1. Prentice Hall, Inc. © 2006

2. Performance Management in Context: Overview
Definition of Performance Management (PM)
The Performance Management Contribution
Disadvantages/Dangers of Poorly-implemented PM systems
Definition of Reward Systems
Aims and role of PM Systems
Characteristics of an Ideal PM system
Integration with Other Human Resources and Development Activities
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3. Performance Management: Definition
Continuous Process of
Identifying performance of individuals and teams
Measuring performance of individuals and teams
Developing performance of individuals and teams
and
Aligning performance with the strategic goals of the organization
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4. PM is NOT performance appraisal
Strategic business considerations
Ongoing feedback
So employee can improve performance
Driven by line manager
Performance appraisal
Assesses employee
Strengths &
Weaknesses
Once a year
Lacks ongoing feedback
Driven by HR
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5. Contributions of PM For Employees
The definitions of job and success are clarified
Motivation to perform is increased
Self-esteem is increased
Self-insight and development and enhanced
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6. Contributions of PM For Managers
Supervisors’ views of performance are communicated more clearly
Managers gain insight about subordinates
There is better and more timely differentiation between good and poor performers
Employees become more competent
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7. Contributions of PM For Organization/HR Function
Organizational goals are made clear
Organizational change is facilitated
Administrative actions are more fair and appropriate
There is better protection from lawsuits
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8. Disadvantages/Dangers of Poorly-implemented PM Systems for Employees
Lowered self-esteem
Employee burnout and job dissatisfaction
Damaged relationships
Use of false or misleading information
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9. Disadvantages/Dangers of Poorly-implemented PM Systems for Managers
Increased turnover
Decreased motivation to perform
Unjustified demands on managers’ resources
Varying and unfair standards and ratings
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10. Disadvantages/Dangers of Poorly-implemented PM Systems for Organization
Wasted time and money
Unclear ratings system
Emerging biases
Increased risk of litigation
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11. Reward Systems: Definition
Set of mechanisms for distributing
Tangible returns
and
Intangible or relational returns
As part of an employment relationship
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12. Tangible returns Cash compensation Benefits, such as Base pay
Cost-of-Living & Contingent Pay
Incentives (short- and long-term)
Benefits, such as
Income Protection
Allowances
Work/life focus
Base pay
Hourly wages
Salary
Cost-of-Living & Contingent Pay
Usually permanent increases in pay based on either cost of living or performance
Covered in more detail in Module 11
Incentives (short- and long-term)
Used to increase performance
E.g., bonuses (short term) or stock options/ownership (long term)
Income Protection
Sometimes required under law, such as
Social Security (what about unemployment insurance in the USA?) Disability pay,
medical insurance,
pension plans,
savings plans
Allowances
E.g., housing
transportation (e.g., company provides car)
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13. Intangible returns Relational returns, such as Recognition and status
Employment security
Challenging work
Learning opportunities
Work/life focus (to help employee balance work/home life)
Such as vacation time,
flextime and telecommuting,
services (e.g., counseling, financial planning, fitness activities)
Relational Returns
Such as recognition,
status,
employment security,
challenging work,
opportunities to learn,
opportunities to form personal relationships
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14. Returns and Their Degree of Dependency on the Performance Management System
Cost of Living Adjustment
Income Protection
Work/life Focus
Allowances
Relational Returns
Base Pay
Contingent Pay
Short-term Incentives
Long-term Incentives
Degree of Dependency
Low
Moderate
High
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15. Purposes of PM Systems: Overview
Strategic
Administrative
Informational
Developmental
Organizational maintenance
Documentation
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16. Strategic Purpose Link employee behavior with organization’s goals
Communicate most crucial business strategic initiatives
Note: the following is slide used before (some of this is not in Module 1)
Links employee activities with organization’s mission and goals
Identifies results and behaviors needed to carry out strategy
Maximizes extent employees exhibit those behaviors and results
Only 13% of organizations use PM to communicate organizational purpose and goals
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17. Administrative Purpose
Provide information for making decisions re:
Salary adjustments
Promotions
Retention or termination
Recognition of individual performance
Layoffs
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18. Informational Purpose
Communicate to Employees:
Expectations
What is important
How they are doing
How to improve
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19. Developmental Purpose
Performance feedback/coaching
Identification of individual strengths and weaknesses
Causes of performance deficiencies
Tailor development of individual career path
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20. Organizational Maintenance Purpose
Plan effective workforce
Assess future training needs
Evaluate performance at organizational level
Evaluate effectiveness of HR interventions
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21. Documentational Purpose
Validate selection instruments
Document administrative decisions
Help meet legal requirements
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22. Characteristics of an Ideal PM System
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23. Congruent with organizational strategy
Consistent with organization’s strategy
Aligned with unit and organizational goals
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24. Thorough All employees are evaluated
All major job responsibilities are evaluated
Evaluations cover performance for entire review period
Feedback is given on both positive and negative performance
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25. Practical Available Easy to use Acceptable to decision makers
Benefits outweigh costs
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26. Meaningful Standards are important and relevant
System measures ONLY what employee can control
Results have consequences Evaluations occur regularly and at appropriate times
System provides for continuing skill development of evaluators
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27. Specific Concrete and detailed guidance to employees what’s expected
how to meet the expectations
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28. Identifies effective and ineffective performance
Distinguish between effective and ineffective
Behaviors
Results
Provide ability to identify employees with various levels of performance
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29. Reliable Consistent Free of error Inter-rater reliability
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30. Valid Relevant (measures what is important)
Not deficient (doesn’t measure unimportant facets of job)
Not contaminated (only measures what the employee can control)
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31. Acceptable and Fair Perception of Distributive Justice
Work performed  evaluation received  reward
Perception of Procedural Justice
Fairness of procedures used to:
Determine ratings
Link ratings to rewards
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32. Inclusive Represents concerns of all involved
When system is created, employees should help with deciding
What should be measured
How it should be measured
Employee should provide input on performance prior to evaluation meeting
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33. Open (No Secrets) Frequent, ongoing evaluations and feedback
2-way communications in appraisal meeting
Clear standards, ongoing communication
Communications are factual, open, honest
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34. Correctable Recognizes that human judgment is fallible
Appeals process provided
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35. Standardized Ongoing training of managers to provide
Consistent evaluations across
People
Time
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36. Ethical Supervisor suppresses self-interest
Supervisor rates only where she has sufficient information about the performance dimension
Supervisor respects employee privacy
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37. Integration with other Human Resources and Development activities
PM provides information for:
Development of training to meet organizational needs
Workforce planning
Recruitment and hiring decisions
Development of compensation systems
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38. Chapter 2
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39. Performance Management Process: Overview
Prerequisites
Performance Planning
Performance Execution
Performance Assessment
Performance Review
Performance Renewal and Recontracting
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40. Performance Management Process
Prerequisites
Performance Planning
Performance Execution
Performance Management Process
Performance Renewal and Recontracting
Performance Assessment
Performance Review
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41. Prerequisites
Knowledge of the organization’s mission and strategic goals
Knowledge of the job in question
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42. Knowledge of mission and strategic goals
Strategic planning
Purpose or reason for organization’s existence
Where organization is going
Organizational goals
Strategies for attaining goals
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43. Mission and Goals Cascade effect throughout organization
Organization Unit Employee
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44. B. Knowledge of the job Job analysis of key components
Activities, tasks, products, services, processes
KSAs required to do the job
Knowledge
Skills
Abilities
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45. Job Description Job duties KSAs Working conditions
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46. Generic Job Descriptions
Occupational Informational Network (O*Net)
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47. Job analysis Use a variety of tools Interviews Observation
Questionnaires (available on Internet)
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48. Job analysis follow-up
All incumbents should
review information and
provide feedback
re:
Task
Frequency
Criticality
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49. Performance Planning: Results
Key accountabilities
Specific objectives
Performance standards
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50. Key Accountabilities Broad areas of a job the employee is responsible
for which
the employee is responsible
