Management Chapter 11

Strategic Congruence

-The extent to which the performance management system elicits job performance that is consistent with the organization's strategy, goals, and culture. -must be flexible to adapt to change

Productivity Measurement and Evaluation System (ProMES)

1.Identify products or set of activities or objectives the organization expects to accomplish 2.Define indicators of the products 3.Establish contingencies between the amount of indicators and level of evaluation associated with that amount 4.Develop a feedback system

contaminated

concerned with maximizing overlap between actual job performance and measure of job performance

Performance Management

ensure employee activities are congruent with goals

performance appraisal

gets information on how well employees are doing jobs

Reducing Rater Errors, Politics, and Increasing Reliability and Validity of Ratings

heuristics: unconscious bias ; appraisal politics reducing errors: •Rater error training •Rater accuracy training, or frame-of-reference training •Unconscious bias training •Calibration meetings

deficient

it does not measure all aspects of performance

performance feedback

•Feedback should be given frequently, not once a year. •Create the right context for the discussion. •Ask the employee to rate his or her performance before the session. •Have ongoing, collaborative performance conversations. •Recognize effective performance through praise. •Focus on solving problems. •Focus feedback on behavior or results, not on the person. •Minimize criticism. •Agree to specific goals and set a date to review progress.

direct reports

•Have best opportunity to evaluate how manager treats employees •Upward feedback •Gives subordinates power over managers •Might lead to emphasis of employee satisfaction over production

evaluation of the quality approach

•Adopts a systems-oriented focus •Advocates evaluation of personal traits, which are difficult to relate to job performance except in work teams

evaluation of the behavioral approach

•Can link company's strategy to specific behavior necessary for implementing strategy •Provides specific guidance and feedback for employees about their expected performance •High acceptability and reliability •Weaknesses: -Behaviors and measures must be continually monitored and revised -Assumes there is "one best way" to do job and behaviors that constitute this best way can be identified

Diagnosing the Causes of Poor Performance

•Consider whether poor performance is detrimental to business: •Determine the cause •Meet with employee

Reliability

•Consistency of a performance measure •Interrater reliability •Consistency among individuals who evaluate employee's performance •Test-retest reliability •Should be reliable over time

The quality approach

•Customer orientation •Prevention approach to errors •Continuous improvement •Primary goal is improving customer satisfaction •Many performance management systems are incompatible with quality approach •Major focus should be to provide employees with feedback •Subjective feedback from managers, peers, and customers about personal qualities •Objective feedback based on work process using statistical process control methods

Using non-financial performance measures (strategic congruence):

•Develop a model linking measures to company's goals •Use existing databases or develop measures •Use statistical and qualitative methods for testing relationships •Revisit the model and revise if needed •Act on conclusions •Audit to see if desired result was achieved

evaluating the attribute approach

•Easy to develop and generalizable •Problems: Little congruence between the techniques and company's strategy; Vague performance standards are open to different interpretations by different raters

technology concerns

•Electronic monitoring systems threaten employees' right to privacy and dignity to work without being monitored •Time-tracking software may be inaccurate •Needless surveilling results in less productivity and motivation, demoralizes employees, and creates stress

Specificity

•Extent to which a performance measure tells employees what is expected and how to meet expectations •Relevant to both strategic and developmental purposes •Must measure what an employee must do to achieve company's goals •Must point out employee's performance problems

peers

•Have expert knowledge of job requirements •Have most opportunity to observe employee in day-to-day activities •Often in best position to praise and recognize each other's performance on daily basis •Not expected to provide feedback •Bring a different perspective •Potential for bias and discomfort evaluating peers

customers

•In service industries, only person present to observe employee's performance •Service companies use customer evaluations: (When employee's job requires direct service to customer or linking customer to other services within the company; When company is interested in gathering information to determine what products and services customer wants) •Expensive

Results Approach

•Managers set goals that are used as standards to evaluate individuals' performance •Three common components: •Setting effective goals (SMART goals) •Different types of measurements can be used for goals or objectives •Goals set with managers' and subordinates' participation •Manager gives objective feedback throughout

evaluation of the results approach

•Minimizes subjectivity •Links individual's results with organization's strategies and goals •Challenges: -Can be both contaminated and deficient -Individuals may focus only on aspects of performance that are measured and neglecting others -Feedback may not help employees learn how to change behavior to increase performance

managers

•Most frequently used source of performance information •Motivated to make accurate ratings •Feedback from supervisors strongly related to performance and to employee perceptions of appraisal's accuracy •Might not have time to observe performance or may have bias against employee

360-degree appraisal

•Multiple raters (boss, peers, subordinates, customers) provide input into a manager's evaluation. •Minimizes bias •Used primarily for strategic and developmental purposes

self

•Not often used as sole source of performance information, but can still be valuable •Tendency toward inflated assessments

continuous performance management process

•Ongoing conversations between managers, employees, and teams focused on work progress, feedback, goals, and needs (Plus more frequent, formal check-ins) •Employees want regular feedback and transparency •Forward-facing •Managers are coaches

statistical process control techniques

•Process-flow analysis •Cause-and-effect diagrams •Pareto charts •Control charts •Histograms •Scattergrams

Actions for Managing Employees' Performance

•Take into account employees' ability, motivation, or both: -Solid performers - high ability and high motivation -Misdirected effort - motivated but lack ability -Underutilizers - have ability but lack motivation -Deadwood - low ability and motivation •Performance improvement plan (PIP)

performance management systems today

•Web-based systems •Social media (Social performance management) •Electronic tracking and monitoring systems

typical rater errors

1. Similar to Me 2. Contrast 3. Leniency 4. Strictness 5. Central Tendency 6. Halo 7. Horns

comparative approach for measuring performance

1. ranking 2. forced distribution 3. paired comparison

the behavioral approach

-behaviorally anchored rating scales (BARS) -behavioral observation scales (BOS) -competency models (identifies and provides descriptions of common competencies; useful for HR; used in development management)

Validity

-extent to which a performance measure assesses all relevant aspects of performance -must not be deficient or contaminated

traditional performance management process

-step 1: define performance outcomes for company division and department -step 2: develop employee goals, behavior, and actions to achieve outcomes -step 3: provide support and ongoing performance discussions -step 4: evaluate performance -step 5: identify improvements needed -step 6: provide consequences for performance results

Six Purposes of Performance Management

-strategic -administrative -developmental -communication -organizational maintenance -documentation

Acceptability

-the extent to which a performance measure is deemed to be satisfactory or adequate by those who use it -three categories of fairness: procedural, interpersonal, and outcome

attribute approach

1. graphic rating scales (evaluate list of traits on a 5 point scale; can be discrete or continuous) 2. Mixed standard scales (can be trait or behavior oriented scales; define relevant performance dimensions and then develop statements representing good, average, and poor performance)

best practices in goal setting

1.Employees and managers should discuss and set no more than three to five goals. 2.Goals should be brief, meaningful, challenging, and include the results the employee is expected to achieve. 3.The time frame for goal achievement should be related to when they are expected to be accomplished. 4.The relationship between goals and rewards should be appropriate. 5.Goals should be "linked up" rather than "cascaded down." This means that functions, teams, and employees should set their own goals that are related to company goals.

balanced scorecard

Four perspectives of performance: •Financial •Customer •Internal or operations •Learning and growth

performance feedback

Provide employees information on their performance