Critical Thinking: Case Study - Develop a Motivation Plan

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SEU_HCM502_Module02_PerformanceManagement_Ch01.pptx

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part one Strategic and General Considerations

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Herman Aguinis, University of Colorado at Denver

Part I: Strategic And General Considerations

Chapter 1: Performance Management in Context

Chapter 2: Performance Management Process

Chapter 3: Performance Management and Strategic Planning

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Herman Aguinis, University of Colorado at Denver

Chapter 1 Performance Management in Context

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Herman Aguinis, University of Colorado at Denver

Overview

Definition of Performance Management (PM)

Purposes of PM

Contributions of PM

Disadvantages/Dangers of Poorly Implemented PM Systems

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Herman Aguinis, University of Colorado at Denver

Overview (continued)

Characteristics of an Ideal PM System

Integration with Other Human Resources and Development Activities

The Changing Nature of PM

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Herman Aguinis, University of Colorado at Denver

Definition of PM

1. Continuous process of …

Identifying

Measuring

Developing

… the performance of individuals and teams

2. Aligning performance with the strategic goals of the organization

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Herman Aguinis, University of Colorado at Denver

Definition of PM (continued)

Performance management (PM)

is NOT

performance appraisal (PA)

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Herman Aguinis, University of Colorado at Denver

Definition of PM (continued)

Strategic business considerations

Driven by line manager

Ongoing feedback

So employee can improve performance

Driven by HR

Assesses employee

Strengths

Weaknesses

Once a year

Lacks ongoing feedback

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Herman Aguinis, University of Colorado at Denver

Performance Appraisal vs. Performance Management

What did you see?

What is wrong with the interaction between the supervisor and her direct report?

Is this performance appraisal? Is this performance management? Why?

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Herman Aguinis, University of Colorado at Denver

Purposes of PM Systems

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Herman Aguinis, University of Colorado at Denver

Purposes of PM Systems Strategic Purpose

Link individual goals with organization’s goals

Communicate most crucial business strategic initiatives

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Herman Aguinis, University of Colorado at Denver

Note: the following is slide used before (some of this is not in Module 1)

Links employee activities with organization’s mission and goals

Identifies results and behaviors needed to carry out strategy

Maximizes extent employees exhibit those behaviors and results

Only 13% of organizations use PM to communicate organizational purpose and goals

Company Spotlight

Sears, one of the largest U.S. retailers, is using PM to reinvigorate the company’s culture

Steps include:

Revising duties and objectives

More frequent communication between supervisors and employees

Using PM to identify future leaders

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Herman Aguinis, University of Colorado at Denver

Purposes of PM Systems Administrative Purpose

Provide information for making decisions regarding:

Salary adjustments

Promotions

Retention or termination

Recognition of individual performance

Layoffs

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Herman Aguinis, University of Colorado at Denver

Purposes of PM Systems Informational Purpose

Communicate to employees:

Expectations

What is important

How they are doing

How to improve

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Herman Aguinis, University of Colorado at Denver

Purposes of PM Systems Developmental Purpose

Performance feedback/coaching

Identification of individual strengths and weaknesses

Identification of causes of performance deficiencies

Tailor development of individual career path

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Herman Aguinis, University of Colorado at Denver

Purposes of PM Systems Organizational Maintenance Purpose

Plan effective workforce

Assess future training needs

Evaluate performance at organizational level

Evaluate effectiveness of HR interventions

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Herman Aguinis, University of Colorado at Denver

Purposes of PM Systems Documentation Purpose

Validate selection instruments

Document administrative decisions

Help meet legal requirements

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Herman Aguinis, University of Colorado at Denver

Contributions of Performance Management

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Herman Aguinis, University of Colorado at Denver

Contributions of Performance Management

For Employees

For Managers

For Organization/HR Function

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Herman Aguinis, University of Colorado at Denver

