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Performance Management :)
This document discusses performance management. It begins by identifying the major determinants of individual performance and the three general purposes of performance management as improving employee performance, developing people for promotional opportunities, and meeting employee needs for feedback. It then identifies five criteria for effective performance management systems: strategic congruence, validity, reliability, acceptability, and specificity. Four approaches to performance measurement are discussed: comparative, attribute, behavioral, and results-oriented. Specific techniques used in each approach and how they compare to the criteria are also examined. The document provides information on choosing effective approaches and sources for performance information for different situations, as well as distinguishing types of rating errors and how to minimize them in evaluations. It discusses understanding the
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Performance Management :)
- 1.
- 2. Performance Management Identify the majordeterminants of individual performance. Discuss the three general purposes of performance management. Identify the five criteria for effective performance-management systems. Discuss the four approaches to performance management, the specific techniques used in each approach, and the way these approaches compare with the criteria for effective performancemanagement systems.
- 3. Performance Management Choose the mosteffective approach to performance measurement for a given situation. Discuss the advantages and disadvantages of the different sources of performance information. Choose the most effective source(s) for performance information for any situation. Distinguish types of rating errors and explain how to minimize each in a performance evaluation.
- 4. Performance Management Understand the performanceappraisal process Conduct an effective performance feedback session. Identify the characteristics of a performance measurement system that follows legal guidelines.
- 5. Introduction Performance management is theprocess through which managers ensure that employee activities and outputs are congruent with the organization's goals. Performance Appraisal is the process through which an organization gets information on how well an employee is doing his or her job. Performance Feedback is the process of providing employees information regarding their performance effectiveness. McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc. All rights reserved.
- 6. PERFORMANCE APPRAISAL VS PERFORMANCEMANAGEMENT Performance appraisal -- setting standards, informing employees, ratings and feedback. Performance management -- “all of those processes led by managers to help employees perform as effectively as they can.”
- 7. GOALS OF PERFORMANCE MANAGEMENT Improve employee performance Develop people for promotional opportunities Meet employee need for feedback Ensure that employees are working toward organizational goals Provide the data needed to make and defend important human resources decisions
- 8. 3 PARTS OFPERFORMANCE SYSTEM DEFINING PERFORMANCE MEASURING FEEDBACK PERFORMANCE INFORMATION OF PERFORMANCE
- 9. An Organizational Modelof Performance Management Organizational Strategy Long and short term goals and values Individual Attributes (skills, abilities) Individual Behaviors Objective Results Situational Constraints Culture and economic conditions McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc. All rights reserved.
- 10. Purposes of Performance Management Strategic Administrative McGraw-Hill/Irwin Developmental ©2006 The McGraw-Hill Companies, Inc. All rights reserved.
- 11. Performance Measures Criteria Fiveperformance criteria stand out: Strategic congruence Specificity Acceptability McGraw-Hill/Irwin Validity Reliability © 2006 The McGraw-Hill Companies, Inc. All rights reserved.
- 12. Performance Measures Criteria Allapproaches and techniques used for measuring and managing performance must be evaluated against the criteria of : - Strategic Congruence - Validity -Reliability - Acceptability -Specificity
- 13. STRATEGIC CONGRUENCE DEFINITION: The extentto which the performance management system elicits its job performance that is congruent with the organisation’s strategy, goals and culture.
- 14. VALIDITY DEFINITION: The extent towhich the performance measure assesses all the relevant – and only the relevant aspects of performance.
- 15. Validity continued Validity is concernedwith maximizing the overlap between actual job performance and the measure of job performance Performance measure is deficient if it does not measure all aspects of performance A contaminated measure evaluates irrelevant aspects of performance that are not job related
- 16. Contamination and Deficiencyof a Job Performance Measure Job Performance measure Contamination Actual, or true job performance Validity Deficiency
- 17. RELIABILITY DEFINITION: The extent towhich the performance is consistent; the degree to which a performance measure is free from random error
- 18. 3 TYPES OFRELIABILITY INTERRATER RELIABILITY INTERNAL CONSISTENCY RELIABILITY TEST-RETEST RELIABILITY
- 19. ACCEPTABILITY DEFINITION: The extent towhich a performance measure is deemed to be satisfactory or adequate by those who use
- 20. Categories of PerceivedFairness & Implications for Performance Management Systems Fairness Importance for Category Performance Mgmt System Procedural Development Fairness Implications Give mgrs & employees opportunity to participate in developing system. Ensure consistent standards when evaluating different employees. Minimize rating errors & bias Interpersonal Use Fairness Give timely& complete feedback. Allow employees to challenge the evaluation. Provide feedback in an atmosphere of respect and courtesy. Outcome Fairness Outcomes Communicate expectations regarding performance evaluations & standards. Communicate expectations regarding
- 21. SPECIFICITY DEFINITION: The extent towhich the performance measure gives detailed guidance to employees about what is expected of them and how they can meet these expectations.
