Performance Management McGraw-Hill/Irwin Copyright © 2010  by The McGraw-Hill Companies, Inc. All rights reserved.
Questions This Chapter Will Help Managers Answer <ul><li>What steps can I, as a manager, take to make the performance mana...
Managing For Maximum Performance <ul><li>Performance management  is a kind of compass—one that indicates actual direction ...
The Process of Performance Management <ul><li>Define performance </li></ul><ul><li>Facilitate performance </li></ul><ul><l...
Defining Performance Key Elements Goals Measures Assessment
Encouraging Performance <ul><li>Provide a sufficient amount of rewards that  employees really value </li></ul><ul><li>2. I...
What is Fairness? Important Practices <ul><li>Voice </li></ul><ul><ul><li>Collect employee input through surveys or interv...
Figure 9-1 Elements of a  Performance Management System
Figure 9-2 Purposes of Performance Appraisal Systems
Requirements of  Effective Appraisal Systems <ul><li>Legally and scientifically, the key requirements of any appraisal sys...
Relevance <ul><li>Implies that there are </li></ul><ul><li>Clear links between the performance standards for a particular ...
Performance Standards …  translate job requirements into levels of acceptable or unacceptable employee behavior.  They pla...
Figure 9-3 Relationship of Performance Standards to Job Analysis and Performance Appraisal
Rating Methods or Formats <ul><li>Relative Rating Systems </li></ul><ul><ul><li>Comparing the performance of employees to ...
Ranking Simple ranking  requires only that a rater order all employees from highest to lowest, from “best” employee to “wo...
Behaviorally Anchored Rating Scales <ul><li>The major advantage of BARS is that they define the dimensions to be rated in ...
Management By Objectives (MBO) A process of managing that relies on goal-setting to establish objectives for the organizat...
Establishing Objectives in MBO What the Key People Involved Should Do <ul><li>Meet to  agree on the major objectives  for ...
Table 9–1: Advantages and Disadvantages of Alternative Appraisal Methods
Work Planning and Review <ul><li>Work planning and review  is similar to MBO; however, it places greater emphasis on the p...
Who Should Evaluate Performance? Possible Raters <ul><li>The immediate supervisor </li></ul><ul><li>Peers </li></ul><ul><l...
Multi-Rater or 360-Degree Feedback Using input from managers, subordinates, peers, and customers to provide a perspective ...
Types of Teams <ul><li>Work or Service Teams </li></ul><ul><ul><li>Intact teams engaged on routine tasks </li></ul></ul><u...
Types of Appraisal Errors Halo error  – raters assign their ratings on the basis of global (good or bad) impressions of ra...
Frame-of-reference training <ul><li>Of the many types of rater training programs available today,  frame-of-reference trai...
Table 9-3 Supervisory Activities Before, During, and After Performance Feedback Interviews
Key Terms Discussed in the Chapter <ul><li>Performance management </li></ul><ul><li>Performance appraisal </li></ul><ul><l...
Key Terms (contd.) <ul><li>Severity </li></ul><ul><li>Central tendency </li></ul><ul><li>Likert method of summed ratings <...
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Chapter 09 Performance Management McGraw-Hill/Irwin

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Chapter 09 Performance Management McGraw-Hill/Irwin

  1. 1. Performance Management McGraw-Hill/Irwin Copyright © 2010 by The McGraw-Hill Companies, Inc. All rights reserved.
  2. 2. Questions This Chapter Will Help Managers Answer <ul><li>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? </li></ul><ul><li>How can we best fit our approach to performance management with the strategic direction of our dept. and business? </li></ul><ul><li>Should managers and nonmanagers be appraised from multiple perspectives – for example, by those above, by those below, by coequals, and by customers? </li></ul><ul><li>What strategy should we use to train raters at all levels in the mechanics of performance management and in the art of giving feedback? </li></ul><ul><li>What would an effective performance management process look like? </li></ul>
  3. 3. Managing For Maximum Performance <ul><li>Performance management is a kind of compass—one that indicates actual direction as well as desired direction </li></ul><ul><li>Many managers incorrectly equate it with performance appraisal —an exercise they typically do once a year to identify and discuss job-relevant strengths and weaknesses of individuals or work teams </li></ul>
  4. 4. The Process of Performance Management <ul><li>Define performance </li></ul><ul><li>Facilitate performance </li></ul><ul><li>Encourage performance </li></ul>
  5. 5. Defining Performance Key Elements Goals Measures Assessment
  6. 6. Encouraging Performance <ul><li>Provide a sufficient amount of rewards that employees really value </li></ul><ul><li>2. In a timely </li></ul><ul><li>3. Fair manner </li></ul>
  7. 7. What is Fairness? Important Practices <ul><li>Voice </li></ul><ul><ul><li>Collect employee input through surveys or interviews </li></ul></ul><ul><li>Consistency </li></ul><ul><ul><li>Ensure that all employees are treated consistently when seeking input and communicating about the process for administering rewards </li></ul></ul><ul><li>Relevance </li></ul><ul><ul><li>Include rewards that employees really care about </li></ul></ul><ul><li>Communication </li></ul><ul><ul><li>Explain clearly the rules and logic of the rewards process </li></ul></ul>
  8. 8. Figure 9-1 Elements of a Performance Management System
  9. 9. Figure 9-2 Purposes of Performance Appraisal Systems
  10. 10. Requirements of Effective Appraisal Systems <ul><li>Legally and scientifically, the key requirements of any appraisal system are </li></ul><ul><ul><li>Relevance </li></ul></ul><ul><ul><li>Sensitivity </li></ul></ul><ul><ul><li>Reliability </li></ul></ul><ul><li>In the context of ongoing operations, the key requirements are </li></ul><ul><ul><li>Acceptability </li></ul></ul><ul><ul><li>Practicality </li></ul></ul>
  11. 11. Relevance <ul><li>Implies that there are </li></ul><ul><li>Clear links between the performance standards for a particular job and organizational objectives, and </li></ul><ul><li>2. Clear links between the critical job elements identified through a job analysis and the dimensions to be rated on an appraisal form </li></ul>
  12. 12. Performance Standards … translate job requirements into levels of acceptable or unacceptable employee behavior. They play a critical role in the job analysis-performance appraisal linkage.
