Performance Management (Week of 3/23)


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  • Three broad purposes include: Strategic purposes: helps the organization achieve its business objectives Administrative purposes: the ways in which the organization uses the system to provide information for day-to-day decisions about salary, benefits, and recognition programs Developmental purposes: serves as a basis for developing employees’ knowledge and skills
  • Performance appraisal: the measurement of specified areas of an employee’s performance. Stages of the performance management process include: Defining performance – How is performance defined? Using information from the job analysis Measuring performance Providing feedback on performance – this involves solving problems the employee may be facing on their job and by rewarding employees through raises, bonuses, etc to communicate information about their performance. Using this type of performance management process in place of the traditional performance appraisal routine helps managers and employees focus on the organization’s goals.
  • Bill rates all of his employees very low except for Jan. Jan gets above average ratings because she consistently comes to work on time. The rating errors Bill makes are _______ and _______, respectively. Leniency; Horn Strictness; Halo Similar-to-me; Central Tendency Horn; Strictness Answer: B
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  • Performance Management (Week of 3/23)

    1. 1. Performance Management
    2. 2. Lecture Outline <ul><li>Definitions </li></ul><ul><li>Purposes </li></ul><ul><li>Process </li></ul><ul><li>Sources </li></ul><ul><li>Types of Ratings and Measurement Methods </li></ul><ul><li>Problems and Errors </li></ul><ul><li>Giving Feedback </li></ul>
    3. 3. Performance Management and Performance Appraisals <ul><li>Performance management definition </li></ul><ul><ul><li>Processes used to identify, encourage, measure, evaluate, improve, and reward employee performance. </li></ul></ul><ul><li>Performance appraisal definition </li></ul><ul><ul><li>The process of evaluating how well employees perform their jobs and then communicating that information to the employees. </li></ul></ul>
    4. 4. Discussion Question <ul><li>Have you received a performance appraisal at your job? </li></ul><ul><li>Did you feel good about the process? Why or why not? </li></ul>
    5. 5. Quick Quiz <ul><li>Rate as True or False: </li></ul><ul><ul><li>Performance ratings should be job-related. </li></ul></ul><ul><ul><li>Employees should not be given a written copy of their job standards in advance of appraisals. </li></ul></ul><ul><ul><li>Managers who conduct the appraisal should be able to observe the behavior they are rating. </li></ul></ul><ul><ul><li>Supervisors need not be trained to use the appraisal form correctly. </li></ul></ul><ul><ul><li>Appraisals should be discussed openly with employees and counseling or corrective guidance offered. </li></ul></ul><ul><ul><li>An appeals procedure should be established to enable employees to express disagreement with the appraisal. </li></ul></ul>
    6. 6. Discussion Question <ul><li>What is the ultimate goal of a performance appraisal? </li></ul><ul><li>What percentage of performance appraisal are effective? </li></ul>
    7. 7. Purposes of Performance Management <ul><li>Three purposes </li></ul><ul><ul><li>Developmental </li></ul></ul><ul><ul><li>Administrative </li></ul></ul><ul><ul><li>Strategic </li></ul></ul>
    8. 8. Developmental and Administrative
    9. 9. Performance Management Process
    10. 10. Quick Quiz <ul><li>Rate whether the HR Unit or Direct Supervisor generally handles the following tasks: </li></ul><ul><ul><li>Designs and maintains appraisal system </li></ul></ul><ul><ul><li>Trains raters </li></ul></ul><ul><ul><li>Typically rates performance of employees </li></ul></ul><ul><ul><li>Prepares formal appraisal documents </li></ul></ul><ul><ul><li>Reviews appraisal with employees </li></ul></ul><ul><ul><li>Tracks timely receipt of appraisals </li></ul></ul><ul><ul><li>Reviews completed appraisals for consistency </li></ul></ul><ul><ul><li>Identifies developmental areas </li></ul></ul>
    11. 11. Sources of Appraisal: Faceless People Supervisor Subordinates Peers Team Customers Self
    12. 12. Discussion Question <ul><li>What is it called when you get appraised by people at all different levels of the organization? </li></ul><ul><li>Do you think this approach is effective? Why or why not? </li></ul>
    13. 13. Measurement Methods <ul><li>Traits </li></ul><ul><li>Behaviors </li></ul><ul><li>Results </li></ul><ul><li>Disclaimer: We’ll go through this quickly! </li></ul>
    14. 14. Trait Methods <ul><li>Forced-choice method </li></ul><ul><ul><li>Requires the rater to choose from statements designed to distinguish between successful and unsuccessful performance. </li></ul></ul><ul><li>Graphic-rating scale method </li></ul><ul><ul><li>A trait approach to performance appraisal whereby each employee is rated according to a scale of individual characteristics. </li></ul></ul><ul><li>Mixed-standard scale method </li></ul><ul><ul><li>An approach to performance appraisal similar to other scale methods but based on comparison with (better than, equal to, or worse than) a standard. </li></ul></ul><ul><li>Essay method </li></ul><ul><ul><li>Requires the rater to compose a statement describing employee behavior. </li></ul></ul>
    15. 15. Forced-Choice Distribution Scale
    16. 16. Graphic Rating Scale
    17. 17. Mixed-Standard Scale
    18. 18. Behavioral Methods <ul><li>Behaviorally anchored rating scale (BARS) </li></ul><ul><ul><li>A performance appraisal that consists of a series of vertical scales, one for each dimension of job performance. </li></ul></ul><ul><li>Behavior observation scale (BOS) </li></ul><ul><ul><li>A performance appraisal that measures the frequency of observed behavior. </li></ul></ul><ul><li>Critical incident </li></ul><ul><ul><li>An unusual event denoting superior or inferior employee performance in some part of the job. </li></ul></ul>
    19. 19. Behaviorally Anchored Rating Scale (BARS) FIREFIGHTING STRATEGY: Knowledge of Fire Characteristics.
