Snell Ch08 - Performance Management.pptx

Chapter 8: Performance Management Snell, Managing Human Resources, 19th Edition. © 2023 Cengage. All Rights Reserved. Many not be scanned, copied or duplicated, or posted to a publicly accessible websi...

Chapter 8: Performance Management Snell, Managing Human Resources, 19th Edition. © 2023 Cengage. All Rights Reserved. Many not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.  Chapter Objectives The following objectives are addressed in this chapter 8.1. Explain what performance management is and how the establishment of goals, ongoing performance feedback, and the evaluation process are part of it. 8.2. Describe the different sources of performance-management information, as well as the strengths or limitations of each. 8.3. Explain the various methods used to evaluate the performance of employees and their potential tradeoffs. 8.4. Outline the characteristics of effective performance review meetings and feedback sessions and ways to improve the performance of employees. Snell, Managing Human Resources, 19 th Edition. © 2023 Cengage. All Rights Reserved. Many not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.  Performance Management Systems Performance management – The process of creating a work environment in which people can perform to the best of their abilities Performance reviews – A process in which a manager evaluates an employee’s performance relative to the requirements of the job and uses the information to show where improvement can be made and how Performance reviews are also called performance appraisals and performance evaluations. Snell/Morris, Managing Human Resources, 19th Edition. © 2023 Cengage. All Rights Reserved. Many not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Steps in the Performance Management Process Snell/Morris, Managing Human Resources, 19th Edition. © 2023 Cengage. All Rights Reserved. Many not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Purposes of a Performance Review Snell/Morris, Managing Human Resources, 19th Edition. © 2023 Cengage. All Rights Reserved. Many not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.  Developing an Effective Performance Management System HR has the primary responsibility for overseeing and coordinating the performance management system. However, managers from the operating departments must be actively involved to establish objectives, ensure alignment ed with a company’s goals, and translate to on-the-job efforts. Employees accept and are satisfied with a performance management system when they participate in its development. Snell/Morris, Managing Human Resources, 19th Edition. © 2023 Cengage. All Rights Reserved. Many not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. What Are the Performance Standards? (slide 1 of 4) Performance standards should be based on job-related requirements derived from a job analysis and reflected in an employee’s job description and job specifications. Establishing SMART goals can be very helpful for this purpose. SMART goals –– Goals that are specific, measurable, achievable, realistic, and time-based Goals that are specific, measurable, achievable, realistic, and time-based Snell/Morris, Managing Human Resources, 19th Edition. © 2023 Cengage. All Rights Reserved. Many not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Establishing Performance Standards  What Are the Performance Standards? (slide 2 of 4) Strategic Relevance Strategic relevance refers to the extent to which the performance standards relate to the objectives of the organization. Criterion Deficiency When performance standards focus on one criterion (such as sales) to the exclusion of other less quantifiable dimensions (such as service), then the performance management system suffers from criterion deficiency. Criterion Contamination There are factors outside an employee’s control that can influence his or her performance. Snell/Morris, Managing Human Resources, 19th Edition. © 2023 Cengage. All Rights Reserved. Many not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.  What Are the Performance Standards? (slide 3 of 4) Reliability Reliability refers to the consistency of a standard or whether individuals maintain a certain performance level over time Reliability is measured by correlating two sets of ratings made by one rater or by two different raters. To make sure managers rate employees consistently, some companies use calibration. Calibration –A A process whereby managers discuss the performance of individual employees to ensure their employee reviews are in line with one another process whereby managers meet to discuss the performance of individual employees to ensure their employee reviews are in line with one another A accessible website, inmanagers meet to discuss the Snell/Morris, Managing Human Resources, 19 Edition. © 2023 Cengage. All Rights Reserved. Many not be scanned, copied or duplicated, or th process whereby posted to a publicly whole or in part. What Are the Performance Standards? (slide 4 of 4) Fairness and Acceptability Employees who believe the performance management system is unfair consider the process a waste of time or feel frustrated Acceptability relates to how hard it is to administer and use the performance management system. If using it is time consuming or difficult, or if it’s hard to see how it’s really helping the organization, the system will fail. Snell/Morris, Managing Human Resources, 19th Edition. © 2023 Cengage. All Rights Reserved. Many not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.  