The document outlines a performance management scenario involving managers Angela, Ashley, and Michael, who discuss aligning employee actions with organizational goals through effective performance management processes. They highlight the three primary purposes of performance management: administrative, developmental, and strategic, while also discussing criteria for effective systems and comparing management by objectives (MBO) and total quality management (TQM) systems. The importance of regular and constructive feedback to address performance deficiencies is emphasized, as well as the value of collaboration between management and employees in goal setting and assessing performance.

1. HRM500 Week 5 Scenario Script: Performance Management
Slide #
Scene/Interaction
Narration
HRM500 Week 5 Scenario Script - Part 1: Performance
Management
Slide 1
Scene 1
Angela’s Office
Angela: Welcome back, team! Performance Management is a
practice in which managers guide employee actions toward
reaching an organization’s goals. Managers must be aware of
the actions and outputs that are required, and must provide
feedback to employees to manage expectations. Come on – let’s
meet back up with Ashley and Michael to take a closer look!
Slide 2
Scene 2
Angela’s Office
Angela: Ashley and Michael, we need to look at the
performance management process within Montrose to determine
if the everyday activities carried out by employees are aligning
with organizational goals.
We need to identify the activities involved in performance
management; ensure that managers are providing performance
feedback effectively; and determine ways to improve
unsatisfactory performances.
Can you two help me come up with a plan to address all of these
areas?
Michael: Sure, Angela!We need to look at the stages of the

2. performance management process by specifying relevant aspects
of performance, appraising performance, and providing
performance feedback.
Ashley: Many of our employees dread their annual performance
appraisal, in which their supervisor analyzes their performance
based on behaviors and accomplishments of the past year.
However, performance management can provide many benefits.
Angela: Absolutely, Ashley! We can assure top performers that
they are valued; encourage dialogue between managers and
employees; create uniform standards for evaluating employees;
and help the company identify strong and weak performers.
Michael: Our first step toward performance management is to
define what the organization expects of each employee. It will
be important to measure each employee’s current performance
to identify expectations and determine if they are being met.
This will allow us to take corrective action, such as providing
training incentives or discipline.
Angela: I think it’s important to remember here that we need to
establish a performance management system for three purposes:
administrative, developmental, and strategic.
Ashley: The administrative purpose will allow us to make day to
day decisions about salary, benefits, and recognition programs.
Performance management will help us support administrative
decision-making related to employee retention, termination for
poor performance, hiring, and layoffs.
Michael: Our developmental purpose for performance
management will allow us to help employees develop the
knowledge and skills necessary to perform their job
responsibilities.
Employees who are meeting expectations become more valuable
when they hear and discuss performance feedback. Effective
performance feedback allows employees to be aware of their

3. own strengths and weaknesses.
Ashley: The strategic purpose of performance management
allows us to achieve business objectives. We can establish this
by linking employee behaviors with the organization’s goals.
We should create a team of employees and managers in each
department to establish objectives for the department. The team
can also identify any trainings the employees need.
Managers can meet with employees regularly to discuss their
progress in meeting objectives.
Angela: Great idea, Ashley! And you have both made important
points.
To recap, we defined the performance management process,
which includes specifying relevant aspects of performance;
appraising performance; and providing performance feedback.
We also discussed the three purposes of performance
management systems, which are administrative, developmental,
and strategic.
Our next step will include looking at the criteria for effective
performance management. We will meet tomorrow to plan our
next course of action. Before that, please take a few minutes to
complete a brief activity on what we’ve learned so far about
performance management.
Slide 3
Dropdown interaction – Match the three purposes of
performance measurement (administrative, developmental, and
strategic) with a brief definition of each.
Slide 4
Scene 3
Angela’s Office

4. *Create Tab interaction for the five criteria
Angela: Good morning, Ashley and Michael. Good job matching
the purposes of performance measurement with their
corresponding definitions.
Today we will look at the five criteria present in an effective
performance management system. There are several ways we
can measure the performance of an employee. Determining the
measures will be a critical part of our planning. Have you done
your research?
Michael: (Home layer of Interaction) We sure have, Angela!
Let’s take a closer look….
Michael (Layer A of Interaction) The first measure we should
look at is fit with strategy. Our performance management
system should aim to align employee attitudes and behaviors
with organizational strategy, goals and culture.
Michael: (Layer B of interaction) The next criteria is validity.
Our measurement tools should actually measure what they are
intended to measure. The performance appraisal should measure
only relevant aspects of performance.
Michael: (Layer C of interaction) Another criteria is reliability,
which looks at the consistency of results when more than one
person measures performance.
Michael: (Layer D of interaction)Acceptability is the next
criteria. A performance measure must be acceptable to the
people who use it. Our employees must believe the performance
standards are fair and not overly time consuming.
Michael: (Layer E of interaction) The final criteria is that
specific feedback be provided to employees, so they can
understand what is expected of them and how they can meet
those expectations. If performance measures are not specific,

