Performance management: a set of processes and managerial behaviors that involve defining, monitoring, measuring, evaluating, and providing consequences for performance expectations.
Figure 6-2 illustrates the four steps for performance management.
Successfully managing performance is a powerful means for improving individual, group, and organizational effectiveness.
Effective performance management generally influences important outcomes such as greater employee engagement and better organizational performance.
Performance management processes have three primary functions: make employee-related decisions, guide employee development, and signal desired employee behavior.
Volumes of research and employee surveys show that the majority of managers and organizations do a poor job of managing employee performance and that the systems used don’t help to improve performance.
Performance management can fail if the practices are obsolete, the process is too time consuming, and the performance measures are too narrow, focusing on only a limited number of elements that are easily measured.
The answer is A, focus on the importance of filling out the performance management form correctly.
Performance goal: targets a specific end result.
Learning goal: involves enhancing your knowledge or skill.
Managers typically emphasize performance goals over learning goals, but skills and experience are needed to achieve performance goals.
When skills are lacking, it often is helpful to set learning goals first and then performance goals once you’ve developed some level of proficiency.
Performance goal: targets a specific end result.
Learning goal: involves enhancing your knowledge or skill.
Managers typically emphasize performance goals over learning goals, but skills and experience are needed to achieve performance goals.
When skills are lacking, it often is helpful to set learning goals first and then performance goals once you’ve developed some level of proficiency.
Rather than using a one-size-fits-all approach to goal setting, managers should use a contingency approach.
Managers can be more effective still if they define performance goals in ways that match the situation and realize that not all performance can or should be measured in dollars and cents.
Table 6.3 describes what types of situations are best suited for behavioral, objective, task, or project goals.
The answer is B, false.
Monitoring performance: measuring, tracking, or otherwise verifying progress and ultimate performance.
You use the information gathered through monitoring to identify problems (and successes) and opportunities to enhance performance during the pursuit of a goal, and your final outcomes.
To do this effectively, you need to use or even create accurate and appropriate measures.
Table 6.3 shows that many goals can be categorized as behavioral, objective, or task-oriented.
Performance measurement and monitoring can be improved by considering other types of measures including timeliness, quality, quantity, and financial metrics.
Accurately and appropriately monitoring and evaluating both progress and outcomes are critical components of effective performance management.
Halo: a rater forms an overall impression about a person or object and then uses that impression to bias ratings about the same.
Leniency: a personal characteristic that leads an individual to consistently evaluate other people or objects in an extremely positive fashion.
Central tendency: the tendency to avoid all extreme judgments and rate people and objects as average or neutral.
Recency effects: the tendency to remember recent information.
Contrast effects: the tendency to evaluate people or objects by comparing them with characteristics of recently observed people or objects.
The answer is E, leniency.
Feedback: information about (individual or collective) performance shared with those in a position to improve the situation.
Feedback enables you to learn how your performance compares to the goal, which you can then use to modify your behaviors and efforts.
Hard data such as units sold, days absent, dollars saved, projects completed, customers satisfied, and quality rejects are all candidates for effective feedback programs.
Performance appraisal programs that discourage two-way communication and treat employee involvement as a bad thing do not represent feedback.
Many people neither receive nor provide feedback as often and as well as they would like.
Research indicates that many employees feel they don’t get enough guidance to improve their performance.
Among the reasons people don’t provide more feedback are concerns about how feedback could strain relationships, time constraints, lack of confidence in providing effective feedback, and the lack of consequences for not providing feedback.
Three common sources of feedback are others, task, and self.
Others as a source of feedback include peers, supervisors, lower-level employees, and outsiders.
Some tasks provide feedback about how well or poorly you are doing.
Table 6.5 lists characteristics of employees who are less likely and those who are more likely to seek feedback.
Many factors influence how people perceive feedback, including the fundamental attribution bias and the self-serving bias.
Beyond attributions, the following also can influence your perceptions of feedback and whether the feedback is rejected or discounted:
Accuracy: the feedback is inaccurate if the PM system measures the wrong things or measures the right things wrong.
Credibility of the source: feedback from top performers or from trusted people will be given more weight.
