1. Copyright  2003 McGraw-Hill Australia Pty Ltd. PPTs t/a Human Resource Management in Australia: Strategy-People-Performance by De Cieri & Kramar 1 Performance management Chapter 9

2. Copyright  2003 McGraw-Hill Australia Pty Ltd. PPTs t/a Human Resource Management in Australia: Strategy-People-Performance by De Cieri & Kramar 9-2 Performance management  Objectives ÙIdentify the major determinants of individual performance. ÙDiscuss the three general purposes of performance management. ÙIdentify the five criteria for effective performance management systems. ÙDiscuss the 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.

3. Copyright  2003 McGraw-Hill Australia Pty Ltd. PPTs t/a Human Resource Management in Australia: Strategy-People-Performance by De Cieri & Kramar 9-3 Performance management  Objectives (continued) ÙChoose the most effective approach to performance measurement for a given situation. ÙDiscuss the advantages and disadvantages of the different sources of performance information. ÙChoose the most effective source(s) for performance information for any situation. ÙDistinguish types of rating errors and explain how to minimise each in a performance evaluation. ÙIdentify the characteristics of a performance measurement system that follows legal guidelines. ÙConduct an effective performance feedback session.

4. Copyright  2003 McGraw-Hill Australia Pty Ltd. PPTs t/a Human Resource Management in Australia: Strategy-People-Performance by De Cieri & Kramar 9-4 Performance management  The means through which managers ensure that employees’ activities and outputs are congruent with the organisation’s goals.  Performance appraisal ÙThe process through which an organisation gets information on how well an employee is doing his or her job.  Performance feedback ÙThe process of providing employees with information regarding their performance effectiveness.

5. Copyright  2003 McGraw-Hill Australia Pty Ltd. PPTs t/a Human Resource Management in Australia: Strategy-People-Performance by De Cieri & Kramar 9-5 Figure 9.1 Model of performance management

6. Copyright  2003 McGraw-Hill Australia Pty Ltd. PPTs t/a Human Resource Management in Australia: Strategy-People-Performance by De Cieri & Kramar 9-6 Performance planning and evaluation (PPE)  Any system that seeks to tie the formal performance appraisal process to the company’s strategies by specifying at the beginning of the evaluation period the types and level of performance that must be accomplished in order to achieve the strategy.

7. Copyright  2003 McGraw-Hill Australia Pty Ltd. PPTs t/a Human Resource Management in Australia: Strategy-People-Performance by De Cieri & Kramar 9-7 Purposes of performance management  Strategic  Developmental  Administrative

8. Copyright  2003 McGraw-Hill Australia Pty Ltd. PPTs t/a Human Resource Management in Australia: Strategy-People-Performance by De Cieri & Kramar 9-8 Performance measures criteria  Strategic congruence ÙThe extent to which the performance management system elicits job performance that is consistent with the organisation’s strategy, goals, and culture. Üe.g.. the balanced score-card

9. Copyright  2003 McGraw-Hill Australia Pty Ltd. PPTs t/a Human Resource Management in Australia: Strategy-People-Performance by De Cieri & Kramar 9-9 Performance measures criteria  Validity ÙThe extent to which a performance measure assesses all the relevant—and only the relevant—aspects of job performance.

10. Copyright  2003 McGraw-Hill Australia Pty Ltd. PPTs t/a Human Resource Management in Australia: Strategy-People-Performance by De Cieri & Kramar 9-10 Figure 9.2 Contamination and deficiency of a job performance measure

11. Copyright  2003 McGraw-Hill Australia Pty Ltd. PPTs t/a Human Resource Management in Australia: Strategy-People-Performance by De Cieri & Kramar 9-11 Performance measures criteria  Reliability ÙThe consistency of a performance measure; the degree to which a performance measure is free from random error.

12. Copyright  2003 McGraw-Hill Australia Pty Ltd. PPTs t/a Human Resource Management in Australia: Strategy-People-Performance by De Cieri & Kramar 9-12 Performance measures criteria  Acceptability ÙThe extent to which a performance measure is deemed to be satisfactory or adequate by those who use it. Üprocedural fairness Üinterpersonal fairness Üoutcome fairness

13. Copyright  2003 McGraw-Hill Australia Pty Ltd. PPTs t/a Human Resource Management in Australia: Strategy-People-Performance by De Cieri & Kramar 9-13 Performance measures criteria  Specificity ÙThe extent to which a performance measure gives detailed guidance to employees about what is expected of them, and how they can meet these expectations.

