, and hence
the need for a process owner arose.
The Brahmins used performance appraisal as a tool to create fear in the
minds of the people. Some of them made a lot of money by selling
performance management tools coated in complicated jargon that
promised accurate measurement and improved future ratings. People wer e
judged more on the basis of past performance rather than present
capability and future potential. They were given KRAs that were not open
to negotiation. There was no freedom to move across roles and empathy
was lost to a cold calculation. The common ma n lived in great fear, at the
mercy of these managers. This was a corrupt system, the managers
accepted gifts and bribes, so some employees could get away without
working, and some worked hard all their lives without promotion or
reward.

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63 4.5 PERFORMANCE MANAGEMENT AND
PERFORMANCE APPRAISAL
A performance management process involves a supervisor and employee
communicating continuously throughout the year, with the aim of meeting
the organization's strategic objectives. It is a continuous process that
focus es on aspects like planning, monitoring, and evaluating employee
objectives in an attempt to enhance employee performance. This helps
employees to put in their best efforts to achieve company goals.
Performance management does not aim at enhancing every s kill. Good
performance management only intends to improve the specific skill sets
that align with the company’s interests and goals. It evaluates the overall
contribution of an employee towards the organization to enhance the
productivity and effectiveness of the employee. Crucial career aspects like
bonuses, promotions, dismissals are closely related to this process.
Objectives of Performance Management
The major objectives of performance management are as follows:
 Defining the company's goals.
 Setting rea listic expectations for managers and employees.
 Establishing clear communication between individuals and teams.
 Defining a performance plan by setting performance benchmarks.
 Shape individual training and performance plans.
Approaches for Conducting Perfor mance Management
The two approaches used for conducting performance management are:
Behavioural approach - This approach is best suited for situations where
individual results are difficult to measure. The behavioural approach
identifies and measures behav iours to evaluate employees. This approach
is mainly used for assessing individuals working in a team, support staff,
HR professionals.
Result -oriented approach - This approach is used when the outcome is
more important than the execution. The employees are evaluated based on
objective criteria. A result -oriented approach is used for evaluating sales
professionals, call centre employees, etc.
The performance management process of Facebook strongly stresses on
peer to peer feedback. This feedback is used in s emi-annual reviews to
evaluate the functioning of teams. Facebook also has internal software that
provides real -time feedback ensuring that issues are solved before they
turn into problems.
How Do Performance Appraisals Work?
Performance appraisals help em ployees advance their careers by providing
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64 manage and meet the expected goals and give them proper assistance by
guiding them on how to reach the target if they fall short. Given the
limited funds to award incentives, companies can easily determine how to
allocate those funds by checking out the top performers through
performance appraisals. They help understand which employees have been
major contributors to the company's growth and are the most deserving.
Performance appraisals assist employees and managers in creating a plan
for employee development via additional training while identifying ways
of improvement. It is important to note that performance appraisal isn't the
only time when emp loyees and managers discuss the employee's
contributions. Frequent conversations help keep all team members on the
same page, strengthen relationships between managers and employees,
and reduce the stress of annual reviews.
Basic types of Performance Appra isals are Self-assessment: An individual
rates their behaviour and performance. Peer assessment: An individual's
co-workers rate their performance. 360-degree feedback assessment:
Performance review is collected from an individual, peers, and supervisor.
Negotiated appraisal: It is a relatively new approach wherein a mediator
is involved. It attempts to moderate the negativity that can be a part of the
performance evaluations by allowing the subject to present first.
A performance appraisal examines an emplo yee's job performance over a
while. The final review highlights both weaknesses and strengths to
encourage future performance. Performance appraisals are usually done to
give employees big -picture feedback on their work. It turns into increases,
bonuses, o r termination decisions. They can take place any time but are
usually annual, semi -annual, or quarterly.
Contrastingly, performance management is an ongoing process that
continues throughout the year to motivate employees to establish goals,
regulate progr ess, and achieve more than the set target.


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65 4.6 LINKAGE OF PERFORMANCE MANAGEMENT
SYSTEM WITH OTHER HR PRACTICES.
The establishment of an effective performance management system
requires time and resources and therefore, the support of senior managers .
When developing a new performance management process, an
organization can strike up a committee made up of employees, managers
and board members to increase understanding and support for the process.
Management support to act upon the outcomes of the per formance
management process is also necessary to ensure that good performance is
recognized, inadequate performance results in the necessary support
and/or training to improve performance and consistently poor performance
It is a continuous communication p rocess between an employee and their
employer with clear objectives and clarity with regards to how the
employee's job contributes to the objectives of the company, the
employee's key performance areas, the standards and expectations in terms
of the key pe rformance areas along with the measurement of key
performance areas and how performance can be improved.
Managers use performance management systems to assess and reward the
performance of their employees. Apart from that, a strategic human
resource manage ment function handles the recruiting, interviewing, hiring
and development of all personnel required to ensure the company can
achieve its goals. The relationship between performance management and
strategic planning links day -to-day operations with the vi sion of the
company.
Personal Development Goals:
An individual establishes his personal goals by aligning his development
activities to the requirements of the organization. For example, a strategic
HR department can provide self -assessment tools that allo w an employee
to understand how he is rated in terms of attributes. These attributes may
include accountability, reliability, integrity and customer -centric
behaviour. Performance gaps may reveal a need to improve in one or
more of these areas. Establishi ng a specific, measurable and attainable
goal makes it easier for an employee to achieve his objective. Goals
should also be realistic and time bound.
Organizational Goals:
As part of the strategic planning process, an organization lays down
certain plans and objectives for the future. For example, a company may
decide to focus on specific IT trends such as cloud computing or data
security. As a result, strategic direction may dictate whether a company
maintains research and development spending. This impac ts the HR
department's ability to attract and retain top talent.

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66 Change Management:
In order to ensure an organization's capability to provide relevant services,
it usually requires assessing the entire workforce against a well -defined
competency model f or each role. Any work usually involves a
combination of technical and professional skills. For example, if a
business needs to make a shift from doing business one way to
transforming to using new processes and technology, skill in change
management becom es a priority. Managers need to recognize, through
performance management processes, individuals who can act as leaders
and help in achieving strategic goals of the organisation.
Training and Development:
HR management allows an organisation to recognize t he need to offer
training and development opportunities that ensure the personnel are able
tackle challenges now and in the future. Workshops, seminars, videos and
job aids can help prepare employees to address problems in the workplace.
By analysing perfo rmance review results, HR administrators can identify
problem areas, such as communication, collaboration and business sense.
Subsequently, they can offer learning and development options. Or, if all
employees appear to lack technical knowledge about a new infrastructure,
the success of the entire company may depend on evaluating performance
gaps.
Scorecard
One way to formalize the link between strategic planning and performance
management is through the implementation of a balanced scorecard, which
involve s creating indicators of individual performance along four separate
perspectives of an organization's success.
For example, in case of a banking institution, a manager should look at the
below areas:
• Financial areas such as cost control, sales growth r ate, profit growth
rate.
• Customer centric area such as service product quality, customer
satisfaction, service timing.
• Internal processes such as information delivery, interaction between
employees and clients, standard operation process
• Learning and growth aspects corporate image, competitiveness,
employee satisfaction.
The HR function should play a critical role in creating and implementing
the human resource management practices and performance management
strategies that will allow the organiza tion to realize its mission and vision.

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67 Specifically, the HR function can make the following contributions:
• Communicate knowledge of strategic plan. The HR function is a good
method to communicate the various components of the strategic plan such
as mission, vision, and objectives to all the employees.
• Outline knowledge, skills, and abilities needed for strategy
implementation. The HR function, through job analyses and the resulting
job descriptions, serves as a repository of knowledge regarding what
KSAs are needed for a successful implementation of the strategic plan.
Thus, the HR function is in a unique situation to provide information
about whether the current workforce has the KAs needed to support the
strategic plan, and if not, to offer suggest ions about what types of
employees should be hired and what types of plans should be put in place
to develop the needed KSAs internally.
Propose compensation systems. The HR function can provide useful
information on what type of compensation system should be implemented
to motivate employees to support the strategic plan.
4.7 COMPONENTS OF PERFORMANCE
MANAGEMENT SYSTEM:
Performance management system is an extremely detailed process. A lot
of areas need to be kept in mind before designing an effective syst em.
Various components form an integral part of this system, without which
the performance management system would not function effectively.
Following are some components that form a part of the process.
Performance Planning : Performance planning is the fi rst crucial
component of any performance management process which forms the
basis of performance appraisals.
Performance planning is jointly done by the manager and the employees in
the beginning of a performance session. During this period, the employees
decide upon the targets and the key performance areas which can be
performed over a year within the performance budget., which is finalized
after a mutual agreement between the manager and the employee.
Performance Appraisal and Reviewing: The appraisals a re normally
performed twice in a year in an organization in the form of mid reviews
and annual reviews which is held in the end of the financial year. In this
process, the employee first offers the self -filled up ratings in the self -
appraisal form and also describes his/her achievements over a period of
time in quantifiable terms. After the self -appraisal, the final ratings are
provided by the appraiser for the quantifiable and measurable
achievements of the employee being appraised. The entire process of
review seeks an active participation of both the employee and the manager
for analysing the causes of loopholes in the performance and how it can be
overcome.
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68 Feedback on the Performance: Feedback and counselling is given a lot
of importance in the perfor mance management process. In this stage the
employee acquires awareness from his manager about the areas of
improvements and also information on his contribution to the expected
levels of performance. The employee receives an open and a very
transparent fe edback and along with this the training and development
needs of the employee is also identified. The appraiser adopts all the
possible steps to ensure that the employee meets the expected outcomes
for an organization through effective personal counselling and guidance,
mentoring and representing the employee in training programmes which
develop the competencies and improve the overall productivity.
Rewarding good performance: This is a very vital component as it will
determine the work motivation of an emp loyee. During this stage, an
employee is recognized for good performance and is rewarded. This stage
is very sensitive for an employee as this may have a direct influence on the
self-esteem and achievement orientation. Any contributions duly
recognized by an organization helps an employee in coping up with the
failures successfully and satisfies the need for affection.
Performance Improvement Plans: In this stage, fresh set of goals are
established for an employee and new deadline is provided for
accomplish ing those objectives.
The employee is clearly communicated about the areas in which the
employee is expected to improve and a stipulated deadline is also assigned
within which the employee must show this improvement.
Potential Appraisal: Potential apprais al forms a basis for both lateral and
vertical movement of employees. By implementing competency mapping
and various assessment techniques, potential appraisal is performed.
Potential appraisal provides crucial inputs for succession planning and job
rotati on.
Performance planning.
Performance planning is a strategic process that ensures that an
organization's goals are met by its employees. It involves setting specific,
measurable, achievable, relevant, and time -bound goals for employees,
and then creating a plan to help them meet those goals. Performance
planning helps to ensure that employees are working towards the
organization's goals, and that they have the tools and resources they need
to be successful. It also allows organizations to track employee p rogress
and identify areas where employees need additional support.
Advantages of Performance Planning
One of the benefits of performance planning is that it allows employees
and managers to identify goals and objectives that need to be
accomplished in ord er for the employee to be successful. Additionally,
performance planning can help to identify any gaps in the employee's
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69 improve communication between employees and managers, and can help
to ensure that employees are aware of the standards that are expected of
them. Additionally, it can help to identify areas in which employees need
additional training or development. Finally, performance planning can
help to document employee performa nce, which can be used as a basis for
salary reviews or other types of performance -based evaluations.
It is a crucial process that is used by managers in organizations to ensure
that they are able to meet the goals and objectives of the organization. It is
also used to ensure that employees are able to meet the expectations of the
organization and that they are able to improve their performance over
time. The process of performance planning is used by managers to assess
the performance of employees and to i dentify any areas where employees
may need additional training or development in order to improve their
performance.
Building a Performance Planning system
Some key steps in creating a successful system include:
 Establishing clear goals and objectives for the organization and
individual employees.
 Defining the key competencies that are needed to achieve the
organization's goals.
 Assessing the current levels of performance of employees against the
defined competencies.
 Setting specific performance goals for employees, aligned with the
organization's goals.
 Developing a plan of action for helping employees meet their
performance goals.
 Monitoring and assessing employee progress against performance
goals on a regular basis.
Taking steps to adjust the plan as ne eded to ensure that employees
continue to make progress. A successful Performance Planning system is
an important tool for helping organizations achieve their goals. By
establishing clear goals and objectives, defining the key competencies
needed to achiev e those goals, and assessing the current levels of
performance against those competencies, organizations can create a plan
of action to help employees meet those goals. By monitoring and assessing
employee progress, organizations can ensure that employees are making
the necessary progress and can take steps to adjust the plan as needed.
Objectives of Performance planning
• To come to an agreement on the individual’s job responsibilities.
• To clarify the goals and objectives that need to be achieved.
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70 • To create an appropriate performance and career development plan for
the individual including his department and the organisation as a whole.

Performance planning is a crucial part of an employee's gr owth in the
organisation. An effective performance planning system will be easy to
understand, as well as to implement. It would also be accurate enough to
provide the performance of an employee throughout the year.
The basic objectives of performance plan ning is explained further.
The first one is to communicate basic responsibilities that the individual
has to perform on a daily basis. Daily operational activities such as
reporting, data management, etc.
The second objective is to remove any vagueness in the goals and
objectives that the individual has to achieve in the year or time period
specified by the team leader.
The third is to identify and build on the competencies of an individual for
doing the job. This helps in making employees more productive.
The fourth is to create an adequate career development plan for the
individual which would keep him/her motivated. If an employee is well
aware of his/her career as well as growth plan, he/she will be self -
motivated.
The performance planning tool should b e effective in monitoring as well
as measuring the results. It should identify key performance levels which
can easily be quantifiable. Performance metrics which are easy to identify
are helpful in making comparisons.
The performance plan laid out would al so be helpful in enlisting various
training programs for employees to increase their knowledge and
productivity.

Normally, there is no specific format in making a performance plan, but it
should have these four parameters. The first is to list the goals, secondly it
should contain various performance measures. Thirdly the performance
planning should enlist various measures or action required to achieve
desired goals, and the last one is that it should have a given time period for
all goals
Ongoing support and coaching.
Coaching is a personal on -the-job approach usually one -to-one, that helps
people develop their skills and levels of competence. The need for
coaching may arise from formal or informal performance reviews but
opportunities for coaching will e merge during normal day -to-day
activities.
Every time a manager delegates a new task to someone, a coaching
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71 feedback to an individual after a task has been completed there is an
opportunity to help that individual perform better next time.
The Coaching Process
Coaching as part of the normal process of management consists of −
Making people aware of how well they are perf orming by, for example,
asking them questions to establish the extent to which they have thought
through what they are doing.
 Ensuring that individuals not only know what is expected of them but
also understand what they need to know and be able to do to c omplete
the task satisfactorily. This gives managers an opportunity to provide
guidance at the beginning itself because guidance at a later stage may
be seen as interference.
 Using whatever situations may arise as opportunities to promote
learning.
 Encoura ging people to look at higher -level problems and how they
would tackle them.
Coaching will be most effective when the coach understands that his or
her role is to help people to learn and individuals are motivated to learn.
They should be aware that their present level of knowledge or skill or their
behaviour needs to be improved if they are going to perform their work to
the satisfaction of themselves and those concerned.
Individuals should be given guidance on what they should be learning and
feedback on how they are doing and, because learning is an active process,
they should be actively involved with their coach who should be
constructive, building on strengths and experience.

Figure 1.1 : Process of Coaching and Feedback
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72
There are many types of coa ching elements that provide a framework of
the coaching process. The following are examples of elements as a part of
Human Resources that are essential when it comes to performance
coaching:
 Building Trust - Trust is key to coaching. The supervisor and
employee relationship must have some level of trust for coaching to
work. A mutual interest in the success of the other is critical. Trust
can begin to develop through open, honest feedback and respect.
 Defining the Issues - The supervisor/manager should seek
information from the employee to better understand the issue or
performance in question. The emphasis is not on proving who is right
or wrong, but on gathering information in a non -judgmental manner.
 Coaching for Success - Taking employees from compliance to
commitment can be difficult. Finding or creating that factor means
sometimes helping the employee get in touch with what matters to
him/her - what are his/her internal goals. Sometimes this is best
achieved through the use of open -ended questions leadi ng to the
employee's self -discovery.
 Creating a Plan of Action - For the purpose of buy -in and
commitment, the supervisor and the employee should jointly create an
action plan. The plan should include performance goals that are
simple, measurable and attai nable.
Performance measurement and evaluation.
Performance measurement is the ongoing, regular process of information
collection for monitoring how a program, policy or strategy is doing. It is
a systematic way of mapping the evidence of the progress made towards
the expected results.
Evaluation is a specific, in -depth way to gather and analyse information
and draw conclusions about the performance of a policy, program or
strategy. Evaluations may also be focussed at the project level.
There are two broad t ypes of evaluations:
 “Formative” also known as process evaluations, are designed to
improve the design and implementation of a program, policy or
strategy as it evolves.
 “Summative” also known as outcome evaluations are designed to
judge a program, policy or strategy’s relevance, success and cost -
effectiveness along with its relative contribution to the intended
outcomes.

