Personnel Management Final

Chapters 8-12

What is performance management?

-The process of measuring and providing feedback about employee contributions to the organization
-Studies have found that measuring performance and providing feedback does indeed improve employee performance

Process of measuring performance

-know what activities and outputs are desired
-observing whether they occur
-providing feedback to help employees meet expectations

Functions of performance evaluation

❑ Evaluation to improve job matching
❑ Communication of organizational values & objectives
❑ Information for self-improvement
❑ Training and career development
❑ Pay (and promotion) for performance
❑ Information for hiring strategies
❑ Validation of other HR practices
❑ Retention and reductions in force
❑ Legal defense
❑ Effects on those doing the evaluating

Performance Management Process

-\>Specify relevant aspects of performance
-\>Appraise performance
-\>Provide performance feedback
--Problem solving
--Rewards

Purposes of Performance Management

-Strategic purpose
-Administrative purpose
-Developmental Purpose

Strategic Purpose

Effective performance
management helps the organization achieve its business
objectives.

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.

Approaches to Developmental Management

What
-skills, competencies, trajectory
How
-more frequent, more qualitative, more dimensions and sources of input, more idiosyncratic (shouldn't be standardized)

Approaches to Administrative Management

What
-results
How
-less frequent, more quantitative, fewer measures, more standardized

Approaches to Strategic Management

What
-links behaviors to organizational goals
-values attitudes, adherence to norms
How
-As organizational goals change
-"how" and "who" selected to reinforce cultural values (e.g. formal v informal; peer/team based v hierarchical; open v secret, etc.)

Strategic Performance Management

Two approaches
-merit based
-parity based

Merit-Based System

Process of recognizing and rewarding high performance.
Some use forced distribution method

Free Agent, Committed Expert

Forced distribution method

Which means certain percentage of employee will receive the highest rating, a majority will be ranked in the middle, and a few will receive the lowest.

Parity based system

Encourage cooperation and allow everyone who meets a certain standard to be classified as a high performer.
Measured frequently, focuses on processes rather than outcome

Bargain Laborer, Loyal Soldier

Absolute measures

Employees are compared to established benchmarks rather than with eachother

Job Performance

Represents the contribution that individuals make to the organization that employs them

-Tasks
-Citizenship
-Counterproductive

Task performance

When employees performa actions that transform raw materials into goods and services.
Most obvious form of contribution
Make significant contributions to org when they have appropriate knowledge, skill, and motivation

Citizenship Performance

Building a positive organizational environment
Willing to go beyond minimum expectations to cooperate and help others

Counterproductive Performance

Harmful to organization
Organizational behavior:
-Production deviance
-Property deviance
Individual behavior:
-Political deviance
-Personal aggression

Production deviance

Employees do thins that reduce the speed and accuracy with which goods and services are produced

Unauthorized breaks

Property deviance

Actions that destroy the assets of an organization.

Sabotage equipment, misuse expense accounts, steal materials and products.

Political deviance

Does things that put other employees at a disadvantage.

favoritism, gossiping, competing in non-beneficial ways

Personal aggression

Seek to personally harm coworkers

violence, sexual harassment

Key dimensions in designing performance evaluation system

◼ Who/What is evaluated
◼ Who performs (and has input into) the evaluation
◼ Time frame: short vs. long
◼ Objective/formulaic vs. subjective/impressionistic
evaluations
◼ Relative vs. absolute performance
◼ Forced distribution vs. unspecified percentages
◼ Multisource vs. single-source evaluation
◼ Multicriterion vs. single summary statistic
◼ Fine vs. coarse performance distinctions

How is performance measured?

Venn diagram:
Contribution to organization--Deficiency: what should be measured but is not
Performance appraisal measure--Contamination: What is measured but should not

Performance appraisal

Process of measuring what each employee contributes

Different types of performance measures

Objective: which are numerical and based on counts of either behavior or outcomes

Subjective: Which are based on judgements from raters

Methods for measuring performance

comparative
-ranking, forced distribution, paired comparision
attribute
-graphic rating scales. mixed standard scales
behavior
-critical incidents, BARS/BOS/OBM, assessment centers
results
quality

Simple Ranking

Requires managers to rank employees in their group from the highest performer to the poorest performer

cons: too much time, lose lots of differences and information about employees

Forced distribution

Assigns a certain percentage of employees to each category in a set of categories

cons: could have borderline difference, how closely distributed and cohort can affect (91,90,92) v (92, 47, 61)

eliminates central tendency error-guidance for giving promotions and pay raises to top performers
--cannot be influenced by environmental factors

Paired Comparison

Compares each employee with each other employee to establish rankings
*only for small groups

Comparative performance evaluation

Permits evaluator to control for the impact of unmeasured environmental variables on tangible measures of performance

May lead to enhanced perception of procedural justice
-not penalized or rewarded for things out of control
-enhance notion of more scientific measure for more subjective systems

