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Chapter 4

Employee Development

HUMAN RESOURCE MANAGEMENT Shah M Saad Husain

Performance Appraisal
1. Performance Appraisal: The identification, measurement, and management of human performance in organization

2. 3.

Identification means determining what areas of work the manager should be examining when measuring performance.
Measurement, the centerpiece of the appraisal system, entails making managerial judgments of how good or bad employee performance was.

Appraisal must take a future-oriented view of what workers can do to achieve their potential in the organization. Supervisors must provide workers with feedback and coach them to higher levels of performance.

HUMAN RESOURCE MANAGEMENT Shah M Saad Husain

HUMAN RESOURCE MANAGEMENT Shah M Saad Husain

Purposes of Performance
Appraisal Systems

Employment Decisions

Diagnosis of Organizational Problems

Purposes of Performance Appraisal System

Employee Feedback

Objectives for Training Programs

Criteria in Test Validation

HUMAN RESOURCE MANAGEMENT Shah M Saad Husain

A model of Performance Appraisal

identification

measurement

management
HUMAN RESOURCE MANAGEMENT Shah M Saad Husain

Job Analysis

Performance Standards
Translate job Requirements into levels of acceptable unacceptable performance

Performance Appraisal

Describes work and Personal requirements of a particular job

Describes the job relevant strength and weaknesses of each individual

Relationship of performance standards to job analysis and performance appraisal

HUMAN RESOURCE MANAGEMENT Shah M Saad Husain

Uses of Performance Appraisal


1.

Organizations conduct appraisals for administrative and developmental purposes:


Promotions
Increments, Rewards Terminations TNA Employee Training + Development Career Planning Succession Planning Transfers, Job Enrichment, Job Rotation, Multiskill Development Aligning individual performance to organizational goals

HUMAN RESOURCE MANAGEMENT Shah M Saad Husain

HUMAN RESOURCE MANAGEMENT Shah M Saad Husain

Benefits of Performance Appraisals


Employer Perspective
1. 2. 3. 4. 5. 1. 2. 3. 4. Individual differences in performance can make a difference to company performance Documentation of performance appraisal and feedback needed for legal defense Appraisal provides a rational basis for increments, bonus or merit systems Appraisal dimensions and standards can help to implement strategic goals and clarity performance expectations. Providing individual feedback is part of the performance management process Performance feedback is needed and desired Improvement in performance requires assessment Fairness requires that differences in performance levels across workers be measured and have an effect on outcomes Assessment and recognition of performance levels can motivate workers to improve their performance

Employee Perspective

HUMAN RESOURCE MANAGEMENT Shah M Saad Husain

Identification of Performance Dimensions


1. Dimension: An aspect of performance that determines effective job performance

2.
3.

Identification of Performance Dimensions is the important first step in the appraisal process. If a significant dimension is missed, employee morale is likely to suffer.
If an irrelevant or trivial dimension is included, employees may perceive the whole appraisal process as meaningless

4.
5. 6.

What is measured should be directly tied to what the business is trying to achieve
Performance dimensions are identified by Job Analysis Organizations identify performance dimensions based on the Strategic Objectives of the organization

HUMAN RESOURCE MANAGEMENT Shah M Saad Husain

Measuring Performance
1. Measuring employee performance involves assigning a number to reflect an employees performance on the identified characteristics or dimensions. Technically, numbers should be related to ranking, such as excellent, good, average and poor. It is often difficult to quantify some performance dimensions e.g.creativity.

2. 3.

HUMAN RESOURCE MANAGEMENT Shah M Saad Husain

HUMAN RESOURCE MANAGEMENT Shah M Saad Husain

HUMAN RESOURCE MANAGEMENT Shah M Saad Husain

Measuring Tools
1. 2. Relative and Absolute Judgments: Measures of employee performance can be classified on the basis of relative or absolute judgement. Relative Judgment: supervisors compare an employees performance to the performance of other employees doing the same job Absolute Judgment: supervisors make judgments about an employees performance based solely on performance standards Trait Appraisal Instrument: An appraisal tool that asks a supervisor to make judgments about worker characteristics that tend to be consistent and enduring. Behavioral Appraisal Instrument: An appraisal tool that asks managers to assess a workers behaviors Outcome Appraisal Instruments: An appraisal tool that asks managers to asses the results achieved by workers. 360 degree appraisal

3. 4. 5.

