Performance Management

1. Performance Management

2. Performance Management and Reward Systemsin Context

3. 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 Overview

4. Definition of Performance Management (PM)

5. Continuous Process of • Identifying • Measuring • Developing The performance of individuals and teams Definition of PM

6. and • Aligning performance with Strategic Goals of the organization Definition of PM (continued)

7. Performance Management is NOT performance appraisal

8. Performance Management • Strategic business considerations • Driven by HR & line manager • Ongoing feedback • So employee can improve performance PM is NOT performance appraisal

9. Performance Appraisal • Assesses employee • Strengths & • Weaknesses • Once on regular intervals • Lacks ongoing feedback PM is NOT performance appraisal

10. Contributions of Performance Management

11. Clarify definitions of • job • success criteria • Increase motivation to perform • Increase self-esteem • Enhance self-insight and development Contributions of Performance ManagementFor Employees

12. Communicate supervisors’ views of performance more clearly • Managers gain insight about subordinates • Better and more timely differentiation between good and poor performers • Employees become more competent Contributions of Performance Management For Managers

13. Clarify organizational goals • Facilitate organizational change • Fairer, more appropriate administrative actions • Better protection from lawsuits Contributions of Performance ManagementFor Organization/HR Function

14. Disadvantages/Dangers of Poorly-implemented PM Systems

15. Lowered self-esteem • Employee burnout and job dissatisfaction • Damaged relationships • Use of false or misleading information Disadvantages/Dangers of Poorly-implemented PM SystemsFor Employees

16. Increased turnover • Decreased motivation to perform • Unjustified demands on managers’ resources • Varying and unfair standards and ratings Disadvantages/Dangers of Poorly-implemented PM SystemsFor Managers

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

18. Reward Systems

19. Set of mechanisms for distributing • Tangible returns and • Intangible or relational returns As part of an employment relationship Reward SystemsDefinition

20. Cash compensation • Base pay • Cost-of-Living & Contingent Pay • Incentives (short- and long-term) Reward SystemsTangible returns

21. Benefits, such as • Income Protection • Allowances • Work/life focus Reward Systems Tangible returns (continued)

22. Relational returns, such as • Recognition and status • Employment security • Challenging work • Learning opportunities Reward SystemsIntangible returns

23. Returns and Their Degrees of Dependencyon the Performance Management System

24. Cost of Living Adjustment • Income Protection Returns with Low Dependencyon the Performance Management System

25. Work/Life Focus • Allowances • Relational Returns • Base Pay Returns with Moderate Dependencyon the Performance Management System

26. Contingent Pay • Short-term Incentives • Long-term Incentives Returns with High Dependencyon the Performance Management System

27. Purposes of PM Systems

28. Strategic • Administrative • Informational • Developmental • Organizational maintenance • Documentational Purposes of PM Systems: Overview

29. Link individual goals with organization’s goals • Communicate most crucial business strategic initiatives Strategic Purpose

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

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

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

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

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

35. Congruent with organizational strategy • Thorough • Practical • Meaningful • Specific • Identifies effective/ ineffective performance • Reliable An Ideal PM System: 14 Characteristics

36. Valid • Acceptable and Fair • Inclusive • Open (No Secrets) • Correctable • Standardized • Ethical An Ideal PM System: 14 Characteristics (continued)

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

38. 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 Thorough

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

40. 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 Meaningful

41. Concrete and detailed guidance to employees • What’s expected • How to meet the expectations Specific

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

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

44. Relevant (measures what is important) • Not deficient (doesn’t measure unimportant facets of job) • Not contaminated (only measures what the employee can control) Valid

45. Perception of Distributive Justice • Work performed  Evaluation received  Reward • Perception of Procedural Justice • Fairness of procedures used to: • Determine ratings • Link ratings to rewards Acceptable and Fair

46. 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 Inclusive

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

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

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

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