Oromia Stae University

Department of HRML

Lecture note on Performance Management

Weekend Program

2022

Batu

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 Oromia State University
Human Resource Management and Leadership Team HRML
Handout on Performance Management I (Weekend Program)

E+R=O
Event + Response = Outcome

Introduction

Performance management is a system designed to identify the ways to achieve organizational

goals through constant assessment and feedback leading to improvement of employee
performance. Performance management, unlike the performance appraisal or annual evaluation
process, is an ongoing assessment of employees in a manner geared to match their goals to the
organizational goals. It also makes strong use of goal setting and metrics to identify progress and
areas of individual strengths.

Performance management systems, in various forms, have been employed for nearly two
millennia. In the third century AD, the Chinese were not only using performance appraisal
systems but were analyzing each other’s biases in their evaluations of their employees (Murphy
and Cleveland; Evans). During the Industrial Revolution of the 18 th century, factory managers
became aware of the importance of their employees’ performance on their production outputs
(Grote and Grote; Murphy and Cleveland). The development of the philosophy of performance
evaluation systems in America has been attributed to such researchers and philosophers as Peter
Drucker and Douglas McGregor, who developed ideas of management by objectives (MBOs)
and employee motivation (Evans, 4; Murphy and Cleveland). Spiegel reported in 1962 that by
the early 1960s more than 60% of American organizations had a performance appraisal system.
The system’s popularity stemmed from the Army’s implementation of a performance
management system for its officers (Murphy and Cleveland). Since then, researchers have
continued to develop theories of how different performance evaluation methods can contribute to
the success of the organization.

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Generally, we will critically elaborate the concept of performance and performance management,
high performing organizational culture, contextual performances, counterproductive behaviors,
performance of multinational organization, coaching, performance, and informal learning and
performance.

OBJECTIVES
The objectives of Performance Management are to:
 Describing the term performance and performance management
 Elaborating the concept of high performing organizational culture
 Describing the concept of contextual performance
 Describing counterproductive behaviors
 Describing performance in multinational companies
 Elaborating the relationship between learning and performance
 Relating coaching with performance
 Increase two-way communication between supervisors and employees
 Clarify mission, goals, responsibilities, priorities and expectations
 Identify and resolve performance problems
 Recognize quality performance
 Provide a basis for administrative decisions such as promotions, succession and strategic
planning, and pay for performance.

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 Chapter One: Overview Of Performance Management

1. Definition
I. Definitions of performance
Performance is the accomplishment of a given task measured against preset known standards of
accuracy, completeness, cost, and speed. In a contract, performance is deemed to be
the fulfillment of an obligation, in a manner that releases the performer from all liabilities under
the contract. For effective performance to exist there should be:
 Accuracy
 Completeness
 Cost
 Speed
II. Definitions of Performance Management
A. Performance management is a means of getting better results from the organization,
teams and individuals within an agreed framework of planned goals, objectives and
standards (Armstrong and Murlis, 1994).
B. Performance management is the process by which the company manages its
performance in line with its corporate and functional strategies and objectives (Bitici,
Carrie and McDevitt, 1997).
C. Performance management is a range of practices an organization engages in to
enhance the performance of a target person or group with the ultimate purpose of
improving organizational performance (DeNisi, 2000).
D. Performance management is a broad set of activities aimed at improving employee
performance (DeNisi and Pritchard, 2006).
E. A systematic approach to improving individual and team performance in order to
achieve organizational goals (Hendry, Bradley and Perkins, 1997).
F. A clear focus on how each employee can contribute to the overall success of the
organization lies at the heart of performance management systems (IDS, 1997).
G. The essence of performance management is the development of individuals with
competence and commitment, working towards the achievement of shared

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 meaningful objectives within an organization that supports and encourages their
achievement (Lockett, 1992).
H. Performance management aims to improve strategic focus and organizational
effectiveness through continuously securing improvements in the performance of
individuals and teams (Philpott and Sheppard, 1992).
I. Performance management is a systematic approach to improving business and team
performance to achieve business objectives (Strebler, Bevan, and Robertson, 2001).
J. Performance management is about ‘directing and supporting employees to work as
effectively and efficiently as possible in line with the needs of the organization’
(Walters, 1995).

