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Explain in detail the steps of a typical Performance Measurement System?

Performance Appraisal : The regular (usual annual) process where an employees performance for the year is assessed by manager and/ employee. It is only one part of the performance management approach. Usually means the same as "performance review".
Performance appraisal is a formal, structured system that compares employee performance to established standards. Assessment of job performance is shared with employees being appraised through one of several primary methods of performance appraisals. Elements in performance appraisal methods are tailored to the organization's employees, jobs, and structure. They include objective criteria for measuring employee performance and ratings that summarize how well the employee is doing. Successful appraisal methods have clearly defined and explicitly communicated standards or expectations of employee performance on the job.
Performance Appraisal Methods
Performance appraisals take many forms. Written essays, the simplest essay method, is a written narrative assessing an employee's strengths, weaknesses, past performance, potential, and provides recommendations for improvement. Types of performance appraisal methods include comparative standards (such as, simple ranking, paired comparison, forced distribution) and absolute standards (such as, critical incidents, BARS, MBO).
· Comparative Standards or Multi-person Comparison. This relative, as opposed to absolute method, compares one employee's performance with that of one or more others.
In group rank ordering the supervisor places employees into a particular classification such as "top one-fifth" and "second one-fifth". If a supervisor has ten employees, only two could be in the top fifth, and two must be assigned to the bottom fifth.
- In individual ranking the supervisor lists employees from highest to lowest. The difference between the top two employees is assumed equivalent to the difference between the bottom two employees.
- In paired comparison the supervisor compares each employee with every other employee in the group and rates each as either superior or weaker of the pair. After all comparisons are made, each employee is assigned a summary or ranking based on the number of superior scores received.
· Critical Incidents. The supervisor's attention is focused on specific or critical behaviors that separate effective from ineffective performance.
· Graphic Rating Scale. This method lists a set of performance factors such as job knowledge, work quality, cooperation that the supervisor uses to rate employee performance using an incremental scale.
· Behaviorally Anchored Rating Scales (BARS). BARS combine elements from critical incident and graphic rating scale approaches. The supervisor rates employees according to items on a numerical scale.
· Management by Objectives. MBO evaluates how well an employee has accomplished objectives determined to be critical in job performance. This method aligns objectives with quantitative performance measures such as sales, profits, zero-defect units produced.
· 360 Degree Feedback. This multi-source feedback method provides a comprehensive perspective of employee performance by utilizing feedback from the full circle of people with whom the employee interacts: supervisors, subordinates and co-workers. It is effective for career coaching and identifying strengths and weaknesses.
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THE PROCESS OF PERFORMANCE APPRAISAL
Performance Appraisal is an ongoing dialogue between manager and employee that links expectations, ongoing feedback and coaching, performance evaluations, development planning, and follow-up.
Set Expectations
As a best practice, we encourage supervisors to define expectations for every position. These expectations and performance measurement standards should be communicated to new employees, and reviewed at least once a year with all employees. Expectations for each position can include: purpose of the position, key responsibilities - both tasks and duties, conduct expectations, and performance standards, as well as, measures such as quality, quantity, timeliness, initiative, and teamwork for each key responsibility.

Gather Data
Performance evaluations should not be a one time event. Supervisors are encouraged to gather data regarding employee performance in a systematic manner throughout the year. The Performance Record and the Coaching Log are guides that can be used by supervisors, in addition to their own best practices, to gather data throughout the year and provide ongoing feedback to employees regarding performance. This information will then be available to supervisors when drafting the Annual Performance Evaluation.
Performance Evaluations
As a supervisor, your role is to set expectations, gather data, and provide on going feedback to your employees to assist them in utilizing their skills, expertise and ideas to produce results. To provide this direction, you should communicate to employees what is expected of them, define satisfactory performance for those expectations, and then monitor and evaluate the performance on an on going basis.
The Annual Performance Evaluation should provide a comparison of actual on-the-job performance to established performance measurement standards. The Annual Performance Evaluation encourages periodic and structured communication between supervisors and employees about the job, and should take place continuously. While day-to-day evaluation is usually informal,
Annual performance evaluations are the final phase of an effective performance management system. As a best practice, we recommend that the process start with performance planning between the supervisor and the employee in which they discuss expectations, performance standards, and objectives for the next year. The performance management process both ends and begins anew with the Annual Performance Evaluation.
Feedback
Feedback is a process by which effective performance is reinforced and less-than-desirable performance is corrected. Feedback should be information that highlights the relationship between what is expected and what has been accomplished after the work is performed or the action is taken.
Feedback can take many forms; it can be informal or formal. It can be given as praise in the form of reward and recognition, or it can be corrective in the form of disciplinary or corrective action.

