Chapter 7 Managing employees’ performance

Question 1

Performance management

Answer 1

The process through which managers ensure that employees’ activities and outputs contribute to the organization’s goals
Requires:
- Knowing what activities and outputs are desired,
- Observing whether they occur,
- Providing feedback to help employees meet expectations.

Question 2

Performance management under scrutiny

Answer 2

• 81% of Canadian organizations report changing or planning to change their performance management process or system
• Majority of Canadian organizations question the effectiveness of their performance management process
• CFOs say performance management is a top priority
• Only 41% of Canadian organizations say their performance management system is effective or very effective

Question 3

What are the purposes ?

Answer 3

Strategic :
- Helps organization achieve strategic objectives
- Links employees behaviour with the organization’s goal

Administrative :
- Provides information for day-to-day decisions e.g. salary and recognition
- Supports hiring decisions

Developmental :
- Basis for developing employees
- Builds awareness of strengths and areas for improvement

Question 4

What are the steps ?

Answer 4

Step 1 : Define performance outcomes for company division and department

Step 2 : Develop employee goals, behaviour, and actions to achieve outcomes

Step 3 : Provide support and ongoing performance discussions

Step 4 : Evaluate performance

Step 5 : Identify improvements needed

Step 6 : Provide consequences for performance results

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Question 5

Criteria for effective performance management

Answer 5

Fit with strategy: support company’s strategy, goals, and culture

Specific feedback: give specific expectations and methods to achieve goals

Acceptability: accepted by those who use it

Reliability: yield consistent results over time
Interrater reliability
Test-retest reliability

Validity: measure all (and only) relevant aspects of performance

Question 6

Contamination and déficiences of a job performance measure

Answer 6

Job performance measure

Actual, or true job performance

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Question 7

How is performance measured ? Making comparaisons

Answer 7

• Simple ranking
  Ranks employees from highest to lowest
• Forced-distribution
  Assigns a certain percentage of employees to each category e.g. Outstanding (5%); Exceeds (20%); Meets (55%)

-Paired-comparison
Compares each employee to each other employee

Question 8

How is performance measured ? Rating individuals

Answer 8

Attributes :
- Graphic rating scale
- Widely used methods

Behaviours :
- Critical incident method
- Behaviourally anchored rating scale (BARS)
- Behavioural observation scale (BOS)
- Organizational behaviour modification (OBM)

Results :
- Management by objectives (MBO)
- Balanced scorecard is an organizational approach

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Question 9

Sources of performance information

Answer 9

• 360-degree performance evaluation
  Managers and supervisors
  Peers
  Direct reports
  Self
  Customers and clients
• Crowdsourcing performance appraisal – variation of 360°
  Gathering and using data from all coworkers and managers
  Using online apps for timeliness, accuracy, and completeness of information
  Submission of feedback open to the entire organization
  An attractive option, but with legal and accuracy concerns

Question 10

Errors in performance measurement

Answer 10

• Humans have limitations in their information processing ability e.g. use simplifying mechanisms (heuristics) to make decisions about people
• Unconscious bias
  Judgment outside our consciousness that affects decisions based on background, culture, and personal experience

Question 11

Types of rating errors

Answer 11

Strictness, leniency, and central tendency
Similar-to-me error
Contrast error
Halo
Horns
Recency emphasis

Question 12

What can be done to reduce errors ?

Answer 12

Rater error training
Rater accuracy training
Unconscious bias training
Calibration meetings
Using data analytics & analysts
Ratee training

Question 13

Effective performance feedback

Answer 13

Feedback should be frequent, not once a year
Create the right context for the discussion
Ask the employee to rate their performance in advance
Have ongoing collaborative conversations
Provide balanced accurate feedback that emphasizes behaviour and goal setting

Question 14

Performance improvement

Answer 14

Most effective way to improve performance varies according to the employee’s ability and motivation
Lack of ability
Lack of motivation
Lack of both

Question 15

Légal, ethical & privacy issues

Answer 15

Legal challenges usually relate to allegations of illegal discrimination and unjust or constructive dismissal

Potential ethical and privacy issues associated with:
Location and monitoring systems e.g. GPS and apps
Software that analyzes employees’ behaviour
Wearables