Performance Management
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Performance Management
description
Performance Management. A Performance Management Model. Business Strategy. Goal Setting. Reward Systems. Individual and Group Performance. Workplace Technology. Employee Involvement. Performance Appraisal. Characteristics of Effective Goals. Goals are Challenging - PowerPoint PPT Presentation
Transcript of Performance Management
Performance Management
A Performance Management Model
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Wor
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lac e
Tec
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olog
yBusiness Strategy
Em
ployee In
volvemen
t
GoalSetting
RewardSystems
PerformanceAppraisal
Individualand Group
Performance
Characteristics of Effective Goals
Goals are Challenging Challenging but realistic Goals are set participatively
Goals are Clear Goals are specific and operationally
defined Resources for goal achievement are
negotiated
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Management by Objectives(MBO) MBO attempts to align personal goals
with business strategy through increased communications and shared perceptions between managers and subordinates
MBO programs may go beyond manager and subordinate roles to address individuals, work groups, and to reconcile conflicts.
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MBO Application Stages Involve the whole work group Goals set jointly by manager and subordinate Action plans are established Criteria and yardsticks are established Work progress and contract reviewed and
adjusted periodically Records of meetings are maintained
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Performance Appraisal Elements
Elements Traditional High Involvement
Purpose Organizational, legal Fragmented
Developmental Integrative
Appraiser Supervisor or manager Appraisee, co-
workers, and others
Role of Appraisee
Passive recipient Active participant
Measurement
Subjective Concerned with validity
Objective and subjective
Timing Period, fixed,
administratively driven Dynamic, timely,
employee- or work-driven
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Performance Appraisal Application Stages
Select the appropriate stakeholders Diagnose the current situation Establish the system’s purposes and
objectives Design the performance appraisal
system Experiment with implementation Evaluate and monitor the system
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Characteristics of Effective Appraisal Systems
Timely Accurate Accepted by the users Understood Focused on critical control points Economically feasible
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Reward System Design FeaturesDesign Feature Definition
Person/Job Based vs.Performance Based
The extent to which rewards are based on the person, the job or the outcomes of the work
Market Position(External Equity)
The relationship between what an organization pays and what other organizations pay
Internal Equity The extent to which people doing similar work within and organization are rewarded the same
Hierarchy The extent to which people in higher positions get more and varied rewards
Centralization The extent to which reward system design, decisions and administration are standardized
Rewards Mix The extent to which different types of rewards are available and offered to people
Security The extent to which work is guaranteed
Seniority The extent to which rewards are based on length of service
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Characteristics of Effective Reward Systems
Availability Timeliness Performance Contingency Durability Equity Visibility
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Types of Rewards Pay
Skill-based pay plans Performance-based pay systems link pay to
performance Gain sharing involves paying bonuses based on
improvements in the operating results Promotions Benefits
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Individual Plan Productivity 4 1 1 4 Cost effectiveness 3 1 1 4 Superiors’ rating 3 1 1 3
Group Productivity 3 1 2 4 Cost effectiveness 3 1 2 4 Superiors’ rating 2 1 2 3
Organization- Productivity 2 1 3 4wide Cost effectiveness 2 1 2 4
Salary-Based Pay for Performance Ratings
Ties p
ay to
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Em
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Individual Plan Productivity 5 3 1 2 Cost effectiveness 4 2 1 2 Superiors’ rating 4 2 1 2
Group Productivity 4 1 3 3 Cost effectiveness 3 1 3 3 Superiors’ rating 3 1 3 3
Organization- Productivity 3 1 3 4wide Cost effectiveness 3 1 3 4
Profit 2 1 3 3
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ay to
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Stock/Bonus Pay for Performance Ratings
Gain Sharing Pay Plan Considerations
Process of design - participative or top-down? Organizational unit covered - plant or
companywide? Determining the bonus - what formula? Sharing gains - how and when to distribute? Managing change - how to implement system?
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