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

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

4. PM is NOT performance appraisal PM 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

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

6. Contributions of PMFor 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

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

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

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

10. Disadvantages/Dangers of Poorly-implemented PM Systems for Organization • Wasted time and money • Unclear ratings system • Emerging biases • Increased risk of litigation

11. Reward Systems: Definition Set of mechanisms for distributing • Tangible returns and • Intangible or relational returns As part of an employment relationship

12. Tangible returns • Cash compensation • Base pay • Cost-of-Living & Contingent Pay • Incentives (short- and long-term) • Benefits, such as • Income Protection • Allowances • Work/life focus

13. Intangible returns • Relational returns, such as • Recognition and status • Employment security • Challenging work • Learning opportunities

14. Returns and Their Degree of Dependencyon the Performance Management System Return 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 Low Moderate Moderate Moderate Moderate High High High

15. Purposes of PM Systems:Overview • Strategic • Administrative • Informational • Developmental • Organizational maintenance • Documentation

16. Strategic Purpose • Link employee behavior with organization’s goals • Communicate most crucial business strategic initiatives

17. Administrative Purpose • Provide information for making decisions re: • Salary adjustments • Promotions • Retention or termination • Recognition of individual performance • Layoffs

18. Informational Purpose Communicate to Employees: • Expectations • What is important • How they are doing • How to improve

19. Developmental Purpose • Performance feedback/coaching • Identification of individual strengths and weaknesses • Causes of performance deficiencies • Tailor development of individual career path

20. Organizational Maintenance Purpose • Plan effective workforce • Assess future training needs • Evaluate performance at organizational level • Evaluate effectiveness of HR interventions

21. Documentational Purpose • Validate selection instruments • Document administrative decisions • Help meet legal requirements

22. Characteristics of an Ideal PM System

23. Congruent with organizational strategy • Consistent with organization’s strategy • Aligned with unit and organizational goals

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

25. Practical • Available • Easy to use • Acceptable to decision makers • Benefits outweigh costs

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

27. Specific Concrete and detailed guidance to employees • what’s expected • how to meet the expectations

28. Identifies effective and ineffective performance • Distinguish between effective and ineffective • Behaviors • Results • Provide ability to identify employees with various levels of performance

29. Reliable • Consistent • Free of error • Inter-rater reliability

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)

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

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

33. Open (No Secrets) • Frequent, ongoing evaluations and feedback • 2-way communications in appraisal meeting • Clear standards, ongoing communication • Communications are factual, open, honest

34. Correctable • Recognizes that human judgment is fallible • Appeals process provided

35. Standardized • Ongoing training of managers to provide • Consistent evaluations across • People • Time

36. Ethical • Supervisor suppresses self-interest • Supervisor rates only where she has sufficient information about the performance dimension • Supervisor respects employee privacy

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

38. Chapter 2

39. Performance Management Process:Overview • Prerequisites • Performance Planning • Performance Execution • Performance Assessment • Performance Review • Performance Renewal and Recontracting

40. Prerequisites Performance Planning Performance Execution Performance Management Process Performance Renewal and Recontracting Performance Assessment Performance Review

41. Prerequisites • Knowledge of the organization’s mission and strategic goals • Knowledge of the job in question

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

43. Mission and Goals Cascade effect throughout organization Organization Unit Employee

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

45. Job Description • Job duties • KSAs • Working conditions

46. Generic Job Descriptions Occupational Informational Network (O*Net) http://online.onetcenter.org/

47. Job analysis • Use a variety of tools • Interviews • Observation • Questionnaires (available on Internet)

48. Job analysis follow-up • All incumbents should • review information and • provide feedback re: • Task • Frequency • Criticality

49. Performance Planning:Results • Key accountabilities • Specific objectives • Performance standards

50. Key Accountabilities Broad areas of a job for which the employee is responsible for producing results