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73 Purpose of Performance measurement and evaluation.
 Measuring progress toward pre -established goals and targets.
 Determining whether an activity is achieving its stated outcome and
objectives and making adjustments if any.
 Serving as an early indicator in the case of significant changes in
operations.
 Assessing the effectiveness of a program, intervention, policy, or
regulation, compared with its absence or with one or more alternative
approaches.
 Establishing a causal relationship between an activity and the
outcomes experienced by those affected by it.
 Addressing questions about implementation, variations in
effectiveness across differ ent settings or populations, and contextual
factors
Through the process of performance measurement and evaluation, below
are some examples of questions addressed by managers. Reflecting on
these questions, managers would be in better positions to quantify and
measure performance.
 Did the program meet its stated output goals?
 How many individuals participated?
 What percentage of people who participated in a program reached a
certain goal?
 In each program site, what was the average length of time it took
participants to complete a program?
 Why did certain individuals engage or not engage in a program?
 How many people reached a certain goal a result of access to a
program, compared to those who did not have access?
 How does the implementation of a program differ across sites, and
how do those differences affect participants’ experiences?
Various performance measures used can be categorised as follows:
Effectiveness: This indicates the degree to which a process output i.e., a
service or product conforms to the set requirements.
Efficiency: This indicates the degree to which the required service or
product is produced and at the minimum resource cost.
Quality: This measures the degree to which a service or product meets the
requirements and expectations of the user.
Timeliness: This measures if the product or service was provided on time.
The criteria for evaluation of timeliness are based on customer
requirements.
Productivity: This is calculated by dividing the value added by the
product or service by t he value of labour and capital cost.
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74 Some of the objectives of evaluation are:
a) It helps to determine how well performance expectations are being
realised.
b) It determines a set of objectives prior to implementation.
c) It assesses the reasons for s pecific successes and failures.
d) It helps to uncover principles underlying success.
e) If explores techniques for improving effectiveness.
f) It establishes a foundation for further research.
g) It redefines system objectives.
Below are a few ways to measure and evaluate employee performance
data:
 Graphic rating scales : A typical graphic scale uses sequential
numbers, such as 1 to 5, or 1 to 10, to rate an employee’s relative
performance in specific areas. Scales are often used to rate behavioural
elements, such as "understands job tasks" or "participates in decision -
making." Or they could note the frequency an employee performs a certain
task or behaviour, such as “always,” “frequently,” “occasionally,” or
“never” coming to work on time.
 360-degree f eedback: This system takes into account the feedback,
opinions and assessments of an employee’s performance from the circle of
people in the company with whom they work. It can include co -workers,
supervisors and others. As inputs are evaluated from many s ources,
positive and negative similarities and trends can be noted. You can also
identify areas that may need additional measurements and support.
 Self-Evaluation: Asking an employee to evaluate her own
performance can be very effective. Often, employees m ay be more critical
of their performance than you might be. You can use a form that requires
multiple -choice answers, essay -type answers, or a combination of the two.
Comparing a self -evaluation to your own objective appraisal can be
helpful in finding sim ilarities and discrepancies along with a richer
understanding of employee’s performance. It can generate conversations
that can be beneficial to employee development.
 Management by Objectives: Also known as “management by
results,” this is a process whereb y employees and managers form
objectives together. They jointly determine individual objectives, how
they align with company goals, and how performance will be measured
and evaluated. MBO gives employees a clear understanding of what’s
expected and allows them to participate in the process, which may foster
better communication and increase motivation.
 Checklists: Using a simple “yes -no” checklist is a quick and easy
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75 areas. It will als o identify those that need additional training and
knowledge to become more efficient.
The performance measurement methods are described as a tool to create
measurable indicators to establish whether progress has been made while
achieving predetermined goa ls.
It helps to monitor budgets against progress so that the organization can
understand how the workforce is functioning individually and a team.
Organizations have realized the importance of implementing the concept
of performance measures in their syste m and the critical role it is going to
play in their growth and development.
4.8 SELF -ASSESSMENT QUESTIONS
Q1. Measurement of employee performance can be done by
a. Historical data
b. Extrapolation
c. Checklists
Q2. The first step of coaching process is
a. Implementa tion
b. Goal setting
c. Evaluation
Q3. Explain the performance management process
Q4. How will you link performance management with other HR practices?
Q5. What are the objectives of performance planning?
Case Study
Priya works in the training department of a la rge information technology
organization. She is in charge of designing and delivering interpersonal
skills training, including communication skills, networking, and new
manager training classes. Priya has excellent knowledge of how to design
training class . She incorporates behavioural modelling and practice into all
of her classes. She has also conducted research on what good
communication consists of, how to network, and what new managers need
to know to be successful. However, individuals who attend her training
classes often give her low ratings, stating that she has a hard time
answering specific questions in classes, and that she does not seem
approachable after the classes when individuals want to ask questions.
Q1. In your opinion, what is causing Pr iya’s poor performance?
Q2. How can the performance problem be solved?

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IMPLEMENTATION AND ISSUES IN
PERFORMANCE MANAGEMENT
Unit Structure
5.0 Learning Objectives
5.1 Implementation and Issues in Performance Management
5.2 Defining Performance
5.3 Determinants of Performance
5.4 Performance Dimensions
5.5 Approaches to Measu ring Performance
5.6 Diagnosing the Causes of Poor Performance
5.7 Differentiating Task from Contextual Performance
5.8 Self-Assessment Questions
5.0 LEARNING OBJECTIVES
At the end of this chapter, you will be able to:
 Infer the implementation of performan ce management.
 Define performance and its determinants.
 Analyze approaches to measuring performance
 Determine the causes of poor performance
5.1 IMPLEMENTATION AND ISSUES IN
PERFORMANCE MANAGEMENT
Case Study
Performance Management System Rollout at BT Glo bal Services
BT Global Services utilized several steps to effectively roll out a new
performance management system called "Maximizing Performance,"
designed to bring new consistency to managing and developing employees
and to create a high -performance cul ture. BT Global Services, a global
communication services company, employs more than 20,000 people.
After obtaining support from senior management, the first steps included a
series of communications, including a workshop for executives so that all
employe es would receive a clear message about why a new system was
being developed, what roles employees would play, and how those roles
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77 training line managers, to ensure involvement and commi tment, including
the important role these managers play in ensuring success. Among other
areas covered, training included how to set effective goals with
employees, providing coaching and feedback to facilitate development.
Roles were reviewed and clarifie d to ensure employees understood
expectations and how their work contributes to the success of their team,
business unit, and the company as a whole. For ongoing monitoring of the
program, data were collected through employee surveys, face -to-face
meetings with line managers, and team meetings. In summary, BT Global
Services illustrates an example of an effective rollout of a new
performance management system including communication plan, training,
and ongoing commitment to monitoring and improvement.
5.2 D EFINING PERFORMANCE

Figure 1.1 indicates how behaviours and actions impact performance
Performance can be defined as what an employee does in terms of the
work assigned to him as a part of his job profile in an organization to
achieve certain objectives. performance is not only a matter of what
people achieve but also how they are achieving it. A high performance
result comes from appropriate behaviour and the effective use of required
knowledge, skills and competencies.
Performance management examines ho w results are attained because this
provides the information necessary to consider what needs to be done to
improve those results.
The concept of performance has been explained by Brumbrach (1988) as
follows: ‘Performance means both behaviours and results . Behaviour
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78 Not just the instruments for results, behaviour is also an outcome in its
own right, which is the product of mental and physical effort applied to
tasks and can be judged apart from results. This leads to the conclusion
that when managing performance both behaviour and results need to be
considered.
Performance is associated with an approach to creating a particular vision
of purpose and aims of the organization, which will be helping each
employee to understand and recognize their part of responsibilities by the
help of which they will manage and enhance the performance of both
individuals and the organization.
In an organization, alignment is a flow of objectives from the top to
bottom and at each level, team or individual objectives are defined in
comparison with higher -level goals. But it also should be a transparent
process where individuals and teams are being given the opportunity to set
their own goals withi n the framework defined by the purpose, strategy and
values of the organization.
Objectives should be agreed, not set, and this agreement should be reached
through the open dialogues that take place between managers and
individuals throughout the year. In other words, this needs to be seen as a
partnership in which responsibility is shared and mutual expectations are
defined.
5.3 DETERMINANTS OF PERFORMANCE
To achieve high performance one must devote large number of hours to
thoughtful Practice. Employees m ust approach performance with the goal
of getting better and better. Below are some characteristics that determine
performance.
Willingness to perform : If employee is performing tasks and
responsibilities in the organization with willingness level of the
performance will be high and will be up to the standards.
Capacity to perform: combination of knowing what to do and how to do
it includes cognitive, physical, perceptual, motor, and interpersonal skills.
Opportunity to perform: expend high level of eff ort, persistence in the
expenditure of that level of effort.
Several factors are affecting employee performance. First, organizational
knowledge management which has a significant role in improving
employee performance through analysing the current skills, knowledge
and ability of employees then design a proper strategy to reduce the gap
between the current and desired performance.
Second, ICT which are considering the core assets of the organization that
are working in encouraging employees to improve the ir performance.
The third factor is the empowerment, which has a tremendous impact on
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79 dealing with numerous challenges and threaten in the market, especially if
the organization is looki ng for their employees as a competitive advantage
for surviving.
Fourth, creative and innovative which are playing as a change -agent in
promoting the manifestation of a new idea, which lead the organization to
face uncertainty and complexity in a highly c hanging environment.
The fifth factor is an organizational culture, that drives employees
performance to develop creative solutions, thinking innovatively and using
flexible reasoning in challenging organizational situations.
FACTORS DETERMINING PERFORMAN CE

Figure 1.2 – Determinants of performance
5.4 PERFORMANCE DIMENSIONS
Performance is multidimensional so consider many different types of
behaviours to understand performance.
1. Quantity of work i.e. the quantity or amount of work produced or the
volum e of work completed by employees, identifies hard -working
employees
2. Timeliness of work i.e. timely delivery of work in terms of schedules,
meeting deadlines, etc. recognises employees who produce work on -time
and meet deadlines
3. Quality of work i.e. t he quality of work produced in terms of standards,
errors, waste and rework recognises employees who produce quality work,
which meets standards and work with few errors or mistakes
4. Use of Resources/Efficiency i.e. produces work in an efficient way in
terms of using time, money, materials and other employee’s time well,
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80 5. Customer impact and value addition i.e. work produced meets the
expectations of customers, t his recognises employees who do work that
meets and exceeds internal or external customer standards and
expectations
6. Self -Reliance i.e. recognises employees who produce work without the
need for extensive supervision which requires a reasonable level of
support
7. Department Contribution – the employee is helpful to others in the
department in getting work done and sets a tone of co -operation
8. Productive Work Habits – the employee has an overall work style
which is effective and productive in terms of time management, setting
priorities and following -up on commitments
9. Adding Skills & Capabilities – the employee is continuously adding
new capabilities in terms of skills, knowledge, and attitude to get work
done in new and better ways and building for the future
10. Alignment & Compliance – the employee behaves in a way that is
aligned with the values, culture and mission of the organisation as well as
common organizational practices and procedures.
This is a very useful way to consider performance and incorporating the
dimensions adds value to the performance management process
5.5 APPROACHES TO MEASURING PERFORMANCES
Measuring the performance of employees is the backbone of any
organization’s management. Business owners usually measure employee
perform ance by assessing how much contribution the employee is making
to the firm’s growth. This is conveyed to the employee at the time of their
performance appraisal.
Performance appraisal refers to the evaluation of employees, providing
them with valuable fee dback, and creating a positive effect on future
performance. Employee performance depends upon a number of factors
such as;
 conducive work environment
 work profile
 compensation
 bonus system
 job satisfaction
 company policies
 technology
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81 Organizations can use different strategies and approaches for the purpose
of measuring the performance of their employees.
The five major approaches are :
1. Comparative approach
2. Attribute approach,
3. Behavioural approach
4. Result Approach
5. Quality approach
Each of these approaches differs in characteristics and suitability. A firm
can select any one or a combination of these approaches on the basis of
their business goals and management type.
1. Comparative approach of measuring performance
The comparative approach involves ranking an employee’s performance
with respect to that of others in the group. Individuals are ranked on the
basis of the highe st to the lowest performer. There are several techniques
for a comparative approach such as the forced distribution technique,
paired comparison, and graphic rating scale. The forced Distribution
technique involves ranking employees in groups.
Take the be low example,
A group of top performers constituted 10%, a group of average performers
constituted 40%, and another group of good performers constituted 40%.
Finally, a group of low performers constitute the remaining 10%.
This ensures rewards for the top p erformers. Given proper training and
guidance, these top performers can be promoted to higher managerial
positions. While the poor performers are given a chance for further
improvisation or dismissed if their performance does not meet the standard
requirem ents. This will, in turn, cause new talent hires. The system ranks
the employees on the basis of categorization rules rather than on their
performance. In such cases, employees with higher rankings would get
better pay than those with lower rankings though they may not deserve it.
In Paired Comparison Technique the organization compares one performer
with the other and assigns a score of 1 for the higher performer. The final
performance score is the summation of all the winning points.
A comparative approac h is undertaken in the case of firms with a small
group of employees with similar job profiles. Therefore, the disadvantage
is that it is unsuitable in the case of firms with a large number of
employees or a firm with different job profiles. Also, since th e scale is
based on subjective judgment, there is a high chance of bias.
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82 2. Attribute approach to measuring performance
In this system, the employees are rated on the basis of a specific set of
parameters such as:
 problem -solving skills,
 teamwork, communi cation,
 judgment, creativity and
 innovation.
The graphic rating scale entails rating the employee on a scale of 1 to 5
that is lowest to highest. A mixed rating scale is a more layered form of
measurement. In the first step, the employee is rated as high, medium, or
low on a given set of parameters. Each parameter is then broken down and
scaled as above (+), equal (0) or below ( -)
The major disadvantage of the attribute approach of performance
measurement is that of subjectivity. It may be heavily reliant on the nature
of the evaluator. Another limitation of this method is that it is accurate in
identifying only the best and the worst performers. However, the
advantage of this method is its simplicity, because of which most
organizations go with it.
3. The behavioural approach to measuring performance
This is one of the oldest performance measurement techniques. The
Behavioural approach consists of a series of vertical scales for different
dimensions of the job. This can be done using the BARS technique or the
BOS technique. The Behaviourally Anchored Rating Scale (BARS)
technique consists of five to ten vertical scales. These scales are based on
parameters which are decided consensually by all employees. Employees
are then ranked on each of the anchors acco rding to their performance.
On the other hand, Behavioural Observation Scale is a recent version of
BARS. It provides a more specific description along with frequency in
regard to employee behaviour for effective performance. The overall score
is the avera ge of all these frequencies. Although the Behavioural approach
is suitable for reliability and accuracy, the major drawback of this
approach is the voluminous data that the managers have to remember.
Supervisors tend to remember only those behaviours that define closely to
the performance scale which leads to a biased rating.
4. Result approach to measuring performance
This approach is a simple and straightforward concept, wherein
organization rate employees on the basis of employee performance results.
The first type of result approach is the Balanced Scorecard technique. This
technique focuses on four perspectives namely:
 financial,
 customer,
 internal & operations, and
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83
The second approach is the Productivity Measurement and Evaluation
System.
It is very effective in motivating employees for enhanced productivity and
measuring feedback. It consists of four steps.
The first step is to identify the objectives which the organization wants to
achieve. The second step measures how well these objectives are made.
The third step involves how effective are they in evaluating employee
performance.
Finally, the fourth step gives feedback to the employees. Organizations
calculate an overall productivity score as a summation of the performance
scores of all these factors.
The main advantage of the result -based approach to performance
measurement is that it converts strategy into operations with a more
holistic view. It takes into consideration the external environment of the
job such as customers a nd learning and growth. It does not simply rely on
financial indicators of job performance.
However, the disadvantages are the lack of focus on the human resource
aspect, and the absence of certain key stakeholders in the indicators.
5. The quality approa ch to measuring performance
This approach focuses on improving customer satisfaction by reducing
errors and achieving continuous service improvisation. This approach
takes into consideration both personal and system factors. Also, employers
take regular fe edback on the personal and professional traits of the
employee from managers, peers, and clients to resolve performance issues.
The Quality Approach mainly focuses on the use of the various quality
management techniques and process in order to continuously improve
business processes.
The advantages of this approach include:
 assessment of both employee and system,
 problem -solving through teamwork,
 use of multiple sources to evaluate performance and
 involvement of both internal and external factors
However, practitioners of this approach believe that this approach does not
correspond with the quality philosophy of an organization.
5.6 DIAGNOSING THE CAUSES OF POOR PERFORMANCE
One of the most important jobs for management in any organization is
dealing with p erformance problems and taking disciplinary action when
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84 uncorrected which in turn may send signals to employees that
unsatisfactory performance and inappropriate behaviour are acceptable , or
that employees can skirt or even break rules or regulations without fear of
discipline.
This situation exists because, too often, management thinks formal
discipline is the only way to deal with poor performance and unacceptable
behaviour. It exists b ecause management and labour, where employees are
represented by a union, failed to explore the many ways to deal effectively
with workplace performance issues in a more enlightened manner, using
approaches that provide greater potential for producing resu lts benefiting
both employees and management.
Performance and disciplinary problems, can be categorized into four
distinct types. If the goal is to correct the problem, then categorization is
crucial to determining an appropriate strategy for improvement. situations
where the employee’s quality and quantity of work is unsatisfactory,
through no justifying circumstances should be examined. The immediate
benefit of sorting problems into categories is that it encourages a thorough
analysis. It frames the exami nation of a broader array of possible causes
and, most importantly, assists in developing strategies for resolution that
are non -punitive and developmental.
The primary source of information is performance measurement data, as
well as behavioural observati on, complaints and incidents. The causes of
poor performance can originate in one of two areas: management - and
organization -centred causes; or employee -centred causes.
The managerial and organizational shortcomings that most often
cause unsatisfactory per formance include:
Lack of understanding of role and expectations: In many instances
management fails to tell subordinates what their role is and what is
expected of them. Performance problems arise when the individual
employee establishes performance expec tations that are different from
those of the organization. Or, in the absence of clearly defined standards
and objectives, the employee simply does not perform to management’s
expectations, undefined as they might be.
Inappropriate job assignment: Another managerial or organizational
cause of poor performance occurs when the corporation makes a poor job
assignment. This fault is more apt to be found in a growing organization,
but it also occurs in more stable situations. The problem lies in promoting,
trans ferring or otherwise assigning an employee to a job to which the
person is not fitted because of a lack of competency, personality or
interest.
Lack of training: There is little justification for assigning an individual to
a job the person isn’t trained fo r. Unless employees are adequately trained
for their positions, it is unreasonable to expect them to perform to
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85 Job design: In many instances poor performance arises because of the
design of the job. Employees will be motivated to per form well in jobs
that offer variety, challenges, responsibility and an opportunity for
personal growth. If the task the employee has to accomplish does not have
these characteristics, less than optimum performance can be expected.
Inadequate or poor super vision: If an employee’s supervisor is
providing inappropriate direction and information, negative or
inappropriate feedback, or inconsistent supervision, then performance
problems will usually occur.
A second major cause of unsatisfactory performance lies with employees
themselves. The problems that arise from these causes are varied and
numerous. In some cases, the problems are enough to cause unsatisfactory
performance by the individual. In other cases, they become evident only
when combined with organiz ational problems. The most common
employee -centred causes are the following:
Lack of interest: To perform an employee has to be interested in the work
that needs to be accomplished.
Personality: In some instances a person’s personality may be a major
cause of poor performance. Personalities are very difficult if not
impossible to change. In these cases, it may be necessary to move the
individual to another assignment more in keeping with the employee’s
personality. For example, not everyone’s temperament is suited to
customer service.
Limited capabilities: Every individual has a limit to what they can do.
Just as we all have physical limits as to how fast we can run or high we
can jump, there are limits to our capabilities to carry out certain
organizational ly required functions.
A review of the causes will allow the manager to better determine the best
approach to solving the problem. In unionized environments, it is at this
stage of the analysis that the level of co -operation between labour and
management w ill be most tested. There will be a temptation for the parties
to fall into traditional adversarial patterns of dealing with one another.
There is a need for objectivity and recognition that they have mutual
interests in resolving the problem in the best i nterest of all the involved
parties.

