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Prentice Hall, Inc. © 2006
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Performance Management in Context: Overview
Definition of Performance Management (PM) The Performance Management Contribution Disadvantages/Dangers of Poorly-implemented PM systems Definition of Reward Systems Aims and role of PM Systems Characteristics of an Ideal PM system Integration with Other Human Resources and Development Activities Prentice Hall, Inc. © 2006
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Performance Management: Definition
Continuous Process of Identifying performance of individuals and teams Measuring performance of individuals and teams Developing performance of individuals and teams and Aligning performance with the strategic goals of the organization Prentice Hall, Inc. © 2006
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PM is NOT performance appraisal
Strategic business considerations Ongoing feedback So employee can improve performance Driven by line manager Performance appraisal Assesses employee Strengths & Weaknesses Once a year Lacks ongoing feedback Driven by HR Prentice Hall, Inc. © 2006
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Contributions of PM For Employees
The definitions of job and success are clarified Motivation to perform is increased Self-esteem is increased Self-insight and development and enhanced Prentice Hall, Inc. © 2006
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Contributions of PM For Managers
Supervisors’ views of performance are communicated more clearly Managers gain insight about subordinates There is better and more timely differentiation between good and poor performers Employees become more competent Prentice Hall, Inc. © 2006
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Contributions of PM For Organization/HR Function
Organizational goals are made clear Organizational change is facilitated Administrative actions are more fair and appropriate There is better protection from lawsuits Prentice Hall, Inc. © 2006
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Disadvantages/Dangers of Poorly-implemented PM Systems for Employees
Lowered self-esteem Employee burnout and job dissatisfaction Damaged relationships Use of false or misleading information Prentice Hall, Inc. © 2006
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Disadvantages/Dangers of Poorly-implemented PM Systems for Managers
Increased turnover Decreased motivation to perform Unjustified demands on managers’ resources Varying and unfair standards and ratings Prentice Hall, Inc. © 2006
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Disadvantages/Dangers of Poorly-implemented PM Systems for Organization
Wasted time and money Unclear ratings system Emerging biases Increased risk of litigation Prentice Hall, Inc. © 2006
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Reward Systems: Definition
Set of mechanisms for distributing Tangible returns and Intangible or relational returns As part of an employment relationship Prentice Hall, Inc. © 2006
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Tangible returns Cash compensation Benefits, such as Base pay
Cost-of-Living & Contingent Pay Incentives (short- and long-term) Benefits, such as Income Protection Allowances Work/life focus Base pay Hourly wages Salary Cost-of-Living & Contingent Pay Usually permanent increases in pay based on either cost of living or performance Covered in more detail in Module 11 Incentives (short- and long-term) Used to increase performance E.g., bonuses (short term) or stock options/ownership (long term) Income Protection Sometimes required under law, such as Social Security (what about unemployment insurance in the USA?) Disability pay, medical insurance, pension plans, savings plans Allowances E.g., housing transportation (e.g., company provides car) Prentice Hall, Inc. © 2006
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Intangible returns Relational returns, such as Recognition and status
Employment security Challenging work Learning opportunities Work/life focus (to help employee balance work/home life) Such as vacation time, flextime and telecommuting, services (e.g., counseling, financial planning, fitness activities) Relational Returns Such as recognition, status, employment security, challenging work, opportunities to learn, opportunities to form personal relationships Prentice Hall, Inc. © 2006
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Returns and Their Degree of Dependency on the Performance Management System
Cost of Living Adjustment Income Protection Work/life Focus Allowances Relational Returns Base Pay Contingent Pay Short-term Incentives Long-term Incentives Degree of Dependency Low Moderate High Prentice Hall, Inc. © 2006
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Purposes of PM Systems: Overview
Strategic Administrative Informational Developmental Organizational maintenance Documentation Prentice Hall, Inc. © 2006
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Strategic Purpose Link employee behavior with organization’s goals
Communicate most crucial business strategic initiatives Note: the following is slide used before (some of this is not in Module 1) Links employee activities with organization’s mission and goals Identifies results and behaviors needed to carry out strategy Maximizes extent employees exhibit those behaviors and results Only 13% of organizations use PM to communicate organizational purpose and goals Prentice Hall, Inc. © 2006
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Administrative Purpose
Provide information for making decisions re: Salary adjustments Promotions Retention or termination Recognition of individual performance Layoffs Prentice Hall, Inc. © 2006
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Informational Purpose
Communicate to Employees: Expectations What is important How they are doing How to improve Prentice Hall, Inc. © 2006
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Developmental Purpose
Performance feedback/coaching Identification of individual strengths and weaknesses Causes of performance deficiencies Tailor development of individual career path Prentice Hall, Inc. © 2006
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Organizational Maintenance Purpose
Plan effective workforce Assess future training needs Evaluate performance at organizational level Evaluate effectiveness of HR interventions Prentice Hall, Inc. © 2006
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Documentational Purpose
Validate selection instruments Document administrative decisions Help meet legal requirements Prentice Hall, Inc. © 2006
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Characteristics of an Ideal PM System
Prentice Hall, Inc. © 2006
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Congruent with organizational strategy
Consistent with organization’s strategy Aligned with unit and organizational goals Prentice Hall, Inc. © 2006
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Thorough All employees are evaluated
All major job responsibilities are evaluated Evaluations cover performance for entire review period Feedback is given on both positive and negative performance Prentice Hall, Inc. © 2006
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Practical Available Easy to use Acceptable to decision makers
Benefits outweigh costs Prentice Hall, Inc. © 2006
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Meaningful Standards are important and relevant
System measures ONLY what employee can control Results have consequences Evaluations occur regularly and at appropriate times System provides for continuing skill development of evaluators Prentice Hall, Inc. © 2006
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Specific Concrete and detailed guidance to employees what’s expected
how to meet the expectations Prentice Hall, Inc. © 2006
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Identifies effective and ineffective performance
Distinguish between effective and ineffective Behaviors Results Provide ability to identify employees with various levels of performance Prentice Hall, Inc. © 2006
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Reliable Consistent Free of error Inter-rater reliability
Prentice Hall, Inc. © 2006
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Valid Relevant (measures what is important)
Not deficient (doesn’t measure unimportant facets of job) Not contaminated (only measures what the employee can control) Prentice Hall, Inc. © 2006
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Acceptable and Fair Perception of Distributive Justice
Work performed evaluation received reward Perception of Procedural Justice Fairness of procedures used to: Determine ratings Link ratings to rewards Prentice Hall, Inc. © 2006
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Inclusive Represents concerns of all involved
When system is created, employees should help with deciding What should be measured How it should be measured Employee should provide input on performance prior to evaluation meeting Prentice Hall, Inc. © 2006
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Open (No Secrets) Frequent, ongoing evaluations and feedback
2-way communications in appraisal meeting Clear standards, ongoing communication Communications are factual, open, honest Prentice Hall, Inc. © 2006
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Correctable Recognizes that human judgment is fallible
Appeals process provided Prentice Hall, Inc. © 2006
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Standardized Ongoing training of managers to provide
Consistent evaluations across People Time Prentice Hall, Inc. © 2006
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Ethical Supervisor suppresses self-interest
Supervisor rates only where she has sufficient information about the performance dimension Supervisor respects employee privacy Prentice Hall, Inc. © 2006
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Integration with other Human Resources and Development activities
PM provides information for: Development of training to meet organizational needs Workforce planning Recruitment and hiring decisions Development of compensation systems Prentice Hall, Inc. © 2006
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Chapter 2 Prentice Hall, Inc. © 2006
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Performance Management Process: Overview
Prerequisites Performance Planning Performance Execution Performance Assessment Performance Review Performance Renewal and Recontracting Prentice Hall, Inc. © 2006
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Performance Management Process
Prerequisites Performance Planning Performance Execution Performance Management Process Performance Renewal and Recontracting Performance Assessment Performance Review Prentice Hall, Inc. © 2006
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Prerequisites Knowledge of the organization’s mission and strategic goals Knowledge of the job in question Prentice Hall, Inc. © 2006
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Knowledge of mission and strategic goals
Strategic planning Purpose or reason for organization’s existence Where organization is going Organizational goals Strategies for attaining goals Prentice Hall, Inc. © 2006
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Mission and Goals Cascade effect throughout organization
Organization Unit Employee Prentice Hall, Inc. © 2006
