Performance Management Systems

1
Performance Management Systems

• Kathy Bozenhard
• Michele Cameron

2
Outline of Presentation

• Group Exercise
• Chapter Review
• Examples
• Human Resource Model
• Concluding Remarks/Key Thoughts

3
Introduction to Performance Measurement

• Includes 5 components
• Planning
• Communication
• Data Gathering, Observation and Documentation
• Appraisal and Feedback
• Diagnosis and Coaching

4
Uses for Measures of Employee Performance

• Administrative
• Feedback, Counseling, and Performance Improvement
• Evaluation of Organizational Programs

5
Types of Performance Measures

• Results Oriented
• Process Oriented
• Employee Comparison
• 360-Degree Appraisal

6
Results Oriented

• Uses verifiable outcome measures as review of
  performance.
• Advantages
• Enhances productivity
• Little measurement error
• Disadvantages
• Contamination
• Deficiency
• Employee Motivation
• Typically used for tying rewards to bonus and
  incentive plans.

7
Process Oriented

• Uses Rating Scales
• Two Criteria
• Thoroughly defined performance dimensions
• Precisely defined scale anchor points
• Two Examples
• BARS Behaviorally Anchored Rating System
• BOS Behavior Observation Scale
• Advantages Disadvantages
• Useful in determining merit salary adjustments
  and for feedback and counseling.

8
Common Rater Errors

• Halo Error
• Leniency Error
• Central Tendency Error
• Recency Error
• First-Impression Error
• Similar-to-me Error
• Association Error

9
Improving Raters Appraisals

• Pay attention to rating scale construction.
• Ensure that the scale measures important
  dimension of job performance.
• Define scale anchors thoroughly.
• Train managers in performance rating.
• Provide frame of reference training to managers
  to develop a common frame of reference and
  consistent use of the appraisal system.

10
Employee Comparisons

• Ranks employees against each other.
• Advantages
• Spreads out the ratings
• Avoids rating errors
• Disadvantages
• Does not allow for feedback to employees
• Difficult to demonstrate tie between role and
  behavioral requirements of employees to rankings
• Most often used for determining promotions.

11
360 Degree Appraisal

• Provides multidirectional measurement for
  employee performance.
• Feedback can be received from
• Supervisor
• Subordinates
• Co-workers
• Oneself
• Internal and External Customers

12
360 Degree Appraisal

• Advantages
• Gives an employee a better insight into his/her
  performance
• Boosts productivity
• Facilitates better communication
• Limits office politics
• Disadvantages
• Causes confusion when there is disagreement
  between groups
• Potential for alliances
• Expensive

13
Examples

• BlueCross BlueShield of Alabama
• Boeing

14
How Does This Fit In to the Human Resource
System Design?
Labor markets
Business Strategy
Organizational Design/Work Processes
Behavioral/role requirements
HRM systems
Technology
Legal environment
15
Conclusion/Key Thoughts

• There is no best way to formulate a performance
  management system.
• Managers should make every effort to improve the
  quality of appraisals through attention to choice
  of measures as well as training.
• Managers should recognize the importance of
  viewing performance management as a system
  comprised of a number of components including
  communication, feedback, and employee development
  processes.