Lecture 6: Performance Management Flashcards
What is the typical performance management process?
DERP(f)
1. Define performance: this involves setting performance goals and establishing and communicating performance expectations
- evaluate performance: this involves monitoring performence and communicating performance strengths/weaknesses (ongoing)
- Review performance: this involves the actual delivery of feedback to employees and the coaching of employees (happens at regular intervals)
- provide performance consequences: this involves the provision of sufficient and valued consequences (awards, promotions; development plans, training programs)
What are the key goals of performance management?
- STRATEGIC: communicating the organizational goals and ensuring that employees’ goals and actions are strategically aligned
- ADMINISTRATIVE: gathering information needed to make and document decisions relevant to selection, compensation, promotion, and terminartion etc.
- DEVELOPMENTAL: provide feedback on strengths and weaknesses along with coaching and training
from textbook 3 more:
- COMMUNICATION: clear sources of information for employees. they tell them what is expected, how well they are performing, and where they should focus their attention. Through formal and informal discussions, supervisors are able to communicate which activities are criticial importance and which require less attention.
- Organizational maintanance: workplace planning efforts. specifically succession planning (which is long term projections about the needs of the future staff in order to ensure key roles are filled as needed.) also involves knowing how to intervene to see whether training programs are efficient or not. (for instance if investing in needs of salespeople, then see if sales increased).
- Documentation: to ensure decisions made on objective criteria and prevent discrimination; well documented records helps organizations comply with legal requirements to demonstrate decisions are fair and rational; also organizations can track employee performance, identify areas for improvement, and make informed decisions to enhance the overall effectiveness of their workforce.
WHAT ARE THE GENERAL VIEWS ON PERFORMANCE MANAGEMENT
EMPLOYEES’ VIEWS:
* 30% of employees believe that their performance reviews help to improve their performance (Watson Wyatt)
* Less than 40% of employees said their systems established clear performance goals, generated honest feedback, or effectively leveraged technology.
* Another study found that almost half of employers believe their managers are, at best, only
slightly effective in helping underperforming employees improve.
* An academic review of more than 600 employee-feedback studies found that in over a third of
cases feedback interventions reduced performance
HR EXECUTIVES’ VIEWS:
* 40% of HR executives believe their performance management process is an effective use of time
GENERAL IDEA: OVERALL PRETTY NEGATIVE VIEW WHICH IS WHY ORGANIZATIONS ARE ALWAYS REVISING PERFORMANCE REVIEW PROCESSES; HOWEVER, THIS CONSTANT EVOLUTION CAN CREATE AMBIGUITY
WHY IS THERE SUCH A NEGATIVE OUTLOOK TOWARDS PERFORMANCE MANAGEMENT SYSTEMS? I.E WHAT ARE THE CHALLENGES FACED BY P.M?
- they dont assess actual performance: managers focus on person characteristics more than actual output
- conflicting objectives: because there are so many goals of P.M, they can oftentimes conflict with each other and do not serve any extremely well.
- there is infrequent feedback: most appraisals are done annually; employees need more regular feedback and coaching
- non-data based assessment: Evaluations commonly based on memory and subjective criteria
- Errors are common: judgements are commonly biased by halo, recency, similar-to-me, leniency,
and other errors (more detail from tb)
WHAT ARE THE 5 RATING ERRORS AND BIASES
- serial position errors: A rating error in which a rater has better recollection of the information given at the beginning (primacy effect) or the end (recency effect) of a sequence, and worse recollection of the information from the middle of the sequence. Thus, if evaluations are only occurring once every six months, the most recent behavior may be given more weight than behavior exhibited at other times.
- contrast error: a rating error which takes place when a rater rates two individuals against a set standard (rather than against each other), and the rating of one individual affects the rating given to the next individual. (for example: if i rate an individual super poorly, the next individual i see might be rated very high, but wouldnt have as high a rating had i not been given the individual to rate before this.)
- halo - horn error: a rating error which occurs when a rater’s general opinion about an employee affect the rating given. when a rater has favorable attitude to individual, called halo, but when unfavorable, called horn error . so a rater may have good feeling about one aspect of the performance of the employee, so when it comes to judging the other factors, the rater may generalize and rate those other aspects as good as well. vice versa for horn error.
