Performance Management and Appraisal

Performance Management

Continuous process of identifying, measuring, and developing the performance of individuals and teams and aligning their performance with the organization’s goals

Performance Management System

PMS

A system that includes three stages or cycles: Planning Performance, Managing Performance, and Assessing Performance

Planning Performance

Setting performance expectations from employees that must be aligned with the organization's goals

Managing Performance

Managing employee performance from goal setting, through mid-term review, to final appraisal

Assessing Performance

Assessment of the employee’s performance for the year and providing feedback

Performance Appraisal

A tool organizations use to assess an employee’s performance, including quantitative and qualitative aspects, against the standards or objectives set by the organization

Quantitative Performance Appraisal

Assessment of measurable aspects of an employee’s performance

Qualitative Performance Appraisal

Assessment of non-numerical aspects of an employee’s performance

Other Terms for Performance Appraisal

Performance assessment, performance evaluation, performance feedback, and performance rating

Performance Management Time Period

Past, present, and future

Performance Appraisal Time Period

Past

Performance Management Focus

Linking employee work activities to specific objectives and strategy

Performance Appraisal Focus

Creating records and documenting performance problems

Performance Management Formality

Informal and verbal

Performance Appraisal Formality

High formality using written forms with signatures

Performance Management Role of Supervisor

Coach, motivator, and partner

Performance Appraisal Role of Supervisor

Authority figure

Performance Management Outcome

Participation, targeted performance, and improved relationships

Performance Appraisal Outcome

Compensation decision and task directives

Performance Management vs Performance Appraisal

Performance management is a continuous process covering past, present, and future performance, while performance appraisal is a formal assessment focused mainly on past performance

Evolution of Performance Appraisal

Development of performance appraisal practices from ancient times to the 21st century

Ancient Times

3000 BC

Egyptians relied on slavery and forced labor in building the great pyramids and whipped workers who did not work as required

Indus Valley

Before 1500 BC

Relied on crafts and trade, used standardized weights to levy taxes, and based performance criteria on total production per individual and the quality of products

Indus Valley Performance Criteria

Based on total production per individual and the quality of products

Indus Valley Products

Gold, ivory, copper, bronze, bricks, ceramics, yarn, cloth, beads, blades, and tools

Vedic Period

1500-600 BC

Aryans were involved in cattle-rearing, herding, breeding, bronze metallurgy, weaponry, weaving, carpentry, and other activities

Vedic Period Performance Criteria

Based on expertise and livelihood, quantity of products, and cost of products

Chinese System

350 BC to 350 AD

Dynasties flourished, peasant farmers were deployed as soldiers, skilled artisans and craftsmen were promoted and given status, and women were exempted from annual labor duties

Indian System

Wages depended on the bargaining capacities of employers and workers and on the worker’s time and work

Indian System Remuneration

If there was no remuneration, a farmer or laborer could claim one-tenth of his produce; wages were also given to skilled workers such as doctors, musicians, and artisans

16th-17th Centuries

St. Ignatius Loyola established a system for formal rating of members of the Jesuit Society

St. Ignatius Loyola’s Rating System

Used a combined system of notes and reports of the activities of each Jesuit

18th-19th Centuries

Early forms of performance appraisal developed in Britain and the USA

Adam Smith and Performance Appraisal

Adam Smith discussed the principle of specialization for manufacturing workers to make monitoring easier

Performance Appraisal During Industrial Revolution

Workers were evaluated and paid based on the quantity of output, while operating procedures and work methods were introduced

US Army Performance Appraisal

Performance appraisals were formally implemented in the US Army in 1813

President Tyler’s Administration

First efforts to establish an employee performance evaluation and rating system were evident during President Tyler’s administration

20th Century Performance Appraisal

Frederick Taylor developed scientific management based on analysis of existing work methods through observation and measurement

Frederick Taylor

Developed the concept of scientific management, focusing on increasing the efficiency of individual workers

