High Performance Work Systems and Performance Management
- Elements of a High-Performance Work System
- High performance work systems are identified by their ability to make full use of resources and opportunities to achieve organizational goals.
- All elements in such a system, including people, technology, and organizational structure, must work together smoothly for success.
- The result of a well-functioning high-performance work system is increased productivity and financial success.
- Definition: Performance management is the process through which managers ensure that employees' activities and outputs contribute to the organization's goals.
- Specification of Performance Aspects: The organization specifies which aspects of performance are relevant.
- Performance Measurement: The relevant aspects are measured through performance appraisals.
- Performance Feedback: Managers provide employees with necessary feedback in performance sessions, helping them adjust their behavior to meet organizational goals.
- Feedback includes efforts to identify and solve problems.
- Organizations have three broad purposes for establishing performance management systems:
- Strategic Purpose: Aligning employee behavior with organizational goals and objectives to meet business objectives.
- Administrative Purpose: Providing information for day-to-day decisions about salary, benefits, recognition, and retention or termination.
- Developmental Purpose: Using the system to enhance employees' knowledge and skills.
- Strategic Alignment: Performance measures should align with the organization's strategy and support its goals and culture.
- Validity: Measures must capture relevant aspects of performance without including irrelevant factors.
- Reliability: Must provide interrater and test-retest reliability to ensure consistency among raters over time.
- Acceptability: The measures should be acceptable to both users and recipients of feedback.
- Specificity: Must clearly define what is expected of employees and how they can meet these expectations.
- Ranking Systems: Includes methods such as simple ranking, forced distribution, and paired comparisons.
- Pros: Counteracts rater biases and distinguishes employees for administrative decisions.
- Cons: Time-consuming and perceived as unfair if actual performance does not align with the ranking system requirements.
- Attribute Ratings: Simple but potentially invalid unless attributes are clearly defined.
- Behavior Ratings: Requires extensive information but effectively links behaviors to goals.
- Results Ratings: Measures productivity or achievement, less subjective but may lack improvement insights.
- Quality Focus: Offers practical benefits but is not as useful for administrative and developmental decisions.
- Performance information can derive from multiple sources, including:
- Self-Appraisal: Biased but knowledgeable of employee behavior.
- Supervisor Appraisal: May lack accurate observation of employees.
- Peer Appraisal: Reliable but can be influenced by friendship biases.
- Subordinate Feedback: Insights into managerial behavior but may fear retaliation.
- Customer Feedback: Valuable but expensive to obtain.
Rating Errors and Minimization
- Common rating errors include:
- Leniency Error: Favoring high ratings.
- Strictness Error: Favoring low ratings.
- Central Tendency: Rating everyone near the middle.
- Halo Error: Positive ratings in all areas due to one strong performance.
- Horns Error: Negative ratings due to one weak performance.
- Strategies to Reduce Errors:
- Training raters to recognize their biases.
- Establishing fair appraisal systems and conducting calibration meetings.
- Feedback must be a regular, scheduled activity.
- Managers should prepare by creating a neutral environment and encouraging self-assessment prior to meetings.
- During feedback sessions:
- Emphasize discussion and problem-solving.
- Focus on behavior/results, not personality.
- Look for opportunities to praise employees while limiting criticism.
- Motivated but Lacks Ability: Provide coaching, training, and feedback; consider job restructuring.
- Has Ability but Lacks Motivation: Investigate external distractions; reinforce appreciation and rewards.
- Lacks Both Ability and Motivation: Assess job fit, provide feedback, or consider demotion/termination.
- High Ability and Motivation: Offer direct feedback, rewards, and developmental opportunities.
- Legal concerns include ensuring fairness without discrimination.
- Use valid measures and accurate evaluations to create a defensible system.
- Address electronic monitoring ethically by communicating its purpose, linking it to performance improvement, and ensuring privacy.
Chapter 11: Employee Turnover and Fairness
Involuntary vs. Voluntary Turnover
- Involuntary Turnover: Required departure often against the employee's wishes.
- Can lead to additional costs, such as recruitment and training expenses, and potential lawsuits.
- Voluntary Turnover: Initiated by employees, often when the organization wishes to retain them.
- Both types are costly and can disrupt organizational functioning.
Fair Treatment in Organizations
- Fairness is determined by:
- Outcome Fairness: Is judgment based on just consequences, proportional to behavior significance?
- Procedural Justice: Are fair processes used to administer decisions?
- Interactional Justice: Are actions conducted with respect to employee feelings?
Legal Requirements for Employee Discipline
- Discipline must avoid wrongful termination and be administered fairly, respecting employees’ privacy.
Additional Notes from Quizzes
- Transaction Processing: Includes documenting HRM decisions and actions associated with employee management.
- Task Design: Process to enhance efficiency while maintaining quality in job categories.
- Reward Systems: Evaluate employee performance; crucial for aligning with organizational goals.
- Rating Errors: Distribution errors and central tendency limit comparability among employees.
- Fairness in Discipline: Requires clear communication and respect to meet interactional justice standards.