HRM gaining a competitive advantage noe ch008

 Identify five criteria for effective performance management systems pms..  Discuss four approaches to performance management, specific techniques used in each approach, and the way th

Human Resource Management:

Gaining a Competitive Advantage

Chapter 8 Performance Management

Learning Objectives

 Identify the major determinants of individual performance

 Discuss three purposes of performance management

 Identify five criteria for effective performance management

systems (pms)

 Discuss four approaches to performance management,

specific techniques used in each approach, and the way

these approaches compare with criteria for effective

performance management systems

Learning Objectives

 Choose the most effective approach to performance

measurement for a given situation

 Discuss advantages and disadvantages of different

sources of performance information

 Choose the most effective sources for performance

information

 Distinguish types of rating errors and explain how to

minimize each in a performance evaluation

 Conduct an effective performance feedback session

 Identify the cause of a performance problem

 Performance management is the process through

which managers ensure that employees’ activities

and outputs are congruent with the organization's

goals.

 Performance Appraisal is the process through

which an organization gets information on how well

an employee is doing his or her job.

 Performance Feedback is the process of providing

employees information regarding their performance

effectiveness.

Performance Management Model

Individual Behaviors

Situational Constraintsculture & economic

Objective Results

3 Purposes of Performance Management

Strategic

Developmental

Administrative

Recommendations - Developing an Effective

Performance Management System

 Mirror the corporate culture and values

 Have visible CEO and senior management support

 Focus on the right company performance measures

 Link job descriptions to the performance management

system

 Differentiate performance fairly and effectively

 Train managers in performance management

 Communicate the total rewards system

 Require managers to search, offer and acquire regular

performance feedback

 Set clear expectations for employee development

 Track effectiveness of the performance management

system

 Adjust the system as required

5 Performance Measures Criteria

Strategic Congruence

Validity

Reliability Acceptability

Specificity

– Managers compare every employee with every

other employee in the work group.

Attribute Approach

 Graphic rating scales

– alist of traits is evaluated by a 5-point rating scale – legally questionable.

 Mixed-standard scales

– define relevant performance dimensions

– develop statements representing good, average,

and poor performance along each dimension.

Behavioral Approach

 Critical incidents approach - requires managers to keep

record of specific examples of effective and ineffective

performance

 Behaviorally anchored rating scales (BARS)

 Behavioral observation scales (BOS)

 Organizational behavior modification - a formal system of

behavioral feedback and reinforcement

 Assessment centers - multiple raters evaluate employees’

performance on a number of exercises

Results Approach

 Management by Objectives

– top management passes down

company’s strategic goals to managers

to define the goals.

 Productivity Measurement and

Evaluation System (ProMES)

– goal is to motivate employees to

higher levels of productivity.

Goals

Hierarchy

Quality Approach

 A performance management system designed

with a strong quality orientation can:

1 Assess both person and system factors in the

measurement system

2 Emphasize managers and employees work together to

solve performance problems

3 Involve both internal and external customers in setting

standards and measuring performance

4 Use multiple sources to evaluate person and system

factors

5 Performance Information Sources

Managers

5 Performance Measurement Rater Errors

Reducing Rater Errors and Politics

 Approaches to Reducing Rater Error:

 Rater error training

 Rater accuracy training

 Calibration Meetings- attended by

managers to discuss employee

performance ratings.

Improve Performance Feedback

1 Give feedback frequently, not once a year.

2 Create the right context for discussion.

3 Ask employees to rate performance before

thesession.

4 Encourage the employee to participate.

5 Recognize effective performance through praise.

6 Focus on solving problems.

7 Focus feedback on behavior or results, not on the

person.

8 Minimize criticism.

9 Agree to specific goals and set progress review date.

Characteristics

Performance Standards/

Goals

Input

5 Factors to Consider When Analyzing Poor Performance

 Low ability and motivation; managerial action,

outplacement, demotion, firing.

Withstand Legal Scrutiny

1 Conduct a valid job analysis related to

performance.

2 Base system on specific behaviors or results.

3 Train raters to use system correctly.

4 Review performance ratings and allow for

Performance Management:

Electronic Monitoring

 Electronic tracking systems include:

 Hand and fingerprint recognition systems

 Global positioning systems (GPS)

 Systems thattrack employees using handheld

computers and cell phones

 Potential increased efficiency and

productivity benefits

 These systems present privacy concerns.

Measuring and managing performance are key to gaining

competitive edge.

 Performance management systems (PMS) serve strategic,

administrative, and developmental purposes

 PMS should be evaluated against the criteria of strategic

congruence, validity, reliability, acceptability and specificity

 Effective managers need to

 be aware of the issues involved in determining best methods

 feed performance information back to employees

 take action based on causes for poor performance: ability,

motivation or both

 be sure that PMS can meet legal scrutiny