CH7.pdf PDF - Performance Management System

# Chapter 7 Flashcards: ## Performance Management System * **Define a performance management system:** A system to align employee performance with organizational goals through setting expectations, monitoring, feedback, and evaluations. * **Explain the purposes of managing performance:** To make d...

# Chapter 7 Flashcards: ## Performance Management System * **Define a performance management system:** A system to align employee performance with organizational goals through setting expectations, monitoring, feedback, and evaluations. * **Explain the purposes of managing performance:** To make decisions about pay, promotions, identify performance gaps, support career growth, and address training needs. ## 6 Steps in an Effective Performance Management System 1. Clarify job duties and standards. 2. Set SMART goals. 3. Provide ongoing coaching. 4. Conduct formal reviews. 5. Recognize and reward performance. 6. Plan for future development. ## Ineffective Performance * **Identify the 3 possible reasons for ineffective performance:** * **Organizational:** Poor selection, lack of training, unclear communication. * **Job:** Unclear expectations, unmotivating tasks, lack of resources. * **Personal:** Family issues, stress, illness, low work ethic ## Performance Management System Failures * **Explain the 4 possible reasons why performance management systems can fail:** They may fail if not aligned with goals, lack management support, are too complex, or if managers aren't properly trained. ## Sources of Performance Information * Describe the 6 various sources of information regarding an employee's performance: Manager reviews, self-reviews, peer reviews, subordinate reviews, customer feedback, and 360-degree reviews. ## Performance Review Methods * **Describe 4 various methods to review performance:** Methods include trait-based rating scales, behavioral assessments, results-oriented reviews, and management by objectives (MBO). * **What is performance appraisal?** A formal review of employee performance against set standards to boost individual and organizational success. ## Performance Evaluation * **Why is performance evaluation important?** Aligns employee efforts with goals, improves productivity, and reduces underperformance. * **Objectives of performance evaluation?** Boost employee and organizational performance. * **Why should employees' performance be appraised?** To assess contributions, identify strengths/weaknesses, guide development, and align goals with organizational success. ## Why Appraise Performance? 1. Guide pay, promotion, and retention decisions. 2. Align performance with company goals. 3. Address deficiencies and reinforce strengths. 4. Review career plans. 5. Identify training needs. ## Performance Appraisal Methods * **What is the Trait Method in performance appraisal?** Measures traits employees possess; easy to develop but can be biased. Example: Graphic Rating Scale (rating traits on a scale, e.g., 1 to 5). * **What does a Graphic Performance Rating Form include?** Lists traits like "teamwork" or "personal effectiveness," rates performance on a scale (e.g., "below expectations" to "role model"), and totals the scores. Supervisors circle or check the best description for each trait. * **What is the Behavioral Method in performance appraisal?** (2 main factors) Focuses on observable behaviors. Includes tools like: * **Behavioral Checklist:** Evaluators check off predefined behaviors. * **BARS (Behaviorally Anchored Rating Scale):** Combines qualitative and quantitative data with specific behavior examples linked to ratings (e.g., 1 = Needs Improvement, 7 = Outstanding). * **What is the Results Method in performance appraisal?** Measures what is produced or achieved, focusing on outcomes and goal attainment. * **What is Management by Objectives (MBO)?** A method where employees set measurable goals aligned with their role and company objectives. * **How is MBO applied in various industries?** In sales, finance, engineering, and customer service, MBO sets measurable goals, such as sales quotas, financial targets, project deadlines, and customer satisfaction metrics. ## Performance Review Sources * **What are the 6 sources of information regarding an employee's performance?** * Manager review * Self-review * Subordinate review * Peer review. * Customer review * 360-degree review. ## Performance Review Pros and Cons * **What are the pros and cons of Self-Review?** * **Pros:** Encourages self-reflection, goal setting, and development. * **Cons:** Can be overly lenient or biased, lack objectivity. * **What are the pros and cons of Subordinate Review?** * **Pros:** Provides insight into leadership effectiveness and team dynamics. * **Cons:** Can be influenced by personal relationships or fear of retribution. * **What are the pros and cons of Peer Review?** * **Pros:** Offers multiple perspectives and captures teamwork skills. * **Cons:** Potential for bias or lack of candid feedback due to peer relationships. * **What are the pros and cons of Customer Review?** * **Pros:** Direct feedback on customer interaction and service quality. * **Cons:** Limited scope, might not reflect overall job performance. ## 360-degree Review * **What is a 360-degree review?