- leniency error: raters can be harsh or lenient. harsh graders can give ratings lower than the “true” level of ability (severity/negative leniency) whereas easy raters will give ratings that are better than the “true” level of ability (positive leniency) usually occer when raters apply personal standards derived from their own values or previous experience. the tendency to make leniency error is stable with individuals (consistently lenient/harsh). the most lenient raters are those high in agreeableness and low in assertiveness and performance management competence.
- central-tendency error:raters unwillingness to assign high or low ratings. In contrast to leniency and severity errors, where individuals’ ratings are unjustifiably high or low, everyone is “average,” and only the middle (cen-tral) part of the scale is used with central-tendency errors. This may happen when raters are asked to evaluate unfamiliar aspects of performance. Rather than not respond, they play it safe and say the person is average in this “unknown” ability.
also just to note that the absnence of errors does not indicate accuracy, but the presence of errors indicate inaccuracy.
WHAT IS FORCED DISTRIBUTION AND HOW CAN IT ADDRESS THESE ERRORS AND BIASES? WHAT ARE THE PROBLEMS WITH FORCED DISTRIBUTION?
FORCED DISTRIBUTION: have to have a certain no. of employees be placed in each category. Eg. 10% on bottom etc. (forced it to be normally distributed).
useful when the sample is large. used when rater must evaluate employees on a single dimension, but can also be used with multiple dimensions. assumes most employees being average performers (normally distributed around the mean), fewer being good or bad performers, and even fewer being exceptionally good or exceptionally bad performers.
a version of this process is top grading also referred to as rank and yank and the vitality curve which is when the bottom 10% is dismissed each year.
But of course, there are problems with forced distributions:
- Cultural implications: diminishes morale and creates a competitive culture which limits collaboration. This is why microsoft abandoned forced rankings
- Also has limited utility in the long term/over time: simulation study found that removing 10% of the lowest performing employees per year led to a 16% average workforce performance improvement in the first 2 years, but fell quickly to 2% in year 6 and 1% in year 10
- also can cause legal risks because companies like ford and capital one have lost class action suits that claimed disproportionate no.s of those yanked were of protected class members.
How can we improve performance management?
TRAINING:
* provide rater training:
* rater error training:
* formal process in which raters are taught about errors, with the idea being that awareness will lead to a reduction in the errors.
* goal of which is go make raters aware of potential errors teach them how to avoid them.
* but this is generally ineffective for improving accuracy. a concern is that reduction of errors does not necessarily increase accuracy in ratings. raters may over-correct their behaviors (becoming more severe to combat leniency). with the halo effect, sometimes a rater may truly be uniformy good, but to avoid halo effect, they may show variation.
* Frame of reference training:
* raters are shown vignettes (short, descriptive scenarios that depict specific situations or instances of job performance) of different levels of performance and asked to provide ratings and then given feedback on those ratings.
* goal is to provide raters with common, specific standards against which to rate employees and the opportunity for calibration through practice
* generally effective for improving accuracy; therefore frame of reference training is better
- behavioral observation training: seeks to make raters better at observing, recalling, and using observation for their performance assessments. In a typical behavioral observation training program, raters are provided with critical incidents to watch for when rating others. They are also taught how to use such tools as diaries to aid in the recording of observations to be used at a later date. The diary not only serves as a record-keeping tool, but also as a memory aid, so that biases such as recency effect or halo error are less likely to appear in ratings
- you can coach managers on how to navigate the challenges of the performance management process (e.g: having difficult convos) peer led workshops can be helpful
- you can also train employees on how to write effective, objective self-assessments
PROCESS
* clearly define and communicate key performance indicators (KPIs) that form the basis of performance evaluation
* Gather additional information
* Adobe gathers peer input before quarterly “check-in” meetings between managers and
employees, which serves as a basis for the conversation
* 27% of companies use crowd-sourced feedback as part of their process (WorldatWork,
2016)
TIMING
* increase the frequency of evaluation, feedback, and coaching
* capture more frequent observations and evaluations of employees.
* encourage regular feedback and coaching, as opposed to annual point-in-time assessments
- Decouple compensation decisions and developmental discussions:
- It’s better to separate discussions about pay and promotions from discussions about personal development at work. Research suggests that when managers use performance appraisals to make decisions about pay and promotions, they often give higher ratings to employees and hesitate to provide honest, constructive feedback. So, to encourage more honest feedback and fair evaluations, it’s recommended to have separate conversations about compensation and development. This way, employees can receive helpful feedback without concerns about how it might impact their pay or promotion opportunities.
