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PERFORMANCE MANAGEMENT
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OBJECTIVES
Identify major determinants of individual performance Discuss the three general purposes of performance management Identify the five criteria for effective performance management system Discuss the four approaches to performance management, specific techniques used in each approach, & the way these approaches compare with criteria for effective performance management system
OBJECTIVES
Choose the most effective approach to performance measurement for a given situation Discuss the advantages & disadvantages of the different sources of performance information Choose the most effective source/s for performance information for any situation Distinguish types of errors & explain how to minimize each in a performance evaluation Identify the cause of a performance problem
Means through which managers ensure that employees activities and outputs are congruent with the organizations goals.
2. Administrative Purpose - administrative decisions: salary administration, promotions, retentions, layoffs, and recognition
Contamination
Validity
Deficiency
15
16
Learning Objective:
Explore various approaches to measuring and managing performance Discuss techniques associated with each approach Evaluate the approached based on criteria
Strategic congruence, validity, reliability, acceptability and specificity
1. COMPARATIVE Approach
Requires the rater to COMPARE an individuals performance with that of others Uses overall assessment of an individuals performance Develop some RANKING of the individuals within the group
1. COMPARATIVE Approach
Three Techniques
Ranking Forced distribution Paired comparison
Simple ranking
Rank employees within their department from hishest to poorest performer BEST TO WORST
Alternation Ranking
List of employees, cross the best and worst employee
Caution!
Received attention in the courts
Validation of the selection system using employee rankings as the measure of performance Criteria of job performance may vary from one supervisor to another
Advantage
Identifies high potential employees Identifies poorest performers Provides mechanism to help align company performance and employee performance and compensation
Disadvantages
This practice is arbitrary May be Illegal Cause poor morale
Ex. 20 70 10 distribution
Prone to discrimination
Age, minority, women
Subjective Potential negative side effects on morale, teamwork, recruiting, and shareholder perceptions
TIME CONSUMING
Effective in differentiating employee performance Easy to develop and easy to use Common failure to be linked to the strategic goal of the organization Subjective dependent on raters Lack specificity for feedback
How can the individual improve his ranking
2. ATTRIBUTE Approach
Characteristic or trait
List of traits evaluated by a five point rating scale See table 8.5 p 360
Subjective Criticized appraisals should demonstrate that rating is objectively related to actual work behavior
Instrument using behavioral statements as a means of reducing rating errors in performance appraisal
Little congruence between techniques and the companys strategy Vague performance standards
Open to different interpretation
These technique does not provide any specific guidance on how an employee can support the companys goal or correct performance deficiencies
3. BEHAVIORAL Approach
Attempts to define the behaviors an employee must exhibit to be effective in the job Behaviors are defined and managers assess the extent to which employees exhibit them
Requires managers to keep record of specific examples of effective and ineffective performance Provides specific feedback to employees - what they do well and what they do poorly Can be tied to the companys strategy Individual approach not being compared to others
3. BEHAVIORAL Approach
3. BEHAVIORAL Approach
Identify critical incidents that represent effective and ineffective performance Experts agree on behavioral anchors that will serve as guide to raters Anchors will serve as guide to managers Rating becomes the employees score
3. BEHAVIORAL Approach
Behavioral Observation Scale (BOS)
3. BEHAVIORAL Approach
Behavioral Observation Scale (BOS)
Drawback
May require more information that most managers can process or remember
3. BEHAVIORAL Approach
Behavioral Observation Scale (BOS)
BOS is preferred for differentiating good from poor performers Maintains objectivity, providing feedback, suggesting training needs and being easy to use
3. BEHAVIORAL Approach
Entails managing the behavior of employees through a formal system of behavioral feedback and reinforcement
Components
1. Define a set of key behaviors necessary for job performance 2. Use of measurement system to assess whether these behaviors are exhibited 3. Manager informs employees of these behaviors 4. Feedback and reinforcement Figure 8.5 p 366
3. BEHAVIORAL Approach
Assessment Centers
Assessors observe the individuals behavior and evaluate their skill or potential as managers
3. BEHAVIORAL Approach
Assessment Centers
Advantage
Provide objective measure of an individuals performance at managerial task. Allow specific performance feedback Individualized developmental plan can be planned/designed Ex: Assessment center for certifications middle manager certificate after OJT and developmental experiences
3. BEHAVIORAL Approach
Evaluation
Strengths
Can be very effective Can link the companys strategy to the specific behavior necessary for implementing strategy Provides specific guidance and feedback Behaviors identified are valid Acceptability is high Techniques are reasonably reliable
Weaknesses
4. RESULTS Approach
Focuses on managing the objective, measurable results of a job or work group Results are the closest indicator of ones contribution to organizational effectiveness
Popular in both private and public organizations Top management team first defines the companys strategic goals
Goals are passed on to the next layer of management Goal setting process cascades down These goals are used as the standards by which an individuals performance is evaluated
Effectiveness
Usually increases productivity Productivity gains tend to be highest when top management is committed
Effectively links individuals performance with firms strategy Firm Department Individual Rewards
4. RESULTS Approach
Goal
Motivate employees to higher levels of productivity Measure and feedback productivity information to personnel
4. RESULTS Approach
1.