14. Copyright  2003 McGraw-Hill Australia Pty Ltd. PPTs t/a Human Resource Management in Australia: Strategy-People-Performance by De Cieri & Kramar 9-14 Approaches to measuring performance  Comparative approach ÙRanking ÙForced distribution ÙPaired comparison

15. Copyright  2003 McGraw-Hill Australia Pty Ltd. PPTs t/a Human Resource Management in Australia: Strategy-People-Performance by De Cieri & Kramar 9-15 Approaches to measuring performance  Attribute approach ÙGraphic rating scales ÙMixed standard scales

16. Copyright  2003 McGraw-Hill Australia Pty Ltd. PPTs t/a Human Resource Management in Australia: Strategy-People-Performance by De Cieri & Kramar 9-16 Approaches to measuring performance  Behavioural approach ÙCritical incidents ÙBehaviourally anchored rating scales (BARS) ÙBehavioural observation scales (BOS) ÙOrganisational behaviour modification (OBM) ÙAssessment centres

17. Copyright  2003 McGraw-Hill Australia Pty Ltd. PPTs t/a Human Resource Management in Australia: Strategy-People-Performance by De Cieri & Kramar 9-17 Approaches to measuring performance  Results approach ÙManagement by objectives (MBO) ÙProductivity measurement and evaluation system (ProMES)

18. Copyright  2003 McGraw-Hill Australia Pty Ltd. PPTs t/a Human Resource Management in Australia: Strategy-People-Performance by De Cieri & Kramar 9-18 Approaches to measuring performance  Quality approach

19. Copyright  2003 McGraw-Hill Australia Pty Ltd. PPTs t/a Human Resource Management in Australia: Strategy-People-Performance by De Cieri & Kramar 9-19 Approaches to measuring performance  Means-based approach ÙCompetency models of assessment

20. Copyright  2003 McGraw-Hill Australia Pty Ltd. PPTs t/a Human Resource Management in Australia: Strategy-People-Performance by De Cieri & Kramar 9-20 Sources of performance information  Managers  Peers  Subordinates  Self  Customers

21. Copyright  2003 McGraw-Hill Australia Pty Ltd. PPTs t/a Human Resource Management in Australia: Strategy-People-Performance by De Cieri & Kramar 9-21

22. Copyright  2003 McGraw-Hill Australia Pty Ltd. PPTs t/a Human Resource Management in Australia: Strategy-People-Performance by De Cieri & Kramar 9-22 Rater errors in performance measurement  Similar to me  Contrast  Distributional errors  Halo and horn errors

23. Copyright  2003 McGraw-Hill Australia Pty Ltd. PPTs t/a Human Resource Management in Australia: Strategy-People-Performance by De Cieri & Kramar 9-23 Reducing rater errors  Rater error training  Rater accuracy training

24. Copyright  2003 McGraw-Hill Australia Pty Ltd. PPTs t/a Human Resource Management in Australia: Strategy-People-Performance by De Cieri & Kramar 9-24 Performance appraisal politics  A situation in which evaluators deliberately distort a rating to achieve personal or company goals.

25. Copyright  2003 McGraw-Hill Australia Pty Ltd. PPTs t/a Human Resource Management in Australia: Strategy-People-Performance by De Cieri & Kramar 9-25 To minimise appraisal politics  Ensure procedural, interpersonal and outcome fairness  Train raters  Ensure top management support for appraisal system  Customise performance objectives and criteria  Recognise employee accomplishments  Ensure constraints do not drive process  Ensure consistency of processes  Develop a climate of openness

26. Copyright  2003 McGraw-Hill Australia Pty Ltd. PPTs t/a Human Resource Management in Australia: Strategy-People-Performance by De Cieri & Kramar 9-26 Performance feedback  The process of providing employees with information regarding their performance effectiveness.

27. Copyright  2003 McGraw-Hill Australia Pty Ltd. PPTs t/a Human Resource Management in Australia: Strategy-People-Performance by De Cieri & Kramar 9-27 Characteristics of effective performance feedback process  Frequent feedback  Feedback context  Self-ratings  Participation in sessions  Recognise performance through praise  Focus on solving problems  Focus feedback on behaviour or results  Minimise criticism  Set goals and dates for review  Manage marginal performers

28. Copyright  2003 McGraw-Hill Australia Pty Ltd. PPTs t/a Human Resource Management in Australia: Strategy-People-Performance by De Cieri & Kramar 9-28 Managing the performance of teams  Senior management ÙProvide clear support ÙDemonstrate links to organisational vision and strategy  Reward teamwork  Allow time for team-building  Ensure team roles and goals are clear  Organisational climate of trust  Participation in decision-making

29. Copyright  2003 McGraw-Hill Australia Pty Ltd. PPTs t/a Human Resource Management in Australia: Strategy-People-Performance by De Cieri & Kramar 9-29 Legal issues for performance appraisal  Documentation for legal protection  Do not condone poor performance by inaction  Employer’s duty to the poor performer  Adequate warning before dismissal  Equal employment opportunity (EEO)  Termination

30. Copyright  2003 McGraw-Hill Australia Pty Ltd. PPTs t/a Human Resource Management in Australia: Strategy-People-Performance by De Cieri & Kramar 9-30 Technology and performance management  Electronic databases for performance information  Electronic monitoring of employees

31. Copyright  2003 McGraw-Hill Australia Pty Ltd. PPTs t/a Human Resource Management in Australia: Strategy-People-Performance by De Cieri & Kramar 9-31 Summary  Measuring and managing performance is a challenging enterprise, and one of the keys to gaining competitive advantage.  Performance management systems serve strategic, administrative and developmental purposes.  A performance measurement system should be evaluated against the five criteria.  Performance management approaches have different strengths and weaknesses.  Performance management system must be legally compliant.