Performance Appraisal and Compensation

1. Performance Appraisal and Compensation Presented by: Mr. Bakary Singhateh

2. Evaluating Employee Performance - Agenda Purpose of performance management system Difficulties in performance management system Steps of the Appraisal process Appraisal methods Presented by: Mr. Bakary Singhateh

3. Performance Evaluation The performance management systems need to include: decisions about who should evaluate performance what format should be used how the results should be utilized Presented by: Mr. Bakary Singhateh

4. Purposes of a Performance Management System Feedback - let employees know how well they have done and allow for employee input. Development – identify areas in which employees have deficiencies or weaknesses. Presented by: Mr. Bakary Singhateh

5. Difficulties in Performance Management Systems Focus on the individual: Discussions of performance may elicit strong emotions and may generate conflicts when subordinates and supervisors do not agree. Presented by: Mr. Bakary Singhateh

6. Difficulties in Performance Management Systems Focus on the process: Company policies and procedures may present barriers to a properly functioning appraisal process. Additionally, appraisers may be poorly trained. Presented by: Mr. Bakary Singhateh

7. The Appraisal Process Presented by: Mr. Bakary Singhateh

8. Step 1 and 2 Establishment of performance standards Derived from company’s strategic goals. Based on job analysis and job description. Communication of performance standards to employee. Presented by: Mr. Bakary Singhateh

9. Step 3 and 4 Measurement of performance using information from: personal observation statistical reports oral reports written reports Comparison of actual performance with standards. Presented by: Mr. Bakary Singhateh

10. Step 5 and 6 Discussion of appraisal with employee. Identification of corrective action where necessary. Basic corrective action deals with causes. Presented by: Mr. Bakary Singhateh

11. Appraisal Methods Three approaches: Absolute standards Relative standards Objectives Presented by: Mr. Bakary Singhateh

12. 1. Absolute Standards Evaluating absolute standards: An employee’s performance is measured against established standards. Evaluation is independent of any other employee. Presented by: Mr. Bakary Singhateh

13. 1. Absolute Standards Essay Appraisal: Appraiser writes narrative describing employee performance & suggestions. Critical Incident Appraisal: Based on key behavior incident illustrating effective or ineffective job performance. Presented by: Mr. Bakary Singhateh

14. 1. Absolute Standards Checklist Appraisal: Appraiser checks off behaviors that apply to the employee. Adjective Rating Scale Appraisal: Appraiser rates employee on a number of job-related factors. Presented by: Mr. Bakary Singhateh

15. 1. Absolute Standards Forced-Choice Appraisal:Appraisers choose from sets of statements which appear to be equally favorable, the statement which best describes the employee. Presented by: Mr. Bakary Singhateh

16. 1. Absolute Standards Behaviorally Anchored Rating Scales (BARS):Appraiser rates employee on factors which are defined by behavioral descriptions illustrating various dimensions along each rating scale. Presented by: Mr. Bakary Singhateh

17. 2. Relative Method Employees are evaluated by comparing their performance to the performance of other employees. Presented by: Mr. Bakary Singhateh

18. 2. Relative Method Group Order Ranking: Employees are placed in a classification reflecting their relative performance, such as “top one-fifth.” Presented by: Mr. Bakary Singhateh

19. 2. Relative Method Individual Ranking: Employees are ranked from highest to lowest. Paired Comparison: Each individual is compared to every other. Final ranking is based on number of times the individual is preferred member in a pair. Presented by: Mr. Bakary Singhateh

20. 3. Achieved Outcome Method Management by Objectives (MBO)‏ includes mutual objective setting and evaluation based on the attainment of the specific objectives Presented by: Mr. Bakary Singhateh

21. 3. Achieved Outcome Method Common elements in an MBO program are: goal specificity participative decision making an explicit time period performance feedback Effectively increases employee performance and organizational productivity. Presented by: Mr. Bakary Singhateh

22. Creating More Effective Performance Management Systems Presented by: Mr. Bakary Singhateh

23. Development of Compensation and Pay systems - Agenda Objectives of compensation Types of rewards Development of a base pay system Presented by: Mr. Bakary Singhateh

24. Objectives of compensation Efficiency Quality Performance Cost Fairness Compliance Presented by: Mr. Bakary Singhateh

25. Types of Reward Plans Intrinsic versus Extrinsic Rewards Intrinsic rewards (personal satisfactions) come from the job itself, such as: pride in one’s work feelings of accomplishment being part of a work team Presented by: Mr. Bakary Singhateh

26. Types of Reward Plans Intrinsic versus Extrinsic Rewards Extrinsic rewards come from a source outside the job include rewards offered mainly by management Money Promotions Benefits Presented by: Mr. Bakary Singhateh

27. Types of Reward Plans Financial versus Non-financial Rewards Financial rewards include: wages bonuses profit sharing pension plans paid leaves purchase discounts Non-financial rewards emphasize making life on the job more attractive; employees vary greatly on what types they find desirable. Presented by: Mr. Bakary Singhateh

28. Introduction Presented by: Mr. Bakary Singhateh

29. Development of a Base Pay System Job Analysis Job Evaluation Pay Survey Job Structure Pay Structure & Grades Presented by: Mr. Bakary Singhateh

30. Development of a Base Pay System Job Evaluation Use of job analysis information to determine the relative value of each job in relation to all jobs within the organization. The ranking of jobs Labor market conditions Collective bargaining Individual skill differences Presented by: Mr. Bakary Singhateh

31. Development of a Base Pay System Job Evaluation Methods Ordering method: A committee places jobs in a simple rank order from highest (worth highest pay) to lowest. Presented by: Mr. Bakary Singhateh

32. Development of a Base Pay System Job Evaluation Methods Classification method: Jobs are placed in classification grades Compare their descriptions to the classification description and benchmarked jobs Look for a common denominator such as skills, knowledge, or responsibility Presented by: Mr. Bakary Singhateh

33. Development of a Base Pay System Job Evaluation Methods Point method: Jobs are rated and allocated points on several identifiable criteria, using clearly defined rating scales. Jobs with similar point totals are placed in similar pay grades. Offers the greatest stability. Presented by: Mr. Bakary Singhateh

34. Development of a Base Pay System Establishing the Pay Structure Compensation surveys Used to gather factual data on pay rates for other organizations Information is often collected on associated employee benefits as well Presented by: Mr. Bakary Singhateh