The meaning of performance
Performance is often defined simply in output terms the achievement of quantified objectives. But performance is a matter not only of what people achieve but how they achieve it. The Oxford English Dictionary defines performance as: ‘The accomplishment, execution, carrying out, working out of anything ordered or undertaken.’ High performance results from appropriate behaviour, especially discretionary behavior, and the effective use of the required knowledge, skills and competencies.
The concept of performance has been expressed by human resource managers in terms of both behaviours and results.
Behaviours emanate from the performer and transform performance from abstraction to action. Not just the instruments for results, behaviours are also outcomes in their own right i.e. the product of mental and physical effort applied to tasks and can be judged apart from results.
This definition of performance leads to the conclusion that when managing performance both inputs (behaviour) and outputs (results) need to be considered. It is not a question of simply considering the achievement of targets, as used to happen in ‘management by objectives’ schemes. Competency factors need to be included in the process.
MEANING OF PERFORMANCE APPRAISAL
A performance appraisal (PA), also referred to as a performance review, performance evaluation, (career) development discussion, or employee appraisal is a method by which the job performance of an employee is documented and evaluated.
Performance appraisal is the process by which a manager or consultant examines and evaluates an employee’s work behavior by comparing it with preset standards; documents the results of the comparison; and uses the results to provide feedback to the employee to show where improvements are needed and why.
It is therefore a management tool which is helpful in.
It is a tool for discovering, analyzing and classifying the differences among workers in relation to job standards in order to motivate and effectively utilizing human resources. It refers to the formal system of appraisal, in which the individual is compared with others and ranked or rated.
Generally, appraisal is made by the supervisor or manager once or twice in a year.
Performance appraisals are employed to determine who needs what training, and who will be promoted, demoted, retained, or fired.
Performance appraisal is a term applied to a variety of processes that involve the assessment and development of an individual and their performance at work. While it is to a large extent about evaluating a person’s performance at work, three key issues are worth bearing in mind.
First, performance appraisal is a two-way process. As much as the employer wishes to measure and understand an employee’s performance, the employee wishes to gain something from the process
Second, the appraisal process is about the development of staff as well as about assessing their performance; it is about exploring the appraisee’s potential for development in terms of their career; and;
Finally, in appraisal there is an important issue about the extent to which one looks at the overall picture of the individual and what they bring to the workplace beyond doing the basic job tasks and activities.
It is important to recognize that the appraisal process can be viewed from a number of different perspectives (e.g. the employee, line manager, senior manager etc.). All might have different views of the process and may have different goals in mind.
Characteristics of an Appraisal System
The following are the key characteristics of an effective appraisal system:
An effective Performance appraisal system must be accepted by all concerned.
There should be a common and clear understanding of the distinction between evaluation and appraisal. Evaluation aims at ‘objective’ measurement, while appraisal includes both objective and subjective assessment of how well an employee has performed during the period under review. Thus performance appraisal aims at ‘feedback, development and assessment.’
The process of performance appraisal should concentrate on the job of an employee, the environment of the organization, and the employee him- or herself. These three factors are inter-related and inter-dependent. Therefore, in order to be effective, the appraisal system should be individualized, subjective, and qualitative and oriented towards problem-solving.
It should be based on clearly specified and measurable standards and indicators of performance. Since what is being appraised is performance and not personality, personality traits which are not relevant to job performance should be excluded from the appraisal framework.
A performance appraisal system should be: Goal oriented i.e. The job description and the performance goals should be structured, mutually decided and accepted by both management and employees; Reliable and consistent in that it should include both objective and subjective ratings to produce reliable and consistent measurement of performance; Practical and simple format aimed at fulfilling its basic functions.
Long and complicated formats are time consuming, difficult to understand, and do not elicit much useful information; Regular and routine since an appraisal system is expected to be formal in a structured manner, informal contacts and interactions can also be used for providing feedback to employees.
An effective appraisal system should also be participatory and open hence involve the employee’s participation, usually through an appraisal interview with the supervisor, for feedback and future planning. During this interview, past performance should be discussed frankly and future goals established. A strategy for accomplishing these goals as well as for improving future performance should be evolved jointly by the supervisor and the employee being appraised. Such participation imparts a feeling of involvement and creates a sense of belonging. Both positive and negative rewards should also be part of the performance appraisal system. Otherwise, the process lacks impact. The process should also incorporate timely feedback. Unless feedback is timely, it loses its utility and may have only limited influence on performance.
