Introduction to Performance Management Systems (one page)
As we have explored, throughout Module 1, performance management systems are critical to individual and organizational success. Consider the scenario below and respond to the three questions asked.
Scenario
You are the new owner of a small business. About one week ago, you purchased this business from the previous owner who decided to retire. The previous owner was a phenomenal businesswoman; however, she did not value the importance of performance management systems. When you decided to purchase the business, you knew that you would need to make organizational changes. Based upon the information provided, answer the following questions:
- In your own words, explain the benefits of a performance management system in terms of employee and organizational success.
- Explain the implications associated with poorly implemented performance management systems.
- Address components that you believe your performance management system should include.
Embed course material concepts, principles, and theories (require supporting citations) in your initial response along with at least one scholarly, peer-reviewed journal article.. Use APA style guidelines.
Be sure to support your statements with logic and argument, citing all sources referenced. Post your initial response early and check back often to continue the discussion.
You are required to reply to at least two peer discussion question post answers to this weekly discussion question. These peer replies need to be substantial and constructive in nature. They should add to the content of the post and evaluate/analyze that post answer. Normal course dialogue doesn’t fulfill these two peer replies but is expected throughout the course. Answering all course questions is also required.
Required
Chapter 1 in Performance Management
Khan, M. (2018).
Working toward Vision 2030: Key employment considerations in Saudi Arabia
.
Machela, T., Kunene, L. M., ∓ Mbhele, T. P. (2019).
Challenges of management performance in managing a professional team: A case of X
. African Journal of Business ∓ Economic Research, 14(4), 81-103. /p>
Radu-Alexandru, S., ∓ Mihaela, H. (2019).
. Studies in Business ∓ Economics, 14(1), 231-244.
Chapter 1 PowerPoint slides
– Performance Management
ADAA: The National Center for Performance Measurement (2019).
Performance measurement operations
.
part one
Strategic
and General
Considerations
1-1
Copyright © 2019 Chicago Business Press
Herman Aguinis, University of Colorado at Denver
Part I: Strategic And General Considerations
Chapter 1: Performance Management in Context
Chapter 2: Performance Management Process
Chapter 3: Performance Management and Strategic Planning
Copyright © 2019 Chicago Business Press
4-2
Herman Aguinis, University of Colorado at Denver
Chapter 1
Performance Management
in Context
1-3
Copyright © 2019 Chicago Business Press
Herman Aguinis, University of Colorado at Denver
Overview
Definition of Performance Management (PM)
Purposes of PM
Contributions of PM
Disadvantages/Dangers of Poorly Implemented PM Systems
1-4
Copyright © 2019 Chicago Business Press
Herman Aguinis, University of Colorado at Denver
Overview (continued)
Characteristics of an Ideal PM System
Integration with Other Human Resources and Development Activities
The Changing Nature of PM
1-5
Copyright © 2019 Chicago Business Press
Herman Aguinis, University of Colorado at Denver
Definition of PM
1. Continuous process of …
Identifying
Measuring
Developing
… the performance of individuals and teams
2. Aligning performance with the strategic goals of the organization
1-6
Copyright © 2019 Chicago Business Press
Herman Aguinis, University of Colorado at Denver
Definition of PM (continued)
Performance management (PM)
is NOT
performance appraisal (PA)
1-7
Copyright © 2019 Chicago Business Press
Herman Aguinis, University of Colorado at Denver
Definition of PM (continued)
PM
Strategic business considerations
Driven by line manager
Ongoing feedback
So employee can improve performance
PA
Driven by HR
Assesses employee
Strengths
Weaknesses
Once a year
Lacks ongoing feedback
1-8
Copyright © 2019 Chicago Business Press
Herman Aguinis, University of Colorado at Denver
Performance Appraisal vs. Performance Management
Performance Appraisal vs. Performance Management
What did you see?
What is wrong with the interaction between the supervisor and her direct report?
