Post on 13-Dec-2015
1Copyright © 2013 by McGraw-Hill RyersonSchwind 10th Canadian Edition
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PERFORMANCE MANAGEMENTPERFORMANCE MANAGEMENTPERFORMANCE MANAGEMENTPERFORMANCE MANAGEMENT
chapterchapter
Ryerson UniversityRyerson UniversityRyerson UniversityRyerson University
2Copyright © 2013 by McGraw-Hill RyersonSchwind 10th Canadian Edition
Performance ManagementPerformance ManagementPerformance ManagementPerformance Management
• Performance management involves much more than just performance appraisal
• Individual employees need to meet their performance goals– Collectively, helps the organization to
meet its goals
3Copyright © 2013 by McGraw-Hill RyersonSchwind 10th Canadian Edition
Uses of Performance Data – Informs:Uses of Performance Data – Informs:Uses of Performance Data – Informs:Uses of Performance Data – Informs:
Corporate cultureCorporate culture
Organizational Organizational benchmarksbenchmarks
Human capital potentialHuman capital potential
Systems and processesSystems and processes
ResourcesResources
Current policiesCurrent policies
Program directionsProgram directions
Sharing results with Sharing results with stakeholdersstakeholders
Asking for shareholder Asking for shareholder inputinput
4Copyright © 2013 by McGraw-Hill RyersonSchwind 10th Canadian Edition
Characteristics of Effective Performance Characteristics of Effective Performance ManagementManagementCharacteristics of Effective Performance Characteristics of Effective Performance ManagementManagement
• Performance objectives
• Performance goals
• Performance measurement
• Output measures
• Outcome measures
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Performance Management System GoalsPerformance Management System GoalsPerformance Management System GoalsPerformance Management System Goals
• Organizations try to achieve the following:– Transform organizational objectives into
understood, measurable outcomes– Provide instruments for measuring,
managing, and improving organizational success
– Include measures of quality, cost, speed to provide an in-depth, predictive system
– Shift to an ongoing, forward-looking strategic partnership between management and employees
6Copyright © 2013 by McGraw-Hill RyersonSchwind 10th Canadian Edition
Performance Management as part of Performance Management as part of managerial strategymanagerial strategyPerformance Management as part of Performance Management as part of managerial strategymanagerial strategy
• Performance appraisal– The process by which organizations
evaluate employee job performance– Provides data to assess every employee
more
7Copyright © 2013 by McGraw-Hill RyersonSchwind 10th Canadian Edition
Performance Management as part of Performance Management as part of managerial strategy – Cont’dmanagerial strategy – Cont’dPerformance Management as part of Performance Management as part of managerial strategy – Cont’dmanagerial strategy – Cont’d
• Balanced scorecard– Very popular approach– Combines the performance measures of
the total organization—integrates customer satisfaction, internal processes, learning, and innovation
8Copyright © 2013 by McGraw-Hill RyersonSchwind 10th Canadian Edition
Uses of Performance AppraisalUses of Performance Appraisal
9Copyright © 2013 by McGraw-Hill RyersonSchwind 10th Canadian Edition
Key ElementsKey ElementsKey ElementsKey Elements
• The HR department usually develops performance appraisals for employees in all departments– Centralization is meant to ensure uniformity
in order to provide for useful results– Employee’s immediate supervisor usually
performs the actual evaluation
10Copyright © 2013 by McGraw-Hill RyersonSchwind 10th Canadian Edition
Appraisal SystemsAppraisal SystemsAppraisal SystemsAppraisal Systems
• Job-related
• Practical
• Have performance standards
• Have performance measures
11Copyright © 2013 by McGraw-Hill RyersonSchwind 10th Canadian Edition
Performance MeasuresPerformance MeasuresPerformance MeasuresPerformance Measures
IndirectIndirect
ObjectiveObjective
•Rater has only substitutes for performance (constructs)
•Verifiable by others•Usually quantitative
DirectDirect
•Not verifiable by others•Based on rater’s opinions
•Rater actually see the employee’s performance
