SOLUTION: Development approach to performance management

1Session 8: Development approach to performancemanagement (NB See also Session 6)LO4Developing Individuals, Teams andOrganisations2Objectives of the SessionBy the end of the session, students should be able to understand:• Stages of development• Setting of criteria and achieving developmental aims23Developmental Approach to performancemanagementPurposes of Performance Management• The fundamental goal of performance management is to promote andimprove employee effectiveness• It is a continuous process where managers and employees work together toplan, monitor and review an employee’s work objectives or goals and theiroverall contribution to the organisation• Aim of the developmental approach – to develop employees who areeffective at their jobs• Managers to focus on development goals “How you will achieve them?” aswell as on performance goals “What you want to achieve?”• The key thing to understand is that employees can achieve theirperformance goals by working on development goals because they createthe capability for succeeding• Developmental goals are learning-oriented – they spell out the skills,knowledge and experiences the employee needs to either remain effectivein their current job or support the employee’s ability to take on newresponsibilities and grow in their career4Developmental Approach to performancemanagementAchieving Performance Management Developmental goals• Mirror the corporate culture and values• Have visible CEO and senior management support• Focus on the right company performance measures• Link job descriptions to the performance management system• Differentiate performance fairly and effectively• Train managers in performance management• Communicate the total rewards system• Require managers to search, offer and acquire regular performancefeedback• Set clear expectations for employee development• Track effectiveness of the performance management system• Adjust the system as required35Developmental Approach to performancemanagementPerformance Measures Criteria• Strategic congruence – the extent to which the performancemanagement system elicits job performance that is consistent withthe organization’s strategy, goals and culture• Validity – the extent to which a performance measure assesses allthe relevant – and only the relevant—aspects of job performance• Reliability – the consistency of a performance measure; the degreeto which a performance measure is free from random error• Acceptability – the extent to which a performance is deemed to besatisfactory or adequate by those who use it• Specificity – the extent to which a performance measure givesdetailed guidance to employees about what is expected of them andhow they can meet those expectations6Developmental Approach to performancemanagementApproaches to measuring performanceComparative ApproachAttribute ApproachResult ApproachQuality Approach47Developmental Approach to performancemanagementApproaches to measuring performanceComparative Approach• Requires the rater to compare an individual’s performance with thatof the others• Uses some overall assessment of an individual performance orworth, and seeks to develop some ranking of the individuals within awork group8Developmental Approach to performancemanagementApproaches to measuring performanceComparative Approach1. Ranking• Simple Ranking – the employer ranks every one from the highest performeror the poorest performer (or best to worst)• Alternative Ranking – rater picks first the best employee, then “keeps” him.The left names would slowly taught about who the worst performer was andcrosses his name off the list, and so on2. Forced Distribution• Requires the manager to put certain percentages of employees intopredetermined categories3. Paired Comparison• Requires managers to compare every employee with every other employeein the work group, giving an employee a score of 1 every time he or she isconsidered the higher performer• In the end, the manager computes for the number of times each employeereceived a favourable decision, making it their evaluation59Developmental Approach to performancemanagementApproaches to measuring performanceComparative Approach EvaluationAdvantages• Effective tool in differentiating employee performance• Eliminates problems of leniency, central tendency and strictness• Good basis for pay raises and promotions• Easy to develop, easy to useDisadvantages• If not enough evaluators, personal biases and opinions would greatly affectthe ratings• Lack for specificity for feedback purposes, as employees are not aware ofwhat they should improve on for their ranking individually10Developmental Approach to performancemanagementApproaches to measuring performanceAttribute Approach• Focuses on the characteristics and traits of the people that aregeared towards the success of the company• Techniques that use this approach define a set of traits – such asinitiative, leadership, and competitiveness—and evaluate individualson them611Developmental Approach to performancemanagementApproaches to measuring performanceAttribute Approach EvaluationAdvantages• Easy to develop• Generalisable across variety of jobs• If much attention is devoted in identifying attributes related to jobperformance, it would be reliable and validDisadvantages• Little congruence between the techniques and the company’sstrategy• Could be vague due to different interpretations by different raters12Developmental Approach to performancemanagementApproaches to measuring performanceResult Approach713Developmental Approach to performancemanagementApproaches to measuring performanceResult Approach EvaluationAdvantages• By being a result-oriented process, it encourages managers to dodetailed planning• Both the manager and the subordinates know what is expected ofthem and hence there is no role ambiguity or confusion• The managers are required to establish measurable targets andstandards of performance and priorities for these targets• It makes individuals more aware of the company goals -thisimproves their morale and commitmentDisadvantages• Can only succeed if it has the complete support of the topmanagement• May be resented by subordinates14Developmental Approach to performancemanagementApproaches to measuring performanceQuality Approach• Emphasizes an assessment of both person and system