K. Performance management is the practice of actively using performance data to

improve the public's health. This practice involves strategic use of performance
measures and standards to establish performance targets and goals, to prioritize and
allocate resources, to inform managers about needed adjustments or changes in policy
or program directions to meet goals, to frame reports on the success in meeting
performance goals, and to improve the quality of public health practice.

2. Performance Management system and its components

Performance Management components include:
 Performance Standards: establishment of organizational or system performance
standards, targets and goals and relevant indicators to improve public health practice
 Performance Measures: application and use of performance indicators and measures
 Reporting of Progress : documentation and reporting of progress in meeting standards
and targets and sharing of such information through feedback
 Quality Improvement: establishment of a program or process to manage change and
achieve quality improvement in public health policies, programs or infrastructure based
on performance standards, measurements and reports.

Remarks

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A Performance Management System is the continuous use of all the above practices so that they
are integrated into the organization's core operations. Performance management can be carried
out at multiple levels, including the program, organization, community, and state levels.

3. Six Purposes of a Performance

a. Strategic: It links the organization’s goals with individual goals, thereby reinforcing
behaviors consistent with the attainment of organizational goals.
b. Administrative: It is a source of valid and useful information for making decisions
about employees, including salary adjustments, promotions, employee retention or

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 termination, recognition of superior performance, identification of poor performers,
layoffs, and merit increases.
c. Communication: It allows employees to be informed about how well they are doing,
to receive information on specific areas that may need improvement, and to learn
about the organization’s and the supervisor’s expectations and what aspects of work
the supervisor believes are most important.
d. Developmental: It includes feedback, which allows managers to coach employees
and help them improve performance on an ongoing basis.
e. Organizational maintenance: It yields information about skills, abilities, promotional
potential, and assignment histories of current employees to be used in workforce
planning as well as assessing future training needs, evaluating performance
achievements at the organizational level, and evaluating the effectiveness of human
resource interventions (for example, whether employees perform at higher levels after
participating in a training program).

4. Evolution Performance Management

The term performance management gained its importance from the times when the competitive
pressures in the market place started rising and the organizations felt the need of introducing a
comprehensive performance management process into their system for improving the overall
productivity and performance effectiveness. The performance management process evolved in
several phases.

 First Phase: The origin of performance management can be traced in the early 1960’s
when the performance appraisal systems were in practice. During this period, Annual
Confidential Reports (ACR’s) which was also known as Employee service Records
were maintained for controlling the behaviors of the employees and these reports
provided substantial information on the performance of the employees.

Any negative comment or a remark in the ESR or ACR used to adversely affect the
prospects of career growth of an employee.

The assessments were usually done for ten traits on a five or a ten-point rating scale
basis. These traits were job knowledge, sincerity, dynamism, punctuality, leadership,

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 loyalty, etc. The remarks of these reports were never communicated to the employees
and strict confidentiality was maintained in the entire process.

The employees used to remain in absolute darkness due to the absence of a transparent
mechanism of feedback and communication. This system had suffered from many
drawbacks.

 Second Phase: This phase continued from late 1960’s till early 1970’s, and the key
hallmark of this phase was that whatever adverse remarks were incorporated in the
performance reports were communicated to the employees so that they could take
corrective actions for overcoming such deficiencies.

In this process of appraising the performance, the reviewing officer used to enjoy
a discretionary power of overruling the ratings given by the reporting officer. The
employees usually used to get a formal written communication on their identified
areas of improvements if the rating for any specific trait used to be below 33%.

