Performance Performance management and management and appraisalappraisalChapter 8Chapter 8

© 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible Web site, in whole or in part. 10–1

Employee Engagement Employee Engagement for a committed Workforce for a committed Workforce

• Level of commitment workers make to their Level of commitment workers make to their employeremployer

• Seen in their willingness to stay at the firm Seen in their willingness to stay at the firm and to go beyond call of duty and to go beyond call of duty

• Found in employees’ minds, hearts, and Found in employees’ minds, hearts, and handshands

8-2

© 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible Web site, in whole or in part. 10–3

The Nature of Performance The Nature of Performance ManagementManagement

Effective Performanc

e 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

Performance Management (PM)Performance Management (PM)

• Goal-oriented process ensuring processes Goal-oriented process ensuring processes are in place to maximize productivity at are in place to maximize productivity at employee, team and organizational levelsemployee, team and organizational levels

• Close relationship between incentives and Close relationship between incentives and performance. performance.

• Dynamic, ongoing, continuous processDynamic, ongoing, continuous process

• Each part of the system is integrated and Each part of the system is integrated and linked for continuous organizational linked for continuous organizational effectiveness effectiveness

8-4

© 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible Web site, in whole or in part. 10–5

Performance Management versus Performance Management versus Performance AppraisalPerformance Appraisal

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

Uses of Performance AppraisalUses of Performance Appraisal

• Human resource planningHuman resource planning

• Recruitment and selectionRecruitment and selection

• Training and development Training and development

• Career planning and developmentCareer planning and development

• Compensation programsCompensation programs

• Internal employee relationsInternal employee relations

• Assessment of employee potentialAssessment of employee potential

8-68-6

Performance Appraisal ProcessPerformance Appraisal ProcessExternal EnvironmentExternal EnvironmentInternal EnvironmentInternal Environment

8-7

Identify Specific Performance Appraisal

Goals

Establish Performance Criteria (Standards) and Communicate Them To

Employees

Examine Work Performed

Appraise the Results

Discuss Appraisal with Employee

Characteristics of Effective Appraisal Characteristics of Effective Appraisal SystemSystem

• Job-related criteriaJob-related criteria• Performance expectationsPerformance expectations• StandardizationStandardization• Trained appraisersTrained appraisers• Continuous open communicationContinuous open communication• Performance reviewsPerformance reviews• Due processDue process

8-8

Continuous Open Communication Continuous Open Communication

• Employees need to know how well Employees need to know how well they are performing they are performing

• Good appraisal system provides Good appraisal system provides highly desired feedback on continuing highly desired feedback on continuing basis basis

• Should be few surprises in Should be few surprises in performance review performance review

8-9

© 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible Web site, in whole or in part. 10–10

FIGURE 10–1

Performance Management Linkage

© 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible Web site, in whole or in part. 10–11

FIGURE 10–2

Components of Performance Management

© 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible Web site, in whole or in part. 10–12

Global Cultural Differences Global Cultural Differences in Performance Managementin Performance Management

• Uncommon for managers in other cultures to Uncommon for managers in other cultures to rate employees or to give direct feedback.rate employees or to give direct feedback.

• Younger subordinates do not engage in joint Younger subordinates do not engage in joint discussions with their managers due their high discussions with their managers due their high respect for authority and age.respect for authority and age.

• Criticism from superiors is viewed as personally Criticism from superiors is viewed as personally devastating rather than as useful feedback.devastating rather than as useful feedback.

© 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible Web site, in whole or in part. 10–13

FIGURE 10–3 Components of a Performance-Focused Culture

© 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible Web site, in whole or in part. 10–14

Identifying and Measuring Employee Identifying and Measuring Employee PerformancePerformance

Quantity of output

Timeliness of output

Quality of output

Presence/attendance on the job

Efficiency of work completed

Effectiveness of work completed

Performance Criteria for Appraisals

© 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible Web site, in whole or in part. 10–15

Identifying and Measuring Employee Identifying and Measuring Employee Performance (cont’d)Performance (cont’d)

• Job DutiesJob Duties Important elements in a given job as identified from Important elements in a given job as identified from

job descriptions.job descriptions. What an organization pays an employee to do.What an organization pays an employee to do.

© 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible Web site, in whole or in part. 10–16

FIGURE 10–4 Types of Performance Information

© 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible Web site, in whole or in part. 10–17

Performance AppraisalsPerformance Appraisals• Benefits of “GOOD” Performance AppraisalsBenefits of “GOOD” Performance Appraisals

Enhanced Employee EngagementEnhanced Employee Engagement

Increased operational competenceIncreased operational competence

Enhanced corporate growthEnhanced corporate growth

Heightened transformational processes and Heightened transformational processes and performanceperformance

Provide answers to a wide array of work-related Provide answers to a wide array of work-related questions of how to improve job performancequestions of how to improve job performance

© 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible Web site, in whole or in part. 10–18

FIGURE 10–6 Uses for Performance Appraisals

© 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible Web site, in whole or in part. 10–19

Decisions About the Performance Decisions About the Performance Appraisal ProcessAppraisal Process

Designing Appraisal Systems

Appraisal Responsibilit

ies

Informal vs. Systematic Processes

Timing of Appraisals

© 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible Web site, in whole or in part. 10–20

Who Conducts Appraisals?Who Conducts Appraisals?

Supervisors rating their employees

Employees rating their superiors

Multisource or360° feedback

Outside sources rating

employees

Team members rating each

other

Employees rating

themselves

Sources of Performance Appraisals

© 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible Web site, in whole or in part. 10–21

FIGURE 10–9 Multisource Appraisal

© 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible Web site, in whole or in part. 10–22

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

© 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible Web site, in whole or in part. 10–23

FIGURE 10–11 Sample Terms for Defining Standards

© 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible Web site, in whole or in part. 10–24

FIGURE 10–13 Forced Distribution on a Bell-Shaped Curve

© 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible Web site, in whole or in part. 10–25

Training Of Managers And Training Of Managers And Employees in Performance Employees in Performance

AppraisalAppraisalAppraisal

process and timing

Performance criteria and job

standards

Common rating errors

Compensation reviews

Positive and negative feedback

Training and development

goals

Performance Appraisals

Training Topics

© 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible Web site, in whole or in part. 10–26

Performance Management System Performance Management System (PMS)(PMS)

Consistent with the strategic

mission

Beneficial as a development

tool

Effectively documents

performance

Viewed as fair by employees

Useful as an administrative

tool

Is legal and job related

Effective Performance Management

System