HRM Lecture 4 PDF

HUMAN RESOURCE MANAGEMENT LECTURE 4: Performance management Management and Inclusion Practices: Encompasses all activities a firm undertakes to improve employee’s performance Begins with goal setting and evaluating performance Subsequent feedback to the employee...

HUMAN RESOURCE MANAGEMENT LECTURE 4: Performance management Management and Inclusion Practices: Encompasses all activities a firm undertakes to improve employee’s performance Begins with goal setting and evaluating performance Subsequent feedback to the employee Decisions about promotion or dismissal Importance: For employees to achieve its objectives → Maximize their performance Crucial information on their progress which can drive their engagement and productivity at work Purpose vs reality: Purpose: Strategic → Drives organizational growth and productivity by aligning employee actions with organizational goals Development → provides employees with information on how to develop Administrative → Provides managers with information on how to reward, promote and retain Reality → Huge moral killers Takeaways: Relevance of performance management process can be understood based on goal setting theory Accuracy and meaningfulness of performance measurement can be increased by using the critical incident method, 360-degree feedback, and competency-based assessments Reasons for underperformance can be understood based on AMO model o To address underperformance → 5-step process Organizations are increasingly using strengths-based and continuous feedback systems Key concepts: Performance management: Process of establishing shared understanding about what is to be achieved, and an approach to managing and developing people in a way which increases the probability that it will be achieved in the short and long term Performance appraisal: Formal process, which occurs infrequently, by which employees are evaluated by some judge who assesses the employee’s performance along a given set of dimensions, assigns a score to that assessment, and then usually informs the employee of his or her formal rating Traditional performance management cycle: w Theoretical perspective: Goal-setting theory: Setting goals which are specific and challenging yet attainable can result in motivation to increase performance Goals regulate performance as they direct the direction, intensity, and duration of motivated action Self-efficacy and feedback can strengthen the link between goal setting and performance Principles of goal-setting theory: Key takeaways: Performance management is an umbrella term while performance appraisal refers to infrequent event when employee performance is measured and discussed Traditional performance management cycle involves goal setting, feedback, and performance appraisals Goal setting theory explains why setting specific and challenging goals motivates employee action Inclusive Workplaces: Diversity: Differences among employees in an organization or groups Underlying characteristics: Knowledge-related differences, values, beliefs, etc Demographic differences Inclusion: Appreciation and valuation of differences ALL employees → Those who have historically been powerful and underrepresented in the cultural context are o Treated fairly o Valued for who they are o Included in core decision making: Can be achieved creating: o Belongingness o Uniqueness It helps: o Your organization’s bottom line o Your employees’ careers o Your image as a fair employer Motivations: Doing what is right and just Showing viable career paths Ensuring business success Research evidence: Key variable: Climate for inclusion → Shared perception by employees of the employer’s policies, procedures, and activities focused on creating a sense of belongingness, while valuing the uniqueness of each individual employee How it is measured: o “I trust the company to treat me fairly” o “The company respects views of people like me” It helps ALL employees perform It matters for firm performance o More diversity combined with inclusive climates lead to better business outcomes o Moderate diversity combined with inclusive climates lead to better business outcomes Inclusive Strategies: From diversity to inclusion: Climate of inclusion: Shared perception by employees of the employer’s policies, procedures and activities focused on creating a sense of belongingness, while valuing the uniqueness of the each individual employee Formal inclusion policies & practices: Need to be aligned with managerial actions Increasing diversity: 1. Recruitment and Selection of targeted demographic categories a. Selection is controversial → Potential to delegitimize the individual b. Recruitment is better option 2. Targeted leadership and development programs for demographic categories a. Risk of delegitimization b. What message is being sent → “Fix minority” or focusing on structural barriers? c. How are candidates identified → Self-identification vs structured process? Enhancing Inclusion 1. Diversity and anti-bias training a. Context-dependent b. Risk of backfiring 2. Making minority employees feel like they belong a. Proactive mentorship programs b. Actively creating connections between employees c. Highlight the value of each employee Creating Accountability: 1. Measure the demographic make-up of the organization 2. Make performance evaluation contingent on inclusion statistics Informal Inclusion Practices → Managerial actions: 1. Informal mentorship 2. Support Flexible Work Arrangements 3. Develop a team charter 4. Outwardly demonstrate support for inclusion Performance measurement: Formal process which occurs infrequently, by which employees are evaluated by some judge who assesses the employee’s performance along a given set of dimensions, assigns a score to that assessment, and then usually informs the employee of his or her formal rating Performance management is: o Create more of it → Performance acceleration o Reliably reveal range → Performance measurement Administrative functions o Organizations need to accurately evaluate employees performance to make decisions Developmental functions o Employees need high-quality feedback to improve current performance and prepare for future roles o Organizations nowadays have more appreciation  Performance management works better when it focuses on continuous feedback and development rather than single annual assessment Defining Performance: Objective evaluations: Job outputs or goal achievements Subjective evaluations: Rely on rater’s judgement Organizations often use multiple performance indicators and engage multiple stakeholders in the evaluation process Performance indicators: o Organizational citizenship behavior o Extra-role performance SMART goals Evaluating Performance: Involves most paperwork Performance evaluation methods: o Absolute rating methods o Comparative rating methods Rater Errors: Leniency / Severity Error: Rater consistently rates employees at the high/low end of the scale Central Tendency Error: Rater consistently rates employees at the scale midpoint Severity error Rater consistently