Performance Management

• Performance Management: 

  A set of integrated management practices designed to help employees maximize performance, thereby allowing the organization to reach its goals 

  • Includes goal setting, pay for performance, training and development, career management, and disciplinary action
• Steps in an Effective Performance Management System 

  Step 1: Clarifying the work to be done/setting goals and establishing performance plans 

  Step 2: Providing frequent coaching 

  Step 3: Conducting formal review of performance 

  Step 4: Recognizing and rewarding performance  

  Step 5: Creating an action plan 
• Step 1: Clarifying the work to be done/setting goals and establishing performance plans


  1.Task Performance

  2. Contextual Performance

  3. Legal Considerations
• Task Performance

  Direct contribution to job-related processes. This refers to the specific duties and responsibilities outlined in an individual's job description or role. Task performance involves completing assigned tasks, meeting deadlines, achieving goals, and generally fulfilling the requirements of the job. It's about how well someone performs the core responsibilities of their position.
• Contextual Performance


  Indirect contribution to the organization's social responsibility values. Refers to behaviors that are not directly part of one's job description but still contribute to the overall functioning and effectiveness of the organization.
• Legal Considerations


  Correlate performance expectations to job activities: Ensuring performance expectations are directly related to the essential functions of the job and are not discriminatory or include favoritism
• Step 2: Providing Frequent Coaching 

  Helps employees achieve their goals 

  Is supportive 

  Should not involve fault-finding or blaming 

  Managers need to listen effectively 

  Managers need to probe and ask open ended questions
• Step 3: Conduct Performance Appraisal and Evalution Disucssion 

  Formal Appraisal Methods: 

  •graphic rating scale

  •alternation ranking

  •paired comparison

  •forced distribution

  •critical incident
• Graphic Rating Scale 

  A scale that lists a number of traits and a range of performance for each 

  The employee is given a rating that best describes the level of performance for each trait Advantages: Simple to use. Provides a quantitative rating for each employee Disadvantages: Standards may be unclear, and halo effect, central tendency, leniency, and bias can also be problems
• Alternation ranking

  
  

  a technique used to evaluate employees by ranking them relative to each other based on the trait being analyzed. Employees are listed from highest to lowest based on their performance of that trait, with the highest performer listed first and the lowest performer listed last. Advantages: Simple to use (but not as simple as graphic rating scale); avoids central tendency and other problems of rating scales. Disadvantages: Can cause disagreements among employees may be unfair if all employees are, in fact, excellent.
• Paired comparison

  •for each trait, list all possible pairs of employees

  •for each pair, indicate “+” for the higher ranked employee, “-” for the lower ranked

  •rank employees by trait based on number of “+” scores Advantages: A more precise ranking method that involves multiple traits. Disadvantages: Difficult to use as employee number increase. Differences many not be noticeable enough to rank.
• Forced Distribution Method 

  •predetermined percentages of ratees are placed in various performance categories

  example:

  •15 percent high performers (promotion)

  •20 percent high-average performers

  •30 percent average performers

  •20 percent low-average performers

  •15 percent low performers (Termination) Advantages: End up with a predetermined number of people in each group. Disadvantages: Appraisal results depend on the adequacy of the original choice of cutoff points
• Critical Incident Method

  Keeping a record of uncommonly good or undesirable examples of an employee’s work-related behavior and reviewing the list with the employee at predetermined times. Advantages: Helps specify what is "right" and "wrong" about the employee's performance. Forces the supervisor to evaluate on an ongoing basis. Disadvantages: Difficult to rate or rank employees relative to one another. Cannot be used to defend salary decision
• Performance appraisal problems

  •Unclear performance standards

  •Halo effect

  •Central tendency

  •Strictness/leniency

  •Appraisal bias
• Unclear performance standards 

  • An appraisal method that is too open to interpretation of traits and standards
• Halo effect

  • In performance appraisal, the problem that occurs when a supervisor’s rating of an employee on one trait biases the rating of that person on other traits
• Central tendency

  •A tendency to rate all employees in the middle of scale
• Strictness/leniency

  •The problem that occurs when a supervisor has a tendency to rate all employees either low or high
• Appraisal bias

  •The tendency to allow individual differences (e.g., age, race, sex) to affect the appraisal ratings that these employees receive
• Who Should Do the Appraising?

  •supervisors

  •self

  •peers

  •committees

  •subordinates

  •360-degree appraisal (all of the above)
• Giving Feedback

  1.Be direct and specific

  •use objective work data

  2.Do not get personal

  •compare against standard

  3.Encourage the person to talk

  •use open-ended questions, listen

  4.Develop an action plan

  •agree on future steps
• How to Handle Criticism and Defensive Employees

  1.Recognize that defensive behaviour is normal.

  2.Never attack a person’s defenses.

  3.Postpone action.

  4.Recognize human limitations.
• Hamburger Method

  •Positive feedback

  •Negative feedback

  •Positive feedback
• Step 4: Recognizing and rewarding performance

  •provide performance awards: merit pay, extra pay

  •important aspects used to determine the appropriate reward/consequence:

  •achievement of goals

  •how the employee meets the defined standards
• Step 5: Creating an action plan 

  •manager and employee discuss opportunities for development

  •based on current job requirements or future development

  •business needs must be balanced with the employee’s preferences