for producing results
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51. Specific Objectives Statements of outcomes Important Measurable
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52. Performance Standards
“Yardstick” to evaluate how well employees have achieved each objective
Information on acceptable and unacceptable performance, such as
quality
quantity
cost
time
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53. Performance Planning: Behaviors
How a job is done
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54. Performance Planning: Competencies
Measurable clusters of KSAs
Critical in determining how results will be achieved
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55. Performance Planning: Development Plan
Areas for improvement
Goals to be achieved in each area of improvement
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56. Performance Execution: Employee Responsibilities
Commitment to goal achievement
Ongoing requests for feedback and coaching
Communication with supervisor
Collecting and sharing performance data
Preparing for performance reviews
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57. Performance Execution: Manager Responsibilities
Observation and documentation
Updates
Feedback
Resources
Reinforcement
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58. Performance Assessment
Manager assessment
Self-assessment
Other sources (e.g., peers, customers, etc.)
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59. Multiple Assessments Are Necessary
Increase employee ownership
Increase commitment
Provide information
Ensure mutual understanding
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60. Performance Review Overview of Appraisal Meeting
Past
Behaviors and results
Present
Compensation to be received
Future
New goals and development plans
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61. Six Steps for Conducting Productive Performance Reviews
Identify what the employee has done well and poorly
Solicit feedback
Discuss the implications of changing behaviors
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62. Six Steps for Conducting Productive Performance Reviews
Explain how skills used in past achievements can help overcome any performance problems
Agree on an action plan
Set a follow-up meeting and agree on behaviors, actions, attitudes to be evaluated
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63. Performance Renewal and Recontracting
Same as/different from Performance Planning
Uses insights and information from previous phases
Cycle begins again
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64. Performance Management Process Summary: Key Points
Ongoing process
Each component is important
If one is implemented poorly, whole system suffers
Links between components must be clear
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65. Chapter 3
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66. Performance Management and Strategic Planning: Overview
Definition and Purposes of Strategic Planning
Linking Performance Management to the Strategic Plan
Strategic Planning
Developing Strategic Plans at the Unit Level
Job Descriptions
Individual and Team Performance
Building Support
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67. Strategic Planning: Definition
Process
Describe organization’s destination
Assess barriers
Select approaches for moving forward
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68. Strategic Planning: Goal
Allocate resources
to provide organization
with competitive advantage
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69. Strategic Planning: Purposes
Help define the organization’s identity
Help organization prepare for the future
Enhance ability to adapt to environmental change
Provide focus and allow for better allocation of resources
(continued on next slide)
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70. Strategic Planning: Purposes
Produce an organizational culture of cooperation
Allow for the consideration of new options and opportunities
Provide employees with information to direct daily activities
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71. Strategic Planning : Overview
Environmental Analysis
Mission
Vision
Goals
Strategies
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72. Environmental Analysis
Identifies external and internal trends
To understand broad industry issues
To make decisions using “big picture” context
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73. External trends Opportunities: Threats:
environmental characteristics that can help the organization succeed
Threats:
environmental characteristics that can prevent the organization from being successful
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74. External trends – Factors to Consider
Economic
Political/legal
Social
Technological
Competitors
Customers
Suppliers
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75. Internal trends Strengths: Weaknesses:
internal characteristics that the organization can use for its advantage
Weaknesses:
internal characteristics that can hinder the success of the organization
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76. Internal trends – Factors to Consider
Organizational structure
Organizational culture
Politics
Processes
Size
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77. Gap Analysis Analyzes: External environment Internal environment
(opportunities and threats)
vis-à-vis
Internal environment
(strengths and weaknesses)
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78. Gap analysis determines:
Opportunity + Strength = Leverage
Opportunity + Weakness = Constraint
Threat + Strength = Vulnerability
Threat + Weakness = Problem
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79. Strategic Planning for the Organization
Environmental and Gap Analyses provide information for organizations to decide:
Who they are
What they do
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80. Mission A good mission statement answers:
Why does the organization exist?
What is the scope of the organization’s activities?
Who are the customers served?
What are the products or services offered?
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81. Mission Statement contains:
A. Information on organization’s
Basic product/service to be offered
Primary market/customer groups
Unique benefits and advantages of product/services
Technology to be used
Concern for survival through growth and profitability
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82. Mission Statement may contain:
B. Information on organization’s values and beliefs
Managerial philosophy
Public image sought by organization
Self-concept of business adopted by
Employees
Stockholders
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83. Vision Statement of future aspirations
Focuses attention on what is important
Provides context for evaluating
Opportunities
Threats
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84. A Good Vision Statement is:
Brief
Verifiable
Bound by a Timeline
Current
Focused
Understandable
Inspiring
A stretch
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85. Purposes for Setting Goals
Formalize expected achievements
Provide motivation
Provide tangible targets
Provide basis for good decisions
Provide basis for performance measurement
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86. Strategies
Create strategies or Game Plans or “How to” procedures to address issues of:
Growth
Survival
Turnaround
Stability
Innovation
Leadership
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87. How the HR Function contributes:
Communicate knowledge of strategic plan
Provide knowledge of KSAs needed for strategy implementation
Propose reward systems
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88. Strategic Plans at the Unit Level
Organization Mission statement, Vision statement, Goals, and Strategies
Must clearly align with
And be congruent with
Every Unit Mission statement, Vision statement, Goals, and Strategies
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89. Alignment of Strategic Plan with Performance
Organization’s Strategic Plan
Mission, Vision, Goals, Strategies
Critical to involve all levels of management
Unit’s Strategic Plan
Mission, Vision, Goals, Strategies
Job Description
Tasks, KSAs
Critical to involve all employees
Individual and Team Performance
Results, Behaviors, Developmental Plan
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90. Job Descriptions
Tasks and KSAs are congruent with Organization and Unit strategic plans
Activities described support mission and vision of Organization and Unit
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91. Individual and Team Performance
Organization and Unit mission, vision, goals lead to
Performance management system, which
Motivates employees
Aligns development plans with organization priorities
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92. Strategic Plan  Choices in PM System Design
Criteria (Behavior vs. Results)
Participation (Low vs. High)
Temporal Dimension (Short Term vs. Long Term)
Level of Criteria (Individual vs. Team/Group)
System Orientation (Developmental vs. Administrative)
Rewards (Pay for Performance vs. Tenure/Position)
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93. Building Support – Answering “What’s In It for Me?”
Top Management:
Help carry out vision
All levels:
Involvement
Participation
Understanding
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94. Chapter 4
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95. Defining Performance and Choosing a Measurement Approach: Overview
Determinants of Performance
Performance Dimensions
Approaches to Measuring Performance
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96. Defining Performance Performance is: Behavior What employees do
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97. Defining Performance Performance is NOT: Results or Outcomes
What employees produce
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98. Behaviors labeled as Performance are:
Evaluative
Negative
Neutral
Positive
Multidimensional
Many different kinds of behaviors
Advance or hinder organizational goals
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99. Behaviors are Not always
Observable
Measurable
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100. Results/Consequences may be used
To infer behavior
As proxy for behavioral measure
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101. Determinants of Performance
Declarative Knowledge X
Procedural Knowledge
Motivation
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102. A. Declarative Knowledge
Information about
Facts
Labels
Principles
Goals
Understanding of task requirements
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103. B. Procedural Knowledge
Knowing
What to do
How to do it
Skills
Cognitive
Physical
Perceptual
Motor
Interpersonal
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104. C. Motivation Choices Expenditure of effort Level of effort
Persistence of effort
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105. Implications for Addressing Performance Problems
Managers need information to accurately identify source(s) of performance problems
Performance management systems must
Measure performance
AND
Provide information on SOURCE(s) of problems
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106. Factors Influencing Determinants of Performance:
Individual characteristics
Procedural knowledge
Declarative knowledge
Motivation
HR practices
Work environment
Prentice Hall, Inc. © 2006

