Chapter 7

Chapter 7- Performance Management

Poll

How are you feeling today?

What is performance management?

The continuous process of identifying, measuring, and developing the performance and aligning performance with the strategic goals of the organization.

​• Continuing, ongoing process

• Importance of alignment

• Performance appraisal

Purposes of Performance Management Systems

Six Purposes

•Strategic

•Administrative

•Communication

•Developmental

•Organizational Maintenance

•Documentation

The Performance Management Process

How can we
evaluate?

Graphic Rating Scales:

• Individuals are rated on a number of traits or factors

• 5-7-point scale

Rater Errors and Biases

• Serial position errors

Primacy vs. recency effect

• Contrast error

Comparisons against others vs. against set standards

• Halo errors

Halo vs. horn effect

• Leniency errors

Positive vs. negative leniency (severity)

• Central-tendency error

Avoidance of extreme ratings

Employee Comparison Models

Rank Order

• High to Low

Paired Comparison

• Each employee compared with every other employee

• # of pair = n(n-1)/2
• Best used with small samples

Forced Distribution

• Best used with large samples

• 5-7 categories (normal distribution assumption)

• Employees must be distributed across all categories

Poll

Do you think ranking, rating, or comparing employees can be controversial?

• Yes

• No

Why is it controversial, or why not? Discuss.

Behavioral Checklists and Scales

Critical Incidents

• Record of good and poor performance
behaviors

• Not usually quantified

Behaviorally Anchored Rating Scales (BARS)

• Combines behavioral incident and rating scale method

Rater error training

• Taught to make fewer errors

• Does not necessarily result in increased accuracy

Frame-of-reference training

• Provide common reference standard

• Calibrate raters

Rater Training

Rater Motivation

Rating intentions

• Accurate

• Avoid conflict

• Benevolence

• Impression management

Intention to deflate ratings

• Defining good performance clearly

• Establishing trust in the system

• Providing a reward for accurate appraisals

• Individuals have poor understanding of their strengths and weaknesses

• Positive leniency is a problem

• Better for developmental (vs. administrative) purposes

Self Assessments

Three types:

• Peer nomination
• Peer ratings
• Peer ranking

Biased by friendship

• Research support to predictive accuracy

(Inter-rater reliability .89 ~.90
Validity .40 ~ .50)

Peer Assessments

Peer and Self Assessments

Feedback in PM Contexts

• Giving feedback is an essential part of the performance management process

• Nevertheless, supervisors dislike doing it (Mum effect)

• One-third of feedback results in decreased performance due to emotional intensity

• Focusing on behavior and task is key

• Increasing virtual work and less direct contact motivate people to proactively seek feedback

• Individuals are more likely to seek feedback in a supportive feedback environment

Giving Feedback

Seeking Feedback

Reactions to Feedback

Individuals can improve their performance when they:

• Attribute negative feedback to something that with their
control

• Believe appraisal system is accurate

• Have the willingness to accept negative feedback

Multiple Choice

Is it up to the employer or employee to change?

• Employer

• Employee

Reactions to PA Systems

• Perceived accuracy and agreement with evaluation

• Employee motivation following appraisal

• Fairness perceptions regarding appraisal

• Satisfaction with appraisal

• Perceived utility of appraisal

Employees will accept evaluation and feel fairness when managers...

1. Solicit and use employee input
2. Use two-way communication during the appraisal interview

3. Give opportunity for employee to rebut rating

4. Are familiar with employee’s work

5. Stick to performance standard
6. Rate based on actual performance

7. Recommend rewards based on their ratings

Future of Performance Management

Performance Management practices are evolving.

1. Conventional

(Manager evaluation/Once a year)

2. Transitional

(Using 360-feedback)

3. Cutting-edge

(More immediate feedback)

Poll

What method of performance management do you prefer?

• Conventional

• Transitional

• Cutting-edge

Draw

Draw a person on a review board who is definitely having a bad day.

REFERENCES

Muchinsky, P. M., & Howes, S. S. (2019). Psychology applied to work: An introduction to industrial and organizational psychology. Hypergraphic Press, Inc.

Other information inspired by Sang won Byun at Towson University.