 Third Phase: In this phase, the term ACR was replaced by performance appraisal. One
of the key changes that were introduced in this stage was that the employees were
permitted to describe their accomplishments in the confidential performance reports. The
employees were allowed to describe their accomplishments in the self-appraisal forms in
the end of a year. Besides inclusion of the traits in the rating scale, several new
components were considered by many organizations, which could measure the
productivity and performance of an employee in quantifiable terms such as targets
achieved, etc. Certain organizations also introduced a new section on training needs in
the appraisal form. However, the confidentiality element was still being maintained and
the entire process continued to be control oriented instead of being development oriented.
 Fourth Phase: This phase started in mid 1970’s and its origin was in India as great
business tycoons like Larsen & Toubro, followed by State Bank of India and many others
introduced appreciable reforms in this field.

In this phase, the appraisal process was more development driven, target based
(performance based), participative and open instead of being treated as a confidential

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 process. The system focused on performance planning, review and development of an
employee by following a methodical approach.

In the entire process, the appraise (employee) and the reporting officer mutually decided
upon the key result areas in the beginning of a year and reviewed it after every six
months. In the review period various issues such as factors affecting the performance,
training needs of an employee, newer targets and the ratings were discussed with the
appraise in a collaborative environment. This phase was a welcoming change in the area
of performance management and many organizations introduced a new HR department
for taking care of the developmental issues of the organization.

 Fifth Phase: This phase was characterized by maturity in approach of handling people’s
issues. It was more performance driven and emphasis was on development, planning, and
improvement. Utmost importance was given to culture building, team appraisals and
quality circles were established for assessing the improvement in the overall employee
productivity.
5. Performance management process
As noted earlier, performance management is a continuous process. Accordingly, it involves the
following stages (Aguinis, 2009; Grote, 1996):

Stage 1: Pre - Requisites

Stage 2: Performance Planning
Stage 3: Performance Execution
Stage 4: Performance Assessment
Stage 5: Performance Review
Stage 6: Performance Renewal and Reconstructing
Stage 1: Prerequisites
There are two important prerequisites that are needed before performance management system is
implemented:
i. knowledge of the organization’s mission and strategic goals
ii. Knowledge of the job in question

i. knowledge of the organization’s mission and strategic goals

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If there is a lack of clarity regarding where the organization wants to go, or the relationship
between the organization ’ s mission and strategies and each of its unit ’ s mission and strategies
is not clear, there will be a lack of clarity regarding what each employee needs to do and achieve
to help the organization get there.

An organization’s mission and strategic goals are a result of strategic planning, which allows an
organization to clearly define its purpose or reason for existing, where it wants to be in the
future, the goals it wants to achieve, and the strategies it will use to attain these goals. Once the
goals for the entire organization have been established, similar goals cascade downward, with
departments setting objectives to support the organization ’ s overall mission and objectives. The
cascading continues downward until each employee has a set of goals compatible with those of
his or her unit and the organization.

ii. Knowledge of the job in question

The second important prerequisite before a performance management system is implemented is
to understand the job in question. This is done through job analysis.

Job analysis is a process of determining the key components of a particular job,

including activities, tasks, products, services, and processes.

Stage 2: Performance Planning

The performance planning stage has the goal for employees to have thorough knowledge of the
performance management system. In fact, at the beginning of each performance cycle, the
supervisor and the employee meet to discuss, and agree on, what needs to be done and how it
should be done. This performance planning discussion includes a consideration of:

i. Results
ii. Behaviors
iii. Development plan

i. Results: Results refer to what needs to be done or the outcomes an employee must
produce. A consideration of results needs to include the key accountabilities, or broad
areas of a job for which the employee is responsible for producing results.

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 A discussion of results also includes specific objectives that the employee will
achieve as part of each accountability.
Objectives are statements of important and measurable outcomes.
Finally, discussing results also means discussing performance
standards. A performance standard is a yardstick used to evaluate how
well employees have achieved each objective. Performance standards
provide information about acceptable and unacceptable performance
(for example, quality, quantity, cost, and time).

Consider the job of university professor. Two key accountabilities are teaching
(preparation and delivery of instructional materials to students) and (2) research (creation
and dissemination of new knowledge).

An objective for teaching could be “to obtain a student evaluation of teaching

performance of 3 on a 4 - point scale.”

An objective for research could be “to publish two articles in scholarly refereed journals
per year.”

