MA Elec 2A - BSMA 3E

1O MANAGING EMPLOYEES’
PERFORMANCE

Reporters:
Belly, Shajah
Bernal, Janssen Rica B.
Dela Cruz, Ashley
Labuten, Herren B.
Leonardo, Arian Maive
Panganiban, Monea Kaye V.
Tino, Janna
INTRODUCTION
Employees play a crucial role in the success of any business
or organization, and their individual performance directly
influences overall company outcomes.Therefore, actively
managing employee performance is essential—not only to
support individual growth but also to ensure the organization
remains competitive and aligned with its objectives.
LEARNING
OBJECTIVES
01 I d e n t i f y t h e a c t i v i t i e s i n vo l v e d i n p e r f or m a n c e m an a ge me n t .

02 D i s c u s s t h e p u r p o s e s o f p e rf o r ma n c e m a n a g e m e n t s y st e ms.

03 D e f i n e f i v e c r i t e r i a f o r m e a s u r i n g t h e e ff e c t i v e n e ss of a p e r f or ma n c e
management system

04 C o m p a r e t h e m a j o r m e t h o d s fo r m e a s u r i n g p e r fo r ma n c e .
LEARNING
OBJECTIVES
05 D e s c r i b e m a j o r s o u r c e s o f p e rf o r m a n c e i n f o r ma t i on i n t e r ms of
their advantages and disadvantages.

06 D e f i n e t y p e s o f r a t i n g e rr o r s , a n d e x p l a i n h o w t o mi n im iz e th e m .

07 E x p l a i n h o w t o p r o v i d e p e r f or m a n c e f e e d b a c k e f f e c t iv e l y .

08 S u m m a r i z e w a y s t o p r o d u c e i m p ro v e m e n t i n u n s at i sf a c to r y
performance.

09 D i s c u s s l e g a l a n d e t h i c a l i s s u e s t h a t a f fe c t p e r f or m an c e
management.
PERFORMANCE
MANAGEMENT
Is the process through which
THIS PROCESS REQUIRES:
Knowing what activities and outputs are
managers ensure that
desired,
employees’ activities and
Observing whether they occur, and
outputs contribute to the
Providing feedback to help employees
organization’s goals.
meet expectations.
PROCESS OF PERFORMANCE MANAGEMENT
Step 6 Step 1
Provide Define performance
Consequences outcomes for
for Performance company division
results. and department.

Step 5 Step 2
Develop employee
Identify goals,behavior and
improvements actions to achieve
needed. outcomes.

Step 3
Step 4 Provide support and
ongoing performance
Evaluate discussions.
performance
 It help the organization
achieve its business
Strategic objectives. It does this by
Purpose helping to link employees’
behavior with
the organization’s goals.

PURPOSE OF Administrative
Ways in which organizations
use the system to provide
information for day-to-day
PERFORMANCE Purpose decisions about salary,
benefits, and recognition

MANAGEMENT
programs.

Basis for developing

employee’s knowledge
Developmental and skills.
Purpose
 CRITERIA
Fit with Specific
Validity Reliability Acceptability
Strategy Feedback
Consistency of Whether or not a A performance
performance measure measure is valid measure
It should results, including;
aim at and reliable should
Interrater A performance specifically
achieving reliability - when
employee measure must be outline
multiple people acceptable to expectations
behavior assess
and users, including and how to
performance, as supervisors, meet them,
attitudes ratings may vary evaluators, and supporting
that support by scorer. employees, who strategy and
the Test-retest should find it not development.
Extent to which a measurement reliability -
organization tool measures what it is intended too time- Vague
’s strategy, ensures consuming and measures fail
to measure, ensuring performance consistency over
goals, and appraisals cover all relevant fair. to guide
culture. . time, allowing employees
aspects and omit irrelevant ones. . detection of true toward
performance organizational
changes. goals. Without
Without reliability, identifying
assessments become problems,
unreliable for employees
decision-making. cannot
improve.
Test Your Knowledge

Jerica is a computer programmer whose job mainly consists of

independently coding software. Interpersonal and teamwork
skills are included on the performance appraisal. Measuring
these skills most closely represents:
a. Criterion contamination
b. Criterion deficiency
c. Unreliability
METHODS FOR
MEASURING
PERFORMANCE
 Comparative

Quality Attribute

Method

Results Behavior

METHODS FOR MEASURING PERFORMANCE

 Criteria

APPROACH FIT WITH STRATEGY VALIDITY RELIABILITY ACCEPTABILITY SPECIFICITY

Depends on rater, but Moderate; easy to develop

Poor, unless manager Can be high if ratings are
Comparative usually no measure of and use but resistant to Very low
takes time to make link done carefully
agreement used normative standard

