Unit 8: Performance Management (2016)

Apunte Inglés
Universidad Universidad de Barcelona (UB)
Grado Administración y Dirección de Empresas - 2º curso
Asignatura Human Resources
Año del apunte 2016
Páginas 14
Fecha de subida 24/04/2016
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Unit 8 Mercè Mach ADE en inglés A6-B6

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UNIT 8: PERFORMANCE MANAGEMENT The strategic importance of performance management Performance management system is a formal, structured process used to measure, evaluate, & influence employees’ job-related attitudes, behaviours, & performance results. The purposes are:  To enhance employee motivation & productivity.
 To support the achievement of the organization’s strategic goals.
 To facilitate strategic planning & change Effective performance management It helps to direct and motivate employees to maximize their efforts on behalf of the organization by:  Defining clear performance goals & measures.
 Conducting performance appraisals.
 Providing ongoing performance feedback.
 Linking performance results to rewards & consequences  Providing career planning & development opportunities.
Enhancing motivation and productivity The expectancy theory states that people chose their behaviour and effort levels. These choices are based on workers’ beliefs that behaviours and efforts will lead to desired consequences.
 Expectancy. If I make an effort, will I be able to perform?  Instrumentality. What consequences will follow from my performance?  Valence. How much do I value the consequence?  Satisfaction. Will I think the rewards received are fair? Performance appraisal and other HRM functions Performance appraisal Appraisal programs can be:  Administrative: Based on compensation and job evaluation  Developmental: Based on individual evaluation, training and career planning.
Purposes performance management Developmental  Provide performance feedback  Identify individual strengths or Administrative  Document personnel decisions  Determine promotion weaknesses  candidates  Recognize individual Determine transfers and performance  Assist in goal achievement  Evaluate goal achievement    Identify poor performance Decide retention or termination  Identify individual training needs  assignments Determine organizational  Validate selection criteria  Meet legal recruitments  training needs  Reinforce authority structure  Allow employees to discuss concerns Decide on layoffs Evaluate training programs/progress  Personnel planning    Improve communication Make reward or compensation decisions.
Provide a forum for leaders to help Factors that influence performance Performance= f(A,M,E) Motivation   Career ambition   Technical ls Frustration  Job design Fairness/satisfactio  Economic skills   Goals/expectations      Communicatio n skills Laws and regulations Analytical skills Management support Problemsolving skills Unions Rules and policies  Interpersonal skills conditions n  Ability Equipment/materia Employee conflict   Environment  Physical limitations A model for understanding employee motivation and performance Factors affecting motivation  Performance goals. These goals should be clearly defined, difficult but achievable, and accepted as a positive effect on productivity.
 Interdependent others. When employees need others employees to help accomplish their job, even highly motivated employees may perform poorly if their co-workers’ performance is poor.
 Satisfaction. This is determined by perception of whether the rewards are fair.
Detection of performance problems Responsibility for managing the performance of a company’s CEO rests with the board of directors. Monitoring the performance of employees at lower levels in the organization is useful for detecting organizational shortcomings Evaluating change first identifies objectives & subsequently assess change results (employee performance) in light of those objectives. Not all organizational change efforts target performance improvement as an objective.
Performance management within an integrated HRM system  The internal environment.
o Performance-Driven culture. It is a culture that depends on effective performance management.
It has performance measurement and feedback as central elements of its HRM system.
It also gives rewards go only to employees who excel in performing all aspects of their jobs.
o Technology. Makes it possible for employees to receive detailed information about their behaviour and performance.
 The external environment.
o Laws and regulations. Performance measures must be nondiscriminatory, job-related and used fairly.
o Valid performance measures. These are based on job analysis results of key areas of job performance.
o Deficient performance measure. Does not assess all of the behaviour and results important and relevant to the job.
o Contaminated performance measure.
It assesses things unimportant or irrelevant to the job.
Prescriptions for appraisal and feedback 1. Job analysis to identify important duties & tasks should precede development of a performance appraisal system.
2. The performance appraisal system should be standardized & formal.
3. Specific performance standards should be communicated to employees in advance of the appraisal period.
4. Objective & uncontaminated data should be used whenever possible.
5. Ratings on traits such as dependability, drive, or attitude should be avoided or operationalized in behavioural terms.
