1. Managing Employees’ Performance
Chapter 8
Managing Employees’ Performance
What Do I Need to Know?
1.  Identify the activities involved in performance management.
 2.  Discuss the purposes of performance management
systems.
 3.  Define five criteria for measuring the effectiveness of a performance management system.
 4.  Compare the major methods for measuring performance.
 5.  Describe major sources of performance information in terms of their advantages and disadvantages.
 6.  Define types of rating errors and explain how to minimize them.
 7.  Explain how to provide performance feedback effectively.
 8.  Summarize ways to produce improvement in unsatisfactory performance.
 9.  Discuss legal and ethical issues that effect performance management.

2. 2 of 16
Introduction
Performance management: the process through which managers ensure that employees’ activities and outputs contribute to the organization’s goals.
The process of performance management requires:
Knowing what activities and outputs are desired
Observing whether they occur
Providing feedback to help employees meet expectations
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3. The Process of Performance Management
Traditional approaches versus performance management
Performance appraisal: the measurement of specified areas of an employee’s performance.
Stages of the performance management process include:
Defining performance
Measuring performance
Providing feedback on performance
Using this type of performance management process in place of the traditional performance appraisal routine helps managers and employees focus on the organization’s goals.
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4. Performance Appraisal Problems and Performance Management Solutions
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Performance Appraisal Problems and Performance Management Solutions
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5. Stages of the Performance Management Process
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6. Purposes of Performance Management
Three broad purposes include:
Strategic purposes: helps the organization achieve its business objectives
Administrative purposes: the ways in which the organization uses the system to provide information for day-to-day decisions about salary, benefits, and recognition programs
Developmental purposes: serves as a basis for developing employees’ knowledge and skills
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7. Criteria for Effective Performance Management
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Criteria for Effective Performance Management
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8. Basic Approaches to Performance Measurement
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Basic Approaches to Performance Measurement
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9. Sources of Performance Information
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10. Errors in Performance Measurement
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Errors in Performance Measurement
Similar-to-me error:
An unfortunate result of this type of error is possible discrimination
Errors in distribution:
Leniency
Strictness
Central tendency
Errors in distribution pose two problems:
They make it difficult to distinguish among employees rated by the same person
They create problems in comparing the performance of individuals rated by different raters
Halo and Horns
When raters make these types of errors, the performance measurement cannot provide specific information needed for useful feedback
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11. Giving Performance Feedback
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Giving Performance Feedback
Once the manager and others have measured an employee’s performance, that information must be given to the employee.
Performance feedback should be a regular, expected management activity.
Providing feedback more than once a year is most beneficial to the employee and the organization.
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12. Preparing for a Feedback Session
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Preparing for a Feedback Session
To prepare for a feedback session managers should:
Be well prepared
Create the right context for the meeting
Select a neutral location
Enable the employee to be well prepared
Ask employees to complete a self-assessment ahead of time
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13. Conducting the Feedback Session
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Conducting the Feedback Session
During the feedback session, managers can take any of three approaches:
Tell and sell approach: managers tell the employees their ratings and then justify those ratings
Problem-solving approach: managers and employees work together to solve performance problems in an atmosphere of respect and encouragement
Tell and listen approach: managers tell the employees their ratings and then let the employees explain their side of the story
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14. Finding Solutions to Performance Problems
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Finding Solutions to Performance Problems
When performance evaluation indicates that an employee’s performance is below standards, the feedback process should launch an effort to correct the problem.
The final stage of performance management involves identifying areas for improvement and ways to improve performance in those areas.
To determine an employee’s ability level, the manager should consider whether the employee has the knowledge, skills, and abilities needed to perform the job effectively.
To determine an employee’s level of motivation, managers need to consider whether the employee is holding a job he or she wants.
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15. Legal Requirements for Performance Management
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Legal Requirements for Performance Management
Because performance measures play a central role in decisions about pay, promotions, and discipline, employment-related lawsuits often challenge an organization’s performance management system.
Lawsuits related to performance management usually involve the charges of discrimination or unjust dismissal.
To protect against both kinds of lawsuits, it is important to have a legally defensible performance management system.
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16. Electronic Monitoring and Employee Privacy
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Electronic Monitoring and Employee Privacy
Computer technology now supports many performance management systems.
Congress has considered laws to regulate computer monitoring.
Electronic monitoring provides detailed, accurate information, but employees may find it demoralizing, degrading, and stressful.
It is essential that organizations protect the privacy of performance measurements, as they must do with other employee records.
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