Performance improvement strategies
Identifying and clarifying role and expectations: As a strategy for
improving performance, managers should clearly outline the employee’s
role and what is expected. Role clarification can be facilitated if a job
description exists. This job description can serve as a basis for discussion
between the boss and subordinate. In a similar sense, the development of
objectives and work plans for the individual employee, along with
measurable standards of expected performance, can be of significant help
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86
Training and development: The challenge in achieving results with a
poorly performing employee is to be certain that a lack of training or skills
deficiency is the r eal reason for the performance discrepancy; and
therefore management is prepared to support the individual in applying the
learned skills once training is completed.
Organization development: In cases where the organization is acting as a
barrier to the at tainment of expected performance levels, dialogue should
take place with the employee regarding those barriers and how they might
be removed or avoided. This dialogue can take the form of a meeting,
involving all the employees in a department or work unit, to identify and
resolve problems.
It is important that such a meeting is well -planned and that action is taken
after the session. In many instances, organizations that follow this strategy
continue with the process of employee involvement by including sta ff in
the development and implementation of action plans for problem
resolution.
Job involvement/enrichment/ re -engineering: Where there is a low level
of interest, increased employee involvement or job enrichment will
produce higher performance levels. Th e type and nature of these changes
can be extensive and, in some cases, difficult to implement. However, in
many instances, organizations have responded to the alienation of workers
by dramatically re -engineering the whole way in which they produce
product s or provide services. These initiatives have produced substantial
improvements in performance not only for the individuals involved, but
also for whole organizational units.
Increased feedback: In many cases, employees perform below standard
because they do not receive timely and accurate feedback on their
performance. For increased feedback to be most effective, the employee
has to know and understand what is expected in specific measurable terms.
The employee must then receive, either through a superviso r or through
some kind of measurement and reporting mechanism, timely feedback on
performance.
Management development: The development and education of
supervisors at all levels of the organization in techniques of motivation,
communication, leadership and other essential managerial skills is an
important step in resolving performance problems.
Managers must be knowledgeable about managerial techniques if they or
their employees are going to be expected to perform effectively. Equally,
managers have to be e mpowered to be able to do something about
problems identified by employees. Most importantly, managers have to
realize that their effectiveness is determined by the performance of their
employees and that through training, support, information and
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87 Removal: Where there is a poor fit between the employee and the job,
then removal, either in terms of transfer or termination, has to be
considered. Too often, managers see this alternative as being the only one
without seriously examining other possibilities such as those outlined
above. In other cases, managers are not prepared to deal with a situation
that can only be resolved through relocating the individual. In the long -
run, both the individual and the organization benefit from removal and
therefore this alternative has to be seriously considered.
The implementation of this alternative is often not easy, particularly where
employees have certain seniority rights under a collective agreement.
Access t o good training programs and reasonable probationary provisions
in the case of transfer can facilitate the use of this solution. In the case of
termination, the provision of outplacement counselling and fair severance
benefits can ease fear and apprehensio n.
Implementation and Issues in Performance Management:
Performance management is a process for setting up a shared
understanding of what is to be achieved at an organization level. It
involves the alignment of organizational objectives with the individua l’s
agreed measures, skills, competency requirements, development plans and
the delivery of results. The focus is on performance improvement through
learning and development in order to achieve the overall business strategy
of the organization. Holisticall y, performance management integrates a
multitude of elements that contribute to effective management of the
human resource.
Performance management is a systematic process which a manager can
use to get the team members to achieve the team’s objectives and targets,
improve overall team effectiveness, develop performance capabilities,
review and assess team and individual performance, and reward and
motivate.
Effective performance management requires:
 Identifying tasks and accountabilities
 Defining competenc ies necessary to be successful in a position
 Ensuring that team members have the required competencies
 Having in place a system to develop competencies
 Providing timely feedback on how effectively the team
members are applying their respective competencies to
accomplish their tasks and achieve the goals
 Rewarding and motivating effective performance
In the event that performance does not meet established requirements, the
manager must understand the corrective processes and methods that can
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88 A performance management system needs to be designed with the unique
needs of an organization in mind. It should be aligned and supportive of
the organization’s mission, vision and values. And it should provide a
useful, and user -friend ly process for gathering, sharing, and documenting
feedback.
Following are the steps to follow to implement an effective performance
management system.
Establish a performance management timeline
As per an organization’s strategic objectives, a manager sho uld conduct
formal review of business model, sales cycles and other criteria that will
vary from one company to another. Performance management process
should be as unique as the company. While reviews have traditionally
been done on an annual basis, many people believe that this is far too
infrequent, including employees who prefer to have more frequent
development -related discussions with their managers.
Evaluation of employee performance
Those employees who evaluate employee performance should be those
most familiar with the work the employee is doing. But, while it may seem
that the manager is the obvious choice, the truth is that others may actually
be more aware of employee performance, peers, mentors, even customers.
Hence 360 degree reviews have be come common in many organizations;
it’s a process that involves gathering feedback from a wide range of
people who can offer insights into employees’ performance.
Performance review questions
Asking the right questions as part of the performance review pr ocess is
critical to ensuring that the feedback will be relevant and aligned with
organizational and individual goals. Once the manager is clear about the
purpose of the review it’s important to frame questions so they are clear
and non -biased. The intent of each question should align with the intent of
the performance management strategy. Another aspect of performance
review questions are ratings by providing a scale.
Performance management goals
This is an important consideration because performance revi ews should be
more forward -looking than backward -looking. In practice, though, too
often reviews focus more on past behaviour. Reviews should be more
developmental. Managers should work with employees to develop
performance management goals that are both a ligned with organizational
goals and reflect employees’ own personal and professional desires.
Employee feedback
Few formal performance management system may occur on a semi -
annual, monthly, or some other timeline, continuous feedback is
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89 and whether it offers feedback, guidance and both positive and
constructive feedback regularly enough to ensure employees are getting
the coaching and counselling they need. Today’s employees, more than
ever, crave that kind of input from their managers and others. Employee
feedback process may occur by one on one basis or check -ins, as part of
monthly dashboard reviews, etc. Cultivating a culture of continuous
feedback can help ensure employees are focu sed on the right goals and
objectives and have the resources and support to be successful.
Introduce employee and manager training
Performance management systems are only as good as the interactions
they drive between managers and employees. Training eve ryone, but
especially managers, to deliver quality and effective feedback is important
to ensure that the performance management process is working the right
way. Organisations must not assume that all managers have the knowledge
and competencies they need to conduct performance evaluations
effectively, especially if their experience comes from working in other
organizations. Each organization is unique and each organization’s
performance review process will be different.
Linkage with performance managemen t software
Successful performance management is about more than just forms and
meetings. It’s dependent on a number of steps and processes all coming
together to create an aligned and smoothly flowing system.
Following questions should be asked and examin ed
 How will you alert employees, and managers, about what they need to
do next?
 How will you follow up with managers who are falling behind?
 How will you stage reviews when you have more than one source of
feedback?
 How will you ensure anonymous feedbac k doesn't get released?
 Will you have HR or managers sign -off on reviews?
 How will you store and control access to the data?
 How will you analyse the data? And on and on.
 - Keeping track of, and staying on top of the many moving parts of an
effective, and continuous, performance management system can be
aided significantly by tying it all together with performance
management software.

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90 What can go wrong in performance management?
The basic objective of performance management is to develop and
improve the performance effectiveness of team members. The manager
and the team member work together to plan, monitor, review and appraise
the latter’s work objectives and overall contribution to achieving the
organization’s goals. Various types of tools are used in this process,
ranging from traits based or behaviour based to result based. Both formal
and informal communications are used to provide feedback. The feedback
could be regular or irregular. A lot of time and energy is spent in getting
the goals and mea sures right, reviewing performance, and appraising it.
However, things could go wrong and the required effectiveness of
employee performance is not obtained.
Some of the major challenges in managing performance could be as
follows:
Wrong Design
The perfor mance management system and tools must fit with the specific
needs of the organization. It cannot be a duplication of a system designed
and implemented in another organization, even an organization in the
same industry or the same business group. Intense c onsultation with
various stakeholders and users of the system is necessary. User trust is an
absolute necessity for the success of the system. The design should be
tried out on a pilot basis before it is rolled out to the organization as a
whole. All docum ents and forms must be in place. The system should be
fair and equitable. Performance management should be viewed as a
continuous process and not an activity conducted once or twice a year.
The design should also include mechanisms for rewarding performanc e
and handling poor performers.
Absence of Integration
The performance management system has to be integrated with the
strategic planning and human resource management systems as well as
with the organizational culture, structure and all other major
organi zational systems and processes.
Lack of Leadership Commitment
Leadership commitment and support is a must for smooth implementation
of the system. Leaders must drive the process and make performance
management an integral part of the management of the comp any. Leaders
contribute not only in setting the strategic direction and performance
measures but also in monitoring and reviewing performance across the
organization. They also reinforce the performance cycle by recognizing
and rewarding performance.
Ignor ing Change Management in System Implementation
Strategic management of change is a vital part of implementing the
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91 resistance. Communication would be a major intervention and a key tool
in managing the change. Implementation milestones and schedules must
be followed. Proper documents must be in place.
Incompetence
Competence to use the performance management system is necessary to
ensure smooth implementation of the system. Some of the m ajor skills
would include:
 Defining strategic objectives, performance indicators, core
competencies and performance contracts
 Defining performance measures that correspond to the KPIs
 Giving and taking feedback, conducting appraisal interviews, and
active listening
 Performance coaching
The focus would be on designing and implementing training and
development interventions that would help in developing the competence
of various job holders. Special emphasis would be on building the
behavioural dimensions of performance.
5.7 DIFFERENTIATING TASK FROM CONTEXTUAL
PERFORMANCE
Job performance consists of two main factors:
Task performance describes the core job responsibilities of an employee.
It is also called in -role prescribed behaviour and is reflected in spe cific
work outcomes and deliverables as well as their quality and quantity.
Whereas, Contextual performance goes beyond formal job responsibilities.
Also referred to as discretionary extra -role behaviour contextual
performance is reflected in activities su ch as coaching co -workers,
strengthening social networks within an organization and going the extra
mile for the organization.
In recent years, it has emerged as an important aspect of an employee's job
performance. The latter is no longer considered consi sting strictly of
performance on a task. Rather, with an increasingly competitive job
market, employees are expected to go above and beyond the requirements
listed in their job descriptions.
Examples of contextual performance include volunteering for addit ional
work, following organizational rules and procedures even when personally
inconvenient, assisting and cooperating with co -workers, and various other
discretionary behaviours. By strengthening the viability of social
networks, these activities are posi ted to enhance the psychological climate
in which the technical core is nested.
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92 One of the most important functions of an organization is to ensure that
employees are effective in performing their jobs. However, in recent
years, contextual performance is viewed as an integral part of overall job
performance.
By recent trends, practitioners and researchers view job performance as
moving beyond what is considered effective for performance on a task. In
today’s world, with changes in the global market and in creased
competition, employees are now expected to go beyond what is expected
in their job description.
Contextual performance captures this ability of employees to engage in
activities that contribute to the overall well -being of the organization. This
aspect of job performance is viewed as equally important as task
performance.
5.8 SELF -ASSESSMENT QUESTIONS
Q1. Which of the following is a determinant of performance?
a. Motivation
b. Punctuality
c. Self-awareness
Q2. Which of the following is a challenge in mappin g performance?
a. Employee behaviour
b. Wrong design
c. Business ethics
Q3. Which of the following is a dimension of performance?
a. Age
b. Gender
c. Quality of work
Q4. Suggest some performance improvement strategies
Q5. Describe some issues in implementing performance man agement.
Q6. Explain task performance and contextual performance.

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93 6
PERFORMANCE MANAGEMENT AND
EMPLOYEE DEVELOPMENT
Unit Structure
6.1 Introduction
6.1. Personal Development Plans
6.2. 360 Degree Feedback as a Developmental Tool
6.3. Performance Management and Reward System
6.4. Performance Linked Remuneration System
6.5. Performance Linked Career Planning and Promotion Policy
6.6 Summary
6.7 Self Assessment Questions
6.1 INTRODUCTION
Performance is considered to be an achieved outcome of the organization
in relation with its predetermined goals. It includes accomplishme nts
through individuals or group contribution to the organization‘s strategic
goals. The term performance encompasses economic as well as behavioral
outcomes.
Managers role is basically divided into 3 different segments:
a. Being: Performances based on Mana ger Competencies
b. Doing: Performance of Manager activities on the dependent roles at
different levels in the organization and on the organizational
performance as a whole.
c. Relating: Managers nature of Relationships which becomes an input to
the productive process with members of the role network -vertical or
horizontal to generate the desired performance as the output.
Manager's Potential is determined based on all 3 segments which is also
related to performance standards set.
6.1. PERSONAL DEVELOPMENT PLA NS
Personal development, which is a continuous lifelong process based on the
continuous improvement of a manager’s knowledge, skills and experience.
Personal development is beneficial not just for an individual but it also
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94 in the individual’s abilities and skills, impact the life of the oneself and the
around you positively. It increases a sense of purpose and boosts one’s
confidence.
A simple and effective way of keeping track of perso nal development is by
completing a personal development plan. A personal development plan,
also known as a PDP, is an action plan that you can use to identify:
1. Individual goals and achievement
2. Strengths and weaknesses
3. Areas that need improvement and develo pment to meet the goals
4. How to achieve the goals.
A plan development program is a form of self -evaluation and self -
reflection that is typically used in higher education and the workplace.
However, it is also essential exercise in the personal life. For exa mple, you
may want to complete a new assignment or need to learn a new language
for an overseas project, the program can help you achieve the goal.
Benefits of the program
1. It provides with clear goals.
2. It helps to identify the strengths and weaknesses.
3. It improves the employability.
4. It improves performance.
5. It increases motivation.
6. It helps to track progress.
7. It improves a sense of purpose.
8. It enhances the mental well -being and reduces stress.
Overall, a plan development program enhances the chances for suc cess
and maximizes the potential.
6.2. 360 DEGREE FEEDBACK AS A DEVELOPMENTAL
TOOL
The overall development of an employee consists of activities that are
initiated by an organization that would help in their prospective growth.
An effective performance man agement system is one which gives high
priority for employee development. Employee development encompasses
the following activities:
1) Identify and conduct necessary training for employees based on
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95 2) Provide enough opportunities to employees by recognizing their talent
and giving them more responsibilities. This will aid employees to
accelerate their growth to leadership positions in th eir organizations.
3) Identify employees who perform poorly and direct them to performance
improvement plan so that they can be effectively guided and groomed to
become good performers.
4) Identify and figure out if there are any other reasons for non -
performance of an employee, like non -availability of tools to perform their
job or any other external factors and remove those obstacles so that
employees are in a position to perform their job well.
The organization receives an excellent return of investment, when they
focus on the performance management system of an employee as the
system would be good due to the following reasons:
1) Well trained employees become more competent and execute their
responsibilities productively. They easily achieve the goals th at are set for
them under performance planning activity.
2) Employees become happy as their development is taken as the prime
focus. This will lead to better employee engagement and reduces attrition.
3) When leaders are groomed within the organization, it helps in
succession planning and reduces the associate costs and risks in hiring a
new employee.
4) When facilities are created for employees to do their job effectively and
obstacles are removed, it ensures that organization goals are met.
The organizati ons always strive to evaluate and guide their employees
toward constant improvement, but a standard performance review system
is always necessary. 360 -degree feedback is a method and a tool that
provides each employee the opportunity to receive performance feedback
from his or her various associated stakeholders that include supervisor or
manager, four to eight peers, reporting staff members, coworkers, and
customers. It also includes the self assessment of the employee who is
assessed for the appraisal. Th e feedback provides insight into the skills and
behaviors desired in the organization to accomplish the mission, vision,
and goals and live the values. The feedback is firmly planted in behaviors
needed to exceed customer expectations.
People who are chose n as feedback providers or raters are often selected in
a shared process by both the organization and the employee. These are
people who generally interact routinely with the person who is receiving
feedback.
Feedback provided for this review process can b e as detailed or brief based
on the choice of the person giving it. For example, a manager may provide
a detailed breakdown of goals they had discussed with the employee, the
progress toward those goals, and the way the employee dealt with
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96 how they it was working with them. For example, a coworker could say
something like "this worker has excellent interpersonal skills and also is
accountable with the tasks assigned."
360-degree feedba ck assists each individual to understand their strengths
and weaknesses and to contribute insights into aspects of their work that
need professional development.
6.3. PERFORMANCE MANAGEMENT AND REWARD
SYSTEM
Any performance management mainly involves manag ing employees and
managers, as their performance directly affects the performance of the
organization as a whole.
Bratton definition ‘Reward system refers to all the monetary, non -
monetary and psychological payments that an organization provides for its
employees in exchange for the work they perform.’
An employee reward system is a motivation tactic, organizations use to
help their staff feel motivated to complete a high -quality work. It's differs
from an incentive program because incentives are goal orie nted and
combined with a reward. A reward is for the team members who perform
exceptional work or are a great asset to a team.
Companies often use rewards as extra motivation by supplementing their
employee's tangible and non -tangible benefits. For instanc e, an employee
can earn a bonus at the end of a pay period on top of their base salary or
monetary rewards separate from their paycheck. This can include
additional paid time off, company lunches or gift cards.
Rewards schemes may include either Extrinsic rewards such as financial
payments and working conditions that the employee receives as part of the
job or Intrinsic rewards that relate to satisfaction that is derived from
actually performing the job such as personal fulfillment, and a sense of
contribut ing something to society. Several people who work for charities,
for example, work for much lower salaries than they might achieve if they
worked for commercial organizations. In doing so, they are exchanging
extrinsic rewards for the intrinsic reward of d oing something that they
believe is good for society.
Objectives of a reward scheme
a. To support the goals of the organization by aligning it with the goals
of employees.
b. To ensure that the organization is able to recruit and retain sufficient
number of empl oyees with the right skills.
c. To motivate employees.
d. To align the risk preferences of managers and employees with those of
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97 e. To comply with legal regulations.
f. To be ethical.
g. To be affordable and easy to administer.
h. Aligning the goals of the organization and employees
Types of reward scheme
Base pay, or basic pay, is the minimum amount that an employee receives
for working for an organization. For example, the employee may be paid
Rs.300 per hour for a minimum of 40 hours per week. The employe e will
therefore earn at least Rs.12000 per week. This will be paid regardless of
how many of those 40 hours the employee is actually working. A fixed
annual salary is another example of basic pay.
Basic pay may be supplemented by other types of remunerati on. A
contract labourer may be paid overtime for example if he works more than
40 hours per week, and a manager may receive some form of performance
pay in addition to the base pay. Basic pay is likely to address the lower
levels of Maslow’s hierarchy of n eeds mentioned above.
Performance -related pay is a generic term for reward systems where
payments are made based on the performance, either of the individual
(individual performance -related pay) or a team of employees (group
performance -related schemes).
6.4. PERFORMANCE LINKED REMUNERATION
SYSTEM
Most companies do performance appraisals once a year and use
performance management software for streamlining the process. Many of
the performance -related reward schemes depend on the performance of the
employees. As such, the employees’ performance has to be assessed. This
usually takes place during the appraisal process. Staff will be assessed on a
regular basis, for example twice a year. During the appraisal, targets will
be set for the next period, and rewards agreed if the targets are met.
In recent decades performance -related pay schemes are more prevalent in
many organizations. This has lead to a situation where a higher portion of
the employees pay is dependent directly on their performance. This
motivates e mployees to work harder, and reward those who make a greater
contribution to the organization's goals. This should lead to efficiency
savings. There are many types of performance -related pay such as:
1. Piecework schemes where a price is paid for each unit of output. These
schemes are appropriate where output can be measured easily in units.
They are typically used for paying freelance, creative people.
2. Individual performance -related pay schemes where the employee
receives either a bonus, or an increase in base pay on meeting previously
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98 are typically used for middle managers in private sector organizations and
for professional staff.
3. Group -related performance -related pay schemes are similar to
individual, where rewards are paid based on the achievement of targets set
for a group of employees, such as a particular department, or branch of a
company, rather than for an individual. Since the rewards apply to a group,
they are likely to be based on a pre -determined quantitative formula, rather
than on assessment of staff.
4. Knowledge contingent pay where an employee will receive a pay
rise or a bonus, or both, for work -related learning.
5. Commissions are a form of remuneration normally us ed for sales staff
who may receive a low basic pay, but will then receive commission, based
on a percentage of the amount of their sales.
6. Profit -related pay is a type of group performance -related pay scheme
where a part of the employee’s remuneration is linked to the profits of the
organization. If the company’s profits hit a pre -determined threshold, a
bonus will be paid to all members of the scheme which is usually a
percentage of the basic pay.
7. Stock option plans aids staff in receiving the right to buy shares in their
company at a certain date in the future, at a price agreed today. Stock
option plans are most appropriate for the senior management of
organizations as they are the people who have the most influence over its
share price.
6.5. PERFO RMANCE LINKED CAREER PLANNING
AND PROMOTION POLICY
Since performance appraisal is the foundation of career planning,
employees work towards goals that support the needs of the business and
their professional development.
The purpose is to build relationsh ips and facilitate conversations between
employees and managers throughout the year with regard to performance
goals, career goals, and career planning which is communicated through
constructive feedback in a positive manner. This boosts the morale of the
employees and helps to identify individual career developmental plans.
Based on these evaluations, employees can develop their career goals,
achieve new levels of competencies, and chart their career progression.
Promotion means the advancement of an emplo yee to a higher job
involving more work, greater responsibility and higher status. It may or
may not be associated with the increment in salary. It is one of the best
forms of incentives and it provides higher responsibilities, better salary,
high morale a nd job satisfaction to the employees. Practically, all the
employees aspire for career advancement and promotion is an
advancement of the employee in the organizational hierarchy. It will be
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99 of present employees by filling the skilled and responsible positions from
within rather than from outside.
Edwin B. Flippo, “A promotion involves a change from one job to another
that is better in terms of status and responsibilities.”
A company may have an open or a closed, a formal as well as an informal
promotion system, promotional system and so on. Promotion is
distinguishable from transfer also in the sense that the latter refers to
changes in jobs that involves little or no change in statu s, responsibility
and pay.
Promotion system involves clear definitions of line of future advancement,
detailed personnel records, specific promotion plans, definite allocation of
responsibility for identifying promotable individuals and a centralized
coordination of promotion function. Promotions may be based on either
the “rank -in-the-job”, where the content of the job including level of skill,
efforts and responsibility form the basis or “rank -in-the-man”, where
emphasis is laid on job analysis, job eval uation, organizational planning,
etc. These determine the pay and status of the individuals in the
organization.
Promotion may be temporary or permanent, depending up on the needs of
an organization, an employee is promoted and may be classified into the
following types:
1. Horizontal Promotion where an employee is shifted in the same
category with increase in pay, responsibilities and change in designation.
For example Second Division Assistant is promoted as First Division
Assistant. This type of promotio n may take place within the same
department or from one department to another or from one plant to another
plant.
2. Vertical Promotion where an employee is shifted from a lower category
to higher category with increase in pay, status and responsibility it is called
vertical promotion. For example a Sales Manager is promoted as General
Manager in the company.
3. Dry Promotion where promotion is made without increase in salary or
remuneration. For example a college professor was promoted as Head of
the Depar tment without an increase in salary. In dry promotion there will
be a change in designation and responsibility without corresponding
changes in remuneration.
There are two bases of promotion:
1. Promotion based on Seniority based on the total length of ser vice and is
counted from the date of his appointment in the organization. This method
is followed in Government service.
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100 2. Promotion based on Merit/Performance is generally followed in private
organizations. Promotions are based on merits of the employ ees, i.e.,
qualifications, knowledge, skills, honesty, initiative, interpersonal
relationship, effective communication and of course performance in the
job. Seniority is not given weight age.
While there exists a third method, a blend of seniority and meri t used in a
balanced manner.
The linking of appraisal to pay as well as promotion is an attempt to ensure
that informed decisions are taken about the career progression of
employees. The objectives of linking performance with promotion policy
are as follow s:
1. To integrate the growth opportunities of the executives with the
fulfillment of the company’s objectives.
2. To identify, train, and develop competent personnel with growth
potential.
3. To provide a policy environment for high levels of performance.
4. To prov ide a system of equality in opportunity, equity in assessment,
and uniformity in implementation among all the areas of the company
in the matter of promotion such as units, business groups, directorates,
and officers.
5. To seek and provide a continuous team of work sustained high levels of
competence in the company.
6.6 SUMMARY
Performance includes accomplishments through individuals or group
contribution to the organization‘s strategic goals. A manager's potential is
determined based on 3 segments which is also related to performance
standards i.e. being doing and relating. Personal development, which is a
continuous lifelong process based on the continuous improvement of a
managers knowledge, skills and experience. Personal development is
beneficial both fo r an individual and also for the growth of the businesses
and society as a whole. It also provides an increased sense of purpose and
boosts one’s confidence. The organizations always strive to evaluate and
guide their employees toward constant improvement, but a standard
performance review system is always necessary. 360 -degree feedback is a
method and a tool that provides each employee the opportunity to receive
performance feedback from his or her various associated stakeholders. An
employee reward system is a motivation tactic, organizations use to help
their staff feel motivated to complete a high -quality work. A reward is for
the team members who perform exceptional work or are a great asset to a
team. It comprises of the basic pay and performance relat ed pay. The
linking of appraisal to pay as well as promotion is an attempt to ensure that
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101 6.7 SELF ASSESSMENT QUESTIONS
1. Discuss in brief the various segments of manager role in perfor mance.
2. What is PDP ? Explain the action plan needed for such programs.
3. “Feedback is essential from all stakeholders of the organization for
performance appraisal and promotion.” Comment.
4. “Rewards are the best way to motivate the employees to perform
better .” Do you agree? Justify with reasons.
5. “Remunerations are an essential component for an employee to
perform more efficiently.” Elucidate with examples.
6. How does promotion policy play a vital role in career planning and
performances of an employee?

