Performance Management HRM
Content Managing employee performance o Performance management in context o Performance management process o Performance appraisal o Managing team performance o Performance management and rewards o Managing employee performance improvement Strategic performance management o Strategic performance management in context o Designing and implementing CSF’s & KPI’s o Measuring organisational performance: Balanced Scorecard o Legal perspectives in performance management
Performance management in context Definition: Performance management (2) Performance management process (6) Performance management v performance appraisal (10) Aim & role of performance management (6) Contributions to employees & organisation (13) Conditions for successful implementation (6) Performance management policy
Performance management process 1 Prerequisite stage 2 Performance planning stage 3 Performance execution stage 4 Performance appraisal stage 5 Performance review stage 6 Performance renewal & recontracting
Performance appraisal SU 3
Performance appraisal Definition: Performance appraisal Purpose & value What is performance? Determinants of performance Factors influencing determinants Approaches to measuring performance Gathering performance information Errors in performance appraisals (13) Performance feedback Risk of implementing 360 degree feedback Dealing with poor performance
Determinants of performance Declarative knowledge o Information about facts & things, incl. task requirements, principles & goals Procedural knowledge o Knowing what to do and how to do it o Cognitive, physical, perceptual, motor and interpersonal skills Motivation o Choice to expend effort o Choice of level of effort o Choice to persist in the expenditure of that level of effort Factors influencing determinants o Employee (abilities & previous experience) o HR practices o Work environment
Performance measuring approach - Behaviour When? Link between behaviour and results not obvious Outcomes are attained in distant future Poor results are due to causes beyond employee’s control Rating methods Narrative essay Ranking Paired comparison Forced distribution Behavioural checklist Graphic rating scales Behaviourally anchored rating scales (BARS)
Performance measuring approach - Results When? Workers are skilled in the needed behaviour Behaviour & results are obviously related Results show consistent improvement over time There are many ways to do a job right Rating methods Management by objectives (MBO) Work planning & review
Rater errors Recency Negativity First impression Spill-over Stereotype Attribution Similar to me Contrast Leniency Severity Central tendency Halo Primacy
Managing team performance SU4
Managing team performance Definition & importance of teams Types of teams (3) Purpose & challenges Including team performance in management system (6) Rewarding team performance
Rewards SU 5
Rewards Linking performance with rewards General objectives Pay-for –performance plan Categories of performance related rewards Individual v group plans Advantages & disadvantages of o Performance related rewards o Individual performance related rewards o Group/tem incentives Non-cash rewards
Performance related rewards Behaviour Merit raise Merit Bonus Results Piece rates Sales commissions Goal based + Discretional bonus Individual non-cash reward Individual Profit sharing Gain sharing Goal sharing Team incentives Team non-cash recognition rewards Group Share bonus plan Share purchase plan Share option plan Share appreciation and other rights plan Organisation
Non monetary rewards Social reinforces In-house learning and development opportunities Merchandise Travel Symbolic awards Earned time off Flexible or family-friendly work schedules
Performance improvement SU 6
Performance improvement Personal development plan Developmental plan objectives Contents Activities Supervisor’s role Challenges Coaching o Activities (7) o Guiding principles (4) o Process (5 steps)
Coaching Activities o Establish development objectives o Communicate effectively o Motivate employees o Document performance o Give feedback o Diagnose performance problems o Develop employees Guiding principles o Good relationship – trust & collaboration o Employee is source & director of change o Employee is whole & unique o Couch is facilitator of employee’s growth
Coaching process Set developmental goals Identify developmental resources & strategies Implement strategies Observe & document developmental behaviour Give feedback
Strategic performance management SU7
Strategic performance management Process Traditional system v strategic performance management Importance of CSF’s & KPI’s Benefits (5) Performance Management Budget/ Target setting Execution/ Forecasting Performance review Incentive compensation Strategy development
Performance management TraditionalStrategic/Integrated One-sided information Low-quality information Tardy information Information overload Low relevance of information Lack of communication Misalignment culture High-quality information Timely information Management support Efficient communication Aligned culture
Designing & implementing CSFs and KPIs SU8
CSF & KPI Critical Success Factors Key Performance Indicators CSF & KPI in context Performance measurement pyramid Results & effort indicators Quality criteria Targets for KPI’s
Measuring organisational performance - BSC SU9
Balanced scorecard Why? o Drawbacks of traditional approaches (4) o BSC implementation pitfalls (10) Developing a balanced scorecard (4) Chain of cause & effect Team & personal goals Rewards Criticism (4) BSC do’s (5) and don’ts (5)
Traditional financially based system drawbacks Outcome focus Drivers of business success Strategy into action Strategic communication, involvement & ownership
BSC implementation pitfalls 1.Vision & strategy not actionable 2.Strategy not linked to departmental team & individual goals 3.Strategy not linked to resource allocation 4.Feedback is tactical not strategic 5.Management style 6.Paper chase 7.Centralised measures 8.Lack of integration 9.Ignoring conceptual issues 10.Excluding stakeholders
BSC perspectives Innovative/growth perspective Internal perspective Customer perspective Financial perspective
Legal perspectives SU10
Legal perspectives Legality of performance management o Legal traps (6) Labour legislation Conducting performance appraisal within law (13) Ethics
Legal traps 1.Employment at will 2.Negligence 3.Defamation 4.Misrepresentation 5.Adverse impact 6.Illegal discrimination