HRMA 

445: Performance Management 
Summer 2020‐2021

Lecture 1: Introduction to Performance 
Management

Lecture Outline 
 Definition of Performance?
 Factors That Influence Performance
 Definition of Performance Management (PM)
 Purposes of PM Systems
 Definition of Performance Appraisal (PA)
 Difference between PM and Performance Appraisals (PA)
 The PM Contribution 
 Disadvantages/Dangers of Poorly Implemented PM Systems
 Characteristics of an Ideal PM System
 Performance Appraisal Process 

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Introduction 
Machine Performance vs. Human Performance

Definition of Performance
 Performance is essentially what an employee does 
or does not do
 Common elements to performance
 Quality of output
 Quantity of output
 Timeliness of output
 Presence at work
 Cooperativeness

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Factors That Influence Performance
Motivation  Environment  Competencies  
 Career Ambition  Job Design   Knowledge 
 Goals/Expectations  Economic Conditions  Skills 
 Frustration  Rules and Policies   Abilities 
 Employee Conflicts   Management Support 
 Fairness/Satisfaction   Law and Regulations 
 Equipment and 
Materials 
 Workplace Conditions 

Performance= f (M, E, C)

Definition of Performance 
Management (PM)
Performance Management is A process that
consolidates:
 Goal setting
 Performance Appraisal
 Development of a common system
Aiming to ensure that employee performance is
supporting the company's strategic aimsAligning
performance with the strategic goals of the
organization

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Purposes of PM Systems (1/2)
1 Strategic  Link individual goals with organization’s goals
 Communicate most crucial business strategic initiatives

2 Administrative  Provide information for making decisions regarding:
 Salary adjustments
 Promotions
 Retention or termination
 Recognition of individual performance
 Layoffs

3 Informational  Communicate to employees:
 Expectations
 What is important
 How they are doing
 How to improve

Purposes of PM Systems (2/2) 

4 Developmental  Identification of individual strengths and weaknesses
 Identification of causes of performance deficiencies
 Tailor development of individual career path

5 Organizational   Plan effective workforce
maintenance  Assess future training needs
 Evaluate performance at organizational level
 Evaluate effectiveness of HR interventions

6 Documentation  Validate selection instruments
 Document administrative decisions
 Help meet legal requirements

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Definition of Performance Appraisal 
(PA)
 Performance appraisal is the identification, 
measurement and management of human performance 
in an organization
 Identification: knowing what behaviours lead to 
performance
 Measurement: anchored tools to provide consistent 
assessment of performance
 Management: feedback and goal setting

Difference between PM and PA
Performance  Performance Appraisals 
Management  (PM) (PA)
Efforts to align employee  Efforts to determine the 
performance with the  extent to which an 
firm Strategic goals employee performs work 
 Defines performance effectively
 Facilitates performance  Measure performance
 Encourages   Evaluate performance
performance  Feedback on 
performance

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Contributions of  Performance 
Management
 For Employees
 For Managers
 For Organization/HR 
Function

Contributions of Performance 
Management for Employees
 Clarify definitions of 
 Job
 Success criteria
 Increase motivation to perform
 Increase self‐esteem
 Enhance self‐insight and development

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Contributions of Performance Management 
for Managers
 Communicate supervisors’ views of performance 
more clearly
 Managers gain insight about subordinates
 Better and more timely differentiation between 
good and poor performers
 Employees become more competent

Contributions of Performance Management for 
Organization/HR Function
 Clarify organizational goals 
 Facilitate organizational change
 Fairer, more appropriate administrative actions
 Better protection from lawsuits
 Integration with other Human Resources and Development 
Activities‐ PM provides information for:
 Development of training to meet organizational needs
 Workforce planning
 Recruitment and hiring decisions
 Development of compensation systems

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Disadvantages/Dangers of  Poorly Implemented  
PM Systems 
For Employees  Lowered self‐esteem
 Employee burnout and job dissatisfaction
 Damaged relationships
 Use of false or misleading information

For Managers  Increased turnover
 Decreased motivation to perform
 Unjustified demands on managers’ resources
 Varying and unfair standards and ratings

For   Wasted time and money
Organization/  Unclear ratings system
HR Function  Emerging biases
 Increased risk of lawsuit

An Ideal PM System:  15 Characteristics 
(1/5)
1 Strategically   Consistent with organization’s strategy
congruent  Aligned with unit and organizational goals

2 Contextually   Congruent with the organization’s culture as well as the 
congruent broader cultural context of the region or country
 Example: A 360‐degree feedback is not effective where 
communication is not fluid and hierarchies are rigid

3 Thorough  All employees are evaluated
 All major job responsibilities are evaluated
 Evaluations cover performance for entire review period
 Feedback is given on both positive and negative 
performance

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An Ideal PM System:  15 Characteristics 
(2/5)
4 Practical  Available
 Easy to use
 Acceptable to decision makers
 Benefits outweigh costs

5 Meaningful  Standards are important and relevant
 System measures ONLY what employee can control
 Results have consequences 
 Evaluations occur regularly and at appropriate times
 System provides for continuing skill development of 
evaluators

6 Specific  Concrete and detailed guidance to employees 
 What’s expected 
 How to meet the expectations

An Ideal PM System:  15 Characteristics
7 Identifies   Distinguish between effective and ineffective:
effective and   Behaviours
ineffective   Results
performance  Provide ability to identify employees with various levels of 
performance.

8 Reliable  Consistent
 Free of error
 Inter‐rater reliability

9 Valid  Relevant (i.e., measures what is important)
 Not deficient (i.e., doesn’t measure unimportant facets of 
job)
 Not contaminated (i.e., only measures what the employee 
can control)

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An Ideal PM System:  15 Characteristics
10 Acceptable   Perception of Distributive Justice
and fair Work performed  Evaluation received  Reward

 Perception of Procedural Justice
Fairness of procedures used to:
 Determine ratings
 Link ratings to rewards

11 Inclusive  Represents concerns of all involved
 When system is created, employees should help with 
deciding:
 What should be measured
 How it should be measured
 Employee should provide input on performance prior to 
evaluation meeting.

An Ideal PM System:  15 Characteristics 
12 Open (No   Frequent, ongoing evaluations and feedback
Secrets)  Two‐way communications in appraisal meeting
 Clear standards and ongoing communication
 Communications are factual, open, and honest

13 Correctable  Recognizes that human judgment is fallible
 Appeals process provided

14 Standardized  Ongoing training of managers to provide
 Consistent evaluations across:
 People
 Time
15 Ethical  Supervisor suppresses self‐interest
 Supervisor rates only where (s)he has sufficient information 
about the performance dimension 
 Supervisor respects employee privacy

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Performance Appraisal Process 

2‐ Identifying  3‐ Gathering and 
1‐ Conducting 
Performance  Providing 
Organisational and 
Objectives and  Performance 
Job Analysis
Measurement Information

5‐ Performance  4‐ Conducting the 
Renewal and Re‐ Performance 
Contracting  Review Meeting

Key References and Readings for 
this Lecture 

Chapter 1: Aguinis, H. (2013) Performance

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Group Consulting Report
2.0 About the Company (750 words‐ +/‐ 10%)
2.1 Information about the company (200 words +/‐
10%)
2.2 Mission and Vision (100 words +/‐ 10%)
2.3 Environmental Assessment (400 words +/‐
10%)
2.3.1 External: Determining external conditions (PEST), threats, and
opportunities
2.3.2 Internal: Determining competencies, strengths, and weaknesses
within the organization
2.4 Organisational Objectives (100 words +/‐ 10%)

End of Lecture 

Thank you 

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