MGT. Ch.8

Effective Performance Management Objectives

-Transform organizational objectives into clearly understood, measurable outcomes, that define success, and shared with stakeholder, and in/outside or organization -provide instruments for measuring , managing and improving overall health and success -include measures of quality, cost, speed, customer service, employee satisfaction, motivation, skills, in-depth performance management system -shift from prescriptive, audit and compliance based management to an ongoing looking forward strategic partnership between top and middle management/employees

Uses of performance appraisals

-administrative decisions (promotions -feedback and performance improvement -employee development/career planning -criteria for test validation -training program objectives -job re-design

Past Performance Evaluation, non comparative

-appraisal methods that evaluate an employees performance according to present data, and not by comparing one persons performance with another co-workers -the rating scale -behaviourally anchored rating scales -performance tests and observations

An Appraisal System

-consists of interlocking , interdependent and reinforcing methods and processes that make the results synergistic

Direct vs Indirect Observations

-direct: rater actually sees performance -Indirect: rater can evaluate only substitutes for actual performance (written test)

Methods to target Future Performance

-evaluate employee potential for future performance, focus on setting future performance goals -the management by objectives approach -assessment centre technique

Performance appraisal and its goals

-goal to evaluate past performance and allocate rewards, use comparative approaches -goal to give employee counselling about their behaviour, use past performance methods -goal to focus on specific skills use future performance systems -goal to seek uncover a specific weakness or help with internal placement, use assessment centres

contrast errors

A rater bias occurring when a rater compares employees to each other rather than to a performance standard.

The Recency Effect

A rater bias that occurs when the rater allows recent employee performance to sway unduly the overall evaluation of the employee's performance

personal prejudice

A rater's dislike for a person or group may distort the ratings.

the leniency and strictness biases

A tendency to rate employees higher than their performance justifies. A tendency to rate employees lower than their performance justifies.

the error of central tendency

An error in rating employees that consists of evaluating employees as neither good nor poor performers even when some employees perform exceptionally well or poorly.

Performance Appraisal

An evaluation that measures employee performance against established standards in order to make decisions about promotions, compensation, training or termination.

the management by objectives approach

Assessment of HR functions and systems by comparing actual results with stated HR objectives; required an employee and superior to jointly establish performance goals for the future -employees are subsequently evaluated on how well they have obtained these objectives -performance feedback must be available to adjust efforts -sometimes to ambiguous or narrow

Development Actions

Career progression Training opportunities Coaching Mentoring Identifying strengths/weaknesses

Performance Management

The use of performance data to effect organizational culture, systems, and processes, set goals, allocate resources, affect policies and programs and share results

Balanced Scorecard

an integrated organizational performance measuring approach, looking at organizational learning, innovation, financial management , internal operations, and customer management

Comparative Evaluation Methods

collection of different methods that compare one persons performance with another coworkers -useful for deciding merit pay increase, promotions because they rank employee best to worst -subjective, little feedback -reliable -ranking methods -forced distributions

360 degree performance appraisal

combination of self, peer, supervisor, and subordinate performance evaluation -requires suitable corporate culture -better used for developments (improve performance) then administrative (determining pay raise) -direct report appraisals: evaluating performance of supervisors

Ranking Method

method of evaluating employees that ranks them from best to worst on some traits -subject t halo and recency effects

Forced Distribution

method of evaluating employees that requires raters to categorize employees (overall performance)

Performance Analyze

offer management the necessary data to assess the current skill, experience and performance level of every employee as well as performance standards critical for future requirements -data has significant impact on HR planning, training, development, career development, compensation forecasts

Rating Scale

scale that requires the rater to provide a subjective evaluation of an individuals performance -completed by checking the most appropriate response for each performance factor -immediate supervisor usually completes it -specific performance criteria might be omitted to make it more applicable, thus the form may rely on irrelevant personality variable that dilute the meaning -limits specific feedback -raters biases likely to be reflected in this subjective instrument

assessment centre technique

standardized form of employee appraisal that relies on several types of evaluation and multiple assessors -evaluating employee potential -at an assessment centre facility , potential is individually evaluated through in-depth interviewing, background histories, peer ratings, leaderless group discussion, simulated work exercises. -pool estimates to arrive at some conclusion about each member