Do Your Performance Reviews Comply with the Law? Performance reviews should meet the following legal guidelines:  Performance ratings must be job related, with performance standards developed through a job analysis.  Employees must be provided with clear, written job standards in advance of their reviews so they understand what to do to get top ratings.  Managers who conduct the reviews must observe the behavior they rate.  Document performance problems when they occur.  HR should review evaluations to see if minorities are adversely impacted.  Reviews should be discussed with employees and corrective guidance offered to help poor performers improve  An appeals procedure should enable employees to express disagreement Snell/Morris, Managing Human Resources, 19th Edition. © 2023 Cengage. All Rights Reserved. Many not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.  Alternative Sources of Reviews 360-degree evaluation – A performance evaluation done by different people who interact with the employee, generally on forms compiled into a single document for use in the evaluation meeting conducted by the employee’s manager.  Sources of Performance Review Information Manager and/or supervisor evaluation by a manager reviewed by a manager Self-evaluation by the employee on a form prior to an evaluation meeting Subordinate evaluations of a superior by an employee, used for development Peer evaluation by fellow employees, on forms used in an evaluation meeting Team evaluation recognizes team not individual accomplishments Customer evaluation includes evaluations from external and internal customers Snell/Morris, Managing Human Resources, 19th Edition. © 2023 Cengage. All Rights Reserved. Many not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.  Training Appraisers (slide 1 of 5) A weakness of review programs is that raters are not trained, and the feedback is therefore not useful or is actually destructive. Establishing a Review Plan  A training program for raters is effective when it follows a process that begins by explaining the objectives of the system and its philosophy  The mechanics of the rating system must be explained, including performance records, how frequently reviews are conducted, who conducts them, what performance standards are, and how to prepare for reviews. Snell/Morris, Managing Human Resources, 19th Edition. © 2023 Cengage. All Rights Reserved. Many not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.  Training Appraisers (slide 2 of 5) Eliminating Rating Errors Distributional Errors  A distributional rating error occurs when a single rating is skewed toward an entire group of employees.  Error of central tendency – A performance rating error in which all employees are rated about average  Leniency or strictness error – A performance rating error in which the appraiser gives employees unusually high or unusually low ratings Snell/Morris, Managing Human Resources, 19th Edition. © 2023 Cengage. All Rights Reserved. Many not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.  Training Appraisers (slide 3 of 5) Eliminating Rating Errors (cont’d) Distributional Errors (cont’d)  Reducing errors: Explain that in large groups of employees, there are significant differences. Use “anchors”—clearly defined characteristics of performance and meaningful descriptions of behavior on the scale. Require ratings to conform to a forced distribution—a performance ranking system whereby raters place employees into performance categories. Use peer rankings, whereby employees are ranked against each other Snell/Morris, Managing Human Resources, 19th Edition. © 2023 Cengage. All Rights Reserved. Many not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.  Training Appraisers (slide 4 of 5) Eliminating Rating Errors (cont’d) Temporal Errors  Recency error: the evaluation is based on the employee’s recent behavior not on behavior throughout the evaluation period Contrast Error  Contrast error –an employee’s review is biased upward or downward because of comparison with another employee Similar-to-Me Error  Similar-to-me error –an appraiser inflates the review because of a personal connection Snell/Morris, Managing Human Resources, 19th Edition. © 2023 Cengage. All Rights Reserved. Many not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.  Training Appraisers (slide 5 of 5) Feedback Training  A training program for raters should assist managers in providing ongoing performance feedback and during reviews and feedback sessions.  Feedback training should cover : Communicating effectively to gain the employee’s support Diagnosing the causes of performance problems Setting goals and objectives to achieve in conjunction with the feedback Snell/Morris, Managing Human Resources, 19th Edition. © 2023 Cengage. All Rights Reserved. Many not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.  