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B. Knowledge of the job Job analysis of key components
Activities, tasks, products, services, processes KSAs required to do the job Knowledge Skills Abilities Prentice Hall, Inc. © 2006
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Job Description Job duties KSAs Working conditions
Prentice Hall, Inc. © 2006
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Generic Job Descriptions
Occupational Informational Network (O*Net) Prentice Hall, Inc. © 2006
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Job analysis Use a variety of tools Interviews Observation
Questionnaires (available on Internet) Prentice Hall, Inc. © 2006
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Job analysis follow-up
All incumbents should review information and provide feedback re: Task Frequency Criticality Prentice Hall, Inc. © 2006
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Performance Planning: Results
Key accountabilities Specific objectives Performance standards Prentice Hall, Inc. © 2006
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Key Accountabilities Broad areas of a job the employee is responsible
for which the employee is responsible for producing results Prentice Hall, Inc. © 2006
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Specific Objectives Statements of outcomes Important Measurable
Prentice Hall, Inc. © 2006
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Performance Standards
“Yardstick” to evaluate how well employees have achieved each objective Information on acceptable and unacceptable performance, such as quality quantity cost time Prentice Hall, Inc. © 2006
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Performance Planning: Behaviors
How a job is done Prentice Hall, Inc. © 2006
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Performance Planning: Competencies
Measurable clusters of KSAs Critical in determining how results will be achieved Prentice Hall, Inc. © 2006
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Performance Planning: Development Plan
Areas for improvement Goals to be achieved in each area of improvement Prentice Hall, Inc. © 2006
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Performance Execution: Employee Responsibilities
Commitment to goal achievement Ongoing requests for feedback and coaching Communication with supervisor Collecting and sharing performance data Preparing for performance reviews Prentice Hall, Inc. © 2006
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Performance Execution: Manager Responsibilities
Observation and documentation Updates Feedback Resources Reinforcement Prentice Hall, Inc. © 2006
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Performance Assessment
Manager assessment Self-assessment Other sources (e.g., peers, customers, etc.) Prentice Hall, Inc. © 2006
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Multiple Assessments Are Necessary
Increase employee ownership Increase commitment Provide information Ensure mutual understanding Prentice Hall, Inc. © 2006
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Performance Review Overview of Appraisal Meeting
Past Behaviors and results Present Compensation to be received Future New goals and development plans Prentice Hall, Inc. © 2006
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Six Steps for Conducting Productive Performance Reviews
Identify what the employee has done well and poorly Solicit feedback Discuss the implications of changing behaviors Prentice Hall, Inc. © 2006
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Six Steps for Conducting Productive Performance Reviews
Explain how skills used in past achievements can help overcome any performance problems Agree on an action plan Set a follow-up meeting and agree on behaviors, actions, attitudes to be evaluated Prentice Hall, Inc. © 2006
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Performance Renewal and Recontracting
Same as/different from Performance Planning Uses insights and information from previous phases Cycle begins again Prentice Hall, Inc. © 2006
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Performance Management Process Summary: Key Points
Ongoing process Each component is important If one is implemented poorly, whole system suffers Links between components must be clear Prentice Hall, Inc. © 2006
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Chapter 3 Prentice Hall, Inc. © 2006
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Performance Management and Strategic Planning: Overview
Definition and Purposes of Strategic Planning Linking Performance Management to the Strategic Plan Strategic Planning Developing Strategic Plans at the Unit Level Job Descriptions Individual and Team Performance Building Support Prentice Hall, Inc. © 2006
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Strategic Planning: Definition
Process Describe organization’s destination Assess barriers Select approaches for moving forward Prentice Hall, Inc. © 2006
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Strategic Planning: Goal
Allocate resources to provide organization with competitive advantage Prentice Hall, Inc. © 2006
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Strategic Planning: Purposes
Help define the organization’s identity Help organization prepare for the future Enhance ability to adapt to environmental change Provide focus and allow for better allocation of resources (continued on next slide) Prentice Hall, Inc. © 2006
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Strategic Planning: Purposes
Produce an organizational culture of cooperation Allow for the consideration of new options and opportunities Provide employees with information to direct daily activities Prentice Hall, Inc. © 2006
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Strategic Planning : Overview
Environmental Analysis Mission Vision Goals Strategies Prentice Hall, Inc. © 2006
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Environmental Analysis
Identifies external and internal trends To understand broad industry issues To make decisions using “big picture” context Prentice Hall, Inc. © 2006
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External trends Opportunities: Threats:
environmental characteristics that can help the organization succeed Threats: environmental characteristics that can prevent the organization from being successful Prentice Hall, Inc. © 2006
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External trends – Factors to Consider
Economic Political/legal Social Technological Competitors Customers Suppliers Prentice Hall, Inc. © 2006
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Internal trends Strengths: Weaknesses:
internal characteristics that the organization can use for its advantage Weaknesses: internal characteristics that can hinder the success of the organization Prentice Hall, Inc. © 2006
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Internal trends – Factors to Consider
Organizational structure Organizational culture Politics Processes Size Prentice Hall, Inc. © 2006
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Gap Analysis Analyzes: External environment Internal environment
(opportunities and threats) vis-à-vis Internal environment (strengths and weaknesses) Prentice Hall, Inc. © 2006
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Gap analysis determines:
Opportunity + Strength = Leverage Opportunity + Weakness = Constraint Threat + Strength = Vulnerability Threat + Weakness = Problem Prentice Hall, Inc. © 2006
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Strategic Planning for the Organization
Environmental and Gap Analyses provide information for organizations to decide: Who they are What they do Prentice Hall, Inc. © 2006
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Mission A good mission statement answers:
Why does the organization exist? What is the scope of the organization’s activities? Who are the customers served? What are the products or services offered? Prentice Hall, Inc. © 2006
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Mission Statement contains:
A. Information on organization’s Basic product/service to be offered Primary market/customer groups Unique benefits and advantages of product/services Technology to be used Concern for survival through growth and profitability Prentice Hall, Inc. © 2006
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Mission Statement may contain:
B. Information on organization’s values and beliefs Managerial philosophy Public image sought by organization Self-concept of business adopted by Employees Stockholders Prentice Hall, Inc. © 2006
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Vision Statement of future aspirations
Focuses attention on what is important Provides context for evaluating Opportunities Threats Prentice Hall, Inc. © 2006
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A Good Vision Statement is:
Brief Verifiable Bound by a Timeline Current Focused Understandable Inspiring A stretch Prentice Hall, Inc. © 2006
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Purposes for Setting Goals
Formalize expected achievements Provide motivation Provide tangible targets Provide basis for good decisions Provide basis for performance measurement Prentice Hall, Inc. © 2006
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Strategies Create strategies or Game Plans or “How to” procedures to address issues of: Growth Survival Turnaround Stability Innovation Leadership Prentice Hall, Inc. © 2006
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How the HR Function contributes:
Communicate knowledge of strategic plan Provide knowledge of KSAs needed for strategy implementation Propose reward systems Prentice Hall, Inc. © 2006
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Strategic Plans at the Unit Level
Organization Mission statement, Vision statement, Goals, and Strategies Must clearly align with And be congruent with Every Unit Mission statement, Vision statement, Goals, and Strategies Prentice Hall, Inc. © 2006
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Alignment of Strategic Plan with Performance
Organization’s Strategic Plan Mission, Vision, Goals, Strategies Critical to involve all levels of management Unit’s Strategic Plan Mission, Vision, Goals, Strategies Job Description Tasks, KSAs Critical to involve all employees Individual and Team Performance Results, Behaviors, Developmental Plan Prentice Hall, Inc. © 2006
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Job Descriptions Tasks and KSAs are congruent with Organization and Unit strategic plans Activities described support mission and vision of Organization and Unit Prentice Hall, Inc. © 2006
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Individual and Team Performance
Organization and Unit mission, vision, goals lead to Performance management system, which Motivates employees Aligns development plans with organization priorities Prentice Hall, Inc. © 2006
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Strategic Plan Choices in PM System Design
Criteria (Behavior vs. Results) Participation (Low vs. High) Temporal Dimension (Short Term vs. Long Term) Level of Criteria (Individual vs. Team/Group) System Orientation (Developmental vs. Administrative) Rewards (Pay for Performance vs. Tenure/Position) Prentice Hall, Inc. © 2006
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Building Support – Answering “What’s In It for Me?”
