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
• Only 41% of Canadian organizations say their performance management system is effective/very effective

Question 3

Changes to Performance Management

Answer 3

• Most frequent changes to performance management systems are: 1- adopting coaching, ongoing feedback, and 2- developmental focus

Question 4

What Are the Purposes?

Answer 4

Strategic:
- Helps organization achieve strategic objectives
- Links employees’ behaviour with the organization’s goals
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 5

What are the steps?

Answer 5

Step 1: Define performance outcomes for company division and department.
Step 2: Develop employee goals, behavior, 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 the performance results.
Steps 5 and 6 lead back to Step 1 and the process begins again.

Question 6

Criteria for Effective Performance Management

Answer 6

• 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 7

How is Performance Measured? Making comparisons

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

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

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

Types of Rating Errors

Answer 10

• Similar-to-me error: overrating people seem similar
• Contrast error: underrating people seem different
• Halo: overrating based on one good quality
• Horns: underrating based on one poor quality
• Errors in distribution: overusing part of a rating scale

Question 11

What Can Be Done to Reduce Errors?

Answer 11

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

Question 12

Effective Performance Feedback

Answer 12

• 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 behavior and goal setting

Question 13

Performance Improvement

Answer 13

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

Question 14

Legal, Ethical & Privacy Issues

Answer 14

• 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