HRIR 3021 Chapter 10

Components of OBM techniques

1. Define a set of key behaviors necessary for job performance 2. Use a measurement system to assess whether the employee exhibits the key behaviors 3. Inform employees of the key behaviors, perhaps in terms of goals for how often to exhibit the behaviors. 4. Provide feedback and reinforcement based on employees behavior

three components of an MBO system

1. Goals are specific, difficult, and objective. ex. increase portfolio value by 10% over the next 12 months 2. Managers and their employees work together to set the goals. 3. The manager gives objective feedback through the rating period to monitor progress toward the goals.

Types of feedback in TQM

1. Subjective feedback from managers, peers, and customers about the employees personal qualities such as cooperation and initiative. 2. Objective feedback based on the work process. Comes from a variety of methods called statistical quality control.

What are the 6 steps in the performance management process?

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. To be effective, the entire performance management process should be reviewed each year to ensure that what is being measured at the employee level aligns strategically with company, division, and departmental goals and objectives.

Fit with strategy

A PM system should aim at achieving employee behavior and attitudes that support the organization's strategy, goals, and culture. Performance appraisals should measure whether employees are engaging in those behaviors, and feedback should help employees improve in those areas. For example, if a company emphasizes customer service, then its performance management system should define the kinds of behavior that contribute to good customer service.

Downsides of forced distribution method

A manager who does very well at selecting, motivating, and training employees will have a group of high performers and this manager would have difficulty assigning employees to the bottom categories. In that situation, saying that some employees require improvement or are "not acceptable" not only will be inaccurate, but will hurt morale.

Management by objectives (MBO)

A system in which people at each level of the organization set goals in a process that flows from top to bottom, so employees at all levels are contributing to the organization's overall goals.

Downsides of rating attributes

Appraisal forms often fail to meet this standard. in addition, measurement of attributes is rarely linked to the organization's strategy. employees also tend to be defensive about receiving a mere numerical rating on some attribute.

Benefits of evaluation of results

Can be less objective than other kinds of performance measurement. This makes measuring results highly acceptable to employees and managers alike. It is also relatively easy to link to the organization's goals.

Privacy concerns of electronic monitoring

Critics complain that monitoring system threaten to make the workplace an electronic sweatshop in which employees are treated as robots, robbing them of dignity. Some note that employees performance should be measured by accomplishments and not just time spent at their desk or workbenches.

weakness of customers as a source of information

Customer surveys are expensive. Can add up to hundreds of dollars to evaluate one individual. Many organizations therefore limit the information gathering to short periods once a year.

Drawbacks of the graphic rating scale

Depends on the managers for decisions about what is "excellent knowledge" or "commendable judgement". The result is low reliability because managers are likely to arrive at different judgements.

Lawsuits for performance management

Discrimination claims often allege that the performance management system discriminated against employees on the basis of their race or sex. The US guidelines are the uniform guidelines on employee selection procedures. When lawsuit are filed on the grounds of unjust dismissal, the usual claim is that the person was dismissed for reasons besides the ones the employer states. The courts generally focus on the performance management system to determine whether the firing could have been based on poor performance.

Scheduling performance feedback

Feedback should be a regular, expected management activity. Annual feedback is not enough. If a problem is noticed, feedback should be given ASAP. Feedback is more effective when it does not surprise the employee. Giving it more frequently, gives the employee an idea of what to expect during their annual performance review. Employees are motivated and directed by regular feedback.

What are the five criteria for measuring the effectiveness of a performance management system?

Fit with strategy validity reliability Acceptability Specific feedback

Disadvantages to peers as a source of information

Friendships or rivalries have the potential to bias ratings. Also, peers can be uncomfortable rating employees for decisions that may affect themselves. Generally, peers are more favorable toward participating in reviews to be used for employees development, like to strengthen teamwork.

Downsides of using self as a source of information

Have the tendency to inflate assessments of their own performance. Additionally, people tend to blame outside circumstance for their failures while taking credit for their successes. Therefore, self appraisals are not appropriate as a basis for administrative decisions.

Questions for diagnosing remedies to performance problems

Inputs: Does the employee know what they are supposed to of? are the procedures clear? Do they have adequate resources? So other work demand conflict with performance? Feedback: Does the employee get frequent feedback? Is feedback timely, accurate, and understandable? Goals/ objectives: Are goals specified? Does the employee know the goals? Are the goals achievable and fair? Rewards/ Consequences: Are there rewards for superior performance? Are rewards valued? Are the rewards timely?

Step 3: provide support and ongoing performance discussions

Involves providing employees with training, necessary resources and tools, and ongoing feedback between the employee and manager, which focuses on accomplishments as well as issues and challenges that influence performance. For effective performance management, both the manager and the employee have to value the feedback and exchange it on a regular basis.

