Transcript Slide 1

Chapter 8
Performance Management
Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.
Learning Objectives
1. Identify major determinants of effective performance
management.
2. Discuss three purposes of performance management.
3. Identify five criteria for effective performance
management systems (PMS) .
4. Discuss four approaches to performance
management, specific techniques used in each
approach and ways these approaches compare with
criteria for effective PMS.
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Learning Objectives, cont.
5. Choose the most effective approach to performance
measurement for a given situation.
6. Discuss advantages and disadvantages of different
sources of performance information.
7. Choose the most effective sources for performance
information.
8. Distinguish types of rating errors and explain how to
minimize each in a performance evaluation.
9. Conduct an effective performance feedback session.
10. Identify the cause of a performance problem.
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Introduction
Performance Management - managers ensure
that employees’ activities and outputs are
congruent with organizational goals.
Performance Feedback
provides employees
information regarding their
performance effectiveness.
Performance Appraisalorganization gets
information on how well an
employee is doing on the
job.
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Performance Management Process
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3 Purposes of Performance Management (PMS)
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5 Criteria of Performance Measures
Specificity
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Measuring Performance
 Comparative approach compares performance with others.
 Ranking
 Simple ranking ranks employees from highest to lowest
performer.
 Alternation ranking crosses off best and worst
employees.
 Forced distribution ranks employees in groups.
 Paired comparison - managers compare every employee
with every other employee in work group.
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Attribute Approach
 Graphic rating scales
 list of traits evaluated by 5-point rating scale.
 legally questionable.
 Mixed-standard scales
 define relevant performance dimensions
 develop statements representing good,
average, and poor performance along each
dimension.
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Example of a Graphic Rating Scale
Performance
Dimensions
Rating
5 Distinguished 4 Excellent 3 Commendable 2 Adequate 1 Poor
Knowledge
5
4
3
2
1
Communication
5
4
3
2
1
Judgment
5
4
3
2
1
Managerial skill
5
4
3
2
1
Quality performance
5
4
3
2
1
Teamwork
5
4
3
2
1
Interpersonal skills
5
4
3
2
1
Initiative
5
4
3
2
1
Creativity
5
4
3
2
1
Problem solving
5
4
3
2
1
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Behavioral Approach
 Critical incidents approach requires managers to keep record
of specific examples of effective and ineffective performance.
 Behaviorally anchored rating scales (BARS)
 Behavioral observation scales (BOS)
 Organizational behavior modification is a formal system of
behavioral feedback and reinforcement.
 Assessment centers are multiple raters who evaluate
employees’ performance on a number of exercises.
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Competency Model
Competencies are sets of skills, knowledge, abilities
and personal characteristics that enable employees
to successfully perform their jobs.
A competency model identifies competencies
necessary for each model and provides descriptions
common for an entire occupation, organization, job
family or specific job, useful for recruiting, selection,
training and development.
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Results Approach
 Management by Objectives
Goals
 top management passes down company’s
strategic goals to managers to define goals.
 Productivity Measurement and Evaluation
System (ProMES)
 goal is to motivate employees to
higher levels of productivity.
Hierarchy
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Balanced Scorecard Approach
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Quality Approach
A (PMS) designed with a strong quality orientation can:
 Assess both person and system factors in the
measurement system.
 Emphasize managers and employees working together
to solve performance problems.
 Involve both internal and external customers in setting
standards and measuring performance.
 Use multiple sources to evaluate person and system
factors.
Sustainability is key element of quality approach.
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Statistical Process
Quality Control Techniques
1.
2.
3.
4.
5.
6.
Process-flow analysis
Cause-and-effect diagrams
Pareto chart
Control chart
Histogram
Scattergram
Kaizen - practices participated in by employees
from all levels of the company that focus on
continuous improvement of business processes
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5 Performance Information Sources
360
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3 Ways Technology Influences PMS
Web-based Online paperless PMS Technology
-Social media; electronic monitoring
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Typical Rater Errors
1. Similar to Me
2. Contrast
3. Leniency
4. Strictness
5. Central Tendency
6. Halo
7. Horns
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Reducing Rater Errors and Politics
Appraisal politics - evaluators purposefully distorting
a rating to achieve goals.
3 Approaches to Reducing Rater Error:
 rater error training
 frame-of-reference or rater accuracy training
 calibration meetings
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Improve Performance Feedback
1. Give feedback frequently, not once a year.
2. Create right context for discussion.
3. Ask employees to rate performance before the session.
4. Encourage employee to participate.
5. Recognize effective performance through praise.
6. Focus on solving problems.
7. Focus feedback on behavior or results, not on the person.
8. Minimize criticism.
9. Agree to specific goals and set progress review date.
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Employee
Characteristics
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Ways to Manage Performance
1. Solid performers
 High ability and motivation; provide development
2. Misdirected effort
 Lack of ability but high motivation; focus on training
3. Underutilizers
 High ability but lack motivation; focus on interpersonal
abilities
4. Deadwood
 Low ability and motivation; managerial action,
outplacement, demotion, firing
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Withstand Legal Scrutiny
1. Conduct a valid job analysis related to performance.
2. Base system on specific behaviors or results.
3. Train raters to use system correctly.
4. Review performance ratings and allow for employee
appeal.
5. Provide guidance/support for poor performers.
6. Use multiple raters.
7. Document performance evaluations.
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Summary
 Measuring and managing performance are key to gain
competitive edge.
 Performance management systems (PMS) serve strategic,
administrative and developmental purposes.
 PMS should be evaluated against criteria of strategic congruence,
validity, reliability, acceptability and specificity.
 Effective managers need to
 be aware of the issues involved in determining best methods
and legal scrutiny.
 feed performance information back to employees
 take action based on causes for poor performance: ability,
motivation or both
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