107. Performance Dimensions: Types of multi-dimensional behaviors:
Task performance
Contextual performance
Pro-social behaviors
Organizational citizenship
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108. Task performance Activities that transform raw materials
help with the transformation process
Replenishing
Distributing
Supporting
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109. Contextual performance
Behaviors that
contribute to organization’s effectiveness
and
provide a good environment in which task performance can occur
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110. Differences Between Task and Contextual Performance
Task Performance
Varies across jobs
Likely to be role prescribed
Influenced by
Abilities
Skills
Contextual Performance
Fairly similar across jobs
Not likely to be role prescribed
Influenced by
Personality
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111. Why Include Task & Contextual Performance Dimensions in PM system?
Global competition
Teamwork
Customer service
Supervisor views
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112. Job Performance in Context
That produce various results
A performer
(individual or team)
Engages in certain behaviors
In a given situation
TRAIT
BEHAVIOR
RESULTS
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113. Approaches to Measuring Performance
Trait Approach
Emphasizes individual traits of employees
Behavior Approach
Emphasizes how employees do the job
Results Approach
Emphasizes what employees produce
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114. Trait Approach Emphasis on individual Evaluate stable traits
Cognitive abilities
Personality
Based on relationship between traits & performance
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115. Trait Approach (continued)
Appropriate if
Structural changes planned for organization
Disadvantages
Improvement not under individual’s control
Trait may not lead to
Desired behaviors or
Desired results
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116. Behavior Approach Appropriate if Not appropriate if
Employees take a long time to achieve desired outcomes
Link between behaviors and results is not obvious
Outcomes occur in the distant future
Poor results are due to causes beyond the performer’s control
Not appropriate if
above conditions are not present
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117. Results Approach Advantages: Less time Lower cost
Data appear objective
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118. Results Approach (continued)
Most appropriate when:
Workers skilled in necessary behaviors
Behaviors and results obviously related
Consistent improvement in results over time
Many ways to do the job right
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119. Chapter 5
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120. Defining Performance and Choosing a Measurement Approach: Overview
Determinants of Performance
Performance Dimensions
Approaches to Measuring Performance
Prentice Hall, Inc. © 2006

121. Defining Performance Performance is: Behavior What employees do
Prentice Hall, Inc. © 2006

122. Defining Performance Performance is NOT: Results or Outcomes
What employees produce
Prentice Hall, Inc. © 2006

123. Behaviors labeled as Performance are:
Evaluative
Negative
Neutral
Positive
Multidimensional
Many different kinds of behaviors
Advance or hinder organizational goals
Prentice Hall, Inc. © 2006

124. Behaviors are Not always
Observable
Measurable
Prentice Hall, Inc. © 2006

125. Results/Consequences may be used
To infer behavior
As proxy for behavioral measure
Prentice Hall, Inc. © 2006

126. Determinants of Performance
Declarative Knowledge X
Procedural Knowledge
Motivation
Prentice Hall, Inc. © 2006

127. A. Declarative Knowledge
Information about
Facts
Labels
Principles
Goals
Understanding of task requirements
Prentice Hall, Inc. © 2006

128. B. Procedural Knowledge
Knowing
What to do
How to do it
Skills
Cognitive
Physical
Perceptual
Motor
Interpersonal
Prentice Hall, Inc. © 2006

129. C. Motivation Choices Expenditure of effort Level of effort
Persistence of effort
Prentice Hall, Inc. © 2006

130. Implications for Addressing Performance Problems
Managers need information to accurately identify source(s) of performance problems
Performance management systems must
Measure performance
AND
Provide information on SOURCE(s) of problems
Prentice Hall, Inc. © 2006

