performance management. 1.how can i best measure the performance of my employees? 2.what is the best...
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1. How can I best measure the performance of my employees?
2. What is the best way to give my employees developmental feedback to improve their perfrmance?
3. How can I communicate the information to employees?
4. How should I manage poorly performing employees?
QUESTIONS
9-2
Performance Managemenet is the process of :
1.Evaluating the peroformance of your employees against he standards set for
them2.Helping them develop action plans to
improve their performance
ANSWER: PERFORMANCE MANAGEMENT
9-3
Results
What the employee achieved
Job outputs #.of products sold or produced etc.
Business results (revenue, market share, etc)
Measurable accomplishments (reducing costs to desired level etc.)
Objectives achieved (finishing a cost saving project etc.)
Loyalty to schedules, budgets, deadlines (labor budget, finishing project on time etc.)
Quality, quantity, cost timeliness (no product returns etc.)
Behaviors
How the employee performed.
Obedience to organizational, values,
teamworkknowledge, attitudes,
skills
TWO COMPONENTS OF HUMAN PERFORMANCE
Results criteria are driven from
well expressed job descriptions (main job
responsibilities) And special projects
Behavior criteria are driven from
competenciesCore competencies expected from all
employeesJob competencies
TechnicalAdministrative
OperationsManagerial
SalesCustomer service....
PERFORMANCE APPRAISAL CRITERIA
Companies use performance management for both administrative and developmental purposes.
Administrative Purposes: Salary adjustment, rewards, transfers, demotions, promotions, disciplinary
purposes…etc.
Developmental Purposes: Use PM to improve employees actual performance to add more value to the
organization. Training needs are adjusted, determine steps to develop employees potential…etc.
PURPOSE
9-7
STEP 1: IDENTIFYING PERFORMANCE DIMENSIONS
Performance dimensions are specific tasks and activities for which
employees are responsible for such as: • Work output (quality and quantity)
• Personal competencies
• Goal (objective) achievement
Global performance measure is a single score to reflect overall
performance9-9
Should be valid, specific, and have clear(specific) standards.
Valid: The measure should give consistent results over time and across raters.
Standard: You should set standards for any performance to measure.
Specific: Should reflect actual needs of the position
STEP 2: DEVELOPING PERFORMANCE MEASURES
9-10
Manager can use various ways to evaluate the performance of their
employees. They can either focus on outcomes or on
traits/behaviors(knowledge, attitudes, desire, commitment) of
their employees.
STEP 3: EVALUATING EMPLOYEE PERFORMANCE
9-11
Trait based- assumes that certain traits drive performance, so it measures certain personal
characteristics of the position holder Behavior based – assumes that certain behaviors drive
performance, so it measures what the position holder does (for supervisors and below)
Knowledge/skill based – assumes that certain knowledge/skills drive performance, so it measures what the position holder knows, applies (production, clerical
workers, some professionals) Results based - assumes that achievement of objectives
equals performance; so it measures what the position holder achieves (professionals, managers, executives)
CHOİCE OF APPRAİSAL SYTEM
GRAPHIC RATING SCALE OF TRAITS
Raters evaluate
employees based on various traits
or attributes they possess
relevant to their performance
9-13
INDIVIDUAL PERFORMANCE
Forced distribution—managers are forced to distribute employees into predetermined categories and prevented from rating everyone as outstanding,
or average
9-15
9-16
CONTEMPORARY PERFORMANCE APPRAİSAL SYSTEMS
Management by Objectives (MBO) Competency Based Performance Evaluation
Balanced Scorecard (BS)360-Degree Approach
9-17
MANAGEMENT BY OBJECTIVES (MBO)
A comprehensive and formal goal-setting and appraisal system requiring:
1. Setting of organization’s goals.
2. Setting of departmental goals.
3. Discussion of departmental goals.
4. Defining expected results (setting individual goals).
5. Conducting periodic performance reviews.
6. Providing performance feedback.
Goal: Raising the present competency levels of the employees to the expected levels
Performance is viewed in terms of the process employees use to achieve their job results
Result based performance appraisal focuses only on “what” they have accomplished (i.e., performance
goals), Competency based performance appraisal focuses on “how” the work was performed, using competencies
for providing feedback.
COMPETENCY BASED PERFORMANCE EVALUATİON
9-18
BALANCED SCORECARD (BS)
An approach developed by Kaplan and Norton - provides a framework of various measures to ensure the complete and
balanced view of the performance of the employees
Balancing performance on a number of metrics versus a single one like profits.
It is an integrated performance management system that directs and evalutes a company’s performance through “key performance indicators”( measure of performance) set in the
four areas:
(financial, customer related, operational, individual)
Involves gathering performance data from as many sources as possible—
supervisors, peers, subordinates, and customers
Can be cumbersome and takes time to sift through all the feedback
360-DEGREE APPROACH
9-20
Supervisors—a key source but may not have time to monitor and observe employees every day
Co-Workers—may be able to comment on cooperation and support, but may intentionally slope rating
Self-Appraisal—can be useful starting point and developmental tool to help employee improve performance
Subordinates—may be hard to separate skill from “likeability”
Customers—satisfaction levels may only report extremely good or bad experiences
SOURCES OF PERFORMANCE DATA
9-21
Most firms include training for both managers and employees on how to effectively give and receive feedback,
Most firms require appraisals every six months to a year
Focus on behaviors rather than employee
Balance approach—positive and improvement areas
Involve/engage employee in discussion
STEP 4: PROVIDING FEEDBACK
9-22
Seek to understand causes of poor performance, which could stem from:
Work environmentDesign of jobs
TechnologySupport or performance of co-workers
Employee’s competencies, attitudes and behaviors
STEP 5: DEVELOPING ACTION PLANS TO IMPROVE
PERFORMANCE
9-23
• Ensure they know what is expected of them
• Ensure they know how to be successful• Reach agreements on targets for improved performance and timelines
• Ensure manager’s support
9-24
Removing barriers to employee success
Training and development activitiesCoaching and mentoring
Work design and technology solutions
TAKING ACTION
9-25
The Importance of Compensation
• Attract and retain employees.• Ensure best levels of employee performance in
meeting the organization’s strategic objectives.