Benefits of ranking employees.

It counteracts the tendency to avoid controversy by rating everyone favorable or near the center of the scale. Also, if some managers tend to evaluate behavior more strictly (or more leniently) than others, a ranking system can erase that tendency from performance scores.

graphic rating scale

Lists traits and provides a rating scale for each trait. The employer uses this scale to indicate the extent to which the employee being rated displays the traits.

Rating individuals.

Looking at each employees performance relative to a uniform set of standards. The measurement may evaluate employees in terms of attributes believe desirable or they may identify whether the employees have behaved in desirable ways, such s closing sales or completing assignments.

Conducting the feedback session

Managers often assume the feedback should focus on problem areas, but the most impact comes from focusing on the employees area of strength and building on those. When employees see their manager as more supportive and trustworthy, they are more open to receiving both praise and constructive criticism. Feedback should conclude by setting or revising goals for the coming period, including timelines for progress reviews and goal attainment.

Corrective actions for employees with high motivation and high ability.

Managers should not ignore these employees even thought hey are solid performers. They are likely to want more opportunities for development and may be able to contribute even more than they already are. To maintain high motivation levels, the manager should use rewards, direct feedback, and growth opportunities.

Corrective action for lack of motivation

Managers with unmotivated employees can explore ways to demonstrate that the employee is being treated fairly and rewarded adequately. The solution may be as simple as more positive feedback (praise). Employees may need a referral for counseling or help with stress management.

Acceptability

Must be acceptable to the people who use it. The users include the employee's supervisor and anyone else who will be measuring the employees performance. For example, the employees must believe that the performance measure is fair, so that they use the feedback as a basis for improving their performance.

Electronic monitoring

Organizations often store records of employees performance ratings, disciplinary actions, and work-rule violations in electronic databases. Many companies use computers, sensors, and mobile devices to monitor productivity and other performance measures electronically. when monitoring is necessary, managers should communicate the reasons for using it. Monitoring may be used more positively to gather information for coaching employees and helping them develop their skills.

Downsides of using one person as information

People tend to like some people more than others, and those feelings can bias how an employees efforts are perceived. Also, one person is likely to see an employee in a limited number of situations.

Corrective action for lack of ability AND lack of motivation

Performance may improve is the manager directs employees attention to the significance of the problem by withholding rewards or providing specific feedback. If the employee does not respond, the manager may have to demote or terminate the employee.

Efective performance management

Performance measurement should evaluate behaviors or results rather than traits. The organization should use multiple raters (including self appraisals) and train raters in how to use the system. The organization should provide a review of all PM by upper level managers and set up a system for employees to appeal when they believe they were evaluated unfairly. This system should include a process for coaching or training employees to help them improve, rather than simply dismissing poor performers.

Downsides to subordinates as a source of information

Power relationships are involves. Subordinates may be reluctant to say negative things about the person to whom the report to; they prefer to provide feedback anonymously. Manager, however, have a better reaction to this feedback when subordinates are NOT anonymous. When it is not anonymous though, subordinates tend to give higher manager ratings. Since information is from the employee's perspective, it tends to emphasize employee satisfaction, sometimes at the expense of productivity. Therefore, these evaluations Arte most appropriate for developmental purposes.

Total Quality Management (TQM)

Provides method for performances measurement and management. Differs from traditional performance measurement in that it assesses both individual performance and the system within which the individual works. This assessment is a process through which employees and their customers work together to set standards and measure performance, with the overall goal to improve customer satisfaction. The feedback aims at helping employees continuously improve the satisfaction of their customers. The focus on continuously improving customer satisfaction is intended to avoid the pitfall of rating individuals on outcomes, such as sales or profits, over which they do not have complete control.

political behavior in performance appraisals

Sometimes the people rating performance distort an evaluation on purpose to advance their personal goals. Motivation could be as simple as not wanting to have to deliver bad news.

Subordinates as a source of information

Subordinates often have the best chance to see how well a manager treats employees. Managers who score low in behaviors such as delivering feedback and coaching employees receive training in how to improve.

Contamination and Deficiency of a job performance measure

The circle on the left represents all the the information in the performance appraisal and the circle on the right represents all the relevant measures of job performance. The overlapping section is all of the valid information. Some of the information gathered is irrelevant, which is considered contamination. Information that is not gathers but is relevant represents a deficiency of the performance measure.

Using self as a means of information

The employee has the greatest chance to observe their own performance. Self ratings are rarely used alone, but can contribute valuable information. Areas of disagreement between self appraisal and other evaluations can be fruitful topics for the feedback session.

