1. Performance Management
Chapter 20
Performance Management

2. Objectives Explain the importance of performance feedback
Describe the process of performance appraisal
Identify the components of effective appraisals
Demonstrate the skills required for a good appraisal
Organizational Behavior: An Experiential Approach 8/E
Joyce S. Osland, David A. Kolb, Irwin M. Rubin and Marlene E. Turner
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3. …Objectives Describe 360-degree feedback
Explain the opposition to appraisal systems
Distinguish between effective and ineffective feedback
Organizational Behavior: An Experiential Approach 8/E
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4. Performance Management System - Defined
A performance management system is a
process of establishing performance
standards and evaluating performance to
ensure that goals are being effectively
accomplished
Organizational Behavior: An Experiential Approach 8/E
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5. The Balanced Scorecard
Customer perspective – How do customers see the organization?
Internal business perspective – What must the organization excel at in order to succeed?
Innovation and learning perspective – How can the organization continue to improve and create value?
Financial perspective – How does the organization look to shareholders?
Organizational Behavior: An Experiential Approach 8/E
Joyce S. Osland, David A. Kolb, Irwin M. Rubin and Marlene E. Turner
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6. Basics of Performance Management
Develop rigorous systems that differentiate between three groups of employees
Create conditions that foster goal accomplishment
Establish a culture of accountability
Organizational Behavior: An Experiential Approach 8/E
Joyce S. Osland, David A. Kolb, Irwin M. Rubin and Marlene E. Turner
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7. Function Of Performance Feedback
Contributes to self-concept
Reduces uncertainty about whether employee is on track
Signals which organizational goals are most important
Helps people master their environment and feel competent
Organizational Behavior: An Experiential Approach 8/E
Joyce S. Osland, David A. Kolb, Irwin M. Rubin and Marlene E. Turner
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8. Manager’s Role? Not a judge, but a coach
Not “gotcha” but “How can I help you do better and achieve your goals?”
Managers’ attitude toward appraisal and their skill in appraising and giving feedback are crucial
Organizational Behavior: An Experiential Approach 8/E
Joyce S. Osland, David A. Kolb, Irwin M. Rubin and Marlene E. Turner
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9. Basic Objectives of Performance Appraisal Systems
Provide employees with feedback
Provide management with data for personnel decisions
Recognize skill acquisition and identify skill deficits for further training and development
Motivate employees to be more effective
Comply with equal opportunity regulations and ensure fairness
Organizational Behavior: An Experiential Approach 8/E
Joyce S. Osland, David A. Kolb, Irwin M. Rubin and Marlene E. Turner
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10. The Appraisal Process Review legal requirements
Translate organizational goals into job descriptions
Set clear job expectations
Provide job training or coaching to meet expectations
Supply adequate supervision
Acknowledge accomplishments, diagnose strengths and weaknesses in interview
Establish performance goals and development plan
Organizational Behavior: An Experiential Approach 8/E
Joyce S. Osland, David A. Kolb, Irwin M. Rubin and Marlene E. Turner
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11. Bias and Appraisals Incorrect attributions can bias appraisals
Potential for bias is reduced when:
Employees make their work visible to the appraiser
Appraisers and appraisees together clarify objectives and task responsibilities
Appraisers use behaviorally-based appraisal scales
Organizational Behavior: An Experiential Approach 8/E
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12. Does Performance Appraisal Work?
