Chapter 9

Question 1

Performance management

Answer 1

The process of managing two related activities:

1. Evaluating the performance of your employees against the standards set for them.
2. Helping them develop action plans to improve their performance. Our goal is to motivate employees to work hard and continually improve what they do.

Question 2

Administrative Purposes - “Documentation”

Answer 2

• Performance management is a tool for administrative decisions such as: compensation, promotions, lateral movements (transfers), demotions, retention/termination, layoffs, and recognition.
• We utilize this performance management results to discipline employees as well.

Question 3

Developmental Purposes - “Develop”

Answer 3

Performance management is a tool to help employees improve their weaknesses and realize their long-term goals and career objectives.

• How to add more to the competitive advantage of the organization?
• Helps in identifying training needs.
• Helps in identifying the employee potential and the course of actions to achieve it.

Question 4

Global performance measure

Answer 4

a single score to reflect an individual employee’s overall performance

Question 5

Performance dimensions

Answer 5

• are different areas that are being evaluated; should reflect the reasons the job exists (tasks, duties, responsibilities).
• Jobs consist of multiple performance dimensions, thus if you do not break their performance down, you won’t be able to identify the areas to improve

Question 6

Deficient performance measure

Answer 6

• An incomplete appraisal of an individual’s performance when important measures are not measured.
• Fail to measure an additional important parts of the job, while focusing on others

Question 7

Contaminated performance measures

Answer 7

A performance measure that is irrelevant to an individual’s actual job performance.

Question 8

Performance Measure Standards

Answer 8

Levels of expected performance that relate to levels of task or job effectiveness

Question 9

How can you compare results if you do not have a standard or benchmark to compare results to?

Answer 9

• Standards could be Quantitative such as Sales, Number of Errors, Quantity of Output.
• Standards could also be Qualitative such assessing if a task was completed successfully ( such as using measures such as Yes or NO / Utilizing a five points scale from Unsatisfactory to Excellent)
• Standards should be both Challenging and Achievable to ensure fairness and motivation.

Question 10

Specificity

Answer 10

• The clarity of the performance standards
• Specific measures makes it clearer for managers to evaluate, thus achieving consistency.
• Specific measures help employees understand how different aspects of the job should be performed.
• Specific in identifying measures for various tasks, rather than overall performance.

Question 11

Ranking approach

Answer 11

• An evaluation approach which employees are evaluated from best to worst along some performance dimension or by virtue of their overall performance.
• Ranking is easier when comparing employees based on quantitative data.

Question 12

Paired comparison

Answer 12

An evaluation approach in which each employee in a business unit is compared to every other employee in the unit.

Question 13

Forced distribution

Answer 13

• A form of individual comparisons whereby managers are forced to distribute employees into one of several predetermined categories.
• It forces managers to be more critical in assessing employees.

Question 14

What are the advantages of individual comparisons?

Answer 14

• Easy approaches to design and implement

- Results could be used for administrative purposes (who to promote or choose for layoff?).

Question 15

What are disadvantages of individual comparisons?

Answer 15

• Ranking and paired comparisons are complicated when the business unit is large.
• It requires a lot of information, time and effort, with limited accuracy as managers might not be able to distinct each individual performance.
• Comparative approaches are not useful for developmental purposes. Often it fails to capture why employees are performing at a certain level.

Question 16

Absolute Approaches

Answer 16

• The evaluation of employees’ by comparing employees against certain “Absolute” standard (rather than against each other) along a number of performance dimensions (rather than simply making a global assessment about them).
• Each employee’s evaluation is independent of others in the workgroup, and might focus on the employee attributes, behaviors or/and results.

