Performance Management 2 nd Edition Performance Management and

  • Slides: 53
Download presentation
Performance Management 2 nd Edition

Performance Management 2 nd Edition

Performance Management and Reward Systems in Context

Performance Management and Reward Systems in Context

Overview Ø Ø Ø Ø Definition of Performance Management (PM) The Performance Management Contribution

Overview Ø Ø Ø Ø 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

Definition of Performance Management (PM)

Definition of Performance Management (PM)

Definition of PM 1. Continuous Process of ü ü ü Identifying Measuring Developing The

Definition of PM 1. Continuous Process of ü ü ü Identifying Measuring Developing The performance of individuals and teams

Definition of PM (continued) and 2. Aligning performance with Strategic Goals of the organization

Definition of PM (continued) and 2. Aligning performance with Strategic Goals of the organization

Performance Management is NOT performance appraisal

Performance Management is NOT performance appraisal

PM is NOT performance appraisal n Performance Management • Strategic business considerations • Driven

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

PM is NOT performance appraisal n Performance Appraisal • Driven by HR • Assesses

PM is NOT performance appraisal n Performance Appraisal • Driven by HR • Assesses employee Strengths & n Weaknesses n • Once a year • Lacks ongoing feedback

Contributions of Performance Management

Contributions of Performance Management

Contributions of Performance Management For Employees ü Clarify definitions of üjob üsuccess criteria ü

Contributions of Performance Management For Employees ü Clarify definitions of üjob üsuccess criteria ü ü ü Increase motivation to perform Increase self-esteem Enhance self-insight and development

Contributions of Performance Management For Managers ü ü Communicate supervisors’ views of performance more

Contributions of Performance Management For Managers ü ü 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 Organization/HR Function ü ü Clarify organizational goals Facilitate organizational

Contributions of Performance Management For Organization/HR Function ü ü Clarify organizational goals Facilitate organizational change Fairer, more appropriate administrative actions Better protection from lawsuits

Disadvantages/Dangers of Poorly-implemented PM Systems

Disadvantages/Dangers of Poorly-implemented PM Systems

Disadvantages/Dangers of Poorly-implemented PM Systems For Employees n n Lowered self-esteem Employee burnout and

Disadvantages/Dangers of Poorly-implemented PM Systems For Employees n n Lowered self-esteem Employee burnout and job dissatisfaction Damaged relationships Use of false or misleading information

Disadvantages/Dangers of Poorly-implemented PM Systems For Managers n n Increased turnover Decreased motivation to

Disadvantages/Dangers of Poorly-implemented PM Systems For Managers n n Increased turnover Decreased motivation to perform Unjustified demands on managers’ resources Varying and unfair standards and ratings

Disadvantages/Dangers of Poorly-implemented PM Systems For Organization n n Wasted time and money Unclear

Disadvantages/Dangers of Poorly-implemented PM Systems For Organization n n Wasted time and money Unclear ratings system Emerging biases Increased risk of litigation

Reward Systems

Reward Systems

Reward Systems Definition Set of mechanisms for distributing Ø Tangible returns and Ø Intangible

Reward Systems Definition Set of mechanisms for distributing Ø Tangible returns and Ø Intangible or relational returns As part of an employment relationship

Reward Systems Tangible returns Ø Cash compensation ØBase pay ØCost-of-Living & Contingent Pay ØIncentives

Reward Systems Tangible returns Ø Cash compensation ØBase pay ØCost-of-Living & Contingent Pay ØIncentives (short- and longterm)

Reward Systems Tangible returns (continued) Ø Benefits, such as ØIncome Protection ØAllowances ØWork/life focus

Reward Systems Tangible returns (continued) Ø Benefits, such as ØIncome Protection ØAllowances ØWork/life focus

Reward Systems Intangible returns Ø Relational returns, such as ØRecognition and status ØEmployment security

Reward Systems Intangible returns Ø Relational returns, such as ØRecognition and status ØEmployment security ØChallenging work ØLearning opportunities

Returns and Their Degrees of Dependency on the Performance Management System

Returns and Their Degrees of Dependency on the Performance Management System

Returns with Low Dependency on the Performance Management System § § Cost of Living

Returns with Low Dependency on the Performance Management System § § Cost of Living Adjustment Income Protection

Returns with Moderate Dependency on the Performance Management System § § Work/Life Focus Allowances