Is this performance appraisal? Is this performance management? Why?
1-9
Copyright © 2019 Chicago Business Press
Herman Aguinis, University of Colorado at Denver
Purposes of PM Systems
1-10
Copyright © 2019 Chicago Business Press
Herman Aguinis, University of Colorado at Denver
Purposes of PM Systems
Strategic Purpose
Link individual goals with organization’s goals
Communicate most crucial business strategic initiatives
1-11
Copyright © 2019 Chicago Business Press
Herman Aguinis, University of Colorado at Denver
Note: the following is slide used before (some of this is not in Module 1)
Links employee activities with organization’s mission and goals
Identifies results and behaviors needed to carry out strategy
Maximizes extent employees exhibit those behaviors and results
Only 13% of organizations use PM to communicate organizational purpose and goals
Company Spotlight
Sears, one of the largest U.S. retailers, is using PM to reinvigorate the company’s culture
Steps include:
Revising duties and objectives
More frequent communication between supervisors and employees
Using PM to identify future leaders
1-12
Copyright © 2019 Chicago Business Press
Herman Aguinis, University of Colorado at Denver
Purposes of PM Systems
Administrative Purpose
Provide information for making decisions regarding:
Salary adjustments
Promotions
Retention or termination
Recognition of individual performance
Layoffs
1-13
Copyright © 2019 Chicago Business Press
Herman Aguinis, University of Colorado at Denver
Purposes of PM Systems
Informational Purpose
Communicate to employees:
Expectations
What is important
How they are doing
How to improve
1-14
Copyright © 2019 Chicago Business Press
Herman Aguinis, University of Colorado at Denver
Purposes of PM Systems
Developmental Purpose
Performance feedback/coaching
Identification of individual strengths and weaknesses
Identification of causes of performance deficiencies
Tailor development of individual career path
1-15
Copyright © 2019 Chicago Business Press
Herman Aguinis, University of Colorado at Denver
Purposes of PM Systems
Organizational Maintenance Purpose
Plan effective workforce
Assess future training needs
Evaluate performance at organizational level
Evaluate effectiveness of HR interventions
1-16
Copyright © 2019 Chicago Business Press
Herman Aguinis, University of Colorado at Denver
Purposes of PM Systems
Documentation Purpose
Validate selection instruments
Document administrative decisions
Help meet legal requirements
1-17
Copyright © 2019 Chicago Business Press
Herman Aguinis, University of Colorado at Denver
Contributions of
Performance Management
1-18
Copyright © 2019 Chicago Business Press
Herman Aguinis, University of Colorado at Denver
Contributions of
Performance Management
For Employees
For Managers
For Organization/HR Function
1-19
Copyright © 2019 Chicago Business Press
Herman Aguinis, University of Colorado at Denver
Contributions of Performance Management for Employees
Enhance self-insight and development
Increase self-esteem
Increase motivation to perform
Increase employee competence
Clarify definitions of
Job
Success criteria
1-20
Copyright © 2019 Chicago Business Press
Herman Aguinis, University of Colorado at Denver
Contributions of Performance Management for Managers
Increase employee engagement
Encourage voice behavior
Minimize employee misconduct
Address declines in performance early
Increase employee motivation, commitment, and intentions to stay in organization
1-21
Copyright © 2019 Chicago Business Press
Herman Aguinis, University of Colorado at Denver
Contributions of Performance Management for Managers (continued)
Communicate supervisors’ views of performance more clearly
Managers gain insight about subordinates
Better and more timely differentiation between good and poor performers
Employees become more competent
1-22
Copyright © 2019 Chicago Business Press
