Overview of Performance Management
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Transcript of Overview of Performance Management
NUR SYAZANA BINTI HAJI AZMAN HISHAMNUR SYAZANA BINTI HAJI AZMAN HISHAM
20124230382012423038
ASSOC. PROF. DR ROSHIDI BIN HASSAN ASSOC. PROF. DR ROSHIDI BIN HASSAN
HRM751OVERVIEW OF PERFORMANCE
MANAGEMENT
Performance Management
Definition of Performance Management
(PM)
Definition of PM
1.1. Continuous Process of Continuous Process of
The performance of individuals and teams andThe performance of individuals and teams and
2.2. AligningAligning performance performance
with with
Strategic Goals of the organizationStrategic Goals of the organization
IdentifyingMeasuringDevelopin
g
Definition of PM (continued)
‘…‘…the process where steering of the the process where steering of the organization takes place through the organization takes place through the
systematic definition of mission, strategy and systematic definition of mission, strategy and objectives of the organization, making these objectives of the organization, making these measurable through critical success factors measurable through critical success factors
and key performance indicators, in order to be and key performance indicators, in order to be able to take corrective actions to keep the able to take corrective actions to keep the
organization on track’ (Waal, Goedegebuure, & organization on track’ (Waal, Goedegebuure, & Geradts, 2011).Geradts, 2011).
‘…‘…the process where steering of the the process where steering of the organization takes place through the organization takes place through the
systematic definition of mission, strategy and systematic definition of mission, strategy and objectives of the organization, making these objectives of the organization, making these measurable through critical success factors measurable through critical success factors
and key performance indicators, in order to be and key performance indicators, in order to be able to take corrective actions to keep the able to take corrective actions to keep the
organization on track’ (Waal, Goedegebuure, & organization on track’ (Waal, Goedegebuure, & Geradts, 2011).Geradts, 2011).
Definition of PM (continued)
Performance management can be regarded as a Performance management can be regarded as a systematic process by which the overall systematic process by which the overall
performance of an organization can be improved performance of an organization can be improved by improving the performance of individuals by improving the performance of individuals
within a team framework (Singh, 2012).within a team framework (Singh, 2012).
Performance management can be regarded as a Performance management can be regarded as a systematic process by which the overall systematic process by which the overall
performance of an organization can be improved performance of an organization can be improved by improving the performance of individuals by improving the performance of individuals
within a team framework (Singh, 2012).within a team framework (Singh, 2012).
Definition of PM (continued)
Effective performance management-involving Effective performance management-involving a complete system of goal setting, training, a complete system of goal setting, training, communication, and ongoing feedback-is a communication, and ongoing feedback-is a
practice on which research often has practice on which research often has important implications (Helm, Courtney L, important implications (Helm, Courtney L,
Frank R, & Christine, 2007).Frank R, & Christine, 2007).
Effective performance management-involving Effective performance management-involving a complete system of goal setting, training, a complete system of goal setting, training, communication, and ongoing feedback-is a communication, and ongoing feedback-is a
practice on which research often has practice on which research often has important implications (Helm, Courtney L, important implications (Helm, Courtney L,
Frank R, & Christine, 2007).Frank R, & Christine, 2007).
Definition of PM (continued)
PM is “something that people actually do and PM is “something that people actually do and can be observed . . . Performance is what the can be observed . . . Performance is what the
organization hires one to do, and do well. organization hires one to do, and do well. Performance is not the consequence or result Performance is not the consequence or result of action, it is the action itself” (W. Smither & of action, it is the action itself” (W. Smither &
London, 2009).London, 2009).
PM is “something that people actually do and PM is “something that people actually do and can be observed . . . Performance is what the can be observed . . . Performance is what the
organization hires one to do, and do well. organization hires one to do, and do well. Performance is not the consequence or result Performance is not the consequence or result of action, it is the action itself” (W. Smither & of action, it is the action itself” (W. Smither &
London, 2009).London, 2009).
