Chapter 10

MANAGING
EMPLOYEES’
PERFORMANCE

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 What Do I Need to Know? 1
L O 10-1 Identify the activities involved in performance
management.
L O 10-2 Discuss the purposes of performance management
systems.
L O 10-3 Define five criteria for measuring the effectiveness of
a performance management system.
L O 10-4 Compare the major methods for measuring
performance.
L O 10-5 Describe major sources of performance information in
terms of their advantages and disadvantages.
©McG
What Do I Need to Know? 2
L O 10-6 Define types of rating errors, and explain how to
minimize them.
L O 10-7 Explain how to provide performance feedback
effectively.
L O 10-8
Loading…
Summarize ways to produce improvement in
unsatisfactory performance.
L O 10-9 Discuss legal and ethical issues that affect
performance management.
level of KSAO
required
Training:fill in the
gap
x
Turrentlevel ofthe employee
- KSAU
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The Process of Performance Management
Process requires:
• Knowing what activities and outputs are desired
• Observing whether the activities and outputs occur
• Providing feedback to help employees meet expectations.
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Figure 10.1 Steps in the Performance Management Process
Quitrinb co lap lai string Ko define, sem pet lai Top level:cty theo
lam dink huong whin,
wai, tair
tring phing bar plain
gi, n

Ngoining acceptale range: strategic

Translate from the
qual tot koctr, Koate.
quaxas
the
to
actions, goals

traing n view hoar define lai Strategic

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5, 6 a
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at
rightplace
right tech/equip...

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ca
gi,
i
I, hi tro"-> the te"lain

hier quei.
-

nhung
ato
Sources: Based on E. Pulakos, Performance Management (Oxford:
relevant
so various tools -> assess
Wiley-Blackwell, 2009); H. Aguinis, “An Expanded View of
aspects ofthe performance Performance Management,” in Performance Management, ed. J. W.
Jump to long description in appendix. Smith and M. London (San Francisco: Jossey-Bass, 2009), pp. 1–43;
J. Russell and L. Russell, “Talk Me Through It: The Next Level of
©McG
Purposes of Performance Management
Strategic Purpose
• Helps organization achieve business objectives
Administrative Purpose
dank sach
tier cornaim:Kochiadin, philtvar
E.g:tinh thuong
lam vis
hquai
-

• Ways in which organizations use system to provide

information for day-to-day decisions
Developmental Purpose
• Basis for developing employees’ knowledge and skills
©McG
Suppose you are a manager and the
performance management system your
company used often created competition
among team members. How would you
address this issue?
POLLING
A. I wouldn’t do anything; competition is good.

QUESTION
B. I would make collaboration be one of the criteria
for evaluation.
C. I would increase the specificity of the feedback I
provided.
D. I would focus my review on personality traits,
rather than tasks.
©McG
Criteria for Effective Performance Management

Effective Performance Measures for"

Strategy binstor" -> criterior
ing thay
• Fit with strategy: support company’s goals whan view Iam i this de
ghinham, girl.
dank 2:sdes ha chow stain girl: tyian or comust
• Validity: measure what it is intended to, relevant aspects
• Reliability: yield consistent results over time and raters
• Acceptability: accepted by those who use it
• Specific feedback: give specific expectations and methods
to achieve goals
©McG
Figure 10.2 Contamination and Deficiency of a
Job Performance Measure

n khony o thing, can

thito ono -28'yn no kictric to
mucin aKH
chuyen
S

v. dung he - gap 14 +
sales
Wien sale-tile
VD:wvien
- trang phur
brang!shuc-gip KH+

Jump to long description in appendix.

©McG
Methods for Measuring Performance 1
Making Comparisons
De, nhanh, tiet
kiemtgian no bias-phuz vo dank gia stint chik xas ko car

• Simple ranking - Method of performance measurement

that requires managers to rank employees in their group
from the highest performer to the poorest performer.
Ancint tile Cho department:10%, 20% A, 259. B, 25.C, 109.D -> Allocate whan new cho phil hiptile;vair bias, Ico'tien che stint
I

10%E himy irang

-

• Forced-distribution method - Method of performance

7

managerwhat vai a
whom
thing -

measurement that assigns a certain percentage of

employees to each category in a set of categories.
• Paired-comparison method - Method of performance
measurement that compares each employee with each other
employee to establish rankings
com what what