SubjectiveSubjective
12Copyright © 2013 by McGraw-Hill RyersonSchwind 10th Canadian Edition
Characteristics for EffectivenessCharacteristics for EffectivenessCharacteristics for EffectivenessCharacteristics for Effectiveness
EffectiveEffectivePerformancePerformanceAppraisalAppraisalSystemSystem
EffectiveEffectivePerformancePerformanceAppraisalAppraisalSystemSystem
Validity
Reliability
Input into development
Acceptable standards
Acceptable goals
Control of standardsmore
13Copyright © 2013 by McGraw-Hill RyersonSchwind 10th Canadian Edition
Characteristics for Effectiveness Characteristics for Effectiveness (cont’d)(cont’d)Characteristics for Effectiveness Characteristics for Effectiveness (cont’d)(cont’d)
EffectiveEffectivePerformancePerformanceAppraisalAppraisalSystemSystem
EffectiveEffectivePerformancePerformanceAppraisalAppraisalSystemSystem
Frequency of feedback
Rater training
Ratee training
Input into interview process
Appraisal consequences
Different sources (raters)
14Copyright © 2013 by McGraw-Hill RyersonSchwind 10th Canadian Edition
Past Performance: NoncomparativePast Performance: NoncomparativePast Performance: NoncomparativePast Performance: Noncomparative
BARSBARS
Tests & Tests & ObservationsObservations
• Descriptions of effective/ineffective performance—examples placed along a scale
• Job-related, practical, and standardized
• May include paper-and-pencil tests or an actual demonstration of skills
Rating scaleRating scale
• Multiple sources of ratings e.g. self, peer, supervisor, subordinate, customer
• Oldest and most widely used method• Subjective i.e. based on the rater’s opinion• Responses may be given numerical values
360-Degree360-Degree
more
15Copyright © 2013 by McGraw-Hill RyersonSchwind 10th Canadian Edition
Past Performance: ComparativePast Performance: ComparativePast Performance: ComparativePast Performance: Comparative
ForcedForceddistributionsdistributions
•Employees sorted into categories•Usually a certain proportion must be put
into each category
RankingRankingmethodmethod
•Employees ranked from best to worst•Subject to halo and recency effects
16Copyright © 2013 by McGraw-Hill RyersonSchwind 10th Canadian Edition
Future Performance MethodsFuture Performance MethodsFuture Performance MethodsFuture Performance Methods
• Management-by-Objectives Approach– Employee and supervisor jointly
establish performance goals for the future
– Goals should be mutually agreed upon and objectively measurable
– Potential increase in employee motivation
more
17Copyright © 2013 by McGraw-Hill RyersonSchwind 10th Canadian Edition
Future Performance MethodsFuture Performance MethodsFuture Performance MethodsFuture Performance Methods
• Assessment Centre Technique– Relies on multiple types of evaluation
and multiple raters– Usually used for middle-level
managers– Candidate is evaluated at a location
removed from the job-site
18Copyright © 2013 by McGraw-Hill RyersonSchwind 10th Canadian Edition
Other DevelopmentsOther DevelopmentsOther DevelopmentsOther Developments• Web-based performance appraisal
– Has become the standard for all sizes of firms
– Ideally performance appraisal software is part of an enterprise-wide software system
• Competencies– Focus more on skills vs job performance
• Talent Management
19Copyright © 2013 by McGraw-Hill RyersonSchwind 10th Canadian Edition
Implications of Appraisal TrainingImplications of Appraisal TrainingImplications of Appraisal TrainingImplications of Appraisal Training
• Training raters– Raters need knowledge of system and its
purpose– Rater training on rater errors– Now focus on cognitive aspect of the rating
process– To make valid judgments using complex
information
20Copyright © 2013 by McGraw-Hill RyersonSchwind 10th Canadian Edition
Implications of Appraisal TrainingImplications of Appraisal TrainingImplications of Appraisal TrainingImplications of Appraisal Training
• Focus on reducing/eliminating rating errors:– Halo Effect– Error of Central Tendency– Leniency and Strictness Bias– Personal Prejudice– Recency Effect– Contrast Errors
21Copyright © 2013 by McGraw-Hill RyersonSchwind 10th Canadian Edition
Implications of Appraisal Evaluation Implications of Appraisal Evaluation InterviewsInterviewsImplications of Appraisal Evaluation Implications of Appraisal Evaluation InterviewsInterviews
