Week 5: Performance ManagementPerformance Management
A well-designed performance management system will link to an organization’s systems, such as the strategic planning process, total rewards (a.k.a. total compensation), employee training and development, succession planning, and HRIS. In addition, there are many different approaches to performance management. Although one would like to assume that there is a "best way", the organization needs to evaluate the cost and benefits of their plans.Elements of a performance management plan include goal setting, performance review, and performance improvement plans.
Discussion Question—Choose one perspective in which to respond.
Non-HR Perspective:One of the reasons for failure of a performance management process is that managers lack the basic skills to manage the performance of their employees which include provide feedback, set goals, and monitor performance. Reflecting on your readings and research, what can you do to ensure a successful performance management process?
HR Perspective:Evaluate a current or past employer on the methods of performance management. If you were the HR consultant for your chosen organization, what do you recommend/propose for a performance management strategy?
In developing your response, you want to consider some of the following elements:
Strategic goals, feedback do’s and don’ts, methods, ethical issues, and risks
10/5/2020 APUS Content https://apus.brightspace.com/shared/elf/hrmt600/lesson5/index.html 1/13 HRMT600 |LESSON FIVE: PERFORMANCE MANAGEMENT AND APPRAISAL SYSTEMS Topics to be covered: Employee behavior and performance on the job Performance management Appraisal systems When individuals become employees for an organization, that organization has expectations for how those employees should behave and perform on the job. To establish standards for behavior and hold employees accountable to those standards, organizations usually have a system of performance management. An important part of this system is a process that evaluates and appraises employee behavior and performance. This lesson will review some of the reasons that employees behave in certain ways and discuss how performance management and appraisal systems can be used to encourage employees to meet organization’s expectations for employee behavior and performance. Introduction Employee Behavior and Performance on the Job Employees do not always behave as expected. Some of the common issues that organizations may experience with employees include chronic tardiness, conducting personal business at work, drug and alcohol abuse, non- performance or underperformance of assigned work tasks, ethical lapses, harassment of others, conflicts with co- workers, and undesirable personal conduct such as the use of swear words in conversation. Organizations must manage such issues to ensure that they do not become problems in the workplace, and this is often the responsibility of HRM professionals. To do this, it is beneficial to understand why employees sometimes behave in undesirable ways. This understanding can begin by reviewing the total person concept, which is the idea that when an organization hires an individual, they are hiring the total person—all of his or her personal 10/5/2020 APUS Content https://apus.brightspace.com/shared/elf/hrmt600/lesson5/index.html 2/13 characteristics—not just his or her job skills. The total person concept also emphasizes that human traits such as physical fitness, self-concept, emotional control, self-awareness, and values orientation are interdependent, with each trait interacting with the other traits to create the total person and shape an individual’s behavior. According to the concept of the Wheel of Life, each individual experiences six areas of life that, when put together, comprise the total person. These areas include the following (Reece, 2012): Family and home Financial and career Physical and health Spiritual and ethical Mental and educational Social and cultural To achieve success in life, individuals must be aware of each of these areas and how they affect life and personal behavior. Each person must realize that he or she cannot devote equal time to every part of life. Likewise, organizations must understand that when they hire an individual, he or she has obligations in each area of life. To be successful, each employee must balance these areas in a way that ensures each one receives sufficient attention. Successful organizations recognize that if the total person can be improved, the organization experiences significant benefits. To promote good health and satisfaction among their employees, some organizations strive to design organizational cultures that support employees in their efforts to balance and achieve success in each area of life. To do that, organization must be aware that employees generally are affected by six major forces that influence their behavior and determine how they will behave in the workplace. According to Schermerhorn, Hunt and Osborn (2005), these forces include the following: abilities, gender, race and culture, attribution, perception and attitude. Abilities are our capabilities and talents, both natural and learned, which enable individuals to successfully perform specific tasks. Individuals have abilities in the following three categories. Intellectual abilities refer to an individual’s intelligence and memory as well as his or her verbal and analytical skills. Physical abilities are an individual’s physical strength, stamina, and motor skills. Self-awareness abilities refer to an individual’s conscious knowledge of his or her personality, including strengths, weaknesses, and other character traits. Gender refers to whether an individual identifies as a male or female. Improving the Total Person 10/5/2020 APUS Content https://apus.brightspace.com/shared/elf/hrmt600/lesson5/index.html 3/13 Race and culture refer to the group(s) that an individual identifies with based on common ancestry, shared physical traits, shared history, and other commonalities such as religious affiliation. Attribution is the process that an individual uses to understand things by determining who or what caused those things to happen. Perception is the process that individuals use to receive, organize, and analyze information and convert it into useful material. Attitude refers to an individual’s tendency to respond positively or negatively to people or things based on his or her values, beliefs, opinions, and other information that they possess. Every behavior that an individual demonstrates is influenced by one or more of these six factors. For example, men and women behave differently, making gender a factor that influences behavior. People from different races and cultures tend to have different opinions about things, making race and culture a factor that determines how someone will behave. Attitudes, perceptions, and attributions all affect what people think