1. CHAPTER 8 MANAGING EMPLOYEES’ PERFORMANCE
Fundamentals of human resource management 5th edition By R.A. Noe, J.R. Hollenbeck, B. Gerhart, and P.M. Wright
CHAPTER 8 MANAGING EMPLOYEES’ PERFORMANCE

2. Introduction
Performance management: process through which managers ensure that employees’ activities and outputs contribute to the organization’s goals.
This process requires:
Knowing what activities and outputs are desired
Observing whether they occur
Providing feedback to help employees meet expectations

3. Purposes of Performance Management
Strategic Purpose - effective performance management helps the organization achieve its business objectives. Administrative Purpose –ways in which organizations use the system to provide information for day-to- day decisions about salary, benefits, and recognition programs. Developmental Purpose – serves as a basis for developing employees’ knowledge and skills.

4. Criteria for Effective Performance Management
Fit with strategy
Validity
Reliability
Acceptability
Specific feedback

5. Methods for Measuring Performance
Comparative
Attribute
Behavior
Results
Quality

6. Measuring Performance: Making Comparisons
Simple Ranking
Requires managers to rank employees in their group from the highest performer to the poorest performer.
Forced Distribution
Assigns a certain percentage of employees to each category in a set of categories.
Paired Comparison
Compares each employee with each other employee to establish rankings.

7. Sources of Performance Information
360-Degree Performance Appraisal: performance measurement that combines information from the employees’:
Managers
Peers
Subordinates
Self
Customers

8. Types of Performance Measurement Rating Errors
Contrast errors: rater compares an individual, not against an objective standard, but against other employees.
Distributional errors: rater tends to use only one part of a rating scale.
Leniency: the reviewer rates everyone near the top
Strictness: the rater favors lower rankings
Central tendency: the rater puts everyone near the middle of the scale

9. Types of Performance Measurement Rating Errors
Rater bias: raters often let their opinion of one quality color their opinion of others.
Halo error: when bias is in a favorable direction. This can mistakenly tell employees they don’t need to improve in any area.
Horns error: when bias involves negative ratings. This can cause employees to feel frustrated and defensive.

10. Political Behavior in Performance Appraisals
Distorting a performance evaluation to advance one’s personal goals
A technique to minimize appraisal politics is a calibration meeting:
Meeting at which managers discuss employee performance ratings and provide evidence supporting their ratings with the goal of eliminating influence of rating errors