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CHAPTER 10: MANAGING EMPLOYEES' PERFORMANCE (Criteria for Effective…
CHAPTER 10: MANAGING EMPLOYEES' PERFORMANCE
Introduction
Performance management
process through which managers ensure that employees’ activities and outputs contribute to the organization’s goals.
Process
Knowing what activities and outputs are desired .
Observing whether they occur.
Providing feedback to help employees meet expectations.
Purposes of Performance Management
Administrative Purpose
ways in which organizations use the system to provide information for day-to-day decisions about salary, benefits, and recognition programs.
Developmental Purpose
serves as a basis for developing employees’ knowledge and skills.
Strategic Purpose
effective performance management helps the organization achieve its business objectives.
Criteria for Effective Performance Management
Validity
Reliability
Acceptability
Specific feedback
Fit with strategy
Methods for Measuring Performance
Making Comparisons
Forced Distribution
Assigns a certain percentage of employees to each category in a set of categories.
Paired Comparison
Compares each employee with each other employee to establish rankings.
Simple Ranking
Requires managers to rank employees in their group from the highest performer to the poorest performer.
Rating Individuals - Attributes
Mixed-standard scale
Uses several statements describing each trait to produce a final score for that trait.
Graphic Rating Scale
Lists traits and provides a rating scale for each trait.
Employer uses the scale to indicate extent to which an employee displays each trait.
Rating Individuals - Behaviors
Critical-Incident Method
Based on managers’ records of specific examples of employees acting in ways that are either effective or ineffective.
Employees receive feedback about what they do well and what they do poorly and how they are helping the organization achieve its goals
Behaviorally Anchored Rating Scale (BARS)
Rates behavior in terms of a scale showing specific statements of behavior that describe different levels of performance.
Behavioral Observation Scale (BOS)
A variation of a BARS which uses all behaviors necessary for effective performance to rate performance at a task.
A BOS also asks the manager to rate frequency with which the employee has exhibited the behavior during rating period.
Organizational Behavior Modification (OBM)
A plan for managing behavior of employees through a formal system of feedback and reinforcement.
Measuring Results
Productivity
is an important measure of success because getting more done with a smaller amount of resources (money or people) increases the company’s profits.
Management by Objectives (MBO
people at each level of the organization set goals in a process that flows from top to bottom, so that all levels are contributing to the organization’s overall goals.
These goals become the standards for evaluating each employee’s performance.
Measuring Quality
Performance measurement combines measurements of attributes and results.
Two kinds of feedback in TQM
Subjective feedback
Statistical quality control
The principles of total quality management (TQM), provide methods for performance measurement and management.
Sources of Performance Information
360-Degree Performance Appraisal: performance measurement that combines information from employees’
Subordinates
Self
Peers
Customers
Managers
Types of Rating Errors
Contrast errors
rater compares an individual, not against an objective standard, but against other employees.
Distributional errors
Strictness
the rater favors lower rankings
Central tendency
the rater puts everyone near the middle of the scale
Leniency
the reviewer rates everyone near the top
Rater Errors and Bias
Raters can be trained how to avoid rating errors.
Rater bias: raters often let their opinion of one quality color their opinion of others.
Halo error: when bias is in a favorable direction. This can mistakenly tell employees they don’t need to improve in any area.
Horns error: when bias involves negative ratings. This can cause employees to feel frustrated and defensive.
Giving Performance Feedback
Preparing for a Feedback Session
Managers should be prepared for each formal feedback session.
Conducting the Feedback Session
Three approaches
“Tell-and-Listen” – managers tell employees their ratings and then let employees explain view.
“Problem-Solving” – managers and employees work together to solve performance problems.
“Tell-and-Sell” – managers tell employees their ratings and then justify those ratings.
Identify ways of improvement depending on if the employee lacks ability, motivation or both.
Scheduling Performance Feedback
Annual feedback is not enough.
Employees should receive feedback so often that they know what the manager will say during their annual performance review.
Performance feedback should be a regular, expected management activity.