Question 17

Attribute-based Approach

Answer 17

• A method of evaluating employees based on various traits or attributes that they possess relevant to their performance.
• Designed to measure the extent to which an employee possess certain characteristics – such as loyalty, dependability, creativity, initiative, and leadership – that are viewed as important for the job and the organization in general

Question 18

Graphic Rating Scale (Attribute-based approach)

Answer 18

• raters use a 3, 5, 7 or 10 points scale to assess the attributes
• This approach is highly useful for developmental purposes as it breaks performance into number of attributes.
• Scales might be designed poorly, ambiguous, and the standards might be interpreted differently by raters.

Question 19

Behavior- based Approaches

Answer 19

• Some attributes reflect truly the employee performance.
• Yet, attributes usually predict the person’s potential to perform well rather than his or her actual performance
• Therefore, an alternative to attribute-based assessments is behavioral-based approaches that emphasize examining the extent to which employees actually display certain behaviors on the job.

Question 20

What are examples of behavior-based approaches?

Answer 20

• Critical Incident Approach
• Forced-Choice Approach
• Behaviorally Anchored Rating Scales (BARS)
• Behavior Observation Scales (BOS)

Question 21

Critical Incident Approach

Answer 21

• A behavior-based evaluation approach where the evaluation criteria consist of statements or examples of exceptionally good or poor performance employees display over the course of the evaluation period.
• Focus on Actual Behaviors rather than traits
• To be effective mangers need to keep track of employee behaviors

Question 22

Forced-Choice Approach

Answer 22

• A behavior-based evaluation approach where managers must choose from a set of alternative statements regarding the person being rated.
• The statements that are viewed “higher” might not be known by the rater – in order to force the rater to choose the most accurate statement.
• Each statement has a predetermined value, based on the priorities of the organization

Question 23

Behaviorally Anchored Rating Scales

Answer 23

• A behavior-based evaluation approach where raters must evaluate individuals along a number of performance dimensions with each performance rating standard anchored by a behavioral example.
• It integrates the benefits of the critical incident approach and the graphic rating scales.
• It provides raters with a frame of reference for evaluating each performance dimension, possibly achieving higher consistency.
• It requires a lot of time and effort to develop.
  BARS are usually job specific, thus they are ineffective to use them across jobs.

Question 24

Behavior Observation Scales

Answer 24

• A behavior-based evaluation approach that requires raters to evaluate how often an employee display certain behaviors on the job.
• The primary difference from BARS is that it details various behaviors (or job elements) for each performance dimension and assess the frequency of each.

Question 25

Direct Measures Approach (Results-Based Approach)

Answer 25

• managers gauge outcomes of employees’ work such as sales, productivity, absenteeism.
• When the right measures are evaluated, it is very clear and meaningful.
• Not all jobs are associated with objective outcome measures.
• Focusing only on certain outcomes might lead to neglecting other outcomes

Question 26

Management-by-objectives (Results-Based Approach)

Answer 26

• managers meet with employees and jointly set goals for them to accomplish during particular time period.
• At the end of the period, they meet again to evaluate whether the employee met or exceeded the objectives or whether they failed.
• Potentially problematic when most objectives are not quantifiable.
• Beware of narrow goals, as they might cause the employee to neglect other aspects of the job that are not being evaluated.

Question 27

Supervisors

Answer 27

• a key source but may not have time to monitor and observe employees every day, or simply managers might not work in close proximity.
• Limited observation capacity, thus does not necessarily represent the full picture of the employee’s performance.
• Source of Performance Data

Question 28

Co-Workers

Answer 28

• may be able to comment on cooperation and support, but may intentionally skew rating.
• Their feedback is especially useful when the employee is part of a team and their work is interrelated.
• They might have more realistic overview of the job
• Beware of interpersonal relationships (like – dislike)
• Source of Performance Data

Question 29

Self-Appraisal

Answer 29

• can be useful starting point and developmental tool to help employee improve performance.
• Employees might tend to inflate their evaluations, especially if data is used for administrative purposes.
• Source of Performance Data

Question 30

Subordinates

Answer 30

• May be hard to separate skill from “likeability”
• Fear from retaliation ( even when the raters are anonymous, the manager might deduce who rated him negatively if the subordinates are few in number).
• Managers might tend to prioritize the satisfaction of his employees over organizational goals.
• Source of Performance Data

