Chapter 8

Question 1

What is performance management?

Answer 1

the continuing process of identifying, measuring, and developing the performance of individuals and teams

aligning performance with the strategic goals of the organization

Question 2

What are steps of performance management?

Answer 2

1: Define performance outcomes for company, divisions, and departments (so can delineate and know what matters)
2: Develop employee goals, behaviours, and actions to achieve outcomes. Review performance standards / expectations (if just eval outcomes, employees will take shortcuts and skip over good behaviours)
3: Provide support and ongoing performance discussions (best if ongoing - monthly/quarterly)
4: Evaluate performance
5: Identify improvements as needed (everyone has small deficiencies, but addresss big ones)
6: Identify consequences for performance shortfalls (make timeline to fix it)

Question 3

What needed for performance evaluation?

Answer 3

Need:

• performance standards! (Defined beforehand, benchmarks for what is good performance/not)
• performance measures (ratings to eval perf) – need to be VALID and RELIABLE

Question 4

What are the important parts of performance standards?

Answer 4

1. Related to the position (diff per person and probably more strategic/hard to articulate at senior levels)
2. Concrete, specific, and measurable metrics (QUANTIFIABLE, best if objective but subj okay too)
3. Practical and easy to measure (if subj need to measure it!)
4. Meaningful to everyone especially incumbent (dont wanna be evaluated on things we dont think are important)
5. Realistic and achievable
6. Reviewed (and updated) periodically (need to reflect standards found in job analysis)

Question 5

What are the types of performance measures?

Answer 5

a) objective (verfiable by others)
b) subjective (based on opinion)
* ** should aim for objective but can have some subj if needed

1) direct (rater sees the performance directly)
2) indirect (rater evaluates substitutes for actual performance that is not observable) ex: use hints that suggest having done well

Question 6

What is on the performance evaluation balanced scorecard? What do most organizations do?

Answer 6

a) financial measures (past) - budget, profit, ROI
b) customer measures (present) - customer loyalty, satisfaction
c) internal process measurement (present) - cycle time, response time
d) growth and development measures (future) - training and dev., investment

Most orgs only focus on financial and maybe customer, but that makes no sense to only use the past to decide the future!

Question 7

What are the main purposes of performance management?

Answer 7

• strategic = help org achieve biz objectives
• administrative = info for decisions on salaries, training and dev., career planning
• developmental = provide info to develop employee knowledge and skills

Question 8

What dictates and effective performance management system?

Answer 8

• fit with strategy!
• reliable and valid
• acceptable to those being evaluated
• specific: identifies what employee needs to do (what needs to stay/be changed) *behaviours, not attitudes bc those are harder to change

Question 9

What are the two main systems for performance evaluation?

Answer 9

1) ranking

2) rating

Question 10

What are the options for a ranking system?

Answer 10

• simple ranking = managers rank employees in their group from highest to lowest
• forced distribution method = rank on a curve –> fit everyone into percentages under curve
• paired comparison model = compare each employee with another, sorting into order as go (“Jen is better than Roy, but Joe is better than Jen “ :. Roy>Jen >Joe )

Question 11

What is the drawback of ranking systems?

Answer 11

Performance of people is evaluated not on valid external criteria, but rather on how well they compare with other employees.

Can be objectively awesome in a group of even more awesome and still be at bottom
Can be objectively not great in a group of even worse and end up on top

Question 12

What is a rating system? What are the 7 types?

Answer 12

Performance is rated to uniform set of standards: rating by assessing attributes, behaviours, or result.

1) Graphic rating scale
2) Mixed standard scales
3) Critical incident method
4) Behaviourally anchored rating scales (BARS)
5) Behavioural observation scale (BOS)
6) Organizatinal behaviour modification (OBM)
7) Management by objective (MBO)

Question 13

What is a graphic rating scale? What do you need for this to work?

Answer 13

Visual method with attributes and a rating scale for each one. Things like knowledge, judgement, communication, teamwork, creativity, etc.

Need definitions of the attributes and of the areas on the rating scale (ex: what does a 4 rating look like?)

Question 14

What is a mixed standard scale?