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102 7

CONDUCTING STAFF APPRAISALS
Unit Structure
7.0 Introduction
7.1 Need
7.2. Skills Required
7.3. The Role of The Appraiser
7.4. Job Description and Job Specification
7.5. Appraisal Methods
7.7. Data Collection
7.8. Conducting an Appraisal Interview
7.9. Follow Up and Validation
7.10 Summary
7.11 Self Assessment Questions
7.0 INTRODUCTION
A staff appraisal is a routine evaluation of an employee's job performance
and overall contribution to a firm. Appraisal is the process of evaluating or
judging the nat ure or value of something or someone.
Definition:
Staff Appraisal (performance appraisal) is defined as a systematic process,
in which the personality and performance of an employee is assessed by
the supervisor or manager, against predefined standards, s uch as
knowledge of the job, quality and quantity of output, leadership abilities,
attitude towards work, attendance, cooperation, judgement, versatility,
health, initiative and so forth.
Staff appraisals are crucial because they provide feedback, a crucia l
component of a successful workplace. It helps develop the culture of your
business and makes sure that you foster an atmosphere where everyone
can work effectively. Given that, ongoing, informal discussions are
crucial. Regular reviews can also be incorp orated into virtually any cycle
of performance management. By doing this, one can create a system
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103 employee is on the proper track and can also automate those cycles with
appropriate HR software in place.
The three objectives of conducting staff appraisals are:
i. calculating pay raises
ii. assisting with organizational planning, placement, or suitability; and
iii. for training and development.
7.1 NEED
The improvement of an organization's human r esources is achieved by
using performance appraisals for evaluation and developmental objectives.
1. Evaluation: To inform employees of their standing in relation to
performance criteria and objectives. A successful evaluation includes the
following:
i. Create s measurable performance standards for standards of
performance.
ii. Establishes measurable performance standards that everyone can
agree upon.
iii. Continues to give staff members performance comments.
iv. Measures performance precisely.
v. Evaluates performance in r elation to performance benchmarks.
vi. Where appropriate, develops personnel or takes corrective action.
The two main reasons for performance evaluation are administrative
purposes and developmental purposes.
2. Development purpose: Help people with their train ing and ongoing
personal growth. Employees that have grown professionally are more
driven, competent, and committed to fulfilling their job responsibilities.
They can significantly increase the effectiveness of the organization. A
rigorous, structured proc edure called performance appraisal compares
employee performance to predetermined standards.
3. Administrative purpose: Documenting decisions made by human
resources on performance and issues that are related to it is one of the
administrative purposes.
i. Choo se which staff will be promoted.
ii. Determine any job transfers or changes.
iii. Identify the employees' weak points in performance.
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104 v. Comply with legal obligations.
vi. Assess the effectiveness of training initiatives.
vii. Make decisions on pay and bonus issues.
viii. Choose between retention and dismissal.
Hence, the purpose of staff appraisal is to evaluate personnel against a set
of standards.
1. Supplying data on the performance rankings used to base decisions like
salary fixing, promotion, etc.
2. Review of subordinates' performance.
3. Supplying data that assists in advising the subordinates.
4. Obtaining data to identify staff skill, knowledge, etc. deficiencies.
5. A comparison of the staffs objectives set at the most recent appraisal to
the factors that c ontributed to the level of performance.
6. To check whether the individual's development needs, which were
recognized at the previous appraisal, have been met, as well as any
roadblocks to effective performance, have been addressed.
7. Goals for the upcoming yea r.
8. Needs for training and development
Following points to be kept in mind while conducting the staff appraisal:
i. The line manager and the employee complete and sign off on the
majority of appraisals. The employee's development and progress are
documented i n the appraisal.
ii. Management staff members are free to disagree with or disagree with
an evaluator's choice on an appraisal.
iii. It's crucial to keep in mind that an appraisal is not a disciplinary
procedure, and the employer shouldn't utilize one to impose
disciplinary punishment. Yet, if a company implements an "employee
improvement process," performance -related difficulties may
occasionally be resolved by referring to prior employee evaluations.
iv. Performance evaluations must take into account employee
manageme nt abilities.
v. The department of personnel provides detailed instructions for
applying policy.
vi. Evaluation to be made only on the basis of performance of employee
at work.
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105 Basic Terminology:
a) Appraiser: An appraiser is a person who conducts a formal evaluation
of a worker's performance.
b) Appraisee: The term "appraisee" refers to a worker who is the subject
of a manager's performance evaluation.
c) Who carries out the performance evaluation? The past and the future
are both taken into account in appraisals. They provide an opportunity
to talk about and create goals for employee performance,
development, and support and are often performed by line managers.
7.2. SKILLS REQUIRED
Appraiser needs the foll owing skills :
i. The appraiser must remain unbiased while evaluating the
performances of the staff. The assessment must be done only based on
the performances as per the set criteria based on the industry
standards.
ii. They must have strong analytical skills
iii. Should be able to communicate the evaluations to the staff
iv. They are expected to evaluate the staff based on future forecasts and
demands of the organization
v. Should not be hassled by emotions
vi. They must measure the performances based on the key performance
indicators of the assessee.
7.3. THE ROLE OF THE APPRAISER
Performance management and human resource management both revolve
around appraisals. It is crucial for all employers that employees
understand their position, goals, and overall purpose. They must also
ensure that people perform to the best of their abilities, realize their
potential, and receive just compensation. Improved organizational
performance follows from this. It also helps to determine any training
requirements and, if necessary, to offer training and development so that a
person may assist the organization in achieving its goals. The element of
the performance review is this. Finally, by attempting to predict the type
of job that a person may be capable of in the future, assessments are
crucial for helping someone grow their career. Hence the following could
be reviewed:
1. To conduct an interview of the individual staff for performance
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106 3. Assess each employee in accordance with the company's standards
and the evaluation's findings, and
4. Must have the willingness to offer suggestions.
7.4. JOB DESCRIPTION AND JOB SPECIFICATION
Job Description: A job description is a written statement of the obligations
and functions of a particular job within an organization.
1. It aids in gathering data for jobs.
2. It is carried out to establish what must be provided for a specific job.
3. It makes it clear who will be reporting to them.
4. It gives the hiring personnel a clear understanding of the type of
candidate each department needs.
5. It assists with staff evaluations.
Job Specification: A job specification is a list of the talents, abilities,
personality traits, and other characteristics that a candidate must possess in
order to execute the job.
1. It assists Applicants in determining whether they are qualified to apply
for a certain job opening.
2. It aids the organization's recruitment personnel in comprehending the
degree of qualifications and attributes.
3. It provides comprehensive information abo ut any position, including
employment duties, necessary technical and physical capabilities, and
ability requirements.

Even though creating a work description and job specification is not
legally required, they are crucial to achieving the intended resul ts. These
data sets aid in establishing the value, need, and extent of a certain job.
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107 Job Description
Job descriptions contain fundamental information about the job that can be
used to market a particular position and draw in a talent pool. It contains
details like the job title, location, reporting to and from employees, job
summary, nature and objectives of a job, tasks and duties to be carried out,
working conditions, machines, tools, and equipment to be utilized by a
potential worker, as well as any po tential risks.
The goal of the job description
i. The primary goal of a job description is to gather information about a
particular position in order to advertise for it. It aids in attracting,
focusing on, hiring, and selecting the ideal candidate for each o pen
position.
ii. It is carried out to ascertain what must be provided for a specific job.
It makes it clear what workers are expected to do if they are hired for
that specific position.
iii. It gives hiring managers a clear picture of the kind of applicant each
department or division needs to complete a certain task or job.
iv. In addition, it specifies who will get reports.
Job Specification
A job specification, also referred to as employee specifications, is a
written description of the educational requirements, part icular qualities,
level of experience, physical, emotional, technical, and communication
skills necessary to perform a job, duties associated with a job, and any
unusual sensory demands. Also, it involves traits like good physical and
mental health, leader ship abilities, emotional intelligence, adaptability,
and flexibility, as well as moral principles, good manners, and creative
thinking.
Job Specification's Goal
i. Job specifications, which are based on job descriptions, assist
candidates in determining whet her they are qualified to apply for a
certain position or not.
ii. It helps recruiting staff for a business, understand what level of
qualifications, traits and set of attributes should be present in an
applicant to make him or her qualified for the job openin g.
iii. Job specifications provide comprehensive details about any position,
including duties, ideal technical and physical abilities, communication
skills, and much more.
iv. It aids in deciding which applicant is best suited for a given position.
The job analysis includes both the job description and the job
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108 instruction for both employers and employees on how to conduct the
entire recruitment and selection process. Both forms of data are very
impo rtant for matching skills to jobs, assessing performance, identifying
areas for improvement, and determining the value of a given position.
7.5. APPRAISAL METHODS
Employee performance is assessed based on how successfully they meet a
set of goals that have been identified as essential to their job's success.
This strategy is also known as management by objectives.
The most recent catchphrase used by businesses worldwide is "be paid
according to what you contribute"; as a result, the majority of businesses
are focusing on performance management, particularly individual
performance.
The emphasis of performance reviews is shifting in the current climate to
place more emphasis on professional advancement through conversations
and dialogue with superiors.
Systems for measuring, grading, and reviewing performance have evolved
to be more complete, systematic, and tailored to each individual employee.
It aids in choosing the best applicant for a certain position.
Several authors have categorized all of the evaluation techniques
developed to far in different ways. While DeCenzo and Robbins divided
evaluation techniques into three groups —absolute techniques, relative
techniques, and objective techniques —Aswathappa divided them into two
groups —past- and future -focused. j ob.
All evaluation techniques have been divided into as many as six categories
by Michael R. Carrell including rating scales, comparative methods,
crucial incidents, essay, MBO, and combination approaches. The
methodologies have been divided into two major groups by Rock and
Levis: restricted interpretation and broad interpretation. Several ways of
evaluation have been grouped by Beatty and Schneier into four categories:
direct indices, goal -setting, absolute procedures, and comparative
methods.
Strauss and Sayles provide a more popular classification of appraisal
techniques into two groups, old techniques and modern techniques.
Modern methods, on the other hand, place more emphasis on the
evaluation of work results, i.e., job achievements, than the evaluati on of
personal traits, whereas traditional methods place emphasis on the rating
of the individual's personality traits, such as initiative, dependability, drive
creativity, integrity, intelligence, and leadership potential. Modern
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109

Traditional Techniques
1. Ranking approach
The ranking approach, in which each employee is compared to all others
in order to determine their relative value, is the most traditional and
straightforward formal systema tic method of performance review. The
employees are listed in order of best to worst, or from highest to lowest. In
doing so, the employee scoring highest on the trait being measured as well
as the person scoring lowest are both indicated. Once all of the employees
who needed to be rated have been ranked, the next highest and the next
lowest will be placed between the next highest and lowest. There will be
ten ranks from 1 to 10 if there are ten employees to be evaluated.
Limitations
(i) Irrespective of how muc h better or worse one is than another, it does
not indicate this.
(ii) Ranking people is challenging when a lot of employees are being
evaluated, and
(iii) It is quite challenging to compare one person to another who exhibit
different behavioural pat terns. The paired comparison approach of
performance appraisal was developed to address these flaws.
2. Paired Comparison:
In this strategy, each employee is individually evaluated against each
other, typically based on a single trait. The rater is given a number of slips,
each with a pair of names on it. He or she marks the employee he believes
to be the better of the two. The final ranking of an employee is based on
how frequently they are rated as superior to others. The following formula
determines the number of possible pairs for a specified number of
employees:
N (N -1)/2
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110 3. Grading Approach:
In this approach, certain classifications of value are systematically
determined in advance. Emplo yees may fall under one of three categories:
excellent, satisfactory, or unsatisfactory. There may be more grades than
just three. Performance of the employee is compared against grade
definitions. The grade that best depicts the employee's performance is
subsequently assigned. Exams that follow the semester system and the
selection of candidates for positions in government both use this form of
grading. The fact that the rater may give the majority of the employees
better performance ratings is one of the main disadvantages of this system.
Exams that follow the semester system and the selection of candidates for
positions in government both use this form of grading. The fact that the
rater may give the majority of the employees better performance ratings is
one of the main disadvantages of this system.
4. Forced Distribution approach:
Tiffen developed the forced distribution approach to get rid of the
widespread propensity for most employees to be rated at the higher end of
the scale. The technique makes the assumption that employees'
performance levels correspond to a normal statistical distribution, or 10,
20, 40, 20, and 10%. This is helpful for evaluating the promotion potential
and job performance of numerous individuals. It typically eliminates or
lesse ns prejudice.
Tiffen developed the forced distribution approach to get rid of the
widespread propensity for most employees to be rated at the higher end of
the scale. The technique makes the assumption that employees'
performance levels correspond to a nor mal statistical distribution, or 10,
20, 40, 20, and 10%. This is helpful for evaluating the promotion potential
and job performance of numerous individuals. It typically eliminates or
lessens prejudice. Also, it is very straightforward to comprehend and u se
when evaluating the performance of individuals in organizations. No
single grade would improve in a ratings system as a result of its flaw.
5.Forced -Choice Method:
J. P. Guilford is the creator of the forced -choice approach. Each statement
in each grou p is rated by the rater according to how well it describes the
subject of the evaluation. There are two statements in the typical forced -
choice strategy, both positive and negative. Each statement contains a
weight or score that is hidden from the rater. T he human resources
department rates both positive and negative sets of statements. On the
basis of all statement sets, the final rating is determined. This form of
employee assessment makes it more objective. The only drawback linked
with this strategy is that the actual construction of multiple evaluative
statements also called 'forced -choice scales', takes a lot of time and work.

