Chapter 7
Performance Management
• Scope of Performance Management
• Graphic Rating Scale
• Behavioral Anchored Rating Scale
• Ranking
• Critical Incident
• Management by Objectives
• The Cynicism About Performance
Management
• SMART Goals
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Performance Management Defined
An ongoing process that includes:
• Setting performance goals with employees
• Monitoring employees’ progress toward their
goals
• Designing improvement strategies with
employees
• Providing ongoing feedback and coaching
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Key Elements of Performance
Management
• Linked with all other human resources
management functions
• An ongoing process that is not limited to the
“annual review”
• A relevant process for employees at all levels
• Use of performance criteria is critical to
successful performance management
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Performance Appraisal Criteria
• Performance standards refer to indicators of what
a job is intended to accomplish, how
performance is measured, and expected levels of
performance
• Some common problems with appraisal criteria:
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Criterion deficiency
Criterion contamination
Poor reliability
Poor validity
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Reliability and Validity of Appraisal
Criteria
• Reliability refers to
– the consistency with which a manager rates an
employee in successive ratings
– Consistency with which two or more managers rate
performance when they have comparable information
• Validity
– The extent to which appraisal criteria actually
measure the performance dimension of interest
– Validity may be particularly problematic when
measuring attitudes or other job-related factors that
are difficult to measure in an objective manner
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Sources and Uses of Job Performance
Information
• Can be used for administrative decisions and
employee development purposes
• Self-appraisal
• Subordinate appraisal
• Team-based appraisal
• Team citizenship appraisal
• Multisource appraisal
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Methods of Organizing Job
Performance Information
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Graphic Rating Scale
Behavior Anchored Rating Scale (BARS)
Behavioral Observation Scale
Ranking
Critical Incidents
Management by Objectives
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The Performance Review
• Gives employees the opportunity to discuss
performance and performance standards
• Addresses employee strengths and weaknesses
• Identifies strategies for improving employee
performance
• Provides an opportunity to discuss personnel
decisions, such as compensation, promotion,
training, and termination
• Provides an opportunity to discuss regulatory
requirements and compliance issues
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Attitudes and Cynicism About
Performance Management
• Perception that performance management is
subjective
• Process is uncomfortable and has high
emotional content
• Performance appraisal is traditionally thought
of as a negative, punitive process
• Managers are prone to “rating errors”
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Rating Errors
• Distributional
– Leniency
– Strictness
– Central tendency
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Halo effect
Personal bias
Similar-to-me bias
Contrast bias
Political factors sometimes promote deliberate
distortion of appraisals
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Conducting Performance Management
Interviews
• SMART goals: specific, measurable, achievable, relevant, and timebound
• Provide feedback on an ongoing basis
• Evaluate the frequency of formal performance appraisals
• Prepare for the interview
• Use multiple sources of information
• Encourage employee participation
• Focus on future performance and problem solving
• Focus on behavior and results, not personal traits
• Reinforce positive performance
• Ensure that performance management is supported by senior
management
• Plan and implement follow-up activities
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