Methods of Performance Management

Organizations with strong performance management systems are 51% more likely to outperform their competitors on financial measures and 41% more likely to outperform their competitors on non-financial measures such as customer satisfaction, employee retention, and quality of products or services (Bernthal et al., 2003).

According to DeCenzo and Robbins (2015), there are three renowned categories of performance management methods:

1. Absolute methods – they compare the work performance of the employees with the standards and requirements for qualified work adopted by the organization. These include: the critical incident rating, the checklist rating, the graphic rating scale.

2. Relative methods – the evaluated are compared with other employees. Most often comparison in group, comparison by pairs, point scales for grading the level of performance, and others are applied.

3. Management by objectives - when evaluating the performance, the results of the employee's work are compared with the initial targets.

Elaborating two popular methods of performance management in below to highlight the characteristics of performance management systems.

1.      360 Degree Feedback

Most important foundation behind the use of 360 degree performance appraisal is that a significant amount of performance data about a given employee can be gathered when multi-sources are used (Sahoo & Mishra, 2012).

Figure 1.0: 360-degree feedback model

Source: (Armstrong, 2006)

According to the Figure 1.0, 360-degree feedback can be applied to an employee from the supervisor, subordinates, his or her peers who work in other division of the organization and their internal customers.

2.      MyPDR

MyPDR is the standard system for Employee Performance Review and Development at B. Braun in Asia Pacific. At B. Braun, employees are committed to an annual performance appraisal process that fosters and rewards good employee performance, and promotes consistency and fairness in performance assessment.

B.Braun continuously strive for Individual Development and further Performance Improvement. MyPDR provides a unified platform to handle both - Performance Appraisal & Employee Development.

There is a philosophy behind MyPDR in order to become as meaningful and effective as possible, it relies on the following 4 main cornerstones.

Figure 2.0: MyPDR Philosophy

The direct superior assigns an overall performance rating to each direct report. The rating system consists of 4 levels.

Figure 2.1: Performance Rating System

MyPDR 1 to 1 Session

·         1-on-1 sessions are a key element of the MyPDR Process.

·         They take place in the form of personal dialogs between employee and his/her direct superior.

·         They do not take place once a year to share final assessment result with employee, but regularly.

·         Their purpose is to give feedback on performance & discuss employee development.

·         Supervisor & employee are both accountable to realize regular 1-on-1 sessions.

References

·         Armstrong, M. (2006) Performance management: key strategies and practical guidelines .3rd ed. London and Philadelphia, Kogan Page

·         B.Braun International, B.Braun Knowledge Center (BKC)

·         Bernthal, P., Rogers, R. and Smith, A., (2003) Managing Performance: Building Accountability for Organizational Success, Pittsburgh PA, Development Dimensions International.

·         DeCenzo, D.,A., Robbins, S.,P., Verhulst, S.,L., (2015), Fundamentals of Human Resource Management, Binder Ready Version, John Wiley & Sons, Wiley PLUS Learning Space, 12^th ed., pp. 234

·         Strauss G., Sayles L.,R., Personnel: The Human Problems of Management, New Delhi Prentice Hall of India Pvt. Ltd., 1971, pp.550-560

·         Sahoo, C.,K., Mishra, S., (2012),Performance management benefits organizations and their employees, Human Resource Management International Digest, Vol. 20