Chapter 7 Implementing a Performance Management System

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Implementing a Performance Management System

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Chapter 7 Implementing a Performance Management System

  1. 1. Herman Aguinis, University of Colorado at IMPLEMENTING A PERFORMANCE MANAGEMENT SYSTEM Prof. Preeti Bhaskar Symbiosis Centre for Management Studies, NOIDA
  2. 2. Herman Aguinis, University of Colorado at Preparation • Need to gain system buy-in through: –Communication plan regarding Performance Management system • Including appeals process –Training programs for raters –Pilot testing system • Ongoing monitoring and evaluation
  3. 3. Herman Aguinis, University of Colorado at Communication Plan answers: • What is Performance Management (PM)? • How does PM fit in our strategy? • What’s in it for me? • How does it work? • What are our roles and responsibilities? • How does PM relate to other initiatives?
  4. 4. Herman Aguinis, University of Colorado at Cognitive Biases that affect communications effectiveness • Selective exposure • Selective perception • Selective retention
  5. 5. Herman Aguinis, University of Colorado at To minimize effects of cognitive biases: A. Consider employees: • Involve employees in system design • Show how employee needs are met
  6. 6. Herman Aguinis, University of Colorado at To minimize effects of cognitive biases: B. Emphasize the positive • Use credible communicators • Strike first – create positive attitude • Provide facts and conclusions
  7. 7. Herman Aguinis, University of Colorado at To minimize effects of cognitive biases: C. Repeat, document, be consistent • Put it in writing • Use multiple channels of communication • Say it, and then – say it again
  8. 8. Herman Aguinis, University of Colorado at Appeals Process • Promote Employee buy-in to PM system –Amicable/Non-retaliatory –Resolution of disagreements
  9. 9. Herman Aguinis, University of Colorado at Appeals Process • Employees can question two types of issue: –Judgmental • (validity of evaluation) –Administrative • (whether policies and procedures were followed)
  10. 10. Herman Aguinis, University of Colorado at Appeals Process • Level 1 – HR reviews facts, policies, procedures – HR reports to supervisor/employee – HR attempts to negotiate settlement • Level 2 – Arbitrator (panel of peers and managers) and/or – High-level manager – final decision
  11. 11. Herman Aguinis, University of Colorado at Rater Training Programs • Content Areas to include – Information – Identifying, Observing, Recording, Evaluating – How to Interact with Employees • Choices of Training Programs to implement – RET – FOR – BO – SL
  12. 12. Herman Aguinis, University of Colorado at Content A. Information - how the system works –Reasons for implementing the performance management system –Information • the appraisal form • system mechanics
  13. 13. Herman Aguinis, University of Colorado at Content B. Identifying, observing, recording, and evaluating performance –How to identify and rank job activities –How to observe, record, and measure performance –How to minimize rating errors
  14. 14. Herman Aguinis, University of Colorado at Content C. How to interact with employees when they receive performance information –How to conduct an appraisal interview –How to train, counsel, and coach
  15. 15. Herman Aguinis, University of Colorado at Choices of Training Programs • Rater Error Training (RET) • Frame of Reference Training (FOR) • Behavioral Observation Training (BO) • Self-leadership Training (SL)
  16. 16. Herman Aguinis, University of Colorado at Rater Error Training (RET) • Goals of Rater Error Training (RET) –Make raters aware of types of rating errors –Help raters minimize errors –Increase rating accuracy
  17. 17. Herman Aguinis, University of Colorado at Intentional rating errors • Leniency (inflation) • Severity (deflation) • Central tendency
  18. 18. Herman Aguinis, University of Colorado at Unintentional rating errors • Similar to Me • Halo • Primacy • First impression • Contrast • Stereotype • Negativity • Recency • Spillover
  19. 19. Herman Aguinis, University of Colorado at Possible Solutions for Types of Rating Errors • Intentional –Focus on motivation –Demonstrate benefits of providing accurate ratings • Unintentional –Alert raters to different errors and their causes
  20. 20. Herman Aguinis, University of Colorado at Frame of Reference Training (FOR) • Helps improve rater accuracy by thoroughly familiarizing rater with the various performance dimension to be assessed. • Raters develop common frame of reference • Observing performance • Evaluating performance *Most appropriate when PM appraisal system focuses on behaviors
  21. 21. Herman Aguinis, University of Colorado at Frame of Reference Training (FOR) includes following steps • Discussion of the job description for the individuals being rated and duties involved. • Rater are familiarized with the performance dimension and discuss the example of good average and poor performance. • Raters are asked to rate factious employee shown in written or videotaped • Rater are asked to assign rating and justification for the ratings. • Finally trainer informs raters about correct rating for each dimension and reason for such ratings then discuss the difference between correct ratings and rating provided by rater
  22. 22. Herman Aguinis, University of Colorado at Behavioral Observation Training (BO) • Training Includes-: – Minimize unintentional rating errors – Improve rater skills by focusing on how raters: • Observe performance • Store information about performance • Recall information about performance • Use information about performance Showing rater how to use observational aids such as notes or diaries .
  23. 23. Herman Aguinis, University of Colorado at Self-leadership Training (SL) • Training Programs Include-: –Improve rater confidence in ability to manage performance –Techniques include positive talk, positive mental processes and positive thought process If there is self direction ,self motivation and confidence there will be increased accuracy