D)
tot how:lat's ranl
Laisr, an
toig: i ntoig - cao

Kobt: tot how nth, o his

mat o fine chink xas.
xit him outliers:ais tot, ste -> 19
↓
-

so is All: So D All:
tot He
©McG
Methods for Measuring Performance 2
Rating Attributes

Graphic Rating Scale Mixed-Standard Scale

• Lists traits and provides a • Uses several statements to
rating scale for each trait describe each trait
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• Employer uses scale to • Employer scores employee
indicate extent to which in terms of how employee
employee displays each trait compares to statements
chia s avel
1 dimension

• Rating scales are subjective

and vary by employer
VD:thang likesert
©McG
Methods for Measuring Performance 2
phai
criterias: valid
©McG
Methods for Measuring Performance 2

+ x
it
+

->
x
↳
M
©McG
Methods for Measuring Performance 2
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Methods for Measuring Performance 3
Rating Behaviors
doit bin de ghiwhan
Behaviorally Anchored
chia viosk
-

Critical-Incident Method
Dia he's anh perform rat tot
vo + wat te
-
-
-
ghi lai
-
->

lam tot S te ...

&
dan't giat cagi Rating Scale (BARS)
• Specific instances of • Builds on critical-incidents
effective and ineffective • Behaviors rated in terms of
employee behavior scale showing specific
documented statements that describe
• Employees receive feedback behaviors at different levels
about what they do well and of performance
what they do poorly
©McG
Methods for Measuring Performance 4
Rating Behaviors continued
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Ma mic di, Iqua'sHinglevel new, mota the"
m

Behavioral Observation Scale Organizational Behavior

(BOS)
• A variation of BARS
• Rating scale includes all
critical behaviors
No huong tap taihimany lai Lequal mong
• Asks the manager to rate
frequency with which
employee has exhibited each
Modification (OBM)
• Builds on branch of
psychology call behaviorism
muon
• Employer provides feedback
and reinforcement to
encourage behaviors that
achieve company goals
perlamtheo huong
theirchinh mint minii

behavior during period

Anh i day trito hqua throng xuyer? Frequency

©McG
Methods for Measuring Performance 5
Measuring Results chic tren
-
Iquai:Sosai ptain,
ID:Gang vin day X frit ->day
thisgian...
isfit hon- When
thing
• Productivity: getting more done with smaller amount of
resources increases company’s profits
• Management by Objectives (MBO) Noting hanh org hader:everyone contribute to
the

1) viio fat r a tier clan

• People at each level of organization set goals in process that flows

from top to bottom
• Employees at all levels contribute to organization’s overall goals
• Set goals become standards for evaluating employee performance
• Specific goals setting together and then giving feedback base on the
monitor progress toward the goals
©McG
Methods for Measuring Performance 6

©John Fedele/Blend Images/Getty Images

A TQM approach to performance measurement includes subjective feedback

from managers, peers, and customers as well as objective feedback based on the
work process.
©McG
Methods for Measuring Performance 7
Total Quality Management
• Assessment of both individual performance and the system
within which the individual works
• Yields subjective feedback from managers
• Yields objective feedback based on work process; obtained from a
variety of methods called statistical quality control
©McG
Sources of Performance Information
360-Degree Performance Appraisal
• Performance measurement that combines information from
a variety of sources
• Results in most complete assessment possible

Customer feedback is one source of

information used in performance appraisals.
Other sources include managers, peers,
subordinates, and employees themselves.
©Thinkstock/Getty Images
©McG
Errors in Performance Measurement 1
Types of Rating Errors
• Raters tend to give higher evaluations to people they
consider similar to themselves -> Conuhlng
traits
dank gia
minh
nng cao

-
cing vs

• Contrast error: rater compares individual not against

-

objective standard but against other employees

standard mas's other
employees
->
os's
©McG
Errors in Performance Measurement 2
Types of Rating Errors continued
• Distributional error: rater uses only part of rating scale
-> danhgid
all ppl(dihovique, danh bal
daitot de dai
-

• Leniency: reviewer rates everyone near top

danh gidqua khokhan
->
• Strictness: reviewer favors lower rankings
cai binh thong
-> gicing rate
• Central tendency: reviewer rates everyone in middle of scale
©McG
Errors in Performance Measurement 3
Types of Rating Errors continued
• Rater bias: rater lets their opinion of one quality color their
opinion of others all di tot
- diatrin 1 o'tot
vacho rang
• Halo error: o'i
bias causes favorable
Xo
ratings
-> diatsen I vodanh gid t at c a de
• Horns error: bias causes negative ratings
©McG
Figure 10.6 Possible
Ratings Errors in
Performance
Measurement

Jump to long description in appendix.