Question 31

Customers

Answer 31

• Good source of data as customers are the critical determinant to company’s success.
• Data might not be equally relevant for all jobs.
• Might be expensive and time-consuming to reach out to all customers.
• Satisfaction levels may only report extremely good or bad experiences.
• Try to ensure a representative sample
• Source of Performance Data

Question 32

Multi-Source or 360-degrees Appraisal

Answer 32

• A comprehensive measurement approach that involves gathering performance data from as many sources as possible.
• Comprehensive, thus potentially more accurate.
• Yet, complex, time-consuming to collect data and analyze it.
• Different raters might have different exposures to employees, thus potential inconsistencies.

Question 33

Weighting Performance Criteria

Answer 33

• Each job differs in terms of how it adds value to the organization
• Some forms of contributions may be more important than others for particular jobs
• Weights are used to adjust the relative importance of different performance dimensions

Question 34

Halo/horn error (Performance Measurement Error)

Answer 34

overall positive or negative view of employee’s performance biases the ratings given on individual criteria

Question 35

Contrast effect (Performance Measurement Error)

Answer 35

manager artificially inflates or deflates an employee’s rating after comparing employee to another individual

Question 36

Primacy error (Performance Measurement Error)

Answer 36

rater’s earlier impressions of individual biases later evaluations of the person

Question 37

Recency error (Performance Measurement Error)

Answer 37

rater focuses on employee’s performance near the time of the evaluation

Question 38

Similar-to-me error (Performance Measurement Error)

Answer 38

when managers rate more highly employees who resemble them in some way

Question 39

Leniency error (Performance Measurement Error)

Answer 39

constantly rating employees on the high end of the scale

Question 40

Strictness error (Performance Measurement Error)

Answer 40

constantly rating employees on the low end of the scale

Question 41

Error of central tendency (Performance Measurement Error)

Answer 41

rating everyone “average”

Question 42

Steps to reduce measurement errors

Answer 42

• Make rating formats more specific, defining precisely what is being evaluated
• Use multiple raters when possible to attain inter-rater reliability.
• Provide appraisal training — to familiarize raters with errors that can occur.
• Provide frame-of-reference training — to help raters understand performance standards and dimensions and develop common evaluation standards
• It is useful to communicate the frame-of-reference to employees as well.

Question 43

Providing Feedback

Answer 43

• In an ideal situation, performance feedback should be provided on an ongoing basis.
• As a manager, try to provide feedback on critical incidents immediately.
• Not providing immediate feedback will implicitly signal that the employee performance is satisfactory.
• Feedback meeting on performance could be separate from meeting on salary decisions.

Question 44

What three steps does continuous performance appraisal feedback include?

Answer 44

• Preparation: gathering information from relevant sources, including the ones being assessed and their performance challenges and deficiencies.
• Communication: conducting the performance appraisal meeting.
• Follow through : following up on what is communicated in order to make sure the points are addressed

Question 45

Balanced approach (providing feedback)

Answer 45

• positive and improvement areas.
• Involve/engage employee in discussion in order to increase
  Self-reflection
  Signal improvement
  Discuss factors that might have influenced their performance

Question 46

Understanding the Causes of Poor Performance

Answer 46

• Seek to understand causes of poor performance, which could stem from:

+ Lacking certain competencies; Knowledge, Skills, Abilities
+ Inadequate working environment that they cannot control
+ Error in Job Design
+ Inadequate Technology
+ Lack of support from coworkers
+ Poor performance of co-workers

Question 47

What are ways to take action to improve perfomrance?

Answer 47

• Removing barriers to employee success
• Training and development activities to address skill deficiencies
• Coaching and mentoring
• Work design and technology solutions
• The qualification and performance of coworkers
• Addressing quality of employee’s performance

Question 48

Performance Improvement Plan

Answer 48

• a tool to monitor and measure an employee’s deficient work products, processes, and/or behaviors to improve performance or modify behavior.