6. Employees should be evaluated on specific work dimensions rather than on a single global or overall measure.
7. If work behaviours rather than outcomes are to be evaluated, evaluators should have ample opportunity to observe rate performance.
8. To increase the reliability of ratings, more than one independent evaluator should perform appraisals whenever possible.
9. Behavioural documentation should be prepared for extreme ratings.
10. Employees should be given an opportunity to review their appraisals.
11. A formal system of appeal should be available for appraisal disagreements.
12. Raters should be trained to prevent discrimination & to evaluate performance consistently.
13. Appraisals should be frequent, offered at least annually.
The HR triad: Roles and responsibilities for measuring performance and providing feedback What to measure  Perform criteria is the dimensions against which the performance of an incumbent, a team, or a work unit is evaluated.
 Personal traits is the criteria that focus on personal characteristics such as “loyalty” and “dependability”. It is not reliable and difficult to defend as measurable performance criteria.
 Behaviours. It focus on how work is performed. It is easier to observe and defend than traits. “Has not been late to work during past 6 months”. There are some types: o Task-related behaviours o General counter-productive behaviours o Organizational citizenship. It may want to include in evaluation as part of overall performance:  Volunteering for tasks not formally part of the job  Helping others  Endorsing, supporting and defending organizational objectives.
 Objective results. It focus on what was accomplished or produced. Yet, it may miss critical aspects of job that are difficult to quantify. i.e. number of traffic tickets written.
 Multiple criteria. Performance appraisal should capture all aspects of the job. Weighting the criteria is adding values to specific criteria based on their importance relative to other criteria.
Timing  Focal-point approach. All employees evaluated at the same time. It is easier to standardize across employees. However, it may create burdensome workload on managers or artificial performance cycles.
 On Anniversary approach.
It does not tie employee’s anniversary individual performance with the to overall organizational performance. Ratings earlier in year may be more lenient.
It is difficult to make comparisons to other employees.
 Natural time span of the job. It ensures feedback is given when it is most useful. It is not suited for short-cycle simple jobs. Some possible time spans (annually, semi-annually, quarterly, ongoing, etc.) o For teams: feedback on progress at the mid-point of a project & again at project completion to assess goal achievements.
Participants in performance measurement and feedback Participants  Issues. Consider the amount and type of information each source has available.
 Supervisors. May make the most reliable judgments.
 Self-appraisals.
o Accuracy. Increase satisfaction with appraisal but are subject to inflation and leniency bias by the employee.
o Cultural differences. Employees from collectivist cultures approach self-appraisals differently.
 Peers. Often have best opportunity to observe behaviour. Are useful predictors of future performance.
 Subordinates. Useful if anonymity guaranteed & contains specific improvement suggestions. Managers should discuss results with direct reports.
 Customers. Most useful when a large number of customers respond & results are not biased by few customers with bad experiences.
 360-degree appraisals.
Evaluations collected supervisors, subordinates, peers, & employees.
from colleagues, Less susceptible to biases. Research support for anonymity of raters & the use of a full circle of raters.
o Assure anonymity o Make respondents accountable o Prevent “gaming” of the system o Use statistical procedures o Identify and quantify biases Performance appraisals formats  Comparative.
o Straight ranking o Forced distribution  Absolute standards o Graphic rating scales o Behaviourally-anchored rating scales o Behavioural observation scales  Results-based formats o Direct index o Management by objectives(MBO). A philosophy of management that rates performance on the basis of employee achievement of goals set by mutual agreement of employee & manager.
The rating process Common rating errors  Halo/Horn  Leniency  Strictness  Central Tendency  Primacy  Recency  Contrast Common performance rating errors HALO AND A TENDENCY TO THINK OF AN EMPLOYEE AS MORE HORN OR LESS GOOD OR BAD IS CARRIED OVER INTO SPECIFIC PERFORMANCE RATINGS.
LENIENCY All employees are rated higher than they should be rated.
This happens when managers aren’t penalized for giving high ratings to everyone, when rewards aren’t part of a fixed & limited pot, & when dimensional ratings aren’t required.
STRICTNESS All employees are rated lower than they should be.
Inexperienced raters who are unfamiliar with environmental constraints on performance, raters with low self-esteem, & raters who have themselves received a low rating are most likely to rate strictly. Rater training that includes a reversal of supervisor-incumbent roles & confidence building can reduce this error.
