1 performance management effective performance management system make clear what the organization...
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Performance Performance ManagementManagement
Effective Performance Management
System
Make clear what the organization
expects
Provide performance
information to employees
Document performance for
personnel records
Identify areas of success and
needed development
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Performance Management Performance Management versus Performance versus Performance
AppraisalAppraisal
Performance Management
Processes used to identify, encourage, measure, evaluate,
improve, and reward employee
performance
Performance Appraisal
The process of evaluating how well employees perform their jobs and then communicating that information to the
employees
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Identifying and Measuring Identifying and Measuring Employee PerformanceEmployee Performance
*Quantity of output*Quantity of output
*Quality of output*Quality of output
*Timeliness of output*Timeliness of output
*Presence*Presence
*Citizenship*CitizenshipTeam memberTeam member
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Identifying and Measuring Identifying and Measuring Employee PerformanceEmployee Performance
Job DutiesJob Duties– Important elements in a job as identified from job Important elements in a job as identified from job
descriptions.descriptions.– What an employer pays an employee to do.What an employer pays an employee to do.
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Relevance of Performance Relevance of Performance CriteriaCriteria
Factors:Factors:– Deficient measuresDeficient measures– Contaminated measuresContaminated measures– Overemphasized measuresOveremphasized measures
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Performance Metrics Performance Metrics in Service in Service
BusinessesBusinesses
Common Sources
of Performance Differences
Regional Labor Cost Difference
s
Service Agreement Difference
s
Equipment/ Infrastruct
ure Differences
Work Volume
Performance that is measured can be managed.
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Decisions About the Decisions About the Performance Appraisal Performance Appraisal
ProcessProcess
1.1. Appraisal responsibilitiesAppraisal responsibilities
2.2. Informal vs. systematic Informal vs. systematic processesprocesses
3.3. Timing of appraisalsTiming of appraisals
4.4. Source(s) of performance Source(s) of performance informationinformation
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Legal Concerns and Legal Concerns and Performance AppraisalsPerformance Appraisals
Legally Defensible Performance Appraisal System:
• Appraisal criteria based on job analysis (i.e., job-related)
• Absence of disparate impact and evidence of validity
• Formal evaluation criteria that limit managerial discretion
• Formal rating instrument linked to job duties and responsibilities
• Personal knowledge of and contact with ratee
• Training of supervisors in conducting appraisals
• Review process to prevent undue control of careers
• Counseling to help poor performers improve
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Performance Information Performance Information SourcesSources
1.1. Supervisor ratingsSupervisor ratings
2.2. Team member/peer evaluationTeam member/peer evaluation
3.3. Subordinate evaluationSubordinate evaluation
4.4. Self-appraisalSelf-appraisal
5.5. Customer feedbackCustomer feedback
6.6. 360 Degree360 Degree
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Employee Rating of Employee Rating of ManagersManagers
Advantages Disadvantages
•Helps in identifying competent managers
•Serves to make managers more responsive to employees
•Contributes to the career development of managers
•Negative reactions by managers to ratings
•Subordinates’ fear of reprisals may inhibit them from giving realistic (negative) ratings
•Ratings are useful only for self-improvement purposes
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Team/Peer RatingTeam/Peer Rating
Advantages Disadvantages
•Helps improve performance of lower-rated individuals
•Peers have opportunity to observe other peers
•Peer appraisals focus on individual contributions to teamwork and team performance
•Can negatively affect working relationships
•Can create difficulties for managers in determining individual performance
•Organizational use of individual performance appraisals can hinder the development of teamwork
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Category Scaling MethodsCategory Scaling MethodsGraphic Rating ScaleGraphic Rating Scale
– Allows the rater to indicate an employee’s performance Allows the rater to indicate an employee’s performance on a continuum of job behaviors.on a continuum of job behaviors.
Aspects of Performance
Measured
Descriptive
Categories
Job Duties
Behavioral
Dimensions
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Graphic Rating ScalesGraphic Rating Scales
Disadvantages:Disadvantages:
• Restrictions on the range and type of rater responses
• Differences in rater interpretations of scale item meanings and scale ranges
• Rating form deficiencies limit effectiveness of the appraisal
• Poorly designed scales that encourage rater errors
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More Scaling MethodsMore Scaling Methods
Behaviorally Anchored Rating Scale Behaviorally Anchored Rating Scale (BARS)(BARS)– Composed of job dimensions (specific Composed of job dimensions (specific
descriptions of important job behaviors) descriptions of important job behaviors) that “anchor” performance levels on that “anchor” performance levels on the scale.the scale.