Top Management: Help carry out vision All levels: Involvement Participation Understanding Prentice Hall, Inc. © 2006
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Chapter 4 Prentice Hall, Inc. © 2006
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Defining Performance and Choosing a Measurement Approach: Overview
Determinants of Performance Performance Dimensions Approaches to Measuring Performance Prentice Hall, Inc. © 2006
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Defining Performance Performance is: Behavior What employees do
Prentice Hall, Inc. © 2006
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Defining Performance Performance is NOT: Results or Outcomes
What employees produce Prentice Hall, Inc. © 2006
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Behaviors labeled as Performance are:
Evaluative Negative Neutral Positive Multidimensional Many different kinds of behaviors Advance or hinder organizational goals Prentice Hall, Inc. © 2006
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Behaviors are Not always
Observable Measurable Prentice Hall, Inc. © 2006
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Results/Consequences may be used
To infer behavior As proxy for behavioral measure Prentice Hall, Inc. © 2006
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Determinants of Performance
Declarative Knowledge X Procedural Knowledge Motivation Prentice Hall, Inc. © 2006
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A. Declarative Knowledge
Information about Facts Labels Principles Goals Understanding of task requirements Prentice Hall, Inc. © 2006
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B. Procedural Knowledge
Knowing What to do How to do it Skills Cognitive Physical Perceptual Motor Interpersonal Prentice Hall, Inc. © 2006
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C. Motivation Choices Expenditure of effort Level of effort
Persistence of effort Prentice Hall, Inc. © 2006
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Implications for Addressing Performance Problems
Managers need information to accurately identify source(s) of performance problems Performance management systems must Measure performance AND Provide information on SOURCE(s) of problems Prentice Hall, Inc. © 2006
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Factors Influencing Determinants of Performance:
Individual characteristics Procedural knowledge Declarative knowledge Motivation HR practices Work environment Prentice Hall, Inc. © 2006
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Performance Dimensions: Types of multi-dimensional behaviors:
Task performance Contextual performance Pro-social behaviors Organizational citizenship Prentice Hall, Inc. © 2006
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Task performance Activities that transform raw materials
help with the transformation process Replenishing Distributing Supporting Prentice Hall, Inc. © 2006
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Contextual performance
Behaviors that contribute to organization’s effectiveness and provide a good environment in which task performance can occur Prentice Hall, Inc. © 2006
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Differences Between Task and Contextual Performance
Task Performance Varies across jobs Likely to be role prescribed Influenced by Abilities Skills Contextual Performance Fairly similar across jobs Not likely to be role prescribed Influenced by Personality Prentice Hall, Inc. © 2006
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Why Include Task & Contextual Performance Dimensions in PM system?
Global competition Teamwork Customer service Supervisor views Prentice Hall, Inc. © 2006
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Job Performance in Context
That produce various results A performer (individual or team) Engages in certain behaviors In a given situation TRAIT BEHAVIOR RESULTS Prentice Hall, Inc. © 2006
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Approaches to Measuring Performance
Trait Approach Emphasizes individual traits of employees Behavior Approach Emphasizes how employees do the job Results Approach Emphasizes what employees produce Prentice Hall, Inc. © 2006
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Trait Approach Emphasis on individual Evaluate stable traits
Cognitive abilities Personality Based on relationship between traits & performance Prentice Hall, Inc. © 2006
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Trait Approach (continued)
Appropriate if Structural changes planned for organization Disadvantages Improvement not under individual’s control Trait may not lead to Desired behaviors or Desired results Prentice Hall, Inc. © 2006
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Behavior Approach Appropriate if Not appropriate if
Employees take a long time to achieve desired outcomes Link between behaviors and results is not obvious Outcomes occur in the distant future Poor results are due to causes beyond the performer’s control Not appropriate if above conditions are not present Prentice Hall, Inc. © 2006
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Results Approach Advantages: Less time Lower cost
Data appear objective Prentice Hall, Inc. © 2006
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Results Approach (continued)
Most appropriate when: Workers skilled in necessary behaviors Behaviors and results obviously related Consistent improvement in results over time Many ways to do the job right Prentice Hall, Inc. © 2006
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Chapter 5 Prentice Hall, Inc. © 2006
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Defining Performance and Choosing a Measurement Approach: Overview
Determinants of Performance Performance Dimensions Approaches to Measuring Performance Prentice Hall, Inc. © 2006
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Defining Performance Performance is: Behavior What employees do
Prentice Hall, Inc. © 2006
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Defining Performance Performance is NOT: Results or Outcomes
What employees produce Prentice Hall, Inc. © 2006
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Behaviors labeled as Performance are:
Evaluative Negative Neutral Positive Multidimensional Many different kinds of behaviors Advance or hinder organizational goals Prentice Hall, Inc. © 2006
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Behaviors are Not always
Observable Measurable Prentice Hall, Inc. © 2006
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Results/Consequences may be used
To infer behavior As proxy for behavioral measure Prentice Hall, Inc. © 2006
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Determinants of Performance
Declarative Knowledge X Procedural Knowledge Motivation Prentice Hall, Inc. © 2006
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A. Declarative Knowledge
Information about Facts Labels Principles Goals Understanding of task requirements Prentice Hall, Inc. © 2006
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B. Procedural Knowledge
Knowing What to do How to do it Skills Cognitive Physical Perceptual Motor Interpersonal Prentice Hall, Inc. © 2006
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C. Motivation Choices Expenditure of effort Level of effort
Persistence of effort Prentice Hall, Inc. © 2006
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Implications for Addressing Performance Problems
Managers need information to accurately identify source(s) of performance problems Performance management systems must Measure performance AND Provide information on SOURCE(s) of problems Prentice Hall, Inc. © 2006
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Factors Influencing Determinants of Performance:
Individual characteristics Procedural knowledge Declarative knowledge Motivation HR practices Work environment Prentice Hall, Inc. © 2006
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Performance Dimensions: Types of multi-dimensional behaviors:
Task performance Contextual performance Pro-social behaviors Organizational citizenship Prentice Hall, Inc. © 2006
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Task performance Activities that transform raw materials
help with the transformation process Replenishing Distributing Supporting Prentice Hall, Inc. © 2006
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Contextual performance
Behaviors that contribute to organization’s effectiveness and provide a good environment in which task performance can occur Prentice Hall, Inc. © 2006
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Differences Between Task and Contextual Performance
Task Performance Varies across jobs Likely to be role prescribed Influenced by Abilities Skills Contextual Performance Fairly similar across jobs Not likely to be role prescribed Influenced by Personality Prentice Hall, Inc. © 2006
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Why Include Task & Contextual Performance Dimensions in PM system?