Preparing for a Feedback Session

The location should be neutral. If the managers office is the site of unpleasant conversation, feedback should be given elsewhere, such as a conference room. The manager should describe the meeting asa change to discuss the role of the employee, the role of the manager, the relationship between then, and they should say that it will be an open dialogue. Managers should ask employees to complete a self assessment ahead of time. This allows them to be more aware of their strengths and weaknesses so they can participate more in the discussion. Difference in manager and employee's rating can be great topics for discussion.

Downsides of ranking

The major downside of ranking involves validity. To state a performance measure as broadly s "best" or "worst" doesn't define what exactly is good or bad about the person's contribution to the organization. Rankings therefore raise questions about fairness. Rankings are often not linked to organization's goals. Also, a simple ranking system leaves the basis for the ranking open to interpretation. In that case, rankings are not helpful fro employee development and may Hirt morale or result in legal challenges.

Managers as a source of information

The most used source. I can be assumed that supervisors have extensive knowledge of the job requirements and their employees performance. They also have an incentive to provide accurate and helpful feedback because their own success depends so much on their employees performance. Finally, when managers give feedback, it is viewed from employees as accurate.

Making comparisons

The performance appraisal method may require the rater to compare one individual's performance with that of others. This method involves some form of ranking, in which some employees are, some are average, and others are worst. The usual techniques for making comparisons are simple ranking, forced distribution, and parted comparison.

performance management

The process through which managers ensure that employees' activities and outputs contribute to the organization's goals. This process requires knowing what activities and outputs are desired, observing whether they occur, and providing feedback to help employee meet expectations.

Administrative Purpose of Performance Management

The ways in which organizations use the system to provide information for day-to-day decisions about salary, benefits, and recognition problems. Since PM supports these administrative decisions, the information in a performance appraisal can have a great impact on the future of individual employees.

Corrective action for lack of ability

When a motivated employee lack knowledge, skills, or abilities in some area, the manager may offer coaching, training, and more detailed feedback. Sometimes it is appropriate to restructure a job so an employee can handle it.

Behavioral observation scale (BOS)

a Variation of BARS. Similarly, is developed from critical incidents. Where BARS discards many examples in creating the ratio scale, BOS uses many of them to define all behaviors necessary for effective performance.

Calibration meeting

a gathering at which managers discuss employee performance ratings and provide evidence supporting their ratings with he goal of eliminating the influence of rating errors.

Drawback of BOS

a major drawback is the amount of information requires. A BOS can have 80 or more behaviors, and the manager must remember how often the employee exhibited each behavior in a 6 to 12 month period. Additionally, managers may have to rate 10+ employees.

Specific feedback.

a performance measure should specifically tell employees what is expected of them and how they can meet those expectations. Being specific helps performance management meet the goals of supporting strategy and developing employees. This ensures that employees will know how to improve.

Organizational behavior modification (OBM)

a plan for managing the behavior of employees through a formal system of feedback and reinforcement.

Productivity

an important measure of success because getting more done with a smaller amount of resources increases the company's profits. Productivity usually refers to the output of production workers, but can be used more generally as a performance measure.

Forced distribution method

assigns a certain percentage of employees to each category in a set of categories. Example image shown. The manager completing the performance appraisal would rate 5% of his or her employees as exceptional, 25% as exceeding standards, and so on.

Downsides of behavioral approaches

behavioral methods do not work as well for complex jobs in which it is difficult to see a link between behavior and results or there is more than one good way to achieve success.

Behaviorally anchored rating scale (BARS)

builds on the critical incidents approach. The BARS method is intended to define performance dimensions specifically using statements of behavior the describe different levels of performance. These statements are based on past performance. The organization gathers many critical incidents representing effective and ineffective performance and then classifies them from most to least effective.

Measuring results

can focus on managing the objective, measurable results of a job or work group. results may include sales, costs, pr productivity, among many possible measures. Two of the most popular methods for measuring results Arte measurement of productivity and management by objectives

Benefits of behavioral approaches

can link the company's goals to the specific behavior required to achieve those goals. Can also generate specific feedback, along with guidance in areas requiring improvements. As a result, these methods tend to be valid. The people to be measured often help in developing the measures, so acceptance tends to be high as well.

Interrater reliability

consistency of results when more than one person measures performance. Simply asking one supervisor to rate an employee on a scale from 1 to 5 would have low interrupter reliability. The rating will differ depending on who is scoring the employees.

Reliability

describes the consistency of the results that the performance measure will deliver

Downsides with using Managers as a source of information

for employees in some jobs, the supervisor does not have enough opportunity to observe employees performing job duties. This may occur for jobs like salespeople, where the manager does not go with on sales, and even if they did, the employees would be on their best behavior.

