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Sminar1Performance Management and Reward Systems in Context

Aguinis, Herman (2013-08-29). Performance Management, Chapter 1AgendaCase Study2: Performance Management at Network Solutions, Inc. ArticlesPerformance Management: Impact and Trend DDI, Roger Sumlin

2Demotivation

No recognition program:- Decreased motivation to perform- Job burnout and dissatisfactionMisleading

more improvementCEO Ratings

Strategic goals

PM drives the key factors associated with business strategy

PM drives the culturalstrategies that maximize human assetsSenior-level support

6 strategic performance areas:Financial performanceOperating efficiencyCustomer satisfactionEmployee performanceInnovation/ChangeCommunity/EnvironmentMeasurement-managed companies outperform those that downplay measurement (1996, 122 organization):

1. PM Impact on Organizational Success 4 mechanisms that contribute to success:Agreement on strategyClarity of communicationFocus and alignment of effortsOrganizational culture1. PM Impact on Organizational SuccessThe 1,200 workers surveyed (1995): They could improve their output by 26%1/4 said they could raise productivity by 50%if they weren't hindered by lack of direction, support, training, and equipment.

An effective PM system delivers the direction and support workers need.1. PM Impact on Organizational Success437 public firms in U.S (1990-1992)Companies with performance managementStranger financial performance Productivity is on par with the industry averageImproved their financial performance and productivity after implementing PM

PM penetration%

2. Performance Management Trends/Best Practices

1993 vs 1997 (by DDI)i. Most frequent practices:

Mgmt. Training

Non-Mgmt. Trainingfrequently use competencies from PMfrequently use peer input

include team-based objectives in individual plan31993 vs 1997 (by DDI)ii. Changes in use: Shows the direction

2 2. Performance Management Trends/Best Practices

PM TrainingForced rankingsFrequently use competencies from PM

Non-Mgmt. Training

Include team-based objectives in individual planTeam-based objectivesCommon rating tools

Different PMinputTeam appraisal

161993 vs 1997 (by DDI)iii. Quality factors of effective PM systems :

2. Performance Management Trends/Best Practices

AlignmentAccountability and training

172. Performance Management Trends/Best PracticesBest Practice: 37 successful firms (1994)Common Traits:Full alignment with other parts of the organization (business objectives, strategy, customer needs)SimplicityFlexibilityDecentralized controlA measurement process (different sources, feedback)Employee development (pay and performance, carrier development)2. Performance Management Trends/Best Practices18 firms with satisfied Mgmt.& HRShared Characteristics:Implementation at the topSimple processReasonable number of goalsAdditional feedback (informal)192. Performance Management Trends/Best Practices1,149 managers and employees 79 companies (1993 DDI and Society for HRM)Satisfaction Factors:Feedback and CoachingPerformance PlanningPerformance ReviewOutcomes

20Dramatic message of 6 studiesPM is an important Business SystemPM makes difference in organizational performanceApproaches to PM are changingSenior managers must be attentive to the PM systems in their organizations.