Conducting

Performance Management

Fatemeh Hashemi

How performance management is

strategically important to firms

Performance management is a formal, structured process used to

measure,evaluate, and influence employees’ job-related attitudes,

behaviours, and performance results.

Performance management serves many purposes in organizations:

1-Enhancing Motivation and Productivity:

An employee’s motivation to perform well is determined by how

responds to three key questions:

• The expectancy question(‘If I make an effort, will I be able to

perform as intended?’)

• The instrumentality question(‘What consequences, if any, will

follow from my decision to perform?’)

• The valence question(‘How much do I value the consequences

associated with the intended behavour?’)

How performance management is

strategically important to firms

2-Supporting Strategic Goals

Defining goals and their measures is an important part of the perfomance management

process.When goals have a direct and obvious link to strategic goals and to the firm’s

success factors, two benefits occur:

• Employees better understand their organization’s strategic focus and how their jobs fit

with it.

• The goals direct employee behaviours toward activites that are consistent and

supportive of the organization’s strategy.

3-Strategic Planning, Alignment and ChangePerformance measures provide valuable information for use in strategic planning and

organizational change.

• Detecting Problems :for example; declining sales performance may point to a

deficiency in training.

• Evaluating Change: Employee performance measures should be a key component of

a plan for evaluating the success of a change initiative.

How performance management fits

within an integrated HRM system

HR Activities

External

Environment

Legal

Labor market

National Culture

Performance Management Practices

If no improvement

make adjustments

Feedback and Follow up

Objectives of Performance

Measurement And Feedback

Performance Measurement

Internal

EnvironmentStrategy

Culture

Technology

The responsibilities of the HR Triad for

performance management

Work with 2+3 to develop

valid performance measures

Work with 1 providing job analysis

data

Work with 1+2 to set performance

expectations

Understanding of errors Train everyone Appraise the work of others

Measure and keep records Coordination and feedback Participation

Feedback to employees Train 1 for feedback Seek and accept feedback

Feedback own performance Train self-managing teams for

feedback

Learn to give feedback

Decision making Monitor managerial decisions Understand performance expectation

Diagnose deficiencies Train self-managing teams for

deficiencies

Learn to diagnose causes of

deficiencies

Work with 3 to develop

Strategies

Ensure 1+3 to deal with deficiencies Work with 1 to develop

improvement strategies

Provide resources Provide personal assistance to 3. Develop goal setting and self-

management skills

LINE MANAGERS HR PROFESSIONALS EMPLOYEES

Several ways to measure

performance

• Performance criteria: are the dimensions against which the performance

of an incumbent, a team or a work unit is evaluated.

organizations can use three types of criteria:

Personal Traits focus on personal characteristics, such as loyalty, dependability,

communication ability and leadership

Behavioral Criteria focus on how work is performed.

Objective Results focus on what was produced rather than how it was produced.

• Weightning the criteria: Job analysis

The timing of the performance

measurement and feedbackThe timing of performance measurement should reflect

strategic considerations. But often the timing of performance

measurement and feedback is driven by convenience and

tradition.The three most common approaches:

1-Focal Point:Performance measurement for all employees

occurs at approximately the same time.

Advantage:Comparison-everyone-same time

Disadvantage:Too much work –same time-artificial

productivity

2-Anniversary Approach:distributes the task of reviewing

performance and providing feedback over the year.

Disadvantage:Individual-team performance,comparison.

3-Natural Time Span of the Job

To compensate for the disadvantages of gathering data

from any single source, most large organizations involve

multiple participants when measuring performance and

providing feedback.

• Supervisors

• Self-Appraisal

• Peers

• Subordinates

• Customers

• 360 – Degree Appraisals

The participants in performance

measurement and feedback

Appraisal formats

Involves evaluating performance based on the judgemets and

opinions of subordinates, peers, supervisors, other managers

and even the employees themselves.

Norm-Referenced1.Straight Ranking

2.Forced Distribution.

Absolute Standards Formats1.Graphic Rating Scales

2.Behaviourally Anchored Rating Scales

3.Behavioural Observation Scales

Result-Based Formats.1.Direct Index Approach

2.Management by Objectives

The rating process

Common Performance Rating Errors

Halo and Horn :sex,age,race

Leniency: high rated

Strictness: low rated

Central Tendency: ‘play –it- safe’ average rating

Primacy:Initial information to categorize

Recency:Recent results

Contrast Effects:Comparison of different levels.

Improving Rater Accuracy

Rating Scale Format:

•A single job activity

•Rate separately

•Do not use term ‘average’

Provide Memory Aids

Provide Rater Training

Reward Accurate and Timely Appraisals

Use Multiple Raters

Providing feedback

The feedback makes employees aware of any problems and should adress the

importance of change when applicable. Many managers feel uncomfortable

providing feedback to employees.

Different perspective,egos,defence,discussions...

Timing:Immediate feedback is most useful.Continous,from several sources and

as much info as reciever can use.

Preparation:Before the actual interview decision has to be taken is it one way or

interactive

Content of the Discussion:The most useful feedback sessions focus on

solving problems and planning for the future.Problem solving involves diagnosing

the causes of performance.

Diagnosis:The objective of diagnosis is to understand the factors that affect an

employee’s performance.Training in problem solving and in giving and receiving

feedback should be provided.

Removing Roadblocks: Action plan: Supervisor should adress lack of

resources,feedback,Subordinate should adress behavorial changes,career

development activities...

Two current issues related to

performance management

• Automated Performance Management

Technology can automate the process by tracking goals,scoring and approving

appraisals and processing the data for use in determining compensation, training

,planning and recruiting.Customer satisfaction,managers ratings etc..the technology

allows organizations to convert a great deal of data into usable

information.Efficiency,time saving,accuracy.

• Monitoring Through Technology

Handscanners-attendancy,GPS devices –location,softwares-emails,internet activities

It concerns privacy.Must find a balance between benefits and privacy.How ?

Communication and training.