- 22. APPROACHES TO MEASURING PERFORMANCE What isa performance measure? A generic term encompassing the quantitative basis by which objectives are established and performance is assessed and gauged. These include performance objectives and criteria, performance standards and other means that evaluate the success in achieving a specified goal.
- 23. Uses of PerformanceMeasures Aim is to manage performance by focusing on employee attributes, behaviors, or results. Measure performance in a relative way, making overall comparisons among individual’s performance.
- 24.
- 25. Approaches to MeasuringPerformance Types of Rating Scales Comparative Attribute Behavioral Compares individual’s performance with that of others Focuses on extent to which Defines behaviors employee individuals have certain must exhibit to be effective attributes in the job Results Quality Focuses on managing the objective, measurable results of a job Focuses on customer orientation and prevention of errors
- 26. The Comparative Approach Ranking Simple ranking ranks from highest to lowest performer. Alternation ranking - crossing off best and worst employees. Forced distribution Employees Paired are ranked in groups. comparison Managers compare every employee with every other employee in the work group. McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc. All rights reserved.
- 27. 1. Ranking Simple Ranking -rank employees from best to worse. Alternation Ranking- subjective elimination of worst employees based on best employee Overall process considered to be subjective.
- 28. 2.Forced distribution Also requires aranking format.ranking done in groups. Manger groups employees into predetermined categories, employees are categorized based on distribution rules, not on their performance. Also considered to be subjective
- 29. 3. Paired Comparison Managers compareemployee with each other in work group/units. Each employee is given a score of 1 for each high activity. Manager computes and compares the number of times score is favorable. Sum of points is employee performance score.
- 30. Evaluating the ComparativeApproach to Measuring Performance Can be an effective tool in differentiating employee performance, eliminates some rater errors (leniency, distributional errors). Disadvantage is failure to link with strategic goals of the organisation. Subjective, therefore validity and reliability is dependent on rater. Feed back mechanisms excluded. Low acceptance by employees- normative rather than absolute standards used.
- 31. The Attribute Approach Graphic ratingscales A list of traits is evaluated by a fivepoint rating scale. Legally questionable. Mixed-standard scales Define relevant performance dimensions and then develop statements representing good, average, and poor performance along each dimension. McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc. All rights reserved.
- 32. Advantages of theAttribute Approach Still popular Easy to Develop Generalize Identifies and defines attributes relevant to job performance Can be reliable & valid
- 33. Disadvantages of theAttribute Approach •Little congruence between techniques and company strategy •Used widely because its easy to use •Performance standards vaguereliability/validity low •No feedback mechanisms
- 34. Behavioral Approach Defines behaviors anemployee must exhibit to be effective in the job There are 5 techniques used in this approach
- 35. Behavioral Approach Critical incidents approach- requires managers to keep record of specific examples of effective and ineffective performance. Behaviorally anchored rating scales (BARS) Behavioral observation scales (BOS) Organizational behavior modification - a formal system of behavioral feedback and reinforcement. Assessment centers - multiple raters evaluate employees’ performance on a number of exercises. McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc. All rights reserved.
