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Overview of Performance Management


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Overview of Performance Management

  2. 2. Performance Management
  3. 3. Definition of Performance Management (PM)
  4. 4. Definition of PM 1. Continuous Process of Identifying Measuring Developing The performance of individuals and teams and 2. Aligning performance with Strategic Goals of the organization
  5. 5. Definition of PM (continued) „…the process where steering of the organization takes place through the systematic definition of mission, strategy and objectives of the organization, making these measurable through critical success factors and key performance indicators, in order to be able to take corrective actions to keep the organization on track‟ (Waal, Goedegebuure, & Geradts, 2011).
  6. 6. Definition of PM (continued) Performance management can be regarded as a systematic process by which the overall performance of an organization can be improved by improving the performance of individuals within a team framework (Singh, 2012).
  7. 7. Definition of PM (continued) Effective performance management-involving a complete system of goal setting, training, communication, and ongoing feedback-is a practice on which research often has important implications (Helm, Courtney L, Frank R, & Christine, 2007).
  8. 8. Definition of PM (continued) PM is “something that people actually do and can be observed . . . Performance is what the organization hires one to do, and do well. Performance is not the consequence or result of action, it is the action itself” (W. Smither & London, 2009).
  9. 9. Performance Management is NOT Performance Appraisal
  10. 10. Philosophy of Performance Management
  11. 11. Performance Management Philosophy Belief of employee performance need to be managed, to ensure that organizational goal will be achieved
  12. 12. Contributions of Performance Management
  13. 13. Contributions of Performance Management For Employees  Increase motivation to perform  Increase self-esteem  Clarify definitions of  job  success criteria  Enhance self-insight and development  Motivation, commitment and intentions to stay in the organization are enhanced
  14. 14. Contributions of Performance Management For Managers  Managers gain insight about subordinates  Employees become more competent  Better and more timely differentiation between good and poor performers  Communicate supervisors‟ views of performance more clearly
  15. 15. Contributions of Performance Management For Organization/HR Function  Organizational goals are made clear  Fairer and more appropriate administrative actions  Better protection from lawsuits  Facilitate organizational change
  16. 16. Disadvantages/Dangers of Poorly-implemented PM Systems
  17. 17. Disadvantages/Dangers of Poorly-implemented PM Systems For Employees • - Lowered self-esteem • - Employee burnout and job dissatisfaction • - Damaged relationships • - Use of false or misleading information
  18. 18. Disadvantages/Dangers of Poorly-implemented PM Systems For Managers Increased turnover Decreased motivation to perform Unjustified demands on managers‟ resources Varying and unfair standards and ratings
  19. 19. Disadvantages/Dangers of Poorly-implemented PM Systems For Organization Wasted time and money Unclear ratings system Emerging biases Increased risk of litigation
  20. 20. Reward Systems
  21. 21. Reward Systems Motivation to obtain rewards is one of the fundamental drives underlying much of both human and non-human animal behavior (Christian & Ian, 2008). Reward systems can shape the behavior of employees within the organization (Suliyanto, 2011)
  22. 22. Reward Systems Definition Set of mechanisms for distributing  Tangible returns and  Intangible or relational returns As part of an employment relationship
  23. 23. Reward Systems Tangible returns Cash compensation Base pay Cost-of-Living & Contingent Pay Incentives (short- and long-term)
  24. 24. Reward Systems Tangible returns (continued) Benefits, such as Income Protection Allowances Work/life focus
  25. 25. Reward Systems Intangible returns Relational returns, such as Recognition and status Employment security Challenging work Learning opportunities
  26. 26. Types of Returns in Performance Management System
  27. 27. Types of Returns in Performance Management System Base Pay Cost of Living Adjustment and Contingent Pay Short-term Incentives Long-term Incentives Income Protection Work/Life Focus Allowances Relational Returns
  28. 28. Purposes of PM Systems
  29. 29. Purposes of PM Systems: Overview Strategic Administrative Informational Developmental Organizational maintenance Documentational
  30. 30. Strategic Purpose  Link individual goals with organization‟s goals  Communicate most crucial business strategic initiatives
