fundamentals of
Human Resource Management
Unit06 Managing Employees’ Performance Managing Employees Performance
NGÔ QUÝ NHÂM
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What Do I Need to Know? 1 Identify 1. Identify the activities involved in performance the activities involved in performance management. 2 Discuss the purposes of performance 2. Discuss the purposes of performance management systems. 3 Define five criteria for measuring the 3. Define five criteria for measuring the effectiveness of a performance management system. system 4. Compare the major methods for measuring performance. f 8‐2
What Do I Need to Know? (continued) 5 Describe 5. Describe major sources of performance major sources of performance information in terms of their advantages and disadvantages. 6. Define types of rating errors and explain how to minimize them to minimize them. 7. Explain how to provide performance feedback effectively. effectively
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What Do I Need to Know? (continued) 8 Summarize 8. Summarize ways to produce improvement in ways to produce improvement in unsatisfactory performance. 9 Di 9. Discuss legal and ethical issues that affect l l d thi l i th t ff t performance management.
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Introduction • Performance Performance management: the process management: the process through which managers ensure that employees’ activities and outputs contribute employees activities and outputs contribute to the organization’s goals. • This process requires: This process requires: – Knowing what activities and outputs are desired – Observing whether they occur Ob i h h h – Providing feedback to help employees meet expectations t ti 8‐5
Test Your Knowledge • If If the performance management system the performance management system created competition among team members, I would A. B B. C. D D.
Make collaboration a criterion to be evaluated. Nothing competition is good Nothing, competition is good. Increase the specificity of the feedback. Foc s on personal traits rather than beha iors Focus on personal traits rather than behaviors.
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Figure 8.1: Stages of the Performance Management Process
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Purposes of Performance Management • Strategic Strategic Purpose Purpose – means effective performance means effective performance management helps the organization achieve its business objectives. • Administrative Purpose – refers to the ways in which organizations use the system to provide information for day‐to‐day decisions about salary, benefits, and recognition programs. • Developmental Purpose l l – means that it serves as a h basis for developing employees’ knowledge and skills skills. 8‐8
Criteria for Effective Performance Management Fit ith t t Fit with strategy V lidit Validity Reliability Acceptability Specific feedback Specific feedback 8‐9
Figure 8.2: Contamination and Deficiency of a Job Performance Measure
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Test Your Knowledge • Martin Martin is a computer programmer whose job is a computer programmer whose job mainly consists of independently coding software If interpersonal and teamwork skills software. If interpersonal and teamwork skills were weighted heavily on his job performance measure it would suffer from measure it would suffer from A. Criterion contamination B Criterion deficiency B. Criterion deficiency C. Unreliability
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Methods for Measuring Performance
Comparative
Quality
Attribute
METHOD
Results
Behavior
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Table 8.1: Basic Approaches to Performance Basic Approaches to Performance Measurement
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Measuring Performance: Making Comparisons Simple Ranking i l ki • Requires q managers to rank employees in employees in their group from the highest highest performer to the poorest performer. f
Forced Forced Distribution
Paired Paired Comparison
• Assigns a g certain percentage of employees to employees to each category in a set of categories categories.
• Compares p each employee with each other other employee to establish rankings rankings.
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Measuring Performance: Rating Individuals ‐ Attributes Graphic Rating Scale Graphic Rating Scale Mixed‐Standard Scale Mixed‐Standard Scale • Lists traits and provides a • Uses several statements rating scale for each trait. describing each trait to produce a final score for • The employer uses the scale that trait. to indicate the extent to which an employee displays which an employee displays each trait.
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Figure 8.3: Example of a Graphic Rating Scale
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Figure 8.4: Figure 8 4: Example of a Mixed‐Standard Mixed‐Standard Scale
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Measuring Performance: R ti I di id l Behaviors Rating Individuals ‐ B h i Critical‐Incident Method Critical‐Incident Method • Based on managers’ records of specific examples of the employee acting in ways that are either effective or ineffective. • Employees receive feedback about what they do well and y p y 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 scale showing specific statements of behavior that describe different levels of performance. f
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Figure 8.5: Figure 8 5: Example of Task‐ BARS Rating Dimension for a Patrol Officer a Patrol Officer
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Measuring Performance: Rating Individuals – Behaviors (continued) Behavioral Observation Scale Organizational Behavior (BOS) Modification (OBM) • A variation of a BARS which • A plan for managing the uses all behaviors necessary uses all behaviors necessary behavior of employees behavior of employees for effective performance to through a formal system of rate performance at a task. feedback and reinforcement. • A BOS also asks the manager to rate the frequency with which the frequency with which the employee has exhibited the behavior during the rating period. i d 8‐20
Figure 8.6: Example of a Behavioral Observation Scale (BOS)
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Measuring Performance: Measuring Results • Management Management by Objectives (MBO): people at by Objectives (MBO): people at each level of the organization set goals in a process that flows from top to bottom so that process that flows from top to bottom, so that all levels are contributing to the organization’s overall goals overall goals. • These goals become the standards for evaluating each employee’ss performance. evaluating each employee performance
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Table 8.2: Management by Objectives – Two Objectives for a Bank
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Test Your Knowledge • The The performance management system at XYZ performance management system at XYZ company currently is perceived as unfair and is time consuming for managers. Which of the following systems is the most likely and least likely used, respectively. A. B. C. D.
