Performance Management Z370 - Kelley School of Business PDF

Performance Management Z370 I-Core Management  Administrative - Performance management systems serve to help organizations make administrative decisions, such as which employees...

Performance Management Z370 I-Core Management  Administrative - Performance management systems serve to help organizations make administrative decisions, such as which employees should receive raises, promotions, Performanc demotions, and the like. e Strategic - Performance management systems also serve to help the Manageme organization determine if they are meeting their strategic goals. nt Purposes Developmental - Finally, performance management systems also help organizations develop their employees by providing feedback that is timely and specific to behaviors and results. 1  Figure 6.2 Effective Performance Management System More than just appraisals. 2  Performance Management Used to: When done well, leads to: Make employee-related decisions. Higher profitability. Guide employee development. Higher productivity. Send strong signals to employees. Higher employee engagement. Higher customer service. Lower turnover. 3  Performance Management: It’s Hard to Do Well Many organizations fail to effectively management employee performance. Why? PM policies often fail to keep pace with organizational change leading to disconnects. Done well, project management can be time-consuming. Performance reviews are often too narrow and only measure a limited set of elements. 4  Step 1: Define Performance: Expectations and Setting Goals Why are goals Two types of goals important? Can lead to happier 1. Performance goals. workers who achieve Targets specific end more. results. Provide focus. Enhance productivity. 2. Learning goals. Bolster self-esteem. Enhances skill and Increase commitment. knowledge. 5  Managing the Goal-Setting Process Four-step process for goal implantation. Setting SMART goals. 1. Set goals. Specific. 2. Promote goal attainment. Measurable. 3. Provide support, feedback. Attainable. 4. Create action plans. Results oriented. Time bound. 6  Table 6.3 Contingency Approach to Defining Performance Do what the situation requires, rather than a one-size-fits-all approach BEHAVIORIAL GOALS OBJECTIVE GOALS TASK OR PROJECT GOALS (RESULTS) Can be used in most Best for jobs with clean Best for jobs that are jobs. and readily measured dynamic, but in which outcomes. nearer-term activities and milestones can be defined. Most relevant for Measure what matters, Similar to SMART goals. knowledge work. not just what can be measured. Example: Treat others Examples: sales quotes, Example: Complete your with professionalism SOURCE: Adapted from and M. Schrage, production rates, “Reward Your Best Teams, Not Justerror portion Star Players,” Harvard of team Business Review, https://hbr.org/2015/06/reward-your-best-teams-not-just-star-players. June 30, project 2015, respect; communicate rates. by Tuesday. clearly. 7  Step 2: Monitor and Evaluate Performance How goals are measured should be consistent with the nature of the goal itself (e.g. behavioral, task oriented). Managers need to monitor and evaluate both progress toward the final goal and the ultimate achievement of the goal. This stage should be used as an opportunity to identify problems and recognize successes. It an also be used to identify opportunities to enhance performance. 8  Three Types Performance Evaluation Methods RELATIVE BEHAVIORA RESULTS L 9  Relative Approach: Two Methods Ranking - Number your workers from highest to lowest Forced Distribution – Certain percentage of people in each bucket (ie. 10% get 1’s, 20% get 2’s, 40% get 3’s, 20% get 4’s, and 10% get 5’s) 10  Pros and Cons of Relative Method Clear succession No absolute planning standard Easy to develop Little and use developmental feedback Excellent Competition! administrative data 11  Behavioral Approach: Behaviorally Anchored Rating Scale (BARS) Workplace Safety: 5 4 3 2 1 Outstanding Excellent Average Below Poor Average Always Consistently Follows Occasionally Does not follows follows safety rules follows know safety safety rules safety rules. most of the safety rules rules and and is Occasionally time. Does but often routinely proactive reports not look for does not. violates about potential opportunities them. reporting problems. to go beyond potential compliance. problems. 12  Pros and Cons of BARS Method Increases inter- Time consuming to rater reliability develop Provides Requires standardized observation feedback Can provide poor Gives administrative developmental data direction Easy to update 13  Results Approach: Management by Objectives Managers and Employees Employees Define Evaluated on Goal Objective Goals Attainment 14  Pros and Cons of Results Method Strong strategic Prioritizes results congruence over behavior Enlists employee in Employee may not process control outcome Emphasizes action and results 15  Common Perceptional Errors Rater errors can lead to biases and undermine performance management systems. Halo effect. Leniency. Central tendency. Recency effects. Contrast effects. 16  Step 3: Reviewing Performance and the Importance of Feedback and Coaching Why is feedback important? Has the potential to boost performance. Given less often and less well than people would like. Dramatically underutilized. Feedback serves two functions. 1. Instructional. 2. Motivational. 17 Best Practices in Delivering Feedback Focus on specific behaviors (not characteristics of the person) Keep records! Timelier is better Approach with a learning/growth mindset (trying to help the person improve not feel bad) Focus on how to get from A to B Treat as a conversation Question assumptions/generate meaning Absolute feedback is better-received than relative feedback Situation-Behavior-Impact (SBI) Feedback Model Situation Behavior Impact Describe the Describe the Describe the specific specific impact of the situation behavior behavior on the Provide sense Better to focus project, team, of time, place, on fewer/most you, etc. and context critical Try to tie impact to something the other person cares about Situation-Behavior-Impact (SBI) Feedback Model Situation Behavior Impact Alex, during our I noticed that When your slides last three team you submitted are late, it delays meetings, we your slides late; our ability to agreed everyone specifically on review and would submit Thursday integrate their slides by evening instead everyone’s work, Wednesday of Wednesday which puts extra evening. evening. pressure on the team to finalize the presentation on time. Other things to consider… Consider both your and the other person’s ability to give and receive feedback Avoid: Blaming Advice-giving unless explicitly asked Trying to “win” Remain open to new information Be open to question assumptions/ revisit expectations Try to assume best intent Don’t fall into the false dichotomy trap  Factors Affecting Perceptions of Feedback Self-serving bias. Accuracy. Credibility of the sources. Fairness of the system. Performance-reward expectancies. Reasonableness of goals and standards. 18  Step 4: Rewards and Consequences Figure 6.3 Key factors in organizational reward systems. 19 Reinforcement and Consequences Law of Effect (Thorndike) Behavior with favorable consequences tends to be repeated, while behavior with unfavorable consequences tends to disappear. Figure 6.6 Contingent Consequences in Operant Conditioning Access the text alternate for slide image. Reinforcement Consequences: The Power of Reinforcement Schedules Continuous reinforcement. Intermittent reinforcement. Every instance of a target Involves reinforcement of some behavior reinforced. but not all instances. Great when learning a new Can vary the ratio and interval. skill. Works best with variable ratio Can quickly lose its effect. and variable interval. Let’s apply what we’ve learned