BU354 Lecture Notes - Lecture 6: Performance Management, Performance Appraisal, Regional Policy Of The European Union
Performance Management
-Performance Management: Process encompassing all activities related to improving employee
performance, productivity, and effectiveness
• Performance management is of considerable strategic importance to today’s
organizations b/c the most effective way for firms to differentiate themselves in a highly
competitive, service-oriented, global marketplace is through the quality of their
employees
Performance Management Process
Defining Performance Expectations and Goals
-Make sure that job duties and job standards are clear
Providing Ongoing Feedback and Coaching
-Achieved through open two-way communication
Conducting Performance Appraisal and Evaluation Discussions
-Done at specific intervals by comparing an employee’s actual performance to the standards that
have been set (usually involving some type of rating form)
-The employee’s performance and progress are discussed to reinforce the things that the
employee is doing well and to develop a plan for correction of any deficiencies that the appraisal
might have identified
Determining Performance Rewards/Consequences
-E.g. Promotions, salary increases, and bonuses
Conducting Development and Career Opportunities Discussions
- used to review each employee’s career plans in light of his/her exhibited strengths and
weaknesses, and it light of the company’s strategic plans
Step 3: Performance Appraisal and Evaluation Discussion
Formal Appraisal Methods
a) Graphic Rating Scale: Scale that lists a number of traits and a range of performance for each
• The employee is then rated by identifying the score that best describes his or her level of
performance for each trait (see page 269)
b) Alternation Ranking Method: Ranking employees from best to worst on a particular trait
c) Paired Comparison Method: Ranking employees by making a chart of all possible pairs of
employees for each trait and indicating the better employee of the pair
d) Forced Distribution Method: Predetermined percentages of rates are placed in various
performance categories
• E.g. may be decided to distribute employees as follows: 15% high performers, 20% high-
average, 30% average, 20% low-average, and 15% low performers
find more resources at oneclass.com
find more resources at oneclass.com
Document Summary
Make sure that job duties and job standards are clear. Done at specific intervals by comparing an employee"s actual performance to the standards that have been set (usually involving some type of rating form) The employee"s performance and progress are discussed to reinforce the things that the employee is doing well and to develop a plan for correction of any deficiencies that the appraisal might have identified. Used to review each employee"s career plans in light of his/her exhibited strengths and weaknesses, and it light of the company"s strategic plans. Advantages and disadvantages of bars: a more accurate measure, clearer standards, feedback, independent dimensions, consistency. Appraisal systems must be based on performance criteria that are valid for the position being rated and must be reliable. Rating scale problems: unclear performance standards - too open to interpretation of traits and standards, halo effect, central tendency, leniency/strictness high or low, appraisal bias, the recency effect.