    20. 20. Behavior Observation Scale (BOS)
    21. 21. Results Methods <ul><li>Productivity </li></ul><ul><ul><li>How much do you get done? </li></ul></ul><ul><li>Management by objectives (MBO) </li></ul><ul><ul><li>A philosophy of management that rates performance on the basis of employee achievement of goals set by mutual agreement of employee and manager. </li></ul></ul><ul><ul><li>Key MBO ideas </li></ul></ul><ul><ul><ul><li>Employee involvement creates higher levels of commitment and performance. </li></ul></ul></ul><ul><ul><ul><li>Encourages employees to work effectively toward achieving desired results. </li></ul></ul></ul><ul><ul><ul><li>Performance measures should be measurable and should define results. </li></ul></ul></ul>
    22. 22. Summary of Appraisal Methods ADVANTAGES DISADVANTAGES TRAITS Inexpensive Meaningful Easy to use Potential for error Poor for counseling Poor for allocating rewards Poor for promotional decisions BEHAVIOR Specific dimensions Accepted by employees Useful for feedback OK for reward/promotion Time consuming Costly Some rating error RESULTS Less subjectivity bias Accepted by employees Performance-reward link Encourages goal setting Good for promotion decisions Time consuming Focus on short term
    23. 23. Introduction to Appraisal Problems <ul><li>Rate the following movies on a scale of 1 (poor) to 5 (outstanding) </li></ul><ul><ul><li>Karate Kid I </li></ul></ul><ul><ul><li>Back to the Future I </li></ul></ul><ul><ul><li>Ferris Bueller’s Day Off </li></ul></ul><ul><ul><li>Breakfast Club </li></ul></ul><ul><ul><li>Pretty in Pink </li></ul></ul>
    24. 24. Common Appraisal Problems <ul><li>Inadequate preparation on the part of the manager. </li></ul><ul><li>Employee is not given clear objectives at the beginning of performance period. </li></ul><ul><li>Manager may not be able to observe performance or have all the information. </li></ul><ul><li>Inconsistency in ratings among supervisors or other raters. </li></ul><ul><li>Performance standards may not be clear. </li></ul><ul><li>Rating personality rather than performance. </li></ul>
    25. 25. Common Appraisal Problems (Ctd.) <ul><li>Inappropriate time span (either too short or too long). </li></ul><ul><li>Overemphasis on uncharacteristic performance. </li></ul><ul><li>Subjective or vague language in written appraisals. </li></ul><ul><li>Organizational politics or personal relationships cloud judgments. </li></ul><ul><li>No thorough discussion of causes of performance problems. </li></ul><ul><li>Manager may not be trained at evaluation or giving feedback. </li></ul><ul><li>No follow-up and coaching after the evaluation. </li></ul>
    26. 26. Discussion Question <ul><li>Why are performance appraisals often high even when performance is not up to par? </li></ul>
    27. 27. Common Rating Errors <ul><li>Halo/horn </li></ul><ul><ul><li>Overly focusing on specific performance ratings or stereotyping employee by a single personal characteristic. </li></ul></ul><ul><li>Leniency </li></ul><ul><ul><li>Rating all employees higher than they should be. </li></ul></ul><ul><li>Strictness </li></ul><ul><ul><li>Rating all employees lower that they should be. </li></ul></ul><ul><li>Central tendency </li></ul><ul><ul><li>Rating all employees as average when individual employee performance actually varies. </li></ul></ul>
    28. 28. Common Rating Errors (Ctd.) <ul><li>Primacy </li></ul><ul><ul><li>Using initial information that supports the rating decision while ignoring later information that does not. </li></ul></ul><ul><li>Recency </li></ul><ul><ul><li>Basing the rating decision primarily on the most recent performance information while placing much less emphasis on past performance. </li></ul></ul><ul><li>Contrast effects </li></ul><ul><ul><li>Comparing one employee to another rather than applying a common standard to all employees. </li></ul></ul>
    29. 29. Quick Quiz <ul><li>Bill rates all of his employees very low except for Jan. Jan gets above average ratings because she consistently comes to work on time. The rating errors Bill makes are _______ and _______, respectively. </li></ul><ul><ul><li>Leniency; Horn </li></ul></ul><ul><ul><li>Strictness; Halo </li></ul></ul><ul><ul><li>Similar-to-me; Central Tendency </li></ul></ul><ul><ul><li>Horn; Strictness </li></ul></ul>
    30. 30. Quick Comic
    31. 31. K.C.
