Performance Management (W9)

What do we mean by performance?

Defined as a complex, multidimensional construct that combines employee behaviours such as effort and initiative, and collaboration with tangible outcomes such as productivity, quality, and achievement of objectives.

• It is not just about meeting or exceeding targets

• It is about the quality of work and the behaviours used to achieve it

• It is a multidimensional, complex construct (Campbell,1990)

What are the 2 ways in which performance can be interpreted?

1. Satisfying/reaching requirements

2. Exceeding requirements/ excellence

What does performance also involve?

“Getting things right”/doing the job well

• Task proficiency- performing core duties correctly

• Consistency and reliability- doing the job well over time

• Efficiency and quality- completing work effectively with minimal errors

what did Campbell (1990) say about performance?

Performance is a complex,multidimensional construct.

• Campbell argued that performance consists of several different behavioural components not just outcomes.

How can we define performance management

It is a strategic,integrated approach that consists of a set of holistic practices such as setting goals/objectives, monitoring performance, providing feedback/revaluation where organisational success is achieved through the alignment of individual objectives with organisation objectives.

What are the stages of a typical performance management system?

What is the central idea of goal setting theory (locke,1968)?

Specific and challenging goals lead to higher levels of performance than vague or easy goals.

How important is goal setting to performance management?

Goal setting is a key foundation of performance management.

What did Latham and Locke (1979) say about goal setting theory?

• Pursuing goals motivates superior performance through clear goals providing direction and purpose and challenging but achievable targets

• Employees will change/adapt behaviour to achieve goals (if they are realistic)

• Feedback improves motivation

• Rewards and recognition reinforce effort

How easy is it actually to set goals?

1. We may not be able to set clear goals

2. Objectives may be numerous or diverse

3. Strategy and therefore goals need to be dynamic

4. Individual vs team tensions

5. Encourages a short term focus

Why do performance management systems rely heavily on goal setting theory?

Because it suggests that, clear challenging goals align with employee behaviour organisational objectives and motivate higher performance.

Goal setting works as a motivational mechanism that links organisational strategy to individual behaviour and performance.

What happens if we can set clear/specific,challenging goals

Increased discretionary effort

• This is because clear goals help people understand why their work matters

• Clear goals provide focus and direction, people know exactly what they are aiming for

• Clear goals provide motivation through challenge

Why does performance management go wrong?

• Poorly set goals- they are unclear, too vague or unrealistic

• Overemphasis on measurement

• Bias and subjectivity- managers may favour certain employees

• Infrequent feedback

• Managers may lack the appropriate skills

Should Performance Management systems require adaptation to the new world of work?

YES

• Work is more flexible and remote

• work is faster and more dynamic- need for continuous feedback

• Modern work is more collaborative than individual

What are the challenges when it comes to performance management?

• Inconsistent evaluation standards- different managers may judge performance differently

• Bias in appraisals- personal bias can influence ratings no matter good or bad

• Maintaining legitimate oversight/control

• Unclear or poorly defined objectives- Employees may not know what ‘good’ performance looks like

• Lack of regular feedback

• Employee resistance

• Poor manager training

What is the definition for performance appraisal?

Performance reviews aim to inform administrative decisions (such as pay, bonuses, promotions or redundancy) and/or to support professional growth.

It is concerned with the assessment or measurement of performance.

What are the objectives of performance appraisal?

• Part of the planning and control function

• Monitor performance

• Motivate improvement

• Clarify where an employee “contributes”

• Assess areas for learning and development

• Standardise employee feedback

• Provide a basis for pay/progression decisions

What are the criticisms of traditional methods of performance appraisal?

• In a fast moving world is it appropriate to discuss performance once or twice a year?

• Goal setting is valuable but must not be one size fits all

• Considerable variability in quality of appraisal discussions and feedback given

• Perceived fairness of process/system is vital

How do we manage underperformance?

