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Performance Management in Context: Overview

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  1. Performance Management in Context: Overview • 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

  2. Performance Management: Definition Continuous Process of • Identifying performance of individuals and teams • Measuring performance of individuals and teams • Developing performance of individuals and teams and • Aligning performance with the strategic goals of the organization

  3. PM is NOT performance appraisal PM Strategic business considerations Ongoing feedback So employee can improve performance Driven by line manager Performance appraisal Assesses employee Strengths & Weaknesses Once a year Lacks ongoing feedback Driven by HR

  4. Contributions of PM For Employees • The definitions of job and success are clarified • Motivation to perform is increased • Self-esteem is increased • Self-insight and development and enhanced

  5. Contributions of PMFor Managers • Supervisors’ views of performance are communicated more clearly • Managers gain insight about subordinates • There is better and more timely differentiation between good and poor performers • Employees become more competent

  6. Contributions of PM For Organization/HR Function • Organizational goals are made clear • Organizational change is facilitated • Administrative actions are more fair and appropriate • There is better protection from lawsuits

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

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

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

  10. Reward Systems: Definition Set of mechanisms for distributing • Tangible returns and • Intangible or relational returns As part of an employment relationship

  11. Tangible returns • Cash compensation • Base pay • Cost-of-Living & Contingent Pay • Incentives (short- and long-term) • Benefits, such as • Income Protection • Allowances • Work/life focus

  12. Intangible returns • Relational returns, such as • Recognition and status • Employment security • Challenging work • Learning opportunities

  13. Returns and Their Degree of Dependencyon the Performance Management System Return Cost of Living Adjustment Income Protection Work/life Focus Allowances Relational Returns Base Pay Contingent Pay Short-term Incentives Long-term Incentives Degree of Dependency Low Low Moderate Moderate Moderate Moderate High High High

  14. Purposes of PM Systems:Overview • Strategic • Administrative • Informational • Developmental • Organizational maintenance • Documentation

  15. Strategic Purpose • Link employee behavior with organization’s goals • Communicate most crucial business strategic initiatives

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

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

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

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

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

  21. Characteristics of an Ideal PM System

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

  23. Thorough • 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

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

  25. Meaningful • 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

  26. Specific Concrete and detailed guidance to employees • what’s expected • how to meet the expectations

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

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

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

  30. Acceptable and Fair • Perception of Distributive Justice • Work performed  evaluation received  reward • Perception of Procedural Justice • Fairness of procedures used to: • Determine ratings • Link ratings to rewards

  31. Inclusive • 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

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

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

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

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

  36. Integration with other Human Resources and Development activities PM provides information for: • Development of training to meet organizational needs • Workforce planning • Recruitment and hiring decisions • Development of compensation systems

  37. Chapter 2

  38. Performance Management Process:Overview • Prerequisites • Performance Planning • Performance Execution • Performance Assessment • Performance Review • Performance Renewal and Recontracting

  39. Prerequisites Performance Planning Performance Execution Performance Management Process Performance Renewal and Recontracting Performance Assessment Performance Review

  40. Prerequisites • Knowledge of the organization’s mission and strategic goals • Knowledge of the job in question

  41. Knowledge of mission and strategic goals • Strategic planning • Purpose or reason for organization’s existence • Where organization is going • Organizational goals • Strategies for attaining goals

  42. Mission and Goals Cascade effect throughout organization Organization Unit Employee

  43. B. Knowledge of the job • Job analysis of key components • Activities, tasks, products, services, processes • KSAs required to do the job • Knowledge • Skills • Abilities

  44. Job Description • Job duties • KSAs • Working conditions

  45. Generic Job Descriptions Occupational Informational Network (O*Net) http://online.onetcenter.org/

  46. Job analysis • Use a variety of tools • Interviews • Observation • Questionnaires (available on Internet)

  47. Job analysis follow-up • All incumbents should • review information and • provide feedback re: • Task • Frequency • Criticality

  48. Performance Planning:Results • Key accountabilities • Specific objectives • Performance standards

  49. Key Accountabilities Broad areas of a job for which the employee is responsible for producing results