Returns with Moderate Dependency on the Performance Management System § § Work/Life Focus Allowances Relational Returns Base Pay

Returns with High Dependency on the Performance Management System § § § Contingent Pay

Returns with High Dependency on the Performance Management System § § § Contingent Pay Short-term Incentives Long-term Incentives

Purposes of PM Systems

Purposes of PM Systems

Purposes of PM Systems: Overview Ø Ø Ø Strategic Administrative Informational Developmental Organizational maintenance

Purposes of PM Systems: Overview Ø Ø Ø Strategic Administrative Informational Developmental Organizational maintenance Documentational

Strategic Purpose Ø Ø Link individual goals with organization’s goals Communicate most crucial business

Strategic Purpose Ø Ø Link individual goals with organization’s goals Communicate most crucial business strategic initiatives

Administrative Purpose Ø Provide information for making decisions re: ØSalary adjustments ØPromotions ØRetention or

Administrative Purpose Ø Provide information for making decisions re: ØSalary adjustments ØPromotions ØRetention or termination ØRecognition of individual performance ØLayoffs

Informational Purpose Communicate to Employees: Ø Expectations Ø What is important Ø How they

Informational Purpose Communicate to Employees: Ø Expectations Ø What is important Ø How they are doing Ø How to improve

Developmental Purpose Ø Ø Performance feedback/coaching Identification of individual strengths and weaknesses Causes of

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

Organizational Maintenance Purpose Ø Ø Plan effective workforce Assess future training needs Evaluate performance

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

Documentational Purpose Ø Ø Ø Validate selection instruments Document administrative decisions Help meet legal

Documentational Purpose Ø Ø Ø Validate selection instruments Document administrative decisions Help meet legal requirements

An Ideal PM System: 14 Characteristics 1. 2. 3. 4. 5. 6. 7. Congruent

An Ideal PM System: 14 Characteristics 1. 2. 3. 4. 5. 6. 7. Congruent with organizational strategy Thorough Practical Meaningful Specific Identifies effective/ ineffective performance Reliable

An Ideal PM System: 14 Characteristics (continued) 8. 9. 10. 11. 12. 13. 14.

An Ideal PM System: 14 Characteristics (continued) 8. 9. 10. 11. 12. 13. 14. Valid Acceptable and Fair Inclusive Open (No Secrets) Correctable Standardized Ethical

Congruent with organizational strategy n n Consistent with organization’s strategy Aligned with unit and

Congruent with organizational strategy n n Consistent with organization’s strategy Aligned with unit and organizational goals

Thorough n n All employees are evaluated All major job responsibilities are evaluated Evaluations

Thorough n n 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

Practical n n Available Easy to use Acceptable to decision makers Benefits outweigh costs

Practical n n Available Easy to use Acceptable to decision makers Benefits outweigh costs

Meaningful n n n Standards are important and relevant System measures ONLY what employee

Meaningful n n n 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

Specific Concrete and detailed guidance to employees • What’s expected • How to meet

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

Identifies effective and ineffective performance n Distinguish between effective and ineffective • Behaviors •

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

Reliable n n n Consistent Free of error Inter-rater reliability

Reliable n n n Consistent Free of error Inter-rater reliability

Valid n n n Relevant (measures what is important) Not deficient (doesn’t measure unimportant

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

Acceptable and Fair n Perception of Distributive Justice • Work performed Evaluation received Reward

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

Inclusive n Represents concerns of all involved • When system is created, employees should

Inclusive n Represents concerns of all involved • When system is created, employees should help with deciding What should be measured n How it should be measured n • Employee should provide input on performance prior to evaluation meeting

Open (No Secrets) n n Frequent, ongoing evaluations and feedback 2 -way communications in

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

Correctable n n Recognizes that human judgment is fallible Appeals process provided

Correctable n n Recognizes that human judgment is fallible Appeals process provided

Standardized n n Ongoing training of managers to provide Consistent evaluations across • People

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

Ethical n n n Supervisor suppresses self-interest Supervisor rates only where she has sufficient

Ethical n n n 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

Integration with other Human Resources and Development Activities

n PM provides information for: • Development of training to meet organizational needs •

n PM provides information for: • Development of training to meet organizational needs • Workforce planning • Recruitment and hiring decisions • Development of compensation systems

Quick Review n n n n Definition of Performance Management (PM) The Performance Management

Quick Review n n n n 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