Performance Management

Performance Management

The process of creating a work environment in which people can perform to the best of their abilities

Performance Review

A process in which a manager evaluates an employee’s performance relative to the requirements. As well as how improvements can be made

What are the most common goals of performance management programs?

• Developmental

• Administrative

Developmental Purposes

A performance management system provides managers with a concrete framework for gathering and organizing information about an employee’s performance

What is the goal of performance management?

• Capitalize on a person’s strengths

• Eliminate potential weaknesses

• Advance their career while improving the organization

HRM programs provide input that can be used for

• promotions

• transfers

• layoffs

• pay decisions

Performance data can be used to document HRM actions that can result in LEGAL ACTION

Why does performance management systems sometimes fail?

• Only half of the HR professionals believe annual performance reviews are accurate

• Many organizations no longer conduct formal evaluations

How to develop an effective program?

• HR department is in charge of overseeing performance

• Managers must be involved in the OBJECTIVES & Translating them into on-the-job efforts

What are the four basic elements that must be considered?

• Strategic Relevance

• Criterion deficient

• Criterion contamination

• Reliability

Strategic Relevance

Individual standards directly relate to strategic goals

Criterion Deficiency

Standards capture all of an individual’s contributions

Criterion Contamination

Performance capability is not reduced by external factors

Reliability

Standards are quantifiable, measurable, and stable

Calibration

A process whereby managers meet to discuss the performance of individual employees to ensure their employee evaluations are in line with one another

• Managers must be able to assess employees and supervisors

Legal Issues

Employee reviews should meet legal criteria to avoid bias:

• Relevance

• Timeliness

• Avoid subjectivity

• Transparency

• Fairness

Sources of Performance Review Information - Manager/Supervisor

A performance evaluation done by an employee’s manager and often reviewed by a manager one level higher

Sources of Performance Review Information - Employee

Generally an evaluation form completed by the employee PRIOR to the review meeting

Sources of Performance Review Information - Subordinates

A performance review of a superior by an employee, which is more appropriate for developmental rather than admin purposes

Sources of Performance Review Information - Peers

Done by an employee, generally on forms compiled into a single profile for use in the evaluation meeting conducted by the employee’s manager

Sources of Performance Review Information - Team Members

Evaluation that recognizes team accomplishment rather than individual performance

Sources of Performance Review Information - Customers

Performance evaluation that includes evaluation from a firms external and internal customers

360-degree evaluation

Combines data from multiple sources of performance evaluation

• Feedback is designed to give employees the most accurate picture of their performance possible

• All sources - Supervisors, peers, subordinates, customers

Appraiser training can accomplish…

• Establish a review plan

• Explain the performance appraisal system’s objectives

• Explain the mechanics of the rating system

• Alert raters to the weaknesses and problems of appraisal systems

Eliminating Rating Errors

• Error of central tendency: Performance rating error in which all employees are rated as about average

• Leniency or strictness error: Performance rating error in which the appraiser tends to give employees unusually high or unusually low ratings

• Forced distribution: Performance ranking system whereby raters are required to place a certain percentage of employees into various categories

• Temporal error: Error in which the evaluation is based largely on the employee’s most recent behavior

• Contrast error: Rating error in which an employee’s evaluation is biased

• Similar-to-me error: Error in which an appraiser inflates the evaluation of an employee because of a mutual personal connection

Performance Review Method

• Traits

• Behaviors

• Results

Performance Review Methods - Trait

• Graphic Rating Scale: rated according to a scale of characteristics

• Mixed-standard scale: based on comparison with a standard

• Forced-choice: chooses from statements

• Essay: rater states employee behavior

Behavior Methods

• Critical Incident: An unusual event that denotes critical employee performance

• Behavioral checklist: Requires the rater to check statements

• Behaviorally Anchored Rating Scale: Series of vertical scales, one of each dimension

• Behavior Observation Scale: measures frequency of observed behavior

Results

• Objective and empowering for employees

• Employees are responsible for outcomes

• Management by Objectives: A results review process that rates the performance of employees based on goals

• Balanced scorecard: Financial, customer, process, and learning

What are the formats for providing feedback?

• Tell-and-sell

• Tell-and-listen

• Problem solving

How do you increase employees willingness to accept feedback?

• Ask for self-evaluation

• Invite participation

• Express appreciation

• Be supportive and demonstrate that you care

• Minimize criticism

• Establish mutual goals

• Follow up day-to-day

Performance

• Function of several factors

  • Ability

  • Motivation

  • Environment

What type of problem is it when an employee’s performance is below expectations?

• A skill problem (knowledge, abilities, technical components)

• An effort problem (motivation to complete the task)

• A problem with the external working conditions

Talented employees who are unmotivated are unlikely to succeed

Each person has a distinct set of strengths and weaknesses that play a role

• Talented employees who are unmotivated are unlikely to succeed