131. Factors Influencing Determinants of Performance:
Individual characteristics
Procedural knowledge
Declarative knowledge
Motivation
HR practices
Work environment
Prentice Hall, Inc. © 2006

132. Performance Dimensions: Types of multi-dimensional behaviors:
Task performance
Contextual performance
Pro-social behaviors
Organizational citizenship
Prentice Hall, Inc. © 2006

133. Task performance Activities that transform raw materials
help with the transformation process
Replenishing
Distributing
Supporting
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134. Contextual performance
Behaviors that
contribute to organization’s effectiveness
and
provide a good environment in which task performance can occur
Prentice Hall, Inc. © 2006

135. Differences Between Task and Contextual Performance
Task Performance
Varies across jobs
Likely to be role prescribed
Influenced by
Abilities
Skills
Contextual Performance
Fairly similar across jobs
Not likely to be role prescribed
Influenced by
Personality
Prentice Hall, Inc. © 2006

136. Why Include Task & Contextual Performance Dimensions in PM system?
Global competition
Teamwork
Customer service
Supervisor views
Prentice Hall, Inc. © 2006

137. Job Performance in Context
That produce various results
A performer
(individual or team)
Engages in certain behaviors
In a given situation
TRAIT
BEHAVIOR
RESULTS
Prentice Hall, Inc. © 2006

138. Approaches to Measuring Performance
Trait Approach
Emphasizes individual traits of employees
Behavior Approach
Emphasizes how employees do the job
Results Approach
Emphasizes what employees produce
Prentice Hall, Inc. © 2006

139. Trait Approach Emphasis on individual Evaluate stable traits
Cognitive abilities
Personality
Based on relationship between traits & performance
Prentice Hall, Inc. © 2006

140. Trait Approach (continued)
Appropriate if
Structural changes planned for organization
Disadvantages
Improvement not under individual’s control
Trait may not lead to
Desired behaviors or
Desired results
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141. Behavior Approach Appropriate if Not appropriate if
Employees take a long time to achieve desired outcomes
Link between behaviors and results is not obvious
Outcomes occur in the distant future
Poor results are due to causes beyond the performer’s control
Not appropriate if
above conditions are not present
Prentice Hall, Inc. © 2006

142. Results Approach Advantages: Less time Lower cost
Data appear objective
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143. Results Approach (continued)
Most appropriate when:
Workers skilled in necessary behaviors
Behaviors and results obviously related
Consistent improvement in results over time
Many ways to do the job right
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144. Chapter 6
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145. Gathering Performance Information: Overview
Appraisal Forms
Characteristics of Appraisal Forms
Determining Overall Rating
Appraisal Period and Number of Meetings
Who Should Provide Performance Information?
A Model of Rater Motivation
Preventing Rating Distortion through Rater Training Programs
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146. Major Components of Appraisal Forms (1)
Basic Employee Information
Accountabilities, Objectives, and Standards
Competencies and Indicators
Major Achievements and Contributions
Stakeholder Input
Employee Comments
Signatures
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147. Major Components of Appraisal Forms (2) (could be included in a separate form)
Developmental Achievements
Developmental
Needs
Plans
Goals
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148. Desirable Features for All Appraisal Forms
Simplicity
Relevancy
Descriptiveness
Adaptability
Comprehensiveness
Definitional Clarity
Communication
Time Orientation
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149. Determining Overall Rating
Judgmental strategy
Mechanical strategy
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150. Appraisal period Number of Meetings Annual Semi-annual Quarterly
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151. When Review Is Completed
Anniversary date
Supervisor doesn’t have to fill out forms at same time
Can’t tie rewards to fiscal year
Fiscal year
Rewards tied to fiscal year
Goals tied to corporate goals
May be burden to supervisor, depending on implementation
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152. 6 Types of Formal Meetings (can be combined)
System Inauguration
Self-Appraisal
Classical Performance Review
Merit/Salary Review
Development Plan
Objective Setting
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153. Who Should Provide Performance Information?
Employees should be involved in selecting
Which sources evaluate
Which performance dimensions
When employees are actively involved
Higher acceptance of results
Perception that system is fair
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154. Who Should Provide Performance Information?
Direct knowledge of employee performance
Supervisors
Peers
Subordinates
Self
Customers
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155. Supervisors Advantages Disadvantages
Best position to evaluate performance vs. strategic goals
Make decisions about rewards
Disadvantages
Supervisor may not be able to directly observe performance
Evaluations may be biased
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156. Peers Advantages Disadvantages Assess teamwork
Possible friendship bias
May be less discriminating
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157. Subordinates Advantages Disadvantages
Accurate when used for developmental purposes
Good position to assess some competencies
Disadvantages
Inflated when used for administrative purposes
May fear retaliation (confidentiality is key)
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158. Self Advantages Disadvantages Increased acceptance of decisions
Decreased defensiveness during appraisal interview
Good position to track activities during review period
Disadvantages
May be more lenient and biased
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159. Customers (external and internal)
Advantages
Employees become more focused on meeting customer expectations
Disadvantages
Time
Money
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160. Disagreement Across Sources
Expect disagreement
Ensure employee receives feedback by source
Assign differential weights to scores by source, depending on importance
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161. Types of Rating Errors Intentional errors Unintentional errors
Rating inflation
Rating deflation
Unintentional errors
Due to complexity of task
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162. A Model of Rater Motivation
Expected Positive and Negative Consequences of Rating Accuracy
Motivation to Provide Accurate Ratings
Probability of Experiencing Positive & Negative Consequences
Rating Behavior
Expected Positive and Negative Consequences of Rating Distortion
Motivation to Distort Ratings
Probability of Experiencing Positive & Negative Consequences