Fairness of the system: feedback will be discounted if you perceive the process or outcomes as unfair.
Performance reward-expectancies: can be fostered through ongoing and open feedback.
Reasonableness of the standards: feedback about unattainable goals would not be valued.
Giving and receiving feedback is often a misunderstood and poorly executed human resource process.
Table 6.7 describes some important and fundamental dos and don’ts for giving feedback, including keeping feedback timely, specific, and descriptive.
Advances in technology that enable employees to leave real-time messages about each other’s performance are allowing companies to provide continual feedback, which is truly more developmental and effective.
Coaching: customized process between two or more people with the intent of enhancing learning and motivating change.
One way to look at coaching is that it is an individualized and customized form of performance management that is different from training, mentoring, and counseling.
Effective coaching is developmental, has specific performance goals, and typically involves considerable self-reflection, self-assessment, and feedback.
The answer is B, provide feedback that is irrelevant to the person’s career.
Extrinsic rewards: come from the environment.
Intrinsic rewards: are self-granted; psychic rewards.
Financial, material, and social rewards qualify as extrinsic rewards.
An employee who works to obtain extrinsic rewards, such as money or praise, is said to be extrinsically motivated.
When you derive pleasure from the task itself, feel your work is meaningful, or have a sense of responsibility, you will likely become engaged with your work.
The relative importance of extrinsic and intrinsic rewards is a matter of culture and personal preferences.
Three general criteria are used for distributing rewards:
Results: tangible outcomes such as quantity, quality, and individual, group, or organizational performance. These are commonly some type of accounting measure—sales, profit, or error rate. Increasingly, these may also include customer satisfaction.
Behavior and actions: teamwork, cooperation, risk taking, and creativity.
Nonperformance considerations: customary or contractual, where the type of job, nature of the work, equity, tenure, level in hierarchy, etc., are rewarded.
Measures, rewards, and distribution criteria need to be aligned to have effective PM.
Pay for performance: monetary incentives linking at least some portion of one’s pay directly to results or accomplishments.
Pay for performance plans include merit pay, bonuses, and profit sharing, and they are designed to give employees an incentive for working harder and/or smarter.
Proponents of incentive compensation say something extra is needed because hourly wages and fixed salaries do little more than motivate people to show up at work and put in the required hours.
The most basic form of pay for performance is the traditional piece-rate plan where the employee is paid a specified amount of money for each unit of work.
Sales commissions, whereby a salesperson receives a specified amount of money for each unit sold, are another long-standing example of pay for performance.
Companies with the best pay for performance results:
Paid top performers substantially higher than the other employees.
Reduced “gaming” of the system by increasing transparency.
Utilized multiple measures of performance.
Calibrated performance measures to assure accuracy and consistency.
Thorndike formulated his famous law of effect, which says behavior with favorable consequences tends to be repeated, while behavior with unfavorable consequences tends to disappear.
This was a dramatic departure from previous notions that behavior was the product of inborn instincts.
The term “contingent” means there is a systematic if-then linkage between the target behavior and the consequence.
A behavior is strengthened when it increases in frequency and weakened when it decreases in frequency.
Figure 6.4 illustrates how operant conditioning can be used to control behavior.
Positive reinforcement: the process of strengthening a behavior by contingently presenting something pleasing.
Negative reinforcement: strengthens a desired behavior by contingently withdrawing something displeasing.
Punishment: the process of weakening behavior through either the contingent presentation of something displeasing or the contingent withdrawal of something positive.
Extinction: weakening a behavior by ignoring it or making sure it is not reinforced.
It’s not just the reinforcement that influences behavior, but also when it is administered. Continuous and intermittent reinforcement schedules are two common means for timing the administration of reinforcers.
Continuous reinforcement: If every instance of a target behavior is reinforced, then a continuous reinforcement (CRF) schedule is in effect. For instance, if you get paid every time you make a sale, then this is a CRF schedule. The sale is the desired behavior and payment is the reinforcement. CRF is useful for making early links between desired behaviors and outcomes, but they are susceptible to perceptions of entitlement and rapid extinction if the link is broken.
Unlike CRF schedules, intermittent reinforcement involves reinforcement of some but not all instances of a target behavior.
