8 Performance Management

Chapter
Performance Management
1. Identify the major parts of an

effective performance management
process
2. Discuss the three general purposes
of performance management
3. Identify the five criteria for effective
Chapter
4. Discuss the five approaches to performance

management, the specific techniques used
in each approach, and the way these
approaches compare with the criteria for
effective performance management
systems
5. Choose the most effective approach to
performance measurement for a given
Chapter
6. Discuss the advantages and disadvantages

of the different sources of performance
information
7. Choose the most effective source(s) for
performance information for any situation
8. Discuss the potential advantages of
performance management, gamification,
social performance management, and
Chapter
9. Distinguish types of rating errors, and explain

how to minimize each in a performance
evaluation
10. Conduct an effective performance feedback
session
11. Identify the cause of a performance problem
What is Performance Management?
The process through which managers ensure that
employee activities and outputs are congruent with
the organization's goals.
It is about aligning individual effort to support
organizational priorities.
It is the central to gaining competitive advantage.
Parts of the Performance
Management
1. Defining Performance
2. Measuring Performance
3. Feeding back performance information
The Process of Performance
Management
Purposes of Performance
Management
Strategic
Administrative Developmental
Criteria for Effective Performance
Management Systems
Five performance criteria stand out:
Strategic congruence
Specificity Validity
Acceptability Reliability
Criteria for Effective Performance
Management Systems
1. Validity - the extent to which a performance
measure assesses all the relevant—and only the
relevant—aspects of performance.
2. Reliability - the consistency of a performance
measure
3. Acceptability - refers to whether the people who
use a performance measure accept it
4. Specify - The extent to which a performance
measure tells employees what is expected of
them and how they can meet these expectations
Approaches to Measuring
Performance
1. Comparative Approach
2. Attribute Approach
3. Behavioral Approach
4. Quality Approach
5. Results Approach
The Comparative Approach
Requires the rater compare an individual’s
performance with that of others.
Techniques use in Comparative approach
1. Ranking-can be simple or alternation ranking

2. Forced Distribution – employees are ranked in
groups
3. Paired Comparison - compare every employee
with every other employee in the work group,
giving an employee a score of 1 every time he or
she is considered the higher performer.
The Attribute Approach
Focuses on the extent to which individuals have
certain attributes (characteristics or traits) believed
desirable for the company’s success
Techniques include the following:
1. Graphic rating scales - list of traits is evaluated by

a five-point rating scale.
2. Mixed-standard scales - define relevant
performance dimensions and then develop
statements representing good, average, and poor
performance along each dimension.
Behavioral Approach
 Attempts to define the behaviors an employee must exhibit
to be effective in the job.
 Techniques used are the following:
1. Behaviorally Anchored Rating Scales - performance

dimension has a number of examples of behaviors that
indicate specific levels of performance along the dimension
2. Behavioral Observation Scales -
3. Competency Models - identifies and provides descriptions
of competencies that are common for an entire occupation,
organization, job family, or a specific job
Results Approach
Focuses on managing the objective, measurable
results of a job or work group.
Management by objectives - top management
passes down company’s strategic goals to next

layer of management, and these managers define
the goals they must achieve.
Approaches used are:
1. Balanced score card

2. Productivity Measurement and Evaluation System
(ProMES)
Results Approach
 Balanced score card – employee performance is linked with
the business strategy through communicating and educating
employees on the elements of the balanced scorecard,
translating strategic objectives into measures for departments
and employees, and linking rewards to performance measures
1. Financial Perspective
2. Customer Perspective
3. Internal or Operations Perspective
4. Learning and Growth Perspective
 ProductivityMeasurement and Evaluation System - goal is

to motivate employees to higher levels of productivity.
Quality Approach
Fundamental characteristics of the
quality approach include a customer
orientation, a prevention approach to
errors, and continuous improvement.
Improving customer satisfaction is the
primary goal of the quality approach.

Customers can be internal or external to
the organization
Quality Approach (cont.)
Techniques used to improve processes to attain
quality:
1. Process-flow analysis
2. Cause-and-effect diagrams
3. Pareto chart
4. Control chart
5. Histogram
6. Scattergram
Sources for Performance
Information
Supervisors/
Managers
Customers Peers
Self Subordinates
Use of Technology in
Performance Measurement
Technology in performance management could make big
different in the process, implementation, cost, and appraisal.
Social media tools are increasingly being used to deliver
timely feedback
Gamification- game-based strategies that are applied to
make it a fun, effective, transparent, and inclusive process for

employees and managers
Companies are relying on electronic tracking and
monitoring systems to ensure that employees are working

when and how they should be and to block access to visiting
certain websites
Performance Feedback
Importance of Performance Feedback
1.Increases motivation – through improved employee
observation, managers can gain a full understanding of an
individual’s strength and weaknesses and help them to grow
and develop and thus, increase their motivation to succeed.
1.Enhances performance – feedback is critical to improving

performance. Although it can be often be mistaken as
criticism, well-delivered constructive criticism can help
produce better decisions and improve performance
Importance of Performance Feedback
3.Feedback elevates engagement – consistent
communication between employees and the manager is
typically connected to higher engagement.
4.Feedback is a tool for career development – an effective
performance management systems empowers managers to set
expectations, provide regular informal feedback and support
employee development. When done well, a performance
management program along with consistent communication
between employees and managers, contributes to employee
growth as well as achieving the agency's mission.
1. Feedback Should Be Given Frequently, Not Once a Year
2. Create the Right Context for the Discussion
3. Ask the Employee to Rate His or Her Performance before
the Session
4. Encourage the Employee to Participate in the Session
5. Focus on Solving Problems
6. Recognize Effective Performance through Praise
7. Minimize Criticism
8. Focus Feedback on Behavior or Results, Not on the Person
9. Agree to Specific Goals and Set a Date to Review Progress
Diagnosing the Cause of
Poor Performance
Managing Performance of Marginal
Performers
1. Solid performers - High ability and motivation;
managers should provide development opportunities
2. Misdirected effort - Lack of ability but high motivation;

managers should focus on training
3. Underutilizers - High ability but lack motivation;

managers should focus on interpersonal abilities
4. Deadwood - Low ability and motivation; managerial

action, outplacement, demotion, firing.

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Chapter

1. Identify the major parts of an

4. Discuss the five approaches to performance

6. Discuss the advantages and disadvantages

9. Distinguish types of rating errors, and explain

1. Ranking-can be simple or alternation ranking

1. Graphic rating scales - list of traits is evaluated by

1. Behaviorally Anchored Rating Scales - performance

passes down company’s strategic goals to next

1. Balanced score card

 ProductivityMeasurement and Evaluation System - goal is

primary goal of the quality approach.

make it a fun, effective, transparent, and inclusive process for

monitoring systems to ensure that employees are working

1.Enhances performance – feedback is critical to improving

2. Misdirected effort - Lack of ability but high motivation;

3. Underutilizers - High ability but lack motivation;

4. Deadwood - Low ability and motivation; managerial

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