Compensation’s Components
– Direct compensation in the form of wages or salary• Base pay (hourly, weekly, and monthly)• Incentives (sales bonuses and or commissions)
– Indirect compensation in the form of benefits• Legally required benefits (e.g., Social Security)• Optional (e.g., group health benefits)
Theory Behind Compensation
• Equity Theory– Comparing inputs and outputs of a similar co-worker– Perceived inequity affects employee effort
• Expectancy Theory– People are motivated by intrinsic and extrinsic outcomes they
desire.– People will only be motivated if outcome is possible.– People will only be motivated if outcome is contingent.
“Monkeys Demand Equal Pay”
A recent study shows brown capuchin monkeys refused to play along when they saw another monkey get a better payoff for performing the same work.
The monkeys were trained to trade a stone token for a piece of cumber. When the reward was the same for both monkeys, they took the cucumber 95 percent of the time.
But it was a different story when one monkey was given something better -- namely, a grape. Then, the other monkey often pitched a fit -- either throwing the token, refusing to eat the cucumber or giving it to the other monkey.
Associated Press 2003
Types of Base Pay Systems
• Job-based– Pay the job (not the person)– Market-based (external equity focus)– Point factor-based (internal equity focus)
• Skills / knowledge-based– Pay the person (not the job)– 62% of F1000 firms used some type of skill based
pay in 1999
Job Based Pay
Attraction Depends on market pricing
Motivation No performance impact
Skill Development Learn job-related and upward mobility skills
Culture Bureaucratic, hierarchical
Structure Hierarchical, individual jobs and differentiation
Cost Good control of individual pay
Individual Skill/Knowledge Based Pay
Attraction Attracts learning-oriented individuals, high skills individuals
Motivation Little performance impact
Skill Development Motivates needed skill development
Culture Learning, self-managing
Structure Flat or team-based
Cost Higher individual pay
When to Use a Job-based Pay Policy
• A job-based pay work best in situations where:– Job duties are stable.– Skills are generic.– Employees move up through the ranks over time.– Jobs are fairly standardized within the industry.
• Drawbacks of a job-based pay system– Discounts individual ability.– Discourages lateral movement.– Tends to be bureaucratic, mechanistic, and inflexible.– Employees’ perceptions of equity are more important than market
or point data.
Individual-based Compensation
• Individual-based compensation works when:– The firm has a relatively educated workforce.– Employees often do different jobs– Technology changes frequently.– Employee participation and teamwork are encouraged.– Opportunities for upward mobility are limited.– Opportunities to learn new skills are present.– The costs of employee turnover and absenteeism in terms of lost
production are high.
Variable Pay Incentives
• Linking performance to pay– Individual – Bonuses, piece-rates, stock options– Team – Bonuses and awards– Plant / Unit / Business – Gainsharing, profit sharing– Corporation – ESOP’s
• “Line of sight” is the perceived link between individual behavior and the reward.
Individual Merit
Attraction Good for high performers
Motivation Good line of sight
Skill Development Learn skills that lead to rewarded performance
Culture Performance oriented, job focused
Structure Individual and independent jobs
Cost Depends on the size of the awards
Team Incentives
Attraction Good if team performs well
Motivation Moderate line of sight
Skill Development Encourages team skills
Culture Team focused
Structure Team-based and integrated
Cost High if significant awards given
Organizational Plans
Attraction Good if organization performs well
Motivation Weak line of sight
Skill Development Encourages broad understanding of business
Culture Business involvement
Structure Organization wide integration
Cost Possible self-funding if based on performance improvement
Pay for Performance Requires
1. Definition of performance– How are we going to measure and compare people?
2. Distribution of performance– Can we distinguish high and low performers?
3. Decide the increase for each level of performance.– How large a difference between high and low
performers?
Key Strategic Issues in Compensation
• Determining compensation relative to the market.• Striking a balance between fixed and variable
compensation.• Deciding whether or not to utilize team-based versus
individual pay.• Creating the appropriate mix of financial and non-
financial compensation.• Developing a cost-effective compensation program
that results in high performance.
New Thinking for the New Millennium
• Strategic approaches to may compensation (pay) systems more responsive:– Pay the person for individual worth (knowledge, skills and
competencies) rather than for the value of a job they perform.
– Reward excellence through a pay for performance compensation that establishes a clear relationship between a significant amount of pay and attainment of organizational objectives.
– Individualize the pay system to give employees choices in how they are rewarded and what reward they receive.
Occupational SafetyOccupational Safety«Send everyworker home whole and healthy everyday»
Workplace Violance ProgramsWorkplace Violance ProgramsMurder…!!! Stop violance at work!!!
Ergonomic ProgramsErgonomic ProgramsTh science of undertsanding the capablities of humans in terms of their work requirements
LABOR UNIONSFinal Homework Due on
20th of August!!!This homework will consitute 50% of your final This homework will consitute 50% of your final exam!exam!
Write a brief report about the development of «labor union» in Turkey. You can check the following web pages for your summary in English!!
•http://notoku.com/turkiyede-sendikaciligin-gelisimi/
•http://grcnozdemir.brinkster.net/1946gts%C3%B6.htm
•http://bagimsizrehberler.blogcu.com/sendika-nedir-turkiye-de-ve-dunyada-sendikal-orgutlenme/12736089
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