Performance standards could be “to obtain a student evaluation of teaching performance

of at least 2 on a 4 - point scale” and “to publish at least one article in scholarly refereed
journals per year.”

Thus, the objective is the desired level of performance, whereas the

standard is usually a minimum acceptable level of performance.

ii. Behaviors: Although it is important to measure results, an exclusive emphasis on results

can give an incomplete picture of employee performance. This is particularly true today
because, in contrast to the hierarchical organization chart of the 20th - century
organization, the 21st - century organization is far more likely to look like a web: an fl at,
intricately woven form that links partners, employees, external contractors, suppliers, and
customers in various collaborations (Cascio & Aguinis, 2008b).

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 Accordingly, for some jobs it may be difficult to establish precise objectives and
standards. For other jobs, employees may have control over how they do their jobs, but
not over the results of their behaviors.
For example,
The sales figures of a salesperson could be affected more by the assigned sales territory
than by the salesperson’s ability and performance. Behaviors, or how a job is done, thus
constitute an important component of the planning phase.

This is probably why, in addition to sales figures, sales people like to be

appraised on such behavioral criteria as communications skills and product
knowledge (Pettijohn, Parker, Pettijohn, & Kent, 2001).

Generally,
A consideration of behaviors includes discussing competencies, which are measurable clusters
of knowledge, skills, and attitudes (KSAs) that are critical in determining how results will be
achieved (cf. Shipman et al., 2000).

Examples of competencies are:

 Customer Service
 Written Or Oral Communication
 Creative thinking
 Dependability

iii. Development plan: Development plans usually include both results and behaviors.
Achieving the goals stated in the development plan allows employees to keep abreast of
changes in their field or profession. Such plans highlight an employee’s strengths and the
areas in need of development, and they provide an action plan to improve in areas of
weaknesses and further develop areas of strength (Reyna & Sims, 1995). In a nutshell,
personal development plans allow employees to answer the following questions:

 How can I continually learn and grow in the next year?

 How can I do better in the future?
 How can I avoid performance problems faced in the past?

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Remark
Information to be used in designing development plans comes from the appraisal form.
Specifically, a development plan can be designed based on each of the performance dimensions
evaluated. For example, if the performance dimension “communication” is rated as substandard,
this area would be targeted by the development plan.

In addition, however, development plans focus on the knowledge and skills needed for more
long - term career aspirations. In addition to improved performance, the inclusion of
development plans and, in more general terms, the identification of employee strengths and
weaknesses as part of the performance management system have another important benefit:
employees are more likely to be satisfied with the system (Boswell &Boudreau, 2000 ).

The direct supervisor or line manager has an important role in the creation and completion of
the employee’s development plan. This active role will help the supervisor understand the
process from the employee’s perspective, anticipate potential roadblocks and defensive attitudes,
and create a plan in a collaborative fashion (Dunning, 2004).

First, the supervisor needs to explain what would be required for the employee to achieve the
desired performance level, including the steps that an employee must take to improve
performance. Provide this information needs to together with information on the probability of
success if the employee completes the suggested steps. Second, the supervisor has a primary role
in referring the employee to appropriate development activities that can assist the employee in
achieving her goals. This includes helping the employee select a mentor, appropriate reading
resources, courses, and so forth.

Third, the supervisor reviews and makes suggestions about the development objectives.
Specifically, the supervisor helps assure the goals are achievable, specific, and doable. Fourth,
the supervisor has primary responsibility for checking on the employee’s progress toward
achieving the development goals. For example, the supervisor can remind the employee of due
dates and revise goals if needed. Finally, the supervisor needs to provide reinforcements so the
employee will be motivated to achieve the development goals. Reinforcements can be extrinsic
and include rewards such as bonuses and additional benefits, but reinforcements can also include

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the assignment of more challenging and interesting work that takes advantage of the new skills
learned.

Finally, a tool that has become popular in helping employees, particularly those in supervisory
roles, improve performance by gathering information from different groups is the 360 – degree
feedback system (Morgeson, Mumford, & Campion, 2005 ). These systems are called 360 -
degree systems because information is gathered from individuals all around the employee.

