Chapter 8: Performance Management Flashcards

1
Q

What is Performance Management?

A

Creating a work environment where people can perform to the best of their abilities.

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2
Q

Performance Review / Appraisals / Evaluations

A

A process in which a manager evaluates an employee’s performance relative to the job’s requirements and uses the information to show the person where and how improvements can be made.

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3
Q

Purposes of Performance Management

A

To influence employees bahaviour and improve an organization’s performance
- Developmental Purposes
- Administrative Purposes

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4
Q

Developmental Purposes

A

Performance management system gives managers a concrete framework to gather and organize information about an employee’s performance, provide feedback, and discuss employee goals and how they align with the organization’s goals. –> How there’s concrete framework to spark development

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5
Q

Administrative Purposes

A

Performance management systems provide input that can be used for the entire range of HRM activities, such as promotions, transfers, layoffs, and pay decisions. → Can also be used to defend the company from legal charges and actions.

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6
Q

Steps in the Performance Management Process

A
  1. Goals set to align with higher level goals
  2. Behavioural expectations and standards set and then aligned with employee and organizational goals
  3. Ongoing performance feedback provided during the cycle
  4. Performance appraised by manager
  5. A formal review session conducted
  6. HR decision making
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7
Q

Basic Performance Management Framework

A
  1. Develop strategy
  2. Measure performance indicators
  3. Assess Results
  4. Report and Review Performance
  5. Align people & culture
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8
Q

Reasons that Performance Management Systems sometimes fail

A
  • A manager has prepared inadequately
  • Ratings are inconsistent among supervisors or other raters
  • Performance standards may not be clear
  • The manager may not be able to observe performance or have all the information
  • The performance standards may not be clear
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9
Q

Developing an Effective Performance Management System

A
  • HR Department → Overseeing and coordinating the performance management systems
  • Managers → Must be actively involved as well (establish objectives and alignment)
  • Employees → More likely to accept and be satisfied with a performance management system when they are also involved.
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10
Q

Performance Standards

A

Accepted level of performance to be achieved by an employee

  • Strategic Relevance
  • Criterion Deficiency
  • Criterion Contamination
  • Reliability
    – Calibration
  • Fairness and Acceptability
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11
Q

Strategic Relevance

A

The extent to which the performance standards relate to or serve the strategic objectives of the organization in which they are applied. → Translate company objectives into performance standards.

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12
Q

Criterion Deficiency

A

Focusing on a single criterion while excluding other important but less quantifiable performance dimensions. → Performance standards should capture the entire range of an employee’s performance.

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13
Q

Criterion Contamination

A

A comparison of the performance of production workers, for example, should not be contaminated because some work with newer machines than others.

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14
Q

Reliability

A

Stability or consistency of a standard or the extent to which individuals maintain a certain performance level over time.
Correlating two sets of ratings.

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15
Q

Calibration

A

A process whereby managers meet to discuss the performance of individual employees to ensure that their employee evaluations are in line with one another (with the other managers)

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16
Q

Fairness and Acceptability

A

Fairness –> Suppose employees are allowed input on what constitutes good performance and how the performance management system operates. In that case, they are more likely to believe that it is fair, and the program is more likely to be successful.

Acceptability –> Difficuly of administering and using the performance management system.

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17
Q

Legal Issues

A

Performance reviews’s legal guidelines are as follows:
1. Relevance
2. Timeliness
3. Avoid subjectivity
a. Look for bias
b. Apply evaluation standards when making judgments
4. Transparency
5. Fairness

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18
Q

Sources of Performance Review Information

A
  • Manager/Supervisor
  • The Employee
  • Subordinates
  • Peers
  • Team Evaluation
  • Customers
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19
Q

Manager/Supervisor

A

A performance evaluation done by an employee’s manager and often reviewed by a manager one level higher

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20
Q

The Employee

A

A performance evaluation done by the employee being evaluated, generally on an evaluation form completed by the employee prior to the review meeting.

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21
Q

Subordinates

A

A performance review of a superior by an employee which is more appropriate for developmental than for administrative purposes.
- Submitted anonymously
- For developmental purposes rather than compensation basis

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22
Q

Peers

A

A performance evaluation is done by one’s fellow employees, generally on forms compiled into a single profile for use in the evaluation meeting conducted by the employee’s manager.
- More accurate and valid information compared to superior evaluation

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23
Q

Team Evaluation

A

A performance evaluation that recognizes team accomplishment rather than individual performance

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24
Q

Customers

A

A performance evaluation that includes evaluation from both a firm’s external and internal customers

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25
Q

360-Degree Evaluations

A

A performance evaluation is done by different people who interact with the employee, generally on forms compiled into a single profile for use in the evaluation meeting conducted by the employee’s manager.

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26
Q

Maximize quality of 360-Degree Evaluations

A
  1. Ensure anonymity
  2. Make respondents accountable
  3. Prevent “gaming” of the system
  4. Use statistical procedures
  5. Identify and quantify biases
27
Q

360-Degree Evaluations Pros

A
  • More comprehensive
  • Lessen bias and prejudice
  • Improve an employee’s self development
28
Q

360-Degree

A
  • System’s complex
  • Feedback can be intimidating and cause resentment
  • Conflicting opinions that are hard to weigh
  • Employees may “game” the system
  • Raters may not feel accountable because of anonymity
29
Q

Training Appraisers

A

Firms should make accurately evaluating and developing their subordinates a standard by which the supervisors themselves will be evaluated.