CENTRAL All employees are rated as average, when performance TENDENCY actually varies. Raters with large spans of control & little opportunity to observe behaviour are likely to use this “playit-safe” strategy. A forced distribution format requiring that most employees be rated average also may create this error.
PRIMACY As a cognitive shortcut, raters may use initial information to categorize a person as either a good or a bad performer.
Information that supports the initial judgment is amassed, & unconfirming information is ignored.
RENENCY A rater may ignore employee performance until the appraisal date draws near. When the rater searches for cues about performance, recent behaviours or results are most salient, so recent events receive more weight than they should.
CONTRAST When compared with weak employees, an average EFFECTS employee will appear outstanding; when evaluated against outstanding employees, an average employee will be perceived as a low performer.
Common rating errors  Halo/Horn. Overly focusing on specific performance ratings or stereotyping employee by a single personal characteristic.
 Leniency. Rating all employees higher than they should be.
 Strictness. Rating all employees lower that they should be.
 Central tendency. Rating all employees as average when individual employee performance actually varies.
 Primacy. Using initial information that supports the rating decision while ignoring later information does not.
 Recency. Basing the rating decision primarily on the most recent performance information while placing much less emphasis on past performance.
 Contrast effects. Comparing one employee to another rather than applying a common standard to all employees.
Improving rater accuracy  Precise rating scale format o Each dimension addresses a single job activity.
o Each performance dimension is rated separately; scores are summed to determine overall rating.
o Ambiguous terms (e.g. “average”) should not to be used.
 Provide memory aids o Behavioral diaries & critical incident files.
o Electronic diary-keeping software.
 Provide rater training. Frame-of-reference training especially useful  Reward accurate and timely appraisals. Salary increases, promotions, assignments to key positions can be partly based on performance as a rater.
 Use multiple raters.
o To increase evaluation accuracy by diffusing responsibility for negative results.
o To increase employee acceptance of evaluation results.
o To allow for group discussion which can help alleviate individual rater biases.
Providing feedback Sources of conflict associated with providing performance feedback:  Understanding attributions.
o It is combining evaluative & developmental goals o Needs to be candid & protect employee’s self-esteem.
o Self-serving employee attributions that interfere with performance improvement.
o Discounting role of external forces in good performance.
o Over-emphasizing external effects in poor performance.
 Timing. Providing immediate feedback is most useful. Giving only as much information as the receiver can use.
 Preparation.
o Scheduling feedback sessions in advance.
o Clarifying purpose & content of meeting.
o Giving both participants time to prepare.
 Content of the discussion: the problem solving approach o Diagnosis: seek to understand the factors that affect performance.
o Removing Roadblocks: seek agreement with the employee on an action plan to address issues such as:  Lack of resources.
 Need for additional information & training.
 Improving ongoing communications & feedback.
o Mutual goal setting: employee participation increases employee acceptance of goals  Follow-up to the feedback session.
o Positive reinforcement. Use of positive rewards to increase occurrence of desired performance. Principles:  People perform in ways that they find most rewarding.
 By providing proper rewards, it is possible to improve performance.
o Punishment.
 Decreases frequency of undesired behavior.
 Gets immediate results & has vicarious power.
 Can have undesirable side effects—employee anger & contingent bad behavior.
 When nothing else works.
o Transfer. When employee & job are not well matched.
o Neutralize. Assign noncritical tasks to minimize the impact of deficiencies.
o Terminate. For dishonesty, habitual absenteeism, substance abuse, insubordination, & low productivity that cannot be corrected.
Performance criteria for teams  Task completion o Accuracy, speed o Creativity, cost  Team development o Cohesiveness o Flexibility o Preparedness for new tasks  Stakeholder satisfaction o Customer, team and other teams’ satisfaction with procedures and outputs.
Individual performance of team members  Task performance. Accuracy, speed, creativity, & efficiency  Relationships with Others. Understanding others’ perspectives, trust by others, new friendships.
 Personal development. Development of competencies, technical knowledge, & skills, development of networks of colleagues Factors of team effectiveness Current issues  Automated Performance Management.
o Uses  Tracking progress on goals.
 Scoring & approving appraisals.
 Processing, storing, & retrieving data.
o Benefits   Improved efficiency & time savings.
 Increased accuracy of appraisals.
 Better communication of standards.
Monitoring through Technology. Balancing the legal necessity to monitor employees with their expectation of privacy.