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Performance Management

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Presentation on theme: "Performance Management"— Presentation transcript:

1 Performance Management

2 Why Conduct Performance Appraisals?

3 Developing an Appraisal System
GOAL SETTING What type of work is examined? Who sets the goals? How difficult are the goals? Team vs. individual goals? What is measured? MEANS TO EVALUATE What rating scale is used? 360 degree feedback? Includes self-evaluation? ADMINISTRATION How often? Flexible or standardized forms? Who conducts appraisals? How frequent is feedback? Is there an appeal process? PERFORMANCE AND PAY Tied to rewards? Linked to development? How are the results used?

4 Legal Issues Brito Vs. Zia equate performance measurement with employee selection processes. Appraisal systems are more defensible if they: Are based on job analysis (Validity) Are consistent among multiple raters (Reliability) Provide written instructions Allow employees to review appraisal results Train appraisers in the use of the system Adverse Impact Rules Apply The legal implications of an employee’s performance appraisal have become a major concern for managers. Shown here are five factors that have been shown to help defend the results of an appraisal in court.

5 Acceptability Performance management systems need to be perceived as fair Procedural fairness Interpersonal fairness Outcome (distributive) fairness Valid – evaluated based on job related metrics. Reliable – evaluations should not depend on which manager are conducting the evaluations.

6 How to Evaluate? Absolute Measurement
Employees are all measured strictly by absolute performance requirements or standards of their jobs. Performance compared to set goals Avoids conflict among workers May decrease differentiation Relative (Comparative) Assessment Employees are measured against other employees . Ranking allows for comparison of employees but does not shed light on the distribution of employee performance. “Forced distribution” among workers May create false distinctions and competition

7 What determines individual performance?

8 Appraisal Forms “Least important elements of the appraisal process”
Appraisal forms are most often contain various styles Performance focused vs. situation focused appraisal Approaches to Appraisal Forms Trait / Attributes Behavior Results / Outcomes Global / Essay

9 What to Evaluate? Trait / Attribute Measures Behavior-based measures
Are an assessment of how the employee fits with the organization’s culture, not what the employee actually does. Behavior-based measures Focus on what an employee does correctly and what the employee should do differently. Results-based measures Focus is on accomplishments or outcomes that can be measured objectively. Problems occur when results measures are difficult to obtain, outside employee control, or ignore the means by which the results were obtained.

10 Trait-Based Appraisals
Characteristics that are enduring and general e.g. “Leadership” “Communication” “Decisiveness” Definitions critical Easy to administer Competency models vs. Trait-based appraisal Are the characteristics really related to performance? Potential Problems Focus on person rather than performance May be ambiguous or arbitrary Poor feedback and goal setting Poor reliability and validity

11 “An employer has no business with a man’s personality
“An employer has no business with a man’s personality. Employment is a specific contract calling for specific performance and nothing else. Any attempt of an employer to go beyond this is usurpation. It is an abuse of power. An employee owes no “loyalty,” he owes no “love,” and no “attitudes” – he owes performance and nothing else.” Peter Drucker Management Tasks, Responsibilities, Practices (1974)

12 Trait-Based Questions
Graphic Rating Scale Discrete scale (e.g. 1 to 5 ratings) Sliding (check along a graphic scale) Mixed-standard scale Statements that describe the amount of a trait (High/Med/Low) Ratings of whether the employee meets the statements A scoring key

13 Behavior-Based Appraisal
Focus on specific behaviors with examples Important behaviors determined through job analysis Critical incidents Positives More valid and reliable Acceptable to employees Better for development and improvement Potential Problems Difficult and expensive to develop Needs to match jobs closely to be effective Emphasizes behaviors (at the expense of others?) Focuses on behavior rather than results

14 Behavior-Based Measures
Behaviorally Anchored Rating Scales (BARS) Descriptive “anchors” attached to each level of performance Anchors associated with different levels of performance Behavioral Frequency / Observation Scale (BOS) Ratings of how often the employee exhibits the behaviors Includes more behaviors than BARS

15 Developing Behavioral Scales
Identify critical incidents and behaviors Sort similar behaviors into dimensions Validate sorting Collect data on relationship between behavior and performance Assign a rating scale Validate the scale Process of developing the rating system is more important than the system itself.

16 Results-Based Appraisal
“Management by Objectives” or MBO Linking individual goals with business strategy Organizational goals flow down to depts. and employees Focus on planning, action items, and interim reviews Objectives negotiated and agreed upon by employees Requires specific and objective goals

17 Results-Based Appraisal
Uses future results as performance targets Challenge is setting goals and measures Can the goals be quantified? May require unique goals for every individual Appraisal forms tend to be very simple Still need a rating scale Should be clear and unambiguous Requires alignment of expectations

18 Results-Based Appraisal
Focus on results compared to specific goals Requires good data and measurement Potential Problems May promote gaming of the system Beware of results at any cost Excessive results orientation Time consuming and needs constant updating

19 How to Judge Appraisal Types
Leads to desired behaviors Minimizes negative behaviors Reliability and validity Perceived fairness (rater and employee) Performance improvement and employee development Flexibility and administrative cost

20 Comparison of Appraisal Forms
Ease of Use Employee Development Employee Acceptance Traits High Low Behaviors Medium Outcomes

21 Performance Diagnosis


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