Performance Management
is NOT Performance
Appraisal
Philosophy of Performance Management
Performance Management Philosophy
Belief of employee performance need to be managed, to ensure that
organizational goal will be achieved
Contributions of Performance Management
Contributions of Performance
Management For Employees
Increase motivation to performIncrease motivation to perform
Increase self-esteemIncrease self-esteem
Clarify definitions of Clarify definitions of
jobjob success criteriasuccess criteria
Enhance self-insight and developmentEnhance self-insight and development
Motivation, commitment and intentions to stay Motivation, commitment and intentions to stay in the organization are enhancedin the organization are enhanced
Contributions of Performance Management
For Managers Managers gain insight about subordinatesManagers gain insight about subordinates
Employees become more competentEmployees become more competent
Better and more timely differentiation Better and more timely differentiation between good and poor performersbetween good and poor performers
Communicate supervisors’ views of Communicate supervisors’ views of performance more clearlyperformance more clearly
Contributions of Performance Management For Organization/HR Function
Organizational goals are made clearOrganizational goals are made clear
Fairer and more appropriate administrative Fairer and more appropriate administrative actionsactions
Better protection from lawsuitsBetter protection from lawsuits
Facilitate organizational changeFacilitate organizational change
Disadvantages/Dangers of
Poorly-implemented PM Systems
Disadvantages/Dangers of Poorly-
implemented
PM Systems
For Employees
• - Lowered self-esteem- Lowered self-esteem
• - Employee burnout and job dissatisfaction- Employee burnout and job dissatisfaction
• - Damaged relationships- Damaged relationships
• - Use of false or misleading information- Use of false or misleading information
• - Lowered self-esteem- Lowered self-esteem
• - Employee burnout and job dissatisfaction- Employee burnout and job dissatisfaction
• - Damaged relationships- Damaged relationships
• - Use of false or misleading information- Use of false or misleading information
Disadvantages/Dangers of Poorly-implemented
PM Systems
For Managers
Increased turnoverIncreased turnover
Decreased motivation to performDecreased motivation to perform
Unjustified demands on managers’ Unjustified demands on managers’ resourcesresources
Varying and unfair standards and ratingsVarying and unfair standards and ratings
Disadvantages/Dangers of Poorly-implemented
PM Systems
For OrganizationWasted time and moneyWasted time and money
Unclear ratings systemUnclear ratings system
Emerging biasesEmerging biases
Increased risk of litigationIncreased risk of litigation
Reward Systems
Reward Systems
Reward Systems
DefinitionSet of mechanisms for distributingSet of mechanisms for distributing
Tangible returnsTangible returns
andand
Intangible or relational returnsIntangible or relational returns
As part of an employment relationshipAs part of an employment relationship
Reward Systems Tangible returns
Cash compensationCash compensation
Base payBase payCost-of-Living & Contingent Cost-of-Living & Contingent
PayPayIncentives (short- and long-Incentives (short- and long-
term)term)
Reward Systems
Tangible returns (continued)
Benefits, such asBenefits, such as
Income ProtectionIncome ProtectionAllowancesAllowances
Work/life focusWork/life focus
Reward Systems Intangible returns
Relational returnsRelational returns, , such assuch as
Recognition and statusRecognition and statusEmployment securityEmployment security
Challenging workChallenging workLearning opportunitiesLearning opportunities
Types of Returns in
Performance Management System
Types of Returns in
Performance Management
System
Purposes of PM Systems
Purposes of PM Systems:
Overview
Strategic Purpose
Link individual goals with organization’s Link individual goals with organization’s goalsgoals
Communicate most crucial business Communicate most crucial business strategic initiativesstrategic initiatives
Administrative Purpose
Provide information for making decisions:Provide information for making decisions:
i. i. Salary adjustmentsSalary adjustments
ii. ii. PromotionsPromotions
iii.iii. Retention or terminationRetention or termination
iv.iv. Recognition of individual performanceRecognition of individual performance
v. v. LayoffsLayoffs
Informational Purpose
Communicate to Employees:Communicate to Employees:
ExpectationsExpectations
What is importantWhat is important
How they are doingHow they are doing
How to improveHow to improve
Developmental Purpose
Performance feedback/coachingPerformance feedback/coaching
Identification of individual strengths and Identification of individual strengths and weaknessesweaknesses
Causes of performance deficienciesCauses of performance deficiencies
Tailor development of individual career Tailor development of individual career pathpath
Organizational Maintenance Purpose
Plan effective workforcePlan effective workforce
Assess future training needsAssess future training needs
Evaluate performance at organizational Evaluate performance at organizational levellevel
Evaluate effectiveness of HR interventionsEvaluate effectiveness of HR interventions
Documentational Purpose
Validate selection instrumentsValidate selection instruments