It should be constructive and clear in communicating:

• How the inadequate performance determination was made
• What corrective and/or disciplinary actions will be taken
• By whom and when
• When and how the individual performance will be reviewed

Question 49

What does the acronym FOSA+ stand for?

Answer 49

F - facts that define the problem, including the company’s expectations
O - Objectives that help the employee understand how to resolve the problem
S - Solutions that can help the employee strategize how to reach the objectives
A - Actions that will be taken if the problem is not corrected
+ - Plus your overall efforts and support to help the employee succeed

Question 50

Progressive Discipline

Answer 50

• a process by which an employee with disciplinary problems progresses through a series of disciplinary stages until the problem is corrected.

Step 1; Verbal warning: stating that the behavior or performance is not acceptable.
Step 2; Written warning: letter or form specifying the problem history, the employee’s explanation, the company expectations for change, and the consequences if improvement is not met within a specific time frame.
Step 3; Suspension without pay: suspending the employee for a week, three days…etc. with a final warning.
Step 4; Termination: last step when previous ones were not effective. Based on consideration and discussions with the employee.

Question 51

Positive discipline

Answer 51

A disciplinary process that is not punitive but focuses on constructive feedback and encourages employees to take responsibility for trying to improve their behaviors or performance at work.

Question 52

Counseling

Answer 52

• bringing a problem to the employee’s attention before it becomes serious enough to require a written warning.
• The key to positive discipline is to help employees identify their problems early on and address the causes of their problematic behavior.

Question 53

Which performance dimensions are emphasized

Organizational Demands: Strategy

Answer 53

• The importance of performance dimensions will vary based on the strategy of the firm.
• Accordingly, the more important performance dimension is given a higher weight.
• For example, in a low-cost strategy, the sales figure might have a higher weight; while in a customer-service strategy, customer satisfaction might have a higher weight.

Question 54

The performance evaluation method used

Organizational Demands: Strategy

Answer 54

• In a low cost strategy, organizations might tend to emphasize comparative approaches, focusing on maximum efficiency.
• Also, they tend to utilize cheaper methods to design and implement.
• In a differentiation approach, absolute methods might be utilized more, where some organization might be willing to spend more on the design and implementation of PM.

Question 55

Which performance evaluation approach is used

Organizational Demands: Company Characteristics

Answer 55

• The organizational size affect the feasibility of using various PM approaches.
• Individual comparisons are easier to utilize in smaller organizations as managers can observe few employees’ behaviors. This is not possible when managing many employees at bigger organizations.
• Developing absolute PM systems are often time-consuming and expensive, thus mostly applicable at bigger organizations.

Question 56

Who carries out the process

Organizational Demands: Company Characteristics

Answer 56

• Smaller organizations depend on line managers to design and implement PM systems due to the lack of support functions.
• At bigger organizations, they have more HR specialists that can work on the design of PM systems and take care of its administration, yet still managers are expected to contribute to the design and implementation.

Question 57

The objective of the performance management system

Organizational Demands: Culture

Answer 57

• Within a competitive culture, the focus of PM is on administrative purposes.
• Within a culture that values long-term employability and employee wellness, the organization tend to focus on developmental purposes.

Question 58

Which evaluation approach is used

Organizational Demands: Culture

Answer 58

• A comparative approach is utilized to increase competition.
• Absolute approaches is utilized to increase employee welfare and loyalty.
• Moreover, if an organization focuses only on results, they might push employees to compete.
• Many organizations focus on how results are achieved, thus highlighting the importance of quality improvement.

Question 59

Effectiveness of performance management approaches

Organizational Demands: Culture

Answer 59

• Make sure that performance management approaches matches the culture to maximize receptivity and reinforcement.