Specifically, information on what performance dimensions could be improved is gathered from

superiors, peers, customers, and subordinates. This information is usually collected
anonymously/incognito/secrete to minimize rating inflation.

Employees also rate themselves on the various performance dimensions and

compare self - perceptions with the information provided by others.

A gap analysis is conducted to examine the areas for which there are large discrepancies
between self -perceptions and the perceptions of others. A 360 - degree feedback system report
usually includes information on dimensions for which there is agreement that further
development is needed. This information is used to create a development plan. Implementing a
360 - degree feedback system should not be a one - time - only event. The system should be in
place and data collected over time on an ongoing basis. The implementation of ongoing 360 -
degree feedback systems is sometimes labeled a 720 - degree feedback system, referring to the
fact that the collection of 360 - degree data takes place at least twice.

In short, administering the system only once will not be as beneficial as

administering the system repeatedly. Once the prerequisites are met and the
planning phase has-been completed, we are ready to begin the implementation
of the performance management system. This includes performance execution,
assessment, review, and renewal and reconstructing.

Stage 3: Performance Execution: Once the review cycle begins, the employee strives to
produce the results and display the behaviors agreed on earlier as well as to work on
development needs. The employee has primary responsibility and ownership of this process.
Employee participation does not begin at the performance execution stage, however.

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As noted earlier, employees need to have active input in the development of the job descriptions,
performance standards, and the creation of the rating form. In addition, at later stages, employees
are active participants in the evaluation process in that they provide a self - assessment and the
performance review interview is a two - way communication process.

Although the employee has primary responsibilities for performance execution, the supervisor
also needs to do his other share of the work. Supervisors have primary responsibility over the
following issues:
Observation and documentation: Supervisors must observe and document
performance on a daily basis. It is important to keep track of examples of both
good and poor performance.
Updates: As the organization’s goals may change, it is important to update and
devise initial objectives, standards, and key accountabilities (in the case of results)
and competency areas (in the case of behaviors).
Feedback: Feedback on progression toward goals and coaching to improve
performance should be provided on a regular basis, and certainly, before the
review cycle is over.
Resources: Supervisors should provide employees with resources and
opportunities to participate in development activities.
Thus, they should encourage (and sponsor) participation in training, classes, and
special assignments. Overall, supervisors have a responsibility to ensure that the
employee has the necessary supplies and funding to perform the job properly.
Reinforcement: Supervisors must let employees know that their outstanding
performance is noticed by reinforcing effective behaviors and progress toward
goals. In addition, supervisors should provide feedback regarding negative
performance and how to remedy the observed problem. Observation and
communication are not sufficient. Performance problems must be diagnosed early
and appropriate steps must be taken as soon as the problem is discovered.

However, what determines whether an employee is performing well or not?

A combination of three factors allows some people to perform at higher levels than others:

 Declarative knowledge,

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  Procedural knowledge
 Motivation
Declarative knowledge is information about facts and things, including information regarding a
given task’s requirements, labels, principles, and goals.

Procedural knowledge is a combination of knowing what to do and how to do it and includes

cognitive, physical, perceptual, motor, and interpersonal skills.

Motivation involves three types of choice behaviors:

I. choice to expend effort (for example, “ I will go to work today ” ),
II. choice of level of effort (for example,“ I will put in my best effort at work ”
versus “ I will not try very hard ” ), and
III. Choice to persist in the expenditure of that level of effort (for example, “I will
give up after a little while” versus “I will persist no matter what”).

Remarks
Because performance is affected by the combined effect of three different factors, managers
must find information that will allow them to understand whether the source of the problem is
declarative knowledge, procedural knowledge, motivation, or some combination of these
three factors.

If an employee lacks motivation but the manager believes the source of the problem is
declarative knowledge, the manager may send the employee to accompany - sponsored training
program so that he can acquire the knowledge that is presumably lacking.

On the other hand, if motivation is the problem, then the implementation of some type of plan
may be a good intervention.