Document administrative decisionsDocument administrative decisions
Help meet legal requirementsHelp meet legal requirements
Characteristics Of An Ideal PM System
An Ideal PM System:
14 Characteristics
An Ideal PM System:
14 Characteristics
An Ideal PM System:
14 Characteristics (continued)
- Consistent with organization’s strategy- Consistent with organization’s strategy
- Aligned with unit and organizational - Aligned with unit and organizational goalsgoals
Thorough
All employees are evaluatedAll employees are evaluated
All major job responsibilities are evaluatedAll major job responsibilities are evaluated
Evaluations cover performance for entire Evaluations cover performance for entire review periodreview period
Feedback is given on Feedback is given on bothboth positive and positive and negative performancenegative performance
Practical
AvailableAvailable
Easy to useEasy to use
Acceptable to decision makersAcceptable to decision makers
Benefits outweigh costsBenefits outweigh costs
Meaningful
Standards are important and relevantStandards are important and relevant
System measures ONLY what System measures ONLY what employee can controlemployee can control
Results have consequences Results have consequences
Evaluations occur regularly and at Evaluations occur regularly and at appropriate timesappropriate times
System provides for continuing skill System provides for continuing skill development of evaluatorsdevelopment of evaluators
Specific
Identifies effective and ineffective
performanceDistinguish between effective and Distinguish between effective and
ineffectiveineffective
BehaviorsBehaviors
ResultsResults
Provide ability to identify employees Provide ability to identify employees with various levels of performancewith various levels of performance
Reliable
ConsistentConsistent
Free of errorFree of error
Inter-rater reliabilityInter-rater reliability
Valid
- Relevant (measures what is important)- Relevant (measures what is important)
- Not deficient (doesn’t measure - Not deficient (doesn’t measure unimportant facets of job)unimportant facets of job)
- Not contaminated (only measures what - Not contaminated (only measures what the employee can control)the employee can control)
Acceptable and Fair
Perception of Perception of DistributiveDistributive Justice JusticeWork performed Work performed Evaluation received Evaluation received Reward Reward
Perception of Perception of Procedural Procedural JusticeJustice
Fairness of procedures used to:Fairness of procedures used to:Determine ratingsDetermine ratings
Link ratings to rewardsLink ratings to rewards
Inclusive
Represents concerns of all Represents concerns of all involvedinvolved
When system is created, When system is created, employees should help with employees should help with
decidingdecidingWhat should be measuredWhat should be measured
How it should be measuredHow it should be measured
Employee should provide input Employee should provide input on performance prior to on performance prior to
evaluation meetingevaluation meeting
Open (No Secrets)
Frequent, ongoing evaluations and feedbackFrequent, ongoing evaluations and feedback
2-way communications in appraisal meeting2-way communications in appraisal meeting
Clear standards, ongoing communicationClear standards, ongoing communication
Communications are factual, open, honestCommunications are factual, open, honest
Correctable
• Recognizes that human judgment is fallibleRecognizes that human judgment is fallible
• Appeals process providedAppeals process provided
• Recognizes that human judgment is fallibleRecognizes that human judgment is fallible
• Appeals process providedAppeals process provided
Standardized
Ethical
• Supervisor suppresses self-interestSupervisor suppresses self-interest
• Supervisor rates only where she has Supervisor rates only where she has sufficient information about the sufficient information about the
performance dimension performance dimension
• Supervisor respects employee privacySupervisor respects employee privacy
Integration with other Human Resources and Development
Activities
• PM provides information for:PM provides information for:
Issues on Performance Management System
• Counterproductive work Counterproductive work behavior (CWB) behavior (CWB) has been defined as has been defined as
“volitional acts that harm or intend to harm “volitional acts that harm or intend to harm organizations and their stakeholders (for organizations and their stakeholders (for
example, clients, co-workers, customers, and example, clients, co-workers, customers, and supervisors)” (Atwater & Elkins, 2009). supervisors)” (Atwater & Elkins, 2009).
Types of CWB1. Abuse against Others1. Abuse against Others
• IncivilityIncivility
• Workplace Aggression/ViolenceWorkplace Aggression/Violence
• Sexual HarassmentSexual Harassment
2. Production Deviance2. Production Deviance
• Passive Production DeviancePassive Production Deviance
• Sabotage and TheftSabotage and Theft
• WithdrawalWithdrawal
Dealing with
Counterproductive Work
Behavior• 1. Non - Punitive Approaches1. Non - Punitive Approaches
• AlignmentAlignment
• Corrective FeedbackCorrective Feedback
• 2. Self - Management Training for Improving Job 2. Self - Management Training for Improving Job PerformancePerformance
• 3. Punishment 3. Punishment
• 4. Termination4. Termination
Punishment