Colegio de Dagupan
School of Business and Accountancy
Human Behavior in Organization
MODULE 6: PERFORMANCE MANAGEMENT AND REWARDS
Learning Outcomes:
At the end of this module, the students are expected to:
1. Define what performance management is
2. Describe staffing, training and career planning and development
3. Define performance appraisal
4. Define and list what rewards are
What is Performance Management
It refers to procedures and systems designed to improve outputs and performance,
often through the use of economic incentive systems.
An effective performance management process considers human resource strategic
planning as a basic requirement.
HR Strategic Planning
It refers to the process of providing capable and motivated people to carry out the
organization’s mission and strategy.
A key element of HR strategic planning is the staffing function which implements the
provision of qualified people to the identified job openings.
Staffing
It refers to the HR planning, acquisition, and development aimed at providing the talent
necessary for organizational success.
Staffing process:
1. Job analysis
2. Recruitment
3. Selection
4. Socialization
Job analysis is a technical procedure used to define the duties, responsibilities, and
accountabilities of a job.
The results of job analysis are very useful in:
a. Preparing job descriptions
b. Evaluating and classifying jobs
c. Training and career development
d. Performance appraisal
e. Other HR aspects
It contains information concerned with the job. Information include job duties and
responsibilities, equipment and materials used, working conditions and hazards, supervision,
work schedules, standards of performance, and relationships to the other jobs.
Job Specification
It is a list of requirements such as education and experience; technical knowledge;
physical aptitudes and abilities; interpersonal and communication skills; analytical aptitudes
and abilities; and creative abilities that an individual needs to perform a job.
Recruitment
It is defined as a human resource management practice designed to locate and attract
job applicant for particular positions.
Recruitment involves the following:
1. Advertisement of a position vacancy
2. Preliminary contact with potential job candidates
3. Preliminary screening to obtain a pool of candidates.
4. Improves the probability of a good selection
5. It is less costly than external recruitment
6. Lesser learning curve
7. Act as a training device for developing managers
The disadvantages of internal recruitment consist of the following:
1. Dysfunctional if inferior internal sources are utilized
2. May generate infighting among the rival candidates
3. Decrease the morale of those not selected
4. May promote “inbreeding”
Selection
It involves assessing and choosing among job candidates
Socialization
It involves orienting new employees to the organization and its work units. Its purpose
is to enable new employees to quickly become productive members of the organization.
Orientation on the following:
1. Key organization factors which includes an overview of the organization, policies and
procedures and others; and
2. Department and job-related issues including department function; job duties and
responsibilities; policies; and others.
Training and Career Planning and Development
Training is the process of changing employee behavior, attitudes, or opinions through
some type of guided experience.
- On-the-Job Training
o This training method is conducted while employees perform job-
related tasks.
- Off-the-Job Training
o This type of training deals with work skills in settings away from their
ordinary workplace.
Career Planning and Development
Career is defined as the pattern of work-related experiences that span the course of a
person’s life.
Performance Appraisal
It is a key aspect of performance management. It may de defined as the process of
evaluating the performance of employees, sharing that information with them, and searching
for ways to improve their performance.
Sources of Performance Appraisal
a. Personal Observation
b. Statistical reports
c. Oral reports
d. Written reports
Functions of Performance Appraisal
a. To give employees feedback on performance
b. To identify the employee’s developmental needs
c. To make promotion and reward decisions
d. To make demotion and termination decisions
e. To develop information about the organization’s selection and placement decisions
Criteria for Performance Appraisal
a. Individual task outcomes – one way of appraising performance is evaluating the
employee’s task outcomes
b. Behavior – in instances when it is difficult to measure an individual’s task outcomes,
management tend to evaluate the employee’s behavior.
c. Traits – many organizations use traits as criteria in appraising employee performance.
This is true even if it is a very weak means.
Performance Appraisal
It is a process in an organization whereby each employee is evaluated to determine how
he or she is performing. It consists of the following steps:
1. Establishment of performance standards
2. Measure actual performance
3. Discuss the appraisal with the employee
Absolute Standards
Subjects of appraisal are not compared with other persons. This approach consists of
the following methods:
1. The essay appraisal
- Is a performance appraisal method whereby an appraiser writes a narrative
about the employee. The employee’s strengths and weaknesses are
described and recommendations for development are indicated.
2. The critical incident appraisal
- Is a performance appraisal method which requires effective or ineffective
performance for each employee being appraised. These incidents are critical
incidents.
3. The checklist
- Is a performance appraisal method wherein the evaluator uses a list of
behavioral descriptions and checks off those behaviors that apply to the
employee.
4. The adjective rating scale
- Also known as graphic rating scale, is a performance appraisal method that
listst a number of traits and a range of performance for each.
5. Forced choice
- Is a type of performance appraisal in which the rater must choose between
two or more specific statements about an employee’s work behavior.
6. Behaviorally anchored rating scales
- Is a rating instrument comprised of traits anchored by job behaviors.
Appraisers select the behavior that best describes the worker’s performance
level.
Errors in Performance Appraisal
1. Halo error- this is a rating error that occurs when a rater assigns ratings on the basis of
an overall impression of the person being rated.
2. Leniency error – this is a rater’s tendency to give relatively high ratings to virtually
everyone. The opposite of this strictness error where the raters tend to give everyone a
low rating.
3. Central tendency error – this occurs when a rater lump everyone together around the
average, or middle category.
Types of Organizational Incentives
1. Intrinsic rewards are those that the worker receives from the job itself, such as pride in
one’s work, etc.
2. Extrinsic rewards are those that the workers get from the employer, usually money, a
promotion, or benefits.
3. Financial rewards are those that enhance an employer’s financial well-being directly
through wages, bonuses, profit sharing, and the like.
4. Nonfinancial rewards are indirect enhancement of an employee’s financial well-being.
This is done through supportive benefits like pension plans, paid vacations, paid sick
leaves, and purchase discounts.
5. Membership- based rewards refers to those that are given to all employees regardless of
performance.
