Performance Management 2 MANA 3320 Dr. Jeanne Michalski michalski@uta.edu

Performance Management Methods used for performance evaluation. Conducting an effective performance appraisal interview.

Appraisal Forms “Least important elements of the appraisal process” Appraisal forms most often contain multiple styles Approaches to Appraisal Forms Trait Behavior Results / Outcomes Global / Essay

Trait-Based Appraisals Characteristics that are enduring and general e.g. “Leadership” “Communication” “Decisiveness” Competency models vs. Trait-based appraisal Are the characteristics really related to performance? Potential Problems Focus on person rather than performance May be ambiguous or arbitrary Poor feedback and goal setting Poor reliability and validity

Behavior-Based Appraisal Focus on specific behaviors with examples Behavioral Frequency / Observation Scale (BOS) Behaviorally Anchored Rating Scales (BARS) Positives More valid and reliable Acceptable to employees Better for development and improvement

Behavior-Based Appraisal Potential Problems Difficult and expensive to develop Needs to match jobs closely to be effective Behaviors may be hard to develop and interpret Emphasizes behaviors (at the expense of others?) Focuses on behavior rather than results May be no more reliable and valid than simple scale Process of developing the rating system is more important than the system itself.

Behavioral Methods Behaviorally Anchored Rating Scale (BARS) Consists of a series of vertical scales, one for each dimension of job performance; typically developed by a committee that includes both subordinates and managers. Behavior Observation Scale (BOS) A performance appraisal that measures the frequency of observed behavior (critical incidents).

BARS For Municipal Fire Companies FIREFIGHTING STRATEGY: Knowledge of Fire Characteristics.

Behavior Observation Scales (BOS)

Results Methods Productivity Measures Criterion contamination Appraisals based on quantitative measures (e.g., sales volume) that directly link what employees accomplish to results beneficial to the organization. Criterion contamination Focus on short-term results 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 and manager.

Results-Based Appraisal Uses future results as performance targets Challenge is setting goals and measures Can the goals be quantified? Unique goals for every individual Appraisal forms tend to be very simple Still need a rating scale

Performance Appraisal under an MBO Program

Results Methods Have less subjectivity bias Advantages Have less subjectivity bias Are acceptable to employees and superiors Link individual to organizational performance Encourage mutual goal setting Are good for reward and promotion decisions Disadvantages Are time-consuming to develop/use May encourage short-term perspective May use contaminated criteria May use deficient criteria

Comparison of Appraisal Forms Ease of Use Employee Development Legal Defensibility Traits High Low Behaviors Medium Results

Performance Rating Approaches Number of categories Example - 5 levels Consistently exceeds expectations, exceeds expectations, meets expectations, does not meet expectations, does not meet any expectations Many supervisors believe they can differentiate however have a hard time explaining these distinctions in a way that employees in a way that employees can understand and accept.

Performance Rating Approaches Number of categories Can be controversial- experts don’t agree on what number of categories are correct Some believe more categories - more accurately performance may be evaluated On other hand too many categories makes hard to objectively differentiate performance at each of the levels. Choice of words important - “no one wants to be average” Do you have an even or odd number of categories Trend is too fewer rating categories

Performance Management Cycle Planning Performance for the Upcoming Period Defining key results for each position (usually 5-8) that support the organization’s business strategy Establishing performance standards against which key result areas will be measured May assign a weight to each key result since all key results are NOT equal – adds complexity

Performance Management Cycle Coaching Performance and Giving Feedback Throughout the Period Structured feedback like mid-period, quarterly, or monthly progress reviews Informal feedback throughout the process Rating Performance for the Just Completed Period One of the most challenging aspects is the approach for rating employee performance

The Performance Appraisal Discussion

Managing Ineffective Performance Possible Courses of Action Provide training to increase skills and abilities Transfer employee to another job or department Attention of actions to motivate employee Take disciplinary action Discharge the employee Cautions All actions taken must be objective and fair.

Diagnosing Performance Problems What determines human performance in any situation?

Diagnosing Performance Problems Performance = f (Ability, Motivation, Environment) Ability Technical Skills Analytical Skills Interpersonal Skills Physical Limitations Business Knowledge Motivation Goals / Expectations Career Motivation Employee Conflict Employee Satisfaction Boredom / Frustration Environment Job Design Equipment / Materials Rules and Policies Economic Conditions Management Support

Performance Diagnosis