- 36. Critical Incidents Log is keptfor recording observable behavior demonstrated by an employee that is both effective and ineffective. Log is used to provide feedback to employees and is used as an aid in goal/ objective setting
- 37. Behavioral Observation Scales -(BOS) Variation of BARS , using critical incidents BOS useful in differentiating good from poor performers, objectivity, providing feedback, training. BOS is easy to use, but does require more information
- 38. Behaviorally Anchored RatingScales (BARS) Expansion of the critical incidents approach and is used to develop behavioral anchors that define different levels of performance. Can increase interrater reliability by providing precise and complete definition of the performance, however behavioral anchors can bias information recall
- 39. Four actions inusing BARS 1. 2. 3. 4. Define key behaviors Use a measurement system to assess behaviors Inform employee of behaviors to be measured Provide feedback and reinforcement to employee
- 40. Organizational Behavior Modification (OBM) Managing behaviorthrough a system of feedback and reinforcement Uses the behaviorist approach which indicates that future behavior is influenced by past behaviour that has been positively reinforced
- 41. Assessment Centers Normally used inselection /promotion , but also for measuring performance Simulations are carried out, multiple raters evaluate employee performance Provide an objective measure of an employee’s job performance Allows for specific feedback & individual developmental plans
- 42. Advantages of theBehavioral Approach Can be effective Provides for strategic congruence Provides specific guidance & feedback for employees about performance expected of them Behaviors measured are valid Acceptability usually high Raters performance is usually high
- 43. Disadvantages of theBehavioral Approach Weaknesses: Behaviors need to be constantly monitored and revised to ensure strategic congruence. Approach assumes that there is only one way to do the job and that behaviors are identifiable
- 44. Arguments : Behavioral systems are”person based outcomes ” employees do not have complete control over these outcomes- may be regarded as contaminated, rather “systems factors” should be used to evaluate performance. Outcomes can result in dysfunctional behavior. Suggests that: performance feedback should given to employees using both objective and subjective feedback Employees should not be categorized for performance ratings Relies on combination of attribute & results for measurement of performance
- 45. Results Approach Management by objectives Goals top management passes down company’s strategic goals to next layer of management, and these managers define the goals they must achieve. Productivity Measurement and Evaluation System (ProMES) Hierarchy goal is to motivate employees to higher levels of productivity. McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc. All rights reserved.
- 46. The Results Approach Focuses on managing the objective, measurable results of a job or workgroup Management team defines organisation strategy. Goals are cascaded Requires specific, difficult objectives Success of system dependent on Management commitment They effectively link employees’ performance with organization's strategic goals.
- 47. What is MBO? A goaldirected and results oriented approach to performance appraisal in which employees and their managers/supervisors set goals together for the upcoming evaluation period and for and explicit time period
- 48. Common components ofthe MBO System They require specific objective goals Goals are set with managers’ and employees’ participation Managers provide objective feedback throughout the rating period to monitor progress towards goals
- 49. What is anObjective Objectives describe: Conditions that will exist when the desired outcome has been established A time frame during which the outcome is to be completed Resources that the organisation is willing to commit.
- 50. GOOD OBJECTIVES ARE “SMART” S M A R T Specific Measurable Alignedwith organizational/unit goals Realistic and results-oriented Timed
- 51. What is aStandard? Standards are established criteria used by an organisation to objectively measure the performance of employees. Standards refer to ongoing performance criterion that must be met consistently.
- 52. Performance Standards A wellwritten performance standard is: 1.Clearly Defined 2. Reliable 3.Valid
- 53. Clearly Defined PerformanceStandards These standards are congruent with the organisation’s strategy, goals and objectives They must also satisfy the following criteria: (SMART) Specific Measurable Attainable Realistic Time Bound
- 54. Reliability Refers to the consistencyof the performance standards and measures
- 55. Validity Validity refers to theextent to which the performance standards measure all/only the relevant aspects of performance. A performance standard is contaminated whenever it measures irrelevant aspects of performance. A performance standard is deficient if it does not measure all aspects of performance.
- 56. Performance Standards Performance standardsare used to minimise: Prejudices Rating Errors Personal biases
- 57. Productivity Measurement Systems(ProMES) Aims to motivateemployees to higher levels of production Has measurement and feedback mechanisms. It is effective, in increasing productivity
- 58. 4 Steps inthe ProMES Process 1. 2. 3. 4. Employees identify the products/activities/objectives to be accomplished by organisation. Staff defines indicators of the product Staff establishes the contingencies between the quantity of the indicator and level of evaluation associated with the amount Feedback system is developed
- 59. Advantages of theResults Approach Minimises subjectivity, objective and quantifiable indicators of performance are used. High acceptability Links individual performance to organisation's strategy & goals.
- 60. Disadvantages of theResults Approach Weaknesses: Measures can be contaminated and deficient Employees tend to focus on measurable aspects of performance- neglecting others Feedback may not help employees improvefeedback needs to focus on actual behavior that needs to be changed
- 61. Quality Approach A performancemanagement system designed with a strong quality orientation can be expected to: Emphasize an assessment of both person and system factors in the measurement system. Emphasize that managers and employees work together to solve performance problems. Involve both internal and external customers in setting standards and measuring performance. Use multiple sources to evaluate person and system factors. McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc. All rights reserved.
