Chapter 9Chapter 9
Performance Management
McGraw-Hill/Irwin© 2006 The McGraw-Hill Companies, Inc. All
rights reserved.
Questions This Chapter Will Help Managers AnswerQuestions This Chapter Will Help Managers Answer
What steps can I, as a manager, take to make the performance management process more relevant and acceptable to those who will be affected by it?
How can we best fit our approach to performance management with the strategic direction of our dept. and business?
Should managers and non-managers be appraised from multiple perspectives – for example, by those above, by those below, by coequals, and by customers?
What strategy should we use to train raters at all levels in the mechanics of performance management and in the art of giving feedback?
The Process of Performance ManagementThe Process of Performance Management
1.Define performance
2.Facilitate performance
3.Encourage performance
Defining PerformanceDefining PerformanceKey ElementsKey Elements
GoalsMeasures
Assessment
Encouraging PerformanceEncouraging Performance
1. Provide a sufficient amount of rewards that employees really value
2. In a timely
3. Fair manner
What is Fairness?What is Fairness?Important PracticesImportant Practices
Voice Collect employee input through surveys or interviews
Consistency Ensure that all employees are treated consistently when seeking input and
communicating about the process for administering rewards
Relevance Include rewards that employees really care about
Communication Explain clearly the rules and logic of the rewards process
Figure 9-1Figure 9-1 Elements of a Performance Management Elements of a Performance Management SystemSystem
Define PerformanceSet objectives
Define PerformanceSet objectives
Encourage PerformanceProvide timely rewards that are valued by employees
Encourage PerformanceProvide timely rewards that are valued by employees
Facilitate PerformanceProvide resources
Facilitate PerformanceProvide resources
TO ENERGIZE EMPLOYEE
PERFORMANCE
Figure 9-2Figure 9-2 Purposes of Performance Appraisal SystemsPurposes of Performance Appraisal Systems
Employment Decisions
Diagnosis of Organizational
Problems
Objectives for Training
Programs
Criteria in Test
Validation
Employee Feedback
Purposes of Performance Appraisal
Systems
RelevanceRelevance
Implies that there are
1. Clear links between the performance standards for a particular job and organizational objectives, and
2. Clear links between the critical job elements identified through a job analysis and the dimensions to be rated on an appraisal form
Performance StandardsPerformance Standards
… translate job requirements into levels of acceptable or unacceptable employee behavior. They play a critical role in the job analysis-performance appraisal linkage.
Figure 9-3Figure 9-3 Relationship of Performance Standards to Relationship of Performance Standards to Job Analysis and Performance AppraisalJob Analysis and Performance Appraisal
Job AnalysisPerformance
StandardsPerformance
Appraisal
Describes work and personal
requirements of a particular job
Translate job requirements into
levels of acceptable
/unacceptable performance
Describes the job-relevant
strengths and weaknesses of an individual or
team
Rating Methods or FormatsRating Methods or Formats
Relative Rating Systems Comparing the performance of employees to that of other
employees
Absolute Rating Systems Evaluating each employee in terms of performance standards
without reference to others
Results-Oriented Systems Emphasis is on what employee produces
RankingRanking
Simple ranking requires only that a rater order all employees from highest to lowest, from “best” employee to “worst” employee.
Alternation ranking requires that a rater initially list all employees on a sheet of paper. From this list he or she chooses the best employee (No. 1), then the worst employee (No. n), then the second best (no. 2), then the second worst (No. n -1), and so forth, alternating from the top to the bottom of the list until all employees have been ranked.
Management By Objectives (MBO)Management By Objectives (MBO)
A process of managing that relies on goal-setting to establish objectives for the organization as a whole, for each department, for each manager within each department, and for each employee
Establishing Objectives in MBOEstablishing Objectives in MBOWhat the Key People Involved Should DoWhat the Key People Involved Should Do
Meet to agree on the major objectives for a given period of time
Develop plans for how and when the objectives will be accomplished
Agree on the “yardsticks” for determining whether the objectives have been met
Who Should Evaluate Performance?Who Should Evaluate Performance?Possible RatersPossible Raters
The immediate supervisorPeersSubordinatesSelf-appraisalCustomers servedComputers
Multi-Rater or 360 Degree FeedbackMulti-Rater or 360 Degree Feedback
Using input from managers, subordinates, peers, and customers to provide a perspective on performance from all angles
Types of TeamsTypes of Teams
Work or Service Teams Intact teams engaged on routine tasks
Project Teams Teams assembled for a specific purpose and expected to
disband once their task is completed
Network Teams Teams that include membership not constrained by
time/space and membership is not limited by organizational boundaries
Types of Appraisal ErrorsTypes of Appraisal Errors
Halo error – raters assign their ratings on the basis of global (good or bad) impressions of ratees
Contrast error – rater compares several employees to one another rather than to an objective standard of performance
Recency error – rater assigns his or her ratings on the basis of the employee’s most recent performance
Halo error – raters assign their ratings on the basis of global (good or bad) impressions of ratees
Contrast error – rater compares several employees to one another rather than to an objective standard of performance
Recency error – rater assigns his or her ratings on the basis of the employee’s most recent performance
Table 9-3Table 9-3 Supervisory Activities Before, During, and Supervisory Activities Before, During, and After Performance Feedback InterviewsAfter Performance Feedback Interviews
Before
Communicate frequently with subordinates about their performanceGet training in performance appraisal interviewingPlan to use a problem-solving approach rather than “tell-and-sell”Encourage subordinates to prepare for performance feedback interviews
During
Encourage subordinates to participateJudge performance, not personality and mannerismsBe specificBe an active listener
Table 9-3 contdTable 9-3 contd..
Avoid destructive criticismSet mutually agreeable goals for future improvements
After
Communicate frequently with subordinates about their performancePeriodically assess progress toward goalsMake organizational rewards contingent on performance
Key Terms Discussed in the ChapterKey Terms Discussed in the Chapter
Performance management Performance appraisal Performance definition Performance facilitation Performance encouragement Relevance Performance standards Sensitivity Reliability Acceptability Practicality
Applicant group Behavior-oriented rating methods Relative rating systems Absolute rating systems Results-oriented rating systems Simple ranking Alternation ranking Paired comparisons Forced distribution Leniency
Key TermsKey Terms (contd.)(contd.)
Severity Central tendency Likert method Summed ratings Critical incidents Graphic rating scales Behaviorally anchored rating
scales (BARS) Management by objectives
(MBO) Cascading process
Work planning and review 360-degree feedback Total quality management Halo error Contrast error Recency error Active listening Destructive criticism