30
Q

Establishing a review plan

A

Training the rater’s most effective when it follows a systematic process that begins by explaining the objectives of the firm’s performance management systems and its philosophy on reviews.

31
Q

Eliminating Rating Errors

A

Eliminate subjective errors made by managers in the evaluation process is important.

  • Horn Error
  • Distributional Error
  • Error of Central Tendency
  • Leniency or strictness error
  • Forced distribution
  • Temporal (Recency Error)
  • Contrast Error
  • Similar-to-Me Error
32
Q

“Horn error”

A

a manager focuses on one negative aspect about an employee and generalizes it into an overall poor evaluation rating.

33
Q

Distributional Error

A

Occurs when a single rating is skewed toward an entire group of employees. To reduce it, explain to raters that in a group, there are significant differences among the employees.

34
Q

Error of central tendency

A

A performance rating error in which all employees are rated about average

35
Q

Leniency or strictness error

A

A performance rating error in when the appraiser tends to give employees either unusually high or unusually low ratings

36
Q

Forced distribution

A

A performance ranking system whereby raters are required to place a certain percentage of employees into various performance categories. → Would create rating errors if most employees are performing above standards, middle, or low.

37
Q

Temporal (Recency) Error

A

A performance rating error is one in which the evaluation is mainly based on the employee’s most recent behavior rather than on behavior throughout the evaluation period.

38
Q

Contrast Error

A

A performance rating error in when an employee’s evaluation is biased either upward or downward because od a comparison with another employee just previously evaluated.

39
Q

Similar-to-Me Error

A

A performance rating error in when an appraiser inflates the evaluation of an employee because of a mutual personal connection.

40
Q

Feedback Training

A

Managers must understand that employees want to know how they are doing and how they can improve instead of being appraised or judged. → Important to provide them with ongoing feedback.

41
Q

3 areas under feedback training

A
  1. Communicating effectively as to gain the employee’s support
  2. Diagnosing the root causes of performance problems
  3. Setting goals and objectives for the employee to achieve with the feedback.
42
Q

Performance Review Methods

A
  • Trait Methods
  • Behavioural Methods
  • Results Methods
43
Q

Trait Methods

A

Measure the extent to which an employee possess certain characteristics, such as dependability, reactivity, initiative, and leadership that are viewed as important for both the job and the organization

44
Q

Trait Methods: Graphic Rating Scale Method

A

Each employee rated according to a scale of characteristics

45
Q

Trait Method: Mixed-Standard Scale Method

A

Based on comparison (better than, equal to, or owrse than) with a standard

46
Q

Trait Method: Forced-Choice Method

A

Choose from statements to distinguish between successful and unsuccessful performance. Rater do not know the correct answer, reduces subjectivity

47
Q

Trait Method: Essay method

A

Compose a statement describing employee behaviour

48
Q

Behavioural methods

A

Specifically describe which actions should or should not be exhibited on the job.

49
Q

Behavioural Methods: Critical Incident Method

A

An unusual event denotes superior or inferior employee performance in some of the job.

50
Q

Behavioural Methods: Behavioural Checklist Method

A

Requires rater to check statements on a list that describes characteristics of the employee’s behaviour.

51
Q

Behavioural Methods: Behaviourally Anchored Rating Scale (BARS)

A

Consists of a series of vertical scales, one for each important dimension of job performance.
- Developed by a committee that includes both subordinates and managers
- High degree of content validity

52
Q

Behavioural Methods: Behaviour Observations Scale (BOS)

A

A behavioural approach to performance rating that measures the frequency of observed behaviour. It is more preferable compared to BARS or trait scales because:
1. Maintaining objectivity
2. Distinguishing good performers from poor performers
3. Providing feedback
4. Identifying training needs

53
Q

Results Methods

A

One of the most favorable. EVALUATE EMPLOYEE’S ACCOMPLISHMENTS

54
Q

Results Method: Productivity Measures

A
  • Sales people → Sales performance
  • Production workers → Number of units they produce
  • Executives → Basis of company’s profits and growth
  • Service-oriented jobs → cooperation, adaptability, initiative, and concern for human relations.
55
Q

Results Method: Management by Objectives

A

A results review process rates employees’ performance based on their achievement of goals set mutually by them and their manager.

56
Q

Results Method: The Balanced Scorecard

A

A BSC Evaluation consists of 4 related categories
- Financial measures
- Customer measures
- Process measures
- Learning measures

57
Q

Types of Performance Review Meetings and Feedback Sessions

A
  1. Tell-and-Sell
  2. Tell-and-Listen
  3. Problem Solving
58
Q

Tell-and-Sell

A

Persuade an employee to change their behaviour in a certain way

59
Q

Tell-and-Listen

A

1st part → Communicates the strong and weak points of an employee’s performance
2nd part → Explore employee’s feelings

60
Q

Problem Solving

A

The most proactive. Seeks to obtain employee’s buy-in for a mutually agreed-upon way to overcome obstacles and improve the person’s performance. Begin with the employee’s self-evaluation then proceed to problem-solve.

61
Q

Steps to conduct review meetings

A
  1. Ask for self evaluation
  2. Invite participation
  3. Express Appreciation
  4. Be Supportive and Demonstrate that you care
  5. Minimize Criticism
  6. Establish Mutual Goals
  7. Always follow-up day-to-day
62
Q

Identify Sources of Ineffective Performance

A
  • Ability
  • Motivation
  • Environment
63
Q

2 ways of managing ineffective performance

A
  1. Provide training
  2. Transfer person to other position or jobs within the organization