Human Resource ManagementLecture 14

MGT 350

Last Lecture

Holland Vocational Preferences • Three major components

– People have varying occupational preferences – If you think your work is important, you will be a more productive

employee – You will have more in common with people who have similar interest

patterns • Holland Vocational Preferences (Six)• Career Choices and Preferences• MBTI personality type.

Topic

Establishing the Performance Management System

HRM Process

Employee Performance Management

• Performance Management System– A process of establishing performance standards

and appraising employee performance in order to arrive at objective HR decisions and to provide documentation in support of those decisions.

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

Checklist for customer relationship officer

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.

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.

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.

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.

The Appraisal Process

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.

The Appraisal Process

• Measurement of performance using information from:

– personal observation – statistical reports – oral reports – written reports

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.

Appraisal Methods

Three approaches:

• Absolute standards

• Relative standards

• Objectives

Appraisal Methods

Evaluating absolute standards:

• An employee’s performance is measured against established standards.

• Evaluation is independent of any other employee.

Appraisal Methods

Evaluating absolute standards: – Essay Appraisal: Appraiser writes

narrative describing employee performance & suggestions.

– Critical Incident Appraisal: Based on key behavior, illustrating effective or ineffective job performance.

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.

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.

Appraisal MethodsEvaluating 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.

Behaviorally Anchored Rating Scales (BARS)

Graph Rating Scale

Appraisal Methods

Relative standards:

• Employees are evaluated by comparing their performance to the performance of other employees.

Appraisal Methods

Relative standards:

• Group Order Ranking: Employees are placed in a classification reflecting their relative performance, such as “top one-fifth.”

Appraisal MethodsRelative 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.

Appraisal Methods

Using Achieved Outcomes to Evaluate Employees Management by Objectives (MBO) A management model that aims to improve performance

of an organization by clearly defining objectives that are agreed to by both management and the employee.

– includes mutual objective setting and evaluation based on the attainment of the specific objectives

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.

360 Degree Evaluation

• Feedback that comes from members of an employee's immediate work circle.

• Boss, subordinate, peer.

MethodMethod AdvantageAdvantage DisadvantageDisadvantage

Written Written essaysessays

Simple to useSimple to use More a measure of evaluator’s writing More a measure of evaluator’s writing ability than of employee’s actual ability than of employee’s actual performanceperformance

Critical Critical incidentsincidents

Rich examples; behaviorally Rich examples; behaviorally basedbased

Time-consuming; lack quantificationTime-consuming; lack quantification

Graphic Graphic rating scalesrating scales

Provide quantitative data; Provide quantitative data; less time-consuming than less time-consuming than othersothers

Do not provide depth of job behavior Do not provide depth of job behavior assessedassessed

BARSBARS Focus on specific and Focus on specific and measurable job behaviorsmeasurable job behaviors

Time-consuming; difficult to developTime-consuming; difficult to develop

Multiperson Multiperson comparisonscomparisons

Compares employees with Compares employees with one anotherone another

Unwieldy with large number of Unwieldy with large number of employees; legal concernsemployees; legal concerns

MBOMBO Focuses on end goals; Focuses on end goals; results orientedresults oriented

Time-consumingTime-consuming

360-degree 360-degree appraisalsappraisals

ThoroughThorough Time-consumingTime-consuming

Summary • Performance Management System• The performance management systems need to include:

– decisions about who should evaluate performance

– what format should be used

– how the results should be utilized

• The Appraisal Process• Difficulties in Performance Management Systems

Three approaches:• Absolute standards• Relative standards• Objectives