163. Motivations for Rating Inflation
Maximize merit raise/rewards
Encourage employees
Avoid creating written record
Avoid confrontation with employees
Promote undesired employees out of unit
Make manager look good to his/her supervisor
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164. Motivations for Rating Deflation
Shock employees
Teach a lesson
Send a message to employee
Build a written record of poor performance
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165. Prevent Rating Distortion through Rater Training Programs
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166. Rater Training Programs should cover:
Information
Motivation
Identifying, observing, recording and evaluating performance
How to interact with employees when they receive performance information
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167. Information - how the system works
Reasons for implementing the performance management system
Information on the appraisal form and system mechanics
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168. Motivation – What’s in it for me?
Benefits of providing accurate ratings
Tools for providing accurate ratings
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169. Identifying, observing, recording, and evaluating performance
How to identify and rank job activities
How to observe, record, measure performance
How to minimize rating errors
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170. How to interact with employees when they receive performance information
How to conduct an appraisal interview
How to train, counsel, and coach
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171. Chapter 7
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172. Implementing a Performance Management System: Overview
Preparation
Communication Plan
Appeals Process
Training Programs
Pilot Testing
Ongoing Monitoring and Evaluation
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173. Preparation Need to gain system buy-in through:
Communication plan regarding Performance Management system
Including appeals process
Training programs for raters
Pilot testing system
Ongoing monitoring and evaluation
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174. Communication Plan answers:
What is Performance Management (PM)?
How does PM fit in our strategy?
What’s in it for me?
How does it work?
What are our roles and responsibilities?
How does PM relate to other initiatives?
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175. Cognitive Biases that affect communications effectiveness
Selective exposure
Selective perception
Selective retention
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176. To minimize effects of cognitive biases:
A. Consider employees:
Involve employees in system design
Show how employee needs are met
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177. To minimize effects of cognitive biases:
B. Emphasize the positive
Use credible communicators
Strike first – create positive attitude
Provide facts and conclusions
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178. To minimize effects of cognitive biases:
C. Repeat, document, be consistent
Put it in writing
Use multiple channels of communication
Say it, and then – say it again
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179. Appeals Process Promote Employee buy-in to PM system
Amicable/Non-retaliatory
Resolution of disagreements
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180. Appeals Process Employees can question two types of issue: Judgmental
(validity of evaluation)
Administrative
(whether policies and procedures were followed)
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181. Appeals Process Level 1 Level 2 HR reviews facts, policies, procedures
HR reports to supervisor/employee
HR attempts to negotiate settlement
Level 2
Arbitrator (panel of peers and managers) and/or
High-level manager – final decision
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182. Rater Training Programs
Content Areas to include
Information
Identifying, Observing, Recording, Evaluating
How to Interact with Employees
Choices of Training Programs to implement
RET
FOR BO SL
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183. Content A. Information - how the system works
Reasons for implementing the performance management system
Information
the appraisal form
system mechanics
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184. Content
B. Identifying, observing, recording, and evaluating performance
How to identify and rank job activities
How to observe, record, and measure performance
How to minimize rating errors
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185. Content
C. How to interact with employees when they receive performance information
How to conduct an appraisal interview
How to train, counsel, and coach
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186. Choices of Training Programs
Rater Error Training (RET)
Frame of Reference Training (FOR)
Behavioral Observation Training (BO)
Self-leadership Training (SL)
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187. Rater Error Training (RET)
Goals of Rater Error Training (RET)
Make raters aware of types of rating errors
Help raters minimize errors
Increase rating accuracy
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188. Intentional rating errors
Leniency (inflation)
Severity (deflation)
Central tendency
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189. Unintentional rating errors
Similar to Me
Halo
Primacy
First impression
Contrast
Stereotype
Negativity
Recency
Spillover
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190. Possible Solutions for Types of Rating Errors
Intentional
Focus on motivation
Demonstrate benefits of providing accurate ratings
Unintentional
Alert raters to different errors and their causes
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191. Frame of Reference Training (FOR)
Goal of Frame of Reference Training (FOR)*
Raters develop common frame of reference
Observing performance
Evaluating performance
*Most appropriate when PM appraisal system focuses on behaviors
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192. Expected Results of Frame of Reference Training (FOR)
Raters provide consistent, more accurate ratings
Raters help employees design effective development plans
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193. Behavioral Observation Training (BO)
Goals of Behavioral Observation Training (BO)
Minimize unintentional rating errors
Improve rater skills by focusing on how raters:
Observe performance
Store information about performance
Recall information about performance
Use information about performance
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194. Self-leadership Training (SL)
Goals of Self-leadership Training (SL)
Improve rater confidence in ability to manage performance
Enhance mental processes
Increase self-efficacy
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195. Pilot Testing Provides ability to Discover potential problems Fix them
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196. Pilot Testing - benefits
Gain information from potential participants
Learn about difficulties/obstacles
Collect recommendations on how to improve
Understand personal reactions
Get early buy-in
Get higher rate of acceptance
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197. Implementing a Pilot Test
Roll out test version with sample group
Staff and jobs generalizable to organization
Fully implement planned system
All participants keep records of issues encountered
Do not record appraisal scores
Collect input from all participants
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198. Ongoing Monitoring and Evaluation
When system is implemented, decide:
How to evaluate system effectiveness
How to measure implementation
How to measure results
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199. Evaluation data to collect:
Reactions to the system
Assessments of requirements
Operational
Technical
Effectiveness of performance ratings
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200. Indicators to consider
Number of individuals evaluated
Distribution of performance ratings
Quality of information
Quality of performance discussion meetings
System satisfaction
Cost/benefit ratio
Unit-level and organization-level performance
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201. Chapter 8
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202. Performance Management and Employee Development: Overview
Personal Developmental Plans
Direct Supervisor’s Role
360-degree Feedback Systems
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203. Stakeholders in the Development Process
Employees
Help plan their own development
Improve their own performance
Managers
Help guide the process of development
Support success of process
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204. Personal Developmental Plans
Specify actions necessary to improve performance
Highlight employee’s
Strengths
Areas in need of development
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205. Personal Developmental Plans answer:
How can I continuously learn and grow in the next year?
How can I do better in the future?
How can I avoid performance problems of the past?
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206. Personal Developmental Plans: Overview
Developmental Plan Objectives
Content of Developmental Plan
Developmental Activities
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207. Overall Developmental Plan Objectives
Encourage:
Continuous learning
Performance improvement
Personal growth
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208. Specific Developmental Plan Objectives
Improve performance in current job
Sustain performance in current job
Prepare employee for advancement
Enrich employee’s work experience
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209. Content of Developmental Plan
Developmental objectives
New skills or knowledge
Timeline
How the new skills or knowledge will be acquired
Resources
Strategies
Standards and measures used to assess achievement of objectives
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210. Content of Developmental Plan
Based on needs of organization and employee
Chosen by employee and direct supervisor
Taking into account
Employee’s learning preferences
Developmental objective in question
Organization’s available resources
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211. Developmental Activities ‘On the job’
On-the-job-training
Mentoring
Job rotation
Temporary assignments
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212. Developmental Activities In addition to ‘on the job’
Courses
Self-guided reading
Getting a degree
Attending a conference
Membership or leadership role
in professional or trade organization
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213. Direct Supervisor’s Role:
Explain what is necessary
Refer employee to appropriate developmental activities
Review & make suggestions regarding developmental objectives
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214. Direct Supervisor’s Role (ongoing):
Check on employee’s progress
Provide motivational reinforcement
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215. 360-degree Feedback Systems
Tools to help employees
Improve performance by using
Performance information
Gathered from many sources
Superiors
Peers
Customers
Subordinates
The employee
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216. 360-degree Feedback Systems
Anonymous feedback
Most useful when used
For DEVELOPMENT
NOT for administrative purposes
Internet used for collecting data
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217. Prentice Hall, Inc. © 2006