Downsides of evaluation of results

has problems with validity because results may be affected by circumstances beyond each employees performance. Also, if the organization measures only final results, it may fail to measure significant aspect of performance that are not directly related to those results. If individuals focus only on aspects of performance that are measured, they may neglect significant skills or behaviors. A limitation of evaluation based on results is that these measures do not provide guidance on how to improve.

behaviorism

holds that an individuals future behavior is determined by their past experiences- specifically the ways in which past behaviors have been reinforced. People tend to repeat behaviors that have been rewarded in the past.

paired comparison method

involves comparing each employee with each other employee to establish rankings. When the manager has compared every pair of employees, the manager counts the number of points for each employee. The employee with the most points is considered to be the top ranking employee. Clearly, this method is time consuming if a group has more Ethan a handful of employees. Ex. for a group of 15, the manager needs to make 105 comparisons.

Developmental Purpose of Performance Management.

it serves as a basis for developing employees knowledge and skills. Even employees who are meeting expectations can become more valuable when they hear and discuss performance feedback.

Downsides of the critical incident method

keeping a daily or weekly log of critical incidents requires significant effort and managers may resist this requirement. also, critical incidents may be unique so they may not support comparison among employees.

problem solving approach

managers and employees work together to solve performance problems in an atmosphere of respect and encouragement. Focuses more on the future than the past.

Tell and listen approach

managers tell employees their ratings and then let the employees explain their side of the story.

Tell and sell approach

managers tell the employees their ratings and then justify those ratings. Most managers rely on this approach, although the problem solving approach is superior.

Customers as a source of information

may be the best source of performance information. This is appropriate in two situations: 1. when an employees job requires direct service to customer or 2. when the organization is interested in gathering information to determine what product and services the customer wants.

halo error

overrating based on one good quality

similar to me error

overrating people who seem similar. We tend to think highly of ourselves, so we rate those who are like us higher.

Peers as a source of information

peers can be a good sources when the supervisor does not often observe the employee. Peers have expert knowledge of the job requirements and likely observe the employee on the day to day. They often bring a different perspective to the evaluation and can provide valid performance assessments.

360 Degree performance appraisal

performance measurement that combines information for the employee's managers, peers, subordinates, self, and customers.

ways to reduce errors.

raters can be trained to avoid rating errors. Another method is to show rater actual examples of ideal performance and this helps the raters evaluate others against this standard.

benefits of rating attributes

rating attributes is the most popular way to measure performance in organizations. In general, attribute based performance methods are easy to develop and can be applied to a variety of jobs and organizations. If the organization is careful to identify which attributes are associated with high performance, and to define them carefully on the appraisal form, these methods can be reliable and valid.

Test-retest reliability

refers to the consistency of results over time. If a performance measure lack retest reliability, determining whether an employees performance has truly changed over time will be impossible.

Uniform Guidelines on Employee selection Procedures

require that organizations avoid using criteria such as race and age as a basis for employment decisions. This requires overcoming widespread rating errors. This requires overcoming widespread rating errors, such as that people tend to rate members of their own groups higher. Also, stereotypes play a role in how people are rated in measures such as leadership.

Critical incident method

requires managers to keep a record of specific examples of the employee acting in ways that are either effective or ineffective. Evaluating performance in this specific way gives employees feedback about what they do well and what they do poorly. The manager can also relate the incidents to how the employee is helping the company achieve its goals.

Simple ranking

requires managers to rank employees in their group from the highest performer to the poorest performer. A variation would be alternation ranking

Validity

the extent to which a measurement tool actually measures what it is intended to measure. In the case of performance appraisals, validity refers to whether the appraisal measures all the relevant aspects of performance and omits irrelevant aspects of performance. The intersection between contamination and deficiency

4: Evaluate performance

the manager and employee discuss and compare targeted goals and supporting behavior with actual results. This steps includes the annual formal performance review.

Alternation ranking

the manager works form a list of employees. First the manager decides which employee is best and crosses that person's name off the list. from the remaining names, the manager decides which employee is the worst and crosses of that name. This continues with second best and second worst and so on.

Rating behaviors

the organization begins by defining which behaviors are associated with success on the job. The appraisal form asks the manager to rate an employee in terms of each of the identified behaviors.

Strategic Purpose of Performance Management

to help the organization achieve its business objectives. It does this by helping to link employees behavior with the organizations goals

horns error

underrating based on one poor quality

contrast error

underrating people who seem different. This occurs when rating against others. They may still be a great performer, but compared to the best performer, they may be underrated.

Mixed standard scales

use several statements describing each trait to product a final score for that trait. The manager scores the employee in terms of how the employee compared to each statement.

strictness

when the rater favors lower rankings

central tendency

when the rater puts everyone near the middle of the scale.

leniency

when the reviewer rates everyone near the top

Benefits of a forced distribution method

works the best is the members of a group really do vary in terms of their performance. It overcomes the temptation to rate everyone high ignorer to avoid conflict.