  24. 24. Herman Aguinis, University of Colorado at Pilot Testing • Provides ability to –Discover potential problems –Fix them
  25. 25. Herman Aguinis, University of Colorado at Pilot Testing - benefits • Gain information from potential participants • Learn about difficulties/obstacles • Collect recommendations on how to improve • Understand personal reactions • Get higher rate of acceptance
  26. 26. Herman Aguinis, University of Colorado at Implementing a Pilot Test • Roll out test version with sample group • Fully implement planned system – All participants keep records of issues encountered – Do not record appraisal scores – Collect input from all participants
  27. 27. Herman Aguinis, University of Colorado at Ongoing Monitoring and Evaluation • When system is implemented, decide: –How to evaluate system effectiveness –How to measure implementation –How to measure results
  28. 28. Herman Aguinis, University of Colorado at Evaluation data to collect: • Reactions to the system • Assessments of requirements – Operational – Technical • Effectiveness of performance ratings
  29. 29. Herman Aguinis, University of Colorado at Indicators to consider • Number of individuals evaluated • Distribution of performance ratings • Quality of information • Quality of performance discussion meetings • System satisfaction • Cost/benefit ratio • Unit-level and organization-level performance
  30. 30. Herman Aguinis, University of Colorado at PERFORMANCE MANAGEMENT AND EMPLOYEE DEVELOPMENT Prentice Hall, Inc. © 2006
  31. 31. Herman Aguinis, University of Colorado at Stakeholders in the Development Process • Employees – Help plan their own development – Improve their own performance • Managers – Help guide the process of development – Support success of process Prentice Hall, Inc. © 2006
  32. 32. Herman Aguinis, University of Colorado at Personal Developmental Plans • Specify actions necessary to improve performance • Highlight employee’s –Strengths –Areas in need of development Prentice Hall, Inc. © 2006
  33. 33. Herman Aguinis, University of Colorado at Personal Developmental Plans answer: • How can I continuously learn and grow in the next year? • How can I do better in the future? • How can I avoid performance problems of the past? Prentice Hall, Inc. © 2006
  34. 34. Herman Aguinis, University of Colorado at Personal Developmental Plans: Overview • Developmental Plan Objectives • Content of Developmental Plan • Developmental Activities Prentice Hall, Inc. © 2006 Overall Developmental Plan Objectives • Encourage: – Continuous learning – Performance improvement – Personal growth
  35. 35. Herman Aguinis, University of Colorado at Specific Developmental Plan Objectives • Improve performance in current job • Sustain performance in current job • Prepare employee for advancement • Enrich employee’s work experiencePrentice Hall, Inc. © 2006
  36. 36. Herman Aguinis, University of Colorado at Content of Developmental Plan • Developmental objectives – New skills or knowledge – Timeline • How the new skills or knowledge will be acquired – Resources – Strategies • Standards and measures used to assess achievement of objectives Prentice Hall, Inc. © 2006
  37. 37. Herman Aguinis, University of Colorado at Content of Developmental Plan • Based on needs of organization and employee • Chosen by employee and direct supervisor • Taking into account – Employee’s learning preferences – Developmental objective in question – Organization’s available resources Prentice Hall, Inc. © 2006
  38. 38. Herman Aguinis, University of Colorado at Developmental Activities ‘On the job’ • On-the-job-training • Mentoring • Job rotation • Temporary assignments Prentice Hall, Inc. © 2006 Developmental Activities In addition to ‘on the job’ • Courses • Self-guided reading • Getting a degree • Attending a conference • Membership or leadership role – in professional or trade organization
  39. 39. Herman Aguinis, University of Colorado at Direct Supervisor’s Role: • Explain what is necessary • Refer employee to appropriate developmental activities • Review & make suggestions regarding developmental objectives • Check on employee’s progress • Provide motivational reinforcement Prentice Hall, Inc. © 2006
  40. 40. Herman Aguinis, University of Colorado at 360-degree Feedback Systems Tools to help employees • Improve performance by using • Performance information • Gathered from many sources – Superiors – Peers – Customers – Subordinates – The employee Prentice Hall, Inc. © 2006
  41. 41. Herman Aguinis, University of Colorado at 360-degree Feedback Systems • Anonymous feedback • Most useful when used – For DEVELOPMENT – NOT for administrative purposes • Internet used for collecting data Prentice Hall, Inc. © 2006
  42. 42. Herman Aguinis, University of Colorado at Advantages of 360-degree Feedback Systems • Decreased possibility of biases • Increased awareness of expectations • Increased commitment to improve • Improved self-perception of performance • Improved performance • Increased employee control of their own careers Prentice Hall, Inc. © 2006
  43. 43. Herman Aguinis, University of Colorado at Risks of 360-degree Feedback Systems • Unconstructive negative feedback hurts. • Are individuals comfortable with the system? User acceptance is crucial. • If few raters, anonymity is compromised. • Raters may become overloaded. • Stock values may drop. Prentice Hall, Inc. © 2006
  44. 44. Herman Aguinis, University of Colorado at Characteristics of a Good 360-degree Feedback System • Anonymity • Observation of employee performance • Used for developmental purposes only • Emphasis on behaviors • Raters go beyond ratings • Feedback interpretation • Follow-up Prentice Hall, Inc. © 2006
  45. 45. Herman Aguinis, University of Colorado at Thank You

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