factors inthe measurement system• Emphasizes that managers and employees work together to solveperformance problems• Involves both internal and external customers in setting standardsand measuring performance• Uses multiple sources to evaluate person and system factors815Developmental Approach to performancemanagementApproaches to measuring performanceQuality Approach and Traditional Approach• Most existing systems measure performance in terms of quantity,not quality• Employees are held accountable for good or bad results to whichthey contribute but do not completely control• Companies do not share the financial rewards of successes withemployees according to how much they have contributed to them• Rewards are not connected to business results16Developmental Approach to performancemanagementApproaches to measuring performanceHeuristics• Research consistently reveals that humans have tremendouslimitations in processing information• Because we are so limited, we often use heuristics, or simplifyingmechanisms, to make judgments, whether about investments orabout people• These heuristics, which appear often in subjective measures ofperformance, can lead to rater errors• Performance evaluations may also be purposefully distorted toachieve personal on company goals (appraisal politics)917Developmental Approach to performancemanagementApproaches to measuring performancePerformance measurement rater errors1. Similar to Me2. Contrast3. Distributional Errors4. Halo and Horns5. Appraisal PoliticsApproaches to Reducing Rater• Rater error training• Rater accuracy training• Calibration Meetings – attended by managers to discuss employeeperformance ratings18Developmental Approach to performancemanagementApproaches to measuring performancePerformance Feedback• It is necessary to feed performance information back to employeesso they can correct any deficiencies• The performance feedback process is complex and provokesanxiety for both the manager and the employee• To provide effective performance feedback managers shouldconsider the following recommendations:• Feedback should be given frequently, not once a year• Create the right context for the discussion• Ask the employee to rate his/her performance before the session• Encourage the subordinate to participate in the session• Tell-and-sell• Tell-and-listen• Problem-solving approach• Recognize effective performance through praise.Focus on solving problems.Focus feedback on behaviour or results,not on the person. Minimize criticism.Agree on specific goals and set a date toreview pro 1019Developmental Approach to performancemanagementApproaches to measuring performancePerformance Feedback• To provide effective performance feedback managers should consider thefollowing recommendations:• Feedback should be given frequently, not once a year• Create the right context for the discussion• Ask the employee to rate his/her performance before the session• Encourage the subordinate to participate in the session– Tell-and-sell– Tell-and-listen– Problem-solving approach– Recognise effective performance through praise– Focus on solving problems– Focus feedback on behaviour or results, not on the person– Minimise criticism– Agree on specific goals and set a date to review pro20Developmental Approach to performancemanagementApproaches to measuring performanceWhat managers can do• Diagnose the causes of poor performance• Employee Characteristics (e.g., Performance Standards/ Goals FeedbackConsequences Input 5 Factors to Consider) when analysing poorperformance• Marginal employees – are those employees who are performing at a bareminimum level because of lack of ability and/or motivation to perform well• Four different types of employees:• Solid performers• Under-utilizers• Misdirected effort• DeadwoodQuestion: As a manager, what would you do to improve the performance eachof the above employee?1121Developmental Approach to performancemanagementApproaches to measuring performanceDeveloping systems that work• Because performance measures play a central role in such administrativedecisions such as promotions, pay raises, and discipline, employees whosue an organization primarily attack measurement systems on which thedecisions were madeTwo types of cases have dominated:• Discrimination- Uniform Guidelines on Employee Selection Procedures• Unjust dismissalDifferentiate between misconduct and poor performance• Incapacity: Poor performance• Given the employee appropriate evaluation, instruction, training, guidanceor counseling and• After a reasonable period of time for improvement, the employee continuesto perform unsatisfactorily• Conducting an investigation• The employee should have the right to be heard and to be assisted by atrade union representative or a fellow employee22Developmental Approach to performancemanagementApproaches to measuring performanceDeveloping systems that work• Guidelines in cases of dismissal for poor work performance• Whether or not the employee failed to meet a performance standard and• If the employee did not meet a required performance standard whether ornot• The employee was aware, or could reasonably be expected to have beenaware, of the required performance standard;• The employee was given a fair opportunity to meet the requiredperformance standard; and• Dismissal was an appropriate sanction for not meeting the requiredperformance standard1223Developmental Approach to performancemanagementApproaches to measuring performanceCharacteristics of systems that withstand legal scrutiny• Developed by conducting job analysis that ascertains the important aspectsof job performance• Based on either behaviours or results• Raters should be trained• Reviewed by upper-level management; employees should be able to appeal• Provide some form of performance counselling or corrective guidance forpoor performers• Engages multiple raters• Employees should be asked to comment on their appraisals• Use of Technology• Electronic tracking systems include hand and fingerprint recognitionsystems, computer software, and systems that can track employees usinghandheld computers and mobile phones• To avoid the potential negative effects of electronic monitoring, managersmust communicate why employees are being monitored24ReferencesChapter 8 – Performance Managementhttps://www.slideshare.net/KimMichelleTan/chapter-8-performancemanagement