Usually low; can be

Usually low; requires Usually low; can be fine if High; easy to develop and
Attribute improved by specific Very low
manager to make link developed carefully use
definitions of attributes

Usually high; minimizes Moderate; difficult to

Behavioral Can be quite high contamination and Usually high develop, but accepted well Very high
deficiency for use

High regarding results,

Usually high; can be both High; main problem can be High; usually developed
but low regarding
Results Very high contaminated and test-retest--depends on with input from those to be
behaviors necessary to
deficient timing of measure evaluated
achieve them

High regarding results,

Hish, but can be both High; usually developed
but low regarding
Quality Very high contaminated and High with input from those to be
behaviors necessary to
deficient evaluated
achieve the,

TABLE 10.1 BASIC APPROACHES TO PERFORMANCE MEASUREMENT

MAKING COMPARISONS

Simple Ranking

Forced-distribution Method

Paired-comparison Method
SIMPLE RANKING
Managers rank employees from highest to poorest performer
Variation: Alternation Ranking
Select best employee, cross off list
Select worst employee, cross off list
Continue alternating until all ranked
Major drawbacks:
Validity issues
Raises fairness concerns
FORCED-DISTRIBUTION
METHOD
Assigns predetermined percentage of employees to each performance
category.
For example:
Exceptional – 5%
Exceeds Standards – 25%
Meets Standards – 55%
Room for Improvement – 10%
Not Acceptable – 5%
When it works: Group members truly vary in performance levels
Challenge: Can hurt morale in high-performing teams
PAIRED-COMPARISON
METHOD
Compare each employee with every other employee
Assign one point to higher performer in each pair
Employee with the most points = top-ranked
Example: 5 employees = 10 comparisons; 15 employees = 105 comparisons
Major Drawback: Extremely time-consuming for larger groups
RATING INDIVIDUALS
Evaluates each employee against uniform standards (not
against each other)

Rating Attributes

Rating Behaviors

Both require identifying desired qualities and providing

rating forms
Typically use rating scale (e.g.,1 to 5)
RATING ATTRIBUTES -
GRAPHIC RATING SCALE
Lists specific traits (knowledge, communication, judgement, teamwork, etc.)
Provides rating scale for each trait (1=poor to 5=distinguished)
Manager indicates extent employee displays each trait
Drawback: Low reliability - managers may interpret rating differently
 Rating

Figure 10.3
PERFORMANCE Example of a Graphic
DISTINGUISHED Rating Scale
EXCELLENT COMMENDABLE ADEQUATE POOR
DIMENSION

Knowledge 5 4 3 2 1

Communication 5 4 3 2 1

Judgment 5 4 3 2 1

Managerial skill 5 4 3 2 1

Quality performance 5 4 3 2 1

Teamwork 5 4 3 2 1

Interpersonal skills 5 4 3 2 1

Initiative 5 4 3 2 1

Creativity 5 4 3 2 1

Problem solving 5 4 3 2 1

FIGURE 10.3 EXAMPLE OF A GRAPHIC SCALE

MIXED-STANDARD
SCALES
Address reliability issues of graphic rating scales
How it works:
Multiple statements describe each trait at different levels (high, medium,
low)
Statements are mixed together
Manager indicates if employee performs above (+), at (0), or below (-) each
statement
Scoring produces final score for each trait (1-7 scale)
Benefit: More objective and reliable than simple graphic scales
FIGURE 10.4 EXAMPLE OF A MIXED-STANDARD SCALE
FIGURE 10.4 EXAMPLE OF A MIXED-STANDARD SCALE
RATING BEHAVIORS

Critical-Incident Method

Behaviorally Anchored Rating Scale (BARS)

Behavioral Observation Scale (BOS)

Organizational Behavior Modification (OBM)