Herman Aguinis, University of Colorado at Denver
Contributions of Performance Management for Organization /
HR Function
Clarify organizational goals
Facilitate organizational change
Fairer, more appropriate administrative actions
Better protection from lawsuits
1-23
Copyright © 2019 Chicago Business Press
Herman Aguinis, University of Colorado at Denver
Disadvantages/Dangers of
Poorly Implemented
PM Systems
For Employees
For Managers
For Organization/HR Function
1-24
Copyright © 2019 Chicago Business Press
Herman Aguinis, University of Colorado at Denver
Disadvantages/Dangers of
Poorly Implemented
PM Systems
1-25
Copyright © 2019 Chicago Business Press
Herman Aguinis, University of Colorado at Denver
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
1-26
Copyright © 2019 Chicago Business Press
Herman Aguinis, University of Colorado at Denver
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
1-27
Copyright © 2019 Chicago Business Press
Herman Aguinis, University of Colorado at Denver
Disadvantages/Dangers of Poorly Implemented PM Systems for Organization/HR Function
Wasted time and money
Unclear ratings system
Emerging biases
Increased risk of litigation
1-28
Copyright © 2019 Chicago Business Press
Herman Aguinis, University of Colorado at Denver
Disadvantages/Dangers of Poorly Implemented PM Systems for Organization/HR Function
Wasted time and money
Unclear ratings system
Emerging biases
Increased risk of litigation
1-29
Copyright © 2019 Chicago Business Press
Herman Aguinis, University of Colorado at Denver
Company Spotlight
Yahoo was subject to a lawsuit due to a poorly implemented performance management system
Missteps include:
Forced ranking of employees
Unclear ratings and lack of openness
Biases including gender discrimination
1-30
Copyright © 2019 Chicago Business Press
Herman Aguinis, University of Colorado at Denver
Company Spotlight
Adobe implemented a state-of-the-science performance management system
Benefits included:
Time savings (80,000 hours)
Increased morale
Decreased turnover
1-31
Copyright © 2019 Chicago Business Press
Herman Aguinis, University of Colorado at Denver
Characteristics of an Ideal PM System
1-32
Copyright © 2019 Chicago Business Press
Herman Aguinis, University of Colorado at Denver
An Ideal PM System:
15 Characteristics
Strategically Congruent
Consistent with organization’s strategy
Aligned with unit and organizational goals
1-33
Copyright © 2019 Chicago Business Press
Herman Aguinis, University of Colorado at Denver
An Ideal PM System:
15 Characteristics
Contextually Congruent
Congruent with the organization’s culture as well as the broader cultural context of the region or country
Example: A 360-degree feedback is not effective where communication is not fluid and hierarchies are rigid
1-34
Copyright © 2019 Chicago Business Press
Herman Aguinis, University of Colorado at Denver
An Ideal PM System:
15 Characteristics
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
1-35
Copyright © 2019 Chicago Business Press
Herman Aguinis, University of Colorado at Denver
An Ideal PM System:
15 Characteristics
Practical
Available
Easy to use
Acceptable to decision makers
Benefits outweigh costs
1-36
Copyright © 2019 Chicago Business Press
Herman Aguinis, University of Colorado at Denver
An Ideal PM System:
15 Characteristics
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
1-37
Copyright © 2019 Chicago Business Press
Herman Aguinis, University of Colorado at Denver
An Ideal PM System:
15 Characteristics
Specific
Concrete and detailed guidance to employees
What’s expected
How to meet the expectations
1-38
Copyright © 2019 Chicago Business Press
Herman Aguinis, University of Colorado at Denver
An Ideal PM System:
15 Characteristics
Identifies effective and ineffective performance
Distinguish between effective and ineffective:
Behaviors
Results
Provide ability to identify employees with various levels of performance.
