Performance
management
Chapter 9
Copyright  2003 McGraw-Hill Australia Pty Ltd.
PPTs t/a Human Resource Management in Australia: Strategy-People-Performance
by De Cieri & Kramar
1
Performance management
 Objectives
Identify the major determinants of individual
performance.
Discuss the three general purposes of
performance management.
Identify the five criteria for effective
performance management systems.
Discuss the 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.
Copyright  2003 McGraw-Hill Australia Pty Ltd.
PPTs t/a Human Resource Management in Australia: Strategy-People-Performance
by De Cieri & Kramar
9-2
Performance management
 Objectives (continued)
 Choose the most effective approach to performance
measurement for a given situation.
 Discuss the advantages and disadvantages of the
different sources of performance information.
 Choose the most effective source(s) for performance
information for any situation.
 Distinguish types of rating errors and explain how to
minimise each in a performance evaluation.
 Identify the characteristics of a performance
measurement system that follows legal guidelines.
 Conduct an effective performance feedback session.
Copyright  2003 McGraw-Hill Australia Pty Ltd.
PPTs t/a Human Resource Management in Australia: Strategy-People-Performance
by De Cieri & Kramar
9-3
Performance management
 The means through which managers ensure
that employees’ activities and outputs are
congruent with the organisation’s goals.
 Performance appraisal
The process through which an organisation
gets information on how well an employee is
doing his or her job.
 Performance feedback
The process of providing employees with
information regarding their performance
effectiveness.
Copyright  2003 McGraw-Hill Australia Pty Ltd.
PPTs t/a Human Resource Management in Australia: Strategy-People-Performance
by De Cieri & Kramar
9-4
Figure 9.1 Model of performance
management
Copyright  2003 McGraw-Hill Australia Pty Ltd.
PPTs t/a Human Resource Management in Australia: Strategy-People-Performance
by De Cieri & Kramar
9-5
Performance planning and
evaluation (PPE)
 Any system that seeks to tie the formal
performance appraisal process to the
company’s strategies by specifying at the
beginning of the evaluation period the
types and level of performance that must
be accomplished in order to achieve the
strategy.
Copyright  2003 McGraw-Hill Australia Pty Ltd.
PPTs t/a Human Resource Management in Australia: Strategy-People-Performance
by De Cieri & Kramar
9-6
Purposes of performance
management
 Strategic
 Developmental
 Administrative
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PPTs t/a Human Resource Management in Australia: Strategy-People-Performance
by De Cieri & Kramar
9-7
Performance measures criteria
 Strategic congruence
The extent to which the performance
management system elicits job performance
that is consistent with the organisation’s
strategy, goals, and culture.
e.g.. the balanced score-card
Copyright  2003 McGraw-Hill Australia Pty Ltd.
PPTs t/a Human Resource Management in Australia: Strategy-People-Performance
by De Cieri & Kramar
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Performance measures criteria
 Validity
The extent to which a performance measure
assesses all the relevant—and only the
relevant—aspects of job performance.
Copyright  2003 McGraw-Hill Australia Pty Ltd.
PPTs t/a Human Resource Management in Australia: Strategy-People-Performance
by De Cieri & Kramar
9-9
Figure 9.2 Contamination and deficiency of
a job performance measure
Copyright  2003 McGraw-Hill Australia Pty Ltd.
PPTs t/a Human Resource Management in Australia: Strategy-People-Performance
by De Cieri & Kramar
9-10
Performance measures criteria
 Reliability
The consistency of a performance measure;
the degree to which a performance measure
is free from random error.
Copyright  2003 McGraw-Hill Australia Pty Ltd.
PPTs t/a Human Resource Management in Australia: Strategy-People-Performance
by De Cieri & Kramar
9-11
Performance measures criteria
 Acceptability
The extent to which a performance measure is
deemed to be satisfactory or adequate by those
who use it.
procedural fairness
interpersonal fairness
outcome fairness
Copyright  2003 McGraw-Hill Australia Pty Ltd.
PPTs t/a Human Resource Management in Australia: Strategy-People-Performance
by De Cieri & Kramar
9-12
Performance measures criteria
 Specificity
The extent to which a performance measure
gives detailed guidance to employees about
what is expected of them, and how they can
meet these expectations.
Copyright  2003 McGraw-Hill Australia Pty Ltd.
PPTs t/a Human Resource Management in Australia: Strategy-People-Performance
by De Cieri & Kramar
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Approaches to measuring
performance
 Comparative approach
Ranking
Forced distribution
Paired comparison
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PPTs t/a Human Resource Management in Australia: Strategy-People-Performance
by De Cieri & Kramar
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Approaches to measuring
performance
 Attribute approach
Graphic rating scales
Mixed standard scales
Copyright  2003 McGraw-Hill Australia Pty Ltd.
PPTs t/a Human Resource Management in Australia: Strategy-People-Performance
by De Cieri & Kramar
9-15
Approaches to measuring
performance
 Behavioural approach
Critical incidents
Behaviourally anchored rating scales (BARS)
Behavioural observation scales (BOS)
Organisational behaviour modification (OBM)
Assessment centres
Copyright  2003 McGraw-Hill Australia Pty Ltd.
PPTs t/a Human Resource Management in Australia: Strategy-People-Performance
by De Cieri & Kramar
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Approaches to measuring
performance
 Results approach
Management by objectives (MBO)
Productivity measurement and evaluation
system (ProMES)
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PPTs t/a Human Resource Management in Australia: Strategy-People-Performance
by De Cieri & Kramar
9-17
Approaches to measuring
performance
 Quality approach
Copyright  2003 McGraw-Hill Australia Pty Ltd.
PPTs t/a Human Resource Management in Australia: Strategy-People-Performance
by De Cieri & Kramar
9-18
Approaches to measuring
performance
 Means-based approach
Competency models of assessment
Copyright  2003 McGraw-Hill Australia Pty Ltd.
PPTs t/a Human Resource Management in Australia: Strategy-People-Performance
by De Cieri & Kramar
9-19
Sources of performance
information