CRITICAL-INCIDENT
METHOD
Managers keep records of specific examples of effective or ineffective
behavior
Example: Application repair technician who prediagnosed problem,
checked truck for parts, and obtained them from inventory to complete
repair on first visit.
Benefits:
Provides specific evidence of performance
Gives concrete feedback on strengths and weaknesses
Links behavior to company goals
Drawbacks:
Requires significant effort (daily/weekly logs)
Managers may resist
Incidents may be unique, limiting comparisons
BEHAVIORALLY ANCHORED
RATING SCALE (BARS)
Builds on critical-incident approach
How it’s developed:
Gather many critical incidents
Classify from most to least effective
Experts verify statements clearly represents performance levels
Statements become “anchors” for rating scale
Example: Patrol officer preparing for duty
Highest (7): Early to work, gathers equipment, reviews previous shift
Lowest (1): Late, doesn’t check equipment, unprepared
Benefits: Improves reliability, provides specific feedback
Limitations: May bias manager’s memory toward similar behaviors
BEHAVIORAL OBSERVATION
SCALE (BOS)
Key Features:
May use 15+ behaviors to define performance levels
Asks managers to rate frequency of each behavior (1=Almost Never to
5=Almost Always)
Ratings averaged for overall score
Example: "Overcoming Resistance to Change"
Describes details of change
Explains why change is necessary
Listens to employee concerns
Asks for help making change work
Major Drawback: Information overload (80+ behaviors tracked over 6-12
months)
Research Finding: Managers and employees prefer BOS despite
complexity
ORGANIZATIONAL
BEHAVIOR
MODIFICATION (OBM)
Based on behaviorism: Past reinforcement determines future behavior
Four Key Components:
1.Define key behaviors necessary for job performance
2.Measure whether employees exhibit these behaviors
3.Inform employees of key behaviors and goals
4.Provide feedback and reinforcement based on behavior
Real-World Success:
Community mental health agency: improved timeliness of critical
behaviors
Processing plant: increased safety behaviors
Principle: People repeat behaviors that are rewarded
 MEASURING RESULT
Evaluating performance based on objectives and measurable
outcome. examaple:
Sales
Cost
Profits
Productivity

PRODUCTIVITY MEASUREMENT

MANAGEMENT BY OBJECTIVES ( MBO)

a. Goal are specific, difficult, and objective
b. Joint Goal Setting
c. Feedback

ADVANTAGE DISADVANTAGE
Objectives and easy to link
organizational goals Can ignore behavior or teamwork
Motivates employees to meet May be affected by external factors
target Does not show how to improve
FIGURE 10.2 MANAGEMENT BY OBJECTIVE: 2 OBJECTIVES FOR A BANK
Test Your Knowledge

The performance management system at XYZ company

currently is perceived as unfair and is time-consuming for
managers. which of the following systems is the most likely and
least likely used, respectively.
a. Paired comparison; Results
b. Results; Forced distribution
c. Behavioral; Attributed
d. Attributes; Comparative
TOTAL QUALITY
MANAGEMENT
A continuous improvement approach assessing both individual and system
performance

GOAL: Customer Satisfaction through teamwork, feedback, and quality

focus
TYPES OF FEEDBACK:
SUBJECTIVE FEEDBACK
OBJECTIVE FEEDBACK

BENEFIT LIMITATION
Improve customer satisfaction and Time-consuming to develop and
product quality. maintain
Promotes employee involvement and Not ideal for decesions on pay or
teamwork. promotion
identifies and fixes system problems, Focuses more on system improvement
not just individual errors. than individual performance
SOURCES OF
PERFORMANCE
INFORMATION
MANAGERS
ADVANTAGES DISADVANTAGES

Possess the basic qualifications

Have an incentive to provide

accurate and helpful feedback For employees in some jobs, the
manager does not have enough
opportunity to observe the employee
Their feedback can improve
performing job duties.
performance

Employees tend to perceive the

appraisal as accurate
PEERS
ADVANTAGES DISADVANTAGES

They have the most opportunity to

observe the employee in a day-to- Friendships (or Rivalries)
day activities.

They are uncomfortable with rating

They bring a different perspective
employees for decisions that may
to the evaluation.
affect themselves
SUBORDINATES
ADVANTAGES DISADVANTAGES

Issues on power relationships involved

Often have the best chance to see

Employees have more power when
how well a manager treats
giving ratings to the manager, as a
employees
result managers tend to emphasize
employee satisfaction, even at the
expense of Productivity.
SELF
ADVANTAGES DISADVANTAGES

Opportunity to give examples of

their successes and request The individual has a tendency to inflate
training which are helpful assessments of their performance.
conversations with their managers.
CUSTOMERS
ADVANTAGES DISADVANTAGES

Provides direct, firsthand feedback High cost of conducting customer

on service performance surveys

Helps identify customer needs and Feedback may be biased or

improve services inconsistent

Limited usefulness for non–customer

Enhances accountability and
facing jobs
service quality

Can create stress or pressure on

employees
ERRORS IN
PERFORMANCE
MEASUREMENT
TYPES OF RATING ERRORS
Copyright © McGraw-Hill Education. Permission required for reproduction or display

Figure 10.1 Possible Rating Errors

Test Your Knowledge

Kelly rates all of his employees very low except for Rex. Rex gets
above average ratings because she consistently comes to
work on time. The rating errorsKelly makes are ___ and ___,
respectively.
a. Leniency; Horn
b. Strictness; Halo
c. Similar-to-me; Central Tendency
d. Horn; Strictness
 Ways to Reduce Errors