Paired comparisons; Results Results; Forced distribution Behavioral; Attributes Attributes; Comparative
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Measuring Performance: Measuring Quality • The The principles of total quality management principles of total quality management (TQM), provide methods for performance measurement and management measurement and management. • With TQM, performance measurement combines measurements of attributes and combines measurements of attributes and results. – Subjective feedback S bj ti f db k – Statistical quality control
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Sources of Performance Information • 360‐Degree 360 Degree Performance Appraisal: Performance Appraisal: performance measurement that combines information from the employees’:: information from the employees – Managers – Peers – Subordinates – Self – Customers
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Types of Performance Measurement Rating Errors • Contrast Contrast errors: the rater compares an errors: the rater compares an individual, not against an objective standard, but against other employees but against other employees. • Distributional errors: the rater tends to use only one part of a rating scale only one part of a rating scale. – Leniency: the reviewer rates everyone near the top – Strictness: St i t th rater the t ffavors llower rankings ki – Central tendency: the rater puts everyone near the middle iddl off th the scale l 8‐27
Types of Performance Measurement Rating Errors (continued) • Rater Rater bias: raters often let their opinion of bias: raters often let their opinion of one quality color their opinion of others. – Halo error: when the bias is in a favorable direction. direction This can mistakenly tell employees they don’t need to improve p in anyy area. – Horns error: when the bias involves negative ratings. This can cause employees p y to feel frustrated and defensive.
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Test Your Knowledge • Bill Bill rates all of his employees very low except rates all of his employees very low except for Jan. Jan gets above average ratings because she consistently comes to work on because she consistently comes to work on time. The rating errors Bill makes are _______ and and _______, respectively. respectively A. B B. C. D D.
Leniency; Horn Strictness; Halo Strictness; Halo Similar‐to‐me; Central Tendency Horn Strictness Horn; Strictness 8‐29
Giving Performance Feedback • Scheduling Performance Feedback Scheduling Performance Feedback – Performance feedback should be a regular, expected management activity. activity – Annual feedback is not enough. – Employees should receive feedback so often that they know what the manager will say during their annual pperformance review.
• Preparing for a Feedback Session – Managers should be prepared for each formal feedback session. 8‐30
Giving Performance Feedback (continued)
• Conducting the Feedback Session Conducting the Feedback Session – During the feedback session, managers can take any of three approaches: 1. “Tell-and-Sell” – managers tell employees their ratings and then justify those ratings. 2. “Tell-and-Listen” – managers tell employees their ratings and then let the employees p y explain p their side of the story. g – managers g and employees p y work 3. “Problem-Solving” together to solve performance problems. 8‐31
Figure 8.7: Improving Performance
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Legal and Ethical Issues in Performance Management • Legal – Performance management processes are often scrutinized in cases of discrimination or dismissal scrutinized in cases of discrimination or dismissal.
• Ethical – Employee monitoring via electronic devices and Employee monitoring via electronic devices and computers may raise concerns over employee privacy.
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Legal Requirements for Performance Management • Lawsuits Lawsuits related to performance management related to performance management usually involve charges of: – Discrimination – Unjust dismissal
• TTo protect against both kinds of lawsuits, it is t t i t b th ki d f l it it i important to have a legally defensible performance management system. f t t
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Legal Requirements for Performance Management (continued) • A A legally defensible legally defensible performance management performance management system includes: – Based on valid job analyses, analyses with requirements for job success clearly communicated to employees. – Performance measurement should evaluate behaviors or results, rather than traits. – Multiple p raters ((includingg self-appraisals) pp ) should be used. – All performance ratings should be reviewed by upper-level managers. – There should be an appeals mechanism for employees. 8‐35
Summary • Performance management is the process through g p g which managers ensure that employees’ activities and outputs contribute to the organization’s goals. • Organizations establish performance management Organizations establish performance management systems to meet three broad purposes: – Strategic purpose – Administrative purpose – Developmental purpose
• Performance Performance measures should fit with the measures should fit with the organization’s strategy by supporting its goals and culture. 8‐36
Summary (continued) • Performance Performance information may come from an information may come from an employee’s self‐appraisal and from appraisals by the employee’s supervisor, employees, peers, and customers. • Using only one source makes the appraisal more subjective. • Organizations may combine many sources into a 360‐ d degree performance appraisal. f l
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Summary (continued) • Organizations Organizations can minimize appraisal politics by can minimize appraisal politics by establishing a fair appraisal system, involving managers and employees in developing the system, allowing employees to challenge evaluations, communicating expectations, and having open di discussion. i • Performance feedback should be a regular, scheduled management activity so that employees scheduled management activity, so that employees can correct problems as soon as they occur.
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Summary (continued) • The performance feedback discussion should focus p on behavior and results rather than on personalities. • Managers must make sure that performance management systems and decisions treat employees dd l equally, without regard to their race, sex, or other protected status. protected status. • A system is more likely to be legally defensible if it is based on behaviors and results, rather than on traits, and if multiple raters evaluate each person’s performance.
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