Development Planning
Development planning is the process of creating experiences for your employees that promote skills and knowledge related to the position, as well as to professional growth.
Development plans draw from the Performance Evaluation:
Performance goals or needs (deficiencies) to be addressed
The employee, with supervisor assistance, identifies ways to achieve those goals and/or address performance deficiencies in systematic ways
Address opportunities for professional growth
Agreement and/or commitment between employee and supervisor
Planned follow-up
Benefits of performance appraisals.
At a macro level performance appraisals assists organisations to match outcomes with organization objectives. It provides a system for improving organization performance and outcomes, within the organization's policy framework, while maintaining good industrial relations. It generates benefits throughout organisational functions and processes.
Performance appraisal recognises that people are the organisation’s most valuable resource, and that people are the key to an innovative, professional and service-oriented public service. Performance management emphasises the relationship between the management and development of people and an effective organisation, and provides a fair and equitable environment for improving performance.
A performance appraisal system links achievements at all levels of the organisation with corporate, business and unit's objectives. It provides the framework for:
· clarifying expectations, roles, responsibilities and resources required to achieve goals;
· improving communication and understanding between managers and employees in terms of work requirements, expectations, performance criteria and achievements;
· linking individual, team or unit performance with quality assurance, continuous improvement and evaluation processes of the organisation;
· facilitating, encouraging and assessing performance;
· encouraging structured feedback from employees and supervisors on performance and career planning and from the community on organisational performance;
· introducing an outcomes focused culture and increasing motivation;
· collecting data and information needed for management decision making or external review ;
· increasing the organisation’s capability to meet future requirements and to improve outcomes for the community;
· identifying performance which requires improvement; and
· recognising and acknowledging performance.
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FOR INDIVIDUAL EMPLOYEES,
-an opportunity for self appraisal.
-an opportunity for the manager to appraise the staff.
-helps to determine the strengths of the employee.
-helps to determine areas for improvements
-helps to determine the employee training needs.
-helps to determine the types of training programs
-helps to determine the merit rewards for the employees.
-an opportunity to acknowledge / offer recognition for performance
-an opportunity to improve the employee's capability/competencies.
-helps to develop individual development plan.
etc etc
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EXPRESSED IN A SIMPLE WAY, IN THE PROCESS OF PERFORMANCE APPRAISAL,
WHICH IS A DIALOGUE BETWEEN THE APPRAISER AND THE APPRAISEE
THE APPRAISER , ON REVIEWING THE APPRAISEE'S PERFORMANCE
IN THE LAST 12 MONTHS AGAINST THE STANDARDS SET PREVIOUSLY
-highlights the positives of the performance.
-brings out the negatives of the performance.
-highlights the gaps in skills
-highlights the gaps in knowledge
-highlights the gaps in competencies
-then sets the required standards for the next 12 months.
-then details the development programs for the next 12 months
which includes training / development/ coaching/ mentoring etc.
THIS DEVELOPMENT PLANS COMES IN A PLAN
CALLED '' INDIVDUAL DEVELOPMENT PLANNING''.

IDP Format
The following is a sample format. You may modify it as needed.
INDIVIDUAL DEVELOPMENT PLAN
Employee ___________________________________________ Department ______________________________
Position Title _______________________________ Period Covered ________________ to __________________

Development Goal Purpose Method or Activity Results Expected/Measures Time Frame