rates employees at low end of scale Halo Error: Rater’s evaluation of an employee on one performance dimension creates an overall positive or negative impression that drives ratings on other dimensions Primacy / Recency Error: Rater’s evaluation is heavily influenced by the employee’s first / most recent performance Contrast Error: Rater’s evaluation of an average employee is boosted after rating a poor employee, or lowered after rating an excellent employee Similar-to-me Error: Rater’s evaluation of an employee is inflated because the rater feels a personal connection resulting from shared demographics, values or experiences Reducing Error & Biases: Training → Recognize and distinguish different levels of performance o Frame-of-reference training: § Help raters create shared understanding of performance evaluation § Orgs give raters explicit references as comparison points § Use of benchmarks until they develop fluency § Informal calibration meetings Memory Aids → Recording information throughout the review cycle o Performance journal Accountability → Raters should expect to have to justify their evaluations to others o Hold yourself accountable if no need to justify to manager Absolute rating methods (Rating): Require to evaluate employees against some standard or benchmark Graphic rating scales o Require rater to evaluate employee on series of performance dimensions o Advantage: § Same scales can be used for multiple jobs § Rating level descriptions provide some feedback o Disadvantage: § Raters apply idiosyncratic standards, limited developmental feedback § Need unique scales for each job Behavioral Observation Scales (BOS): o Behavioral frequency description o Advantage: Explicit behavioral standards / explicit behavioral feedback o Disadvantages: Need unique scales for individual jobs Comparative rating methods (Ranking) Simplest involves directly ranking employees within a workgroup or department Raters identify best employee followed by second-best employee and so forth Alternative method: Raters group employees supervised into forced distribution o Constrain extent to which raters can use specific performance categories Best → Linked to clear objective criteria known to the employees o Otherwise, can draw employees to compete with one another Advantage: o Easy to use o Useful for eliminating poor performance and distributing bonuses Disadvantages: o Limited developmental feedback o May be perceived as politically motivated or capricious o Can generate employee competition and unethical behavior Increasing Performance Evaluation Accuracy: All performance management systems have common weak link o Rater making performance judgement o Raters’ idiosyncrasies account for 62% of variance in performance ratings Improving performance measurement: Critical incident technique → Concrete behavioral examples: - Can be time-consuming - Requires excellent observational skills + Ratings based on concrete behavioral examples + Memory aid and performance measurement in one + Meaningful information for personal development 360-degree feedback → Multi-source review: - Bureaucratic process, given the different sources used + Provides relevant information for personal development + Promotes a climate of continuous improvement + Especially helpful when employees work with many different parties and supervisors have limited insight into performance Sample competencies for consultants: To reduce subjectivity, organizations may opt to only measure results But: Results are not always under employee control and actions not contributing to results may be disregarded Organizations are thus advised to also measure ‘competencies’ Trends: 95% of managers are unhappy with how their companies conduct performance reviews 59% of employees feel performance reviews are not worth the time invested 56% of employees say they do not receive feedback on what to improve Problems with traditional and annual performance reviews Performance reviews focus on identifying past mistakes rather than developing strengths o To: Strength-based feedback o To: Focus on Future Behavior and Personal Development Infrequent and poor alignment with employees’ progress o To: continuous and Personalized Feedback Why strengths-based feedback: We do not learn and growth the most in our areas of weakness We grow newest synapses in areas of our brain where we have the most pre-existing synapses Our strengths are our true areas of opportunity for growth The feedforward interview protocol:  1. Helping employee to identify a personal success story a. Focus on positive experiences only b. Let employees describe nature of positive emotions in that moment 2. Helping the employee to discover their personal success code a. Personal characteristics and actions b. Supporting actions of others → Supervisor, peers c. Supporting conditions created by organization 3. Helping the employee to align their future with their personal success code a. Asking the feedforward question ADOBE disrupted performance reviews: Check In Key takeaways: Employees and managers tend to dislike traditional (annual) performance reviews Strength-based feedback views employee strengths as true opportunities for growth o Feedforward interview is interview protocol used for providing strength-based feedback Continuous feedback conversations provide real-time feedback that take employees progress into account o ADOBE “Check-In” to provide more meaningful and timely feedback to employees Developing Employee Performance: Employees who view their evaluations as fair → positively motivated to improve Employees who view their evaluations as unfair o Less likely to be motivated o May be more inclined to leave Source of Performance Feedback (the Who): Managers should perform the feedback 360-degree feedback Feedback timing (the When): Today, managers are expected to deliver feedback on an ongoing basis  Feedback has greatest impact when immediately following effective or ineffective performance Social performance management (SPM) The feedback message (The What): Consider SMART goals already set Should be balanced and as specific as possible Balanced feedback: Most effective feedback focuses on both positive and negative feedback Limit volume of negative feedback you deliver at one time Enough negative feedback so employee can accept personal responsibility for change without feeling crushed Specific Feedback: Ensure performance feedback is as specific as possible Focuses on task and behavior Employees are more receptive to feedback when information helps improve skills & performance Check your own assumptions: If you think ability is something that can be developed you are more likely to recognize changes in your employees’ job performance and more willing to coach poor performing employees Invite a Self-Appraisal: Require employees to monitor and reflect on their performance Can facilitate learning and generate greater change than feedback coming from a manager Encourage Employee-Generated Solutions: Important to agree on how to improve performance in the future