MH

Chapter 6: Performance Management

Steps in Performance Management Systems

  1. Define performance expectations.

  2. Monitor and evaluate performance.

  3. Provide feedback.

  4. Reward or discipline accordingly.

Purpose and Outcomes of Performance Management (PM)

  • Employee-related decisions: Promotions, pay raises, terminations.

  • Development: Identifies training and growth opportunities.

  • Signals to employees: Clarifies what is valued and expected.

  • Successful PM leads to: Increased motivation, improved performance, and better retention.

Challenges of Performance Management

  • Not easy to implement due to biases, unclear criteria, or lack of manager training.

Goals: Characteristics of Effective Goals

  • Clear, specific, challenging, and attainable.

Why Goals Are Important

  • Provide direction, increase motivation, and enhance performance.

Types of Goals

  • Performance Goals: Focus on achieving specific outcomes.

  • Learning Goals: Aim at acquiring new knowledge or skills.

  • SMART Goals: Specific, Measurable, Achievable, Relevant, Time-bound.

  • Behavioral Goals: Focus on actions taken.

  • Objective/Outcome Goals: Focus only on results (problem: may ignore how results are achieved).

  • Task/Project Goals: Related to completing specific tasks or projects.

Perceptual Errors (Ch. 4)

  • Halo Effect: One positive trait influences overall perception.

  • Leniency: Giving high ratings to everyone.

  • Central Tendency: Rating everyone as average.

  • Recency Effect: Emphasizing recent events over overall performance.

  • Contrast Effect: Comparing employees to each other instead of standards.

Feedback & Perceptions

  • Why Feedback Is Important: Improves performance, clarifies expectations, and boosts morale.

  • Functions of Feedback: Motivational and instructional.

Do’s & Don’ts of Feedback

  • Do: Be specific, timely, and constructive.

  • Don’t: Be vague, personal, or overly critical.

360-Degree Feedback

  • Feedback from multiple sources (managers, peers, subordinates, and self-assessments).

Biases (Ch. 4)

  • Self-Serving Bias: Attributing success to oneself and failure to external factors.

  • Fundamental Attribution Bias: Overestimating personal factors and underestimating situational factors in others' behavior.

Rewards & Consequences

  • Using Consequences for Desired Outcomes: Rewards reinforce good behavior, punishments deter bad behavior.

Intrinsic vs. Extrinsic Motivation

  • Intrinsic: Motivation from within (passion, interest).

  • Extrinsic: Motivation from external rewards (money, promotions).

Pay for Performance

  • Works when performance is measurable and rewards are tied to effort.

Failure

  • Can be a learning opportunity if managed correctly.

Law of Effect

  • Behavior followed by positive consequences is more likely to be repeated.

Reinforcement (Operant Conditioning)

  • Positive Reinforcement: Adding a reward to encourage behavior.

  • Negative Reinforcement: Removing something unpleasant to encourage behavior.

  • Punishment: Adding an unpleasant consequence to discourage behavior.

  • Extinction: Removing a reward to stop behavior.

  • Continuous Reinforcement: Rewarding every time (fast learning but quick extinction).

  • Intermittent Reinforcement: Rewarding sometimes (most effective for long-term behavior).

Social Learning Theory

  • Learning by observing others.

Self-Efficacy

  • A person’s belief in their ability to succeed.

Behavioral Modeling

  • Learning by imitating successful behaviors.