Performance Management v2

8/12/2019 Performance Management v2

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1. Slide

What is Performance Management ?

Performance management is the process through which managers ensure thatemployees

activitiesand outputscontribute to the organizations goals.

2. Slide

The Process of Performance Management

Performance management can potentially deliver many benefits;

Effective performance management can tell top performers that they are valued. Encourages communication between managers and their employees. Establish uniform standards for evaluating employees, and help the organization identify

its strongest and weakest performers.

3. SlideManagers should provide objectives to the member of organization.

Here in the figure you can see the stages of Performance Management Process:

First, the organization specifies which aspects of performance are relevant to theorganization. These decisions are based on the job analysis.

Next, the organization measures the relevant aspects of performance by conductingperformance appraisals.

Finally, through performance feedback sessions, managers give employees informationabout their performance so they can adjust their behavior to meet the organizations goals.


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4. Slide

Purposes of Performance Management

Organizations establish performance management systems to meet three broad purposes:

strategic, administrative, and developmental.

1. Strategic purposemeans effective performance management helps the organizationachieve its business objectives. It does this by helping to link employees behavior with

the organizations goals.

5. Slide2. The admini strative purposeof a performance management system refers to the ways in

which organizations use the system to provide information for day-to-day decisions about

salary, benefits, and recognition programs.

3. Finally, performance management has a developmental purpose, meaning that it serves asa basis for developing employees knowledge and skills.

6. Slide

Criteria for Effective Performance

Several criteria determine the effectiveness of performance measures:

1. Fit with strategyA performance management system should aim at achieving employee behavior and

attitudes that support the organizations strategy, goals, and culture.


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7. Slide2. Validity

Validityis the extent to which a measurement tool actually measures what it is intended to

measure.

In the case of performance appraisal, validityrefers to whether the appraisal measures all

the relevant aspects of performanceand omits irrelevant aspects of performance.

8. Slide3. Reliability

With regard to a performance measure, reliability describes the consistency(istikrar, tutarllk)

of the results that the performance measure will deliver.

To kinds of reliability:

Interrater reliabilityis consistency of results when more than one person measures

performance.

Test-retest reliability refers to consistency of results over time.

9. Slide4. Acceptability

Whether or not a measure is valid and reliable, it must meet the practical standard of being

acceptable to the people who use it.

5. Specific feedback

A performance measure should specifically tell employees what is expected of them and how

they can meet those expectations.

10.SlideMethods for Measuring Performance

Organizations have developed a wide variety of methods for measuring performance.

Making Comparisons


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The performance appraisal methodmay require the rater to compare one individualsperformance with that of others.

This method involves some form of ranking, in which some employees are best, some areaverage, and others are worst.

The usual techniques for making comparisons are simple ranking, forced distribution,and paired comparison.

11.Slide Simple ranking requires managers to rank employees in their group from the highest

performer to the poorest performer.

Forced-distribution methodassigns a certain percentage of employees to eachcategory in a set of categories.

For example, the organization might establish the following percentages and categories: Exceptional5 percent

Exceeds standards25 percent

Meets standards55 percent

Room for improvement10 percent

Not acceptable5 percent

12.Slide Another variation on rankings is the paired-comparison method. This approach involves comparing each employee with each other employee to establish

rankings.

13.SlideBenetifs and drawbacks of Ranking:

It counteracts the tendency to avoid controversy by rating everyone favorably or nearthe center of the scale.

If some managers tend to evaluate behavior more strictly (or more leniently) thanothers, a ranking system can erase that tendency from performance scores.

Ranking systems can be useful for supporting decisions about how to distribute payraises or layoffs.

14.SlideRating Individuals


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Instead of focusing on arranging a group of employees from best to worst, performancemeasurement can look at each employees performancerelative to a uniform set of

standards.

The performance management system must identify the desired attributes or behaviors,then provide a form on which the manager can rate the employee in terms of those

attributes or behaviors.

Typically, the form includes a rating scale, such as a scale from 1 to 5, where 1 is theworst performance and 5 is the best.