Performance Review Methods Performance review methods can measure traits, behaviors, or results.  Trait approaches are based on people’s characteristics.  Behavioral approaches provide action-oriented information to employees and may be best for development.  The results-oriented approach focuses on the measurable contributions that employees make to the organization. Snell/Morris, Managing Human Resources, 19th Edition. © 2023 Cengage. All Rights Reserved. Many not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.  Trait Methods  Graphic rating scale method – each employee is rated according to a scale of characteristics  Mixed-standard scale method – A rating based on a comparison with (better than, equal to, or worse than) a standard  Forced-choice method – A rater chooses from statements which distinguish between successful and unsuccessful performance  Essay method – The rater writes a statement describing an employee’s behavior Snell/Morris, Managing Human Resources, 19th Edition. © 2023 Cengage. All Rights Reserved. Many not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.  Behavioral Methods (slide 1 of 2) Critical Incident Method For the critical incident method, the manager keeps a log for an employee and notes critical incidents related to performance. Behavioral Checklist Method The behavioral checklist method requires the rater to check statements on a list that describe characteristics of employee’s behavior. Behavior Observation Scale Behavior observation scale (BOS) – A behavioral approach to performance rating that measures the frequency of observed behavior Snell/Morris, Managing Human Resources, 19th Edition. © 2023 Cengage. All Rights Reserved. Many not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.  Behavioral Methods (slide 2 of 2) Behaviorally Anchored Rating Scale  Behaviorally anchored rating scale (BARS) – A behavioral approach to performance rating that consists of a series of vertical scales, for each dimension of job performance These dimensions are “anchored” by behaviors identified through a critical incident job analysis. Critical incidents are placed along the scale and are assigned point values according to the opinions of experts. Snell/Morris, Managing Human Resources, 19th Edition. © 2023 Cengage. All Rights Reserved. Many not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.  Results Methods Sales, Productivity, and Quality Measures  Sales, productivity, and quality measures link what employees accomplish to results for the organization. Management by Objectives  Management by objectives (MBO) – A philosophy of management that rates performance based on their achievement of goals set mutually by employees and managers The Balanced Scorecard  A balanced-scorecard review considers four measures: (1) financial, (2) customer, (3) process, and (4) learning. Snell/Morris, Managing Human Resources, 19th Edition. © 2023 Cengage. All Rights Reserved. Many not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Performance Review under an MBO Program  Performance Review Meetings and Feedback Sessions  The format for the meeting or session is determined by its purpose, type of performance management system used, and a firm’s review form.  A formal performance evaluation should be scheduled in advance to allow the subordinate and manager to prepare for the discussion.  Usually 10 days to 2 weeks offers sufficient lead time. Snell/Morris, Managing Human Resources, 19th Edition. © 2023 Cengage. All Rights Reserved. Many not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.  Types of Performance Review Meetings and Feedback Sessions Three formats: Tell-and-sell  Motivational and persuasive techniques used to change employee behavior. Tell-and-listen  The appraiser communicates the strong and weak points of performance  Then the employee’s feelings about the review are explored. Problem-solving  Obtains employee buy-in for a way to overcome obstacles and improve performance. Snell/Morris, Managing Human Resources, 19th Edition. © 2023 Cengage. All Rights Reserved. Many not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.  Improving Performance Identifying the Sources of Ineffective Performance Performance is a function with three concerns: ability, motivation, and environment. Performance Diagnosis By comparing different performance measures, managers can get an idea of the causes of performance problems. Managing Ineffective Performance Once the problems are known, action can be planned, such as providing training or transferring an employee. Focus on Changing the Behavior, Not the Person A manager must separate the employee from the behavior. Snell/Morris, Managing Human Resources, 19th Edition. © 2023 Cengage. All Rights Reserved. Many not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Factors That Affect an Employee’s Performance Snell/Morris, Managing Human Resources, 19th Edition. © 2023 Cengage. All Rights Reserved. Many not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.