- 62. Quality Approach (cont.) Statistical processquality control techniques used: Process-flow analysis Cause-and-effect diagrams Pareto chart Control chart Histogram Scattergram McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc. All rights reserved.
- 63. Recommendations for designingan Effective Performance System 1. 2. 3. Aim for Precision in defining and measuring performance. Link Performance dimensions to meeting internal and external customer requirements. Measure and correct for the impact of situational constraints.
- 64. CURRENT ISSUES INPERFORMANCE MANAGEMENT The focus on ratings and rewards Too much for one rater to appraise The system is too top down Team-based work systems Total Quality Management
- 65. PERFORMANCE MANAGEMENT INNOVATIONS Increased employee involvement Lessfocus on ratings and rewards Multi-rater systems (i.e., 360 degree feedback, peer reviews)
- 66. IMPLEMENTATION ISSUES AND STRATEGIES Involvement ofusers in development Pilot programs Implementation in one unit Staggered implementation
- 67. OBSTACLES TO SUCCESSFUL IMPLEMENTATION Lack ofcommitment from the top Overselling the program A program excessive in paperwork and administrative requirements Failing to train and retrain appraisers Changing the system Failing to monitor the program and deal with noncompliance
- 68.
- 69. PERFORMANCE APPRAISAL VSPERFORMANCE MANAGEMENT Performance management -- “all of those processes led by managers to help employees perform as effectively as they can.” Performance appraisal -- process involving setting standards, informing employees, assigning ratings and giving feedback.
- 70. Why Appraise? Appraisal isdesigned as a means of monitoring the progress and achievement of the organisation ,to encourage and support the continuing development of the organisation in a changing world
- 71. Objective of PerformanceAppraisal Performance Appraisal is the systematic evaluation of an individual’s job performance which seeks to measure his/her performance in relation to the achievement of an organization’s strategy.
- 72. Effective Characteristics forManaging Performance Know your organisation’s performance cycle Demonstrate effective communication skills Be able to explore causes of performance problems Ability to develop action plans and empower employee to be solution-oriented Be objective and focus attention towards the problem Be able to provide feedback
- 73. Sources for Performance Information Supervisors Customers Peers Self McGraw-Hill/Irwin Subordinates ©2006 The McGraw-Hill Companies, Inc. All rights reserved.
- 74. Rater Errors inPerformance Measurement Similar to me Contrast Distributional errors Halo and horns Recency Stereotypes Selective perception Bias McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc. All rights reserved.
- 75. Following Legal Guidelines Conduct avalid job analysis related to performance. Base system on specific behaviors or results. Train raters to use system correctly. Review performance ratings and allow for employee appeal. Provide guidance/support for poor performers. Use multiple raters. McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc. All rights reserved.
- 76. Reducing Errors andAppraisal Politics Two Approaches to reducing rater error: Rater error training Rater accuracy training Appraisal politics - a situation in which evaluators purposefully distort ratings to achieve personal or company goals. McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc. All rights reserved.
- 77. Purposes of PerformanceAppraisals Monitor progress & achievements of organizations Identify employees current levels of performance Encourage & motivate employees Reward employees performance Identify training & development needs Link strategic goals with employees’ activities Organizational development Provide for succession planning
- 78. Benefits To theOrganization Identification of skills to enhance organization’s performance Employees are motivated Proactive identification of training and development needs Provides a competitive advantage by managing behavior and results of employees.
- 79. Benefits To TheManager Builds the relationship with the employee Enhance employee’s motivation Evaluate employee’s effectiveness against strategic goals Identify training & developmental needs Builds a rational basis for constructing rewards Provides documentation for legal purposes.