Global competition Teamwork Customer service Supervisor views Prentice Hall, Inc. © 2006
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Job Performance in Context
That produce various results A performer (individual or team) Engages in certain behaviors In a given situation TRAIT BEHAVIOR RESULTS Prentice Hall, Inc. © 2006
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Approaches to Measuring Performance
Trait Approach Emphasizes individual traits of employees Behavior Approach Emphasizes how employees do the job Results Approach Emphasizes what employees produce Prentice Hall, Inc. © 2006
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Trait Approach Emphasis on individual Evaluate stable traits
Cognitive abilities Personality Based on relationship between traits & performance Prentice Hall, Inc. © 2006
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Trait Approach (continued)
Appropriate if Structural changes planned for organization Disadvantages Improvement not under individual’s control Trait may not lead to Desired behaviors or Desired results Prentice Hall, Inc. © 2006
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Behavior Approach Appropriate if Not appropriate if
Employees take a long time to achieve desired outcomes Link between behaviors and results is not obvious Outcomes occur in the distant future Poor results are due to causes beyond the performer’s control Not appropriate if above conditions are not present Prentice Hall, Inc. © 2006
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Results Approach Advantages: Less time Lower cost
Data appear objective Prentice Hall, Inc. © 2006
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Results Approach (continued)
Most appropriate when: Workers skilled in necessary behaviors Behaviors and results obviously related Consistent improvement in results over time Many ways to do the job right Prentice Hall, Inc. © 2006
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Chapter 6 Prentice Hall, Inc. © 2006
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Gathering Performance Information: Overview
Appraisal Forms Characteristics of Appraisal Forms Determining Overall Rating Appraisal Period and Number of Meetings Who Should Provide Performance Information? A Model of Rater Motivation Preventing Rating Distortion through Rater Training Programs Prentice Hall, Inc. © 2006
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Major Components of Appraisal Forms (1)
Basic Employee Information Accountabilities, Objectives, and Standards Competencies and Indicators Major Achievements and Contributions Stakeholder Input Employee Comments Signatures Prentice Hall, Inc. © 2006
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Major Components of Appraisal Forms (2) (could be included in a separate form)
Developmental Achievements Developmental Needs Plans Goals Prentice Hall, Inc. © 2006
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Desirable Features for All Appraisal Forms
Simplicity Relevancy Descriptiveness Adaptability Comprehensiveness Definitional Clarity Communication Time Orientation Prentice Hall, Inc. © 2006
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Determining Overall Rating
Judgmental strategy Mechanical strategy Prentice Hall, Inc. © 2006
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Appraisal period Number of Meetings Annual Semi-annual Quarterly
Prentice Hall, Inc. © 2006
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When Review Is Completed
Anniversary date Supervisor doesn’t have to fill out forms at same time Can’t tie rewards to fiscal year Fiscal year Rewards tied to fiscal year Goals tied to corporate goals May be burden to supervisor, depending on implementation Prentice Hall, Inc. © 2006
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6 Types of Formal Meetings (can be combined)
System Inauguration Self-Appraisal Classical Performance Review Merit/Salary Review Development Plan Objective Setting Prentice Hall, Inc. © 2006
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Who Should Provide Performance Information?
Employees should be involved in selecting Which sources evaluate Which performance dimensions When employees are actively involved Higher acceptance of results Perception that system is fair Prentice Hall, Inc. © 2006
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Who Should Provide Performance Information?
Direct knowledge of employee performance Supervisors Peers Subordinates Self Customers Prentice Hall, Inc. © 2006
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Supervisors Advantages Disadvantages
Best position to evaluate performance vs. strategic goals Make decisions about rewards Disadvantages Supervisor may not be able to directly observe performance Evaluations may be biased Prentice Hall, Inc. © 2006
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Peers Advantages Disadvantages Assess teamwork
Possible friendship bias May be less discriminating Prentice Hall, Inc. © 2006
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Subordinates Advantages Disadvantages
Accurate when used for developmental purposes Good position to assess some competencies Disadvantages Inflated when used for administrative purposes May fear retaliation (confidentiality is key) Prentice Hall, Inc. © 2006
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Self Advantages Disadvantages Increased acceptance of decisions
Decreased defensiveness during appraisal interview Good position to track activities during review period Disadvantages May be more lenient and biased Prentice Hall, Inc. © 2006
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Customers (external and internal)
Advantages Employees become more focused on meeting customer expectations Disadvantages Time Money Prentice Hall, Inc. © 2006
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Disagreement Across Sources
Expect disagreement Ensure employee receives feedback by source Assign differential weights to scores by source, depending on importance Prentice Hall, Inc. © 2006
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Types of Rating Errors Intentional errors Unintentional errors
Rating inflation Rating deflation Unintentional errors Due to complexity of task Prentice Hall, Inc. © 2006
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A Model of Rater Motivation
Expected Positive and Negative Consequences of Rating Accuracy Motivation to Provide Accurate Ratings Probability of Experiencing Positive & Negative Consequences Rating Behavior Expected Positive and Negative Consequences of Rating Distortion Motivation to Distort Ratings Probability of Experiencing Positive & Negative Consequences
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Motivations for Rating Inflation
Maximize merit raise/rewards Encourage employees Avoid creating written record Avoid confrontation with employees Promote undesired employees out of unit Make manager look good to his/her supervisor Prentice Hall, Inc. © 2006
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Motivations for Rating Deflation
Shock employees Teach a lesson Send a message to employee Build a written record of poor performance Prentice Hall, Inc. © 2006
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Prevent Rating Distortion through Rater Training Programs
Prentice Hall, Inc. © 2006
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Rater Training Programs should cover:
Information Motivation Identifying, observing, recording and evaluating performance How to interact with employees when they receive performance information Prentice Hall, Inc. © 2006
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Information - how the system works
Reasons for implementing the performance management system Information on the appraisal form and system mechanics Prentice Hall, Inc. © 2006
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Motivation – What’s in it for me?
