Page 144 - DMGT406_HUMAN_RESOURCE_MANAGEMENT

Unit 8: Performance Management System

8.6 Summary Notes

 Performance management system is a process for setting goals and monitoring progress
toward achieving those goals. It is just like other system where achieved results are
continually measured and compared with the desired goals or outputs.
 Planning means setting performance expectations and goals for groups and individuals to
channel their efforts toward achieving organizational objectives. Performance appraised
systems are designed to improve performance, they broadly cover three areas: define
performance, facilitate performance and encourage performance. The post appraisal
interview is an essential part of the performance appraisal system. It also gives the
opportunity to the employee to explain his views about the ratings, standards, rating
methods, internal and external causes for low level of performance.

8.7 Keywords

Assessment Centre: It is an appraisal technique that relies on multiple types of evaluation and
multiple raters.
Behaviourally Anchored Ratios Scale: It is an absolute assessment technique wherein critical
incidents are identified and a range of performance possibilities (from poor to good) are described
for each dimension.
Central Tendency: The reluctance to use the extremes of a rating scale and to thereby fail to
adequately differentiate employees being rated.
Checklist: Performance appraisal tool that uses a lot of statements or words that are checked by
raters.
Contrast Error: Tendency to rate people relative to other people rather than to performance
standards.
Halo Effect: Bias which occurs when the rater's personal opinion of a specific trait of employee
influences the rater's overall assessment of performance.

Performance Appraisal: A systematic and objective way of evaluating both work related
behaviour and potential of employees.
Performance Management System: It is a process for setting goals and monitoring progress
toward achieving those goals.
Planning: Planning means setting performance expectations and goals for groups and individuals
to channel their efforts toward achieving organizational objectives.

Rater Bias: Error that occurs when a rater's values or prejudices distort the rating.
Rating Scale: A method which requires the rater to provide a subjective performance evaluation
along a scale from low to high.

8.8 Review Questions

1. "Some of the so-called modern industries still follow traditional techniques of performance
appraisal". Do you agree? If yes, defend your argument with reasoning.
2. Think of a time when someone gave you counselling in an inappropriate manner. Given
what you read in this chapter, how could you have reacted to improve the usefulness of
the feedback?

LOVELY PROFESSIONAL UNIVERSITY 137