1-39
Copyright © 2019 Chicago Business Press
Herman Aguinis, University of Colorado at Denver
An Ideal PM System:
15 Characteristics
Reliable
Consistent
Free of error
Inter-rater reliability
1-40
Copyright © 2019 Chicago Business Press
Herman Aguinis, University of Colorado at Denver
An Ideal PM System:
15 Characteristics
Valid
Relevant (i.e., measures what is important)
Not deficient (i.e., doesn’t measure unimportant facets of job)
Not contaminated (i.e., only measures what the employee can control)
1-41
Copyright © 2019 Chicago Business Press
Herman Aguinis, University of Colorado at Denver
An Ideal PM System:
15 Characteristics
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
1-42
Copyright © 2019 Chicago Business Press
Herman Aguinis, University of Colorado at Denver
An Ideal PM System:
15 Characteristics
Acceptable and Fair
Perception of Interpersonal Justice
Perceptions of quality of the design and implementation of the PM system
Perception of Informational Justice
Performance expectations and goals
Feedback received
Information given to justify administrative decisions
1-43
Copyright © 2019 Chicago Business Press
Herman Aguinis, University of Colorado at Denver
An Ideal PM System:
15 Characteristics
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.
1-44
Copyright © 2019 Chicago Business Press
Herman Aguinis, University of Colorado at Denver
An Ideal PM System:
15 Characteristics
Open (No Secrets)
Frequent, ongoing evaluations and feedback
Two-way communications in appraisal meeting
Clear standards and ongoing communication
Communications are factual, open, and honest
1-45
Copyright © 2019 Chicago Business Press
Herman Aguinis, University of Colorado at Denver
An Ideal PM System:
15 Characteristics
Correctable
Recognizes that human judgment is fallible
Appeals process provided
1-46
Copyright © 2019 Chicago Business Press
Herman Aguinis, University of Colorado at Denver
An Ideal PM System:
15 Characteristics
Standardized
Ongoing training of managers to provide consistent evaluations across:
People
Time
1-47
Copyright © 2019 Chicago Business Press
Herman Aguinis, University of Colorado at Denver
An Ideal PM System:
15 Characteristics
Ethical
Supervisor suppresses self-interest
Supervisor rates only where (s)he has sufficient information about the performance dimension
Supervisor respects employee privacy
1-48
Copyright © 2019 Chicago Business Press
Herman Aguinis, University of Colorado at Denver
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
1-49
Copyright © 2019 Chicago Business Press
Herman Aguinis, University of Colorado at Denver
Changing Nature of PM
PM is changing rapidly due to:
Technological Advancements
Globalization
Demographic Changes
1-50
Copyright © 2019 Chicago Business Press
Herman Aguinis, University of Colorado at Denver
Changing Nature of PM
Technological Advancements
Use of cloud computing for real-time and constant feedback
Availability of Big Data and use of Electronic Performance Monitoring (EPM)
1-51
Copyright © 2019 Chicago Business Press
Herman Aguinis, University of Colorado at Denver
Changing Nature of PM
Globalization
Increasing prevalence of virtual teams located across the world
Need to consider local norms—including societal and organizational cultural issues
1-52
Copyright © 2019 Chicago Business Press
Herman Aguinis, University of Colorado at Denver
Changing Nature of PM
Demographic Changes
Retirement of baby boomers and influx of Gen X and Gen Y (Millennials)
1-53
Copyright © 2019 Chicago Business Press
Herman Aguinis, University of Colorado at Denver
Millennials in the Workforce
Millennials in the Workforce
What are some of the stereotypes associated with Millennials and how would you manage them?
Which of these stereotypes have been particularly exaggerated?
1-54
Copyright © 2019 Chicago Business Press
Herman Aguinis, University of Colorado at Denver
Definition of Performance Management (PM)
Purposes of PM Systems
Contributions of PM
Disadvantages/Dangers of Poorly Implemented PM Systems
Characteristics of an Ideal PM System
Integration with Other Human Resources and Development Activities
Changing Nature of PM
Quick Review
1-55
Copyright © 2019 Chicago Business Press
Herman Aguinis, University of Colorado at Denver
All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior written permission of the publisher. Printed in the United States of America.
Copyright © 2019 Chicago Business Press
1-56
Copyright © 2019 Chicago Business Press
Herman Aguinis, University of Colorado at Denver
56