Benefits of providing accurate ratings Tools for providing accurate ratings Prentice Hall, Inc. © 2006
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Identifying, observing, recording, and evaluating performance
How to identify and rank job activities How to observe, record, measure performance How to minimize rating errors Prentice Hall, Inc. © 2006
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How to interact with employees when they receive performance information
How to conduct an appraisal interview How to train, counsel, and coach Prentice Hall, Inc. © 2006
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Chapter 7 Prentice Hall, Inc. © 2006
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Implementing a Performance Management System: Overview
Preparation Communication Plan Appeals Process Training Programs Pilot Testing Ongoing Monitoring and Evaluation Prentice Hall, Inc. © 2006
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Preparation Need to gain system buy-in through:
Communication plan regarding Performance Management system Including appeals process Training programs for raters Pilot testing system Ongoing monitoring and evaluation Prentice Hall, Inc. © 2006
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Communication Plan answers:
What is Performance Management (PM)? How does PM fit in our strategy? What’s in it for me? How does it work? What are our roles and responsibilities? How does PM relate to other initiatives? Prentice Hall, Inc. © 2006
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Cognitive Biases that affect communications effectiveness
Selective exposure Selective perception Selective retention Prentice Hall, Inc. © 2006
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To minimize effects of cognitive biases:
A. Consider employees: Involve employees in system design Show how employee needs are met Prentice Hall, Inc. © 2006
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To minimize effects of cognitive biases:
B. Emphasize the positive Use credible communicators Strike first – create positive attitude Provide facts and conclusions Prentice Hall, Inc. © 2006
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To minimize effects of cognitive biases:
C. Repeat, document, be consistent Put it in writing Use multiple channels of communication Say it, and then – say it again Prentice Hall, Inc. © 2006
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Appeals Process Promote Employee buy-in to PM system
Amicable/Non-retaliatory Resolution of disagreements Prentice Hall, Inc. © 2006
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Appeals Process Employees can question two types of issue: Judgmental
(validity of evaluation) Administrative (whether policies and procedures were followed) Prentice Hall, Inc. © 2006
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Appeals Process Level 1 Level 2 HR reviews facts, policies, procedures
HR reports to supervisor/employee HR attempts to negotiate settlement Level 2 Arbitrator (panel of peers and managers) and/or High-level manager – final decision Prentice Hall, Inc. © 2006
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Rater Training Programs
Content Areas to include Information Identifying, Observing, Recording, Evaluating How to Interact with Employees Choices of Training Programs to implement RET FOR BO SL Prentice Hall, Inc. © 2006
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Content A. Information - how the system works
Reasons for implementing the performance management system Information the appraisal form system mechanics Prentice Hall, Inc. © 2006
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Content B. Identifying, observing, recording, and evaluating performance How to identify and rank job activities How to observe, record, and measure performance How to minimize rating errors Prentice Hall, Inc. © 2006
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Content C. How to interact with employees when they receive performance information How to conduct an appraisal interview How to train, counsel, and coach Prentice Hall, Inc. © 2006
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Choices of Training Programs
Rater Error Training (RET) Frame of Reference Training (FOR) Behavioral Observation Training (BO) Self-leadership Training (SL) Prentice Hall, Inc. © 2006
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Rater Error Training (RET)
Goals of Rater Error Training (RET) Make raters aware of types of rating errors Help raters minimize errors Increase rating accuracy Prentice Hall, Inc. © 2006
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Intentional rating errors
Leniency (inflation) Severity (deflation) Central tendency Prentice Hall, Inc. © 2006
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Unintentional rating errors
Similar to Me Halo Primacy First impression Contrast Stereotype Negativity Recency Spillover Prentice Hall, Inc. © 2006
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Possible Solutions for Types of Rating Errors
Intentional Focus on motivation Demonstrate benefits of providing accurate ratings Unintentional Alert raters to different errors and their causes Prentice Hall, Inc. © 2006
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Frame of Reference Training (FOR)
Goal of Frame of Reference Training (FOR)* Raters develop common frame of reference Observing performance Evaluating performance *Most appropriate when PM appraisal system focuses on behaviors Prentice Hall, Inc. © 2006
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Expected Results of Frame of Reference Training (FOR)
Raters provide consistent, more accurate ratings Raters help employees design effective development plans Prentice Hall, Inc. © 2006
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Behavioral Observation Training (BO)
Goals of Behavioral Observation Training (BO) Minimize unintentional rating errors Improve rater skills by focusing on how raters: Observe performance Store information about performance Recall information about performance Use information about performance Prentice Hall, Inc. © 2006
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Self-leadership Training (SL)
Goals of Self-leadership Training (SL) Improve rater confidence in ability to manage performance Enhance mental processes Increase self-efficacy Prentice Hall, Inc. © 2006
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Pilot Testing Provides ability to Discover potential problems Fix them
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Pilot Testing - benefits
Gain information from potential participants Learn about difficulties/obstacles Collect recommendations on how to improve Understand personal reactions Get early buy-in Get higher rate of acceptance Prentice Hall, Inc. © 2006
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Implementing a Pilot Test
Roll out test version with sample group Staff and jobs generalizable to organization Fully implement planned system All participants keep records of issues encountered Do not record appraisal scores Collect input from all participants Prentice Hall, Inc. © 2006
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Ongoing Monitoring and Evaluation
When system is implemented, decide: How to evaluate system effectiveness How to measure implementation How to measure results Prentice Hall, Inc. © 2006
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Evaluation data to collect:
Reactions to the system Assessments of requirements Operational Technical Effectiveness of performance ratings Prentice Hall, Inc. © 2006
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Indicators to consider
Number of individuals evaluated Distribution of performance ratings Quality of information Quality of performance discussion meetings System satisfaction Cost/benefit ratio Unit-level and organization-level performance Prentice Hall, Inc. © 2006
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Chapter 8 Prentice Hall, Inc. © 2006
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Performance Management and Employee Development: Overview
Personal Developmental Plans Direct Supervisor’s Role 360-degree Feedback Systems Prentice Hall, Inc. © 2006
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Stakeholders in the Development Process
Employees Help plan their own development Improve their own performance Managers Help guide the process of development Support success of process Prentice Hall, Inc. © 2006
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Personal Developmental Plans
Specify actions necessary to improve performance Highlight employee’s Strengths Areas in need of development Prentice Hall, Inc. © 2006
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Personal Developmental Plans answer:
How can I continuously learn and grow in the next year? How can I do better in the future? How can I avoid performance problems of the past? Prentice Hall, Inc. © 2006
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Personal Developmental Plans: Overview
Developmental Plan Objectives Content of Developmental Plan Developmental Activities Prentice Hall, Inc. © 2006
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Overall Developmental Plan Objectives
Encourage: Continuous learning Performance improvement Personal growth Prentice Hall, Inc. © 2006
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Specific Developmental Plan Objectives
Improve performance in current job Sustain performance in current job Prepare employee for advancement Enrich employee’s work experience Prentice Hall, Inc. © 2006
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Content of Developmental Plan
Developmental objectives New skills or knowledge Timeline How the new skills or knowledge will be acquired Resources Strategies Standards and measures used to assess achievement of objectives Prentice Hall, Inc. © 2006
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Content of Developmental Plan
Based on needs of organization and employee Chosen by employee and direct supervisor Taking into account Employee’s learning preferences Developmental objective in question Organization’s available resources Prentice Hall, Inc. © 2006
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Developmental Activities ‘On the job’
On-the-job-training Mentoring Job rotation Temporary assignments Prentice Hall, Inc. © 2006
