Chapter 9

Conducting Performance Management
 Chapter 9 – Conducting Performance Management [Kristi]___________________________ 

Strategic Importance of Performance Management: 

Performance Management: 

Organizations with effective performance management: 

· Define clear performance goals and measures

· Conduct performance appraisals

· Provide ongoing performance feedback

Performance Management serves following purposes: enhance employee motivation and productivity, support achievement of organizations strategic goals, and facilitate strategic planning and change.

Enhance Employee Motivation and Productivity

Motivation

(1) Decision about which behaviors to engage in

(2) Decision about how much effort to expend

§ Note: Effective job performance requires that employees engage in the appropriate behaviors and exert relatively high levels of effort. (p. 315)

Expectancy Theory

Examples of behavioral choices:

§ Whether to go to work or call in sick

§ Whether to leave work at the official quitting time or stay late

§ Whether to exert a great deal of effort or work at a relaxed pace

An employee’s motivation to perform well is determined by how he or she responds to three key questions

(1) The expectancy questions

(2) The instrumentality question

(3) The valence questions

Expectancy Question

employees to be motivated to expend effort, they must expect that their efforts will translate into performance. There can be overlap between actual performance and measured performance. Biases and inaccuracies on the part of the people who asses an employee’s performance can mean that the performance measures reflect irrelevant information, such as whether the boss likes the employee.

Instrumentality Question

perform?” (p. 316) The issue is whether performance is of any instrumental usefulness. Example given is incentives based upon performance. For example, if goal of 100 entries of data entry are entered with 95% accuracy by Thursday, then employee earns the rest of the week off. (p. 316-317)

Valence Question

behavior?” Even when employees believe that good performers experience different consequences than poor performer, they may not be motivated to put in the required effort if the consequences are not valued. Valences are personal, same valence may be important for one person and not for another. (p. 317)

Satisfaction

received for performance are fair. Satisfied employees are more likely to continue to feel motivated. Dissatisfied employees exert less effort, which results in declining performance and a general downward spiral to ineffectiveness. (p. 317)

Supporting Strategic Goals: 

(1) Employees better understand their organizations strategic focus and how their jobs fit with it.

(2) The goals direct employee behaviors toward activities that are consistent and supportive of the organization’s strategy. (p. 317)

Strategic Planning, Alignment and Change

Detecting Problems

Evaluating Change

Performance Management w/in an Integrated HRM System: 

Performance-driven Culture: A culture that depends on effective performance

management. (p. 319) Share a common focus on monitoring and improving

performance. Example: dismissing lowest performing employees (bottom 10%) and Dell (Be direct, celebrate briefly, difficult goals, pull the plug, teamwork, no excuses). (p. 320)

Legal Environment: An important external environmental factor that affects PM. Society has a

vested interest in ensuring that employers use high-quality information for these important decisions and their interest are reflected in various laws and regulations. Measured used to assess employees should be nondiscriminatory, job related and fairly used. (p. 321)

Valid Performance Measure

nothing else.

Deficient Performance Measure: If the PM does not assess all of the

behaviors and results that are important and relevant to the job, it is a deficient performance measure.

Contaminated Performance Measure: The PM asses anything that is

unimportant or irrelevant to the job.

HR Triad

Managers: Expected to review performance results with employees and explain any

consequences (pay raises, disciplinary action, etc.). PM is a means for moving into a more productive future, employees must act on results, manager’s responsibility is to ensure that employees accept the feedback they receive and use it as a basis for improving on in the future. (p. 324)

Employees: Seeking honest feedback and using it to improve their performance. Often asked to

participate by first providing their own assessment of their performance and often share responsibility for evaluating the performance or others and providing feedback.

HR Professionals: Ensuring that the organization’s PM practices are aligned with the internal

organizational contexts, reflect state-of-the-art knowledge, and meet legal standards.

They also help ensure that well-designed practices are implemented appropriately and support managers by holding them accountable for their appraisals, while supporting employees. (p. 324-325).

Support for Managers

Accountability of Managers

Support for Employees

What to Measure 

Performance Criteria

team, or a work unit is evaluated. (p. 326)

Personal Traits: Focus on personal characteristics, such as loyalty, dependability,

communication ability, and leadership.

Behaviors:

Behavioral Criteria: Focus on how work is performed. Can includes task-related or

more general counterproductive behaviors such as absenteeism, tardiness and carelessness. (p. 326)

Customer Service: Ex. Au Bon Pain, created list of behaviors that convey

friendliness to customers.

