Chapter 7 Performance Management Scope of Performance Management Graphic Rating Scale Behavioral Anchored Rating Scale Ranking Critical Incident Management by Objectives The Cynicism About Performance Management SMART Goals Copyright 2011 Health Administration Press

Performance Management Defined An ongoing process that includes: Setting performance goals with employees Monitoring employees’ progress toward their goals Designing improvement strategies with employees Providing ongoing feedback and coaching Copyright 2011 Health Administration Press

Key Elements of Performance Management Linked with all other human resources management functions An ongoing process that is not limited to the “annual review” A relevant process for employees at all levels Use of performance criteria is critical to successful performance management Copyright 2011 Health Administration Press

Performance Appraisal Criteria Performance standards refer to indicators of what a job is intended to accomplish, how performance is measured, and expected levels of performance Some common problems with appraisal criteria: Criterion deficiency Criterion contamination Poor reliability Poor validity Copyright 2011 Health Administration Press

Reliability and Validity of Appraisal Criteria Reliability refers to the consistency with which a manager rates an employee in successive ratings Consistency with which two or more managers rate performance when they have comparable information Validity The extent to which appraisal criteria actually measure the performance dimension of interest Validity may be particularly problematic when measuring attitudes or other job-related factors that are difficult to measure in an objective manner Copyright 2011 Health Administration Press

Sources and Uses of Job Performance Information Can be used for administrative decisions and employee development purposes Self-appraisal Subordinate appraisal Team-based appraisal Team citizenship appraisal Multisource appraisal Copyright 2011 Health Administration Press

Methods of Organizing Job Performance Information Graphic Rating Scale Behavior Anchored Rating Scale (BARS) Behavioral Observation Scale Ranking Critical Incidents Management by Objectives Copyright 2011 Health Administration Press

The Performance Review Gives employees the opportunity to discuss performance and performance standards Addresses employee strengths and weaknesses Identifies strategies for improving employee performance Provides an opportunity to discuss personnel decisions, such as compensation, promotion, training, and termination Provides an opportunity to discuss regulatory requirements and compliance issues Copyright 2011 Health Administration Press

Attitudes and Cynicism About Performance Management Perception that performance management is subjective Process is uncomfortable and has high emotional content Performance appraisal is traditionally thought of as a negative, punitive process Managers are prone to “rating errors” Copyright 2011 Health Administration Press

Copyright 2011 Health Administration Press Rating Errors Distributional Leniency Strictness Central tendency Halo effect Personal bias Similar-to-me bias Contrast bias Political factors sometimes promote deliberate distortion of appraisals Copyright 2011 Health Administration Press

Conducting Performance Management Interviews SMART goals: specific, measurable, achievable, relevant, and time-bound Provide feedback on an ongoing basis Evaluate the frequency of formal performance appraisals Prepare for the interview Use multiple sources of information Encourage employee participation Focus on future performance and problem solving Focus on behavior and results, not personal traits Reinforce positive performance Ensure that performance management is supported by senior management Plan and implement follow-up activities Copyright 2011 Health Administration Press