Scientific Management

Based on analysis of existing work methods through observation and measurement

20th Century Performance Focus

Emphasis was given to behavior, human relations, morale, and motivation

Financial Incentives

Used during the development of performance appraisal in the 20th century

Balanced Scorecard

A strategic performance management system introduced to link strategic, operational, and individual performance

21st Century Performance Appraisal

Organizations customized their performance appraisal and management systems and introduced new trends, methods, and techniques

Uses of Performance Appraisal

Performance improvement, compensation adjustments, placement decisions, training and development needs, career planning and development, staffing process deficiencies, information accuracies, job design errors, and equal employment opportunity

Performance Improvement

Intervention with appropriate actions to improve performance

Compensation Adjustments

Pay increases and bonuses

Placement Decisions

Promotions, transfers, demotions, layoffs, grievance, and discipline

Training and Development Needs

Identifying the need for training or retraining and harnessing untapped potential

Career Planning and Development

Helping establish an employee’s career path

Staffing Process Deficiencies

Identifying strengths and weaknesses in the staffing procedure

Information Accuracies

Identifying errors in job analysis, HR plans, or other personnel management information systems

Job Design Errors

Diagnosing errors in crafting job design

Equal Employment Opportunity

Ensuring non-discriminatory internal placement decisions

Strategic Performance Management of the Philippine Civil Service

Performance management approach used within the Philippine civil service

Strategic Performance Management System

SPMS

A mechanism that links employee performance with organizational performance to enhance the performance orientation of the compensation system

SPMS Employee Objective

Ensures that the employee achieves the objectives set by the organization

SPMS Organizational Objective

Ensures that the organization achieves the objectives set in its strategic plan

Performance-Based Incentive System

PBIS

A system linked to SPMS that consists of the Productivity Enhancement Incentive and the Performance-Based Bonus

Productivity Enhancement Incentive

PEI

One component of the Performance-Based Incentive System

Performance-Based Bonus

PBB

One component of the Performance-Based Incentive System

SPMS Coverage

Applicable to all constitutional bodies, departments, bureaus, agencies of the National Government, Local Government Units, Government-Owned and Controlled Corporations, and State Universities and Colleges

Constitutional Bodies

Organizations covered by the SPMS

National Government Departments

Departments covered by the SPMS

National Government Bureaus

Bureaus covered by the SPMS

National Government Agencies

Agencies covered by the SPMS

Local Government Units

LGUs

Government units covered by the SPMS

Government-Owned and Controlled Corporations

GOCCs

Government corporations covered by the SPMS

State Universities and Colleges

Universities and colleges covered by the SPMS

Civil Service Commission

CSC

The government body associated with the Strategic Performance Management System in the presentation

Strategic Performance Management Process

The process involving performance planning and commitment, performance monitoring and coaching, performance review and evaluation, and performance rewarding and development planning

Performance Planning and Commitment

The phase where success indicators are determined and performance targets and measures are established

Success Indicators

Performance level yardsticks consisting of performance measures and performance targets

Performance Targets

Major Final Outputs or MFOs that serve as the basis for creating the OPCR and IPCR

Major Final Outputs

MFOs

Performance targets that serve as the basis for the creation of the Office Performance Commitment and Review Form and Individual Performance Commitment and Review

Office Performance Commitment and Review Form

OPCR

A form created using Major Final Outputs as a basis for office performance

Individual Performance Commitment and Review

IPCR

An individual employee performance form created using Major Final Outputs as a basis

Performance Measures

Indicators used to measure performance in terms of effectiveness/quality, efficiency, and timeliness

Effectiveness/Quality

Actual performance compared with target performance; objectives are achieved and the right things are done

Efficiency

Targets are accomplished with a minimum amount or quantity of waste, expense, or unnecessary effort

Timeliness

Time based on the requirements of the law or clients/stakeholders, including completion deadlines and time management skills

Performance Monitoring and Coaching

The phase where the performance of the office and every individual is regularly monitored at various levels

Regular Performance Monitoring

Regular monitoring of office and individual performance at various levels

Managers as Coaches

Managers provide coaching and support to improve team performance

Supervisors as Coaches

Supervisors act as coaches and mentors to provide an enabling environment and intervention