- 80. Benefits To TheEmployee Fairness of system measurement enhances/effects outcomes Recognition and rewards for contributions to the organization Enables employee to improve performance Provides for feedback Enhances communication between employee and manager Acts as a motivator to improve performance
- 81. Challenges Associated WithPerformance Appraisals Managers are uncomfortable providing feedback Culture of the organization/organizational politics Process can be subjective rather than objective if not properly administered Rater Errors can cause bias in appraising actual performance. Whether to focus on individual or team performance Legal Issues
- 82. Challenges Associated WithPerformance Appraisalscontinued Managers/Supervisor: Often resist May have limited contact with subordinate May be poor at giving feedback. Viewed as wasted paperwork Fear the emotions that can be unleashed and fear being unable to defend the ratings. Don’t like giving negative feedback, fear reaction
- 83. Preparing for PerformanceReview Schedule time and place for appraisal Assemble data Compare performance to standards Review previous performance appraisals
- 84. Choosing a PerformanceReview Approach Tell & Sell Tell & Listen Problem Solving
- 85. Appraisal Styles Interview dominatedby Managers Interview shared between manager and subordinate Manager tells Manager tells& Sells Manager tells & Listen Manager Shares problems & solutions
- 86. OVERCOMING BIASES Recognize theones you have. Share expectations with the appraisee. Keep a “log” of events during the year. Give regular feedback (no surprises!). Review your draft appraisal with someone. Remind yourself of your biases before every performance appraisal conference.
- 87. The Appraiser’s Role Be Ready Establishtrust Empower Find Out Listen Negotiating Agreeing
- 88. Conducting Appraisal Review purposeof the interview Be direct and specific Start out with the positives Don’t get personal Encourage mutual communication Don’t “skirt” performance issues Pay attention to your non- verbals
- 89. Handling Defensive Employees Recognise thatdefensive behavior s normal Never attack a person’s defensives Postpone action Recognise your own limitations
- 90. Appraisal of Teams Typesof teams: Work or service Teams Project Teams Network Teams
- 91. Challenges of TeamPerformance Management How do we assess relative individual contribution? How do we balance individual and team performance? How do we identify individual and team measures of performance?
- 92. 3Types of TeamPerformance 1. Individual performance 2. Individual performance that contributes to team performance 3. Team performance
- 93. Factors to considerfor effective measurement of Teams Key Success Factors- Competencies 1. 2. 3. Communication Decision Making Collaboration Key Accountabilities 1. 2. Goals to be reached Performance standards
- 94. Appraisal of Teams UsingFour dimensions for measurement of team performance: 1. Effectiveness 2. Efficiency 3. Learning and Growth 4. Team Member Satisfaction
- 95. Performance Feedback Characteristics ofan Effective Feedback Process
- 96. What is Coaching? Adirective process by a manager/supervisor to train and orient an employee to the realities of the workplace and to help the employee remove barriers to optimum work performance. Crisp 1989
- 97. Benefits of Coaching Builds your reputation as a people developer Increases productivity when employees know what the goals are and how to achieve them Positive recognition and feedback increases employee motivation and initiative Avoids surprises and defensiveness in performance appraisals Increases creativity and innovation of unit as employees feel safe to take risks Increases team cohesiveness due to clarified goals and roles
- 98. Improving Performance Feedback Feedback should be given every day, not once a year. Create the Right Context for Discussion. Ask employees to rate their performance before the session. Encourage the subordinate to participate in the session. Recognize effective performance through praise. Focus on solving problems. Focus feedback on behavior or results, not on the person. Minimize criticism. Agree to specific goals and set a date to review progress. McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc. All rights reserved.
- 99. Characteristics Shared byEffective Supervisors They They explore causes direct attention to causes They empower worker solutions They direct communication at performance
- 100. Managing Performance ofMarginal Performers Solid performers High ability and motivation; managers should provide development opportunities Misdirected effort Lack of ability but high motivation; managers should focus on training Underutilizers High ability but lack motivation; managers should focus on interpersonal abilities Deadwood Low ability and motivation; managerial action, outplacement, demotion, firing. McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc. All rights reserved.
- 101. The Process Feedback shouldbe given Frequently Encourage employee to rate his/her performance Create the right context for the discussion Encourage employee to participate in discussion
- 102. Coaching For ImprovedPerformance Critical Discussion Steps Set informal tone Clarify discussion purpose Discuss relationship between observations & objectives Ask for and discuss solutions Mutually agree on necessary actions Express confidence in employee and set next review date
- 103. Coaching For ImprovedPerformance -continued Recognise effective performance Focus on solving problems Focus feedback on behavior or results,not the person Minimize criticism
- 104. Coaching For ImprovedPerformancecontinued SETTING EXPECTATIONS Review organizational and unit goals and individual performance expectations. Identify duties,objectives, and projects. Describe performance measures and standards. Identify performance factors. Develop a monitoring plan Agree to specific goals Monitor performance, Set progress review dates.
Editor's Notes
- #45 “