HRM Week 4 - Book PDF

HRM week 4 Lecture: Purpose Strategic: Drives organizational growth and productivity by aligning employee actions with organizational goals. Developmental: Provides employees with information on how to develop. Administrative: Provides managers with information on how to...

HRM week 4 Lecture: Purpose Strategic: Drives organizational growth and productivity by aligning employee actions with organizational goals. Developmental: Provides employees with information on how to develop. Administrative: Provides managers with information on how to reward, promote, and retain. Learning objectives 1. Explain the key concepts in performance management 2. Evaluate performance measurement schemes 3. Design effective strategies to address underperformance 4. Design effective feedback conversations 5. Explain key concepts and findings for inclusive workplaces  6. Identify formal and informal strategies for fostering inclusive workplaces Takeaways The relevance of the 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. The reasons for underperformance can be understood based on the AMO model. To address underperformance, a 5-step process can be followed. Organizations are increasingly using strengths-based and continuous feedback systems. Performance Management: A process for 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. Encompassing all activities a firm comprises to improve employee's performance 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. 1. Performance Plan -> Translate organizational goals into individual goals -> Determine what will be measured to determine performance 2. Feedback -> Provide feedback to employee about performance 3. Mid-Year evaluation -> Discuss incremental goal attainment -> Redefine goals if necessary 4. Year-end Performance appraisal ->Formal performance rating -> Discuss goal attainment and areas for improvement Theoretical perspective: Goal-setting theory Setting goals which are specific and challenging yet attainable can result in motivation to increase performance (Locke and Latham, 1990). Goals regulate performance as they direct the direction, intensity, and duration of motivated action (Latham and Locke, 1991). Self-efficacy and feedback can strengthen the link between goal setting and performance. Principles of goal setting theory:  1. Clarity – clear and specific 2. Challenge 3. Commitment 4. Feedback 5. Task complexity Choose goals that follow the SMART principle Managers can involve employees for the setting of goals as it increases employee motivation and commitment to the goals Employees who receive feedback about goal progress are more likely to attain goals. Key takeaways  Performance management is an umbrella term, while performance appraisal refers to the infrequent event when employee performance is measured and discussed. The traditional performance management cycle involves goal setting, feedback, and performance appraisals. Goal setting theory explains why setting specific and challenging goals motivates employee action. 3 – Inclusion Diversity Diversity Differences among employees in an organization or groups Underlying characteristics: Knowledge- related differences (job, education, experience); values; beliefs Demographic differences (sex, race or ethnicity, religion, disability status, age, LGBTQ, neurodivergency) How to leverage benefits of diversity without avoiding downsides: R: INCLUSION! Inclusion ALL employees both those who have historically been powerful and underrepresented in the cultural context are Treated fairly Valued for who they are Included in core decision making Belongingness Uniqueness These are the 2 feelings You can feel included, or not! Motivations: Doing what is right and just Showing viable career paths Ensuring business success Less risk of lawsuits 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 is it measured: “I trust the company to treat me fairly” “The company respects views of people like me” Key Takeaways Inclusion helps: Your organization’s bottom line  Your employees’ careers Your image as a fair employer Diversity: differences between people in a group Inclusion: appreciation and valuation of those differences Diversity - differences Inclusion – being appreciated for those differences Class 4: Inclusive strategies: 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 each individual employee Formal Inclusion Policies and Practices: Increasing diversity: 1. Recruitment and Selection of targeted demographic categories Selection is controversial: Potential to delegitimize the individual Recruitment is better option 2. Targeted leadership and development programs for demographic categories Risk of delegitimization  What message is being sent: “Fix the minority” or focusing on structural barriers? How are candidates identified: Self-identification vs structured process? Many leadership programs rely on self-identification. Minorities are less prone to see themselves as qualified for leadership roles Next step should be to develop inclusive procedures and process Enhancing Inclusion: 1.Diversity and anti-bias training Risk of backfiring Context dependent 2.Making minority employees feel like they belong: Proactive mentorship programs Actively creating connections between employees Highlight the value of each employee Formal Inclusion Policies and Practices: 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. Emphasise work outcomes, not work time! Key Takeaways Formal organizational policies need to be aligned with managerial actions Formal policies should focus on a) increasing diversity, b) enhancing inclusion, and c) creating accountability. Informal policies can include a) proactively building relationships, b) emphasize work outcomes rather than time, c) developing a team charter, and d) using inclusive language. You as manager can create proactively feeling between your employees Performance Measurement (appraisal) Performance measurement “refers to a formal process, which occurs infrequently, by which employees are evaluated by some judge (typically a supervisor) 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.” How can the errors be addressed? 