6) Performance management

• Performance Management


  Series of activities designed to ensure that the organization gets the performance it needs from its employees
• Performance Appraisal


  Process of determining how well employees do their jobs relative to a standard and communicating that information to them
• Effective Performance Management System


  • Make clear what the organization expects
  • Provide performance information to employees
  • Identify areas of success and needed development
  • Document performance for personal records
• In some cultures, it is uncommon for managers to rate employees or to give direct feedback, and younger subordinates do not engage in joint discussions with their managers. Criticism from superiors is viewed as negative rather than as useful feedback.
• Components of a Performance-Focused Culture


  • Presence/attendance on the job
  • Quality of output
  • Quantity of output
  • Timeliness of output
  • Efficiency of work completed
  • Effectiveness of work completed
• Types of Performance Information


  • Trait-Based Information
  • Behavior-Based Information
  • Result-Based Information
• Performance Standards


  Definition of the expected levels of employee performance. They should be realistic, measurable, and clearly understood. They can be both numerical and non-numerical.
• Measuring performance in service businesses can be difficult due to individualized services, great variation in the services that can be offered, and the subjective perception of quality. Common sources of performance differences include regional labor cost differences, service agreement differences, equipment/infrastructure differences, and work volume.
• Uses for Performance Appraisals


  • Assess an employee's performance
  • Provide a platform for feedback
  • Help administering wages and salaries
  • Help identifying individual employee strengths and weaknesses
  • Provide answers to work-related questions
  • Help improve job performance
  • Ethics, Codes of conduct
• Decisions about the Performance Appraisal Process


  • Appraisal Responsibilities (HR Unit vs. Managers)
  • Informal vs. Systematic Processes (Whenever vs. a regular time interval)
  • Timing of Appraisals (Annually, 2x a year)
• Who Conducts Appraisals?


  • Supervisors rating their employees
  • Employees rating their superiors
  • Team members rating each other
  • Employees rating themselves
  • Outside sources (customers) rating employees
  • Multisource rating or 360 feedback
• Tools for Appraising Performance


  • Category Scaling Methods
  • Graphic Rating Scales
  • Comparative Methods
  • Narrative Methods
  • Goal Setting and Management by Objectives (MBO)
  • Combination of Methods
• Category Scaling Methods


  Performance appraisal method that allows the rater to mark an employee's performance on a continuum indicating low to high levels of a particular characteristic
• Graphic Rating Scale


  Performance appraisal method that describes specific examples of job behavior which are then "anchored" or measured against a scale of performance levels
• Behaviorally Anchored Rating Scale (BARS)


  Performance appraisal method that describes specific examples of job behavior which are then "anchored" or measured against a scale of performance levels
• Ranking


  Performance appraisal method in which employees are listed from highest to lowest in performance levels and relative contributions
• Forced Distribution


  Performance appraisal method in which the ratings of employees' performance levels are distributed along a bell-shaped curve
• Critical Incident


  Performance appraisal method in which the manager keeps a written record of highly favorable and unfavorable employee actions performed during the entire rating period
• Essay


  Performance appraisal method in which the manager writes a short essay describing an employee's performance during the rating period
• Management by Objectives (MBO)


  A specific performance appraisal method that highlights the performance goals that an individual and manager identify together
• SMART


  A model for setting targets: Specific, Measurable, Achievable, Relevant, Timely
• No single appraisal method is best for all situations. A performance measurement system that uses a combination of methods may be sensible. Managers can choose and mix methods to accomplish what they want a performance appraisal system to do.
• Performance Appraisals Training Topics


  • Appraisal process and timing
  • Performance criteria and job standards
  • Positive and negative feedback
  • Training and development goals
  • Compensation reviews
  • Common rating errors
• Types of Rater Errors


  • Varying Standards
  • Recency and Primacy Effects
  • Central Tendency, Leniency, and Strictness
  • Rater Bias
  • Halo and Horns Effects
  • Contrast Error
  • Similar-to-Me/Different-from-Me Errors
  • Sampling Error
• Appraisal Interview


  Communicate employee's positive contributions, discuss to enable the employee to identify their own deficiencies and develop improvement plans
• Typically, managers and employees have negative perceptions of appraisals, and they often avoid negative issues or provide biased ratings due to fear of having to confront or defend. Well-done appraisals are often viewed as constructive.
• Characteristics of Effective Performance Management


  • High, average, low performers are clear
  • Beneficial as a development tool
  • Useful as an administrative tool
  • Legal and job-related
  • Viewed as fair by employees
  • Effective in documenting performance
  • Lead to higher employee motivation and satisfaction
• There are challenges and solutions regarding performance appraisal, such as dissatisfaction, revision, new methods like micro feedback, gamification, preview (review), and self-service online application.