Fundamentals of Human Resource Management Eighth Edition De
- Slides: 36
Fundamentals of Human Resource Management Eighth Edition De. Cenzo and Robbins Chapter 10 Establishing the Performance Management System Fundamentals of Human Resource Management 8 e, De. Cenzo and Robbins
Introduction • Employees generally see performance evaluations as having a direct effect on their work lives. • The performance management systems need to include: – decisions about who should evaluate performance – what format should be used – how the results should be utilized Fundamentals of Human Resource Management 8 e, De. Cenzo and Robbins
Performance Management Systems Purposes of a Performance Management System – Feedback - let employees know how well they have done and allow for employee input. – Development – identify areas in which employees have deficiencies or weaknesses. – Documentation - to meet legal requirements. Fundamentals of Human Resource Management 8 e, De. Cenzo and Robbins
Performance Management Systems Difficulties in Performance Management Systems – Focus on the individual: Discussions of performance may elicit strong emotions and may generate conflicts when subordinates and supervisors do not agree. Fundamentals of Human Resource Management 8 e, De. Cenzo and Robbins
Performance Management Systems Difficulties in Performance Management Systems – Focus on the process: Company policies and procedures may present barriers to a properly functioning appraisal process. – Additionally, appraisers may be poorly trained. Fundamentals of Human Resource Management 8 e, De. Cenzo and Robbins
Performance Management and EEO • HRM practices must be bias free, objective and job-related. • Valid performance appraisals are conducted at established intervals and are done by trained appraisers. Fundamentals of Human Resource Management 8 e, De. Cenzo and Robbins
The Appraisal Process 7. Appeal if not satisfied Fundamentals of Human Resource Management 8 e, De. Cenzo and Robbins
The Appraisal Process • Establishment of performance standards – Derived from company’s strategic goals. – Based on job analysis and job description. • Communication of performance standards to employee. Fundamentals of Human Resource Management 8 e, De. Cenzo and Robbins
The Appraisal Process • Measurement of performance using information from: – personal observation – statistical reports – oral reports – written reports • Comparison of actual performance with standards. Fundamentals of Human Resource Management 8 e, De. Cenzo and Robbins
The Appraisal Process • Discussion of appraisal with employee. • Identification of corrective action where necessary. – Immediate action deals with symptoms. – Basic corrective action deals with causes. Fundamentals of Human Resource Management 8 e, De. Cenzo and Robbins
Appraisal Methods Three approaches: • Absolute standards • Relative standards • Objectives Fundamentals of Human Resource Management 8 e, De. Cenzo and Robbins
Appraisal Methods Evaluating absolute standards: • An employee’s performance is measured against established standards. • Evaluation is independent of any other employee. Fundamentals of Human Resource Management 8 e, De. Cenzo and Robbins
Appraisal Methods Evaluating absolute standards: – Essay Appraisal: Appraiser writes narrative describing employee performance & suggestions. – Critical Incident Appraisal: Based on key behavior anecdotes illustrating effective or ineffective job performance. Fundamentals of Human Resource Management 8 e, De. Cenzo and Robbins
Appraisal Methods Evaluating absolute standards: – Checklist Appraisal: Appraiser checks off behaviors that apply to the employee. – Adjective Rating Scale Appraisal: Appraiser rates employee on a number of job-related factors. Fundamentals of Human Resource Management 8 e, De. Cenzo and Robbins
Appraisal Methods Evaluating absolute standards: – Forced-Choice Appraisal: Appraisers choose from sets of statements which appear to be equally favorable, the statement which best describes the employee. Fundamentals of Human Resource Management 8 e, De. Cenzo and Robbins
Appraisal Methods Evaluating absolute standards: • Behaviorally Anchored Rating Scales (BARS): Appraiser rates employee on factors which are defined by behavioral descriptions illustrating various dimensions along each rating scale. Fundamentals of Human Resource Management 8 e, De. Cenzo and Robbins
Appraisal Methods Relative standards: • Employees are evaluated by comparing their performance to the performance of other employees. Fundamentals of Human Resource Management 8 e, De. Cenzo and Robbins
Appraisal Methods Relative standards: • Group Order Ranking: Employees are placed in a classification reflecting their relative performance, such as “top onefifth. ” Fundamentals of Human Resource Management 8 e, De. Cenzo and Robbins
Appraisal Methods Relative standards: – Individual Ranking: Employees are ranked from highest to lowest. – Paired Comparison: • Each individual is compared to every other. • Final ranking is based on number of times the individual is preferred member in a pair. Fundamentals of Human Resource Management 8 e, De. Cenzo and Robbins
Appraisal Methods Using Achieved Outcomes to Evaluate Employees Management by Objectives (MBO) – includes mutual objective setting and evaluation based on the attainment of the specific objectives Fundamentals of Human Resource Management 8 e, De. Cenzo and Robbins