©McG
Bill rates all of his employees very low except
for Jan. Bill gives Jan above average ratings
because she consistently comes to work on
time. Bill makes the rating errors of _____ for
his team and of _____ for Jan.
POLLING
A. leniency; horn
QUESTION
B. strictness; halo
C. similar-to-me; central tendency
D. horn; strictness
©McG
Errors in Performance Measurement 4

>
Ways to Reduce Errors
• Raters can be trained to avoid making errors using a variety
of methods: A cham bannerG+ ate
• Rating fictional employees and discussing decisions
e

• Studying actual examples of various performances

• Focusing on complex nature of employee performance

• Data analysts can be used to find patterns

©McG
Errors in Performance Measurement 5
Political Behavior in Performance Appraisals
• Sometimes raters are political; they distort evaluations to
advance their own personal goals
• Calibration meetings can be used to minimize politics
• Managers discuss performance ratings and provide evidence
supporting their ratings with goal of eliminating intentional errors
©McG
Giving Performance Feedback 1
Scheduling Performance Feedback
• Should be a regular, expected management activity
• Beneficial when scheduled frequently
• Most effective when information does not surprise employee
• Employees motivated when they know if they are on right track
©McG
Giving Performance Feedback 2
Preparing for a Feedback Session
• Managers should be well prepared for each session
• Managers should ask each employee to complete a self-
assessment ahead of time
Loading…

When giving performance feedback, do it in

an appropriate meeting place that is neutral
and free of distractions. What other factors are
important for a feedback session?
©Ryan McVay/Getty Images
©McG
Giving Performance Feedback 3
Conducting the Feedback Session
• “Tell-and-sell” approach ->
Fihg lng nghe nhanvan
·

• Managers tell employees their ratings and justify those ratings

• “Tell-and-listen” approach -> FB vo langnghe

• Managers tell employees their ratings and then let employees

explain their own view
F langnghe +
tim giai phap
so

• “Problem-solving” approach -
+

• Managers and employees work to solve performance problems

©McG
Finding Solutions to Performance Problems
Type of action depends on what employee lacks
• Lack of ability
• Lack of motivation
• Lack of both
• Lack of neither
Employees with high ability and high motivation are
generally solid performers
©McG
Figure 10.7
Questions for
Diagnosing
Remedies to
Performance
Problems

Jump to long description in appendix.

Sources: Based on G. Rummler, “In Search of the Holy Performance Grail,” Training and Development, April 1996, pp. 26–31; C. Reinhart, “How to
Leap over Barriers to Performance,” Training and Development, January 2000, pp. 20–24; F. Wilmouth, C. Prigmore, and M. Brya, “HPT Models: An
Overview of the Major Models in the Field,” Performance Improvement 41 (2002), pp. 14–21.
©McG
Legal and Ethical Issues in
Performance Management 1
Legal Requirements for Performance Management
• Lawsuits often arise in two areas:
• Uniform Guidelines on Employee Selection Procedures
• Unjust dismissal

• System should be legally defensible

• Based on valid job analyses
• Evaluations based on behaviors rather than traits
• Uses multiple raters whose ratings can be appealed
• Provides employees with feedback and coaching or training
©McG
Legal and Ethical Issues in
Performance Management 2
Electronic Monitoring and Employee Privacy
• Organizations often store records of employees’ ratings and
evaluations in electronic databases
• Can improve productivity, but raises privacy concerns
• Electronic systems should not substitute for careful
management
©McG

Appendix of Image Long

Descriptions
 Appendix to Figure 10.1 Steps in the
Performance Management Process
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.

Return to original slide

©McG
Appendix to Figure 10.2 Contamination and
Deficiency of a Job Performance Measure
One circle is labeled “job performance measure.”
The second circle is labeled “actual, or true, job performance.”
Where the two circles overlap is labeled “validity”, and includes
information gathered by the job measure that is relevant to job
performance.
Contamination includes information gathered by the job measure
that is irrelevant to job performance.
Deficiency includes information that includes actual job
performance.