*can be disadvantages if not carefully constructed*

Old performance management

▪ Annual review
▪ Numerical ratings
▪ Annual goals only align with business objectives
▪ Forced-rating based system and appraisal-driven merit pay
▪ Emphasis on
individual accountability

New performance management

▪ Instant feedback from
supervisors to employees
▪ Conversations b/w
supervisors & employees
▪ Project-based and self-related goals, shorter term priorities
▪ Merit increases based on informal assessment
▪ All about improvement and growth

Graphic Rating Scale

Raters are asked to provide a numerical rating for a number of different dimensions of work performance

quality/quantity of output, cooperation, development

Mixed-Standard Scale

Uses several statements describing each trait to produce a final score for that trait

Critical Incident method

Based on manager records of anecdotes
Receive feedback about what they do well or not and how they help achieve goals.

Behaviorally Anchored Rating Scale (BARS)

Rates behavior in terms of a scale showing specific statements of behavior that describe different levels of performance

Behavioral Observation Scale (BOS)

A variation of a BARS which uses all behaviors necessary for effective performance to rate performance at a task
Manager rates frequency of exhibited behaviors

Organizational Behavior Modification (OBM)

A plan for managing the behavior of employees through a formal system of feedback and reinforcement

Management by Objectives (MBO)

People at each level of the organization set goals in a process that flows from top to bottom, so that all levels are contributing to the organization's overall goals.
These goals become standards for evaluating employee's performance

Sources of Performance Information

managers-limited observation
peers-leniency, relationship
subordinates-pandering, effects of non-anonymity
self-leniency, over/underestimate
customers-response bias, cost, opportunity to observe

Common Problems with Performance Measures

Rater errors, contrast error, general impression error (halo/horns), recency error, primacy error

Rater error

an error in performance appraisals that reflects consistent biases on the part of the rater
-central tendency: everyone in middle
-leniency: everyone is at top

Contrast error

Unintentionally compares people to each other

Recency error

Places too much emphasis on recent behaviors/outcomes

Primacy error

Too much emphasis on first observed behaviors

Situational influences

◼ Job-Related Information: Rules, policies, informal Procedures
◼ Tools and equipment: Machinery and instruments
◼ Materials and supplies: Ingredients and components
◼ Budgetary support: Financial resources
◼ Required services and help from others
◼ Task preparation: education and training from organization
◼ Time availability: interruptions and alternative obligations
◼ Work environment: Noise, temperature, space, lighting

Multisource performance ratings

seek to evaluate performance by obtaining information from multiple raters who have different perspectives

Five factors of performance evaluation systmes

Strategy, external environment, technology and work organization, workforce, culture

Providing feedback

1. Focus comments on the task rather than the person.
2. Combine feedback with goals for improvement.
3. Describe behaviors in an unemotional manner.
4. Focus on what is observed rather than underlying causes.
5. Remain nonjudgmental.
6. Provide clear examples to support points.

Appraisal Interviews

1. Place the employee at ease with small talk.
2. Allow the employee to share his or her perspective before
you share yours.
3. Be positive and use action-oriented behavioral terms.
4. Use specific and measurable expressions.
5. Avoid comparing the employee to yourself or others.
6. Balance negatives with positives; start with a positive.
7. Spend time planning for improvement.

3 approaches to giving feedback

1. "Tell-and-Sell" - managers tell employees their ratings and then justify those ratings.
2. "Tell-and-Listen" - managers tell employees their
ratings and then let the employees explain their side of
the story.
3. "Problem-Solving" - managers and employees work
together to solve performance problems.

Improving Performance

Misdirected effort: high motivation, low ability
Solid performers: high motivation, high ability
Deadwood: low motivation, low ability
Underutilizers: low motivation, high ability

4 steps to effective coaching

1. Identify shortcoming
2. Determine cause and what needs to change
3. Get commitment to the change and provide the needed support
4. Measure results and provide feedback

Training

A planned effort by a company to facilitate learning of job-related competencies, knowledge, skills, and behaviors by employees.

Why do firms train employees?

B - S \> C
B: the gross benefits that will accrue to the employer if the employee gets this training
S: the increases in salary that must be paid to the employee by the employer because of the training
C: the cost of training

Strategic Framework for Employee Training

Bargain Laborer: hire new for desired skill, training focuses on reducing costs and improving efficiency
Loyal Soldier: training existing workers, training focuses on reducing costs and improving efficiency
Free Agent: hire new for desired, focus on providing superior service, innovation
Committed Expert: training existing workers, focus on superior service, innovation

Cost of Training

Visible costs: development, delivery, trainer salary & benefits

Hidden costs: trainee compensation & lost productivity, wasted investment

Key principles for getting benefits from training

1. Operate training as a partnership among employees, their managers, and HR professionals
2. Develop training systematically - needs assessment, design&delivery, evaluation

Stages of Instructional Design

Asses needs for training -\> Ensure readiness for training -\> plan training program (objectives, trainers, methods) -\> implement training program -\> evaluate results of training

Proactive needs assessment

a systematic process for determining and prioritizing the training programs to be developed and delivered by an organization
-organization analysis, task analysis, person analysis

Reactive needs assessment

A problem-solving process used to determine whether training is necessary to fix a specific performance problem and, if training is necessary, what training should be delivered.

