Appraising and managing

performance
Performance management
Performance management system
Performance mgmt – process through w/c mgrs
ensure that Ees’ activities and outputs are
congruent w/ the org’ns goals. PM is central to
gaining competitive advantage. It has three
parts: defining performance (through job
analysis), measuring performance(through
performance appraisal), and feeding back
performance info. Performance feedback is also
fulfilled through tying rewards to performance
via the compensation system.
The practice of performance mgmt
Most companies’ PM practices require annual
paper-driven reviews that include both
behaviors and business goals. While many
companies use PM to manage EE performance
and make pay decisions, less than 25% of the
companies use PM to help manage talent
through identifying training needs and
developing leadership talent. Unfortunately,
although PM is a prevalent practice, it is often
not valued or effectively used.
 Model of the effective performance
management process
Step 1. define performance outcomes for company
division and department.
Step 2. develop employee goals, behavior, and
actions to achieve outcomes
Step 3. provide support and ongoing performance
discussions.
Step 4. evaluate performance.
Step 5. identify improvements needed
Step 6. provide consequences for performance
results.
 Purposes of performance
management
Strategic purpose. It should link Ee activities with the
org’ns goals.
Administrative purpose. PM info is used in many
administrative decisions: salary administration (pay
raises), promotions, retention-termination, layoffs, and
recognition of individual performance.
Developmental purpose. Ideally the PM system
identifies not only any deficient aspects of the Ees’
performance but also the causes of these deficiencies –
for ex. a skill deficiency, a motivational problem, or some
obstacle holding the Ee back.
 Performance measures criteria
Strategic congruence – the extent to w/c the PM system
elicits job performance that is consistent w/ the orgn’ns
strategy, goals and culture. (Note: when a company’s strategy
changes, its Ees’ behavior needs to change, too.)
Validity - the extent to w/c a performance measure assesses
all the relevant – and only the relevant aspects of job
performance.
Reliability – the consistency of a performance measure, the
degree to w/c a performance measure is free from random
error. (ex. Interrater reliability, reliable over time or test-
retest reliability)
Acceptability – extent to w/c a performance measure is
deemed to be satisfactory or adequate by those who use it.
Performance measures criteria (con’t)
Specificity. Extent to w/c a PM gives detailed
guidance to Ees about what is expected of them
and how they can meet these expectations.
Approaches to measuring performance.
Comparative approach. Requires the rater to
compare an individual’s performance w/ that of
others. This approach usually uses some overall
assessment of an individual’s performance or worth
and seeks to develop some ranking of the
individuals w/in a group. Some techniques:
ranking, forced distribution, and paired comparison.
 Approaches to measuring
performance (con’t)
Attribute approach. Focuses on the extent on which
individuals have certain attributes (characteristics or
traits) believed desirable for the company’s success. The
techniques that use this approach define a set of traits –
such as initiative, leadership, and competitiveness -- and
evaluate individuals on them. Techniques used: graphic
rating scales and mixed-standard scales.
Behavioral approach. Attempts to define the behaviors
an Ee must exhibit to be effective in the job. The various
techniques define those behaviors and then require
managers to assess the extent to w/c Ees exhibit them.
 Approaches to measuring
performance (con’t)
Techniques that rely on the behavioral approach:
behaviorally anchored rating scales, behavioral observation
scales, competency models.
Results approach. Focuses on managing the objective,
measurable results of a job or work group. This approach
assumes that subjectivity can be eliminated from the
measurement process and that results are the closest
indicator of one’s contribution to orgt’l effectiveness. Two
PM systems that use this approach: the balanced scorecard
and the productivity measurement and evaluation system.
Quality approach. A non-traditional approach to measuring
and evaluating Ee performance. Fundamental characteristics
of the quality approach include a customer orientation, a
prevention approach to errors, and continuous improvement.
 Approaches to measuring
performance (con’t)
Improving customer satisfaction is the primary goal
of the quality approach. Customers can be internal
or external to the org’n.
Primary sources for performance information:
managers, peers, subordinates, self, and customers.
360-degree appraisal. A performance appraisal
process for managers that includes evaluations
from a wide range of persons who interact w/ the
manager. The process includes self-evaluations as
well as evaluations from the manager’s boss,
subordinates, peers, and customers.
 Use of technology in performance
management
Influence of technology in performance mgmt systems:
many companies are moving to web-based online
paperless performance mgmt systems; social media tools
similar to Facebook and Twitter are increasingly being
used to delivery timely feedbacks; companies are starting
to use gamification in performance mgmt;and, companies
are relying on electronic tracking and monitoring systems
to ensure that Ees are working when and how they
should be and to block access to visiting certain websites.
These systems include hand and fingerprint recognition
systems, global positioning systems (GPS), and software
that can track Ees using smartphones and notebook
computers.
 Performance feedback
Once the expected performance has been defined and Ees’
performances have been measured, it is necessary to feed
that performance info back to the Ees so they can correct any
deficiencies. Recommendations for an effective PM system
through providing effective feedback:
1. Feedback should be given frequently, not once a year.
2. Create the right context for the discussion. (neutral
location)
3. Ask the Ee to rate his/her performance before the session.
4. Encourage the Ee to participate in the session.
5. Recognize effective performance through praise.
6. Focus on solving problems.
 Performance feedback (con’t)
7. Focus feedback on behavior or results, not on
the person.
8. Minimize criticism.
9. Agree to specific goals and set a date to review
progress.
Additional readings: approaches and techniques
to performance measurement, pps. 333-350;
Feedbacking, pps. 360-365. study figure 8.8 and
table 8.13 reference: Noe, Hollenbeck, Gerhart
and Wright. 2017) Human Resource Management:
Gaining a Competitive Advantage, 10th ed.
 End-topic assignments
Individual work: instructions:
1. review your organizations’ performance appraisal
instrument and answer the ff. questions: 1.1 what
approach does it reflect and what techniques were
applied to get the data needed? 1.2 what is your
personal assessment/evaluation of the instrument, in
terms of criteria used to evaluate performance mgmt
systems? (strategic congruence, validity, reliability,
acceptability, and specificity).
2. Take the self-assessment exercise on p. 369. Submit a
brief write-up on the findings and your answer to the
end question. Same reference for additional readings
3. SUBMIT HARD COPY BASED ON PRESCRIBED FORMAT.
 End-topic assignments (con’t)
Group work. MAXIMUM OF 5 MEMBERS PER GROUP.
SAME REFERENCE BOOK AS FOR INDIVIDUAL WORK.
Draw lots for case assignment.
Adobe pps. 319 and 368; Connecticut Health Fdtn. p.
352; Persistent Systems p. 357; Progress Rail Services pp.
369-370; Vivaki Nerve Center pps. 370-371; and Xactly p.
371. Note: as announced during the last class session,
group members who will not be able to join the group
during the presentation will have to submit a separate
paper and will not be included in the grade given to the
group. ALL STUDENTS ARE REMINDED TO MONITOR
STATUS ON THEIR ALLOWED NUMBER OF MISSED CLASS
HOURS/SESSIONS.