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Managing Employee Performance

Q: For what 3 purposes are performance management systems established?

1. Strategic purpose (linking employee behaviour with business goals) 2. Administrative purpose (performance management system used to provide info for day-to-day decisions about salaries etc.) 3. Developmental purpose - for developing employee knowledge and skills

Q: What are the advantages and disadvantages of simple ranking?

Pro: Easy Con: 'best' and 'worst' are very broad definitions, and results might thus not be fair

35 important questions on Managing Employee Performance

For what 3 purposes are performance management systems established?

1. Strategic purpose (linking employee behaviour with business goals)
2. Administrative purpose (performance management system used to provide info for day-to-day decisions about salaries etc.)
3. Developmental purpose - for developing employee knowledge and skills

What are the 5 criteria for effective performance management?

1. Fit with strategy
2. Validity
3. Reliability
4. Acceptability (by both managers and employees)
5. Specific feedback

What are the 5 approaches to measure performance?

1. Comparative
2. Attribute
3. Behavioural
4. Results
5. Quality

What is the comparative approach to performance measurement?

The rater compares individuals ratings with that of others

What are the 3 different comparison techniques in the comparative approach to performance measurement?

1. Simple ranking - rate employees from highest performer to poorest performer
2. Forced-distribution method - assigns certain percentage of employees to a category
3. Paired-comparison method - comparing employees with each other employee to establish ranking

What are the advantages and disadvantages of simple ranking?

Pro:
Easy

Con:
"best" and "worst" are very broad definitions, and results might thus not be fair

What are the advantages and disadvantages of the forced-distribution method?

Pro:
Good way to identify high-potentials and poor performers
Works well if there is a lot of variance in performance
Overcomes temptation to rank everyone highly to avoid conflict

Con:
May lead to illegal/immoral practices if criteria for specific groups are subjective or unclear

What are the advantages and disadvantages of the paired comparison method?

Pro:
Quite accurate

Con:
Incredibly time-consuming

What are the advantages and disadvantages of attribute rating?

Pro:
- Generalisable
- If attributes are evaluated well, it is very reliable and valid

Con:
- Often poor relationship with company's strategy
- Not specific enough in performance expectations
- Different raters lead to different scores reducing reliability and validity

What are the 2 most widely used rating scales for attribute rating?

1. Graphic rating scale - lists traits and provides discrete/continuous rating scale for each trait
2. Mixed-standard scales - uses several statements describing each trait to produce a final score for that trait

What does rating behaviours entail?

Determines the behaviours that employees need to show in order to be effective in their jobs

What are the 4 types of behaviour measurement?

1. Critical-incident methods
2. Behaviourally anchored rating scale
3. Behavioural observation scale
4. Organisational behaviour modification

What is the critical-incident method of behaviour measurement?

Based on managers' records of specific examples of when the employee acts in ays that are either effective or not. Unique nature of incidents makes it difficult to compare employees

What is the Behaviourally Anchored Rating Scale method of behaviour measurement?

Intended to define performance dimensions specifically, using statements of behaviour that describe different levels of performance. Critical incidents are then gathered that represent effective performance, and classified from most effective to least

What is the Behavioural Observation Scale method of behaviour measurement?

Variation of BARS, uses all behaviours necessary for effective performance unlike BARS which discards many examples of critical incidents.
Frequency of behaviour during rating period is also measured to get an average.
Requires huge amounts of info

What is the Organisational behaviour modification method of performance measurement?

A plan for managing the behaviour of employees through a formal system of feedback and reinforcement. Based on the idea that future behaviour is determined by past experiences

What are the 4 components of OBM?

1. Define set of key behaviours necessary for job performance
2. Use a measurement system to assess whether the employee exhibits key behaviour
3. Inform employees of the key behaviours, perhaps in terms of goals for how often to exhibit the behaviours
4. Provide feedback and reinforcement based on employees behaviour

What are the 2 most used measurements of performance results?

1. Productivity
2. Management by Objectives (people from each level set goals, so all employees are contributing to the organisation's goals

What are the 3 components of Management by Objectives?

1. Goals are specific, difficult and objective
2. Managers and employees work together to set goals
3. Managers give objective feedback throughout the rating period

What are the advantages and disadvantages of MBO?

Pro:
- Connecting individual employee performance with overall goals is easier
- Productivity gains is high
- Evaluation of results is less subjective and thus more acceptable

Con:
- Results may be affected by external circumstances (makes them less valid)
- Focus on final results leads to not measuring of other performance aspects not directly related to results
- No guidance on how to improve

What is Total quality management?

Form of performance management that assesses both individual performance and the system in which the individual works. Employees and customers work toegther to set goals

What are the main pitfalls in the TQM approach?

1. Quantitative measures are used
2. Employees are held accountable for results influenced by system factors
3. Companies don't share financial results
4. The rewards are not connected to business success

What sort of feedback should be given in the TQM approach?

1. Subjective feedback from managers, peers and customers about personal qualities of the employee
2. Objective feedback based on work process (from statistical quality controls)

What are statistical quality controls?

Provide objective feedback on work processes, by using charts to give further insight into the causes of problems, measures of performance or relationships between work related variables

What is a 360-degree performance appraisal?

Appraisal that combines all info on performance from all possible sources to get an as complete overview as possible

What are the different types of rating errors?

1. People give higher raters to people they consider similar to themselves
2. Contrast error, when the rater compares the person to others
3. Distribution error, when the rater is very lenient, strict or rates everyone in the middle
4. When the opinion of one quality affects their opinion of all others (halo vs horns)

What are the 4 different types of appraisal politics?

1. Raters are accountable to the employee being rated
2. Goals of rating are not compatible with one another
3. Performance appraisal is directly linked to highly desirable rewards
4. Top executives tolerate/ignore distorted ratings

What is a calibration meeting?

Method to reduce appraisal politics. It is a meeting in which managers discuss employee performance ratings and provide evidence supporting their ratings, to eliminate the influence of rating errors

What are the 3 approaches managers can have to a feedback session?

1. Tell-and-sell - managers tell employee rating and justify their rating
2. Tell-and-listen - managers tell employee rating and let employee tell their side of the story
3. Problem-solving - managers and employees work together to solve performance problems

What are the requirements of a legally defensible performance measurement system?

1. Valid job analyses with requirements for successful job performance clearly communicated to employees
2. System based on behaviours or results and avoid ambiguous traits
3. Use of multiple raters, that are trained
4. Upper-level managers should review all performance ratings and employees must have opportunity to appeal
5. Performance counseling or corrective guidance for improvement of poor performers
6. Performance evaluations should be documented

What are the 4 main negative effects of ditching performance appraisals?

1. Performance: drop of approximately 10%
2. Engagement: high-performers satisfaction drop
3. Connection: less between manager and employee
4. Communication: perception of communication quality dropped

What are the key characteristics of a strong performance appraisal system?

1. Focus on strengths, not weaknesses
2. Ongoing responsibility of managers and employees (not just once a year but asking for appraisal throughout the year)
3. Two-way process
4. Timely
5. Opportunity to develop

What are the key behaviours for managers in performance management?

1. Set clear expectations and standards
2. Revise expectations real-time
3. Provide informal feedback daily
4. Check in regularly with employees
5. Coach employees and help them in problem solution

What are key behaviours for employees in performance management?

1. Clarify performance expectations to ensure they understand priorities and standards
2. Set expectations with peers
3. Ask for and accept feedback openly
4. Use feedback to course-correct and improve continuously

What are the 5 most important factors for team performance?

1. Psychological safety
2. Dependability
3. Structure and clarity
4. Meaning
5. Impact

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Human Resource Management

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