Management of Human Resources: The Essentials — Chapter 7 Performance Management

Vocabulary flashcards covering key concepts and terms from Chapter 7 on Performance Management.

Performance Management

The process encompassing all activities related to improving employee performance, productivity, and effectiveness, including goal setting, pay for performance, training and development, career management, and disciplinary action.

Performance Management Process (Steps)

Step 1: Define performance expectations; Step 2: Provide ongoing feedback and coaching; Step 3: Conduct performance appraisal and evaluation discussions; Step 4: Determine performance rewards/consequences; Step 5: Conduct development and career opportunity discussions.

360‑Degree Appraisal

An appraisal method that gathers feedback from multiple sources: manager/supervisor, additional superiors, internal/external clients, co-workers, self, subordinates, etc.

Appraisal Interviews (Types)

Three types: satisfactory—promotable (development plans), satisfactory—not promotable (maintain performance), unsatisfactory—correctable (action plan to correct performance).

Graphic Rating Scale

A formal appraisal method listing traits with a rating scale for each trait.

Alternation Ranking Method

Ranking employees from best to worst on a trait by alternately selecting the highest and lowest rated individuals.

Paired Comparison Method

For each trait, compare all pairs of employees and rate by the number of “plus” versus “minus” scores to rank them.

Forced Distribution Method

Predetermined percentages of ratees allocated to performance categories; criticized as demotivating.

Critical Incident Method

Keeping a record of exceptional or undesirable work-related behavior and reviewing it at predetermined times.

Behaviourally Anchored Rating Scales (BARS)

An appraisal method that combines narratives, critical incidents, and quantified ratings by anchoring a scale with specific behavioral examples.

Management by Objectives (MBO)

A goal‑setting approach aligning organizational, departmental, and individual goals with planned performance reviews and feedback.

PIP (Performance Improvement Plan)

A plan outlining expectations with a timeline (often 30–90 days) to bring performance to acceptable levels, emphasizing two‑way communication.

Merit Pay

A form of performance reward: wage increases tied to performance.

Electronic Performance Monitoring (EPM)

Technology that automates record keeping, reporting, development paths, and monitoring of performance.

Performance Rewards/Consequences

Rewards (e.g., merit pay) or consequences determined by achievement of goals and adherence to standards.

Career Development Discussion

Manager and employee discuss development opportunities, balancing current job needs with future growth.

Task Performance

Direct contribution to job-related processes.

Contextual Performance

Indirect contribution to the organization’s social responsibility values and overall effectiveness.

Validity

The degree to which an appraisal measures what it intends to measure.

Reliability

The consistency of appraisal measurements across raters and over time.

Halo Effect

A rating bias where one trait unduly influences ratings of other traits.

Central Tendency

Tendency to rate most employees toward the middle of the scale.

Leniency

Tendency to rate employees too positively.

Strictness

Tendency to rate employees too harshly.

Recency Effect

Giving disproportionate weight to recent performance when rating.

Similar‑to‑Me Bias

Rating bias where the rater favors someone who is similar to them.

Legal and Ethical Issues in Appraisals

Use job analysis to define characteristics; ensure clear standards; use multiple raters; maintain documentation and provide corrective guidance.

Future of Performance Management

Linking individual goals to business strategy, displaying leadership accountability, tying appraisal to rewards and recognition, investing in development, and maintaining an efficient system with good communication.