Raters Biases

the halo effect the error of central tendency the leniency and strictness biases personal prejudice the recency effect contrast errors

Key Elements of Performance Appraisal Systems

-job related: the system evaluates critical behaviours that constitute job success -Practical: system that is understood by evaluators and employees -Performance standards: benchmark against which performance is measured, should relate to desired results of each job -Performance measures: ratings used to evaluate performance, must be easy to use, reliable, report on critical behaviour -objective: indications of performance verifiable by others (verifiable, quantitative) -Subjective: based on opinion or perception

Effective Performance Managemen

-make clear connections between company goals and employee objectives, work plans, and criteria for success -high-level executive develop goals for their division that alling with organizational goals, mid-level managers develop unit goals to meet the divisional goals , managers develop team goals to meet unit goals, until all the way to the individual

Methods of Evaluating Past Performance

-non comparative -comparative

Performance Tests and Observations

-paper to pen or actual demonstration of skills -must be reliable and valid -practicality may suffer with high costs

Performance Management Characteristics

-performance objectives -performance goals -performance measurement -output measures -outcome measures

Training raters

-problem in understanding consistency -past focused on rating error (halo effect) emphasis shifted to the cognitive aspects of the rating process -ability of raters to make valid judgments on the basis of relatively complex information

Other methods for future performance appraisals

-web-based performance appraisals -focus on talent management , identifying and developing specific individuals within the organization who are seen as having high potential -categorized into future star, consistent star, current star, then opportunities granted

Training for raters involves 3 steps

1. biases and their causes should be discussed. 2. the role of performance appraisals in employee decisions should be explained to stress the need for impartiality and objectivity. 3.raters should be allowed to apply subjective performance measures as part of their training.

Guid lines for effective performance evaluation interviews

1. emphasize positive aspects 2. tell them its to improve performance, not discipline 3. review performance formally, frequently, for new employees, or poor ones 4. make criticisms specific 5. stay calm do not argue 7. identify specific action to improve performance 8. emphasize your willingness to assist the employees efforts 9. end it with stressing positive aspects and reviewing plans to improve

Characteristics of an Effective Performance Appraisal system

1. validity (relevance) 2. reliability (consistency) 3. input into system development 4. acceptable performance standards 5. acceptable goals 6. control of standards 7. frequency of feedback 8. rater training 9. ratee training 10. input into interview process 11. appraisal consequences 12. different sources (raters) *Nurturing organizational environment

Halo Effect

A bias that occurs when an evaluation allows some information to disproportionately affect the final evaluation.

Administrative Performance Appraisal

Dismissal from work Disciplinary procedures Compensation adjustments Promotions;/demotions Transfers

Behaviourally Anchored Rating Scales

Evaluating tools that rate employees along a rating scale by means of specific behaviour examples on the scale -description of effective/ineffective behaviour -group examples into performance related categories (employee knowledge, customer relations) -then rate specific examples along a scale (1-7) -more objective, more feedback -rater could still be biased, but behaviours that anchor the scale are criteria to guide sincere rater -limited number of categories

Developing & understanding Corporate Strategy *

Identifying Performance Expectations Providing Performance Direction Encourage Employee Participation Assessing job Performance Conducting Performance Apppraisal

Feedback Process Evaluation Interview

Necessary to improve employee performance -Performance review sessions that give employees feedback about their past performance or future potential. -should be positive -negative comments should be focused on work performance not personality -specific, not general or vague, examples of shortcoming -concludes by focusing on action to improve, assistance to overcome deficiencies -tell and sell approach -tell and listen approach -problem solving approach

Measuring Employee performance

Quantity of output Timeliness of output Efficiency of work completed Effectiveness of work completed Presence/attendance on the Job Quality of output Quantity of output