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Managing Employees Performance

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Learning Objectives

1. Identify the activities involved in performance management.

2. Discuss the purposes of performance management systems.

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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. Explain how to provide performance feedback effectively.
7. Discuss legal and ethical issues that affect performance
management.
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Learning Management System

A LMS is a software application that automates the

administration, development, delivery and tracking of training
programs.

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Can be used by organizations to carry out the instructional

design process more efficiently and effectively.

The system can be linked to the organizations performance

management system to plan for and manage:

training outcomes
associated rewards

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training needs

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Performance Management

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The process through which managers ensure that employees

activities and outputs contribute to the organizations goals.
This process requires:

knowing what activities

and outputs are desired

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observing whether they

occur
providing feedback to
help employees meet
expectations

Purposes of Performance Management

Strategic Purpose means effective performance

management helps the organization achieve its business
objectives.

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Administrative Purpose refers to the ways in which

organizations use the system to provide information for dayto-day decisions about salary, benefits, and recognition
programs.

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Developmental Purpose means that it serves as a basis

for developing employees knowledge and skills.

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Employees Want More Feedback

Criteria for Effective Performance Management

Fit with strategy

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Validity

Acceptability
Specific feedback

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Reliability

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Contamination and Deficiency of a Job

Performance Measure

Methods for Measuring Performance

Quality

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Comparative

Attribute

Results

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METHOD

Behavior

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Basic Approaches to Performance Measurement

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Measuring Performance: Making Comparisons

Assigns a certain
percentage of
employees to
each category in
a set of
categories.

Paired
Comparison
Compares each
employee with
each other
employee to
establish
rankings.

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Requires
managers to
rank employees
in their group
from the highest
performer to the
poorest
performer.

Forced
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Simple Ranking

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Measuring Performance:
Rating Individuals - Attributes
Mixed-Standard Scale

Lists traits and provides a

rating scale for each trait.

Uses several statements

describing each trait to
produce a final score for
that trait.

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Graphic Rating Scale

The employer uses the

scale to indicate the extent
to which an employee
displays each trait.

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Example of a Graphic Rating Scale

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Example of a Mixed-Standard Scale

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An employees performance measurement differs

from job to job. For example, a car dealers
performance is measured by the amount of sales,
the number of new customers and customer
satisfaction surveys.

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Measuring Performance:
Rating Individuals - Behaviors
Behaviorally Anchored
Rating Scale (BARS)

Critical-Incident Method
Based on managers records
of specific examples of the
employee acting in ways that
are
either
effective
or
ineffective.
Employees receive feedback
about what they do well and
what they do poorly and how
they
are
helping
the
organization achieve its goals.

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Rates behavior in terms of a

scale
showing
specific
statements of behavior that
describe different levels of
performance.

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Example of Task- BARS Rating Dimension

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Measuring Performance:
Rating Individuals Behaviors (cont.)
Organizational Behavior
Modification (OBM)

A variation of a BARS which

uses all behaviors necessary
for effective performance to
rate performance at a task.
A BOS also asks the
manager
to
rate
the
frequency with which the
employee has exhibited the
behavior during the rating
period.

A plan for managing the

behavior
of
employees
through a formal system of
feedback and reinforcement.

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Behavioral Observation
Scale (BOS)

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Example of a Behavioral Observation Scale (BOS)

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Measuring Performance: Measuring Results

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Management by Objectives (MBO): people at each level

of the organization set goals in a process that flows from top
to bottom, so that all levels are contributing to the
organizations overall goals.

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These goals become the standards for evaluating each

employees performance.

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Measuring Performance:
Measuring Quality

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The principles of total quality management (TQM),

provide methods for performance measurement and
management.
With
TQM,
performance
measurement
combines
measurements of attributes and results.
Subjective feedback

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Statistical quality control

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Coaches provide feedback to their team just as

managers provide feedback to their employees.
Feedback is important so that individuals know
what they are doing well and what areas they
may need to work on.
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Sources of Performance Information

360-Degree
Performance
Appraisal:
performance
measurement that combines information from the employees:
Managers

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Peers
Subordinates
Self

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Customers

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Performance management is critical for executing

a talent management system and involves one-onone contact with managers to ensure that proper
training and development are taking place.
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Types of Performance Measurement Rating Errors

Contrast errors: the rater compares an individual, not against
an objective standard, but against other employees.

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Leniency: the reviewer rates everyone near the top

Distributional errors: the rater tends to use only one part of

a rating scale.
Strictness: the rater favors lower rankings

Central tendency: the rater puts everyone near the middle of the
scale

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Rater bias: raters often let their opinion of one quality color
their opinion of others.

Halo error: when the bias is in a favorable direction. This can

mistakenly tell employees they dont need to improve in any area.
Horns error: when the bias involves negative ratings. This can
cause employees to feel frustrated and defensive.

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Political Behavior in Performance Appraisals

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Distorting a performance evaluation to advance ones personal

goals
A technique to minimize appraisal politics is a calibration
meeting:

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Meeting at which managers discuss employee performance ratings

and provide evidence supporting their ratings with the goal of
eliminating the influence of rating errors.

Scheduling Performance Feedback

Performance feedback should be a regular, expected management
activity.
Annual feedback is not enough.
Employees should receive feedback so often that they know what
the manager will say during their annual performance review.

Preparing for a Feedback Session

Managers should be prepared for each formal feedback session.
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Giving Performance Feedback (cont.)

Conducting the Feedback Session

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During the feedback session, managers can take any of three

approaches:
Tell-and-Sell managers tell employees their ratings and
then justify those ratings.

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Tell-and-Listen managers tell employees their ratings

and then let the employees explain their side of the story.

3.

Problem-Solving managers and employees

together to solve performance problems.

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work

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Improving Performance

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Legal and Ethical Issues in Performance Management

Legal

Performance management processes are often scrutinized in

cases of discrimination or dismissal.

Ethical

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Employee monitoring via electronic devices and computers

may raise concerns over employee privacy.

Lawsuits related to performance management usually involve

charges of:
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Discrimination

To protect against both kinds of lawsuits, it is important to

have a legally defensible performance management
system.

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Legal Requirements for

Performance Management (cont.)
A legally defensible performance management system
includes:
Based on valid job analyses, with requirements for job
success clearly communicated to employees.

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Performance measurement should evaluate behaviors or

results, rather than traits.
Multiple raters (including self-appraisals) should be used.
All performance ratings should be reviewed by upper-level
managers.
There should be an appeals mechanism for employees.

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Conclusions

Performance management is the process through which

managers ensure that employees activities and outputs
contribute to the organizations goals.

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Performance measures should fit with the organizations

strategy by supporting its goals and culture.
Performance feedback should be a regular, scheduled
management activity, so that employees can correct
problems.

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Managers must make sure that performance management

systems and decisions treat employees equally, without
regard to their race, sex, or other protected status.

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Copyright

This didactic material is meant for the personal use of the student only, and is
copyrighted. Its reproduction, even for a partial utilization, is strictly forbidden
in compliance with and in force of the law on Authors rights.

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