Fundamentals of Human Resource Management Chapter 10

Performance Management

the process through which managers ensure that employees' activities and outputs contribute to the organization's goals

3 purposes of performance management

strategic, administrative, developmental

Strategic Purpose

effective performance management helps the organization achieve its business objectives. Helps link employee behavior with goals.

Administrative Purpose

ways in which organizations use the system to provide information for day-to-day decisions about salary, benefits, and recognition programs.

Developmental purpose

serves as a basis for developing employees' knowledge and skills

Six Steps in the Performance Management Process:

1. define performance outcomes for company division and department

2. develop employee goals, behavior, and actions to achieve outcomes

3. provide support and ongoing performance discussions

4. evaluate performance

5. identify improvements needed

6. provide consequences for performance results

fit with strategy

A performance management system should aim at achieving employee behavior and attitudes that support the organization's strategy, goals, and culture.

validity

refers to whether the appraisal measures all the relevant aspects of performance and omits irrelevant aspects of performance

Reliability

describes the consistency of the results that the performance measure will deliver.

Acceptability

whether or not a measure is valid and reliable, it must meet the practical standard of being acceptable to the people who use it.

specific feedback

a performance measure should specifically tell employees what is expected of them and how they can meet those expectations

interrater reliability

has consistency of results when more than one person measures performance

test-retest reliability

the consistency of scores on a test over time

Contamination

irrelevant information (they were mean once)

deficiency

disregard hard work etc

Simple Ranking

method of performance measurement that requires managers to rank employees in their group from the highest performer to the poorest performer

alternation ranking method

Ranking employees from best to worst on a particular trait, choosing highest, then lowest, until all are ranked.

forced distribution method

similar to grading on a curve; predetermined percentages of ratees are placed in various performance categories

paired comparison method

method of performance measurement that compares each employee with each other employee to establish rankings

5 methods of measuring performance

comparative, attribute, behavioral, results, quality

graphic rating scale

lists traits and provides a rating scale for each trait; the employer uses the scale to indicate the extent to which an employee displays each trait (Attribute)

Mixed-Standard Scales

uses several statements describing each trait to produce a final score for that trait (Attribute)

critical incident method

specific examples of employees acting in ways that are either effective or ineffective

- employees receive feedback about what they do well and what they do poorly and how they are helping the organization achieve its goals (Behavior)

Behaviorally Anchored Rating Scale (BARS)

Scale showing specific statements of behavior that describe different levels of performance (Behavior)

Behavior Observation Scale (BOS)

a variation of a BARS which uses all behaviors necessary for effective performance to rate performance at a task (Behavior)

Organizational Behavior Modification

a plan for managing the behavior of employees through a formal system of feedback and reinforcement (Behavior)

Productivity

getting more done with a smaller amount of time

Management by Objectives (MBO)

measurable results of a job or work group

Total Quality Management

provide methods for performance measurement and management

subjective feedback

comes from managers, peers, and customers about the employee's personal qualities such as cooperation and initiative

Statistical Quality Control

methods use charts to detail causes of problems, measures of performance, or relationships between work-related variables

360-Degree Performance Appraisal

performance measurement that combines information from the employee's managers, peers, subordinates, self, and customers

Contrast errors

rater compares an individual, not against an objective standard, but against other employees

distributional errors

rater tends to use only one part of a rating scale.

Leniency: the reviewer rates everyone near the top

Strictness: the rater favors lower rankings

Central tendency: the rater puts everyone near the middle of the scale

halo error

when bias is in a favorable direction. This can mistakenly tell employees they don't need to improve in any area.

Horns error

when bias involves negative ratings. This can cause employees to feel frustrated and defensive.

rater bias

raters often let their opinion of one quality color their opinion of others

Political Behavior in Performance Appraisals

Distorting a performance evaluation to advance one's personal goals. calibration meetings minimize this

tell and sell

managers tell employees their ratings and then justify those ratings

tell and listen

managers tell employees their ratings and then let employees explain view

problem solving

managers and employees work together to solve performance problems (BEST)

Uniform Guidelines on Employee Selection Procedures

requires that organization avoid using criteria such as race or age bias for employment decisions

Unjust dismissal

The usual claim is that the person was dismissed for reasons besides the ones that the employer states.

electronic monitoring and employee privacy

Records of employees' performance ratings, disciplinary actions, and work-rule violations are often stored in electronic databases

Electronic monitoring can improve productivity, it also generates privacy concerns