Performance ManagementPERFORMANCE MANAGEMENT
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Performance Management in Context:
The Performance Management Contribution
Definition of Reward Systems
Integration with Other Human Resources and Development Activities
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Performance Management: Definition
Continuous Process of
and
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PM is NOT performance appraisal
PM
Driven by line manager
Contributions of PM
Motivation to perform is increased
Self-esteem is increased
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Contributions of PM
Managers gain insight about subordinates
There is better and more timely differentiation between good and poor performers
Employees become more competent
Contributions of PM
For Organization/HR Function
Organizational change is facilitated
There is better protection from lawsuits
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Disadvantages/Dangers of
Damaged relationships
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Disadvantages/Dangers of
Varying and unfair standards and ratings
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Disadvantages/Dangers of
Reward Systems: Definition
Tangible returns
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Tangible returns
Cash compensation
Base pay
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
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
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Intangible returns
Such as vacation time,
Relational Returns
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Returns and Their Degree of Dependency
on the Performance Management System
Return
Purposes of PM Systems:
Strategic Purpose
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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Administrative Purpose
Salary adjustments
Informational Purpose
Developmental Purpose
Performance feedback/coaching
Causes of performance deficiencies
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Organizational Maintenance Purpose
Plan effective workforce
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Documentational Purpose
Characteristics of an Ideal PM System
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Congruent with organizational strategy
Aligned with unit and organizational goals
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Thorough
Evaluations cover performance for entire review period
Feedback is given on both positive and negative performance
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Practical
Available
Meaningful
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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Specific
what’s expected
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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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Reliable
Consistent
Valid
Not deficient (doesn’t measure unimportant facets of job)
Not contaminated (only measures what the employee can control)
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Acceptable and Fair
Perception of Procedural Justice
Determine ratings
Inclusive
When system is created, employees should help with deciding
What should be measured
Employee should provide input on performance prior to evaluation meeting
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Open (No Secrets)
Clear standards, ongoing communication
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Correctable
Appeals process provided
Standardized
Consistent evaluations across
Ethical
Supervisor suppresses self-interest
Supervisor rates only where she has sufficient information about the performance dimension
Supervisor respects employee privacy
Integration with other Human Resources
and Development activities
Workforce planning