218. Prentice Hall, Inc. © 2006

219. Prentice Hall, Inc. © 2006

220. Prentice Hall, Inc. © 2006

221. Necessary organizational norms include:
Cooperation
Openness and trust
Input and participation valued
Fairness
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222. Overview of 360-degree Feedback Systems
Advantages of 360-degree Feedback Systems
Risks of 360-degree Feedback Systems
Characteristics of a Good 360-degree Feedback System
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223. Advantages of 360-degree Feedback Systems
Decreased possibility of biases
Increased awareness of expectations
Increased commitment to improve
Improved self-perception of performance
Improved performance
Reduction of ‘undiscussables’
Increased employee control of their own careers
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224. Risks of 360-degree Feedback Systems
Unconstructive negative feedback hurts.
Are individuals comfortable with the system? User acceptance is crucial.
If few raters, anonymity is compromised.
Raters may become overloaded.
Stock values may drop.
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225. Characteristics of a Good 360-degree Feedback System
Anonymity
Observation of employee
performance
Avoidance of survey fatigue
Raters are trained
Used for developmental purposes only
Emphasis on behaviors
Raters go beyond ratings
Feedback interpretation
Follow-up
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226. Chapter 9
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227. Performance Management Skills: Overview
Coaching
Coaching Styles
Coaching Process
Performance Review Meetings
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228. Collaborative ongoing process
Coaching: Definition
Manager
Interacts with employee and
Takes active role and interest in performance
Collaborative ongoing process
Directing employee behavior
Motivating employee behavior
Rewarding employee behavior
Concerned with long-term performance
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229. Major Coaching Functions:
Give advice
Provide guidance
Provide support
Give confidence
Promote greater competence
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230. Key Coaching Behaviors
Establish developmental objectives
Communicate effectively
Motivate employees
Document performance
Give feedback
Diagnose performance problems
Develop employees
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231. The Good Coach Questionnaire
Do you listen to your employees?
Do you understand their individual needs?
Do you encourage employees to express their feelings openly?
Do you give tangible and intangible support for development?
Do your employees know your expectations about their performance?
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232. The Good Coach Questionnaire (continued)
Do you encourage open and honest discussions and problem solving?
Do you help your employees create action plans that will
Solve problems?
Create changes?
Do you help your employees explore potential areas of
Growth?
Development?
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233. Coaching Styles Driver Analyzer Persuader Amiable More Assertive
Less assertive
Task & Fact oriented
Driver
Analyzer
People oriented
Persuader
Amiable
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234. Adaptive coaches use all styles according to employee needs:
Sometimes providing direction
Sometimes persuading
Sometimes showing empathy
Sometimes paying close attention to rules and established procedures
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235. Coaching Process Identify Developmental Resources & Strategies
Set Developmental Goals
Implement strategies
Give Feedback
Observe and Document Developmental Behavior
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236. Coaching Process: Steps covered in Chapter 8
Set Developmental Goals
Identify Resources and Strategies Needed to Implement Developmental Goals
Implement Developmental Goals
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237. Coaching Process: Overview of remaining steps
Observe and Document Developmental Behavior and Outcomes
Give Feedback
Praise
Negative Feedback
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238. Observe and Document Developmental Behavior and Outcomes
Constraints:
Time
Situation
Activity
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239. Organizational Activities to improve documentation of performance
Good communication plan to get manager buy-in
Training programs
Rater error training
Frame-of-reference training
Behavioral observation training
Self-leadership training
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240. Reasons to document performance
Minimize cognitive load
Create trust
Plan for the future
Legal protection
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241. Recommendations for Documentation
Be specific
Use adjectives and adverbs sparingly
Balance positives with negatives
Focus on job-related information
Be comprehensive
Standardize procedures
Describe observable behavior
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242. Giving Feedback Main purposes: Help build confidence
Develop competence
Enhance involvement
Improve future performance
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243. Potential costs of failing to provide feedback:
Employees are deprived of chance to improve their own performance
Chronic poor performance
Employees have inaccurate perceptions of how their performance is regarded by others
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244. To be effective, feedback should:
Be timely
Be frequent
Be specific
Be verifiable
Be consistent (over time and across employees)
Be given privately
Provide context and consequences
(continued next slide)
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245. To be effective, feedback should: (continued)
Describe first, evaluate second
Cover the continuum of performance
Identify patterns
Demonstrate confidence in employee
Allow for both advice and idea generation
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246. Guidelines for Giving Praise
Be sincere – only give praise when it is deserved
Give praise about specific behaviors or results
Take your time
Be comfortable with act of praising
Emphasize the positive
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247. Giving Negative Feedback
Managers avoid giving negative feedback due to:
Negative reactions and consequences
Negative experiences in the past
Playing “god”
Need for irrefutable and conclusive evidence
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248. Negative feedback is most useful when it:
Identifies warning signs and performance problem is still manageable
Clarifies unwanted behaviors and consequences
Focuses on behaviors that can be changed
Comes from a credible source
Is supported by data
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249. Feedback Sessions should always answer:
How is your job going?
What can be done to make it better?
Job
Product
Services
How can you better serve your customers?
Internal
External
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250. Supervisory roles in managing performance
Judge
Evaluate performance
Allocate rewards
Coach
Help employee solve performance problems
Identify performance weaknesses
Design developmental plans
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251. Performance Review Formal Meetings
Possible types of formal meetings:
System Inauguration
Self-Appraisal
Classical Performance Review
Merit/Salary Review
Developmental Plan
Objective Setting
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252. Steps to take before meeting:
Give at least 2-weeks notice
Block sufficient time
Arrange to meet in a private location without interruptions
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253. Merged Performance Review Meeting Components
Explanation of meeting purpose
Employee self-appraisal
Supervisor & employee share rating and rationale
Developmental discussion
Employee summary
Rewards discussion
Follow-up meeting arrangement
Approval and appeals process discussion
Final recap
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254. Possible defensive behaviors of employees
Fight response
Blaming others
Staring at supervisor
Raising voice
Other aggressive responses
Flight response
Looking/turning away
Speaking softly
Continually changing the subject
Quickly agreeing without basis
Other passive responses
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255. To prevent/reduce defensive behaviors
Establish and maintain rapport
Be empathetic
Observe verbal and nonverbal cues
Minimize threats
Encourage participation
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256. When defensiveness is unavoidable:
Recognize it
Allow its expression
If situation becomes intolerable
Reschedule the meeting for a later time
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257. Chapter 10
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258. Reward Systems and Legal Issues Overview
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259. Reward Systems: Overview
Traditional and Contingent Pay (CP) Plans
Reasons for Introducing CP Plans
Possible Problems Associated with CP