• Identifying what the performance “gap” is

• Communicating performance standarda

• Comparing “actual” and “planned” performance

• Applying corrective action

• Recognise that an organisation can depend on its “average” performers

Is performance appraisal the same as performance management?

NO

it is part of performance management but it is NOT the same thing

how did armstrong define performance management?

• It is a strategic and integrated approach

• improves the performance of people in the organisations by developing the capabilities of teams and individual contributors.

Summarise briefly the term performance.

It is a complex combination of behaviours and outcomes, involving meeting and exceeding job requirements, and cannot always be fully quantified.

Is performance management a single activity?

NO, it is a holistic set of practices. Which includes setting objectives, monitoring performance, providing feedback and linking outcomes to rewards

Explain goal setting. (first step of holistic practices)

• Organizations set individual and team objectives aligned with overall business strategy

• Ensures employees are working toward shared organizational goals

How does performance management show improvement?

It focuses on continuous development, not just evaluation.

• Highlighting weaknesses and where to improve them

• Training and coaching is required

With performance management are employees held responsible for their performance?

Yes, depending on results, there may be:

• Rewards for strong performance

• Support or improvement plans for underperformance

• Disciplinary action if performance does not improve

What are the core principles of the goal setting theory?

• Specific goals improve focus and clarity- Employees know what they are trying to achieve and what to prioritise

• Challenging but realistic goals increase effort and persistence- they require individuals to work harder while maintaining belief in success

How does goal setting motivate performance?

1. Directs behaviour as it tells employees what to do and what to prioritise, provides a sense of purpose and focus

2. Encourages effort and persistence as challenging goals push employees to work harder and stay committed

3. Drives behavioural change as employees adapt their behaviour to meet goals

4. Links individual and organisational goals - organisational goals are translated into individual targets

What are some examples of how employees may adapt their behaviour when it comes to goal setting theory (Locke,1960)

• Develop new skills

• Improve communication

• Collaborate more effectively

• Improve time management

What are the strengths of goal setting?

• Improves the motivation and productivity of employees- having a specific target makes it easier to stay motivated

• Provides clear direction - goals give you a target to aim for which helps focus your time.

• Improves performance- people perform better with specific, challenging goals

• Makes progress measurable- clear goals let you track performance

• Boosts confidence and satisfaction- achieving goals boosts confidence and sense of accomplishment

What are the limitations of goal setting?

• Not all performance is easily measurable; there may be difficulty in setting clear goals

• Multiple and diverse objectives- can reduce clarity leading to confusion over priorities

• Individual vs team tensions- creates misalignment between objectives

• Overly rigid goals may reduce creativity and flexibility

• Unrealistic goals can demotivate employees

• May encourage short term focus over long term development

is goal setting a short term or long term focus?

May encourage short-term focus over long-term development

How can we address and work on the limitations caused by goal setting?

• Combine goals with regular feedback - use continuous feedback instead of only end-of-year reviews

• Ensure goals are realistic and flexible - unrealistic goals reduce motivation

• Involve employees in goal setting- increases ownership and motivation

• Use a mix of quantitative and qualitative goals

What have critics said about performance management?

• Bias- manager evaluations can be influenced by personal bias leading to unfair ratings

• Annual reviews are outdated- too infrequent in fast changing work environments

• Demotivation- performance reviews can feel stressful, judgemental or like a tick box exercise

• Damages trust- employees may feel as if they are being constantly judged

• excessive control

It should shift toward continuous feedback, coaching and development-focused systems instead.

What are the arguments for performance management?

1. Aligns individual goals with organisational strategy, improving organisational performance (aka goal setting theory)

2. Provides clarity and direction as employees know what is expected of them, improving focus and efficiency

3. Enhances motivation and effort as feedback + rewards drive effort

4. Supports employee development - identifies skill gaps and provides continuous feedback, encourages training and learning

5. Encourages behavioural adaptability

What are the arguments against performance management?

