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PERFORMANCE

MANAGEMENT

Herman Aguinis

Herman Aguinis, University of Colorado at Denver

PERFORMANCE

MANAGEMENT

Herman Aguinis

Prentice Hall Inc. 2006

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Performance anagement in Conte!t"

#vervie$

Definition of Performance Management (PM) The Performance Management Contribution

Disadvantages/Dangers of Poorly-implemented PMsystemsDefinition of Reard !ystems"ims and role of PM !ystems

Characteristics of an #deal PM system #ntegration ith $ther %uman Resources and

Development "ctivities

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Performance anagement" Definition

Continuous Process of#dentifying performance of individuals and teams

Measuring performance of individuals and teams

Developing performance of individuals and teams

and

"ligning performance ith the strategic goals of the

organi&ation

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P is %#& 'erformance a''raisal

PM !trategic business

considerations

$ngoing feedbac'

!o employee can

improve performance

Driven by line manager

Performance

a''raisal "ssesses employee

!trengths

ea'nesses

$nce a year

*ac's ongoing feedbac'

Driven by %R

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Contri(utions of P

)or *m'loyees

The definitions of +ob and success are clarified

Motivation to perform is increased

!elf-esteem is increased

!elf-insight and development and enhanced

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Contri(utions of P

)or anagers

!upervisors, vies of performance are

communicated more clearly

Managers gain insight about subordinates

There is better and more timely differentiation

beteen good and poor performers

mployees become more competent

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Contri(utions of P

)or #rgani+ationH- )unction

$rgani&ational goals are made clear

$rgani&ational change is facilitated

"dministrative actions are more fair and

appropriate

There is better protection from lasuits

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DisadvantagesDangers ofPoorlyim'lemented P /ystems

for *m'loyees *oered self-esteem

mployee burnout and +ob dissatisfaction

Damaged relationships

.se of false or misleading information

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DisadvantagesDangers ofPoorlyim'lemented P /ystems

for anagers #ncreased turnover

Decreased motivation to perform

.n+ustified demands on managers, resources

arying and unfair standards and ratings

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asted time and money

.nclear ratings system

merging biases

#ncreased ris' of litigation

DisadvantagesDangers ofPoorlyim'lemented P /ystems

for #rgani+ation

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Pur'oses of P /ystems"

#vervie$

!trategic

"dministrative

#nformational

Developmental

$rgani&ational maintenance

Documentation

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/trategic Pur'ose

*in' employee behavior ith organi&ation,s

goals

Communicate most crucial business strategic

initiatives

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Administrative Pur'ose

Provide information for ma'ing decisions re0!alary ad+ustments

Promotions

Retention or termination

Recognition of individual performance

*ayoffs

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Informational Pur'ose

Communicate to mployees0

1pectations

hat is important

%o they are doing

%o to improve

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Develo'mental Pur'ose

Performance feedbac'/coaching

#dentification of individual strengths and

ea'nesses

Causes of performance deficiencies

Tailor development of individual career path

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#rgani+ational aintenance Pur'ose

Plan effective or'force

"ssess future training needs

valuate performance at organi&ational level

valuate effectiveness of %R interventions

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Documentational Pur'ose

alidate selection instruments

Document administrative decisions

%elp meet legal re2uirements

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Caracteristics of an Ideal P /ystem

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Congruent $it organi+ational strategy

Consistent ith organi&ation,s strategy

"ligned ith unit and organi&ational goals

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&oroug

"ll employees are evaluated

"ll ma+or +ob responsibilities are evaluated

valuations cover performance for entirerevie period

3eedbac' is given on both positive and

negative performance

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Practical

"vailable

asy to use

"cceptable to decision ma'ers

4enefits outeigh costs

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eaningful

!tandards are important and relevant

!ystem measures $5*6 hat employee cancontrol

Results have conse2uences valuationsoccur regularly and at appropriate times

!ystem provides for continuing s'ill

development of evaluators

ifi

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/'ecific

Concrete and detailed guidance to

employees

hat,s e1pected

ho to meet the e1pectations

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Identifies effective and ineffective 'erformance

Distinguish beteen effective and ineffective 4ehaviors

Results

Provide ability to identify employees ith

various levels of performance

- li (l

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-elia(le

Consistent

3ree of error

#nter-rater reliability

1 lid

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1alid

Relevant (measures hat is important)

5ot deficient (doesn,t measure unimportant

facets of +ob)

5ot contaminated (only measures hat the

employee can control)

A t (l d ) i

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Acce'ta(le and )air

Perception of Distributive 7ustice

or' performedevaluation receivedreard

Perception of Procedural 7ustice

3airness of procedures used to0 Determine ratings

*in' ratings to reards

I l i

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Inclusive

Represents concerns of all involved hen system is created8 employees should help

ith deciding

hat should be measured %o it should be measured

mployee should provide input on performance

prior to evaluation meeting

# % / t 3

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#'en %o /ecrets3

3re2uent8 ongoing evaluations and feedbac'

9-ay communications in appraisal meeting

Clear standards8 ongoing communication Communications are factual8 open8 honest

C t (l

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Correcta(le

Recogni&es that human +udgment is fallible

"ppeals process provided

/t d di d

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/tandardi+ed

$ngoing training of managers to provide

Consistent evaluations across

People

Time

i l

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*tical

!upervisor suppresses self-interest

!upervisor rates only here she has sufficient

information about the performance dimension

!upervisor respects employee privacy

Integration $it oter Human -esources

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Integration $it oter Human -esources

and Develo'ment activities

PM provides information for0

Development of training to meet organi&ational

needs

or'force planning

Recruitment and hiring decisions

Development of compensation systems