Chapter 10: Managing Employees' Performance

The Performance Management Process (6)

1. Define performance outcomes for company division and department 2. Develop employee goals, behavior, and actions to achieve outcomes 3. Provide support and ongoing performance discussions 4. Evaluate performance 5. Identify improvements needed 6. Provide consequences for performance results

Distributional Errors (4)

1. Leniency - rater gives ratings that are too high 2. Central tendency- rater gives ratings that are too average (no one is high or low) 3. Strictness - rater gives ratings that are too low 4. Halo error (and horns error)- rater's overall positive impression of individual results in artificially high (or low) ratings

Performance Appraisal Methods

1. Making Comparisons 2. Rating Individuals

Sources of Performance Information (5) Need multiple sources because...

1. Managers 2. Peers 3. Subordinates 4. Self 5. Customers errors can occur!

2 types of rating appraisal methods

1. Rating Attributes *Graphic Rating Scale: focuses on rating traits (kind, focused, etc.) -most widely used -easy to use and develop -does not have good reliability and validity 2. Rating Behaviors Behaviorally Anchored Rating Scales (BARS): focuses on rating behaviors -the best source of measurement these two use a scale from 1-5 usually

3 types of comparison appraisal methods

1. Simple ranking: best to worst 2. Forced-distribution: forcing placement of people in top 5%, bottom 5%, etc.; bell curve 3. Paired comparisons: Meg to Ryan, Meg to Sam, Meg to Jake

Importance of performance management Need accurate evaluations for:

1. Strategic purposes - helps organization achieve business goals by making HR decisions, clarifying performance goals 2. Administrative purposes - helps determine how much to pay employees, shows support for decisions (layoffs) 3. Developmental purpose - All employees (high and low performers) benefit from feedback. Good time to talk about strengths and weaknesses, career goals, etc.

Performance Appraisal Best Practices (5)

1. Use a Behaviorally Anchored Rating Scale (BARS) 2. Use multiple raters 3. Provide training for your raters 4. Make sure the system is fair and transparent: have employee help write the questions, stick to clear standards for compensation decisions 5. Make sure that the purpose of the performance appraisal (e.g., strategic, administrative, or developmental?) is clear

During feedback conversations, what makes giving feedback successful?

Alignment - make sure everyone is on the same page about what good performance looks like. Both parties work to reduce the defensiveness of the person receiving feedback -Both the person giving and receiving feedback have the same goal - to agree on performance to date, to clarify areas of uncertainty, and to work together to solve problems Cover different types of feedback -Positive and negative -Past and future-oriented feedback The person delivering the feedback should be trusted by the person receiving it Cultivate a mindset focused on the importance of learning, rather than showing off what you know Believe in your ability to change. Individuals who believe they can change (rather than having an "you either got it or you don't") mindset benefit more from feedback Remember that research shows the most competent people tend to respond the best to feedback. Poor performers often fail to realize their own incompetence.

Reasons giving feedback can be difficult

People get defensive There are many aspects to feedback

Because of these problems, some managers don't give feedback. So why should you still do it?

People want feedback (e.g., 87% of employees at facebook). The lack of feedback is more stressful than negative feedback. Good employees are especially likely to want feedback Because workplaces change, feedback will be necessary at some point

Why is it bad if managers are the source of performance info?

don't always know what's going on

Giving feedback can ...

increase or decrease work performance

Why is it bad if peers are the source of performance info?

knows the job just as well BUT there is bias and they may rank someone worse to make themselves look better

Why is is bad if self is the source of performance info?

people tend to inflate

Other factors that affect performance management ratings

political behavior

Why is is bad if peers are the source of performance info?

power dynamics (manager has the final say) subordinates may be afraid to be honest

If you don't do formal performance appraisals...

ratings will still exist. They will just be hidden.

Contrast errors

value is inaccurate because previous candidate was good or bad