Developing a BARSDeveloping a BARS– Identify important job dimensionsIdentify important job dimensions– Write short statements of job behaviorsWrite short statements of job behaviors– Assign statements (anchors) to job Assign statements (anchors) to job
dimensionsdimensions– Set scales for anchorsSet scales for anchors
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Comparative MethodsComparative Methods
RankingRanking
– Listing employees from highest to Listing employees from highest to lowestlowest
– DisadvantagesDisadvantages
1.1. Doesn’t reflect size of differences Doesn’t reflect size of differences between employeesbetween employees
2.2. Implies that lowest-ranked employees Implies that lowest-ranked employees are unsatisfactory performers.are unsatisfactory performers.
3.3. Laborious if the group to be ranked is Laborious if the group to be ranked is large.large.
– Paired comparisonsPaired comparisons
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More Comparative MethodsMore Comparative MethodsForced DistributionForced Distribution
– Employee performance ratings distributed along bell-Employee performance ratings distributed along bell-shaped curve.shaped curve.
Advantages
• Helps deal with “rater inflation.”
• Makes managers identify high, average, and low performers.
• Ensures that compensation increases reflect performance differences among individuals.
Disadvantages
• Managers resist placing people in the lowest or highest groups.
• Explanation for placement can be difficult.
• Performance may not follow normal distribution.
• Managers may make false distinctions between employees.
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Narrative MethodsNarrative Methods
Critical IncidentCritical Incident– Manager keeps written record of Manager keeps written record of
highly favorable and unfavorable highly favorable and unfavorable employee perf.employee perf.
– DisadvantagesDisadvantages1.1. Variations in how managers define “critical Variations in how managers define “critical
incident”incident”
2.2. Time consuming and limited opportunity to Time consuming and limited opportunity to observeobserve
3.3. Most employee actions are not observed and Most employee actions are not observed and may change if observedmay change if observed
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Narrative MethodsNarrative Methods
EssayEssay– Manager writes essay describing Manager writes essay describing
an employee’s performance.an employee’s performance.– DisadvantagesDisadvantages
1.1. Depends on the managers’ writing Depends on the managers’ writing skills and their ability to express skills and their ability to express themselves.themselves.
2.2. Time consuming Time consuming
3.3. May lack opportunities to observe May lack opportunities to observe perf.perf.
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Management by Objectives Management by Objectives (MBO)(MBO)
Management by ObjectivesManagement by Objectives– Performance goals that an individual and his/her Performance goals that an individual and his/her
manager agree the employee will to try to attain manager agree the employee will to try to attain within appropriate length of time.within appropriate length of time.
Key MBO IdeasKey MBO Ideas– Employee involvement creates higher levels of Employee involvement creates higher levels of
commitment and performance.commitment and performance.
– Employees encouraged to work effectively toward Employees encouraged to work effectively toward goals.goals.
– Perf. measures should be measurable and should Perf. measures should be measurable and should define results.define results.
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The MBO ProcessThe MBO Process
4. Continuing performance discussions
3. Setting of objectives
2. Development of performance
standards
1. Job review and agreement
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MBO ProcessMBO Process
1.1. Job Review and agreementJob Review and agreement
2.2. Development of performance Development of performance standardsstandards
3.3. Setting of objectivesSetting of objectives
4.4. Continuing performance Continuing performance discussionsdiscussions
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Preparing Managers to Preparing Managers to Deliver Performance Deliver Performance
InformationInformation
1.1. Procedure and timingProcedure and timing
2.2. Performance criteriaPerformance criteria
3.3. Rating errorsRating errors
4.4. Delivering feedbackDelivering feedback
5.5. Compensation decisionsCompensation decisions
6.6. Training needs assessmentTraining needs assessment
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Strategic Performance Management System
*Consistent with org strategic mission*Consistent with org strategic mission
*Documents performance*Documents performance
*Perceived as fair*Perceived as fair
*Legal and job-related*Legal and job-related
*Developmental tool—leads to *Developmental tool—leads to performance improvement, performance improvement, promotion, etc.promotion, etc.