  31. 31. Administrative Purpose  Provide information for making decisions:  i. Salary adjustments  ii. Promotions  iii. Retention or termination  iv. Recognition of individual performance  v. Layoffs
  32. 32. Informational Purpose Communicate to Employees:  Expectations  What is important  How they are doing  How to improve
  33. 33. Developmental Purpose  Performance feedback/coaching  Identification of individual strengths and weaknesses  Causes of performance deficiencies  Tailor development of individual career path
  34. 34. Organizational Maintenance Purpose  Plan effective workforce  Assess future training needs  Evaluate performance at organizational level  Evaluate effectiveness of HR interventions
  35. 35. Documentational Purpose  Validate selection instruments  Document administrative decisions  Help meet legal requirements
  36. 36. Characteristics Of An Ideal PM System
  37. 37. An Ideal PM System: 14 Characteristics Congruent with organizational strategy Meaningful Thorough Practical Specific Identifies effective/ ineffective performance Reliable
  38. 38. An Ideal PM System: 14 Characteristics (continued) Valid Acceptable and Fair Inclusive Open (No Secrets) Correctable Standardized Ethical
  39. 39. Congruent with organizational strategy - Consistent with organization‟s strategy - Aligned with unit and organizational goals
  40. 40. Thorough All employees are evaluated All major job responsibilities are evaluated Evaluations cover performance for entire review period Feedback is given on both positive and negative performance
  41. 41. Practical Available Easy to use Acceptable to decision makers Benefits outweigh costs
  42. 42. Meaningful Standards are important and relevant System measures ONLY what employee can control Results have consequences Evaluations occur regularly and at appropriate times System provides for continuing skill development of evaluators
  43. 43. Specific Concrete and detailed guidance to employees • What‟s expected • How to meet the expectations
  44. 44. Identifies effective and ineffective performance Distinguish between effective and ineffective Behaviors Results Provide ability to identify employees with various levels of performance
  45. 45. Reliable Consistent Free of error Inter-rater reliability
  46. 46. Valid - Relevant (measures what is important) - Not deficient (doesn‟t measure unimportant facets of job) - Not contaminated (only measures what the employee can control)
  47. 47. Acceptable and Fair Perception of Distributive Justice Work performed  Evaluation received  Reward Perception of Procedural Justice Fairness of procedures used to: Determine ratings Link ratings to rewards
  48. 48. Inclusive Represents concerns of all involved When system is created, employees should help with deciding What should be measured How it should be measured Employee should provide input on performance prior to evaluation meeting
  49. 49. Open (No Secrets) Frequent, ongoing evaluations and feedback 2-way communications in appraisal meeting Clear standards, ongoing communication Communications are factual, open, honest
  50. 50. Correctable Recognizes that human judgment is fallible Appeals process provided
  51. 51. Standardized Ongoing training of managers to provide Consistent evaluations across People Time
  52. 52. Ethical Supervisor suppresses self-interest Supervisor rates only where she has sufficient information about the performance dimension Supervisor respects employee privacy
  53. 53. Integration with other Human Resources and Development Activities
  54. 54. PM provides information for:
  55. 55. Issues on Performance Management System Counterproductive work behavior (CWB) has been defined as “volitional acts that harm or intend to harm organizations and their stakeholders (for example, clients, co-workers, customers, and supervisors)” (Atwater & Elkins, 2009).
  56. 56. 1. Abuse against Others Types of CWB Incivility Workplace Aggression/Violence Sexual Harassment 2. Production Deviance Passive Production Deviance Sabotage and Theft Withdrawal
  57. 57. Dealing with Counterproductive Work Behavior 1. Non - Punitive Approaches Alignment Corrective Feedback 2. Self - Management Training for Improving Job Performance 3. Punishment 4. Termination
  58. 58. Punishment 1. Determine whether there are legal issues that should be taken into account. 2. Consider only work - related factors. 3. Apply policies and decision - making rules consistently. 4. Allow employees a voice in the discipline process. 5. Make the punishment consistent with the severity of the offense. 6. Communicate clear performance expectations. 7. Provide employees with sufficient time to improve their performance or change their behavior.