Managing Multiculturalism: Behavioral criteria are proving useful for monitoring

whether managers are investing sufficient energy in the development of employees from diverse backgrounds. When combined with performance feedback, behavioral measures are particularly useful for employee development.

Objective Results:

Results Criteria:

was accomplished or produced. (p. 327)

Multiple Criteria: Using multiple criteria, for example, behavioral, results and trait-based.

(p. 328)

Weighting the Criteria

weight for the criteria. One way is to equally weight all or you can assign various

weights to each criterion. Use job analysis info when assigning weights. (p. 329)

Timing: 

Focal-Point Approach

Anniversary Approach

Natural Time Span of the Job

Participants: 

Supervisors: Provide more reliable and useful performance judgments that others, perhaps

because they have knowledge of several aspects of employees performance. (p. 332)

Self-Appraisal: When employees asses their own performance. (p. 332)

Accuracy

Cultural Differences

Peers: Research shows that peer appraisals are useful predictors of training success and future

performance (p. 333).

Subordinates: Many have access to supervisor-subordinate interactions. (p. 333)

Upward Appraisal

Anonymity

Usefulness

Customers

360'°' Appraisals

Performance Appraisal Formats

Performance Appraisal: Involves evaluating performance based on the judgments and

opinions of subordinates, peers, supervisors, their manager and even the employees themselves (p. 335)

Norm-Reference Formats: The rater is forced to evaluate the individual or team and make

comparisons to others (p. 335)

Straight Ranking

Forced Distribution

Absolute Standard Formats

Graphic Rating Scales

Behaviorally Anchored Rating Scales (BARS)

Behavioral Observation Scales (BOS

Results-Based Formats

Direct Index Approach

Balanced Scorecard Approach

Management by Objectives (MBO)

The Rating Process: 

Rating Errors: Rating errors can affect all stages of the process – but their effects are most

clearly seen at the final state, after ratings have actually been recorded (p. 341).

Common Performance Rating Errors

§ Halo and horns: Thinking of an employee as more or less good or bad.

§ Leniency: rating higher than they should be rated.

§ Strictness: All employees are rated lower than they should be.

§ Central Tendency: All rated average when there should vary.

§ Primacy: Using initial info to categorize employee as good or bad.

§ Recency: Rater may ignore employee performance until the appraisal date draws near.

§ Contract Effects: When compared with weak employees, an average employee will appear outstanding.

Improving Rater Accuracy: Several strategies can be used to reduce appraisal errors and improve

rater accuracy. They include:

Rating Scale Format

performance criteria and the rating scales are precise. Reevaluate your scale to ensure accurate ratings (p. 342).

Provide Memory Aids

performance (p. 342).

Provide Rater Training

behaviors to observe and was to reduce rating errors (p. 342).

Reward Accurate and Timely Appraisals

be rewarded. Can make this a part of the rating manager’s job description (p. 342).

Use Multiple Raters

may be especially effective in producing accurate ratings, because discussion among members of the group helps overcome the various errors and biases of individuals (p. 342-343).

Providing Feedback: 

Differing Perspectives: Ideally, a conversation about how to improve in the future follows from a

discussion of how well thing have gone in the past. This discussion becomes difficult when employees and their managers have different perspectives about the causes of past-performance (p. 343).

Timing: Needs to be well-timed and immediate feedback is best. Should involve only as much

info as the receiver can use (p. 344).

Preparation: Schedule and be prepared prior to review session (p. 344).

Content of Discussion: Most useful feedback sessions focus on solving problems and planning for

the future.

Diagnosis

Removing Roadblocks

Follow-up

Positive Reinforcement: Involves the use of positive rewards to increase the occurrence

of the desired performance (p. 346).

Punishment: Decreases the frequency of undesirable behavior (p. 346).

When Nothing Else Works

Transfer

Neutralize

Terminate

Current Issues: 

Automated Performance Management: Automation can do more than just improve efficiency and

save managers time – it also can increase the accuracy of the appraisals, making them seem more equitable to employees. Can be useful for communicating performance standards to employees (p. 347).

Monitoring through Technology: Hand scanners, GPS, RFID, software scanning emails and

Internet activities, etc. Although lowering privacy expectations and monitoring only business-related activities will help protect the employer from a legal standpoint, employees may still resent constant monitoring. (p. 348).

Biometric Technologies