Appraisal Methods Using Achieved Outcomes to Evaluate Employees – Common elements in an MBO program are: • • goal specificity participative decision making an explicit time period performance feedback – Effectively increases employee performance and organizational productivity. Fundamentals of Human Resource Management 8 e, De. Cenzo and Robbins
Factors that can Distort Appraisals Fundamentals of Human Resource Management 8 e, De. Cenzo and Robbins
Factors that can Distort Appraisals • Leniency error – Each evaluator has his/her own value system. – Some evaluate high (positive leniency) and others, low (negative leniency). • Halo error: Evaluator lets an assessment of an individual on one trait influence evaluation on all traits. Fundamentals of Human Resource Management 8 e, De. Cenzo and Robbins
Factors that can Distort Appraisals • Similarity error: Evaluator rates others in the same way that the evaluator perceives him or herself. • Low appraiser motivation: Evaluators may be unwilling to be accurate if important rewards for the employee depend on the results. Fundamentals of Human Resource Management 8 e, De. Cenzo and Robbins
Factors that can Distort Appraisals • Central tendency: The unwillingness to use the extremes of a rating scale and to adequately distinguish among employees being rated. • Inflationary pressures: Pressures for equality and fear of retribution for low ratings leads to less differentiation among rated employees. • Inappropriate substitutes for performance: Effort, enthusiasm, appearance, etc. are less relevant for some jobs than others. Fundamentals of Human Resource Management 8 e, De. Cenzo and Robbins
Factors that can Distort Appraisals Attribution Theory • Evaluations are affected based on whether someone’s performance is due to – internal factors they can control – external factors which they cannot • If poor performance is attributed to internal control, the judgment is harsher than when it is attributed to external control. Fundamentals of Human Resource Management 8 e, De. Cenzo and Robbins
Factors that can Distort Appraisals • Impression management: • If employee positively influences the relationship with the supervisor, he/she is likely to receive a higher rating. Fundamentals of Human Resource Management 8 e, De. Cenzo and Robbins
Creating More Effective Performance Management Systems Use Behavior-Based Measures: • Measures based on specific descriptions of behavior are more jobrelated and elicit more inter-rater agreement than characters, such as “loyalty” or “friendliness”. Fundamentals of Human Resource Management 8 e, De. Cenzo and Robbins
Creating More Effective Performance Management Systems Combine Absolute and Relative Standards: • Absolute standards tend to be positively lenient; relative standards suffer when there is little variability. • Combining the standards tends to offset the weaknesses of each. Fundamentals of Human Resource Management 8 e, De. Cenzo and Robbins
Creating More Effective Performance Management Systems Provide Ongoing Feedback: • Expectations and disappointments should be shared with employees on a frequent basis. Fundamentals of Human Resource Management 8 e, De. Cenzo and Robbins
Creating More Effective Performance Management Systems Use Multiple Raters: • Increasing the number of raters leads to more reliable and valid ratings. – Use peer evaluations: Coworkers offer constructive insights and more specific evaluations. – Upward appraisals allow employees to give their managers feedback. – 360 -Degree appraisals: Supervisors, peers, employees, team members, customers and others with relevant information evaluate the employee. Fundamentals of Human Resource Management 8 e, De. Cenzo and Robbins
Creating More Effective Performance Management Systems Rate Selectively – Appraisers only evaluate in those areas about which they have sufficient knowledge. – Appraisers should be organizationally as close as possible to the individual being evaluated. – More effective raters are asked to do the appraisals. Fundamentals of Human Resource Management 8 e, De. Cenzo and Robbins
Creating More Effective Performance Management Systems Train Appraisers: • Untrained appraisers who do poor appraisals can demoralize employees and increase legal liabilities. Fundamentals of Human Resource Management 8 e, De. Cenzo and Robbins
Creating More Effective Performance Management Systems Fundamentals of Human Resource Management 8 e, De. Cenzo and Robbins
International Performance Appraisal • Who performs the evaluation? – Different cultural perspectives and expectations between the parent and local country make evaluation difficult. – Evaluation forms may not be translated accurately. – Quantitative measures may be misleading. Fundamentals of Human Resource Management 8 e, De. Cenzo and Robbins
International Performance Appraisal • Evaluation Formats – May make sense to use different forms for parent-country nationals and host-country nationals. – Performance criteria for a particular position should be modified to fit the overseas position and site. – Include a current expatriate’s insights as part of the evaluation. Fundamentals of Human Resource Management 8 e, De. Cenzo and Robbins
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