  13. 13. Figure 9-3 Relationship of Performance Standards to Job Analysis and Performance Appraisal
  14. 14. Rating Methods or Formats <ul><li>Relative Rating Systems </li></ul><ul><ul><li>Comparing the performance of employees to that of other employees </li></ul></ul><ul><li>Absolute Rating Systems </li></ul><ul><ul><li>Evaluating each employee in terms of performance standards without reference to others </li></ul></ul><ul><li>Results-Oriented Systems </li></ul><ul><ul><li>Emphasis is on what employee produces </li></ul></ul>
  15. 15. Ranking 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/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.
  16. 16. Behaviorally Anchored Rating Scales <ul><li>The major advantage of BARS is that they define the dimensions to be rated in behavioral terms and use critical incidents to describe various levels of performance </li></ul>
  17. 17. 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
  18. 18. Establishing Objectives in MBO What the Key People Involved Should Do <ul><li>Meet to agree on the major objectives for a given period of time </li></ul><ul><li>Develop plans for how and when the objectives will be accomplished </li></ul><ul><li>Agree on the “measurement tools” for determining whether the objectives have been met </li></ul>
  19. 19. Table 9–1: Advantages and Disadvantages of Alternative Appraisal Methods
  20. 20. Work Planning and Review <ul><li>Work planning and review is similar to MBO; however, it places greater emphasis on the periodic review of work plans by both supervisor and subordinate in order to identify goals attained , problems encountered , and the need for training </li></ul>
  21. 21. Who Should Evaluate Performance? Possible Raters <ul><li>The immediate supervisor </li></ul><ul><li>Peers </li></ul><ul><li>Subordinates </li></ul><ul><li>Self-appraisal </li></ul><ul><li>Customers served </li></ul><ul><li>Computers </li></ul>
  22. 22. Multi-Rater or 360-Degree Feedback Using input from managers, subordinates, peers, and customers to provide a perspective on performance from all angles
  23. 23. Types of Teams <ul><li>Work or Service Teams </li></ul><ul><ul><li>Intact teams engaged on routine tasks </li></ul></ul><ul><li>Project Teams </li></ul><ul><ul><li>Teams assembled for a specific purpose and expected to disband once their task is completed </li></ul></ul><ul><li>Network Teams </li></ul><ul><ul><li>Teams that include membership not constrained by time/space and membership is not limited by organizational boundaries </li></ul></ul>
  24. 24. Types 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/her ratings on the basis of the employee’s most recent performance
  25. 25. Frame-of-reference training <ul><li>Of the many types of rater training programs available today, frame-of-reference training (FOR) is the most effective at improving the accuracy of performance appraisals </li></ul>
  26. 26. Table 9-3 Supervisory Activities Before, During, and After Performance Feedback Interviews
  27. 27. Key Terms Discussed in the Chapter <ul><li>Performance management </li></ul><ul><li>Performance appraisal </li></ul><ul><li>Performance facilitation </li></ul><ul><li>Performance encouragement </li></ul><ul><li>Relevance </li></ul><ul><li>Performance standards </li></ul><ul><li>Sensitivity </li></ul><ul><li>Reliability </li></ul><ul><li>Acceptability </li></ul><ul><li>Practicality </li></ul><ul><li>Applicant group </li></ul><ul><li>Behavior-oriented rating methods </li></ul><ul><li>Relative rating systems </li></ul><ul><li>Absolute rating systems </li></ul><ul><li>Results-oriented rating systems </li></ul><ul><li>Simple ranking </li></ul><ul><li>Alternation ranking </li></ul><ul><li>Paired comparisons </li></ul><ul><li>Forced distribution </li></ul>
  28. 28. Key Terms (contd.) <ul><li>Severity </li></ul><ul><li>Central tendency </li></ul><ul><li>Likert method of summed ratings </li></ul><ul><li>Critical incidents </li></ul><ul><li>Graphic rating scales </li></ul><ul><li>Behaviorally anchored rating scales (BARS) </li></ul><ul><li>Management by objectives (MBO) </li></ul><ul><li>Leniency </li></ul><ul><li>Work planning and review </li></ul><ul><li>360-degree feedback </li></ul><ul><li>Halo error </li></ul><ul><li>Contrast error </li></ul><ul><li>Recency error </li></ul><ul><li>Active listening </li></ul><ul><li>Destructive criticism </li></ul><ul><li>Frame-of-reference training </li></ul><ul><li>Narrative essay </li></ul>
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