3 helpful strategies Two classic approaches: Ranking and Rating To reduce subjectivity, organizations may opt to only measure ‘results’ (e.g., % sales increase, number complaints) 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’ (i.e., knowledge, skills and attitudes) Key takeaways The performance measurement process needs to be standardized due to rate error and human biases that distort ratings of employee performance. Rating errors and biases can be addressed through training, memory aids, and accountability Ranking and rating are traditional approaches to performance measurement. To increase accuracy and meaningfulness, the critical incident method and 360-degree feedback can be used. Measure ‘what’ (results) employees deliver and ‘how’ they do it(competencies). 6 – Trends in Performance Management Problems with performance reviews Performance reviews focus on identifying past mistakes rather than developing strengths To: Strength-based Feedback – becoming popular – employees affirmation and encouragement. To: Focus on Future Behavior and Personal Development Infrequent and poor alignment with employees’ progress To: Continuous and Personalized Feedback Most important driver of differential team performance is whether a person feel that his strengths are in play. 2 out in 10 ppl feel their strengths are used at work. Why strengths-based feedback? “Although we label weaknesses “areas of opportunity,” brain science reveals that we do not learn and grow the most in our areas of weakness. In fact the opposite is true: we grow the most new synapses in those areas of our brain where we have the most pre-existing synapses. Our strengths, therefore, are our true areas of opportunity for growth.” The feedforward interview protocol Source: Kluger, A. N., & Nir, D. (2010). The feedforward interview. Human Resource Management Review, 20, 235-246; https://www.youtube.com/watch?v=axC- lXu-G-I. 6 Step 1: Helping the employee to identify a personal success story − Focus on positive experiences only − Let employee describe nature of positive emotions in that moment  Step 2: Helping the employee to discover their personal success code − Personal characteristics and actions − Supporting actions of others (e.g., supervisor, peers) − Supporting conditions created by organisation (e.g., access to information) Step 3: Helping the employee to align their future with their personal success code − Asking the feedforward question Adobe adopted continuous feedback sessions. Adobe invented “check in”, Key takeaways Employees and managers tend to dislike traditional (annual) performance reviews. Strength-based feedback views employee strengths as the true opportunities for growth. The feedforward interview is an interview protocol used for providing strength-based feedback. Continuous feedback conversations provide real-time feedback that take employees progress into account. ADOBE introduced a system called “Check-In” to provide more meaningful and timely feedback to their employees. ----------------------------------------------------------------------------------- – Book Managing Employee Performance. Despite this intensive effort by company managers, performance reviews leave employees feeling uninspired and demotivated. Employees characterize the review process as “a soul crushing exercise” and, in the company’s annual employee engagement survey, identify it as one of the processes most in need of improvement. And every year, the company sees a spike in voluntary attrition in the months following the performance review. Performance management has two distinct functions: administrative and developmental. On the administrative side, organizations need to accurately evaluate employees’ performance so they can make decisions about pay raises, promotions, layoffs, and the like. On the developmental side, employees need high-quality feedback to improve their current performance and prepare for future roles. Both functions are important to your organization, but they place you, the manager, in two distinct roles with conflicting demands. To make good administrative decisions, you need to play the Judge and focus on the employee’s past performance. But to develop employees, you need to switch gears and play the Coach (future), The two roles require different skill sets, and managers sometimes find it hard to move between them. Performance management works best when it focuses on continuous feedback and development rather than on a single standalone annual assessment. That means a greater emphasis on your Coach role. In collect-ivistic cultures (like China), companies are more likely to define performance in relation to group-level outcomes rather than individual achievements. In cultures that minimize status differences (like the United States), companies are more likely to engage a wide range of stakeholders in evaluating employee performance. And in companies with a strong learning culture (like Culture Amp; see Chapter 6, Training and Developing Employees), managers and employees are more likely to have robust discussions (and debates) about performance development. Three stages of the overall performance management cycle: 1. Defining, 2. Evaluating, 3. Developing employee performance. Defining Performance Objective evaluations focus on job outputs or goal achievements, but subjective evaluations rely on a rater’s judgment. Throughout this chapter, we’ll focus on the performance indicators that are most central to an employee’s job. You might want to know if Harry and Sally show initiative, take on extra tasks, or provide support to other sales reps. These activities are sometimes described as organizational citizenship behavior or extra-role performance – activities that are valued by the organization but are outside the scope of the employee’s formal job requirements. Behaviors can make organizations more productive (and a nicer place to work). You can build these behaviors into a performance management system alongside the more traditional indicators of work quantity and quality. Adobe’s performance management system, employees work with their managers to develop individualized SMART (specific, measurable, attainable, relevant, and time bound) goals along with specific actions about how those goals will be achieved. A typical SMART goal for an Adobe rep might be to improve customer satisfaction scores by 3 points (specific) by responding to all customer-generated requests within 12 