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Performance Management  Identify the major determinants of individual performance.  Discuss the three general purposes of performance management. 

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Presentation on theme: "Performance Management  Identify the major determinants of individual performance.  Discuss the three general purposes of performance management. "— Presentation transcript:

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2 Performance Management  Identify the major determinants of individual performance.  Discuss the three general purposes of performance management.  Identify the five criteria for effective performance-management systems.  Discuss the four approaches to performance management, the specific techniques used in each approach, and the way these approaches compare with the criteria for effective performance- management systems. Chapter 8

3 Performance Management  Choose the most effective approach to performance measurement for a given situation.  Discuss the advantages and disadvantages of the different sources of performance information.  Choose the most effective source(s) for performance information for any situation.  Distinguish types of rating errors and explain how to minimize each in a performance evaluation. Chapter 8

4 Performance Management  Identify the characteristics of a performance measurement system that follows legal guidelines.  Conduct an effective performance feedback session. Chapter 8

5 Introduction  Performance management is the process through which managers ensure that employee activities and outputs are congruent with the organization's goals.  Performance Appraisal is the process through which an organization gets information on how well an employee is doing his or her job.  Performance Feedback is the process of providing employees information regarding their performance effectiveness. © 2006 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/Irwin

6 An Organizational Model of Performance Management Individual Behaviors Situational Constraints Culture and economic conditions Individual Attributes (skills, abilities) Organizational Strategy Long and short term goals and values Objective Results © 2006 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/Irwin

7 Purposes of Performance Management Strategic Developmental Administrative © 2006 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/Irwin

8 Performance Measures Criteria Five performance criteria stand out: Strategic congruence Validity Reliability Acceptability Specificity © 2006 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/Irwin

9 The Comparative Approach  Ranking  Simple ranking ranks from highest to lowest performer.  Alternation ranking - crossing off best and worst employees.  Forced distribution  Employees are ranked in groups.  Paired comparison  Managers compare every employee with every other employee in the work group. © 2006 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/Irwin

10 The Attribute Approach  Graphic rating scales  A list of traits is evaluated by a five- point rating scale.  Legally questionable.  Mixed-standard scales  Define relevant performance dimensions and then develop statements representing good, average, and poor performance along each dimension. © 2006 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/Irwin

11 Behavioral Approach  Critical incidents approach - requires managers to keep record of specific examples of effective and ineffective performance.  Behaviorally anchored rating scales (BARS)  Behavioral observation scales (BOS)  Organizational behavior modification - a formal system of behavioral feedback and reinforcement.  Assessment centers - multiple raters evaluate employees’ performance on a number of exercises. © 2006 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/Irwin

12 Results Approach  Management by objectives  top management passes down company’s strategic goals to next layer of management, and these managers define the goals they must achieve.  Productivity Measurement and Evaluation System (ProMES)  goal is to motivate employees to higher levels of productivity. Goals © 2006 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/Irwin Hierarchy

13 Quality Approach  A performance management system designed with a strong quality orientation can be expected to:  Emphasize an assessment of both person and system factors in the measurement system.  Emphasize that managers and employees work together to solve performance problems.  Involve both internal and external customers in setting standards and measuring performance.  Use multiple sources to evaluate person and system factors. © 2006 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/Irwin

14 Quality Approach (cont.)  Statistical process quality control techniques used:  Process-flow analysis  Cause-and-effect diagrams  Pareto chart  Control chart  Histogram  Scattergram © 2006 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/Irwin

15 Sources for Performance Information Customers Peers Self Subordinates Supervisors © 2006 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/Irwin

16 Rater Errors in Performance Measurement  Similar to me  Contrast  Distributional errors  Halo and horns © 2006 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/Irwin

17 Reducing Errors and Appraisal Politics  Two Approaches to reducing rater error:  Rater error training  Rater accuracy training  Appraisal politics - a situation in which evaluators purposefully distort ratings to achieve personal or company goals. © 2006 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/Irwin

18 Improving Performance Feedback  Feedback should be given every day, not once a year.  Create the Right Context for Discussion.  Ask employees to rate their performance before the session.  Encourage the subordinate to participate in the session.  Recognize effective performance through praise.  Focus on solving problems.  Focus feedback on behavior or results, not on the person.  Minimize criticism.  Agree to specific goals and set a date to review progress. © 2006 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/Irwin

19 Managing Performance of Marginal Performers  Solid performers  High ability and motivation; managers should provide development opportunities  Misdirected effort  Lack of ability but high motivation; managers should focus on training  Underutilizers  High ability but lack motivation; managers should focus on interpersonal abilities  Deadwood  Low ability and motivation; managerial action, outplacement, demotion, firing. © 2006 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/Irwin

20 Following Legal Guidelines  Conduct a valid job analysis related to performance.  Base system on specific behaviors or results.  Train raters to use system correctly.  Review performance ratings and allow for employee appeal.  Provide guidance/support for poor performers.  Use multiple raters. © 2006 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/Irwin


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