Contributions of Performance Management for Employees

Enhance self-insight and development

Increase self-esteem

Increase motivation to perform

Increase employee competence

Clarify definitions of

Job

Success criteria

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Herman Aguinis, University of Colorado at Denver

Contributions of Performance Management for Managers

Increase employee engagement

Encourage voice behavior

Minimize employee misconduct

Address declines in performance early

Increase employee motivation, commitment, and intentions to stay in organization

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Herman Aguinis, University of Colorado at Denver

Contributions of Performance Management for Managers (continued)

Communicate supervisors’ views of performance more clearly

Managers gain insight about subordinates

Better and more timely differentiation between good and poor performers

Employees become more competent

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Herman Aguinis, University of Colorado at Denver

Contributions of Performance Management for Organization / HR Function

Clarify organizational goals

Facilitate organizational change

Fairer, more appropriate administrative actions

Better protection from lawsuits

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Herman Aguinis, University of Colorado at Denver

Disadvantages/Dangers of Poorly Implemented PM Systems

For Employees

For Managers

For Organization/HR Function

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Herman Aguinis, University of Colorado at Denver

Disadvantages/Dangers of Poorly Implemented PM Systems

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Herman Aguinis, University of Colorado at Denver

Disadvantages/Dangers of Poorly Implemented PM Systems for Employees

Lowered self-esteem

Employee burnout and job dissatisfaction

Damaged relationships

Use of false or misleading information

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Herman Aguinis, University of Colorado at Denver

Disadvantages/Dangers of Poorly Implemented PM Systems for Managers

Increased turnover

Decreased motivation to perform

Unjustified demands on managers’ resources

Varying and unfair standards and ratings

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Herman Aguinis, University of Colorado at Denver

Disadvantages/Dangers of Poorly Implemented PM Systems for Organization/HR Function

Wasted time and money

Unclear ratings system

Emerging biases

Increased risk of litigation

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Herman Aguinis, University of Colorado at Denver

Disadvantages/Dangers of Poorly Implemented PM Systems for Organization/HR Function

Wasted time and money

Unclear ratings system

Emerging biases

Increased risk of litigation

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Herman Aguinis, University of Colorado at Denver

Company Spotlight

Yahoo was subject to a lawsuit due to a poorly implemented performance management system

Missteps include:

Forced ranking of employees

Unclear ratings and lack of openness

Biases including gender discrimination

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Herman Aguinis, University of Colorado at Denver

Company Spotlight

Adobe implemented a state-of-the-science performance management system

Benefits included:

Time savings (80,000 hours)

Increased morale

Decreased turnover

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Herman Aguinis, University of Colorado at Denver

Characteristics of an Ideal PM System

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Herman Aguinis, University of Colorado at Denver

An Ideal PM System: 15 Characteristics Strategically Congruent

Consistent with organization’s strategy

Aligned with unit and organizational goals

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Herman Aguinis, University of Colorado at Denver

An Ideal PM System: 15 Characteristics Contextually Congruent

Congruent with the organization’s culture as well as the broader cultural context of the region or country

Example: A 360-degree feedback is not effective where communication is not fluid and hierarchies are rigid

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Herman Aguinis, University of Colorado at Denver

An Ideal PM System: 15 Characteristics Thorough

All employees are evaluated

All major job responsibilities are evaluated

Evaluations cover performance for entire review period

Feedback is given on both positive and negative performance

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Herman Aguinis, University of Colorado at Denver

An Ideal PM System: 15 Characteristics Practical

Available

Easy to use

Acceptable to decision makers

Benefits outweigh costs

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Herman Aguinis, University of Colorado at Denver

An Ideal PM System: 15 Characteristics Meaningful

Standards are important and relevant

System measures ONLY what employee can control

Results have consequences

Evaluations occur regularly and at appropriate times

System provides for continuing skill development of evaluators

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Herman Aguinis, University of Colorado at Denver

An Ideal PM System: 15 Characteristics Specific

Concrete and detailed guidance to employees

What’s expected

How to meet the expectations

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Herman Aguinis, University of Colorado at Denver

An Ideal PM System: 15 Characteristics Identifies effective and ineffective performance

Distinguish between effective and ineffective:

Behaviors

Results

Provide ability to identify employees with various levels of performance.