Organization analysis

a process used to identify characteristics of the organizational environment that will influence the effectiveness of training (strategic goals, resources, management support)

Task analysis

a process identifying the tasks performed by trainees and the knowledge and skill necessary to perform the tasks effectively
-competency modeling, cognitive task analysis, team task analysis

Competency modeling

similar to task analysis but results in a broader, more worker-focused (as opposed to work-focused) list of training needs, most frequently used with managerial jobs.

Cognitive task analysis

examines the goals, decisions, and judgements that employees make on the job

Team task analysis

examining the task and coordination requirements of a group of individuals working together toward a common goal

Person Analysis

a process used to identify who needs training and what characteristics of those individuals will influence the effectiveness of training

Reactive needs assessment

Problem definition -\> causal analysis -\> solution implementation

Effective learning objectives

Performance: what the trainee is expected to do or produce
Conditions: important circumstances under which performance is to occur
Criteria: acceptable performance in a quantifiable and objective way

Training methods

classroom instruction
audiovisual training
computer-based training
on-the-job training
simulations
business games and case studies
behavior modeling
experiential programs
team training
action learning

Evaluating training results

Reaction, learning, behavior, results

Difference between training and development

Development: preparing for change in the form of new jobs, responsibilities, or requirements
Training: tends to be more focused on building skills and abilities for individual's current jobs and tends to have a more short-term focus

Employee Development

70% on job
20% through people
10% by training

External/Internal Strategic employee development

External: Focus on development to attract employees from external labor market

Internal:
Focus on developing skills of existing employees

Differentiation/Cost Strategic employee development

Cost: Focus on low-cost development options

Differentiation: focus on developing skills needed for high-level service and innovation

Approach to Employee Development

Work experience
Assessment and Feedback
Formal Education
Interpersonal relationship

Work Experience

The combination of relationships, problems, demands, tasks, and other features of their job

Types of Developmental Job Experience

Promotion
Job rotation
Job transfer
Demotion

Developmental Relationship

develop skills and increase knowledge about the organization and customers by interacting with more experienced member

Mentor

an experienced, productive senior employee who helps develop a less experienced employee

Coach

a peer or manager who works with an employee to motivate the employee, help him or her develop skills, and provide reinforcement and feedback

Types of developmental relationships

Coach/sponsor
Mentor
Supervisor/coworker
role model
support group/network

What are careers like today?

previously just climbed career ladder

today careers move lateral as well as hierarchical and employees may spend time as a contract worker or small business owner

Protean Career

A career that frequently changes in the person's interests, abilities, and values and in the work environment

characterized by:
-personal responsibility
-continuous
-self-directed development and an emphasis on psychological success

Protean Career v Traditional

Responsibility: person v organization
Core values: freedom/growth v advancement/power
Degree of mobility: higher v lower
Performance: psychological success v position level/salary
Attitude: professional commitment v organizational commitment
Identity: self-esteem/awareness v esteem from others/organizational awareness

Steps in Career development process

Self-assessment
Reality check
Goal setting
Action planning

self-assessment

Employee: identify opportunities and needs to improve

Company: Provide assessment information to strengths, weaknesses, interests, and values

reality check

Employee: identify what needs are realistic to develop

Company: communicate performance evaluation, where employee fits in long-range plans of company

goal setting

Employee: identify goal and method to determine goal progress

Company: ensure that goal is specific, challenging, and attainable; commit to help employee reach the goal

action planning

Employee: identify steps and timetable to reach goal

Company: identify resources employee needs to reach goal, including courses, work experiences, relationship

important career development challenges

Orientation of new employees.
Preventing employee burnout.
Balancing work/life issues.
Developing a diverse workforce.
Managing international assignments.

Employee Compensation

the process of paying and rewarding people for the contributions they make to an organization.

External Equity

Fairness of what the company is paying the, compared with what they could earn elsewhere
How pay level compares to competitors

Internal Equity

beliefs concerning the fairness of what the organization is paying them compared with what it pays other employees.

Also uses long-term incentives to reward employees who stay with them for long periods

Compensation: Differentiation

Compensation is used to encourage risk taking

Substantial spread between the pay of high contributors and the pay of low contributors
wage gap-vertical/horizontal

Compensation: Cost Leadership

Employees are usually paid fixed salaries that do not increase as performance increases

The value of a high performer is not substantially greater than the benefit of an average performer, so compensation is used to *develop feelings of inclusion and support from the organization*

Variable rewards

A reward system that pays some employees substantially more than others in order to emphasize differences between high and low performers.