15.SlideRating Attributes

Kinds: graphic rating scale, mixed-standard scales

The most widely used method for rating attributes is the graphic rating scale. This method lists traits and provides a rating scale for each trait. The employer uses the scale to indicate the extent to which the employee being rated

displays the traits.

16.Slide

Figure 8.3 shows an example of a graphic rating scale that uses a set of ratings from 1 to 5.


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17.Slide The second method for rating attributes is the mixed-standard scales, which use several

statements describing each trait to produce a final score for that trait.

The manager scores the employee in terms of how the employee compares to eachstatement.

18.Slide


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19.SlideRating Behaviors

One way to overcome the drawbacks of rating attributes is to measure employeesbehavior.

To rate behaviors, the organization begins by defining which behaviors are associatedwith success on the job.

Which kinds of employee behavior help the organization achieve its goals?20.Slide The appraisal form asks the manager to rate an employee in terms of each of the identified

behaviors.

One way to rate behaviors is with the critical-incident method. This approach requires managers to keep a record of specific examples of the employee

acting in ways that are either effective or ineffective.

21.SlideMeasuring Results

Two of the most popular methods for measuring results are measurement of productivity

and management by objectives.

MEASUREMENT OF PRODUCTIVITY

Productivityis an important measure of success, because getting more done with asmaller amount of resources (money or people) increases the companys profits.

Productivity usually refers to the output of production workers, but it can be used moregenerally as a performance measure.

To do this, the organization identifies the products (set of activities or objectives) itexpects a group or individual to accomplish.

22.SlideMANAGEMENT BY OBJECTIVES

Management by objectives (MBO) is a system in which people at each level of the

organization set goals in a process that flows from top to bottom, so employees at all levels

are contributing to the organizations overall goals.


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23.SlideAn MBO system has three components:

1. Goals are specific, difficult, and objective. The goals listed in the second column of Table

8.2provide two examples for a bank.

2. Managers and their employees work together to set the goals.

3. The manager gives objective feedback through the rating period to monitor progress

toward the goals. The two right-hand columns in Table 8.2 are examples of feedback given

after one year.

24.SlideTotal Quality Management

Total quality management (TQM)assesses both individual performance and the systemwithin which the individual works.

This assessment is a process through which employees and their customers work togetherto set standards and measure performance, with the overall goal being to improve

customer satisfaction.

The feedback aims at helping employees continuously improve the satisfaction of theircustomers.

25.Slide With TQM, performance measurement essentially(actually) combines measurements of

attributes and results.

The feedback in TQM is of two kinds: (1) subjective feedback from managers, peers, andcustomers about the employees personal qualitiessuch as cooperation and initiative;

and (2) objective feedback based on the work process.


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26.SlideSources of Performance Information

possible for sources of performance infromation are managers, peers, subordinates, self,and customers.

Managers

It is usually safe for organizations to assume that manager have extensive knowledge ofthe job requirements and that they have enough opportunity to observe their employees.

The advantage of using managers for this responsibility is that they have the motivation toprovide exact and helpful feedback, because their own success depends on their

employees performance.

27.SlidePeers

Another source of performance information is the employees peers or co-workers. Peers are an excellent source of information about performance in a job where the

manager does not often observe the employee.

Subordinates

For evaluating the performance of managers, subordinates are an especially valuablesource of information.

Subordinates (the people reporting to the manager) often have the best chance to see howwell a manager treats employees.

For instance; Dell, asks employees to rate their managers.28. SlideSelf

No one has a greater chance to observe the employees behavior on the job thandoes theemployee himself or herself.

Self-ratings are rarely used alone, but they can contribute valuable information. A common approach is to have employees evaluate their own performance before the

feedback session.


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29.SlideCustomers

Services are often produced and consumed on the spot(on the time which employeeserves), so the customer is often the only person who directly observes the service

performance.

Therefore, for these kinds of situations may be customers are the best source ofperformance information.

Many companies in service industries have introduced customer evaluations of employeeperformance.

Performance Management v2

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