Maintaining Performance Chapter 12 Lawrence Erlbaum Associates, Publisher, Copyright 2002 12.1.

Maintaining Performance

Chapter 12

Lawrence Erlbaum Associates, Publisher, Copyright 2002

12.1

Chapter Overview

• Compensation Systems

• Types of Discrimination

• Goal Setting


12.2

• Performance Appraisal Systems

• Managing for Improved Performance

Compensation Systems

The financial reward structures

organizations use to compensate individuals

for the work they perform for the organization


12.3

Goals of Compensation

Systems

1. To produce desired behavior in employees

2. To accomplish the first goal within the limitations faced by the organization


12.4

Types of Incentive Systems

Incentive SystemsIncentive Systems

Individual IncentivesIndividual Incentives

SalarySalary Standard Hour Rate

Standard Hour Rate

Piece-Rate Plan

Piece-Rate Plan

Skill-Based Pay

Skill-Based Pay

Scanlon Plan

Scanlon Plan

Profit Sharing

Profit Sharing

Gain-sharing

Gain-sharing

ESOP ESOP

Group IncentivesGroup Incentives


12.5

Employee BenefitsPension Plans Vacation Time

Holiday Pay

Jury-duty Pay

Health Insurance

Employee Assistance Programs

Flextime

Social SecurityWorkers Compensation

Unemployment Compensation

Telecommuting

Disability Insurance


Travel Pay

12.6

Noneconomic Rewards

• Intrinsic Job Rewards (i.e. flextime)

• Extrinsic Job Rewards (i.e. annual

banquets)• Non-job Based Rewards

(i.e. status)


12.7

Types of Discrimination

• Legal and fair

• Legal and unfair

• Illegal and fair

• Illegal and unfair


12.8

Goal Setting

Specifying a direction for action and a

specific quantity of work to be accomplished


12.9

Steps in Setting Performance

Goals1. Specify the general objective or task

2. Specify how performance will be measured

3. Specify the standard or target to be met

4. Specify a deadline for performance

5. Prioritize goals

6. Determine coordination requirements


12.10

Performance Appraisal Systems


12.11

Conflict and Problems in Performance

Appraisals• Responding honestly to shortcomings while being

evaluated for salary increases or promotions

• Most supervisors are unable to convey negative feedback effectively

• Lack of incentives for supervisors to conduct high-quality performance appraisals


12.12

• Supervisors often find themselves in no-win situations

• Employees often display discomfort during the process

• Universal dissatisfaction with the process

Improving Performance Appraisal Systems


12.13

Rating Scales• Graphic Rating Scale - This instrument asks the rater to provide general evaluations of ratees’ performance in various areas of the job

• Behavior Observation Scale (BOS) - This instrument asks raters to report and describe the frequency of specific job-related behaviors

• Behaviorally Anchored Rating Scale (BARS) - This instrument consists of a set of rating scales, each of which is composed of brief examples of critical incidents of effective and ineffective job performance


12.14

360-degree Feedback

Feedback derived from:

Supervisors

Suppliers

Customers

Peers

Workers themselves


12.15

Who should rate employees?


12.16

Employee (self rating)

Supervisors

Outsiders

Subordinates

Peers

Performance Appraisals: Advice for Managers

• Start by getting the big picture in mind

• Highlight the key issues you want to discuss

• Highlight the best evidence you have

• Give specific examples

• Use active listening

• Give employees time to prepare

• Start with your best performers

• Review the goals and objectives of each employee’s job


12.17

Managing for Improved Performance


12.18

Diagnosing the Poor Performer

Internal Causes:

Employee’s Skills

Employee’s Abilities

Employee’s Effort

Employee’s Personality

External Causes:

Task Difficulty

Resource Availability

Interpersonal Demands

Information Availability

Supervisors and employees rarely agree on the causes of poor performance!


12.19

Questions to consider...1. Has the individual performed at a higher level in the past?

2. Is the performance deficiency total, or is it confined to particular tasks?

3. How well do the individual’s capabilities match the job’s selection criteria?

4. Has the individual been properly trained in how to perform the tasks expected of him or her?


12.20

Recommendations for dealing with poor

performers...1. Recognize that even marginal performers are a source of gains in productivity for organizations

2. Recognize the need to implement positive turnaround strategies for dealing with marginal performers

3. Be ready to accept at least partial responsibility for the subordinate’s marginal performance


12.21

Maintaining Performance Chapter 12 Lawrence Erlbaum Associates, Publisher, Copyright 2002 12.1.

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