5. our employees will not be able to support the organization’s
strategy.
Ashley: So, just to recap, we have discussed the five criteria for
measuring the effectiveness of our performance management
system.
They are: fit with strategy, validity, reliability, acceptability,
and specific feedback.
Angela: Great job, both of you! I’ve reserved the conference
room because we still have a lot of ground to cover. Let’s meet
there after lunch to discuss the two main options for managing
performance, as well as sources of performance information.
Slide 5
Scene 4 – Conference Room
Angela: Hello again, Ashley and Michael. This morning we
discussed the five criteria needed in an effective performance
management system.
Now, first up on this afternoon’s agenda, let’s compare two
widely used systems for managing employee performance –
Management by Objectives and Total Quality Management.
Michael, what have you learned about management by
objectives?
Michael: I learned that in adopting a system of management by
objectives, people at all levels in the organization need to set
goals that align with the organization’s overall objectives.
Ashley: Management by objectives, or MBO for short, has three
components: specific, difficult, and objective. Managers and
their employees will work together to set goals. Managers will
give feedback throughout the rating period to monitor progress
toward goals.
Michael: MBO can have a positive effect on our performance
here at Montrose. Productivity increases when top management
is committed to MBO.

6. Ashley: If our employees are involved in goal setting, it is
likely that an MBO system will effectively link individual
employees’ performance with the organization’s overall goals.
Angela: That makes sense to me! Let’s move on to the next
system of measuring employee performance, Total Quality
Management, or TQM.
Slide 6
Scene 5 – Conference Room
Michael: Total Quality Management is another option for
managing performance. This method entails assessing the
individual’s performance and the system within which the
employee works.
Ashley: Yes! In TQM, employees and their customers work
together to set standards and measure performance, with the
ultimate goal being to improve customer satisfaction.
Feedback within a TQM system comes from managers, peers
and customers. It is also subjective and largely based on the
employee’s personal qualities, such as cooperation, initiative,
and responsiveness to direction.
Angela: You’ve both definitely done your research! Now let’s
move on to our last item on the agenda today… what did you
two find about sources of performance information?
Slide 7
Scene 6 – Conference Room
*Create diagram of 360 degree performance appraisal
measurement
Michael: We discovered that sources of performance
information can include managers, peers, subordinates, the
employee himself, and customers.
We can adopt a 360 degree performance appraisal measurement

7. system that combines information from all of these sources.
Ashley: Also, it is important to note that performance feedback
should be regular and consistent, and should be treated as an
expected role of management.
Generally, employees receive formal performance feedback
once a year. However, this is not often enough, since managers
are responsible for improving performance deficiencies as they
occur. Feedback is most effective when the information is not a
surprise to the organization.
Angela: Well, that’s certainly not a surprise to me, anyway!
(laughs) You both have done a good job explaining the two
main systems of performance management that can be used
within an organization and identifying the major sources of
performance information.
Let’s complete a quick activity to reinforce what we’ve learned
before we call it a day, and then meet back in my office to wrap
things up.
Slide 8
Drag/drop interaction with two envelopes – TQM and MBO –
and multiple examples that learner must drag to the correct
envelope based on which of these 2 performance management
systems they represent
Slide 9
Scene 7 – Angela’s office
Angela: Great job on that activity, both of you. You have a
solid understanding of the different features of the two
performance management systems we studied – Management By
Objectives and Total Quality Management.
Angela: To sum it up, Performance Management is a critical
step in which managers guide employee actions toward reaching
an organization’s goals. Managers must be aware of the
activities and outputs that are required in performance

8. management, make sure these things are done, and improve
feedback to employees regarding performance. Dialogue
between managers and employees may identify performance
issues and ways to resolve them.
Don’t forget to complete this week’s discussions on
Performance Management and Performance Pressure. Also, try
to check out the article I put in your Additional Resources
folder on “The Top 50 Problems with Performance Appraisals”.
Have a great week, and good luck on your exam!