hours (measurable and attainable as an incremental improvement from the previous year) thereby retaining customers (relevant to the company’s bottom line). Progress toward the customer satisfaction goal and the response speed are both measured quarterly (time bound). Evaluating Performance: Now, please place your Judge hat firmly on your head. One of your roles as a manager is to evaluate the performance of your employees. You need to identify the best performers, and the not-so-good performers, so you know who to send to training, who to recommend for a pay increase, who to promote into a higher-level role and – sometimes – who to terminate. This stage of the performance management process is, sorry to say, the one that involves the most paperwork. There are many different performance evaluation methods, but we’ll keep it simple by sorting the methods into two groups: 1. Absolute rating methods Require you to evaluate your employees against some standard or benchmark (even if those benchmarks aren’t always clearly defined) 2. Comparative rating methods are relative Employees are compared against one another. They force you to decide whether Harry or Sally is the better performer. You’ll soon see that absolute and comparative methods have different advantages and disadvantages. We’ve summarized some of the key points in Table 7.1. Absolute Rating Methods: Absolute performance ratings usually rely on graphic rating scales. Graphic rating scales require the rater to evaluate the employee on a series of performance dimensions (e.g., initiative, teamwork, work quality). The rater chooses a number, a descriptive category, or a point on the scale (e.g., 1 = unsatisfactory to 5 = outstanding). graphic rating scales with “strongly disagree” and “strongly agree”. The main disadvantage of graphic rating scales is that, within most organizations, the “standard” against which performance is evaluated exists solely in the mind of the rater. Raters apply their own idiosyncratic standards, and so they diverge in their performance ratings even when they are evaluating the same employee. To nudge raters toward common benchmarks, some organizations develop behavioral scales. ideally, the ratings of other managers would align with yours, since you’re using the same scale benchmarks). Unfortunately, BOS scales have never really caught on in organizations, partly because they are more difficult to develop. You’d need a unique rating scale for every job in your company, and creating those scales is time- consuming and expensive. Comparative Methods: If you’ve done a careful job of hiring and training employees (of course you have!), you may be in the luxurious position of supervising a group of outstanding employees. Unfortunately, many organizational decisions require employee-to-employee comparisons. The simplest comparative method involves directly ranking employees within a work group or department. An alternative comparative method is when raters group the employees they supervise into a forced distribution. Forced distributions constrain the extent to which raters can use specific performance categories. McDonald’s forced managers to differentiate their ratings: now only 20% of employees can be designated top performers and 10% must be designated underperformers (leaving 70% for the midrange performer category). Comparative performance management systems work best when linked to clear objective criteria known to employees. Otherwise, a manager’s decision about who is ranked first, or who gets an “A,” can be perceived as politically motivated or capricious, damaging morale and professional relationships. Further, comparative performance management systems can drive employees to compete with one another, which can reduce innovation and even motivate unethical employee behavior. Unless they are very carefully managed, comparative management systems are likely to generate strong feelings of mistrust – and even lawsuits. Increasing Performance Evaluation Accuracy: Common rater errors: Leniency Error - A rater consistently rates employees at the high end of the scale. Severity Error - A rater consistently rates employees at the low end of the scale. Central Tendency Error - A rater consistently rates employees at the scale midpoint. Halo Error - A rater’s evaluation of an employee on one performance dimension creates an overall positive or negative impression that drives ratings on other dimensions. Recency Error - A rater’s evaluation is heavily influenced by the employee’s most recent performance. Contrast Error - A 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 - A rater’s evaluation of an employee is inflated because the rater feels a personal connection resulting from shared demographics, values, or experiences. They haven’t been able to identify a performance evaluation method that avoids rater errors entirely. So, rather than trying to find the best possible performance evaluation method (it doesn’t exist!), it’s better if organizations design the system to encourage raters to make more accurate judgments. Researchers have identified three things that make a difference: training, memory aids, and accountability. Training: The more you know about your employees’ jobs, the more clearly you can recognize, and distinguish, different levels of performance. frame-of-reference training to help raters create a shared understanding of performance evaluation. If your organization doesn’t offer formal training, you can still reach out to other managers to discuss how they use your company’s performance management tools and develop a shared understanding of good (and poor) performance.. Memory Aids: Many of the rater errors in Table 7.2 (e.g., recency, halo) result when raters base their evaluation on a limited pool of evidence. Instead of relying on your memory, use memory aids. Develop a process for recording performance information across the entire year (e.g., a performance journal) so that your ratings aren’t overly influenced by isolated (but vivid) performance events. Accountability: In general, raters make more accurate evaluations when they expect that they will need to justify their evaluations to someone else. Organizations that hold managers accountable are more likely to have quality data emerge from their performance evaluation