Performance

Management
and Appraisal

Topic 7

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 Basic Concepts in Performance
Management
• Performance appraisal means evaluating an
employee’s current and/or past performance
relative to performance standards. The company can
set the performance standards – evaluation scores,
no of subjects taken etc,
• Performance Management is the entire, integrated
process of continuously identifying, measuring and
developing performance and aligning performance
with strategic goals

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 Performance Appraisal

• (1) According to Edwin Flippo, "Performance

Appraisal is the systematic, periodic and rating
of an employee's excellence, in matters
pertaining to his present job and his potential for
a better job."
• (2) According to Dale Beach, "Performance
Appraisal is the systematic evaluation of the
individual with regards to his or her performance
on the job and his potential for development."
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 Why Appraise Performance?

• Appraisals provide important input used by

supervisors to make promotion and salary raise
decisions
• The appraisal lets the boss and subordinate develop
a plan for correcting deficiencies and reinforce what
the subordinate does right.
• Appraisals serve as a useful career-planning tool
providing opportunity to review the employee’s
plans

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 Pilot’s Performance Appraisals
• Airline captains undergo simulator check rides (proficiency checks: engine failures ,
emergencies at the most operationally challenging airports very mountainous airports,
airports with difficult security or noise , take off, landing, ) every 6 months. They occur every
12 months for first officers – universal procedure . A few airlines give both captains and FO's
recurrent proficiency checks every 9 months. A failure goes on your permanent record, but
you get several attempts to pass before you are placed on probationary leave or fired. or
instance, we practice and abatement procedures, etc). “ to keep an eye on you…

• In addition, pilots get "checked" on an actual flight once a year where a company instructor
observes their flight or acting as a crewmember. This is called a "line check". The FAA can
check you anytime they please by observing your flight from the jump seat.

• A first officer who unsuccessfully attempts to upgrade to captain 2 or 3 times is usually forced
to resign. Before the upgrade process is complete, the pilot must complete a flight under the
observation of an FAA designee. This is known as the "fed ride". and is usually the final
obstacle that most be overcome to earn a captain position.
 AIRLINES PERFORMANCE MANAGEMENT

• A key feature of performance management:

Three dimension of performance:

• Employee well being
• Customer satisfaction
• Shareholder gains
 Who Should Do the Appraising?

• Immediate supervisors
• Peers
• Rating committees
• Self-ratings
• Appraisal by subordinates
• 360-degree feedback

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Figure : Stages of the Performance
Management Process
 APPRAISAL PROCESS
• The Performance Appraisal process involves the following
steps :
• (1) Establish the Standards of Performance.
• (2) Communicate these standards to employees.
• (3) Measure the actual performance .
• (4) Compare actual performance with the standards
established.
• (5) In case of variation, initiate corrective action.
• (6) Communicate the rating to the employee.
• (7) Discuss the feedback with the employee.
• (8) Conduct post-appraisal Interview.
• (9) Initiate corrective action if required. 9
Purposes of Performance Management

• Strategic Purpose – means effective performance

management helps the organization achieve its
business objectives.
• Administrative Purpose – refers to the ways in which
organizations use the system to provide information
for day-to-day decisions about salary, benefits, and
recognition programs.
• Developmental Purpose – means that it serves as a
basis for developing employees’ knowledge and
skills.
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 Purpose / Uses
• The main purposes of employee assessment are as follows :
• (1) Identify employees who are eligible for salary increase.
• (2) Generate data to take personnel decisions such as
promotion, transfer and lay-off or termination decision.
• (3) Determine the training and development needs of the
employees.
• (4) Validate the selection process.
• (5) To measure whether standards laid down has been
achieved by the employees or not.
• (6) Helps to recognize potential of promising employees.
• (7) Last but not the least, performance appraisal also helps in
motivating employees by providing feed back about their level
of performance.
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 Advantages of Performance Appraisal :

• (1) SWOT Analysis : Performance Appraisal gives a

complete idea of the employee's strength,
weaknesses and based on that their opportunities
and threats.
• (2) Career Planning : On the basis of one's own
SWOT analysis, an employee can have his career
plans.
• (3) Suitable Placement : Performance appraisal
enables a company to give suitable placement to an
employee based on their talents and skills.

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• (4) Self-Development : Performance Appraisal is very much a
positive activity which enables an employee to know his own
weaknesses and also enables him to remove their weaknesses and
lead to self-development.
• (5) Effective Training Programme : Training programmes can be
drawn out on the basis of the needs of employees to remove their
weaknesses.
• (6) Higher Employee Productivity : Employer morale will be high
because there can be a system of rewards for employees with
higher performance. This will improve organization productivity.
• (7) Performance Appraisal will help in potential human resource
planning

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 Performance Management

• Performance management is a continuous process

of identifying, measuring and developing the
performance of employees
• Employers are migrating to performance
management because of the following:
– Total quality
– Appraisal issues
– Strategic planning

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 Total Quality

• Based on W. Edwards Deming’s work Total Quality

indicates that problems occur because of the
system, not the employee
• Per Deming, an employee’s performance is a
function of things like training, communication,
tools and supervision than individual motivation
• Instead of focusing on problems, Deming’s
philosophy uses changes to the system to improve
performance

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Appraisal Issues

• Issues with traditional

appraisals. Employees and
managers feeling that often
the appraisal is not just
useless but tense and
counterproductive

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 Strategic Planning

• The challenge is not designing good strategies it is

getting employees to execute them
• Strategic goals go unmet for several reasons
– The company does not bother to track
performance
– Strategies and goals are poorly communicated to
employees
– Employees are not assigned clear tasks and
responsibilities

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• Performance management avoids issues with
strategic planning by encouraging employees
to set goals that make sense and are provided
with continuous feedback with corrective
action taken as needed
 Limitations of Performance Appraisal :
• (1) Personal Bias : The biggest limitation of performance
Appraisal is subjectivity. Due to human element in
Appraisal, there is always a fear of one's own opinion
coming in the way of Appraisal.
• (2) Halo Effect : The tendency of an individual to rate
an employee consistently high due to some earlier good
performance rather than his existing performance is
called as carrying a halo around oneself.
• (3) Horn Effect : The tendency of a superior to rate a
subordinate lower than his performance justifies due to
some recent/earlier failures.

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 The Employee’s Role in Career Planning

• Identify skills and aptitudes

• Identify high-potential occupations
• Change jobs if necessary
• Find and utilize a mentor

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The Employer’s Impact on Career
Management

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 Managing Promotions and Transfers

• Seniority versus competence

• Lateral moves or transfers
– Can be due to downsizing
– Usually do not result in greater rate of pay
– Employees seek out transfers for advancement
opportunity and non-career reasons like better
hours, work location, etc.

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 Retirement Counseling

• Successful retirement counseling can help employees

and employers
• The workforce is growing older and less younger
replacements are available - how will pending
retirements affect the company?
• Effective retirement counseling not only assists
employees but enables the employer to retain
retiring talent in some capacity

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 Retirement Counseling, cont.

• Minimize retirement effects on company by creating

a culture that honors experience
• Modify selection procedures
and offer flexible work
• Create a phased- retirement
system

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