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Developmental Activities In addition to ‘on the job’
Courses Self-guided reading Getting a degree Attending a conference Membership or leadership role in professional or trade organization Prentice Hall, Inc. © 2006
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Direct Supervisor’s Role:
Explain what is necessary Refer employee to appropriate developmental activities Review & make suggestions regarding developmental objectives Prentice Hall, Inc. © 2006
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Direct Supervisor’s Role (ongoing):
Check on employee’s progress Provide motivational reinforcement Prentice Hall, Inc. © 2006
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360-degree Feedback Systems
Tools to help employees Improve performance by using Performance information Gathered from many sources Superiors Peers Customers Subordinates The employee Prentice Hall, Inc. © 2006
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360-degree Feedback Systems
Anonymous feedback Most useful when used For DEVELOPMENT NOT for administrative purposes Internet used for collecting data Prentice Hall, Inc. © 2006
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Necessary organizational norms include:
Cooperation Openness and trust Input and participation valued Fairness Prentice Hall, Inc. © 2006
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Overview of 360-degree Feedback Systems
Advantages of 360-degree Feedback Systems Risks of 360-degree Feedback Systems Characteristics of a Good 360-degree Feedback System Prentice Hall, Inc. © 2006
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Advantages of 360-degree Feedback Systems
Decreased possibility of biases Increased awareness of expectations Increased commitment to improve Improved self-perception of performance Improved performance Reduction of ‘undiscussables’ Increased employee control of their own careers Prentice Hall, Inc. © 2006
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Risks of 360-degree Feedback Systems
Unconstructive negative feedback hurts. Are individuals comfortable with the system? User acceptance is crucial. If few raters, anonymity is compromised. Raters may become overloaded. Stock values may drop. Prentice Hall, Inc. © 2006
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Characteristics of a Good 360-degree Feedback System
Anonymity Observation of employee performance Avoidance of survey fatigue Raters are trained Used for developmental purposes only Emphasis on behaviors Raters go beyond ratings Feedback interpretation Follow-up Prentice Hall, Inc. © 2006
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Chapter 9 Prentice Hall, Inc. © 2006
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Performance Management Skills: Overview
Coaching Coaching Styles Coaching Process Performance Review Meetings Prentice Hall, Inc. © 2006
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Collaborative ongoing process
Coaching: Definition Manager Interacts with employee and Takes active role and interest in performance Collaborative ongoing process Directing employee behavior Motivating employee behavior Rewarding employee behavior Concerned with long-term performance Prentice Hall, Inc. © 2006
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Major Coaching Functions:
Give advice Provide guidance Provide support Give confidence Promote greater competence Prentice Hall, Inc. © 2006
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Key Coaching Behaviors
Establish developmental objectives Communicate effectively Motivate employees Document performance Give feedback Diagnose performance problems Develop employees Prentice Hall, Inc. © 2006
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The Good Coach Questionnaire
Do you listen to your employees? Do you understand their individual needs? Do you encourage employees to express their feelings openly? Do you give tangible and intangible support for development? Do your employees know your expectations about their performance? Prentice Hall, Inc. © 2006
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The Good Coach Questionnaire (continued)
Do you encourage open and honest discussions and problem solving? Do you help your employees create action plans that will Solve problems? Create changes? Do you help your employees explore potential areas of Growth? Development? Prentice Hall, Inc. © 2006
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Coaching Styles Driver Analyzer Persuader Amiable More Assertive
Less assertive Task & Fact oriented Driver Analyzer People oriented Persuader Amiable Prentice Hall, Inc. © 2006
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Adaptive coaches use all styles according to employee needs:
Sometimes providing direction Sometimes persuading Sometimes showing empathy Sometimes paying close attention to rules and established procedures Prentice Hall, Inc. © 2006
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Coaching Process Identify Developmental Resources & Strategies
Set Developmental Goals Implement strategies Give Feedback Observe and Document Developmental Behavior Prentice Hall, Inc. © 2006
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Coaching Process: Steps covered in Chapter 8
Set Developmental Goals Identify Resources and Strategies Needed to Implement Developmental Goals Implement Developmental Goals Prentice Hall, Inc. © 2006
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Coaching Process: Overview of remaining steps
Observe and Document Developmental Behavior and Outcomes Give Feedback Praise Negative Feedback Prentice Hall, Inc. © 2006
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Observe and Document Developmental Behavior and Outcomes
Constraints: Time Situation Activity Prentice Hall, Inc. © 2006
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Organizational Activities to improve documentation of performance
Good communication plan to get manager buy-in Training programs Rater error training Frame-of-reference training Behavioral observation training Self-leadership training Prentice Hall, Inc. © 2006
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Reasons to document performance
Minimize cognitive load Create trust Plan for the future Legal protection Prentice Hall, Inc. © 2006
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Recommendations for Documentation
Be specific Use adjectives and adverbs sparingly Balance positives with negatives Focus on job-related information Be comprehensive Standardize procedures Describe observable behavior Prentice Hall, Inc. © 2006
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Giving Feedback Main purposes: Help build confidence
Develop competence Enhance involvement Improve future performance Prentice Hall, Inc. © 2006
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Potential costs of failing to provide feedback:
Employees are deprived of chance to improve their own performance Chronic poor performance Employees have inaccurate perceptions of how their performance is regarded by others Prentice Hall, Inc. © 2006
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To be effective, feedback should:
Be timely Be frequent Be specific Be verifiable Be consistent (over time and across employees) Be given privately Provide context and consequences (continued next slide) Prentice Hall, Inc. © 2006
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To be effective, feedback should: (continued)
Describe first, evaluate second Cover the continuum of performance Identify patterns Demonstrate confidence in employee Allow for both advice and idea generation Prentice Hall, Inc. © 2006
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Guidelines for Giving Praise
Be sincere – only give praise when it is deserved Give praise about specific behaviors or results Take your time Be comfortable with act of praising Emphasize the positive Prentice Hall, Inc. © 2006
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Giving Negative Feedback
Managers avoid giving negative feedback due to: Negative reactions and consequences Negative experiences in the past Playing “god” Need for irrefutable and conclusive evidence Prentice Hall, Inc. © 2006
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Negative feedback is most useful when it:
Identifies warning signs and performance problem is still manageable Clarifies unwanted behaviors and consequences Focuses on behaviors that can be changed Comes from a credible source Is supported by data Prentice Hall, Inc. © 2006
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Feedback Sessions should always answer:
How is your job going? What can be done to make it better? Job Product Services How can you better serve your customers? Internal External Prentice Hall, Inc. © 2006
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Supervisory roles in managing performance
Judge Evaluate performance Allocate rewards Coach Help employee solve performance problems Identify performance weaknesses Design developmental plans Prentice Hall, Inc. © 2006
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Performance Review Formal Meetings
Possible types of formal meetings: System Inauguration Self-Appraisal Classical Performance Review Merit/Salary Review Developmental Plan Objective Setting Prentice Hall, Inc. © 2006
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Steps to take before meeting:
Give at least 2-weeks notice Block sufficient time Arrange to meet in a private location without interruptions Prentice Hall, Inc. © 2006
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Merged Performance Review Meeting Components
Explanation of meeting purpose Employee self-appraisal Supervisor & employee share rating and rationale Developmental discussion Employee summary Rewards discussion Follow-up meeting arrangement Approval and appeals process discussion Final recap Prentice Hall, Inc. © 2006
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Possible defensive behaviors of employees
Fight response Blaming others Staring at supervisor Raising voice Other aggressive responses Flight response Looking/turning away Speaking softly Continually changing the subject Quickly agreeing without basis Other passive responses Prentice Hall, Inc. © 2006
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To prevent/reduce defensive behaviors