system. Developing Employee Performance: It’s time to switch hats. In the previous stage of the performance management cycle, you were acting as a Judge and your priority was making accurate evaluations of your employees’ performance. But now, in the third stage of the performance cycle, you need to act as a Coach: communicating the performance review results to employees and motivating them to improve. Employees who view their performance evaluations as fair will be positively motivated to improve; employees who view their evaluations as unfair are less likely to be motivated and may be more inclined to leave the organization. But what makes employees feel fairly treated in performance discussions? One of the most powerful tools you have to develop a good manager–employee relationship is feedback (your observations on the employee’s past behavior) – along with feedforward (your support in developing the employee’s future behavior). Remember, performance management is a cycle, so the third-stage manager–employee interactions influence and revise the first-stage goals to launch the cycle again. In this section, we’ll walk you through the key questions to consider (Who? When? What? How?) to achieve the best results. Who? The Source of Performance Feedback: “Who should provide feedback?” is you, the manager. Managers usually provide performance feedback directly to their employees, and their feedback greatly impacts employee behavior. 360-degree feedback process that involves a range of people in the performance evaluation. When employees receive feedback from multiple stakeholder groups (coworkers, customers, subordinates), they know they aren’t just hearing the idiosyncratic views of their individual manager, and that can make employees view the feedback as fairer and be more willing to accept it. How can they increase their impact? Those questions are to solicit specific, constructive feedback the employee can address immediately. When? Feedback Timing: But if there’s one thing that characterizes the “new” performance management system, it’s the frequency of feedback. while any feedback is useful, daily and weekly feedback are particularly effective in improving performance. Don’t ever worry that you might be providing too much feedback, because there’s no evidence that employee performance declines at high levels of feedback. Managers were able to tune in to struggling employees earlier and coach them toward improvement. In this chapter, we’re emphasizing feedback that you personally deliver to employees, because that’s the feedback that contributes to the quality of your relationship with employees. But you can also use technology to increase feedback frequency. Employees can use Mozilla’s SPM system to establish shared goals, track their progress in real time, and ask for feedback. The system facilitates an ongoing conversation about performance rather than documenting performance and evaluating it after the fact. What? The Feedback Message: In the first stage of the performance management cycle, you set some SMART goals with Harry and Sally. Now the feedback that you deliver to them can connect back to those goals and expectations. The feedback that you communicate to employees should have two key characteristics: The feedback should be balanced (include positive feedback about what the employee is doing right alongside constructive feedback about how they can improve), and as specific as possible. Balanced Feedback: Let’s be frank: It’s always going to be easier for you to give positive feedback to employees. but negative feedback is threatening and likely to generate defensiveness. That’s especially the case if employees receive repeated doses of negative feedback, to the point where they question whether they will ever achieve their goals. The most effective feedback focuses on both positive and negative aspects of performance. The “trick” is to limit the volume of negative feedback you deliver at one time. and striking a balance between positive and negative feedback. Deliver enough negative feedback so the employee can accept personal responsibility for change without feeling crushed. Specific Feedback: The other important thing is to ensure that performance feedback (whether it comes directly from you or from other stakeholders) is as specific as possible about which employee behaviors were effective and ineffective. How? The Feedback Process Delivering effective feedback isn’t easy and takes practice. Adobe engages their managers in roleplaying realistic, and sometimes difficult, developmental conversations. also conducts ongoing “pulse surveys” with random samples of employees to see how well managers are applying that training: Are managers doing a good job setting expectations, giving and receiving feedback, and helping their employees develop? If your company offers training about how to give constructive feedback and how to manage employee reactions to feedback, we encourage you to take advantage of it. In the meantime, we’ll offer a few tips to make feedback more effective. Check Your Own Assumptions: You can start by reflecting on your own beliefs about your employees’ job performance and abilities. If you think that ability is something that can be developed, you are more likely to recognize changes in your employees’ job performance and be more willing to coach poor performing employees. Invite a Self-Appraisal: Employees who participate and engage in the performance management process will be more committed to change. One easy strategy to encourage participation is to invite employees to do a self-appraisal. Self-appraisals require employees to monitor and reflect on their performance; that reflection can facilitate learning and generate greater change than feedback that comes from a manager. A thorough self-assessment before a formal performance discussion can help employees feel prepared for the meeting and increase their perceptions of fair process. Encourage Employee-Generated Solutions: Once the area in need of improvement has been identified, the problem needs to be diagnosed and a collaborative action plan developed. It’s not unusual for managers and employees to disagree on the exact cause of a performance problem, but it’s very important that you agree on how to improve performance in the future.