    32. 32. Dawson
    33. 33. K.C. and Dawson
    34. 34. Quick Comic
    35. 35. Providing Feedback <ul><li>Issues to consider when providing feedback </li></ul><ul><ul><li>Differing perspectives </li></ul></ul><ul><ul><li>Timing </li></ul></ul><ul><ul><li>Preparation </li></ul></ul><ul><ul><li>Content of the discussion </li></ul></ul><ul><ul><li>Follow-up </li></ul></ul>
    36. 36. Discussion Question <ul><li>Why is it so difficult to provide feedback? </li></ul><ul><li>How can you provide negative feedback that leads to motivation rather than withdrawal? </li></ul>
    37. 37. Providing Feedback (Ctd.) <ul><li>Differing perspectives </li></ul><ul><ul><li>Combining evaluative and developmental goals </li></ul></ul><ul><ul><ul><li>Need to be candid and protect employee’s self-esteem </li></ul></ul></ul><ul><li>Self-serving employee attributions that interfere with performance improvement </li></ul><ul><ul><li>Discounting role of external forces in good performance </li></ul></ul><ul><ul><li>Over-emphasizing external effects in poor performance </li></ul></ul>
    38. 38. Providing Feedback (Ctd.) <ul><li>Timing </li></ul><ul><ul><li>Providing immediate feedback is most useful </li></ul></ul><ul><ul><li>Giving only as much information as the receiver can use </li></ul></ul><ul><li>Preparation </li></ul><ul><ul><li>Scheduling feedback sessions in advance </li></ul></ul><ul><ul><li>Clarifying purpose and content of meeting </li></ul></ul><ul><ul><li>Giving both participants time to prepare </li></ul></ul>
    39. 39. Providing Feedback (Ctd.) <ul><li>Content of the discussion: The problem-solving approach </li></ul><ul><ul><li>Diagnosis: Seek to understand the factors that affect performance. </li></ul></ul><ul><ul><li>Roadblocks: Seek agreement with the employee on an action plan to address issues such as: </li></ul></ul><ul><ul><ul><li>Lack of resources </li></ul></ul></ul><ul><ul><ul><li>Need for additional information and training </li></ul></ul></ul><ul><ul><ul><li>Improving ongoing communications and feedback </li></ul></ul></ul><ul><ul><li>Mutual goal setting: Employee participation increases employee acceptance of goals. </li></ul></ul>
    40. 40. Providing Feedback (Ctd.) <ul><li>Diagnosing the causes of performance deficiencies </li></ul><ul><ul><li>Does the employee have the competencies and the interest to perform as desired? </li></ul></ul><ul><ul><li>Have specific, difficult but attainable goals been communicated? </li></ul></ul><ul><ul><li>Is the employee certain about desired performance, the consequences of performance, his/her power (level of authority)? </li></ul></ul>
    41. 41. Sample Checklist for Diagnosing the Causes of Performance
    42. 42. Follow-Up to the Feedback Session <ul><li>Positive reinforcement </li></ul><ul><ul><li>Use of positive rewards to increase occurrence of desired performance </li></ul></ul><ul><ul><ul><li>People perform in ways that they find most rewarding </li></ul></ul></ul><ul><ul><ul><li>By providing proper rewards, it is possible to improve performance </li></ul></ul></ul><ul><li>Punishment </li></ul><ul><ul><li>Decreases frequency of undesired behavior </li></ul></ul><ul><ul><li>Gets immediate results and has vicarious power </li></ul></ul><ul><ul><li>Can have undesirable side effects —employee anger and contingent bad behavior </li></ul></ul>
    43. 43. Take-Home Points <ul><li>Understand purpose of performance management </li></ul><ul><li>Aware of the various methods for assessing performance </li></ul><ul><li>Knowledge of difficulties of performance management and ways to improve it </li></ul><ul><li>Knowledge of best way to provide feedback when you are managing someone </li></ul>