Return to original slide

©McG
Appendix to Figure 10.6 Possible Ratings Errors in
Performance Measurement
Similar-to-me error overstates performance.
Contrast error leads to variation in relation to performance.
Distributional errors:
Leniency overstates performance.
Strictness understates performance.
Central tendency leads to variation in relation to performance.
Overall impression:
Halo error overstates performance.
Horns error understates performance.
Return to original slide
©McG
Appendix to Figure 10.7 Questions for Diagnosing
Remedies to Performance Problems
Questions are grouped in terms of potential remedies.
Inputs: does the employee know what he or she is supposed to do? Are
procedures clear and logical? Do employees have adequate resources
(supplies, tools, time)? Do other work demands conflict with performance?
Feedback: does the employee get frequent performance feedback? Is the
feedback timely, accurate, and understandable?
Goals and Objectives: are goals specified? Does the employee know the goals?
Does the employee believe the goals are achievable and fair?
Rewards and Consequences: are there rewards for superior performance? Are
the rewards valued? Are the rewards timely? Are there rewards (such as co-
worker approval) for falling short?

Return to original slide

 Asana’s Performance Management Aligns with Its Values

Dustin Moskovitz and Justin Rosenstein founded their soft-

ware company. Asana, because they had not only an idea for
a product, but also a vision for how to operate. The product,
also called Asana (the Sanskrit word for a pose in yoga), is
software for enabling teamwork. The vision is to apply
Eastern wisdom traditions to create a culture of clarity,
authenticity, and mindfulness. That vision provides the
defining criteria for performance management, and the result
is a workplace in which key stakeholders-employees in
Silicon Valley’s highly competitive market for high-tech
workers—feel valued and empowered.
strategic
Asana offers a means of operating in which everyone has
clear goals and responsibilities, coupled with a high degree of
authority. This exists within an environment of constant
observation, learning, and improvement. In this context,
performance management is not so much about checking up
on employees to find out what they have been doing; Asana’s
own teamwork software takes care of that. Rather,
performance management is about enabling employees to
continue improving along with the entire company.
Strategic Goal setting applies the principle of clarity. Asana pres
ents
the company’s purpose as a pyramid. At the top is the mission
to “help humanity thrive by enabling all teams to work
together effortlessly.’’ Below that is an easily understood
three-part strategy of making a product that enables effort-
less teamwork, getting the product to all teams, and making
 Asana the company that does both of these better than any
other. To carry out the strategy, the company sets roughly a
dozen business, product, and internal objectives for the year.
Every team has key results to achieve some of these
objectives, and every employee works at projects aimed at the
key results. Cross-functional teams define the higher-level
goals in twice-yearly meetings to review the previous six
months’ performance. And once a year, each employee
defines per sonal goals that align with the objectives in the
pyramid.

The degree of empowerment is a striking feature of work at

Administrative Asana. The planning process identifies every task and piece of
work, with a deadline for each. Each one is called an area of
0
responsibility (AOR), and each is assigned to one person, the
AOR holder, based on the person’s expertise. AOR holders
are encouraged to discuss issues with their col leagues, but
they have the full authority to make decisions within their
area. To enable wise use of this authority, all employees
receive leadership training that includes listening, giving and
developmental receiving feedback nondefensively, and “holding beliefs
lightly.” that is. being open to new ideas.

This degree of empowerment would make it difficult for a

manager to offer performance feedback in the form of
e
directions to improve. Rather, the emphasis is on mentor ing
development and coaching. Employees complete annual self-reviews, and
regular peer reviews provide another source of perfor mance
data. Managers meet frequently one-on-one with their direct
reports. Because the Asana software is already telling
managers what their people have accomplished and whether
they are on track toward goals, the meetings focus on
employees' needs and goals. When problems arise at any level
of the organization—including when an employee leaves—the
response is to conduct an analysis of the underlying reason-;
so that processes can be improved.

So far. this approach is delivering exceptional performance,

including high sales growth and employee satisfaction.
Maintaining a culture in a fast-growing company is difficult,
but the founders point out that change is built into Asana’s
method of operating. If the culture stops working, the owners
hold their beliefs lightly and will move the com pany into a
new pose.

Questions
1. How well do you think Asana’s approach to performance
management meets the (a)strategic, (b) administrative,
and (c) strategic purposes of performance management?
Use evidence from the case to support your opinions.

2. Like other high-tech companies, Asana is struggling to

build a more diverse workforce. Identify two ways the
company is or could be ensuring that its performance
management system does not discriminate.
Reducing 4
error
performance assessment:
data
Using analysis
training leadership