Ch 8 - Performance Management
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A continuous process of identifying, measuring, and developing the performance of individuals and teams and aligning performance with the strategic goals of the organization.
The systematic description of individual or group job-relevant strengths and weaknesses within and between employees or groups.
Purposes for Performance Management relevant to Employment Decisions
- To promote outstanding performers (or increase compensation)
- To inform succession plans
- To terminate low performers
- To train, transfer, or discipline others
Purposes for Performance Management relevant to Developmental reasons
To establish objectives for training programs
What's the most recommended suggestion of who does the rating in Performance Management and Appraisal?
Why are supervisors the most essential in Performance Appraisal?
- Acquainted with target, the objectives, the job
- Responsible for implementing rewards/punishments
- Research has demonstrated that this source is most closely related to objective performance
What are the issues with Peers rating one another in Performance Appraisals?
- Perceived political/friendship biases
- Strong reactance to negative feedback
- Lower cohesion, satisfaction, trust, perceived performance of group/team
What are the advantages of subordinates being rated by employees rather than supervisors in Performance Appraisals?
- Predictive of long-term effectiveness
- Precedes improvements in managerial performance
- Averaged ratings are more reliable
When rating subordinates, what's different from a supervisor's perspective?
- Tend to rate contextual performance
- Aware of leadership styles (e.g. freq. of delegation)
What are the issues with rating yourself on performance?
- Leniency, bias, low variability, low agreement with others
- Also tend to use intentions vs. actual behaviors
What are the ways to improve accuracy and effectiveness when rating yourself?
- Objective indicators used
- Training in appraisal system
- When used for development purposes only
- Rate self relative to others (e.g. above/below average)
- Confidentiality (won't be made public)
- Focus on the future (what can be improved)
Fundamental Attribution Error
- Attributing successes to self and failures to circumstances.
- Attributing the failures of others to them and their successes to circumstances.
What do Rating Methods ask the rater to assess?
- The employee's personal characteristics or traits.
- The employee's work behaviors
- The employee's work resultsThe employee's over value, or worth in comparison to other employees.
What are the Trait Methods?
- Graphic Rating Scales
- Essay Method
What is the Graphic Rating Scales Trait Method?
Asks the rater to evaluate the employee on a series of scales.
What is the Essay Method Trait Method?
- Requires a manager to keep a log of behaviors
- Pros: meaningful feedback based on performance instead of personality
- Cons: time consuming and burdensome, delayed feedback, not easily quantified, comparisons difficult
What is an example of a Behavioral Method?
Behaviorally Anchored Rating Scales (BARS)
What are the Behaviorally Anchored Rating Scales (BARS)?
- Critical incidents used to anchor each level of performance.
- Example: Scale 1-5, 1 = Argued with customer about product suitability, 3 = offered positive information when asked directly, 5 = used positive phrases to describe product
What's an example of a Results Oriented Method?
Management By Objectives (MBO)
What are the characteristics of Management By Objectives (MBO)?
- Focus on what employee achieves
- Use external, objective measures as indicators of employee performance
What are examples of Comparison Methods?
- Paired Comparisons
- Forced Distribution
What is the Rank-Ordering Comparative Method?
Ordering employees from 1st to last
What is the Paired Comparisons Comparative Method?
Compare each employee to each other employee in terms of which is superior
What is the Forced Distribution Comparative Method?
- Example: Top 10%, bottom 10%, middle 80%
- AKA "cruelty curves"
- Popularized by Jack Welch at GE
An employee's perception of his or her exchange relationship with an organization, outcomes the organization has promised to provide to the employee, and contributions the employee is obligated to make to the organization.
What are determinants of Psychological Contracts?
- Direct Communication (recruitment, info from co-workers and supervisors)
- Observation (Employee treatment, nature of important decisions made)
- Written Documents (Employee handbooks, policies, hr documents, website)
Realistic Job Preview
An honest assessment of the advantages and disadvantages of a particular job and working in a particular organization.
What are the two types of Psychological Contracts?
- Transactional Contracts
- Relational Contracts
What are characteristics of a Relational Contract?
- Long term
- General and evolving
- Extensive and broad promises and obligations
What are characteristics of a Transactional Contract?
- Short term
- Narrow and specific
- Limited promises and obligations
Managers use the information gained from performance appraisals for what two main reasons?
- Developmental purposes
- Evaluative, decision-making purposes
What are the choices in developing an effective Performance Appraisal System?
- Choosing the mix of formal and informal appraisals
- Choosing what factors to evaluate (traits, behaviors, or results)
- Choosing methods of appraisal (graphic rating scales, BARS, or BOS)
- Choosing who appraises performance (supervisors, peers, subordinates, etc.)
Measures that are based on facts
Measures that are based on individual perceptions
Behavioral Observation Scale (BOS)
A subjective measure on which the frequency with which an employee performs a behavior is indicated.
A performance appraisal in which an employee's performance is evaluated by a number of people who are in a position to evaluate the employee's performance such as peers, superiors, subordinates, and customers or clients.
Merit Pay Plan
A plan that bases pay on performance.
The idea that jobs or equivalent value to an organization should carry the same pay rates regardless of differences in the work and the personal characteristics of the employee
The sum of work-related experiences through a person's lifetime.
What are the four types of careers?
- Steady state careers
- Linear careers
- Spiral careers
- Transitory careers
What are steady-state careers?
A one-time commitment to a certain kind of job that is maintained through one's working life.
What is a linear career?
A person progresses through a sequence of jobs, and each job entails progress over the prior one in terms of responsibility, skills needed, level in the hierarchy of an organization, and so on.
What is a spiral career?
A person holds different types of jobs that build on each other but tend to be fundamentally different.
What is a transitory career?
A person with a transitory career changes jobs frequently, and each job is different from the one before it.
A career that is not tied to a single organization and in which a person has a variety of kinds of work experiences in different organizations.
What are the 5 Career Stages?
- Preparation for work (acquiring the skills and education necessary for job)
- Organizational entry (People try to find a job that will be a good start to their chosen careers)
- Early career (establishment and achievement)
- Mid career (20-35 yrs of work, how to stay productive?)
- Late career (how long career is active)
The experiences, positions, or jobs that employees would like to have in the course of their careers.
A position from which the chances of obtaining a promotion or a job with more responsibility become very small.
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