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111 6. Checklist Method:
The main goal of using the check -list method is to lessen the burden of the
rater's evaluation. With th is strategy, the HR department creates a list of
statements, or questions, with yes -or-no replies. The checklist is then
given to the rater, who must check the applicable options that apply to the
appraisee. Each question has a weight associated with it ba sed on how
significant it is.


The HR department receives the check list once it is finished and uses it to
generate the final ratings for all appraises based on all questions. When
creating the questions, an effort is made to gauge the rater's level of
consistency by asking the same question repeatedly but in various ways.
However, one drawback of the checklist approach is that it is challenging
to compile, analyze, and weigh a multitude of comments on employee
contributions and qualities. This approach may not be cost -effective
because a checklist of questions must be created for each category of
employment, which is especially true if the organization has several
different job categories. That will take a great deal of time, money, and
effort.
6. The Criti cal Incident Technique:
This technique concentrates the rater's attention on those crucial behaviors
that make the difference between completing a task satisfactorily or not
(effectively or ineffectively). The process of applying this method to
evaluate pe rsonnel entails three parts. A collection of notable on -the-job
behavior from certain situations is first compiled, both good and poor.
Second, a panel of specialists rates or weights these instances based on
how desirable it would be for them to carry out a task. Finally, a check -list
of instances that characterize employees as "good" or "bad" is created. The
rater is then provided the checklist to use in assessing the staff.
The main goal of this grade is to inform employees who can efficiently
carry out their duties in urgent situations. This is the case since most
people in typical situations work similarly. The critical incident method's
advantage is that it emphasizes behavior and, hence, performance rather
than personalities. It’s disadvantages includ e the requirement for managers
to constantly record key incidents, which adds to their workload and takes
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112 essential to work performance is determined by the rater's conclusion. As
a res ult, the technique is susceptible to all the drawbacks associated with
subjective evaluations.
7. Graphic Rating Scale Method:
The visual rating scale is one of the most well -liked and straightforward
methods for evaluating performance. Also called a linear rating scale.
Each employee is evaluated using the printed appraisal form in this
approach. The form lists qualities (such quality and dependability) and a
range of work performance qualities (from below average to above
average) for each quality. On the b asis of discrete points along the
continuum, ratings are given. The standard procedure is to use a five -point
scale. Each appraisee is given a rating by the rater, who then adds up the
allotted values for each attribute to determine which score best captur es
the performance of each trait.


This strategy works well for evaluating an employee's diverse work
behaviors. But, while judging an employee's behavior at work, it is equally
susceptible to the prejudice of the rater. Any uncertainty in the graphic
scale's design leads to prejudice when evaluating an employee's
performance.
Modern Methods:
1. Management by Objectives (MBO):
Peter F. Drucker introduced a novel idea, called Management By
Objectives (MBO), in his book back in 1954 in order to solve this issue.
The concept of MBO as was conceived by Drucker, can be described as a
"process whereby the superior and subordinate managers of an
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113 major areas of responsibility in terms of results expected of him and use
these measures as guides for operating the unit and assessing the
contribution of each its members". In other words, MBO, when reduced to
its core, calls for the manager to set goals with each employee and then
frequently review their progress.
Setting goals, establishing performance standards, conducting
comparisons, and conducting periodic reviews are the four key
components of an MBO program.
i. In goal -setting, objectives are established for each person to achieve.
These objectives are jointly set by the superior and subordinate. The
desired outcome that each employee is expected to attain is referred to
as the aim.
ii. Performance standards set expectations for workers based on the
previously planned time period. Employees l earn what needs to be
done, what has already been done, and what needs to be done once
they begin working.
iii. The third phase compares the agreed -upon goals with the actual level
of goals achieved. This enables the assessor to identify the causes of
the discr epancy between the employees' actual performance and
expected performance. Such a comparison aids in identifying the
training requirements for raising employee performance. It can also
study the variables that have an impact on performance but are
outside of the control of the personnel.
iv. When actual performance deviates from the standards established in
the first step -goal establishing stage, corrective action is then taken in
the periodic review step. Periodic progress reviews are handled
constructively ra ther than punitively, in line with the MBO principle.
2. Behaviorally Anchored Rating Scales (BARS):
An approach called "Behaviorally Anchored Rating Scales (BARS)" was
developed by some organizations in the 1960s in order to achieve
objectivity in performanc e evaluation due to the issue of judgmental
performance evaluation that is inherent in traditional techniques of
performance evaluation. BARS are explanations of different levels of
behavior in relation to a particular performance dimension.
With the use o f concrete behavioral examples to anchor a quantified scale,
it combines the advantages of storytelling, crucial incidents, and
quantified ratings. BARS' supporters assert that compared to other
performance rating methods, it provides better and more equit able
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114

Because it offers benefits including a more precise gauge, clearer
standards, greater feedback, and consistency in evaluation, the BARS
technique of performance appraisal is thought to be superior to th e
traditional ones. BARS has several restrictions, though. According to the
research on BARS, it too is distorted, as are other rating scales. The
study's findings made it evident that the lofty hopes for scale
independence were not supported by studies o n BARS to this point. In
conclusion, BARS may perform better than traditional rating methods, but
it is obvious that they are not a magic bullet for attaining high inter -rater
reliability.
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115 3. Assessment Centers:
Assessment centers are mostly utilized in the corporate world to gauge
potential for executive or managerial roles. An assessment center is, by
definition, a hub where managers congregate to take part in well planned
simulation exercises. During two to three days, senior managers evaluate
them with ps ychologists and HR experts. In order to successfully do the
actual job, the assessee is required to participate in in -basket activities,
work groups, simulations, and role playing. Following the recording of the
assessee's behavior, the raters gather to di scuss their combined data and
observations before providing their assessment of the assessee. The
assessees are also given feedback regarding their strengths and faults at
the conclusion of the process.
The assessment centers offer a number of distinct adv antages, such as
more accurate evaluation, little bias, proper executive selection and
promotion, and others. Yet, there are also several drawbacks and issues
with the assessment center methodology. The method is somewhat
expensive and time -consuming, suff ocates good performers, discourages
weak performers (rejected), fosters unhealthy competition among
assessees, and has negative impacts on individuals who are not chosen for
assessment.
4. 360 – Degree Appraisal:
An employee's performance is evaluated by his supervisor, peers,
subordinates, and customers with whom he interacts while doing his work
duties in a 360 -degree feedback appraisal system. All of these appraisers
respond to survey questions created with this objective to provide
information or feedback on an employee. All of the data is then collated
using a computerized system to create customized reports. These reports
are shown to me regarding the rated personnel. They then meet with me
appraiser —whether it be one's superior, subordinates, or peers —and
provide the information they feel is relevant and valuable for creating a
plan for self -improvement.
7.6. RATERS ERRORS
Rater mistakes are systematic errors in judgment that happen when one
person watches and assesses another. How we assess a person's
performance may be influenced by personal beliefs and prejudices. The
fact that the observer frequently isn't aware that she or he is making these
mistakes makes them more challenging to remedy.
Rater error types
• Halo Effect - The propensity to extrapolat e incorrectly from one facet of
an employee's performance at work. This is because it's influenced by
one or more standout qualities, either good or bad.
Leniency is the propensity to overrate everyone and to give exaggerated
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116 • Central Tendency - The inclination to consider every person as average
despite variances in performance.
• Strictness - The propensity to give everyone a bad rating and to be
unduly critical of output.
• Contrast Effect - The p ropensity for a rater to assess an individual in
relation to other people rather than specific work criteria.
• First Impression Mistake - The propensity for a manager to generate an
initial opinion about someone, whether favorable or bad, and then
disrega rd future information that contradicts this impression.
• Similar -to-Me Effect - The propensity to judge others more favorably if
they are thought to be similar to the leader. An effective team must have
a wide range of talent, style, aptitude, perspective , background, and
opinion. The most crucial rater error to avoid might be this one.
To reduce the Raters error :
It's crucial to work on preventing rater errors because they can
significantly reduce the value of the Performance Development Process.
Self-Assessment Questions to Help Prevent Rater Mistakes
• Do I base my evaluations on evidence supporting my observations of the
Employee's conduct, or do I rely solely on my perceptions?
• Am I evaluating this Employee's skills individually, or have I made
gene ralizations about how they are performing?
• Have I considered the competencies of this Employee over time, or have
I made generalizations based on my early impressions of her or him?
• Have I acknowledged any prejudices I may possess so I can avoid lettin g
them color my judgment?
• Did I rate this employee based on how they actually behaved or on how
they compared to other people?
7.7. DATA COLLECTION
As a manager, wide range of alternatives for gathering information about
each team member's performance is imperative. They are:
1) Goal Progress: In terms of their regular reporting, you can assign a
portion of the performance data gathering to each team member. These
reports can be outlined as a component of the objectives you establish or
as an element of a job function for which the individual is accountable or
involved. As an illustration, call reports, sales reports that include
potential revenue and the possibility of closing the transaction, or reports
that detail the number of calls made within a specif ic time period may be
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117 2) Generating Data: This area of data collection frequently pertains to
the perceptions people have of their jobs and the company.
3) Third -Party Comments: You need to collect information on a
person's relationship s with third parties in order to truly understand how
well they are performing and contributing to the business. Depending on
the makeup of your team and each person's function, you can gather
different kinds of data from these third parties. These actions might be
impacted by variables beyond the person's control. For instance, a
salesperson might be particularly good at scheduling meetings with
potential clients, delivering sales presentations, and getting the chance to
quote for the company's services. N onetheless, if the rates offered are not
reasonable, the salesman may not be able to make sales.
7.8. CONDUCTING AN APPRAISAL INTERVIEW
While doing a review interview there are actually four fundamental sorts
of assessment interviews, and each has a differ ent set of goals:
1. Satisfactory and promotable - The employee is going to be promoted
because of his or her satisfactory job performance. The interview is
the simplest.
2. Satisfactory and not promotable - The worker performs his or her
duties satisfactorily , but is not yet prepared for a promotion. Some
workers are content in their current roles and do not desire
promotions.
3. Unsatisfactory but correctable - If an employee's performance on the
job is subpar but correctable, you should create an action plan t o
address it.
4. Unsatisfactory and uncorrectable - If the employee's performance is
unsatisfactory and uncorrectable, the appraiser must nonetheless
provide an action plan for them to follow in order to improve it.
The following procedures should be kept in mind when conducting an
appraisal interview:
Step 1: Prepare for the interview. First, get the information. Using the
employee's feedback and the objective work data. Second, evaluate the job
description, prior evaluations, and performance standards for the
individual to compare performance to. Finally, schedule the interview at a
time that works for both parties and give yourself enough time to complete
it.
Step 2: Provide the employee with enough information to enable them to
comprehend the conversatio n. You should offer the employee at least a
week's notice to assess his or her performance, read the job description,
identify any issues, and compile questions and comments in order to
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118 Step 3: Fairly conduct the interview first of all, refrain from using phrases
like "You're too slow in producing those reports" when speaking with the
employee. Instead, you ought to contrast the employee's work with a
benchmark. Enco urage the employee to speak next. Next, after the
communication is complete, you should make sure the employee is aware
of exactly what they are doing well and wrong. Last but not least, an
employee may become defensive when told their work performance is
subpar. Whatever the case, dealing with a defensive subordinate is a
crucial assessment ability.
Step 4: Acknowledgement 1. Examine performance in the past and
current. If you only conduct appraisals once a year, it's simple to give
comments just on issues that are still recent in your memory. In addition to
giving your staff members regular, informal feedback, you should spend
some time between evaluations to record any noteworthy events or
accomplishments that each employee has. Even while it may initiall y seem
like more work, doing so could greatly increase the value of your
performance reports. 2. Be truthful and concise. The time during
evaluations is used to address problems that might be hurting an
employee's performance or the health of the team as a whole. If someone
is a bad performer, your team members will probably notice it, and if you
don't confront it, you risk losing their respect. Provide clear and constant
communication. Your employee and you should part ways with a clear
understanding of wh at you both need and anticipate from one another
moving forward.
7.9. FOLLOW UP AND VALIDATION
It's time to turn your attention away from the past performance of
your employees and onto their potential after you've done and
finished performance appraisal o r evaluation meetings with them.
1. Develop performance objectives with each worker. These
objectives centre on the employee's particular performance at work,
including his production, results, competences, and behaviour.
2. Define each employee's personal de velopment objectives.
These objectives centre on enhancing the employee's knowledge,
abilities, and skills. In addition to developing the areas where the
employee's knowledge and abilities are lacking, the goal is to build
on their strengths.
3. Make meaning ful goals. Genuine goals are embraced by both
you and your team and are clear, attainable, prioritized, quantifiable,
supported by action plans, aligned with the company, related to your
goals, and backed by action plans.
4. Wander around. Your effectiveness in the performance
appraisal process, as well as your effectiveness as a manager, will be
greatly enhanced if you spend time working directly with your
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119 degree of contact and communication with them throughout the
evaluation period.
5. Be a coach. Take the time to regularly recognize your
employees when they’re performing particularly well, and to provide
them with formal and informal coaching, guidance, feedback,
direction, and follow -up not only t o further build their strengths, but
also to upgrade their performance in areas where it has fallen short.
6. Remember your role. You are your employees’ central role
model, and that makes you their most compelling trainer
7.10 SUMMARY
Appraisal is the proces s of evaluating or judging the nature or value of
something or someone. Staff appraisals are crucial because they provide
feedback, a crucial component of a successful workplace. It helps develop
the culture of your business and makes sure that you foster an atmosphere
where everyone can work effectively. Given that, ongoing, informal
discussions are crucial. The two main reasons of performance evaluation
are administrative purposes and developmental purposes. An appraiser
ensures that people perform to the best of their abilities, realize their
potential, and receive just compensation. Improved organizational
performance follows from this. It also helps to determine any training
requirements and, if necessary, to offer training and development so that a
person may assist the organization in achieving its goals. The role of the
appraiser is essential in the evaluation of a performance of the appraisee
for which certain skill are required.
The performance evaluation is done based on the approaches used by
different authors. Two methods used are traditional and modern
approaches for evaluating the performances of the staff. It is necessary for
the organizations to also keep at bay the raters error while evaluating and
accordingly ensure proper data is collecte d and validated. The evaluation
must also regularly be checked and followed up to find the improvements
in the staff.
7.11 SELF ASSESSMENT QUESTIONS
1. Explain the ways to conduct staff appraisal?
2. Why is there a need to have staff appraisals in the organizati on?
3. Explain the traditional appraisal methods in brief.
4. Write a short note on:
i. Assessment Centre
ii. MBO
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120 iv. Checklist Method.
v. ‘A manager must collect data for performance evaluation.’ Justify.
vi. Why must an appraisal interview be necessary? Explain wit h certain
procedures essential to conduct the interview?
vii. ‘The past performance of employees and their potentials must be
regularly checked even after you've finished performance appraisal or
evaluation meetings with them.’ Explain.

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122 8
PERFORMANCE CONSULTING
Unit Structure
8.1 Concept
8.2 The Need for Performance Consulting
8.3 Role of The Performance Consulting
8.4 Designing and Using Performance Relationship Maps
8.5 Contracting for Performance Consulting Services
8.6 Organizing Perf ormance Improvement Department
8.7 Summary
8.8 Self Assessment Questions
8.1 CONCEPT
Performance Consulting is defined as a strategy process that boosts
individual and organizational performance to create business results. The
word "strategic" is used with intent. Future organizational and corporate
success depends on strategic work. A method used to collaborate with
management on these kinds of initiatives is performance consulting. With
performance consulting, businesses can improve both the individual an d
collective performance of their workforce. It places a focus on attaining
distinctly defined company goals.
Performance consultants carry out analyses, create training interventions,
assess the effectiveness of the interventions, and, as necessary, modi fy the
interventions based on the data. When business leaders and senior
management notice that their staff are not performing to the acceptable
standards or meeting the necessary KPI’s, they frequently hire
performance consultants. Some instances of probl ems with human
performance that performance consultants can assist with: Customers of a
national grocery chain are leaving the store without making any purchases
because the lines are too long and the cashiers are counting up customers
too slowly. Due to t heir lack of thorough product knowledge, a highly
qualified sales force routinely falls short of its sales targets. When the
nursing staff treats patients poorly while they are there, patients are
providing negative comments on exit surveys for a city hosp ital.
8.2 THE NEED FOR PERFORMANCE CONSULTING
Performance consulting is a technique that boosts employee performance
within a company to create business results. It focuses on the gaps between
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123 investigate and clarify the "how" and "what" that organization intends to
achieve in order to, in the end, improve the performance of the
organization as a whole.
The annual performance evaluation is supplemented with performance
management. Empl oyees and management are made aware of what to
anticipate at the annual appraisal through this. It informs both the manager
and the employee on ongoing modifications to the performance
management procedure, what each can do to make it more efficient, and
how performance might be enhanced generally. Employees perceive
managers' value in them as reflected in continual performance
management. Workers think that their bosses are concerned about their
goals, their work, and any problems that may arise on the wor kplace.
Moreover, they grow more receptive to receiving criticism.
When working with a department that is primarily concerned with the
"people side" of the business, performance consultants often encounter
three types of work.
1. Transactional Work
Administra tive tasks comprise transactional work. Usually, the
requirements of a specific person are addressed in this job. Transactional
queries are made when a manager asks for clarification on how to apply a
certain organizational regulation or when a worker asks how her tuition
reimbursement payment is progressing. Each of these tasks —transactional
requests —is required of procurement managers and call center agents.
Requests involving suppliers must be processed. His work must be
completed quickly and effectively . Although his line of work is significant,
it is not strategic.
2. Tactical Work
Designing and putting into action strategies that enable effective work -
group performance is the emphasis of tactical work. Examples include
implementing a compliance training p rogramme using an e -learning
technique or implementing a more efficient work process. A strategy is
designed to be supported by tactics. The issue is that a lot of tactical
decisions are made with little to no connection to a strategic objective. In
these situations, the solutions are primarily events or programmes.
3. Strategic Work
The long -term and overarching goals and interests of the organization
benefit from strategic work. It calls for precise business objectives that
serve as a guide for the performa nce standards of those who support those
objectives. A plan without tactics is merely a fantasy; strategic effort
includes tactical labor. Performance consultants want to make sure that the
work we conduct to develop and put into action techniques directly
supports one or more of the organization's strategic goals.
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124 In order to make wise selections, the performance consulting mental model
is useful. The SHOULD -IS-CAUSE logic and the Need Hierarchy make
up this mental paradigm.
Need Hierarchy
The Need Hierar chy is the first component of the mental model for
performance consulting. Four different sorts of needs are included in his
hierarchy and must be assessed and matched:

i. Business Needs : Business needs are frequently mentioned in for -
profit enterprises. T he phrase is frequently replaced with organization or
operational need in a not -for-profit organization. The phrase "agency
necessity" may be used by a governmental entity. Whatever it may be
named, this need must be met. The organization's survival is thr eatened if
this is not done over time.
ii. Performance Needs : Performance needs are the on -the-job
achievements and behavior expected of people functioning in a certain job
and contributing to the realization of organizational goals. Performance
needs pinpoin t what employees must perform more, better, or otherwise
differently in order to meet organizational objectives. Behavioral words
are used to describe performance requirements. The people who are
achieving outstanding results —the top performers —are the bes t source for
this information.
iii. Organizational Capability Needs : The infrastructure of the
organization, which includes its work procedures, information systems,
and incentives, is referred to as having the necessary organizational
capability. The goal of this infrastructure is to support and facilitate the
work group's required practices for the achievement of business objectives.
Both tangible and intangible organizational capability aspects are possible.
Intangible variables examples include rules, rewar ds, clearly defined
expectations, and degree of power. Tangible elements that affect
organizational capability include the availability of vehicles, computers,
and enough space.
iv. Individual Capability Needs : The skills, knowledge, and qualities
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125 as individual capacity needs. Needs that can be developed often include
knowledge and skills. The greatest way to acquire attributes, however, is
through the selection process because the dev elopment process itself may
be time -consuming and even ineffective.
SHOULD -IS-CAUSE logic
To examine business and performance circumstances, SHOULD -IS-
CAUSE, is the second component of the mental model. A tool was
developed to assist performance consultant s as they gather data required to
solve a specific business problem or opportunity when working with a
client on a strategic endeavor. The device is also known as a Gaps Map a
performance advisor. You aim to close gaps by understanding where there
are disc onnects between what SHOULD be happening and what actually
is. By using a Gaps Map, you can gather data that focuses on the
SHOULD (objective), IS (actual state), and CAUSE (factors that might
facilitate or obstruct attaining the specified goals). The goal of Gaps Map
is to organize relevant SHOULD -IS-CAUSE information that is already
known about the situation, ensure that the business and performance
SHOULD, as expressed by the client, are identified in specific terms, and
identify what information is rele vant but unknowable so that you can
determine what information must be obtained to determine workable
solutions. The Gaps Map aids you in avoiding deciding on a course of
action right away.
8.3 ROLE OF THE PERFORMANCE CONSULTING
There are five main steps i n the performance management cycle. To
evaluate an employee performance, following actions are essential:
1. Organizing
Setting and discussing goals with staff is part of this step. These objectives
should be stated again when the individual is hired, even if they should
have been stated in the job description to draw in quality applicants. Based
on the performance management procedure used in your firm, you might
want to give each of these objectives a percentage in order to assess how
well they were achie ved.
2. Monitoring
Managers must keep an eye on how well their staff is performing in this
phase in relation to the objective. Continuous performance management
enters the scene in this situation. With the appropriate performance
management software, you c an monitor your team's progress in real -time
and make necessary adjustments and course corrections.
3. Developing
Using the information gathered during the monitoring phase in this phase
can help employees perform better. To boost performance or maintain
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126 them a task that will help them advance their knowledge and performance
at work, or change the plan for employee growth.
4. Rating
Periodically and at the time of the performance review, each employee's
performance must be evaluated. To assess the level of employee
performance and make adjustments as necessary, ratings are crucial. These
evaluations can be given for 360 -degree feedback from peers and bosses
alike.
5. Rewarding
The perfor mance management process and employee engagement both
depend on recognizing and rewarding good performance. One can
accomplish this through social recognition, or with a comprehensive
employee incentives programme that consistently recognizes and honors
exceptional performance inside the company.

8.4 DESIGNING AND USING PERFORMANCE
RELATIONSHIP MAPS
Performance mapping is centered on the characteristics of peak learner
performance and the factors that currently exist that are impeding that
performance. Wh en performance consultants build training programmes,
their main goal is to alter learners' perspectives in a way that leads to
successful business outcomes.
The business effect, a modest, measurable objective that establishes the
parameters of a corporate training solution, is defined as the first step in
the performance mapping process. Increasing or decreasing anything
organizationally is a normal business impact.
Simply said, "directed conduct" or "purposeful work" defines performance
(Rudman, 1998, p. 205). In other words, people are hired so that
organizations can achieve the particular and defined results (outputs) that
jobs exist to achieve. So, in order for firms to succeed, employees must
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127 using machinery, and other tasks are examples of job activities. These
actions must be viewed in light of what the company expects employees to
do and how well they are to do it. Hence, "optimal" performance is defined
as concentrated conduct t hat produces intended results.
A "performance gap" develops when the "actual" performance falls short
of the "ideal" performance (optimal - actual = gap). It may be considered
"bad" performance: precise, agreed -upon departures from expected
behavior if the difference between actual performance and optimal
performance starts to have a negative effect (Mitchell & O'Reilly, 1983).
Keep in mind that variations must be specified and approved by both the
performer and the assessor.
Every organizational system and its internal operations result in an output.
People, technology, materials, information, and time are all components of
outputs. There are two different affects (results) that performance might
have on the output:
Positive Impact: The performance has a "d esired impact" on the output
when paired with time, material, information, and technology. The output,
in turn, alerts the performer to the adjustments that must be made, further
improving the result. As a result, both performance and production have an
impact on one another.
Negative Impact: Every discrepancy from the ideal performance has an
"unwanted influence" on the final product. Lack of education, the
surrounding environment, motivators, etc. could all contribute to the
discrepancy. The output that m iscues the performer as a result of this
performance gap has a negative effect (inverse relationship), which in turn
exacerbates the issue.
Performance Evaluation
We may define the issue, identify the factors that contribute to it, and
choose a performance remedy with the aid of the performance analysis.
(1991, p. 33; Rossett & Sheldon).
1. The first step is to measure the gap to ascertain its size and the impact it
actually has on the organization (describes the problem). Even while the
performer, supervisors , managers, peers, etc. may be aware that there is a
performance problem, it usually takes an analysis to fully understand its
scope. That is, what specifically is incorrect and what ought to be taking
place?
2. The gap's "drivers" (causes) are then identifi ed. Even if it is sometimes
simple to spot a problem, finding the source of the issue usually takes
some serious investigation. Yet no matter what you do, the issue will
persist if the fundamental cause is not found.
3. A system of solutions is then chosen. T o measure the gap, identify all
the factors, and then choose a partial remedy, the Performance Analysis
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128 iteration, we must consider the gap to see if the chosen solution will in fact
close it. This approach can be performed multiple times until a complete
set of solutions is found. The aggregate of the "partial solutions"
eventually becomes the Solution System.

Performance Relationship Map
An examination of the training requirements is carried out if certain
information, abilities, and attitudes are necessary. After defining the
necessary needs, an effective strategy for creating training that will meet
those needs is to do a training requirements analysis (Watkins & Kaufman,
1998). To d o this, the learners, job or task, and environment are identified
(Molenda, Pershing, Reigeluth, 1996). Moreover, a "cognitive job
analysis" is typically required (Clark, R., 2002).
The following three procedures (nodes) are then put into practise for
training:
1. Design: The process of design produces a blueprint of the strategies that
will support the performance goals listed in the analytical procedures.
Learning goals and learner assessments (tests) are created if training is
necessary (Tovey, 1997, p. 44). Also, the fundamental "architecture" is
established (Clark, R., 2000).
2. Development: According to the majority of instructional design
theories, the development process should include at least three steps:
Gathering content, adding context (experien ce that results in performance),
and chunking and sequencing the material are the first three steps.
3. Education: This is the Implementation phase according to the ISD
paradigm. Experiences that provide us the opportunity to (Wertenbroch &
Nabeth, 2000):
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129 ● Absorb from the environment WYSIWYG
● Do the activities
● Interact and socialize
● Reflection (Dewey 1933)
8.5 CONTRACTING FOR PERFORMANCE
CONSULTING SERVICES
A business need, its underlying cause(s), and the training plan (if
appropriate) that may address tha t need are all identified during
performance consulting. Not all business challenges can or should be
resolved with training, so it's critical to determine whether this is a viable
option before moving further with performance consulting. E.g. the CTO
head meets with the L&D leader due to an increase in risky email habits
among staff members from various departments. She asks the L&D leader
to arrange for company -wide cyber security training.
Enablers who specialize in improving employees' performance are c alled
performance consultants. They work with enterprises to identify
performance issues and provide fixes. They are specialists in business,
human performance technology, partnership, and consulting. A
performance consultant's primary responsibility is to determine and meet
an employee's performance needs, but they are also Change Agents who
are responsible for developing and sustaining strong relationships with
organization leaders recorders for training and non -training actions, to
measure any changes in performance and cost savings. Assessments are
used by consultants to research performance gaps and the causes of these
gaps.
Five stages of performance consulting have been defined by the training
industry as forming a continuous cycle of activity: contra cting, analysis,
recommendations and agreements, implementation, and results
assessment.
Performance -based contracting, sometimes referred to as performance -
based logistics or performance -based procurement, is a method of
procuring goods and services that aims to produce measurable supplier
performance. Developing strategic performance indicators and closely
linking contractual payment to success against these criteria are the main
goals of a PBC strategy. Availability, dependability, support,
maintainabili ty, and total cost of ownership are examples of common
metrics.
The most effective way to do this is through long -term, incentive -based
contracts with agreed -upon, quantifiable, and specified operational
performance standards set by the client. The goal of the incentive -based
performance measurements is to encourage the supplier to adopt new
procedures that provide better performance and cost efficiency. This
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130 payment is contingent upon meeting project deliverable and milestones.
With PBC, it is essential to create a clear set of standards for the provider
because a portion or the entirety of the payment is dependent on the
provider's performance and the purchaser is not involved in the specifics of
the process.
The following is a typical procedure for implementing a PBC:
Business Case: A document typically provided to top management to help
them make decisions that examines the risks, rewards, and other potential
consequences of a PB C.
Outcome: A succinct statement describing the anticipated outcome or
ultimate deliverable of the contract is called an "outcome."
Measures: Determine the metrics that will be used to evaluate the
performance of the organization in relation to the outcome statement.
Levels: Set performance standards for the performance metrics, i.e., what
standards the contractor must meet.
Payment: Create a set of payment curves that outline the pay for
performance system, i.e., the contractor's compensation based on
performance level.
Incentives: Establish a set of rewards that will encourage positive behavior
and deter undesirable behavior.
Contract: Draft, evaluate, workshop, and finalize a contract that addresses
every facet of the relationship's performance, payment, and terms &
conditions.
Review: Evaluate and analyze the results of the PBC while taking into
account the various definitions of success from the parties to the contract.
8.6 ORGANIZING PERFORMANCE IMPROVEMENT
DEPARTMENT
As a manager or leader, you must tr aditionally focus on the four areas
known as the "4 P's of Performance" if you want your team to perform to
its greatest potential.
They are:
● Priorities:
● People
● Processes
● Practices
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131 Performance management is a systematic procedure used by organizations
to include both individuals and groups of employees in enhancing
organizational effectiveness in the pursuit of their missions and objectives.
Employee performance management entails:
● Scheduling tasks and establishing expectations;
● Continuously assessing p erformance;
● Building performance capability;
● Periodically summarizing performance ratings; and
● Rewarding excellent performance.
Effective businesses have managers and staff who naturally practice good
performance management and effectively carry out eac h major component
procedure. Routinely, objectives are set and work is scheduled. Employees
receive feedback as well as measurements of the goals' progress. Although
there are high expectations, the abilities required to meet them are
carefully developed.
Rewards, both official and informal, are used to acknowledge actions and
outcomes that help a task be completed. Performance management is
achieved naturally and successfully when the five component processes —
planning, monitoring, developing, rating, and r ewarding —work together
and support one another. It is therefore necessary to have a performance
management model to improve the performances in the organization.

Performance Management Model

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132 Employee Development
From the organization's overall objecti ves down to the group, unit, or
team, and finally to the individual employee, there must be a direct line of
sight. While providing transactional work standards to employees is
simple, writing standards for occupations that are more challenging to
quantify is far more complicated (e.g. management analysts, attorneys,
human resource specialists, etc.) For these kinds of assignments, the
emphasis must be largely on the caliber and timeliness of the work
delivered, with another indicator for internal customer satisfaction
comprising goals and objectives (at every level) of the company
Performance Metrics Tracking
Review the group's performance every day, every week, or every month as
necessary. The more often the review sessions, the better. Teams of leaders
frequently have to switch off on who is in charge of these ongoing
evaluations and discussions of group performance. The more this
information is published in real time (through your IT system), the better.
This puts it in everyone's face, encourages discuss ion of performance
concerns, and makes it possible to respond to issues with performance
more rapidly. It is also possible to utilize a central site to measure overall
performance and to show where it makes sense to motivate everyone to
pay attention to pe rformance all the time.
Assess and Appraise
Utilize data to form opinions about how the organization is doing, and then
act accordingly by changing staffing or organizational structure, policy, or
processes. You can also decide whether additional training is necessary, or
whether a change in management's approach might be necessary. You can
also give praise when it is appropriate. One firm discovered they were
spending too much time conducting meetings after measuring how much
time they were spending on var ious tasks. They were able to spend more
time on direct labor since they reduced the amount of time they spent in
meetings. Therefore, the idea of evaluating and assessing also applies to
specific personnel. So there are no shocks when it comes time for
performance reviews, they should frequently receive feedback on how they
are doing. Hence it is recommended to give staff feedback each month,
preferably in the form of printed report cards.
Reliable Outcomes
Reliable consequences for all levels of performan ce and behavior should
be a core component of any performance system. In other words,
exceptional teams or personnel should be recognized; average performers
should receive grade raises but often not incentives; and bad performers
should face more scrutiny and potential repercussions if their performance
doesn't improve. The premise behind this is that the system should
motivate workers to do better, which it will achieve if it is transparent and
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133 On the other hand, if a low performer notices t hat management
consistently takes action against individuals who don't live up to their
standards (while initially attempting to help them improve), he will do
everything in his power to step it up because he understands that his job
may be in danger if he doesn't improve.
Yet, if people think that management just rewards its favourite and
punishes those it disapproves of, the culture will erode because people will
think that what matters is not what one does but who knows. On the other
hand, employees are considerably more likely to be interested and
dedicated if they feel they will be treated fairly and honestly.
Renewal
Renewal is based on the idea that you should reflect on the past, learn from
your failures, and improve the organization via renewal. The Organization
Systems Design (OSD) Model, which was improved by Paul Gustavson, is
the finest tool for doing this. It helps to find the links between the systems
and assess what worked and what didn't.

By comparing the past to this model, you can underst and how your design
decisions have a significant impact on your culture. Also, you may see any
discrepancies in your systems and applications that may have confused
your staff and distracted you.
Having a culture that genuinely rewards performance is the g reatest
approach to achieve outstanding long -term performance. Although it is
difficult, creating such a culture is not impossible either. Such a culture
necessitates a workforce that is well -developed and devoted, a
management team that is willing to impl ement the systems in a fair and
equitable manner, and the coordination of all of your systems with a clear
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134 8.7 SUMMARY
Performance Consulting is defined as a strategy process that boosts
individual and organizational performance to cr eate business results.
Performance consultants carry out analyses, create training interventions,
assess the effectiveness of the interventions, and, as necessary, modify the
interventions based on the data. The annual performance evaluation is
supplemente d with performance management. Employees perceive
managers' value in them as reflected in continual performance
management.
When working with a department that is primarily concerned with the
"people side" of the business, performance consultants often en counter
three types of work i.e. transactional work, tactical work and strategic
work. So, in order to make wise selections, the performance consulting
mental model is useful. The SHOULD -IS-CAUSE logic and the Need
Hierarchy make up this mental paradigm.
Performance management cycle, states the actions that needs to be taken to
evaluate an employee's performance in the organization. Performance
mapping is centered on the characteristics of peak learner performance and
the factors that currently exist that are impeding that performance. Both
performance and production have an impact on one another. Hence it is
important to evaluate the performances based on the factors that contribute
in aiding the performance analysis. Therefore several performance
consulti ng stages have been defined by the training industry as forming a
continuous cycle of activity i.e. contracting, analysis, recommendations
and agreements, implementation, and results assessment. Also, building a
culture that genuinely rewards performance i s the greatest approach to
achieve outstanding long -term performance. Such a culture necessitates a
workforce that is well -developed and devoted, a management team that is
willing to implement the systems in a fair and equitable manner, and the
coordinatio n of all of your systems with a clear performance emphasis.
8.8 SELF ASSESSMENT QUESTIONS
1. ‘With performance consulting, businesses can improve both the
individual and collective performance of their workforce.’ Elaborate.
2. Explain the need for performance c onsulting in an organization.
3. What are the three types of work that are often encountered by the
performance consultants while working with any department?
4. How is a mental model useful in making wise selections by
performance consultants?
5. Write a short not e on : Performance management cycle
6. Explain the importance of performance relationship maps in an
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135 7. How is performance evaluated and practiced in organization?
8. ‘Performance -based procurement, is a method of procuring goods and
services that aim s to produce measurable supplier performance.
Comment.
9. What is Performance -based contracting? Describe its procedures in
brief.
10. Write a note on organization development.