• Evaluation interviews are performance review sessions that give employees feedback– Tell-and-sell– Tell-and-listen– Problem-solving
• The interview should be a positive, performance-improving dialogue
22Copyright © 2013 by McGraw-Hill RyersonSchwind 10th Canadian Edition
Effective Evaluation InterviewsEffective Evaluation InterviewsEffective Evaluation InterviewsEffective Evaluation Interviews
• Emphasize positive aspects of Emphasize positive aspects of employee performanceemployee performance
• Tell each employee the evaluation Tell each employee the evaluation session is to improve performance not session is to improve performance not to disciplineto discipline
• Provide immediate positive and Provide immediate positive and developmental feedback in a private developmental feedback in a private locationlocation
more
23Copyright © 2013 by McGraw-Hill RyersonSchwind 10th Canadian Edition
Effective Evaluation Interviews Effective Evaluation Interviews (cont’d)(cont’d)Effective Evaluation Interviews Effective Evaluation Interviews (cont’d)(cont’d)
• Review performance formally at least Review performance formally at least annuallyannually
• Make criticisms specific, not general and Make criticisms specific, not general and vaguevague
• Focus criticisms on performance, not Focus criticisms on performance, not personalitypersonality
• Stay calm and do not argueStay calm and do not argue
more
24Copyright © 2013 by McGraw-Hill RyersonSchwind 10th Canadian Edition
Effective Evaluation Interviews Effective Evaluation Interviews (cont’d)(cont’d)Effective Evaluation Interviews Effective Evaluation Interviews (cont’d)(cont’d)
• Identify specific actions the employee can Identify specific actions the employee can taketake
• Emphasize the evaluator’s willingness to Emphasize the evaluator’s willingness to assistassist
• End the evaluation session by stressing End the evaluation session by stressing the positive aspects of performance and the positive aspects of performance and reviewing plans to improve performancereviewing plans to improve performance
25Copyright © 2013 by McGraw-Hill RyersonSchwind 10th Canadian Edition
Human Resource Management FeedbackHuman Resource Management FeedbackHuman Resource Management FeedbackHuman Resource Management Feedback
• Performance management process also Performance management process also provides insight into effectiveness of HRMprovides insight into effectiveness of HRM
• If poor performance is widespread, many If poor performance is widespread, many employees are excluded from promotions employees are excluded from promotions and transfersand transfers
• Unacceptably high numbers of poor Unacceptably high numbers of poor performance may indicate errors in the performance may indicate errors in the HRM functionHRM function
26Copyright © 2013 by McGraw-Hill RyersonSchwind 10th Canadian Edition
Legal Aspects of Performance AppraisalLegal Aspects of Performance AppraisalLegal Aspects of Performance AppraisalLegal Aspects of Performance Appraisal
• A performance appraisal form is a legal A performance appraisal form is a legal documentdocument
• Raters must use only performance criteria Raters must use only performance criteria that are relevant to the jobthat are relevant to the job
• Avoid non-relevant criteriaAvoid non-relevant criteria
more
27Copyright © 2013 by McGraw-Hill RyersonSchwind 10th Canadian Edition
Legal Aspects of Performance AppraisalLegal Aspects of Performance AppraisalLegal Aspects of Performance AppraisalLegal Aspects of Performance Appraisal
• A reasonable time must be set for A reasonable time must be set for performance improvementperformance improvement
• Well-documented performance Well-documented performance shortcomings and use of feedback shortcomings and use of feedback interviews have been viewed favourably in interviews have been viewed favourably in court and with arbitratorscourt and with arbitrators
28Copyright © 2013 by McGraw-Hill RyersonSchwind 10th Canadian Edition
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8eighteight
PERFORMANCE MANAGEMENTPERFORMANCE MANAGEMENTPERFORMANCE MANAGEMENTPERFORMANCE MANAGEMENT
chapterchapter
Ryerson UniversityRyerson UniversityRyerson UniversityRyerson University