1 Copyright © 2013 by McGraw-Hill RyersonSchwind 10th Canadian Edition. 8 eight PERFORMANCE...

1Copyright © 2013 by McGraw-Hill RyersonSchwind 10th Canadian Edition

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8eighteight

PERFORMANCE MANAGEMENTPERFORMANCE MANAGEMENTPERFORMANCE MANAGEMENTPERFORMANCE MANAGEMENT

chapterchapter

Ryerson UniversityRyerson UniversityRyerson UniversityRyerson University


Performance ManagementPerformance ManagementPerformance ManagementPerformance Management

• Performance management involves much more than just performance appraisal

• Individual employees need to meet their performance goals– Collectively, helps the organization to

meet its goals


Uses of Performance Data – Informs:Uses of Performance Data – Informs:Uses of Performance Data – Informs:Uses of Performance Data – Informs:

Corporate cultureCorporate culture

Organizational Organizational benchmarksbenchmarks

Human capital potentialHuman capital potential

Systems and processesSystems and processes

ResourcesResources

Current policiesCurrent policies

Program directionsProgram directions

Sharing results with Sharing results with stakeholdersstakeholders

Asking for shareholder Asking for shareholder inputinput


Characteristics of Effective Performance Characteristics of Effective Performance ManagementManagementCharacteristics of Effective Performance Characteristics of Effective Performance ManagementManagement

• Performance objectives

• Performance goals

• Performance measurement

• Output measures

• Outcome measures


Performance Management System GoalsPerformance Management System GoalsPerformance Management System GoalsPerformance Management System Goals

• Organizations try to achieve the following:– Transform organizational objectives into

understood, measurable outcomes– Provide instruments for measuring,

managing, and improving organizational success

– Include measures of quality, cost, speed to provide an in-depth, predictive system

– Shift to an ongoing, forward-looking strategic partnership between management and employees


Performance Management as part of Performance Management as part of managerial strategymanagerial strategyPerformance Management as part of Performance Management as part of managerial strategymanagerial strategy

• Performance appraisal– The process by which organizations

evaluate employee job performance– Provides data to assess every employee

more


Performance Management as part of Performance Management as part of managerial strategy – Cont’dmanagerial strategy – Cont’dPerformance Management as part of Performance Management as part of managerial strategy – Cont’dmanagerial strategy – Cont’d

• Balanced scorecard– Very popular approach– Combines the performance measures of

the total organization—integrates customer satisfaction, internal processes, learning, and innovation


Uses of Performance AppraisalUses of Performance Appraisal


Key ElementsKey ElementsKey ElementsKey Elements

• The HR department usually develops performance appraisals for employees in all departments– Centralization is meant to ensure uniformity

in order to provide for useful results– Employee’s immediate supervisor usually

performs the actual evaluation


Appraisal SystemsAppraisal SystemsAppraisal SystemsAppraisal Systems

• Job-related

• Practical

• Have performance standards

• Have performance measures


Performance MeasuresPerformance MeasuresPerformance MeasuresPerformance Measures

IndirectIndirect

ObjectiveObjective

•Rater has only substitutes for performance (constructs)

•Verifiable by others•Usually quantitative

DirectDirect

•Not verifiable by others•Based on rater’s opinions

•Rater actually see the employee’s performance

SubjectiveSubjective


Characteristics for EffectivenessCharacteristics for EffectivenessCharacteristics for EffectivenessCharacteristics for Effectiveness

EffectiveEffectivePerformancePerformanceAppraisalAppraisalSystemSystem


Validity

Reliability

Input into development

Acceptable standards

Acceptable goals

Control of standardsmore


Characteristics for Effectiveness Characteristics for Effectiveness (cont’d)(cont’d)Characteristics for Effectiveness Characteristics for Effectiveness (cont’d)(cont’d)



Frequency of feedback

Rater training

Ratee training

Input into interview process

Appraisal consequences

Different sources (raters)


Past Performance: NoncomparativePast Performance: NoncomparativePast Performance: NoncomparativePast Performance: Noncomparative

BARSBARS

Tests & Tests & ObservationsObservations

• Descriptions of effective/ineffective performance—examples placed along a scale

• Job-related, practical, and standardized

• May include paper-and-pencil tests or an actual demonstration of skills

Rating scaleRating scale

• Multiple sources of ratings e.g. self, peer, supervisor, subordinate, customer

• Oldest and most widely used method• Subjective i.e. based on the rater’s opinion• Responses may be given numerical values

360-Degree360-Degree

more


Past Performance: ComparativePast Performance: ComparativePast Performance: ComparativePast Performance: Comparative

ForcedForceddistributionsdistributions

•Employees sorted into categories•Usually a certain proportion must be put

into each category

RankingRankingmethodmethod

•Employees ranked from best to worst•Subject to halo and recency effects


Future Performance MethodsFuture Performance MethodsFuture Performance MethodsFuture Performance Methods

