Performance Management

Performance Management

1. Process

2. PURPOSE

   • Strategic purpose
     • Means effective performance management helps the organization achieve its business objectives
   • administrative purpose
     • refers to the ways in which organizations use the system to provide information for day-to-day decisions about salary, benefi ts, and recognition programs.
   • developmental purpose
     • Serves as a basis for developing employees’ knowledge and skills

3. CRITERIA

   • Fit with strategy
     • System should aim at achieving employee behavior and attitudes that support the organization’s strategy, goals, and culture.
   • Validity—
     • validity refers to whether the appraisal measures all the relevant aspects of performance and omits irrelevant aspects of performance.
   • Reliability
     • the consistency of the results that the performance measure will deliver.
   • 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.
   • Specifi c feedback
     • A performance measure should specifi cally tell employees what is expected of them and how they can meet those expectations.

4. METHODS

   • Comparative
     • •Rater compares one individuals performance with that of others. This method involves some form of ranking
       • 3 techniques • Simple ranking • Forced distribution • Paired comparison
   • Attribute
     • Rate employeees in terms of attributes (characteristics or traits) believed desireable.
       • Techniques: • Graphic Rating Scale • Mixed standard scale
   • Behavior
     • •Rate employeees in terms of behaviours. Organisations begins by defining successful employee behaviours i.e. what employee behvaiours help the organisation achieve its goals?
       • Techniques: • Critical incident method • A behaviourally anchored rating scale (BARS) • A behavioiral observation scale (BOS) • Organizational behaviour modification (OBM)
   • Results
     • This approach focuses on managing the objective, measurable results of a job or work group i.e. sales, costs, productivity such as units produced per worker.
       • Measurement of productivity • Management by objectives
   • Quality
     • Assesses both individual performance and the system in which the individual works. Employees and customers work together to set standards, and the overall goal is customer satisfaction. Combines a focus on attributes and results.
       • Total Quality Management

5. SOURCES

   • Managers
   • Peers
   • Subordinates
   • Self
   • Customers

6. Rating Errors

   • Rater bias: raters often let their opinion of one quality color their opinion of others
     • • Halo error: when bias is in a favorable direction. This can mistakenly tell employees they don’t need to improve in any area .
     • Horns error: when bias involves negative ratings. This can cause employees to feel frustrated and defensive
   • Similar to me error:
     • Rater gives a higher evaluation to people they consider similar to themselves. When similarity is based on characteristics such as race or sex, decisions may be discriminatory
   • Contrast errors:
     • Rater compares an individual, not against an objective standard, but against other employees.
   • Distributional errors: rater tends to use only one part of a rating scale.
     • Leniency: the reviewer rates everyone near the top • Strictness: the rater favors lower rankings • Central tendency: the rater puts everyone near the middle of the scale

7. feedback

   • Scheduling
     • should be a regular, expected management activity. Annual feedback is not enough. Employees should receive feedback so often that they know what the manager will say during their annual performance review.
   • Preparing
     • Managers should be prepared for each formal feedback session. When giving performance feedback, do it in an appropriate meeting place Meet in a setting that is neutral and free of distractions
   • Conducting
     • -“Tell-and-Sell” – managers tell employees their ratings and then justify those ratings. “Tell-and-Listen” – managers tell employees their ratings and then let employees explain view. “Problem-Solving” – managers and employees work together to solve performance problems.
   • Be aware of bias and rating error tendencies

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