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Herman Aguinis, University of Colorado at Denver

An Ideal PM System: 15 Characteristics Reliable

Consistent

Free of error

Inter-rater reliability

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Herman Aguinis, University of Colorado at Denver

An Ideal PM System: 15 Characteristics Valid

Relevant (i.e., measures what is important)

Not deficient (i.e., doesn’t measure unimportant facets of job)

Not contaminated (i.e., only measures what the employee can control)

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Herman Aguinis, University of Colorado at Denver

An Ideal PM System: 15 Characteristics Acceptable and Fair

Perception of Distributive Justice

Work performed  Evaluation received  Reward

Perception of Procedural Justice

Fairness of procedures used to:

Determine ratings

Link ratings to rewards

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Herman Aguinis, University of Colorado at Denver

An Ideal PM System: 15 Characteristics Acceptable and Fair

Perception of Interpersonal Justice

Perceptions of quality of the design and implementation of the PM system

Perception of Informational Justice

Performance expectations and goals

Feedback received

Information given to justify administrative decisions

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Herman Aguinis, University of Colorado at Denver

An Ideal PM System: 15 Characteristics Inclusive

Represents concerns of all involved

When system is created, employees should help with deciding:

What should be measured

How it should be measured

Employee should provide input on performance prior to evaluation meeting.

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Herman Aguinis, University of Colorado at Denver

An Ideal PM System: 15 Characteristics Open (No Secrets)

Frequent, ongoing evaluations and feedback

Two-way communications in appraisal meeting

Clear standards and ongoing communication

Communications are factual, open, and honest

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Herman Aguinis, University of Colorado at Denver

An Ideal PM System: 15 Characteristics Correctable

Recognizes that human judgment is fallible

Appeals process provided

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Herman Aguinis, University of Colorado at Denver

An Ideal PM System: 15 Characteristics Standardized

Ongoing training of managers to provide consistent evaluations across:

People

Time

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Herman Aguinis, University of Colorado at Denver

An Ideal PM System: 15 Characteristics Ethical

Supervisor suppresses self-interest

Supervisor rates only where (s)he has sufficient information about the performance dimension

Supervisor respects employee privacy

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Herman Aguinis, University of Colorado at Denver

Integration with other Human Resources and Development Activities

PM provides information for:

Development of training to meet organizational needs

Workforce planning

Recruitment and hiring decisions

Development of compensation systems

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Herman Aguinis, University of Colorado at Denver

Changing Nature of PM

PM is changing rapidly due to:

Technological Advancements

Globalization

Demographic Changes

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Herman Aguinis, University of Colorado at Denver

Changing Nature of PM Technological Advancements

Use of cloud computing for real-time and constant feedback

Availability of Big Data and use of Electronic Performance Monitoring (EPM)

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Herman Aguinis, University of Colorado at Denver

Changing Nature of PM Globalization

Increasing prevalence of virtual teams located across the world

Need to consider local norms—including societal and organizational cultural issues

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Herman Aguinis, University of Colorado at Denver

Changing Nature of PM Demographic Changes

Retirement of baby boomers and influx of Gen X and Gen Y (Millennials)

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Herman Aguinis, University of Colorado at Denver

Millennials in the Workforce

What are some of the stereotypes associated with Millennials and how would you manage them?

Which of these stereotypes have been particularly exaggerated?

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Herman Aguinis, University of Colorado at Denver

Definition of Performance Management (PM)

Purposes of PM Systems

Contributions of PM

Disadvantages/Dangers of Poorly Implemented PM Systems

Characteristics of an Ideal PM System

Integration with Other Human Resources and Development Activities

Changing Nature of PM

Quick Review

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Herman Aguinis, University of Colorado at Denver

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Herman Aguinis, University of Colorado at Denver