Selecting a CP Plan
Putting Pay in Context
Pay Structures
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260. Traditional Pay Salary and salary increases are based on Position
Seniority
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261. Contingent Pay (CP) Salary and salary increases are based on
Job performance
Also called: Pay for Performance
If not added to base pay, called:
Variable pay
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262. Reasons for Introducing CP
Performance management is more effective when rewards are tied to results
CP Plans force organizations to:
Clearly define effective performance
Determine what factors are necessary
CP plans help to recruit and retain top performers
CP plans project good corporate image
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263. CP plans help improve motivation when:
Employees see clear link between their efforts and resulting performance (Expectancy)
Employees see clear link between their performance level and rewards received (Instrumentality)
Employees value the rewards available (Valence)
motivation =
expectancy x instrumentality x valence
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264. Possible Problems Associated with CP
Poor performance management system
Rewarding counterproductive behavior
Insignificant rewards
The reward becomes the driver
Extrinsic vs. intrinsic motivation
Disproportionately large rewards for executives
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265. Selecting a CP Plan: Issues to consider
Culture of organization
Strategic direction of organization
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266. A. Culture of organization: Types of organizations
Traditional
Top-down decision making
Vertical communication
Jobs that are clearly defined
Involvement
Shared decision making
Lateral communications
Loosely defined roles
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267. CP systems for different organizational cultures:
Traditional organizations
Piece rate
Sales commissions
Group incentives
Involvement organizations
Profit sharing
Skill-based pay
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268. B: CP Plans to enhance Strategic Directions:
Employee development
Skill based pay
Customer service
Competency based pay
Gainsharing
Overall Profit
Executive pay
Profit or stock sharing
Productivity
Individual
Piece rate
Sales commissions
Group
Gainsharing
Group incentives
Teamwork
Team sales commissions
Competency based pay
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269. Putting Pay in Context A reward increases the chance that
Specific behaviors and results will be repeated, or
Employee will engage in new behavior and produce better results
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270. Rewards can include: Pay Recognition Time Trust & Respect Challenge
Public
Private
Status
Time
Trust & Respect
Challenge
Responsibility
Freedom
Relationships
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271. How to Make Rewards Work
Define and measure performance first and then allocate rewards
Only use rewards that are available
Make sure all employees are eligible
Rewards should be both
Financial
Non-financial
(continued)
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272. How to Make Rewards Work (continued)
Rewards should be:
Visible
Contingent
Timely
Reversible
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273. Pay Structures
Job Evaluation
Broad-banding
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274. Pay structures An organization’s pay structure Classifies jobs
Into categories
Based on their relative worth
Is designed by job evaluation methods
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275. Job evaluation Method of data collection Consideration of
Determine the worth of various jobs to
Create a pay structure
Consideration of
KSAs required for each job
Value of job for organization
How much other organizations pay
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276. Types of job evaluation methods:
Ranking
Classification
Point
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277. Job evaluation methods: Ranking
Create job descriptions
Compare job descriptions
Rank jobs
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278. Advantages of using Ranking method
Requires little time
Minimal effort needed for administration
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279. Disadvantages of using Ranking method
Criteria for ranking may not be clear:
Distances between each rank may not be equal
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280. Job evaluation methods: Classification
A series of classes or grades are created
Each job is placed within a job class
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281. Advantages of using Classification method
Jobs can be quickly slotted into structure
Employees accept method because it seems valid
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282. Disadvantages of using Classification method
Requires extensive time and effort for administration
Differences between classification levels may not be equal
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283. Job evaluation methods: Point method
Identify compensable factors (job characteristics)
Scale factors (e.g. on a scale of 1 – 5)
Assign a weight to each factor so the sum of the weights for all factors = 100%
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284. Advantages of using Point method
Establish worth of each job relative to all other jobs within organization
Comprehensive measurement of relative worth of each job in organization
Easy to rank jobs when total points are known for each job
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285. Disadvantages of using Point method
Requires extensive administrative
Time
Effort
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286. Does job evaluation method matter?
Fairness
Evaluators
Impartial
Objective
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287. Compensation surveys Information on
Base pay
All other types of compensation
Conducted in-house or by consultants, such as: or
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288. Broad-banding:
Pay structure collapses job classes into fewer categories
Advantages:
Provides flexibility in rewarding people
Reflects changes in organization structure
Provides better base for rewarding growth in competence
Gives more responsibility for pay decisions to managers
Provides better basis for rewarding career progression
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289. Reward Systems: Summary
Traditional and Contingent Pay (CP) Plans
Reasons for Introducing CP Plans
Possible Problems Associated with CP
Selecting a CP Plan
Putting Pay in Context
Pay Structures
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290. Legal Issues: Overview
Performance Management and the Law
Some Legal Principles Affecting PM
Laws Affecting PM
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291. Performance Management and the Law
Performance management systems are legally sound, if they are fair:
Procedures are standardized
Same procedures are used with all employees
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292. Some Legal Principles Affecting PM: Overview
Employment-at-will
Negligence
Defamation
Misrepresentation
Adverse Impact
Illegal Discrimination
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293. Employment-at-will Employment relationship can be ended at any time by
Employer
Employee
Exceptions
Implied contract
Possible violation of legal rights
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294. Negligence If organization documents describe a system and
It is Not implemented as described,
Employee can challenge evaluation, charging negligence
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295. Defamation Disclosure of performance information that is Untrue and
Unfavorable
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296. Misrepresentation Disclosure of performance information that is
Untrue and
Favorable
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297. Adverse Impact / Unintentional Discrimination
PM system has unintentional impact on a protected class
Organization must demonstrate:
Specific KSA is a business requirement for the job
All affected employees are evaluated in the same way
Organization should review ongoing performance score data by protected class to implement corrective action as necessary
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298. Illegal Discrimination or Disparate Treatment
Raters assign different scores to employees based on factors that are NOT related to performance
Employees receive different treatment as result of such ratings
Employees can claim they were intentionally and illegally treated differently due to their status
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299. Employee claim of illegal discrimination:
Direct evidence of discrimination, or
Evidence regarding the following:
Membership in protected class
Adverse employment decision
Performance level deserved reward/different treatment
How others were treated (not in protected class)
