1. 1 Copyright © 2007 by McGraw-Hill Ryerson. All rights reserved.Schwind 8th Canadian Edition. 8 E I G H T Performance Management C H A P T E R

2. 2 Copyright © 2007 by McGraw-Hill Ryerson. All rights reserved.Schwind 8th Canadian Edition Performance Management Performance objectives Performance goals Performance measurement Output measures

3. 3 Copyright © 2007 by McGraw-Hill Ryerson. All rights reserved.Schwind 8th Canadian Edition Uses of Performance Appraisal Performance improvement Compensation adjustments Placement decisions Training & development needs Career planning & development Identify deficiencies in staffing process Detect informational inaccuracies Diagnose job design errors Avoid discrimination External challenges

4. 4 Copyright © 2007 by McGraw-Hill Ryerson. All rights reserved.Schwind 8th Canadian Edition Key Elements EmployeeFeedback Employee Records & HR Decisions HumanPerformance Performance Measures & Criteria PerformanceAppraisalInterview

5. 5 Copyright © 2007 by McGraw-Hill Ryerson. All rights reserved.Schwind 8th Canadian Edition Appraisal Systems Job-related –System evaluates critical behaviours that constitute job success Practical –Understood and relatively simple Performance standards –Related to the desired results of each job Performance measures –Reports on critical behaviours

6. 6 Copyright © 2007 by McGraw-Hill Ryerson. All rights reserved.Schwind 8th Canadian Edition Performance Measures Indirect Objective Rater has only substitutes for performance (constructs) Verifiable by others Usually quantitative Subjective Not verifiable by others Rater’s personal opinions Direct Rater actually sees the employee’s performance

7. 7 Copyright © 2007 by McGraw-Hill Ryerson. All rights reserved.Schwind 8th Canadian Edition Rater Biases Raterbiases Haloeffect Error of centraltendency Leniency & strictness bias Recencyeffect Personalprejudice

8. 8 Copyright © 2007 by McGraw-Hill Ryerson. All rights reserved.Schwind 8th Canadian Edition Characteristics for Effectiveness EffectivePerformanceAppraisalSystem Validity Reliability Input into system development Acceptable standards Acceptable goals Control of standards more

9. 9 Copyright © 2007 by McGraw-Hill Ryerson. All rights reserved.Schwind 8th Canadian Edition Characteristics for Effectiveness (cont’d) EffectivePerformanceAppraisalSystem Frequency of feedback Rater training Ratee training Input into interview process Appraisal consequences Different sources (raters)

10. 10 Copyright © 2007 by McGraw-Hill Ryerson. All rights reserved.Schwind 8th Canadian Edition Past-Oriented: Noncomparative Criticalincident Behaviourallyanchored Rater records performance statements Describes very effective/ineffective behaviour Performance-related categories Looks at specific job-related factors Rating scale Oldest and most widely used method Subjective i.e. based on the rater’s opinion Responses may be given numerical values Appraisal based upon a test Test may be pen & pencil or demonstration Tests & observations

11. 11 Copyright © 2007 by McGraw-Hill Ryerson. All rights reserved.Schwind 8th Canadian Edition Past-Oriented: Comparative Forceddistributions Categories are developed Employees assigned to categories Ranking Employees ranked from best to worst Subject to halo and recency effects

12. 12 Copyright © 2007 by McGraw-Hill Ryerson. All rights reserved.Schwind 8th Canadian Edition Future-Oriented Methods Management- by-objectives Assessmentcentre Employee & supervisor jointly establish goals Employee is later evaluated on the objectives Usually used to evaluate future potential Multiple types of evaluation Usually used for high-potential managers Self- Appraisals Useful to further self-development Can be used with any evaluation approach

13. 13 Copyright © 2007 by McGraw-Hill Ryerson. All rights reserved.Schwind 8th Canadian Edition Recent Developments 360-degree appraisal –In line with the trend toward flatter organizations –Combination of perspectives e.g. peer, self, supervisor, subordinate Performance appraisal software –Data easily analyzed, stored, and retrieved Balanced scorecard –Combines performance measures of the total organization

14. 14 Copyright © 2007 by McGraw-Hill Ryerson. All rights reserved.Schwind 8th Canadian Edition Training Raters Rater’s handbook Focus on the ability of raters to make judgments –Attention –Categorization –Recall –Information integration

15. 15 Copyright © 2007 by McGraw-Hill Ryerson. All rights reserved.Schwind 8th Canadian Edition Evaluation Interviews Performance review sessions that give employees feedback about their past performance or future potential Interview should be a positive, performance-improving dialogue –Tell-and-sell –Tell-and-listen –Problem-solving approach

16. 16 Copyright © 2007 by McGraw-Hill Ryerson. All rights reserved.Schwind 8th Canadian Edition Effective Evaluation Interviews Emphasize positive aspects of employee performance Tell each employee the evaluation session is to improve performance not to discipline Conduct the performance review session in private without interruptions Review performance formally at least annually Make criticisms specific, not general and vague more

17. 17 Copyright © 2007 by McGraw-Hill Ryerson. All rights reserved.Schwind 8th Canadian Edition Effective Evaluation Interviews (cont’d) Focus criticisms on performance, not on personality Stay calm and do not argue with the person being evaluated Identify specific actions to improve performance Emphasize willingness to assist the employee’s efforts to improve performance End the evaluation by stressing positive aspects and reviewing improvement plans

18. 18 Copyright © 2007 by McGraw-Hill Ryerson. All rights reserved.Schwind 8th Canadian Edition. 8 E I G H T Performance Management C H A P T E R