STEPS
Identify what (product) the organization expects to accomplish Staff defines indicators of the product Staff establishes the contingencies between the amount of indicators and the level of evaluation associated with that amount Feedback
2. 3.
4.
Deficient
Not all aspects of the job are amenable to objective measurement
May focus only on aspects of their performance that are measurable Feedback lacks behavioral aspect
5. QUALITY Approach
Fundamental characteristics
Customer orientation Prevention approach to errors
Goal
Improving customer satisfaction
5. QUALITY Approach
Expectations
Emphasize an assessment of both person and system Emphasize that managers and employees work together to solve performance problems Involve both internal and external customers in setting standards and measuring performance Use multiple sources to evaluate person and system factors
5. QUALITY Approach
Techniques
Process flow analysis
Identify cause of delay/redundancy in the process
Pareto Chart
Highlight most important cause of a problem
Control Charts
Collecting data at multiple points in time
Histogram Scattergrams
Relies primarily on combination of attributes and results approaches Adopts a system-oriented focus rather than individual employee performance
Weakness Many companies are unwilling to abandon their traditional performance management
Performance Information
V.
Most effective approach to Performance management for a given situation VI. Advantages & Disadvantages of the different sources of performance information VII. Most effective source/s for performance information in any situation
1. 2. 3. 4. 5.
Co-workers
Expert knowledege of job requirement Observe employee daily! Bring a different perspective in the evaluation process - provide extremely valid assessment of performance
Useful esp if supervisor does not always observe employee (eg.law enforcement)
PROBLEMS: Bias due to friendship although no empirical basis Being both a rater & a ratee is uncomfortable esp if administrative decisions are evaluated
Not often used Observe own behavior employees are given responsibility to contribute to corporate decisions Useful if used as a prelude to a performance feedback session
PROBLEMS Tendency toward self inflated assessments (esp for administrative decisions eg. Pay raises) Employees attribute poor performance to co-workers
Often the only best person to observe employee performance BEST source of information
USEFUL
When employee gives Direct service to the customer When company needs info on what the customer wants
PROBLEM Expense
74
4.
4.
5.
6.
PREVENTIVE MEASURES
1.
2.
3.
-emphasizes the multidimensional nature of performance -familiarizes raters with various performance dimensions.
APPRAISAL POLITICS
APPRAISAL POLITICS - refers to evaluators purposefully distorting a rating to achieve personal or company goals.
APPRAISAL POLITICS
Appraisal Politics occur because;
- raters are accountable to the employee being rated. - there are competing rating goals. - a direct link between bet performance appraisal and desirable awards. - top executives tolerate distortion - distortion is part of company folklore
PERFORMANCE FEEDBACK
1. Expected performance defined 2. Employees performances measured 3. Performance Feedback
PERFORMANCE FEEDBACK
Recommendations;
- Feedback Frequently > 1/year - Create the Right Context for Discussion - Ask the Employee to Rate Himself First - Encourage the Subordinate to Participate in the Session Recognize Effective Performance through Praise
PERFORMANCE FEEDBACK
Recommendations
-Focus on Solving Problems. - Focus Feedback on Behaviour or Results, Not on the Person. - Minimize Criticisms - Agree to Specific Goals and Set a Date to Review Progress
I N P U T
Employee Knows/Understands what to do? Job Flow and Procedures Logical? Resources for activity Available? Interference from other Job Demands?
Is the employee mentally, physically and emotionally able to perform at the expected level?
Do work groups or team norms encourage employees not to meet performance standards?
HIGH
M O T I V A T I O N
SOLID PERFORMERS -Reward good performance -Identify development opportunities' -Provide honest, direct feedback
MISDIRECTED EFFORT -Coaching --frequent performance feedback -- Goal setting --Training -- Restructured Job DEADWOOD -Withholding Pay Increases -- Demotion -- Outplacement -- Firing -- Specific, direct Feedback on Performance Problems
UNDERUTILIZERS -give, honest and direct feedback -Counselling, team building -- Give rewards -- Training -- Mange stress levels
OBJECTIVES
Identify major determinants of individual performance Discuss the three general purposes of performance management Identify the five criteria for effective performance management system Discuss the four approaches to performance management, specific techniques used in each approach, & the way these approaches compare with criteria for effective performance management system
OBJECTIVES
Choose the most effective approach to performance measurement for a given situation Discuss the advantages & disadvantages of the different sources of performance information Choose the most effective source/s for performance information for any situation Distinguish types of errors & explain how to minimize each in a performance evaluation Identify the cause of a performance problem
PERFORMANCE MANAGEMENT
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