Chapter 11
Performance Management
Falkenberg, Stone, and Meltz
Human Resource Management
in Canada
Fourth Edition
Copyright © 1999 Harcourt Brace &
Company Canada, Ltd.
Chapter Overview
Performance management
defined
 Relation to other HRM
functions
 Designing a performance
management system

11.1
Performance Management:
Relation to Other HRM Functions
Job
Analysis
Human
Resource
Development
Human
Resource
Planning
Selection
Performance
Management
Career
Planning
Compensation
11.2
HRM Professionals’ Responsibility
in Designing a Performance
Management System
Identifying the information needed
 Identifying appropriate evaluation
method(s)
 Applying measurement standards
 Implementing the performance
management system
 Responding to developmental problems

11.3
Performance Management
Information
Systems assessment
 Administrative assessment
 Developmental needs

11.4
Identifying Appropriate
Evaluation Methods
Management by objectives (MBO)
 Ranking and forced distribution
methods
 Rating scales
 Team-style peer review
 Multi-source assessment

11.5
Management by Objectives
Goal-Setting Phase



Relate goals to the
organization’s
strategic objectives
Establish when and
how to measure
progress.
Identify problem or
growth areas.
Performance Review Session



Review progress and
achievement of goals
Identify performance
factors that enhance or
limit goal achievement
Ensure goals are of
appropriate difficulty
11.6
Characteristics of Good
Rating Scales




Have clearly defined performance dimensions
Use behaviourally based scales that allow a
rater to support all ratings with objective,
observable evidence
Have anchors or points that are briefly defined
in terms relevant to the dimension itself
Avoid abstract trait names such as “loyalty” or
“honesty” unless they can be defined in terms
of observable behaviours
11.7
Rating Errors with Graphic
Rating Scales
Rating Error
Halo
Leniency
Strictness
Central tendency
Contrast
Description
An individual perceived as high or low
on one performance dimension receives the
same rating on all other dimensions.
All group members, regardless of
performance, receive an above-average rating.
All group members, regardless of
performance, receive a below-average rating.
All group members are rated as average,
regardless of performance level.
Group members are compared with one
member rather than with an objective
11.7
standard.
Reasons for the Popularity of
Multi-Source Appraisals



The additional feedback from multiple
sources is useful for development
Managers can compare their selfevaluations with the perceptions of others
The consequences of an employee's
performance affect all the people with
whom he or she comes in contact, so it is
reasonable to receive feedback from them
11.9
Applying Measurement Standards to a
Performance Management System




Does the system/method provide
reliable information?
Does the system/method provide valid
information?
Are the components of the
system/method practical?
Do the various components of the
system/method ensure that distributive
and procedural justice is obtained?
11.10
Implementing the Performance
Management System
Reducing resistance to the
evaluation process
 Reducing perceptual barriers
 Communicating performance
appraisal information

11.11
Communicating Performance
Evaluation Information
To start the performance evaluation
interview:
1. Review the purpose of the
interview and/or expected
outcome
2. Highlight the need for two-way
communication and feedback
11.12
Communicating Performance
Evaluation Information (cont’d.)
To develop communication within the
interview:
1. Use probing questions to increase the exchange of
information
2. Appeal to the individual’s values and/or
aspirations
3. Involve the individual in planning and goal setting
4. Avoid using threats
5. Maintain calmness and limit defensive reactions
6. Apologize when appropriate
11.13
Three Approaches to
Appraisal Interviews
“Tell and sell” — to communicate
evaluation and get employees to
change
 “Tell and listen” — to communicate
evaluation and encourage discussion
 “Problem-solving” — to stimulate
growth and development of employee

11.14