Meta-analysis results
Feedback generally improves performance, but it can also diminish performance
Appraisals used for developmental rather than administrative reasons (e.g., promotions, bonuses) are more likely to produce positive reactions
Organizational Behavior: An Experiential Approach 8/E
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13. For Team Appraisals
Determine KSAs required for team’s task and process-oriented skills
Identify who should be involved in the appraisal
Use both individual and team performance measures
Address social loafing
Ensure peers are trained in performance appraisal
Organizational Behavior: An Experiential Approach 8/E
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14. Multirater/Multisource Feedback - Defined
Multirater or multisource feedback, such as
360-degree feedback, incorporates
feedback from various sources, such as:
superiors, peers, subordinates, suppliers,
and customers
Organizational Behavior: An Experiential Approach 8/E
Joyce S. Osland, David A. Kolb, Irwin M. Rubin and Marlene E. Turner
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15. 360-Degree Multirater Feedback
Employee
Manufacturers’ & Customers’ ratings
Suppliers’ ratings
Employee’s self-rating
Superiors’ ratings
Other Team
Members’
Ratings
Subordinates’ ratings
Organizational Behavior: An Experiential Approach 8/E
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16. For Effective 360-Feedback
Ratees are held accountable for using the feedback
Raters are held accountable for the accuracy or usefulness of their feedback
Management provides resources to support the ratee’s behavioral change
Organizational Behavior: An Experiential Approach 8/E
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17. Eliminate Performance Appraisal
Deming’s criticisms of appraisals:
Usually lack objectivity
Ignore factors outside the employee’s control
Encourage individual rather than team focus
Promote short-sightedness and short-term focus
Encourage employee to see boss as their “customer” rather than the real customer, which can result in fear, rivalry, and politics
The TQM solution: recognize outstanding
performers and coach poor performers; teams
continuously gather data on own performance
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18. Forced Distribution Systems - Defined
In forced distribution or forced ranking
systems, managers have to rank all
employees and fit them into a pre-determined
distribution with only a certain percentage of
employees allowed in each category
Organizational Behavior: An Experiential Approach 8/E
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19. Results of Forced Distribution Systems
Employee skepticism
Lower morale
Less collaboration
Lower productivity
Organizational Behavior: An Experiential Approach 8/E
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20. Develop Strengths, Not Weaknesses
Marcus Buckingham
Focusing on Flaws
Evokes negative memories/emotions
Creates self-doubt
Lowers motivation, energy, productivity and self-assurance
Focusing on
Strengths is more
productive
Discover each employee’s unique strengths
Capitalize on them
Work around their weaknesses
Organizational Behavior: An Experiential Approach 8/E
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21. Effective Vs. Ineffective Feedback
Descriptive
Specific, data-based
Directed at controllable behaviors
Solicited
Immediate
Suggests ways to improve
Intended to help
Occurs when receiver is ready to listen
Ineffective
Evaluative
General
Directed at personality traits
Imposed
Delayed
Prescribes ways to improve
Intended to punish
Occurs when giver is ready
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22. Steps in the Interview Process
Explain the format and purpose
Discover employee opinions regarding performance and career goals
Provide supervisor’s appraisal
Problem solve about performance if necessary
Plan for next period
Employee presents self-appraisal
Organizational Behavior: An Experiential Approach 8/E
Joyce S. Osland, David A. Kolb, Irwin M. Rubin and Marlene E. Turner
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23. ...Steps in the Interview Process
Respond to employee self-appraisal and convey feedback
Ask about conditions or problems that hinder performance
Problem solve about what both could do to improve employee performance
Together set objectives and design plan for next period
Discuss long-term career goals and development needs
Organizational Behavior: An Experiential Approach 8/E
Joyce S. Osland, David A. Kolb, Irwin M. Rubin and Marlene E. Turner
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24. When Does Culture Matter in Performance Appraisal?
Different cultures have different perceptions
about the purpose of performance appraisal
and how it should be carried out
Organizational Behavior: An Experiential Approach 8/E
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25. Culture and Performance Appraisal
Harmony and face-saving
In Eastern cultures, negative feedback is likely to be interpreted as a loss of face and public humiliation
Power distance
In low power-distance cultures, employees are more willing to question superiors
In high power-distance cultures, employees are more fearful of disagreeing with their boss
Organizational Behavior: An Experiential Approach 8/E
Joyce S. Osland, David A. Kolb, Irwin M. Rubin and Marlene E. Turner
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26. …Culture and Performance Appraisal
Uncertainty avoidance
In cultures characterized by high uncertainty avoidance, appraisal systems are more formalized with more detailed regulations and procedures
Organizational Behavior: An Experiential Approach 8/E
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27. …Culture and Performance Appraisal
Individualistic Cultures
emphasize
Individual achievement
Individual incentive schemes
Formal appraisal processes with feedback on performance
Merit-based hiring and promotion
Collectivist Cultures
emphasize
Group achievement
Group incentive schemes
Informal appraisals
Hire and fire based on loyalty and seniority
Organizational Behavior: An Experiential Approach 8/E
Joyce S. Osland, David A. Kolb, Irwin M. Rubin and Marlene E. Turner
20 -26