1. Human Resource Management Lecture 14 MGT 350

2. Last Lecture Holland Vocational Preferences Three major components – People have varying occupational preferences – If you think your work is important, you will be a more productive employee – You will have more in common with people who have similar interest patterns Holland Vocational Preferences (Six) Career Choices and Preferences MBTI personality type.

3. Topic Establishing the Performance Management System

4. HRM Process

5. Employee Performance Management Performance Management System – A process of establishing performance standards and appraising employee performance in order to arrive at objective HR decisions and to provide documentation in support of those decisions.

6. Introduction Employees generally see performance evaluations as having a direct effect on their work lives. The performance management systems need to include: –decisions about who should evaluate performance –what format should be used –how the results should be utilized

7. Checklist for customer relationship officer

8. Performance Management Systems Purposes of a Performance Management System –Feedback - let employees know how well they have done and allow for employee input. –Development – identify areas in which employees have deficiencies or weaknesses. –Documentation - to meet legal requirements.

9. Performance Management Systems Difficulties in Performance Management Systems –Focus on the individual: Discussions of performance may elicit strong emotions and may generate conflicts when subordinates and supervisors do not agree.

10. Performance Management Systems Difficulties in Performance Management Systems –Focus on the process: Company policies and procedures may present barriers to a properly functioning appraisal process. –Additionally, appraisers may be poorly trained.

11. Performance Management and EEO HRM practices must be bias free, objective and job-related. Valid performance appraisals are conducted at established intervals and are done by trained appraisers.

12. The Appraisal Process

13. Establishment of performance standards –Derived from company’s strategic goals. –Based on job analysis and job description. Communication of performance standards to employee.

14. The Appraisal Process Measurement of performance using information from: –personal observation –statistical reports –oral reports –written reports

15. The Appraisal Process Discussion of appraisal with employee. Identification of corrective action where necessary. –Immediate action deals with symptoms. –Basic corrective action deals with causes.

16. Appraisal Methods Three approaches: Absolute standards Relative standards Objectives

17. Appraisal Methods Evaluating absolute standards: An employee’s performance is measured against established standards. Evaluation is independent of any other employee.

18. Appraisal Methods Evaluating absolute standards: –Essay Appraisal:Appraiser writes narrative describing employee performance & suggestions. –Critical Incident Appraisal: Based on key behavior, illustrating effective or ineffective job performance.

19. Appraisal Methods Evaluating absolute standards: –Checklist Appraisal: Appraiser checks off behaviors that apply to the employee. –Adjective Rating Scale Appraisal: Appraiser rates employee on a number of job- related factors.

20. Appraisal Methods Evaluating absolute standards: –Forced-Choice Appraisal: Appraisers choose from sets of statements which appear to be equally favorable, the statement which best describes the employee.

21. Appraisal Methods Evaluating absolute standards: Behaviorally Anchored Rating Scales (BARS): Appraiser rates employee on factors which are defined by behavioral descriptions illustrating various dimensions along each rating scale.

22. Behaviorally Anchored Rating Scales (BARS)

23. Graph Rating Scale

24. Appraisal Methods Relative standards: Employees are evaluated by comparing their performance to the performance of other employees.

25. Appraisal Methods Relative standards: Group Order Ranking: Employees are placed in a classification reflecting their relative performance, such as “top one- fifth.”

26. Appraisal Methods Relative standards: –Individual Ranking: Employees are ranked from highest to lowest. –Paired Comparison: Each individual is compared to every other. Final ranking is based on number of times the individual is preferred member in a pair.

27. Appraisal Methods Using Achieved Outcomes to Evaluate Employees Management by Objectives (MBO) A management model that aims to improve performance of an organization by clearly defining objectives that are agreed to by both management and the employee. –includes mutual objective setting and evaluation based on the attainment of the specific objectives

28. Appraisal Methods Using Achieved Outcomes to Evaluate Employees –Common elements in an MBO program are: goal specificity participative decision making an explicit time period performance feedback –Effectively increases employee performance and organizational productivity.

29. 360 Degree Evaluation Feedback that comes from members of an employee's immediate work circle. Boss, subordinate, peer.

30. MethodAdvantageDisadvantage Written essays Simple to use More a measure of evaluator’s writing ability than of employee’s actual performance Critical incidents Rich examples; behaviorally based Time-consuming; lack quantification Graphic rating scales Provide quantitative data; less time-consuming than others Do not provide depth of job behavior assessed BARS Focus on specific and measurable job behaviors Time-consuming; difficult to develop Multiperson comparisons Compares employees with one another Unwieldy with large number of employees; legal concerns MBO Focuses on end goals; results oriented Time-consuming 360-degree appraisals ThoroughTime-consuming

31. Summary Performance Management System The performance management systems need to include: –decisions about who should evaluate performance –what format should be used –how the results should be utilized The Appraisal Process Difficulties in Performance Management Systems Three approaches: Absolute standards Relative standards Objectives