and how they will behave. Different people have different abilities, and this influences behavior. To be successful, individuals need to understand these six factors and how each one affects behavior. Likewise, in organizations, HRM professionals and other managers need to be aware of these six factors and recognize that each employee behaves the way he or she does because of the way these factors influence him or her. These factors should be considered in all aspects of the workplace, including the development of organizational cultures and job design. These factors also should be a consideration during performance management and employee appraisals. Performance Management Understanding employee behavior is an important part of performance management, which refers to a process used by HRM professionals and other organization managers to establish standards and motivate employee performance by monitoring employee activities and providing constant feedback on how well each employee is performing his or her job, enabling an organization to achieve its overall goals and objectives. As part of this process, underperforming employees are given the resources they may need, such as training, to enable them to improve their job performance. Watch this short video for an excellent way to address poor performance: Coaching Poor Performance According to Cascio (2010), those involved in a performance management system should be able to handle the following three processes: define, facilitate, and encourage performance. Open file: Transcript https://www.youtube.com/watch?v=O_vlekGIt_M https://apus.brightspace.com/shared/elf/hrmt600/lesson5/elf/Utility/L5%20Coaching%20poor%20performance%20transcript.txt 10/5/2020 APUS Content https://apus.brightspace.com/shared/elf/hrmt600/lesson5/index.html 4/13 As it applies to the workplace, performance refers to the actions that an employee takes to complete tasks and achieve the work assigned to his or her job. In a performance management system, according to Cascio (2010), the concept of performance definition represents a process that requires HRM professionals and other managers to fully explain and define what an employee is supposed to do on the job. This helps ensure that each employee understands the expectations that an organization has for him or her and the things that he or she must do to meet these expectations. With this understanding, each employee focuses on doing his or her part to achieve the organization’s goals and objectives, and each employee respects the need to have his or her performance measured and assessed to determine if changes are needed. Knowing that his or her performance will be appraised motivates employees to perform as effectively as possible when they do their work. 1/3 Define Performance ‹ › Suggested Activities for an Effective Performance Management System According to Banfield and Kay (2008), an effective performance management system will include the following activities, which should be completed by HRM professionals and others involved in the process: Establish the organization’s overall goals and objectives, with long-term strategies for achieving these. Define the key measures of success that will be used to determine if the organization has met its goals and objectives. Establish the departmental, team, and individual employee goals and objectives that should be met to enable the organization to achieve its overall goals and objectives. Define the key measures of success that will be used to determine if departments, teams, and individual employees have achieved their goals and objectives. Evaluate effectiveness by appraising how well the organization, each department, each team, and each employee has performed and whether goals and objectives have been achieved. 10/5/2020 APUS Content https://apus.brightspace.com/shared/elf/hrmt600/lesson5/index.html 5/13 Required Terms for Performance Management To successfully practice performance management, Banfield and Kay (2008) argue that HRM professionals and others involved in the process must understand the following terms: Productivity refers to the ratio of inputs to outputs. At the employee level, this refers to the inputs that were required from each employee to produce specific outputs. At the organization level, this refers to the overall inputs expended by the organization as a whole to produce the organization’s overall outputs. Effectiveness refers to the relationship between objectives and outcomes, and whether goals were successfully achieved. Effort refers to the amount of resources and the intensity of work that must be expended to achieve desired outcomes. Effort bargain refers to how much work employees must do, and the intensity of work required, to receive rewards and recognition. Discretionary effort refers to the idea that employees do not work at full capacity and that management has no control over whether they will decide to expend higher levels of effort. Contribution refers to extra effort that employees put forth in addition to the efforts expected of them as per their job descriptions. HRM professionals and other managers involved in performance management must use the information presented thus far in this lesson to inform the performance appraisal process, which is one of the most critical activities in performance management. 10/5/2020 APUS Content https://apus.brightspace.com/shared/elf/hrmt600/lesson5/index.html 6/13 To ensure that employees do the work that is expected of them, managers must periodically evaluate employees’ job performance. As stated above, this is a critical part of a performance management system. A performance appraisal “is a process of systematically evaluating performance and providing feedback on which performance adjustments can be made” (Schermerhorn, Hunt, & Osborn, 2005, p. 168). Performance appraisals generally serve the following purposes: Define specific criteria and provide benchmarks against which an employee’s job performance can be measured. A benchmark can be defined as a standard or measure that is used as a reference point for judging and evaluating an employee’s performance and the quality of his or her work. Provide a means for measuring past job performance and comparing it to current and future job performance. Identify areas of concern where employees need motivation or other assistance, such as training and resources, to improve their job performance. Distinguish excellent, average, and substandard job performance, thereby justifying feedback, including rewards and punishments, that are given to employees based on their job performance. Appraisal Systems Performance Appraisal as a Decision Making Tool Performance appraisals assist HRM professionals and managers as they make two types of decisions — evaluative and development. The information gained from performance appraisals provides justification for decisions and actions in both of these areas: Evaluative decisions