** A comprehensive appraisal method collecting feedback from all sources: managers, peers, subordinates, customers, and self-reviews. ## Who Should Appraise? * **Who should do the appraising (4)? Why/why not?** * **Managers:** Best for authority, context, and understanding overall performance. * **Peers:** Good for teamwork insights but may lack objectivity. * **Subordinates:** Effective for leadership evaluation, but can be biased. * **Self:** Important for development but may be overly lenient. ## Ineffective Performance Factors * **What are the 6 ORGANIZATIONAL factors that cause ineffective performance?** * Poor selection decisions * Insufficient training * Lack of accountability * No alignment between performance and rewards * Unclear communication * Unclear reporting standards * **What are the 6 JOB factors that cause ineffective performance?** * Unclear job expectations * Unmotivating work, poor role boundaries * Unsafe work * Inadequate resources * Too much work * Mismatch with skills * **What are the PERSONAL factors that cause ineffective performance?** * Marital problems * Financial worries * Emotional disorders * Work-family conflict * Physical limitations * Low work ethic * Illness ## Additional Ineffective Performance Factors * **What else could cause ineffective performance in the workplace? (4)** * Environmental factors like poor workplace culture * Lack of support * Unclear goals * Inadequate leadership ## Performance Management System Failure * **Why can performance management systems fail when not aligned with organizational outcomes?** If the system doesn't align with company goals, it becomes ineffective in driving desired performance or outcomes. * **How does an organization's culture affect the success of performance management systems?** If the culture doesn't support the system, employees may resist it, and it becomes difficult to implement and maintain. * **Why does lack of support from top management cause performance management system failure?** Without support from top management, the system lacks authority and resources, reducing its effectiveness and sustainability. * **How does complexity contribute to performance management system failure?** When the system is too complex and cumbersome, employees and managers struggle to understand and apply it, leading to frustration and inefficiency. * **Why does lack of training for managers lead to performance management system failure?** If managers aren't trained to use the system properly, they may misapply it, leading to inconsistent feedback and ineffective performance evaluations. * **What are the 5 factors that contribute to performance management system failure?** * Not aligned with organizational outcomes * Organization's culture does not support the system * Lack of support from top management * Too complex and cumbersome * Lack of training for managers ## Employee Role in Performance Reviews * **What 2 role do employees play in performance reviews?** * **Active participants:** Employees are actively involved in the performance review process by preparing self-assessments, reflecting on their performance, and contributing to the discussion. This engagement helps set goals and address areas for improvement. * **Complete a self-assessment of their performance prior to the review.** ## Performance Review Errors * **What should managers be watchful of during performance reviews (4)?** Managers should be mindful of errors like the: * Halo effect * Horns effect * Recency bias * Leniency or Strictness bias ## Performance Review Legal Requirements * **What is the legal requirement for performance reviews?** Performance reviews must meet legal criteria of reliability, fairness, and validity. * **What does reliability mean in the context of performance reviews?** Reliability refers to measuring performance consistently across all employee participants. * **What does fairness mean in the context of performance reviews?** Fairness ensures the system avoids biases unrelated to actual performance. * **What does validity mean in the context of performance reviews?** Validity ensures that the performance assessment is job-related and accurate, complying with legal standards. * **What is the Halo effect?** Occurs when a positive impression of one trait leads to overly favorable ratings in other areas. * **What is the Horns effect?** Happens when a negative impression in one area leads to unfairly low ratings in other areas. * **What is Recency bias?** Is when recent events are given too much weight in an evaluation, ignoring past performance. * **What is Leniency or Strictness bias?** Leniency or Strictness bias is when an evaluator is consistently too lenient or too strict in rating employees, not based on performance. ## Legal Requirements Checklist * **What are the 6 legal requirements for performance reviews?** * Performance standards must be job-related. * Employees must receive a written copy of performance standards. * Managers must observe performance. * Managers and supervisors should be trained. * Reviews should be discussed openly with employees. * An appeals procedure should be in place.