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136 9
REWARD FOR PERFORMANCE
Unit Structure
9.1.Reward System
9.1.Components of Reward System
9.2.Objective of Reward System
9.3 Linkage of performance management to reward and compensation
System
9.4 Performance Management Pitfalls and Remedies
9.5 Recogni zing the problems and Pitfalls Limitations, Shortcoming or
efficiencies of performance appraisal
9.6 Efficiencies of performance appraisal
9.7 Guideline for performance appraisal and good practices
9.8 Summary
9.9 Self Assessment Question
9.1. REWARD S YSTEM
The term "reward system" refers to all financial, non -financial, and
psychological benefits that an organization offers to its staff in exchange
for the job they complete.
Extrinsic and intrinsic incentives may both be included in reward
programmes. Extrinsic rewards are things an employee gets as part of their
job, such as money and favorable working conditions. The satisfaction that
comes from doing the work itself, such as a sense of personal fulfillment
and of making a positive contribution to so ciety, is referred to as intrinsic
reward. Employers can encourage their employees to produce high -quality
work by implementing an employee reward system. Since incentives are
goal-oriented and include a reward, they vary from this programme. Team
members who perform exceptionally well or are a valuable addition to the
group receive rewards.
Companies frequently supplement their employees' pay with rewards to
provide them with additional motivation. An employee may, for instance,
receive a bonus in addition to their basic pay at the end of a pay period.
Employees may also receive other tangible or monetary rewards distinct
from their paycheck. This can consist of extra paid vacation days, business
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137 The advantages and purposes of a reward scheme –
The following are some justifications for implementing an incentive
system:
1. Greater attendance: Using a reward system may result in greater
attendance because it can improve employees' motivation to come to work
and complete their tasks. Additio nally, it might motivate workers to
remain with the company longer.
2. Better work quality: Because your team members are aiming for
goals other than their basic pay, your team's work quality may improve.
Everyone wins because the job you receive is of a high er caliber, and team
members are rewarded for their growth.
3. Greater job satisfaction: Because organizations respect and honor
their contributions, employees may experience greater job satisfaction
with a reward system. This act of gratitude may encourage y our team
members to feel more devoted to the business.
4. Faster project completion: If your team members are working hard
and efficiently to receive a reward of some sort, it can help meet project
deadlines early. As a result of meeting project deadlines ear lier than
anticipated and producing high -quality work, this can enhance your
company's reputation.
9.1. COMPONENTS OF REWARD SYSTEM
They make up the reward system of an organization. All of these factors
must be properly taken into account when creating an efficient reward and
compensation system, as explained below:
1) Financial Reward: Financial reward is direct monetary remuneration
that includes paying employees in cash for job completed or increased
effort. For instance, pay, bonuses, commission, and o ther compensation.
2) Non -Financial Reward: Non -financial rewards are indirect financial
payments, such as the financial worth of goods and services an
organization gives its staff members in lieu of direct payment of spendable
cash. For instance, health i nsurance, life insurance, subsidized
transportation, free uniforms, interest -free loans, and so forth.
3) Reward Policies: Reward policies will address the following issues -
i) Compensation Level: The company's stance on compensation levels
reveals wheth er it is a high payer, content to pay median or average rates
of pay, or even, incredibly, accepts that it must pay less than the average.
ii) External Competitiveness against Internal Equity: The external
competitiveness of an organization's jobs is measu red in comparison to the
salaries of its rivals. When an employer pays wages that are proportionate
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138 equality exists. This is established according to the employer's opinion of
the importance of the task accomplished.
iii) Assimilation Policies: When a new or significantly updated pay
structure is introduced, policies on how existing employees should be
assimilated, or modified into it, must be devised. These regulations specify
where individuals should be put in their new grades and what will happen
to them if their new grade and pay range cause their current rate to fall
within or exceed the new scale for their position.
iv) Protection Policies: Protection (also termed safeguarding) is the
process of dealing with the issue when, following the introduction of a
new pay structure, the existing salary of some employees may be above
the maximum for their new grade and they are therefore 'red -circled. The
usual rule is that no one should l ose any of their current wages in these
situations.
v) Transparency: Without a clear explanation of the organization's
incentive policies and procedures, there is little hope of developing a
fruitful psychological contract. Achieving transparency requires
participation and communication.
4) Psychological Satisfaction: This type of reward includes chances to do
meaningful work, social contacts with coworkers, opportunities for job
training and career advancement, recognition, company brand, and a
variety of other related elements.
5) Pay Structures: Depending on market rates and the organization's
employment structure, businesses may create multiple pay structures.
Exempt and non -exempt structures, pay structures based on job families,
and pay structures base d on location are examples of typical pay
structures:
i) Exempt and Non -Exempt Pay Structures: Exempt positions are exempt
from the act's provisions requiring overtime compensation. The primary
parameters of pay for these positions are typically specified as an annual
salary. The act's provision on overtime pay applies to non -exempt jobs.
The core pay for these jobs is therefore stated as an hourly pay rate. These
pay structures are set up by businesses for administrative cases. Exempt
and non -exempt jobs a re distinguished by some generally consistent
characteristics, According to the Fair Labor Standards Act, exempt
employment are typically executive, administrative, or professional
positions with a wide range of responsibilities. Non -exempt positions are
typically not supervisory in nature, and their responsibilities are frequently
clearly outlined.
ii) Compensation Structures Based on Job Family: Several job families
include executive, managerial, professional, technical, clerical, and artisan
positions. M oreover, pay structures are created based on job families, each
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139 iii) Pay Structures Based on Geography: Businesses with numerous,
geographically dispersed locations, such as sales offices, manufacturing
plants, service centers, and corporate offices, may create pay structures
based on standard pay rates in various geographic regions because local
economic conditions may affect pay levels. Compared to the south and
southeast of the country, the northeast of the Un ited States has a
significantly higher cost of living.
6) Basic Pay: Base (or basic) pay refers to the amount of compensation
(the set wage or salary) that makes up the rate for the position. It might
give you a way to decide on additional income based on your
performance, talent, or competency. Moreover, it might control life
insurance and pension eligibility. Jobs' base pay scales take into account
both internal and external relativities. Some type of job assessment that
classifies jobs in a hierarchy and measures job evaluations' internal
relativities may be used (although the trend now is to play down the notion
of hierarchy in the new process -based organizations). By monitoring
market rates, external relativities are evaluated.
7) Job evaluation is a me thodical procedure for determining the relative
value or size of a work within an organization. It establishes internal
relativities and serves as the foundation for creating a fair grade structure,
grading tasks within the structure, and managing relativi ties. It does not
have a direct impact on pay scale. The creation of job descriptions or role
profiles is based on the examination of jobs or roles.
8) Contingent Pay: Extra monetary rewards that are contingent upon
performance, competence, contribution, s kill, and/or experience may be
given. Contingent pay is the term used to describe this. Such payments can
be referred to as variable pay if they are not included to basic pay. Pay at
risk is another term for variable pay. For instance, commission -only sale s
agents' compensation is completely vulnerable. The most common forms
of contingent remuneration are:
i) Individual Performance -Related Pay: This type of compensation
determines base pay increases or cash incentives based on performance
evaluations and ra tings (also known as merit pay).
ii) Bonuses: Cash payments made in lump sums in accordance with the
accomplishments made by individuals, teams, or the company as
compensation for successful performance.
iii) Incentives: Payments associated with achieving previously established
goals; these payments are intended to inspire individuals to work at a
higher level. Often, the goals are specified in terms of production or sales.
iv) Commission: This unique type of incentive pays sales people based on
a proportio n of the sales value they produce.
v) Service -Related Pay: This type of pay rises in fixed increments
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140 vi) Competence -Related Pay: The amount of pay that is tied to
competence varies depending on the individual's level of competence.
vii) Contribution -Related Pay: This system links compensation to inputs
as well as results (performance) (competence).
viii) Skill -Based Pay (also known as Knowledge -Based Pay): This type of
compensation is based on the amount of skill a person reaches.
ix) Career Development Pay: It rewards individuals for accepting more
responsibility as their career progresses laterally within a broad grade (a
broad -banded pay structure).
9) Al lowances: Allowances are components of pay that come in the form
of a distinct sum of money for things like overtime, shift work, call -outs,
and residing in big cities like London. London or large -city allowances
were occasionally combined; businesses that were streamlining their pay
structures may "buy out the allowance" and raise base pay as a result.
10) Total Earnings: Base pay plus any additional payments are typically
added together to determine total earnings.
11) Total Remuneration: The sum of all c ash payments (total earnings)
and benefits that employees receive is their total remuneration.
9.3 OBJECTIVE OF REWARD SYSTEM
What do businesses want a rewards programme to accomplish? The
following are among the most essential objectives:
● to support organ izational objectives by coordinating employee goals
with these.
● to make certain that the company can find and keep an adequate
number of qualified employees.
● to inspire workers.
● to match the organization's risk preferences with those of managers and
worker s.
● to abide by regulatory requirements.
● to act morally.
● to be inexpensive and simple to use.
9.4 LINKAGE OF PERFORMANCE MANAGEMENT TO
REWARD AND COMPENSATION SYSTEM
To improve employee retention and dedication to work, which eventually
improves the employe e's contribution factor, a connection between
incentive and performance should be developed. Pay for Performance is a
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141 paid. variable compensation depending on their great performan ce should
be stated in addition to the base pay, based on the job description.
Although a pay increase can help employees feel more motivated, what
they really want is for their work to be valued and recognised by society.
This is where employee recognitio n programmes come in. Many workers
lose interest in their jobs.
Advantages of Performance -Based Rewarding
1. Using Performance -based an organization's and employees' benefits
from a rewarding approach might be numerous.
2. Reduced attrition rates encourage long -term commitment and personnel
retention. The organization's financial stability is aided by lower
recruitment costs as a result of higher staff retention and a lower
attrition rate.
3. Encourage workers to perform at a higher level in accordance with the
objectives of the company. Workers are given a clear understanding of
what has to be done to achieve the goals.
4. Increased employee involvement (Participation Management) leads to
improved autonomy, increased productivity, and increased satisfaction.
Workers ar e more confident and innovative at work because they feel
like they are a part of a great success.
9.5 PERFORMANCE MANAGEMENT PITFALLS AND
REMEDIES
Conventional employee performance evaluation's drawbacks:
1. Competencies/Skills Gaps: Organizations turn a blind eye to the lack of
certain skills in the people, positions, or groups they are in charge of.
Because of this ignorance, managers frequently fail to recognise the
abilities that both the company and its people require.
2. Irregular performance activi ties: There aren't enough formal
management and performance evaluation processes in place. As a result,
until the next planned performance review, organizations are ignorant of
performance concerns that are brewing or entrenched within the
workforce.
3. La ck of Objective Evaluation: All too frequently, a manager's
judgements about an employee's performance are used. Thus, if a manager
provides less than positive feedback, their neutrality may be called into
question —even if they are the most successful mana ger.
4. In most organizations, the job description serves as the main yardstick
by which performance is assessed and controlled. Employees are left
wondering what their performance expectations are due to irrelevant or
ambiguous job descriptions, and manag ers find it difficult to manage such
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142 5. Insufficient feedback: Telling employees merely how well or poorly
they perform is insufficient as a performance management measure.
Feedback must provide specific steps for performance improv ement in
addition to reviewing and highlighting performance gaps.
6. Formal evaluation systems are insufficient: One problem with
performance management systems is that they are sometimes too formal.
These methods are ineffective because they are frequentl y done using a
template - or cookie -cutter -based approach and are frequently planned as
yearly or biannual processes. When it comes to timely and in -the-flow-of-
work performance management, an excessive dependence on formal
assessment methods is frequently insufficient.
7. Lack of a "strategy" for dealing with below -par performance:
Identifying performance gaps is useless if no plan is in place to fix them.
A missed opportunity for performance management results from the
absence of a performance improvement strategy.
Improved Performance Management: The Way Forward
Here are a few remedies to the issues with performance management
outlined above:
1. Gaps in competencies and skills must be identified for improvement and
improved performance management, and they must then be promptly
filled. To remedy these gaps, appraisers may recommend further training,
improved supervision, or even the assignment of coaches and mentors.
2. Regular assessments, check -ins, and other forms of feedback are crucial
components of a strong performance management process. Don't merely
use yearly or biannual cycles to get performance improvement input.
Better performance may be achieved at all levels using real -time feedback
(in-the-flow-of-work) management (observe, instruct, encourage , coach,
and assess).
3. Lack of Objective Assessment: Implementing methods like 360 -degree
appraisal, on -the-job assessment, management by objectives, peer reviews,
and trait/behavior -based appraisals are suggested ways to improve
objectivity in assessmen ts.
4. Job descriptions that aren't relevant: Clearly describe a worker's position
within a team and the overall organization, talk about performance goals,
and make sure it's clear how performance will be evaluated. Establish
SMART (smart, measurable, att ainable, realistic) performance goals as
part of the job definition. Connect a person's performance against their job
description and the company's goals.
5. Insufficient feedback is frequently the result of either giving feedback
that is either superficia l ("Needs improvement" or "Work on
communicating better") or giving criticism that is given after a possible
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143 clear and covers a wide range of performance measures is a fantastic
meth od to deal with this problem.
6. Lack of a "plan" in case of subpar performance Implement a strong
performance support system as part of a performance management
strategy. Consultations and counseling, suggestions for extra training,
recommending refresher courses, ongoing skill improvement, or the
assignment of mentors are all parts of the plan.
7. A high -performing staff is necessary for an organization to perform well
in all areas, including profitability, competitiveness, brand loyalty,
reputation, pric ing power, and market share growth. And improving
performance management is necessary to get workers to perform at their
best. Organizations risk losing skilled and seasoned personnel to the
competition if supervisors don't do a good job of performance
management or if underlying issues with performance management
systems are persistently disregarded.
9.6 RECOGNIZING THE PROBLEMS AND PITFALLS
LIMITATIONS, SHORTCOMING OR EFFICIENCIES OF
PERFORMANCE APPRAISAL
1. Don't evaluate actual performance; instead, ha ve managers characterize
"the person," including their personal "traits" (such as dedication),
expertise (such as technical understanding), or behaviors (i.e. attendance).
These elements could influence performance, but they don't represent real
output. "P erson appraisal" is the term to use if you wish to evaluate the
individual. Performance is measured by production volume, quality, cost,
and reactivity.
2. Infrequent feedback - it makes no sense to do the procedure once a year
if the main objective is to find and fix performance problems. Everywhere
else in the company, a quality assessment/control software would run in
real time. Quarterly formal input, similar to the GE procedure, should be
the absolute minimum.
3. Non -data-based assessment – Most proced ures rely solely on the
recollection of individuals doing the assessment since it would be too
difficult to pre -populate the forms with data to guide conclusions
(cynicism). Moreover, the majority of evaluation criteria are ambiguous
and subjective.
4. Abs ence of effectiveness metrics – Many people agree that the process's
objectives are to acknowledge results, offer feedback to rectify
deficiencies, identify underperformers, and determine what training is
necessary. Sadly, process owners almost ever assess how their processes
are helping to achieve any of these objectives. The percentage of
completed evaluations is the more typical metric in relation to
performance reviews.
5. There is a lack of accountability; supervisors are not held to standards
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144 reprimanded for finishing them late, there is no punishment for doing a
shoddy job or making mistakes, both of which are quite prevalent. One
corporation seeking to terminate a difficult employee fou nd that the
management had ranked the individual the highest within the department
and awarded them employee of the year.
6. Corporate culture difficulties – firms may be unable to modify their
cultures due to subjective assessments. Performance reviews ca n be
impacted by cultural norms and beliefs in some workplaces. For instance,
regardless of their actual performance, new recruits at one business were
automatically assigned an average rating for their first year. One of my top
performers who was given th is cultural gift unexpectedly left her job.
9.7 EFFICIENCIES OF PERFORMANCE APPRAISAL
1. Quickly developing firms must explicitly explain the role of each
employee in attaining the vision and objectives to provide transparency
across all levels. Employees perform better when they are aware of the
what, how, and why of their jobs.
2. Leaders must instruct team members on how to reach their destination
while also helping them think and come up with ideas for the best course
of action.
3. Create excellent Ob jectives and Key Results that outline the main goals
and crucial outcomes they are connected to in order to harmonize
expectations.
4. The KPIs must be tailored and modified in accordance with the unique
work cultures of fast -growing organizations in orde r to meet certain
business requirements.
9.8 GUIDELINE FOR PERFORMANCE APPRAISAL
AND GOOD PRACTICES
The willingness and commitment to focus on daily performance
improvement at the level of the individual or team are required for the
performance evaluation . An ongoing performance assessment system acts
as a compass, giving instantaneous, real -time information about the
deviation from one's intended direction. In order to implement a strong
performance assessment system, managers must deliver timely
performa nce feedback while continually keeping everyone's attention on
the main goal of outperforming the competition in the market.
One of the best tools for improving individuals is a well -written
performance assessment. The efficacy and perceived worth of your team
inside your business would be greatly increased by using the following
recommendations for performance assessments.
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145 1. Raise the amount of comfort that workers have with performance
reviews. Explain the assessment procedure, grading system, and appra isal
form at the start of each review period. Decide on performance goals and
benchmarks for the next evaluation period.
2. See team assessments as a chance to improve the effectiveness and
efficiency of the team. Assess performance using mutually agreed -upon
standards that are relevant to the work, then discover and recommend
measures to enhance outcomes.
3. Encourage staff to retain continuing records in addition to the
organization's records.
To offer a true, comprehensive review of the results of the em ployees, use
examples, facts, and accomplishments taken from these continuing
records. Precise language helps employees stay on task, supports ratings,
and provides them with a tangible tool to enhance or sustain performance.
Employ objective (factual) lan guage to focus on observable behaviors
rather than on personality qualities when writing performance evaluations
that are believable and promote desirable behaviors.
4. Encourage and recognise employees to reach their greatest potential.
Cite successes and make improvements using enlightened language. So be
cautious to take into account how remarks using harsh language may
affect staff members.
5. Benefits from the language may be used to inspire workers and
encourage desirable behavior. Inform staff member s and the management
above them of the importance and value of their activities.
6. Use performance reviews to analyze and discuss the year's performance.
The impact of feedback to an employee is greatest soon following a
particular activity. Have an immed iate or short -term focus when drafting
action plans for development requirements, relate the plan and any
recommended training to the team's business objectives, and avoid making
insignificant remarks that devalue the whole evaluation. Focus the
performanc e review on important areas for improvement and noteworthy
successes.
9.9 SUMMARY
Companies frequently supplement their employees' pay with rewards to
provide them with additional motivation. An employee may, for instance,
receive a bonus in addition to th eir basic pay at the end of a pay period.
Employees may also receive other tangible or monetary rewards distinct
from their paycheck. Reward policies will address issues such as
Compensation Level, External Competitiveness against Internal Equity,
Assimil ation and Protection Policies as well as Transparency,
Psychological Satisfaction and Pay Structures .
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146 To improve employee retention and dedication to work, which eventually
improves the employee's contribution factor, a connection between
incentive and pe rformance should be developed. Pay for Performance is a
strategy created for this purpose. Workers should perform effectively to be
paid.
There are several performance evaluation drawbacks such as
Competencies/Skills Gaps, Irregular performance activities , Lack of
Objective Evaluation, Insufficient feedback, Formal evaluation systems
are insufficient, Lack of a "strategy" for dealing with below -par
performance: Identifying performance gaps is useless if no plan is in place
to fix them.
It also comprises f ew remedies to the issues which appraisers may
recommend further training, improved supervision, or even the assignment
of coaches and mentors to fill gaps in competencies and skills.Regular
assessments, check -ins, and other forms of feedback are crucial
components of a strong performance management process. Implementing
methods like 360 -degree appraisal, on -the-job assessment, management by
objectives, peer reviews, and trait/behavior -based appraisals are suggested
ways to improve objectivity in assessment s. Establish SMART (smart,
measurable, attainable, realistic) performance goals as part of the job
definition. Connect a person's performance against their job description
and the company's goals.
Consultations and counseling, suggestions for extra trainin g,
recommending refresher courses, ongoing skill improvement, or the
assignment of mentors are all parts of the plan.
Person appraisal is the term to use if you wish to evaluate the individual.
Performance is measured by production volume, quality, cost, and
reactivity. There is a lack of accountability; supervisors are not held to
standards or required to give honest feedback. Performance reviews can
be impacted by cultural norms and beliefs in some workplaces.
There are several efficiencies of performan ce appraisal such as quickly
developing firms must explicitly explain the role of each employee in
attaining the vision and objectives to provide transparency across all levels
by providing excellent KPIs and Objectives and Key Results that outline
the ma in goals and crucial outcomes they are connected to in order to
harmonize expectations.
For such efficiencies a proper Guideline for performance appraisal and
good practices must be followed with tools such as performance
assessment for improving individ uals.



