chapter 10 establishing the performance management system
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Fundamentals of Human Resource Management Eighth Edition DeCenzo and Robbins. Chapter 10 Establishing the Performance Management System. Introduction. Employees generally see performance evaluations as having a direct effect on their work lives. - PowerPoint PPT PresentationTRANSCRIPT
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Fundamentals of Human Resource Management 8e, DeCenzo and Robbins
Chapter 10Establishing the Performance Management System
Fundamentals of Human Resource ManagementEighth Edition
DeCenzo and Robbins
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Fundamentals of Human Resource Management 8e, DeCenzo 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
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Fundamentals of Human Resource Management 8e, DeCenzo 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.
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Fundamentals of Human Resource Management 8e, DeCenzo 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.
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Fundamentals of Human Resource Management 8e, DeCenzo 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.
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Fundamentals of Human Resource Management 8e, DeCenzo 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.
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Fundamentals of Human Resource Management 8e, DeCenzo and Robbins
The Appraisal Process
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Fundamentals of Human Resource Management 8e, DeCenzo 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.
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Fundamentals of Human Resource Management 8e, DeCenzo 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.
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Fundamentals of Human Resource Management 8e, DeCenzo 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.
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Fundamentals of Human Resource Management 8e, DeCenzo and Robbins
Appraisal Methods
Three approaches:• Absolute standards• Relative standards• Objectives
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Fundamentals of Human Resource Management 8e, DeCenzo and Robbins
Appraisal Methods
Evaluating absolute standards: • An employee’s performance is
measured against established standards.
• Evaluation is independent of any other employee.
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Fundamentals of Human Resource Management 8e, DeCenzo 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.
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Fundamentals of Human Resource Management 8e, DeCenzo 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.
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Fundamentals of Human Resource Management 8e, DeCenzo 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.
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Fundamentals of Human Resource Management 8e, DeCenzo 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.
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Fundamentals of Human Resource Management 8e, DeCenzo and Robbins
Appraisal Methods
Relative standards: • Employees are evaluated by comparing
their performance to the performance of other employees.
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Fundamentals of Human Resource Management 8e, DeCenzo and Robbins
Appraisal Methods
Relative standards:• Group Order Ranking: Employees are
placed in a classification reflecting their relative performance, such as “top one-fifth.”
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Fundamentals of Human Resource Management 8e, DeCenzo 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.
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Fundamentals of Human Resource Management 8e, DeCenzo 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
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Fundamentals of Human Resource Management 8e, DeCenzo 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.
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Fundamentals of Human Resource Management 8e, DeCenzo and Robbins
Factors that can Distort Appraisals
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Fundamentals of Human Resource Management 8e, DeCenzo 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.
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Fundamentals of Human Resource Management 8e, DeCenzo 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 reluctant to be accurate if important rewards for the employee depend on the results.
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Fundamentals of Human Resource Management 8e, DeCenzo and Robbins
Factors that can Distort Appraisals
• Central tendency: The reluctance 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.
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Fundamentals of Human Resource Management 8e, DeCenzo 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.
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Fundamentals of Human Resource Management 8e, DeCenzo 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.
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Fundamentals of Human Resource Management 8e, DeCenzo and Robbins
Creating More Effective Performance Management Systems
Use Behavior-Based Measures:• Measures based on specific
descriptions of behavior are more job-related and elicit more inter-rater agreement than traits, such as “loyalty” or “friendliness”.
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Fundamentals of Human Resource Management 8e, DeCenzo 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.
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Fundamentals of Human Resource Management 8e, DeCenzo and Robbins
Creating More Effective Performance Management Systems
Provide Ongoing Feedback:• Expectations and disappointments
should be shared with employees on a frequent basis.
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Fundamentals of Human Resource Management 8e, DeCenzo 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.
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Fundamentals of Human Resource Management 8e, DeCenzo 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.
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Fundamentals of Human Resource Management 8e, DeCenzo and Robbins
Creating More Effective Performance Management Systems
Train Appraisers:• Untrained appraisers who do poor
appraisals can demoralize employees and increase legal liabilities.
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Fundamentals of Human Resource Management 8e, DeCenzo and Robbins
Creating More Effective Performance Management Systems
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Fundamentals of Human Resource Management 8e, DeCenzo and Robbins
International Performance Appraisal
• Who performs the evaluation? – Different cultural perspectives and
expectations between the parent and local country may make evaluation difficult.
– Evaluation forms may not be translated accurately.
– Quantitative measures may be misleading.
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Fundamentals of Human Resource Management 8e, DeCenzo 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.