• Management-by-Objectives Approach– Employee and supervisor jointly

establish performance goals for the future

– Goals should be mutually agreed upon and objectively measurable

– Potential increase in employee motivation

more


Future Performance MethodsFuture Performance MethodsFuture Performance MethodsFuture Performance Methods

• Assessment Centre Technique– Relies on multiple types of evaluation

and multiple raters– Usually used for middle-level

managers– Candidate is evaluated at a location

removed from the job-site


Other DevelopmentsOther DevelopmentsOther DevelopmentsOther Developments• Web-based performance appraisal

– Has become the standard for all sizes of firms

– Ideally performance appraisal software is part of an enterprise-wide software system

• Competencies– Focus more on skills vs job performance

• Talent Management


Implications of Appraisal TrainingImplications of Appraisal TrainingImplications of Appraisal TrainingImplications of Appraisal Training

• Training raters– Raters need knowledge of system and its

purpose– Rater training on rater errors– Now focus on cognitive aspect of the rating

process– To make valid judgments using complex

information


Implications of Appraisal TrainingImplications of Appraisal TrainingImplications of Appraisal TrainingImplications of Appraisal Training

• Focus on reducing/eliminating rating errors:– Halo Effect– Error of Central Tendency– Leniency and Strictness Bias– Personal Prejudice– Recency Effect– Contrast Errors


Implications of Appraisal Evaluation Implications of Appraisal Evaluation InterviewsInterviewsImplications of Appraisal Evaluation Implications of Appraisal Evaluation InterviewsInterviews

• Evaluation interviews are performance review sessions that give employees feedback– Tell-and-sell– Tell-and-listen– Problem-solving

• The interview should be a positive, performance-improving dialogue


Effective Evaluation InterviewsEffective Evaluation InterviewsEffective Evaluation InterviewsEffective Evaluation Interviews

• Emphasize positive aspects of Emphasize positive aspects of employee performanceemployee performance

• Tell each employee the evaluation Tell each employee the evaluation session is to improve performance not session is to improve performance not to disciplineto discipline

• Provide immediate positive and Provide immediate positive and developmental feedback in a private developmental feedback in a private locationlocation

more


Effective Evaluation Interviews Effective Evaluation Interviews (cont’d)(cont’d)Effective Evaluation Interviews Effective Evaluation Interviews (cont’d)(cont’d)

• Review performance formally at least Review performance formally at least annuallyannually

• Make criticisms specific, not general and Make criticisms specific, not general and vaguevague

• Focus criticisms on performance, not Focus criticisms on performance, not personalitypersonality

• Stay calm and do not argueStay calm and do not argue

more


Effective Evaluation Interviews Effective Evaluation Interviews (cont’d)(cont’d)Effective Evaluation Interviews Effective Evaluation Interviews (cont’d)(cont’d)

• Identify specific actions the employee can Identify specific actions the employee can taketake

• Emphasize the evaluator’s willingness to Emphasize the evaluator’s willingness to assistassist

• End the evaluation session by stressing End the evaluation session by stressing the positive aspects of performance and the positive aspects of performance and reviewing plans to improve performancereviewing plans to improve performance


Human Resource Management FeedbackHuman Resource Management FeedbackHuman Resource Management FeedbackHuman Resource Management Feedback

• Performance management process also Performance management process also provides insight into effectiveness of HRMprovides insight into effectiveness of HRM

• If poor performance is widespread, many If poor performance is widespread, many employees are excluded from promotions employees are excluded from promotions and transfersand transfers

• Unacceptably high numbers of poor Unacceptably high numbers of poor performance may indicate errors in the performance may indicate errors in the HRM functionHRM function


Legal Aspects of Performance AppraisalLegal Aspects of Performance AppraisalLegal Aspects of Performance AppraisalLegal Aspects of Performance Appraisal

• A performance appraisal form is a legal A performance appraisal form is a legal documentdocument

• Raters must use only performance criteria Raters must use only performance criteria that are relevant to the jobthat are relevant to the job

• Avoid non-relevant criteriaAvoid non-relevant criteria

more


Legal Aspects of Performance AppraisalLegal Aspects of Performance AppraisalLegal Aspects of Performance AppraisalLegal Aspects of Performance Appraisal

• A reasonable time must be set for A reasonable time must be set for performance improvementperformance improvement

• Well-documented performance Well-documented performance shortcomings and use of feedback shortcomings and use of feedback interviews have been viewed favourably in interviews have been viewed favourably in court and with arbitratorscourt and with arbitrators


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8eighteight

PERFORMANCE MANAGEMENTPERFORMANCE MANAGEMENTPERFORMANCE MANAGEMENTPERFORMANCE MANAGEMENT

chapterchapter

Ryerson UniversityRyerson UniversityRyerson UniversityRyerson University

1 Copyright © 2013 by McGraw-Hill RyersonSchwind 10th Canadian Edition. 8 eight PERFORMANCE...

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