IMPLEMENTING A PERFORMANCE MANAGEMENT SYSTEM (NOTES)

IMPLEMENTING A
PERFORMANCE

MANAGEMENT SYSTEM

(NOTES)

BY:
1. AFIQAH AMIRAH BINTI MOHD AZILAN (4183007962)

2. IWANI BINTI KHAIRUL (4182012591)

TABLE OF CONTENT

DEFINITION OF A PERFORMANCE MANAGEMENT
SYSTEM

PREPARATION
COMMUNICATION PLAN
APPEALS PROCESS
TRAINING PROGRAMS
PILOT TESTING
ONGOING MONITORING AND EVALUATION

DEFINITION OF A PERFORMANCE MANAGEMENT
SYSTEM

Performance Management System is an ongoing process that monitor
people’s performance to achieve the organization’s desired goals. Its is
systematic process by HR Department. A performance management
system helps HR Managers establish clear performance expectations
through which employees can easily understand what is expected in their
job. It is involving a system which includes Preparation, Communication
Plan, Appeals Process, Training Programs, Pilot Testing and Ongoing
Monitoring and Evaluation.

PREPARATION

Preparation is needed to gain system buy-in through three systems:

• Communication Plan. It is regarding a Performance Management
System. This is including Appeal Process.

• Training Programs for raters to rate the people’s performance either it
is achieving the desired goals or not.

• Pilot Testing Systems.

All of these systems are an ongoing monitoring and evaluation that needs
HR to always check up on to achieve desired goals and results.

COMMUNICATION PLAN

To prepare a Performance Management System, the HR Department will
have a Communication Plan. They have to consider these answers to fit
in with the desired goals and results that needs to be achieved by the
organizational. The types of answers are:

• What is Performance Management (PM)?
• How does PM fit in our strategy?
• What is in it for me?
• How does it work?
• What are our roles and responsibilities?
• How does PM relate to other initiatives?

Cognitive Biases that affect Communication Effectiveness are Selective
Exposure, Selective Perception and Selective Retention.

These Cognitive Biases needs to be minimized to achieved
Communication Effectiveness in a Performance Management System.
There are three steps on how to minimize effect of cognitive biases.

Firstly, consider employees. It involves employees in system design and
it can show how the employee needs are met.

Secondly, emphasize the positive. HR have to use a credible
communicator to create an effective communication. HR also need to
strike first to create a positive attitude among the organizational. HR also

need to provide facts and conclusion to meet an agreement to the biases
of creating effective communication.

Lastly, repeat, document and be consistent. This step can be put in
writing and use multiple channels of communication such as formal or
informal types of communications. It needs to say it and say it again
repeatedly.

APPEALS PROCESS

This process can promote employee buy-in to Performance Management
System which are Amicable/Nonretaliatory and Resolution of
Disagreements.

It can increase perception of the system’s fairness and employee can
question two types of issues such as:

• Judgemental – Validity of Evaluation
• Administrative – Whether policies and procedures were followed.

Recommended Appeals Process:

Level 1:
• HR reviews facts, policies and procedures
• HR reports to supervisors or employee
• HR attempts to negotiate a settlement

Level 2:
• Arbitrator – Panel of peers and managers
• High-level Manager – Final decision

RATERS TRAINING PROGRAMS

Content Areas to Include:
• Information.
• Identifying, Observing, Recording and Evaluating.
• How to Interact with employees.

Choices of Training Programs to Implement
• Rater Error Training.
• Frame of Reference Training.
• Behavioural Observation.
• Self-Leadership Training.

Content Area:

• Information – How the system works.

o Reasons for implementing the Performance Management System
o Information

➢ The Appraisal Form
➢ System Mechanics

• Identifying, Observing, Recording and Evaluating performance
o How to identify and rank job activities
o How to observe, record and measure performance
o How to minimize rating errors

• How to Interact with Employees – When they receive performance
information

o How to conduct an appraisal interview
o How to train, counsel and coach

Choices of Training Programs:

• Rater Error Training (RET).
• Frame of Reference Training (FOR).
• Behavioural Observation Training (BO).
• Self-Leadership Training (SL).

• Rater Error Training (RET)

Goals of RET is to:

o Make raters aware of types of rating errors they are likely to make
o Help raters minimize errors
o Increase rating accuracy

Intentional Rating Errors:

o Leniency (inflation)
o Severity (deflation)
o Central tendency

Unintentional Rating Errors: ✦ Stereotype
✦ Negativity
o Similar to me ✦ Recency
o Halo ✦ Spillover
o Primacy ✦ Attribution
o First Impression
o Contrast

Possible Solutions for Types of Rating Errors:
Intentional Rating Errors:

• Focus on motivation
• Demonstrate benefits of providing accurate ratings
Unintentional Rating Errors:
• Alert raters to different errors and their causes

• Frame of Reference Training (FOR)

Goals of FOR is to:

o Raters develop common frame of reference
➢ Observing performance
➢ Evaluating performance

***Most appropriate when PM appraisal system focuses on behaviours

Expected results of FOR is to:

o Raters provide consistent, more accurate ratings
o Raters help employees design effective development plans

***Most appropriate when PM appraisal system focuses on behaviours

• Behavioural Observation Training (BO)

Goals of BO is to:

o Minimize unintentional rating errors
o Improve rater skills by focusing on how raters:

➢ Observe performance
➢ Store information about performance
➢ Recall information
➢ Use information about performance

• Self-Leadership Training (SL)

Goals of SL is to:

o Improve rater’s confidence in ability to manage performance
o Enhance mental processes
o Increase self-efficacy

PILOT TESTING

Pilot Testing is done before the system is implemented. It is providing
ability to:

• Discover potential problems
• Fix them

Benefits of Pilot Testing:

• Gain information from potential participants
• Learn about difficulties or obstacles
• Collect recommendations on how to improve system
• Understand personal reactions
• Get early buy-in from some participants
• Get higher rate of acceptance

Implementing a Pilot Test:

• Roll out test version with sample group
• Staff and jobs generalizable to the organization
• Fully implement planned system
• All participants keep records of issues encountered
• Do not record appraisal scores
• Collect input from all participants

ONGOING MONITORING AND EVALUATION

When system is implemented, decide:
• How to evaluate system effectiveness
• How to measure implementation
• How to measure results

Evaluation data to collect:
• Reactions to the system
• Assessments of operational and technical requirements
• Effectiveness of performance ratings

Indicators to Consider:

• Number of individuals evaluated
• Distribution of performance ratings
• Quality of information
• Quality of follow-up actions
• Quality of performance discussion meetings
• System satisfaction
• Cost-benefit ration or return on investment (ROI)
• Unit-level and organization-level performance