Chapter 10, Performance Management

Question 1

Explain the strategic value and importance of performance management (why)

Answer 1

Performance management strategically aligns employee efforts with organizational goals, enhances productivity, identifies and addresses performance gaps, fosters a culture of continuous improvement, supports talent management, and ensures legal and ethical compliance.

Question 2

Discuss the five steps in the performance management process (how)

Answer 2

• Defining performance expectations and goals
• Providing ongoing feedback and coaching
• Conducting performance appraisal and evaluation discussions
• Determining performance rewards/consequences
• Conducting development and career opportunities discussions

Question 3

Define contextual and task-based performance and how they differ.

Answer 3

Task Performance
- Direct contribution to job-related processes (what exactly are they supposed to do)
- Focusing on fulfilling specific duties outlined in job descriptions

Contextual Performance (CSR/ESG)
- Indirect contribution to the organization’s social responsibility value (often considered under fit)
- Including behaviours like helping coworkers and promoting a positive work culture.

The main differences:
- Task performance is about job-related duties, while contextual performance involves organizational social contributions.

Question 4

Describe five performance appraisal methods and the pros and cons of each (which)

Answer 4

Graphic Rating Scales:
- pros: simple to use, facilitates employee comparison
- cons: unclear performance standards, prone to bias

Alternation Ranking:
- pros: Avoids central tendency
- cons: Unfair if most employees perform well

Paired Comparison
- Pros: ensures all employees are compared with each other
- Cons: unfair if most employees perform similarly

Narrative Forms:
- Pros: provides concrete feedback
- Cons: Time-Consuming, subjective

Forced Distribution Method:
- Pros: Ensures performance differentiation
- Cons: Can demotivate employees classified as below average

Question 5

Discuss the major problems inhibiting effective performance appraisal

Answer 5

Appraisal problems include:
- unclear standards,
- the halo effect,
- central tendency,
- leniency or strictness,
- appraisal bias,
- the recency effect, and
- the similar-to-me bias.

Question 6

Discuss 360-degree appraisal from multiple sources

Answer 6

There are various sources of performance appraisal, including the employee, their manager or supervisor, their subordinates, their co-workers, their customers, or multiple stakeholders combined via the 360-degree approach.

Question 7

Consider the future of performance management

Answer 7

Quoted from Forbes, traditional methods of performance management may no longer be effective (Chellappa, 2022). Alternative methods, such as continuous feedback, goals set in collaboration with employees, and more frequent feedback, may be more suitable for a changing workforce.