HUMAN RESOURCE MANAGEMENT Shah M Saad Husain

Challenges to Effective Performance Measurement


1. 2. Rater errors and bias The influence of liking

3.
4. 5.

Organizational politics
Whether to focus on the individual or the group Infrequent performance appraisal and feedback

6.
7. 8.

Immature performance appraisal system


Inadequate Transparency and communication with employees Poor utilization of performance appraisal results for employee development and organizational development.

9.
10.

Inadequate correlation of performance dimensions with appraisal ranking


Legal issues

HUMAN RESOURCE MANAGEMENT Shah M Saad Husain

Managing Performance
1. The effective management of human performance in organizations requires more than formal reporting and annual ratings 2. A complete appraisal process includes informal day-to-day interactions between managers and workers as well as formal face-to-face interviews

3. The ratings themselves are important, but even more critical is what managers do with them
HUMAN RESOURCE MANAGEMENT Shah M Saad Husain

The Appraisal Interview


1. 2. 3. 4. Upon completing the performance rating, the supervisor conducts an interview with the employee to provide feedback When money is at stake, the manager is much more likely to take the tasks of appraisal and feedback seriously. The best management practice is to combine development, career planning and salary discussion into one performance review Managers who have to justify a low salary increase will probably take time to carefully support their performance assessment, with more detailed feedback, making the appraisal session more valuable to the employee Inclusion of salary discussion can energize the performance discussion

5.

6.

Feedback, goal setting, and making action plans can become a hollow and meaningless exercise when salary implications are not included in the session

HUMAN RESOURCE MANAGEMENT Shah M Saad Husain

HUMAN RESOURCE MANAGEMENT Shah M Saad Husain

HUMAN RESOURCE MANAGEMENT Shah M Saad Husain

Performance Improvement
1. Supervisors who manage performance effectively generally share four characteristics, they: Explore the causes of performance problems Direct attention to the cause of problems Develop an action plan and empower workers to reach a solution Direct communication of performance and provide effective feedback 3600 degree Feedback: The combination of peer, subordinate, and self-appraisal With so many more employees reporting to one supervisor, it is just not possible for the supervisor to gauge everyones work accurately The old system where the supervisor alone reviews performance is out of sync with todays emphasis on teamwork and participative management Feedback from one source is easy to discount, but a message from many sources is hard to ignore

2. 3. 4. 5.

HUMAN RESOURCE MANAGEMENT Shah M Saad Husain

Key Steps in Implementing 360o Appraisal


For a successful 360o appraisal program 1. 2. 3. Top management should communicate the goals of and need for 360o appraisal. Employees and managers are involved in the development of the appraisal criteria and appraisal process. Employees are trained in how to give and receive feedback

4.
5.

Employees are informed of the nature of the 360o appraisal instrument and process
The 360o system undergoes pilot testing in one part of the organization

6.

Management continuously reinforces the goals of the 360o appraisal and is ready to change the process when necessary

HUMAN RESOURCE MANAGEMENT Shah M Saad Husain

HUMAN RESOURCE MANAGEMENT Shah M Saad Husain

Training Employees
1. Training: process of providing employees with specific skills or knowledge to help them correct deficiencies in their current performance Development: An effort to provide employees with the abilities the organization will need in the future.

2.

3.

Training Versus Development:


Training Development

Focus Scope Time Frame Goal


HUMAN RESOURCE MANAGEMENT Shah M Saad Husain

Current job Individual employees Immediate Fix current skill deficit

Current and future jobs Work group or organization Long term Prepare for future work demands

HUMAN RESOURCE MANAGEMENT Shah M Saad Husain

HUMAN RESOURCE MANAGEMENT Shah M Saad Husain

HUMAN RESOURCE MANAGEMENT Shah M Saad Husain

Phases of Training
ASSESSMENT PHASE
Assess Instructional Need

TRAINING AND DEVELOPMENT PHASE

EVALUATION PHASE
Develop Criteria

Derive Objectives

Select Training Media and Learning Principles

Pretest Trainees

Monitor Training

Evaluate Transfer

Evaluate Training Evaluate Transfer

Feedback
HUMAN RESOURCE MANAGEMENT Shah M Saad Husain

Assessing Training Needs


Several levels of analysis for determining the needs that training can fulfill:

1.