Feedback must be impersonal if it is to have the desired effect. Personal feedback is usually rejected with contempt, and eventually de-motivates the employee. Feedback must be noticeable i.e. the staff member being appraised must be made aware of the information used in the appraisal process. An open appraisal process creates credibility.
Relevance and responsiveness Planning and appraisal of performance and consequent rewards or punishments should be relevant and responsive i.e. oriented towards the objectives of the programme in which the employee has been assigned a role. For example, if the objectives of a programme are directed towards a particular client group, then the appraisal system has to be designed with that orientation. In addition, Responsibility for the appraisal system should be located at a senior level in the organization so as to ensure commitment and involvement.
MEANING OF PERFORMANCE MANAGEMENT
Performance management is a systematic process for improving organizational performance by developing the performance of individuals and teams. It is a means of getting better results by understanding and managing performance within an agreed framework of planned goals, standards and competency requirements.
Performance management processes exist for establishing shared understanding about what is to be achieved, and for managing and developing people in a way that increases the probability that it will be achieved in the short and longer term. It focuses people on doing the right things by clarifying their goals and is owned and driven by line management.
The overall aim of performance management is to establish a high performance culture in which individuals and teams take responsibility for the continuous improvement of business processes and for their own skills and contributions within a framework provided by effective leadership.
Specifically, performance management is about aligning individual objectives to organizational objectives and ensuring that individuals uphold corporate core values. It provides for expectations to be defined and agreed in terms of role responsibilities and accountabilities (expected to do), skills (expected to have) and behaviours (expected to be).
The aim is to develop the capacity of people to meet and exceed expectations and to achieve their full potential to the benefit of themselves and the organization. Importantly, performance management is concerned with ensuring that the support and guidance people need to develop and improve are readily available.
Characteristics of Performance Management
Performance management is a planned process of which the primary elements are agreement, measurement, feedback, positive reinforcement and dialogue. It is concerned with measuring outputs in the shape of delivered performance compared with expectations expressed as objectives. In this respect, it focuses on targets, standards and performance measures or indicators. It is based on the agreement of role requirements, objectives and performance improvement and personal development plans.
Performance management focuses on future performance planning and improvement rather than on retrospective performance appraisal. It functions as a continuous and evolutionary process, in which performance improves over time. It provides the basis for regular and frequent dialogues between managers and individuals about performance and development needs. It is mainly concerned with individual performance but it can also be applied to teams.
It is also concerned with inputs and values. The inputs are the knowledge, skills and behaviours required to produce the expected results. Developmental needs are identified by defining these requirements and assessing the extent to which the expected levels of performance have been achieved through the effective use of knowledge and skills and through appropriate behaviour that upholds core values.
Performance management is a continuous and flexible process, which involves managers and those whom they manage acting as partners within a framework that sets out how they can best work together to achieve the required results.
Performance management is an important part of the reward system through the provision of feedback and recognition and the identification of opportunities for growth. It may be associated with performance or contribution-related pay, but its developmental aspects are much more important.
Performance Appraisal and Performance Management
It is sometimes assumed that performance appraisal is the same thing as performance management. But there are significant differences. Performance appraisal can be defined as the formal assessment and rating of individuals by their managers at, usually, an annual review meeting. In contrast, performance management is a continuous and much wider, more comprehensive and more natural process of management that clarifies mutual expectations, emphasizes the support role of managers who are expected to act as coaches rather than judges, and focuses on the future.
Performance appraisal has been discredited because too often it has been operated as a top-down and largely bureaucratic system owned by the HR department rather than by line managers. It has been perceived as a means of exercising managerial control. Performance appraisal tends to be backward looking, concentrating on what had gone wrong, rather than looking forward to future development needs. Performance appraisal schemes existed in isolation. There is little or no link between them and the needs of the business. Line managers have frequently rejected performance appraisal schemes as being time-consuming and irrelevant. Employees have resented the superficial nature with which appraisals have been conducted by managers who lack the skills required, tend to be biased and are simply going through the motions. The differences between them are set out in the following table.
| Performance Appraisal | Performance Management |
| Basically focuses on individual objectives | Emphasis on integrating corporate, team and individual objectives |
| Mostly qualitative | Competence requirements and quantitative measures |
| Annual appraisal | Continuous review with one of more formal reviews |
| Top-down system with ratings | Joint process, ratings are less |
| Often linked to pay | May not be directly linked to pay |
| Monolithic system | Flexible process |
| Complex paperwork | Documentation is minimized |
| Owned by HR department | Owned by line management |
