8-1McGraw-Hill/Irwin Copyright © 2009 by The McGraw-Hill Companies, Inc. All Rights Reserved.

fundamentals of

Human Resource Management 4th editionby R.A. Noe, J.R. Hollenbeck, B. Gerhart, and P.M. Wright

CHAPTER 8

Managing Employees’ Performance

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Figure 8.1: Stages of the Performance Management Process

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Table 8.1:Basic Approaches to Performance Measurement

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Measuring Performance:Making Comparisons

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Measuring Performance:Rating Individuals - Attributes

Graphic Rating Scale• Lists traits and provides a

rating scale for each trait.• The employer uses the scale

to indicate the extent to which an employee displays each trait.

Mixed-Standard Scale• Uses several statements

describing each trait to produce a final score for that trait.

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Measuring Performance:Rating Individuals - Behaviors

Critical-Incident Method• Based on managers’ records

of specific examples of the employee acting in ways that are either effective or ineffective.

• Employees receive feedback about what they do well and what they do poorly and how they are helping the organization achieve its goals.

Behaviorally Anchored Rating Scale (BARS)• Rates behavior in terms of a

scale showing specific statements of behavior that describe different levels of performance.

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Measuring Performance:Rating Individuals – Behaviors (continued)

Behavioral Observation Scale (BOS)

• A variation of a BARS which uses all behaviors necessary for effective performance to rate performance at a task.

• A BOS also asks the manager to rate the frequency with which the employee has exhibited the behavior during the rating period.

Organizational Behavior Modification (OBM)

• A plan for managing the behavior of employees through a formal system of feedback and reinforcement.

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Measuring Performance:Measuring Results

• Management by Objectives (MBO): people at each level of the organization set goals in a process that flows from top to bottom, so that all levels are contributing to the organization’s overall goals.

• These goals become the standards for evaluating each employee’s performance.

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Sources of Performance Information

• 360-Degree Performance Appraisal: performance measurement that combines information from the employees’:– Managers– Peers– Subordinates– Self– Customers

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Types of Performance MeasurementRating Errors

• Contrast errors: the rater compares an individual, not against an objective standard, but against other employees.

• Distributional errors: the rater tends to use only one part of a rating scale.– Leniency: the reviewer rates everyone near the top– Strictness: the rater favors lower rankings– Central tendency: the rater puts everyone near the

middle of the scale

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Political Behavior in Performance Appraisals

• Distorting a performance evaluation to advance one’s personal goals

• A technique to minimize appraisal politics is a calibration meeting:– Meeting at which managers discuss employee

performance ratings and provide evidence supporting their ratings with the goal of eliminating the influence of rating errors

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Giving Performance Feedback

• Scheduling Performance Feedback– Performance feedback should be a regular, expected

management activity.– Annual feedback is not enough.– Employees should receive feedback so often that they

know what the manager will say during their annual performance review.

• Preparing for a Feedback Session– Managers should be prepared for each formal feedback

session.

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Figure 8.7: Improving Performance

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Legal and Ethical Issues inPerformance Management

• Legal– Performance management processes are often

scrutinized in cases of discrimination or dismissal.

• Ethical– Employee monitoring via electronic devices and

computers may raise concerns over employee privacy.

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Summary

• Performance management is the process through which managers ensure that employees’ activities and outputs contribute to the organization’s goals.

• Organizations establish performance management systems to meet three broad purposes:– Strategic purpose– Administrative purpose– Developmental purpose

• Performance measures should fit with the organization’s strategy by supporting its goals and culture.