Establish and maintain rapport Be empathetic Observe verbal and nonverbal cues Minimize threats Encourage participation Prentice Hall, Inc. © 2006
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When defensiveness is unavoidable:
Recognize it Allow its expression If situation becomes intolerable Reschedule the meeting for a later time Prentice Hall, Inc. © 2006
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Chapter 10 Prentice Hall, Inc. © 2006
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Reward Systems and Legal Issues Overview
Prentice Hall, Inc. © 2006
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Reward Systems: Overview
Traditional and Contingent Pay (CP) Plans Reasons for Introducing CP Plans Possible Problems Associated with CP Selecting a CP Plan Putting Pay in Context Pay Structures Prentice Hall, Inc. © 2006
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Traditional Pay Salary and salary increases are based on Position
Seniority Prentice Hall, Inc. © 2006
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Contingent Pay (CP) Salary and salary increases are based on
Job performance Also called: Pay for Performance If not added to base pay, called: Variable pay Prentice Hall, Inc. © 2006
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Reasons for Introducing CP
Performance management is more effective when rewards are tied to results CP Plans force organizations to: Clearly define effective performance Determine what factors are necessary CP plans help to recruit and retain top performers CP plans project good corporate image Prentice Hall, Inc. © 2006
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CP plans help improve motivation when:
Employees see clear link between their efforts and resulting performance (Expectancy) Employees see clear link between their performance level and rewards received (Instrumentality) Employees value the rewards available (Valence) motivation = expectancy x instrumentality x valence Prentice Hall, Inc. © 2006
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Possible Problems Associated with CP
Poor performance management system Rewarding counterproductive behavior Insignificant rewards The reward becomes the driver Extrinsic vs. intrinsic motivation Disproportionately large rewards for executives Prentice Hall, Inc. © 2006
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Selecting a CP Plan: Issues to consider
Culture of organization Strategic direction of organization Prentice Hall, Inc. © 2006
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A. Culture of organization: Types of organizations
Traditional Top-down decision making Vertical communication Jobs that are clearly defined Involvement Shared decision making Lateral communications Loosely defined roles Prentice Hall, Inc. © 2006
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CP systems for different organizational cultures:
Traditional organizations Piece rate Sales commissions Group incentives Involvement organizations Profit sharing Skill-based pay Prentice Hall, Inc. © 2006
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B: CP Plans to enhance Strategic Directions:
Employee development Skill based pay Customer service Competency based pay Gainsharing Overall Profit Executive pay Profit or stock sharing Productivity Individual Piece rate Sales commissions Group Gainsharing Group incentives Teamwork Team sales commissions Competency based pay Prentice Hall, Inc. © 2006
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Putting Pay in Context A reward increases the chance that
Specific behaviors and results will be repeated, or Employee will engage in new behavior and produce better results Prentice Hall, Inc. © 2006
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Rewards can include: Pay Recognition Time Trust & Respect Challenge
Public Private Status Time Trust & Respect Challenge Responsibility Freedom Relationships Prentice Hall, Inc. © 2006
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How to Make Rewards Work
Define and measure performance first and then allocate rewards Only use rewards that are available Make sure all employees are eligible Rewards should be both Financial Non-financial (continued) Prentice Hall, Inc. © 2006
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How to Make Rewards Work (continued)
Rewards should be: Visible Contingent Timely Reversible Prentice Hall, Inc. © 2006
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Pay Structures Job Evaluation Broad-banding Prentice Hall, Inc. © 2006
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Pay structures An organization’s pay structure Classifies jobs
Into categories Based on their relative worth Is designed by job evaluation methods Prentice Hall, Inc. © 2006
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Job evaluation Method of data collection Consideration of
Determine the worth of various jobs to Create a pay structure Consideration of KSAs required for each job Value of job for organization How much other organizations pay Prentice Hall, Inc. © 2006
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Types of job evaluation methods:
Ranking Classification Point Prentice Hall, Inc. © 2006
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Job evaluation methods: Ranking
Create job descriptions Compare job descriptions Rank jobs Prentice Hall, Inc. © 2006
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Advantages of using Ranking method
Requires little time Minimal effort needed for administration Prentice Hall, Inc. © 2006
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Disadvantages of using Ranking method
Criteria for ranking may not be clear: Distances between each rank may not be equal Prentice Hall, Inc. © 2006
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Job evaluation methods: Classification
A series of classes or grades are created Each job is placed within a job class Prentice Hall, Inc. © 2006
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Advantages of using Classification method
Jobs can be quickly slotted into structure Employees accept method because it seems valid Prentice Hall, Inc. © 2006
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Disadvantages of using Classification method
Requires extensive time and effort for administration Differences between classification levels may not be equal Prentice Hall, Inc. © 2006
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Job evaluation methods: Point method
Identify compensable factors (job characteristics) Scale factors (e.g. on a scale of 1 – 5) Assign a weight to each factor so the sum of the weights for all factors = 100% Prentice Hall, Inc. © 2006
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Advantages of using Point method
Establish worth of each job relative to all other jobs within organization Comprehensive measurement of relative worth of each job in organization Easy to rank jobs when total points are known for each job Prentice Hall, Inc. © 2006
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Disadvantages of using Point method
Requires extensive administrative Time Effort Prentice Hall, Inc. © 2006
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Does job evaluation method matter?
Fairness Evaluators Impartial Objective Prentice Hall, Inc. © 2006
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Compensation surveys Information on
Base pay All other types of compensation Conducted in-house or by consultants, such as: or Prentice Hall, Inc. © 2006
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Broad-banding: Pay structure collapses job classes into fewer categories Advantages: Provides flexibility in rewarding people Reflects changes in organization structure Provides better base for rewarding growth in competence Gives more responsibility for pay decisions to managers Provides better basis for rewarding career progression Prentice Hall, Inc. © 2006
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Reward Systems: Summary
Traditional and Contingent Pay (CP) Plans Reasons for Introducing CP Plans Possible Problems Associated with CP Selecting a CP Plan Putting Pay in Context Pay Structures Prentice Hall, Inc. © 2006
290
Legal Issues: Overview
Performance Management and the Law Some Legal Principles Affecting PM Laws Affecting PM Prentice Hall, Inc. © 2006
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Performance Management and the Law
Performance management systems are legally sound, if they are fair: Procedures are standardized Same procedures are used with all employees Prentice Hall, Inc. © 2006
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Some Legal Principles Affecting PM: Overview
Employment-at-will Negligence Defamation Misrepresentation Adverse Impact Illegal Discrimination Prentice Hall, Inc. © 2006
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Employment-at-will Employment relationship can be ended at any time by
Employer Employee Exceptions Implied contract Possible violation of legal rights Prentice Hall, Inc. © 2006
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Negligence If organization documents describe a system and
It is Not implemented as described, Employee can challenge evaluation, charging negligence Prentice Hall, Inc. © 2006
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Defamation Disclosure of performance information that is Untrue and
Unfavorable Prentice Hall, Inc. © 2006
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Misrepresentation Disclosure of performance information that is
Untrue and Favorable Prentice Hall, Inc. © 2006
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Adverse Impact / Unintentional Discrimination
PM system has unintentional impact on a protected class Organization must demonstrate: Specific KSA is a business requirement for the job All affected employees are evaluated in the same way Organization should review ongoing performance score data by protected class to implement corrective action as necessary Prentice Hall, Inc. © 2006
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Illegal Discrimination or Disparate Treatment
Raters assign different scores to employees based on factors that are NOT related to performance Employees receive different treatment as result of such ratings Employees can claim they were intentionally and illegally treated differently due to their status Prentice Hall, Inc. © 2006