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147 9.10 SELF ASSESSMENT QUESTION
1. Explain what is meant by reward system and state the advantages and
purposes of a reward scheme
2. State the objectives of the reward system.
3. What are the various components of the reward system?
4. ‘Pay structures are an essential component of reward systems.’
Justify.
5. What are the various shortcomings of the performance assessment and
how to resolve them?
6. Do we need guidelines for performance appraisal? Why?


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148 10
ETHICS IN PERFORMANCE
MANAGEMENT
Unit Structure
10.1 Ethical Performance Management
10.1.1. Objectives of Ethics in performance Management
10.1. 2 Significance of Ethics in Performance Management
10.2 Ethical issues and remedies in Performance Manageme nt
10.3 Ethical Strategies in Performance management
10.4. Performance Management in Multinational Corporations
10.5 Summary
10.6 Self Assessment Questions
An organization's ethical behavior is crucial for conducting business in the
cutthroat market of tod ay. An ethics professor named Brenner (1992)
made the following observation: "A corporate ethics programme is made
up of beliefs, rules, and activities which effect the propriety of
organization behavior." This kind of behavior is crucial to the success of
the corporation as a whole .
Six components are included in the organizations' definition of a robust
ethics and compliance programme.
1. Written guidelines for moral behavior at work
2. A way for staff members to anonymously report ethics infractions
3. Orientatio n or instruction on upstanding behavior at work
4. A dedicated location, phone number, email address, or website where
staff members can seek guidance on matters of ethics
5. Assessment of moral behavior as part of routine performance reviews
6. Employees who viola te company ethics may be disciplined.
10.1 ETHICAL PERFORMANCE MANAGEMENT
The process of rationally determining "What values to hold and when to
hold them" is known as ethics. A moral principle or set of moral values
that a person or group of people uphol ds
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149 According to the rules of professional conduct, ethical means having or
being based on a set of moral standards regarding what is good and wrong.
Standards and moral judgment used by managers in their work are known
as managerial ethics.
Ethical Conduc t
1. Greater loyalty among employees
2. Encouragement of selflessness
3. Adherence to organizational rules
4. Decrease in turnover
5. Customer satisfaction
Unethical Conduct
1. Manufacturing: Using materials of low quality
2. Marketing: Misleading customers about the differen ces between a
product's characteristics or services.
3. Distribution: Adjusting booked orders' priorities without notifying
consumers.
4. Customer service: Breaking promises made about guarantees.
In order for a business organization to specifically safeguard th eir
interests, organizational stakeholders, which include individuals, groups,
and organizations of various forms, engage into a relationship with the
firm. As a result, there is a shared expectation that business organizations
and stakeholders would opera te morally and in each other's best interests.
Relationships may be strained and the organization's reputation may be
harmed by a stakeholder's or the organization's choice to act unethically.
Organizations are frequently motivated to promote and support ethical
conduct as well as to avoid and report unethical activity by the heightened
risk of reputational damages and harm from bad headlines.

Furthermore, in a world where many people use mobile technology to
access social media, the risk that unethical b ehavior will harm an
organization's reputation is arguably much higher than it was in the past
because it is simpler to record behavior on video, capture it in photos,
share it online, and turn it into headlines than it was in the past. Beyond
protecting o ne's reputation, ethical behavior in the workplace has other
advantages. Employee perceptions of an organization's ethical behavior
can lead to favorable consequences and greater financial results. Employee
performance, work happiness, organizational commi tment, trust, and
organizational citizenship behaviors can all be improved by perceived
ethical conduct. Altruism, conscientiousness, civic virtue, sportsmanship,
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150
10.1. 1. Objectives of Eth ics in performance Management
Providing an honest assessment of performance and together developing a
strategy to increase the individual's effectiveness are the two main goals of
performance appraisal. Making individuals aware of where they stand in
terms of performance success is a prerequisite for the same. Structured
performance objectives are established to guarantee adherence to the
performance principles, keeping the following factors in mind:
1. Adequate explanations of the organization's goals and pur pose.
2. Priority issues, such as upholding principles or accomplishing
performance objectives.
3. The way in which employees help the business achieve its goals.
4. The organization's main goal is to achieve performance.
5. Retaining and cultivating talent of the org anization.
6. Strengthening the overall performance and culture of the organization.
7. Ensuring that the legal compliances are met and followed strictly for
the wellbeing and the hygiene of the organization.
8. Generating a better reporting policies and framework to motivate the
employees to perform fairly in the organization.
10.1. 2 Significance of Ethics in Performance Management
Putting in place procedures to guarantee that there are ethical working
conditions and views of organizational support. Reactive system s are used
by many firms to flag unethical activity. But, implementing a proactive
employee voice system and using voice of the employee technologies to
proactively provide employees the ability to be heard is the single most
significant thing firms can do differently to encourage ethical conduct.
Systems that encourage reporting unethical activity and effectively support
ethical behavior satisfy five essential criteria:
1. Be simple to comprehend, relevant to the entire business and all
employees, and capable of accurately diagnosing problems
2. Be simple to use, extensively publicized, and available to all workers
3. Be proper in giving and incorporate complaint follow -up
4. Being responsive means being on time, being accommodating to
management, and delivering outcom es.
5. Managers and workers must be safeguarded from retaliation and must
remain anonymous.
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151 10.2. ETHICAL ISSUES AND REMEDIES IN
PERFORMANCE MANAGEMENT
"An ethical problem is not a decision between right and evil, but a choice
between two rights." remarked R ushworth Kidder in 1995.
While many managers in businesses talk about ethics, they seldom notice
or take action on ethical concerns in the course of their daily
administrative tasks. Most ethical difficulties in organizational settings
come from interperso nal connections. Performance management is
fundamentally an organization's commitment -based framework. This aims
to coordinate employee behavior and activity with the intended
organizational goals. Employees are the center of the organization, and as
a res ult, their beliefs, values, behaviors, and actions profoundly affect the
outcomes of the organization. Most organizations are aware that
employees are more likely to engage in behavior that is acknowledged and
rewarded than avoid behavior that is sanctione d.
For instance, there is a performance -based incentive system in a reputed
company, where one of the employees has performed really well over the
entire year and merits considerable acknowledgment. However, the
employee is already getting the highest pay grade for his position. Because
there are too many employees in the grade above him in the company, the
firm is unable to promote him.
Similarly, there are many such ethical problems and conundrums:
1. Performance Evaluation
While evaluation of a person's pe rformance is dependent on observations
and judgment, and HR managers are required to watch the performance in
order to assess its efficacy, performance appraisal lends itself to ethical
difficulties. The managers often give the highest ratings to the worke rs
they view as their loyalists, inflate their performance evaluations, and
reward them for output they have never demonstrated or probably could
never provide. These forms of unethical managerial behavior and
behaviors in such circumstances have a negativ e impact on the rest of the
staff, especially performers.
2. Discord in Values
Every organization has its own set of fundamental principles, and these
principles are expected to be upheld and lived by all members of the
organization. On the other hand, if we take into account the employees,
they too have their own set of values and objectives and choose to adhere
to them above the ideals of the company.
3. Occupational Politics
Today's top issue is workplace politics, and a poll found that managing
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152 time. This kind of circumstance also indicates that such purposeful
behavior is used to gain control or to further one's own interests.
4. Workplace Engagement Giving Out Extra Credit
It has been observed that many bright employees demonstrate a lack of
enthusiasm in their work and make an effort to perform at the bare
minimum to keep their employment. It has been noted that they largely
wasted their valuable time on other pointless pursuits. As an illustr ation,
consider employees that log on to the company's internet during working
hours and lose productivity as a result.
5. Unlawful and Unethical Behavior
Being loyal is a moral virtue, and many people feel compelled to further
the interests of close friends or special organizations. Yet, the main
devotion is to the moral code and the common good, and these duties
might turn out to be immoral when they include ensuring that a particular
group or person gains at the expense of other groups.
6. Giving Biased Recogn itions
Many managers give their staff members' work the appearance of being
their own and claim unwarranted credit for their efforts. Some supervisors
misappropriate their subordinates' excellent work as their own because
they are either inept or disliking their jobs, which has a negative effect on
staff performance.
7. Multiple allegiances
As an ethical principle, loyalty makes many people feel compelled to
further the goals of close friends or special organizations. The greatest
allegiance, however, is to th e moral code and the common good, and these
commitments can turn immoral when they go so far as to ensure that a
particular group or person gains at the expense of other groups.
The issue is that while many businesses deploy voice of the employee
systems w ith the best of intentions, the voice of the employee tools
actually employed are ineffective. It is important to use voice -of-the-
employee techniques, such as interviews and surveys, to proactively
identify and curtail unethical behavior:
1. Utilizing an Ope n-Ended Question to make sure all potential
problems are found, the voice of the employee initiatives should
concentrate on posing an open -ended query concerning knowledge of
compliance -related problems. Closed -ended inquiries don't give you the
chance to find every potential problem or all the information you need to
comprehend a problem.
2. Externally, to ensure accuracy, the study should be carried out by a
neutral third party in order to eliminate biases and obstacles that prevent
employees from feeling fr ee to voice their genuine opinions about
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153 employees aren't being completely honest with the company, therefore
actual perceptions aren't shared. Workers could be hesitant to let their
manag ement down or risk disappointing them. When carried out outside,
data is methodically gathered and fully reported.
3. It is essential to use a mixed methods research instrument that asks
"why?" in an open -ended, qualitative way in order to avoid restricting t he
range of what can be learned from each individual employee in order to
obtain detailed reasons for perceptions of unethical behavior. Third -party
researchers can provide high -quality online and telephone interviews that
systematically record in -depth qu alitative replies. You may get in -depth
information and uncover the roots of perceptions by asking fewer open -
ended questions and particularly following up to inquire why the
participant views unethical conduct.
4. Data should be systematically collected for use in further data
gathering and analysis in order to track trends and development. In order
to enable future reporting and analysis, external research employs a
standardized question set, data collecting equipment, and a trustworthy
technique to gather r esponses. Next, using this data, issues that could be
present in particular employee groups, departments, job categories, or
even supervisors, can be found.
The stakeholders' conflict over right and wrong also effects a perceived
ethical or immoral reputat ion of the organizations. Hence, it is crucial to
aggressively encourage ethical behavior inside your company before you
risk being completely demolished by tomorrow's news.



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154 10.2 ETHICAL STRATEGIES IN PERFORMANCE
MANAGEMENT
The following list of essen tial rules will help the company sustain a moral
performance management system:
1. Creating Standards is the responsibility of HR
● The development of HR functions is the responsibility of the HR
professionals in a business to offer value. They are also in c harge of
preserving the organization's balance between ethical behavior and
performance progress. When it comes to dealing with morality, integrity,
and honesty concerns with other stakeholders, notably customers,
suppliers, and society at large, HR profes sionals must function as ethical
stewards and teach and develop human resources.
● The development of HR functions is the responsibility of the HR
professionals in a business to offer value. They are also in charge of
preserving the organization's balance be tween ethical behavior and
performance progress. When it comes to dealing with morality, integrity,
and honesty concerns with other stakeholders, notably customers,
suppliers, and society at large, HR professionals must function as ethical
stewards and tea ch and develop human resources.
● Professionals in human resources must work to uphold the highest
standards of knowledge and morality. The goal is to consistently and
continuously stay informed on corporate strategy, mission, and objectives.
They must spear head widespread ethical training for senior management
and staff. The importance of ethics in achieving high performance
standards must be made clear to them. With the performance management
system, HR professionals must communicate ethics to staff members ,
supervisors, and external stakeholders.
2. Fairness and justice in ethical leadership
● Human resource professionals need to demonstrate individual
leadership if they want performance management to be a really business -
aligned, transparent, and credible ma nagement activity. To help their
organizations, they ought to serve as ethics communicators.
● There should be fairness and justice in regards to incentives and
recognitions for employee job successes and their contribution to
enhancing organizational compet ence and performance.
● Human resource professionals have a moral obligation to advance
justice and fairness inside the company, and they must foster a climate
where moral conduct and action are important performance indicators.
3. Conflict Resolution Inform ation Transfer
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155 linked to incentives and recognition, etc. They must protect the interests of
all parties.
● The human resourc e specialists should guarantee communication is
genuine. It must pertain to performance evaluations and counseling,
assisting senior management in making wise personnel decisions.
10.3. PERFORMANCE MANAGEMENT IN
MULTINATIONAL CORPORATIONS
The evaluation of a person who temporarily works for a foreign company
in order to impart knowledge or cultivate global leadership abilities is
known as international performance management. International
performance management should, at its best, contribute to the overal l
business objectives. The management of expatriate performance is fraught
with difficulties as each firm may have different requirements. To the best
of one’s ability, try to identify the difficulties that a business is likely to
face and make plans to ad dress them in the expatriate performance
management plan.
Environmental Changes
Systems for performance management rarely function the same way
domestically and abroad. International performance evaluations typically
need to be tailored to each expatriate because of environmental variances,
including differing growth rates, the local surroundings, and changes in
performance.
Distance and time
Technology advancements have made this less of a problem than it
formerly was, but local infrastructure and time zon es will affect
performance and evaluations. This is especially true for expats who work
in developing nations.
Cultural adaptation
Performance is likely to be impacted by the employee's capacity to adapt
to both the general culture in their new nation and the organizational
culture within the subsidiary. The development of a quantifiable
international performance management system will be facilitated by the
HR team, the management team, and the employee having a thorough
awareness of the local organizationa l culture.
Implementation irregularity
Like any performance improvement, it will only be effective if it is used
consistently throughout all corporate divisions. When it comes to most
Human Resource functions, oversight of this might be difficult.
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156 For a g lobal human resources manager, creating a system that will
function well across markets is a huge task. An expatriate performance
management system's ultimate objective is to identify, enable, and
promote performance in the person and the teams they work w ith. The
international performance management system of an organization should
make it possible for managers of foreign workers to establish quantifiable,
precise targets that support the company's overarching goals. Setting goals
alone, however, is insuff icient for success; the programme also has to
include a way to evaluate achievement over the course of a year, many
times.
Employees must be able to remove obstacles to performance, such as old
hardware or software, inadequate processes, and micromanagemen t, in
order to meet the goals that have been set. Yet, depending on where they
are situated, overseas employees could experience additional challenges
with regard to governmental obligations or personal safety. In this aspect,
flexibility must be considere d while creating an expat performance
management system.
Lastly, it has been demonstrated that promising performance is still
another indicator of a successful overseas assignment. The techniques
used to reward performance may differ from one nation to the next. While
more pay may be effective at the corporate level, other nations may place
a higher importance on time off or other perks. Surveying foreign staff is
the quickest and most straightforward approach to learn what could
perform best.
A well -though t-out training strategy for all stakeholders is crucial to the
success of global performance management. After the process is finished,
managers must be held responsible for rolling it out to all of their own
staff members. Ideally, upper management and/or human resources will do
this through their own performance reviews.
The new expatriates must be provided with the resources they need to
succeed as a global HR manager to avoid costly expat failure. The
variations in how performance feedback should be giv en across cultures
must be taken into consideration while developing a cross -cultural
performance improvement strategy. For instance, criticism should be
straightforward and actionable in some European cultures, yet in some
Asian cultures, the same critici sm can result in an intolerable loss of face
for the employee. In order to create standards for how feedback should be
given, it is crucial to understand the local culture.
10.4 SUMMARY
An organization's ethical behavior is crucial for conducting business in the
cut throat market of today. Six components are included in the
organizations' definition of a robust ethics and compliance programme
include written guidelines, staff members confidentiality to report ethics
infractions, orientation on upstanding be havior at work, maintain norms
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157
The process of rationally determining "What values to hold and when to
hold them" is known as ethics. The ethical conduct of the employees must
always be upheld and safeguarded. In order for a business organization to
specifically safeguard their interests, organizational stakeholders, which
include individuals, groups, and organizations of various forms, engage
into a relationship with the firm. As a result, there is a shared expectation
that business organizations and stakeholders would operate morally and in
each other's best interests. Relationships may be strained and the
organization's reputation may be harmed by a stakeholder's or the
organization's choice to act unethically. Employee perceptions of an
organization's ethical behavior can lead to favorable consequences and
greater financial results.
Providing an honest assessment of performance and together developing a
strategy to increase the individual's effectiveness are the two main goals of
performance appraisal. Making individuals aware of where they stand in
terms of performance success is a prerequisite for the same. Reactive
systems are used by many firms to flag unethical activity. But,
implementing a proactive employee voice system and using voice of the
employee technologies to proactively provide employees the ability to be
heard is the single most significant thing firms can do differently to
encourage ethical conduct.
Most ethical difficulties in organizational settings come from int erpersonal
connections. It is important to use voice -of-the-employee techniques, such
as interviews and surveys, to proactively identify and curtail unethical
behavior. Several ethical strategies in performance management that help
the company sustain a mo ral performance management system are
creating standards, development of HR functions, uphold the highest
standards of knowledge and morality ,fairness and justice in ethical
leadership and provide conflict resolution information transfer.
The evaluation of a person who temporarily works for a foreign company
in order to impart knowledge or cultivate global leadership abilities is
known as international performance management. International
performance management should, at its best, contribute to the over all
business objectives. The management of expatriate performance is fraught
with difficulties such as environmental changes, distance and time,
cultural adaptation, implementation irregularity as each firm may have
different requirements.
An expatriate pe rformance management system's ultimate objective is to
identify, enable, and promote performance in the person and the teams
they work with. The international performance management system
should make it possible for managers of foreign workers to establis h
quantifiable, precise targets that support the company's overarching goals.
Since promising performance is still an indicator of a successful overseas
assignment. Also provide new expatriates with the resources that they
need to succeed as a global HR ma nager to avoid costly expat failure. In munotes.in

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Competency Based
HRM & Performance Management
158 order to create standards for how feedback should be given, it is crucial to
understand the local culture.
10.5 SELF ASSESSMENT QUESTIONS
1. What do mean by retaining ethics in performance management? State
the various components to be included while maintaining ethics.
2. What according to you are the unethical and ethical practices that one
must follow?
3. ‘Relationships may be strained and the organization's reputation may
be harmed by a stakeholder's or the organization's choice to act
unethically.’ Explain
4. State the various objectives and significance of ethics in performance
management.
5. "An ethical problem is not a decision between right and evil, but a
choice between two rights." Comment.
6. What are the various issues face d while deploying voice of the
employee systems in the organization?
7. State the various ethical strategies that one must follow in
performance management.
8. Explain how performance management is evaluated in multinational
companies.

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