Organization analysis focuses on identifying where within the organization training is needed. Important to analyze training needs required to achieve organizational objectives and strategies. Operations analysis attempts to identify the content of training what an employee must do in order to perform competently
Individual analysis determines how well each employee is performing the tasks that make up his or her job

2.
3.

HUMAN RESOURCE MANAGEMENT Shah M Saad Husain

Training Needs Assessment Model


ENVIRONMENT Unions Economy Laws
Training Cycle

ORGANIZATION ANALYSIS Objectives Resources Allocation of resources

Training Need?

Yes

No

OPERATIONS ANALYSIS Specific behavior: What an employee must do in order to perform job effectively.

Training Need?

Yes

INDIVIDUAL ANALYSIS Knowledge Skills Attitudes

No

(a) Current (b) Desired level of level of performance performance

Alternate solutions

Alternate solutions Alternate solutions

Training Need?
No

Yes

HUMAN RESOURCE MANAGEMENT Shah M Saad Husain

Objectives of Training (Example)


Overall Objective

Increase interpersonal sensitivity + employee contribution

Specific Content Dimensions

Listening skills

Feedback skills

Example Behavioral Objectives

1. 2. 3. 4.

Understanding and analyzing differing view points Supervisor summarizes key points of action plan at end of discussion. Supervisor does not interrupt the speech of others Supervisor provides an estimate of how long before a request can be filled

1. 2. 3. 4.

Supervisor describes the issues in concrete terms. Supervisor explains the Action Plan in detail Supervisor attacks the problem, not the person Supervisor provides feedback in a timely fashion

HUMAN RESOURCE MANAGEMENT Shah M Saad Husain

Types of Training
1. 2. Training approaches vary by location, and type. On-the-job training (OJT) approach, the trainee works in the actual work setting, usually under the guidance of an experienced worker, supervisor, or trainer. Job Rotation allows employees to gain experience in different kinds of jobs in the organization. It is often used to give future leadership a broad background. Apprenticeships, OJT programs are typically associated with skilled trades, (from the old practice of having the young learn a trade from an experienced worker) Peer Training Cross Functional Training Multiskill Training Monitoring coaching and grooming Retraining to keep pace with job changes Learning as a Project/Team member Organizations maintain a Training Resource File

3.
4.

5. 6. 7. 8. 9. 10. 11.

HUMAN RESOURCE MANAGEMENT Shah M Saad Husain

Training Methods
Slides and Videotapes Teletraining Computers Reading, Data Banks Plant/Location Visits Conferences, Exhibitions Panel, Discussions Distant Learning Tutoring Orientation Understudy, Grooming

Simulations
Virtual Reality Classroom instruction Role-Plays

HUMAN RESOURCE MANAGEMENT Shah M Saad Husain

Training Needs Assessment


1. 2. 3. 4. The need or Competency Deficit for each employee is identified via a thorough assessment Specific training objectives are generated, Training Content and Training Plan developed to achieve those objectives The criteria for assessing the trainings effectiveness are also based on the objectives identified in the assessment phase A Training Calendar is developed for the whole company and monitored monthly Training for Customer Service not only increases profits but also decreases lawsuits.

5.

HUMAN RESOURCE MANAGEMENT Shah M Saad Husain

The Evaluation Phase


1. 2. 3. In the evaluation phase of the training process, the effectiveness of the training program is assessed, both for the short term and long term A training program designed to increase workers efficiency is assessed by its effects on productivity or costs. The ROI of Training: calculating formula:
ROI = = (Training Benefits Training Costs) ---------------------------------------------------------- x 100 Training Costs Net Training Benefits ----------------------------------------------------------- x 100 Training Costs

4. 5. 6. 7.

Plan ahead Determine what you will measure Design how the effectiveness of training will be assessed Convert nonmonetary measures to rupees terms.

HUMAN RESOURCE MANAGEMENT Shah M Saad Husain

Training Benefits Evaluation


x x $ 55 (average savings per job) 55 (jobs per week) 4 (number of weeks)

= = 6.745 -----------5,355

$ 12,100 (benefits) $ 5,355 (cost of training)


$ 6,745 (net benefits) = 1.26 = 126% ROI

HUMAN RESOURCE MANAGEMENT Shah M Saad Husain