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Employee claim of illegal discrimination:
Direct evidence of discrimination, or Evidence regarding the following: Membership in protected class Adverse employment decision Performance level deserved reward/different treatment How others were treated (not in protected class) Prentice Hall, Inc. © 2006
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Employer response to claim of illegal discrimination
Legitimate and non-discriminatory reason for action Related to performance Note: Good performance management system and subsequent performance-related decision, used consistently with all employees, provides defense Prentice Hall, Inc. © 2006
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Laws Affecting PM: During past few decades, several countries have passed laws prohibiting discrimination based on: Race or Ethnicity Sex Religion National Origin Age Disability status Sexual orientation Prentice Hall, Inc. © 2006
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Laws in the United Kingdom:
Equal Pay Act of 1970 Race Relations Act of 1976 Sex Discrimination Act of 1975 Disability Discrimination Act of 1995 Employment Equality (Sexual Orientation) Regulations 2003 Employment Equality (Religion or Belief) Regulations 2003 Prentice Hall, Inc. © 2006
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Laws in the United States of America
Equal Pay Act of 1963 Civil Rights Act of 1964 Age Discrimination in Employment Act of 1967 (as amended in 1986) Americans with Disabilities Act of 1990 Prentice Hall, Inc. © 2006
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Characteristics of Legally Sound PM Systems
Organization: The system is formally explained and communicated to all employees The system includes a formal appeals process Procedures are standardized and uniform for all employees within a job group The system includes procedures to detect potentially discriminatory effects or biases and abuses in the system Prentice Hall, Inc. © 2006
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Characteristics of Legally Sound PM Systems
Management Supervisors are provided with formal training and information on how to manage the performance of their employees Performance information is gathered from multiple, diverse, and unbiased raters The system includes thorough and consistent documentation including specific examples of performance based on first-hand knowledge Prentice Hall, Inc. © 2006
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Characteristics of Legally Sound PM Systems
Employees Performance dimensions and standards are: Clearly defined and explained to the employee, Job-related, and Within the control of the employee Employees are given Timely information on performance deficiencies and Opportunities to correct them Employees are given a voice in the review process and treated with courtesy and civility throughout the process Prentice Hall, Inc. © 2006
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Legal Issues: Summary Performance Management and the Law
Some Legal Principles Affecting PM Laws Affecting PM Prentice Hall, Inc. © 2006
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Chapter 11 Prentice Hall, Inc. © 2006
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Managing Team Performance: Overview
Definition and Importance of Teams Types of Teams and Implications for PM Purposes and Challenges of Team PM Including Team Performance in the PM System Rewarding Team Performance Prentice Hall, Inc. © 2006
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Definition of Team Two or more people Interact Share common and valued
Dynamically Independently Share common and valued Goal, Objective or Mission Prentice Hall, Inc. © 2006
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Importance of Teams Global pressures
Flexibility in flatter organizations Complexity of products and services Rapidly changing environments Prentice Hall, Inc. © 2006
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Performance Management & Teams
PM systems should target: Individual performance Individual’s contribution to team performance Performance of entire team Prentice Hall, Inc. © 2006
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General principles of PM relating to teams
Design and implement best possible system Consider dangers of poorly implemented system Prentice Hall, Inc. © 2006
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Managing for Improved Team Performance
Don’t limit team processes with other task or organizational requirements Provide good team design and organizational support Give feedback only on processes that the team members can control Prentice Hall, Inc. © 2006
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Types of Teams Classified by Complexity of task
Membership configuration Prentice Hall, Inc. © 2006
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Complexity of Task ranges from:
Routine Well defined Few deviations in how work is done Outcomes easily assessed - to - Non-routine Not defined well No clear specifications on how to do the work Outcomes are long term and difficult to assess Prentice Hall, Inc. © 2006
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Membership Configuration includes
Length of time team expects to work together Stability of team membership Static Dynamic Prentice Hall, Inc. © 2006
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Types of Teams Based on Membership Configuration and Task Complexity
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Types of Teams Work or Service Teams Project Teams Network Teams
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Work or Service Teams Intact Routine tasks Share similar skill sets
Prentice Hall, Inc. © 2006
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Project Teams Assembled for specific purpose
Tasks outside core product or service Members from different functional areas Prentice Hall, Inc. © 2006
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Network Teams Membership not constrained by Teams may include
Time or space Organizational boundaries Teams may include Temporary or full-time workers Customers Vendors Consultants Work is extremely non-routine Prentice Hall, Inc. © 2006
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Examples of PM Approaches by Type of Team
Work & Service Team Project Team Network Team Type of PM Approach Peer ratings Ongoing measurements Development of competencies Prentice Hall, Inc. © 2006
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Purposes of Team PM Traditional goals of any PM System
Specific to Team performance: Make all team members accountable Motivate all team members to have a stake in team performance Prentice Hall, Inc. © 2006
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Challenges of Team PM How do we assess relative individual contribution? How do we balance individual and team performance? How do we identify individual and team measures of performance? Prentice Hall, Inc. © 2006
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Including Team Performance in the PM System
Prerequisites Performance Planning Performance Execution Performance Assessment Performance Review Performance Renewal and Re-Contracting Prentice Hall, Inc. © 2006
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Performance Management Process
Prerequisites Performance Planning Performance Execution Performance Renewal and Re-contracting Performance Assessment Performance Review Prentice Hall, Inc. © 2006
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Prerequisites Knowledge of mission
Organization Team Knowledge of job to be performed by the team Prentice Hall, Inc. © 2006
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Performance Planning Results expected of the team
Behaviors expected of team members Developmental objectives to be achieved by team and its members Prentice Hall, Inc. © 2006
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Performance Execution
Team responsibilities Commit to goal achievement Seek feedback from Each other Supervisor Communicate openly & regularly Conduct regular & realistic peer-appraisals Prentice Hall, Inc. © 2006
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Performance Execution
Supervisor responsibilities Observe and document Team performance Relative contribution of team members Update team on any changes in goals of the organization Provide resources & reinforcement Prentice Hall, Inc. © 2006
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Performance Assessment
Types of Assessments Self-appraisals Peer evaluations Supervisor evaluation Outsider appraisals (if appropriate) Prentice Hall, Inc. © 2006
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Performance Assessment
Kinds of Performance to be Assessed Individual task performance Individual contextual performance Team performance Prentice Hall, Inc. © 2006
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Dimensions of Team Performance to assess:
Effectiveness Efficiency Learning and growth Team member satisfaction Prentice Hall, Inc. © 2006
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Performance Review Two meetings with supervisor or review board
Team meeting Individual meeting Emphasis on past, present and future Prentice Hall, Inc. © 2006
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Team meeting Discuss overall team Information comes from: Performance
Results Information comes from: Team members Other teams/outsiders Supervisor’s evaluation Prentice Hall, Inc. © 2006
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Individual meeting Discuss how individual behavior contributed to team performance Information comes from: Self-appraisal Peer ratings Supervisor’s evaluation Prentice Hall, Inc. © 2006
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Performance Renewal and Re-Contracting
Make adjustments to performance plan Include plan for individual performance as it affects team functioning Prentice Hall, Inc. © 2006
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Making Team-based Rewards Effective
All employees should be eligible Rewards should be Visible Contingent Reversible Avoid factors which cause reward systems to fail Consider variable pay systems (in addition to individual bonuses) Prentice Hall, Inc. © 2006
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