Question 60

Perceptions of procedural and distributive justice

Organizational Demands: Employee Concerns

Answer 60

• Are employees perceiving the PM results as fair in reflecting their true performance? Does the PM system have a good rationale and provide clear directions on how to improve?
• Is the PM system design fair and unbiased? Are the measures Deficient, Contaminated, or Unachievable? Were the measures communicated well? Were the raters in a good position to evaluate them? Was the feedback constructive?

Question 61

Employees’ responsiveness to performance feedback

Organizational Demands: Employee Concerns

Answer 61

• At many instances, managers need to rely on PM for administrative purposes.
• Yet, employees want to focus on feedback and development.

Question 62

Achieving work/life balance

Organizational Demands: Employee Concerns

Answer 62

• PM can support or conflict with work/life balance initiatives.
• Telecommute and flexible hours might affect how raters evaluate employees, especially that they have limited capability to observe behaviors.

Question 63

Accuracy of performance evaluations

Environmental Influences: Labor Market

Answer 63

Given that many organizations might depend on subjective approaches, the increasing diversity of the workforce might increase direct and indirect discrimination.

Question 64

The need to evaluate diversity efforts

Environmental Influences: Labor Market

Answer 64

• Managers should be held accountable for diversity initiatives.
• For example, they can be evaluated on their ability to develop employees from diverse backgrounds.

Question 65

The performance management process

Environmental Influences: Technology

Answer 65

• Companies are capable of monitoring performance utilizing various technologies.
• Data also can be collected from various sources electronically.
• Technology might also be utilized to provide instant feedback to track their progress.

Question 66

How telecommuters are evaluated

Environmental Influences: Technology

Answer 66

Usually managers focus on outputs (results) rather than behaviors.

Question 67

What is evaluated

Environmental Influences: Globalization

Answer 67

• The performance dimensions effective at one location might not be effective at others.
• For example, what is achievable in one week at one location might need 3 months to be achieved at another.

Question 68

The acceptability of the performance management system

Environmental Influences: Globalization

Answer 68

• Individualistic vs. collectivists cultures
• For international assignees, they might need to apply different mechanisms to succeed at various locations, thus the need to have different performance dimensions, standards and employee perceptions.

Question 69

Who provides performance data

Environmental Influences: Globalization

Answer 69

• Home country manager: more knowledgeable of the international assignee previous performance and culture, but incapable of observing the IA behavior and might not appreciate customization.
• Host country manager: might not consider the IA’s cultural background, pressure the IA for customization, yet more capable of observing the IA’s behavior.

Question 70

Employees’ perceptions of the performance management system

Environmental Influences: Ethics

Answer 70

• Ensure that the PM system is ethical.
• The importance of distributive and procedural justice, in addition to offering the employee voice throughout the process.

Question 71

How employees react to surveillance and monitoring

Environmental Influences: Ethics

Answer 71

• Technological advances allow us to monitor employee performance, yet it raised the issue of employee privacy.
• Are we allowed to monitor emails and phone calls? Do managers trust employees? Aren’t they invasive?

Question 72

How ethically employees behave at work

Environmental Influences: Ethics

Answer 72

• PM might foster an ethical or unethical behaviors.
• A system that focuses on individual comparisons and/or financial results might foster unethical behaviors.
• Also, this is true for systems that focus on administrative purposes

Question 73

Efforts to reduce discrimination in the performance management process
(Regulatory Issues)

Answer 73

• Beware of forced distribution, it had caused a lot of litigations before.
• Beware of direct or indirect discrimination.
• Evaluating employees on outputs is more objective and defensible.
• Be detailed when utilizing BARS and BOS and train raters well.
• Measures should be job-related, valid, reliable, specific and clear.

Question 74

The importance of documenting employee performance

Regulatory Issues

Answer 74

• You need to document all of the evidence that supports the PM results.
• This minimizes bias, such as recency effect.
• Document all discussions, steps taken for improvement and disciplinary actions with accurate timeline.