Chapter 8

Learning Objectives
1. Identify the activities involved in
performance management.
2. Discuss the purposes of performance
management systems.
3. Define five criteria for measuring the
effectiveness of a performance
management system.
4. Compare the major methods for measuring
performance.
 Chapter 8
Learning Objectives (continued)

5. Describe major sources of performance

information in terms of their advantages and
disadvantages.
6. Define types of rating errors and explain how to
minimize them.
7. Explain how to provide performance feedback
effectively.
8. Summarize ways to produce improvement in
unsatisfactory performance.
9. Discuss legal and ethical issues that affect
performance management
Performance
Appraisal
 Purposes of Performance
Management
• Strategic Purpose – how effective performance
helps the organization achieve its business
objectives.
• Administrative Purpose – how organizations
use the system to provide information for day-to-
day decisions about salary, benefits, and
recognition programs.
• Developmental Purpose – how the system
serves as a basis for developing employees’
knowledge and skills.
Stages of Performance Appraisal
 Criteria for Effective
Performance Management
Appraisal Methods
Feedback

• Coaches provide feedback to their team just as

managers provide feedback to their employees.
• Feedback is important so that individuals know
what they are doing well and what areas they
may need to work on.
Providing Performance Feedback
Types of Performance Measurement
Rating Errors
Contrast errors:

Distributional errors:

Rater bias:
Improving Performance
 Legal and Ethical Issues in
Performance Management
• Legal
– Performance management processes are
often scrutinized in cases of discrimination or
dismissal.
• Ethical
– Employee monitoring via electronic devices
and computers may raise concerns over
employee privacy.