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300. Employer response to claim of illegal discrimination
Legitimate and non-discriminatory reason for action
Related to performance
Note: Good performance management system and subsequent performance-related decision, used consistently with all employees, provides defense
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301. Laws Affecting PM:
During past few decades, several countries have passed laws prohibiting discrimination based on:
Race or Ethnicity
Sex
Religion
National Origin
Age
Disability status
Sexual orientation
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302. Laws in the United Kingdom:
Equal Pay Act of 1970
Race Relations Act of 1976
Sex Discrimination Act of 1975
Disability Discrimination Act of 1995
Employment Equality (Sexual Orientation) Regulations 2003
Employment Equality (Religion or Belief) Regulations 2003
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303. Laws in the United States of America
Equal Pay Act of 1963
Civil Rights Act of 1964
Age Discrimination in Employment Act of 1967 (as amended in 1986)
Americans with Disabilities Act of 1990
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304. Characteristics of Legally Sound PM Systems
Organization:
The system is formally explained and communicated to all employees
The system includes a formal appeals process
Procedures are standardized and uniform for all employees within a job group
The system includes procedures to detect potentially discriminatory effects or biases and abuses in the system
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305. Characteristics of Legally Sound PM Systems
Management
Supervisors are provided with formal training and information on how to manage the performance of their employees
Performance information is gathered from multiple, diverse, and unbiased raters
The system includes thorough and consistent documentation including specific examples of performance based on first-hand knowledge
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306. Characteristics of Legally Sound PM Systems
Employees
Performance dimensions and standards are:
Clearly defined and explained to the employee,
Job-related, and
Within the control of the employee
Employees are given
Timely information on performance deficiencies and
Opportunities to correct them
Employees are given a voice in the review process and treated with courtesy and civility throughout the process
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307. Legal Issues: Summary Performance Management and the Law
Some Legal Principles Affecting PM
Laws Affecting PM
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308. Chapter 11
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309. Managing Team Performance: Overview
Definition and Importance of Teams
Types of Teams and Implications for PM
Purposes and Challenges of Team PM
Including Team Performance in the PM System
Rewarding Team Performance
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310. Definition of Team Two or more people Interact Share common and valued
Dynamically
Independently
Share common and valued
Goal, Objective or Mission
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311. Importance of Teams Global pressures
Flexibility in flatter organizations
Complexity of products and services
Rapidly changing environments
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312. Performance Management & Teams
PM systems should target:
Individual performance
Individual’s contribution to team performance
Performance of entire team
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313. General principles of PM relating to teams
Design and implement best possible system
Consider dangers of poorly implemented system
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314. Managing for Improved Team Performance
Don’t limit team processes with other task or organizational requirements
Provide good team design and organizational support
Give feedback only on processes that the team members can control
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315. Types of Teams Classified by Complexity of task
Membership configuration
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316. Complexity of Task ranges from:
Routine
Well defined
Few deviations in how work is done
Outcomes easily assessed
- to -
Non-routine
Not defined well
No clear specifications on how to do the work
Outcomes are long term and difficult to assess
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317. Membership Configuration includes
Length of time team expects to work together
Stability of team membership
Static Dynamic
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318. Types of Teams Based on Membership Configuration and Task Complexity
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319. Types of Teams Work or Service Teams Project Teams Network Teams
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320. Work or Service Teams Intact Routine tasks Share similar skill sets
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321. Project Teams Assembled for specific purpose
Tasks outside core product or service
Members from different functional areas
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322. Network Teams Membership not constrained by Teams may include
Time or space
Organizational boundaries
Teams may include
Temporary or full-time workers
Customers
Vendors
Consultants
Work is extremely non-routine
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323. Examples of PM Approaches by Type of Team
Work & Service Team
Project Team
Network Team
Type of PM Approach
Peer ratings
Ongoing measurements
Development of competencies
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324. Purposes of Team PM Traditional goals of any PM System
Specific to Team performance:
Make all team members accountable
Motivate all team members to have a stake in team performance
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325. Challenges of Team PM
How do we assess relative individual contribution?
How do we balance individual and team performance?
How do we identify individual and team measures of performance?
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326. Including Team Performance in the PM System
Prerequisites
Performance Planning
Performance Execution
Performance Assessment
Performance Review
Performance Renewal and Re-Contracting
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327. Performance Management Process
Prerequisites
Performance Planning
Performance Execution
Performance Renewal and Re-contracting
Performance Assessment
Performance Review
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328. Prerequisites Knowledge of mission
Organization
Team
Knowledge of job to be performed by the team
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329. Performance Planning Results expected of the team
Behaviors expected of team members
Developmental objectives to be achieved by team and its members
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330. Performance Execution
Team responsibilities
Commit to goal achievement
Seek feedback from
Each other
Supervisor
Communicate openly & regularly
Conduct regular & realistic peer-appraisals
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331. Performance Execution
Supervisor responsibilities
Observe and document
Team performance
Relative contribution of team members
Update team on any changes in goals of the organization
Provide resources & reinforcement
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332. Performance Assessment
Types of Assessments
Self-appraisals
Peer evaluations
Supervisor evaluation
Outsider appraisals (if appropriate)
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333. Performance Assessment
Kinds of Performance to be Assessed
Individual task performance
Individual contextual performance
Team performance
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334. Dimensions of Team Performance to assess:
Effectiveness
Efficiency
Learning and growth
Team member satisfaction
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335. Performance Review Two meetings with supervisor or review board
Team meeting
Individual meeting
Emphasis on past, present and future
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336. Team meeting Discuss overall team Information comes from: Performance
Results
Information comes from:
Team members
Other teams/outsiders
Supervisor’s evaluation
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337. Individual meeting
Discuss how individual behavior contributed to team performance
Information comes from:
Self-appraisal
Peer ratings
Supervisor’s evaluation
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338. Performance Renewal and Re-Contracting
Make adjustments to performance plan
Include plan for individual performance as it affects team functioning
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339. Making Team-based Rewards Effective
All employees should be eligible
Rewards should be
Visible
Contingent
Reversible
Avoid factors which cause reward systems to fail
Consider variable pay systems (in addition to individual bonuses)
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