Rating Training Program Use of Data Analytics

Error Awareness Training Organizations use technology to
Raters watch videos designed track and analyze employee
to trigger specific rating errors behavior and feedback
They discuss how these errors Example: IBM used text analysis on
affect their decisions and learn employee feedback to improve
tips to avoid them its performance review system,
Performance Dimension Training ensuring it reflected empoyee
Focuses on the complex nature sentiments
of performance ..................................................................................
Helps improve accuracy and ..................................................................................
thoroughness in evaluations ..................................................................................
..............................................................................
Political Behavior in Performance Appraisals
Distorting a performance evaluation to advance one’s goal
or to avoid conflict, causing unfair feedback that
demotivates employees and hinders organizational goals
Sugarcoating’ feedback creates false confidence
Encourage accurate feedback to have a real
improvement
A technique to minimize appraisal politics is a calibration
meeting:
Meeting at which managers discuss employee
performance ratings and provide evidence supporting
their ratings with the goal of eliminating influence of
error.
GIVING PERFORMANCE
FEEDBACK
Scheduling Performance Feedback
Regular and expected management activity
Annual feedback is not enough
Preparing for a Feedback Session
Managers should be prepared for each formal
feedback session
DO IT IN AN APPROPRIATE MEETING
PLACE—NEUTRAL AND FREE OF
DISTRACTIONS.
Avoid Manager’s office CEO of Timmerman
NOAH SCHUMACHER Industries
Avoid Distractions
Neutral rooms create comfort
and equality.
CONDUCTING THE
FEEDBACK SESSION
Three Approaches:
1.Tell-and-Sell - managers tell and justify their
ratings
2.Tell-and-Listen - managers tell the ratings and
let the employee explain
3.Problem-Solving - manager and employee work
together to solve performance problems
FINDING SOLUTIONS TO
PERFORMANCE PROBLEMS
Use feedback to fix and enhance performance.
Focus on strengths and achievements.
Stay genuine and positive.
Connect feedback to goals and vision.
Be specific about behavior and results.
Don’t mix feedback with rewards or threats.
IMPROVING PERFORMANCE
Performance improvement depends on employee ability
and motivation.
Lack of ability – Coaching, training, feedback,
restructure
Lack of motivation – Fairness, rewards, praise,
counseling
Lack of both – Feedback, withhold rewards,
demote/terminate
Lack of neither – Rewards, feedback, growth
opportunities
LEGAL AND ETHICAL ISSUES IN
PERFORMANCE MANAGEMENT
Legal
Performance management processes are often
scrutinized in cases of discrimination or dismissal.
Ethical
Employee monitoring via electronnic devices and
computers may rate concerns over employee privacy
Lawsuits related to performance
management usually involve charges of:
Discrimination
Unjust dismissal
To protect against both kind of lawsuits, it is
important to have a legally defensible
performance management system
LEGALLY DEFENSIBLE
PERFORMANCE MANAGEMENT
SYSTEM
Based on valid job analyses, with requirements for job
CEO of Timmerman
NOAH SCHUMACHER
success clearly communicated to employees. Industries

Evaluates behaviors or results, rather than traits.

Multiple raters (including self-appraisal) used
All performance ratings reviewed by upper-level
managers.
Appeals mechanism for employees
PHILIPPINE LAWS RELATED TO
PERFORMANCE FEEDBACK
DISCRIMINATION LAWS
RA 10911 - Anti-Age Discrimination in Employment Act
No age-based feedback discrimination
Same standards for all ages
RA 9710 - Magna Carta of Women
No gender-based feedback discrimination
No penalties for maternity leave
RA 7877 - Anti-Sexual Harassment Act of 1995
No harassment in feedback sessions
Professional comments only
RA 11313 - Safe Spaces Act ("Bawal Bastos Law")
Respectful feedback communications
No sexist remarks or online harassment
RA 7277 - Magna Carta for Persons with Disability
Fair feedback with accommodations considered
Evaluate actual performance, not disability
PHILIPPINE LAWS RELATED TO
PERFORMANCE FEEDBACK
UNJUST DISMISSAL LAW
PD 442 - Labor Code of the Philippines
Article 297: Gross and Habitual Neglect
Documented feedback required
Two-Notice Rule mandatory
Progressive discipline needed

OTHER RELEVANT LAWS

RA 10173 - Data Privacy Act of 2012
Secure feedback records storage
Inform employees of data collection
RA 11036 - Mental Health Act
Constructive feedback delivery
Support employee wellbeing
 MA Elec 2A - BSMA 3E

THANK
YOU
References:
Noe, R. A., Hollenbeck, J., Gerhart, B., & Wright, P. (2024). Fundamentals of
Human Resource Management. McGraw Hill.

‌A g u i n i s , H . ( e . g . , l a t e s t e d i t i o n ) . P e r f o r m a n c e M a n a g e m e n t . U p p e r S a d d l e R i v e r ,
NJ: Pearson.