1. Bias and subjectivity- managers may introduce bias into evaluation leading to inconsistent or inaccurate assessments

2. Demotivation of employees- performance management can feel like constant criticism or evaluation

3. Resistance from employees as they may perceive it as control rather than support

4. Tensions between individual objectives and team objectives

5. Often poorly implemented- seen as a tick box exercise, may be lack of manager training

What are the problems with performance appraisal interviews?

• Subjective and bias as managers may be influenced by personal relationships

• One off and infrequent

• Employees may feel judged rather than supported

• Poor quality feedback as managers may not be trained properly

What are the reasons for underperformance?

• A lack of skills or knowledge

• Personal problems (health or relationship issues)

• Poor engagement, commitment or motivation

How is communication a challenge for performance management?

There must be a clear 2 way communication between managers and employees.

• Objectives may not be clearly explained

• Feedback may be unclear, inconsistent or too frequent

• Employees may not understand expectations or how they are being evaluated

How can managers combat poor communication?

• Clear objectives (SMART objectives)

• Continuous feedback (regular reviews instead of annual)

• Healthy working environment where employees feel like they can ask questions and respond

How is maintaining legitimate oversight seen as a challenge to performance management?

Managers need to monitor and control performance appropriately, but in a way that is seen as fair and justified.

• too much management- micromanagement

• too little monitoring- loss of control

• employees may feel distrusted or surveiled

Explain what is monitoring in performance management?

Continuously measuring and comparing actual performance against targets using appropriate metrics, enabling managers to identify deviations and take corrective action.

1. Measuring performance using KPIs and targets

2. Compare actual results with set targets

3. Must occur continuously

Why is monitoring important?

Because it tracks progress toward goals and ensures employees stay on target.

• This means managers can identify problems and provide timely feedback

• Employees can then adjust their behaviour before poor performance becomes serious

What are the potential issues that could arise from monitoring?

• Too much monitoring- micromanagement/stress/demotivation

• Too little- loss of control

What is feedback?

Feedback is the communication of performance information to employees, aimed at reinforcing good performance and improving weak performance.

Why is feedback important in performance management?

• Motivates employees

• Helps improve future performance

• Builds understanding and clarity

What are the potential issues that come from feedback?

• Poor quality or vague feedback- makes it hard to improve if you don’t know how

• Too infrequent- if feedback happens annually it becomes outdated

• Too negative - reduces morale

• Bias- feedback may reflect personal opinions

Why must performance management be adapted to the “new world of work”

• Work is more flexible and remote

• Work is faster and constantly changing

• Work is more collaborative than individual based

Should we totally remove performance management in the new world of work?

NO, as the core principles of performance management remain essential, meaning adaptation rather than complete replacement is necessary.

• Organisations still need accountability

• Ensures employees’ work supports wider strategy

• Pay,promotion and incentives often rely on performance information

How effective is performance management?

Only effective to the extent that it is implemented as a meaningful and continuous process rather than a bureaucratic tick box exercise. When organisations rely on rigid, annual appraisal systems, performance management becomes ineffective as goals and organisational priorities evolve throughout the year. Therefore continuous feedback and adaptive goal setting are essential for maintaining its relevance and effectiveness.

If clear goals are linked to rewards or recognition are employees willing to go above and beyond?

YES, they are willing to go beyond expectations.

When setting goals do they only improve focus?

NO, they don’t just improve focus they direct effort toward relevant tasks & increase persistence.

goals ensure employee behaviour matches company strategy, is the statement true or false?

TRUE

What makes performance related pay work well?

• Rewards high performers

• Can motivate effort and productivity

What makes performance related pay break down?

• Measuring “performance” is often subjective or biased

• Can encourage short term thinking or unhealthy competition

• Employees may only focus on certain tasks and not others

How do we structure each paragraph for the essay?

• Provide a balanced argument for each paragraph

• When discussing points for performance management also give a critique

do we add conditions in our essay?