Answer 14

Uses several statements describing each attribute to produce a final score for that attribute. Similar to graphic ratings but provides more detail with respect to each attribute being assessed.

ex: give +, 0, - for the statement: employee uses good judgement when addressing problems and provides workable alternatives, but sometimes does not take actions to prevent problems

Question 15

What is the critical incident method?

Answer 15

Based on managers’ records of specific examples of the employee behaving in ways that are either effective or ineffective. Require ‘recording’ (logging) when these behaviours occur.

Critical incidents are exceptionally impactful - employee could be exceptionally great in that situation
^ critical incidents because those are most serious, other events are kinda middle ground, dont always show true colours because less intense

Question 16

What is a Behaviourally Anchored Rating Scale (BARS)?

Answer 16

Rates behaviour in terms of a scale showing specific statements of behaviour that describe different levels of performance. Usually derived from critical incident analysis.

Ex: 1-7 with 7 = expect employee to make valuable suggestions for increased sales and have positive relationships with all customers // 1 = can expect to take extended breaks and roam around without purpose –> allows for eval on what has actually been observed because explains exact details for each rating

Question 17

What is a behavioural observation scale (BOS)?

Answer 17

a variation of BARS which uses all behaviours necessary for effective performance to rate performance at a task.

ex: ‘does x’ - options = always, sometimes, etc. with definitions of what those mean (always = 95-100% of the time)

Question 18

What is an organizational behaviour modification (OBM) method?

Answer 18

define a set of key critical behaviours necessary to do a job. Results in a plan for managing the behaviour of employees through a formal system of feedback and reinforcement.

Helps change behaviour even if they dont want to, as once behaviour is forced, attitude will shift to avoid COGNITIVE DISSONANCE

ex: mandate seatbelts = HAVE to wear them even if dont want to, and after a while youre fine with it

Question 19

What is a management by objective (MBO) method?

Answer 19

focuses on results whereby people at each level of the organization set goals in a process that flows from top to bottom, so that employees at all levels are contributing to the organization’s overall goals; these goals become the standards for evaluating each employee performance.

Set own goals and evaluate if you reached them

** often qualitiative though which makes it hard to measure

Question 20

What is the 360 degree performance assessment? Why is this type of eval useful?

Answer 20

Combines info from the employee’s managers, peers, direct reports, self and customers.

** Best used for employee development, not performance appraisal.

useful because multiple different perspectives and can help reduce errors/biases

Question 21

What are the 10 typical errors in performance measurement?

Answer 21

Rating errors:

• Similar-to-me error
• Personal prejudice: a rater pejoratively stereotypes the employee developing an inherent dislike
• Contrast effect error: comparing employee’s performance to co-workers rather than to an objective standard.
• Focus on activities error: employees are assessed on how busy they appear rather than how effective they are in achieving results.
• Recency effect error: the rating is based on the success/failure of the most recent work
• First effect error: the rating is based on the success/failure of the first interaction with the employee or the first work performed.
• Halo error: rater reacts to one positive performance aspect by rating the employee positively in all areas
• Horns errors: rater responds to one negative aspect by rating an employee low in other aspects

Distribution errors:

• Leniency error: higher ratings are given to all employees – too nice!
• Strictness error: lower ratings are given to all employees – too intense/high standards
• Central tendency error: all employees are at or near the middle to a rating scale – no distinctions really, everyone around average

Question 22

How can one reduce assessment errors?

Answer 22

• Train raters how to use performance assessment tools
• Train raters how to identify and respond to their biases
• Train raters how to make the assessment process more objective and less subjective
• Use more direct measures (if pos) or better indirect (proxy) measures
• Discuss with raters the results of employee performance ratings and provide evidence in support of their ratings with the goal of eliminating rating errors –> Hold a ‘calibration session’

Question 23

What should a good performance feedback session have?

Answer 23

• should be regular and scheduled
• use neutral site
• focus on behaviours (not personalities – “you’re just lazy”)
• ask for self assessment
• manager should summarize how to improve and specify official standards for fix or for further issues
• should make sure both parties are heard, understood, respected
• emphasize that it is discussion
• fully documented!!! and empl sign off