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Managers
Peers
Subordinates
Self
Customers
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PPTs t/a Human Resource Management in Australia: Strategy-People-Performance
by De Cieri & Kramar
9-20
Copyright  2003 McGraw-Hill Australia Pty Ltd.
PPTs t/a Human Resource Management in Australia: Strategy-People-Performance
by De Cieri & Kramar
9-21
Rater errors in performance
measurement




Similar to me
Contrast
Distributional errors
Halo and horn errors
Copyright  2003 McGraw-Hill Australia Pty Ltd.
PPTs t/a Human Resource Management in Australia: Strategy-People-Performance
by De Cieri & Kramar
9-22
Reducing rater errors
 Rater error training
 Rater accuracy training
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PPTs t/a Human Resource Management in Australia: Strategy-People-Performance
by De Cieri & Kramar
9-23
Performance appraisal politics
 A situation in which evaluators deliberately
distort a rating to achieve personal or
company goals.
Copyright  2003 McGraw-Hill Australia Pty Ltd.
PPTs t/a Human Resource Management in Australia: Strategy-People-Performance
by De Cieri & Kramar
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To minimise appraisal politics
 Ensure procedural, interpersonal and outcome
fairness
 Train raters
 Ensure top management support for appraisal
system
 Customise performance objectives and criteria
 Recognise employee accomplishments
 Ensure constraints do not drive process
 Ensure consistency of processes
 Develop a climate of openness
Copyright  2003 McGraw-Hill Australia Pty Ltd.
PPTs t/a Human Resource Management in Australia: Strategy-People-Performance
by De Cieri & Kramar
9-25
Performance feedback
 The process of providing employees with
information regarding their performance
effectiveness.
Copyright  2003 McGraw-Hill Australia Pty Ltd.
PPTs t/a Human Resource Management in Australia: Strategy-People-Performance
by De Cieri & Kramar
9-26
Characteristics of effective
performance feedback process

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Frequent feedback
Feedback context
Self-ratings
Participation in sessions
Recognise performance through praise
Focus on solving problems
Focus feedback on behaviour or results
Minimise criticism
Set goals and dates for review
Manage marginal performers
Copyright  2003 McGraw-Hill Australia Pty Ltd.
PPTs t/a Human Resource Management in Australia: Strategy-People-Performance
by De Cieri & Kramar
9-27
Managing the performance of
teams
 Senior management
Provide clear support
Demonstrate links to organisational vision
and strategy

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
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Reward teamwork
Allow time for team-building
Ensure team roles and goals are clear
Organisational climate of trust
Participation in decision-making
Copyright  2003 McGraw-Hill Australia Pty Ltd.
PPTs t/a Human Resource Management in Australia: Strategy-People-Performance
by De Cieri & Kramar
9-28
Legal issues for performance
appraisal
 Documentation for legal protection
 Do not condone poor performance by
inaction
 Employer’s duty to the poor performer
 Adequate warning before dismissal
 Equal employment opportunity (EEO)
 Termination
Copyright  2003 McGraw-Hill Australia Pty Ltd.
PPTs t/a Human Resource Management in Australia: Strategy-People-Performance
by De Cieri & Kramar
9-29
Technology and performance
management
 Electronic databases for performance
information
 Electronic monitoring of employees
Copyright  2003 McGraw-Hill Australia Pty Ltd.
PPTs t/a Human Resource Management in Australia: Strategy-People-Performance
by De Cieri & Kramar
9-30
Summary
 Measuring and managing performance is a
challenging enterprise, and one of the keys to
gaining competitive advantage.
 Performance management systems serve strategic,
administrative and developmental purposes.
 A performance measurement system should be
evaluated against the five criteria.
 Performance management approaches have
different strengths and weaknesses.
 Performance management system must be legally
compliant.
Copyright  2003 McGraw-Hill Australia Pty Ltd.
PPTs t/a Human Resource Management in Australia: Strategy-People-Performance
by De Cieri & Kramar
9-31