B8204 Human Resource Management: Performance Management

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B8204 Human Resource Management Performance
Management

• Thursday March 9th, 2006

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Agenda

• Performance Management
• Text Chapter 7 Managing Employees Performance
• Reserve (1) Silverman, S. B., Pogson, C. E.,
  Cober, A. B. (2005). When employees at work dont
  get it A model for enhancing individual employee
  change in response to performance feedback.
  Academy of Management Executive, 29, 135-147.
• (2) Cannon, M.D., Witherspoon, R. (2005).
  Actionable feedback Unlocking the power of
  learning and performance improvement. Academy of
  Management Executive, 19, 120-134.

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Performance Management

• One of the most challenging aspects of a
  managers job is giving subordinates effective
  performance feedback to recognize
  accomplishments, motivate them to improve their
  weaknesses and develop them for the future
• Accurate measurement of employee performance is a
  necessary precondition for effective management
• Pays off in bottom line organizational results
  and more satisfied employees

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Purposes

• Provide employees with the opportunity to discuss
  performance and performance standards with
  supervisors
• Provide supervisors with a means of identifying
  the strengths and weaknesses of employees
  performance
• Provide a format for supervisors to recommend
  specific programs to help employees improve
  performance
• Provide a basis for salary recommendations
• Administrative
• Input that can be used for the entire range of
  HRM activities
• Paper trail for legal aspects
• Development
• Provides feedback essential for discussing
  strengths and weaknesses

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Performance Management

• The identification, measurement, management of
  performance in organizations
• Identification
• Performance Dimensions
• Rational legally defensible
• Measurement
• Centrepiece of the appraisal system select
  instrument
• Judgments of how good or bad performance is
• Must be consistent maintain comparable rating
  standards
• Management
• Overriding goal of appraisal system source of
  feedback
• Should take a future-oriented view of what
  workers can do

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Actual and Measured Performance
Evaluator situational factors
Performance Overlooked by Evaluator
Disagreement
Unreliability
Employee Temporary Personal factors
TrueAssessment
Deficiency
Invalidity
Poorly defined Performance Standards
Actual Performance
Performance Measured
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Even though criticized, there are reasons why it
is valuable

• Employer Perspective
• Individual differences affect company performance
• Legal defense
• Reward/bonus/merit system
• Implement strategic goals clarify performance
  expectations
• Part of performance management
• Can include teamwork

• Employee Perspective
• Needed and desired
• Improvement requires assessment
• Fairness requires performance be measured and
  influence outcomes
• Can motivate workers
• Mutual understanding of effective performance
• Builds trust teamwork
• Builds communication

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Developing an Effective Performance Appraisal
Program

• Establish performance standards and measures
• Clearly defined and communicated to Employees
• Strategic relevance performance standards linked
  to organizational goals and competencies
• Complying with the law
• Reliability, validity, fairness
• Job related
• Decide who should appraise performance
• Manager/supervisor Self-appraisal Subordinate
  appraisal Peer appraisal Team appraisal
• Train appraisers
• Establish appraisal plan
• Minimize rater error
• Provide feedback

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Why they Fail

• Lack of information concerning an employees
  actual performance
• Evaluation standards are unclear
• Supervisor does not take appraisal seriously
• Mgr not sincere honest
• Supervisor lacks appraisal skills
• Employee doesnt receive ongoing performance
  feedback
• Unclear/ambiguous language

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Why they Fail

• Rater biases
• Halo Effect
• Error of Central Tendency
• Leniency and Strictness Biases
• Personal Prejudice
• Recency Effect
• Similar-to-me error (social identity theory)
• Contrast error (social identity theory)

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Performance Measurement Systems/Tools

• Appraisal formats can be classified according to
• The type of judgment
• Relative judgment Appraisal format that asks a
  supervisor to compare an employees performance
  to performance of other employees doing the same
  job.
• Absolute judgment Appraisal format that asks a
  supervisor to make judgments about an employees
  performance based on performance standards.
• The focus of the measure
• Trait data worker characteristic that tend to be
  consistent and enduring
• Ambiguous, focus on person
• Behavioral data a workers critical behaviors
• Focus on exhibition of behaviors, BARS, unnatural
• Outcome data the results achieved by employees
• MBO, fairness, results at any cost

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Performance Appraisal Methods Past-Oriented

• Noncomparative Evaluation Methods
• Rating Scale
• Subjective rating on scale (e.g., poor to
  exemplar for performance factors)
• Critical Incident Method
• Recording short descriptions of critical
  incidents (positive and negative)
• Behaviourally Anchored Rating Scales (BARS)
• Rating tool with specific examples of behaviours
• Performance Tests and Observations
• Comparative Evaluation Methods
• Ranking method
• Ranks employees from best to worst.
• Forced distributions
• Sort employees into different categories
  (classifications).

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Performance Appraisal Methods Future-Oriented

• Self-Appraisals
• Employer expectations stated Employees
  understanding of job identifies problems and
  roadblocks
• Management-by-objectives approach
• Employer and employee set measurable goals
  together assess later
• Assessment Centre Technique
• A standardized form of employee appraisal that
  relies on several types of evaluation and several
  raters (Schwind et al, 2005, p. 370).
• 360-Degree Performance Appraisal
• Combination of self, peer, supervisor and
  subordinate appraisal
• Integrity safeguards
• Assure anonymity Make respondents accountable
  Prevent gaming of the system Use statistical
  procedures Identify and quantify biases

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Articles

• What are the
• 1 strengths,
• 2 weaknesses, and
• 3 practical HRM implications,
• from the Silverman, Pogson, Cober and Cannon
  Witherspoon pieces?

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The appraisal interview

• A complete appraisal process includes informal
  day-to-day interactions between managers and
  workers as well as formal face-to-face interviews
  
• An interview with the employee to provide
  feedback is one of the most important parts of
  the appraisal process

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Conducting the Appraisal Interview

• Ask for self-assessment and invite participation
• Conduct appraisal in private, with enough time
• Express appreciation, be supportive, treat
  employee respectfully, and minimize criticism
• Refer to relevant information
• Change the behaviour, not the person
• Focus on established criteria
• Concentrate on things employees can control
• Perceptions, reactions, and opinions as such, not
  facts
• Focus on solving problems
• Establish goals
• Make feedback specific
• Suggest ways to improve
• Deal with defensiveness, emotional reactions
• Follow-up day to day

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Performance Improvement

• Supervisors who manage performance effectively
• Explore the causes of performance problems
• Direct attention to the causes of problems
• Develop an action plan and empower workers to
  reach a solution
• Direct communication at performance

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Next Class

• Tuesday March 14th, 2006
• Case Presentation The Trials and Tribulations of
  Performance Appraisal at Ford