This is why performance management systems need not only to measure

performance but also to provide information about the source of any
performance deficiencies, which is done in the performance assessment stage.
Stage 4: Performance Assessment

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In the assessment phase, both the employee and the manager are responsible for evaluating the
extent to which the desired behaviors have been displayed, and whether the desired results have
been achieved. Both participate in the daily evaluation process.
Although many sources can be used to collect performance information (for example, peers or
subordinates), in most cases the direct supervisor provides the information. This also includes an
evaluation of the extent to which the goals stated in the development plan have been achieved.

It is important that both the employee and the manager take ownership of the assessment process.
The manager fills out his and others appraisal form, and the employee should also fill out his or
her form.

The fact that both parties are involved in the assessment provides good
information to be used in the review phase.

Advantages of the participation

1. When both the employee and the supervisor are active participants in the evaluation process,
there is a greater likelihood that the information will be used productively in the future.
2. Specifically, the inclusion of self - ratings helps emphasize possible discrepancies between
self - views and the views that important others (that is, supervisors) have.

It is the discrepancy between these two views that is most likely to trigger
development efforts, particularly when feedback from the supervisor is more
negative than are employee self - evaluations.

3. The inclusion of self - appraisals is also beneficial regarding important additional factors.
Self - appraisals can reduce an employee’s defensiveness during an appraisal meeting and
increase the employee’s satisfaction with the performance management system, as well as
enhance perceptions of accuracy and fairness and therefore acceptance of the system (Shore,
Adams, & Tashchian, 1998)

Stage 5: Performance Review

The performance review stage involves the meeting between the employee and the manager
to review their assessments. This meeting is usually called the appraisal meeting or discussion.
Note

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The appraisal meeting is important because it provides a formal setting in which the employee
receives feedback on his or her performance.
In spite of its importance in performance management, the appraisal meeting is often regarded
as the “Achilles ’heel of the entire process” (Kikoski, 1999). This is because many managers
are uncomfortable with providing performance feedback, particularly when performance is
deficient (Ghorpade & Chen, 1995). This high level of discomfort, which often translates into
anxiety and the avoidance of the appraisal interview, can be mitigated through training those
responsible for providing feedback.

In short, the appraisal discussion focuses on the past (what has been done and
how), the present (what compensation is received or denied as a result), and the
future (goals to be attained before the upcoming review session).

According to Grossman and Parkinson (2002) offer the following six recommendations for
conducting effective performance reviews:
a) Identify what the employee has done well and poorly by citing specific positive
and negative behaviors.
b) Solicit feedback from your employee about these behaviors.
c) Listen for reactions and explanations.
d) Discuss the implications of changing, or not changing, the behaviors.
e) Explain to the employee how skills used in past achievements can help him or her
overcome any current performance problems.
f) Agree on an action plan. Encourage the employee to invest in improving his or her
performance by asking questions such as
 What ideas do you have for?
 What suggestions do you have for?
g) Set up a meeting to follow up and agree on the behaviors, actions, and attitudes to
be evaluated

Remark on “Achilles ’heel

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An Achilles’ heel is a deadly weakness in spite of overall strength, that can actually or
potentially lead to downfall. While the mythological origin refers to a physical vulnerability,
idiomatic references to other attributes or qualities that can lead to downfall are common.

In Greek mythology, when Achilles was a baby, it was foretold that he would die young. To
prevent his death, his mother Thetis took Achilles to the River Styx, which was supposed to offer
powers of invulnerability, and dipped his body into the water. However, as Thetis held Achilles
by the heel, his heel was not washed over by the water of the magical river. Achilles grew up to
be a man of war who survived many great battles.

However, one day, a poisonous arrow shot at him was lodged in his heel, killing him shortly
after. Still, Achilles is remembered as one of the greatest fighters who ever lived.

Stage 6: Performance Renewal and Reconstructing

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The final stage in the performance process is renewal and reconstructing. Essentially, this is
identical to the performance-planning component. The main difference is that the renewal and
reconstructing stage uses the insights and information gained from the other phases.
For example, some of the goals may have been set unrealistically high given an
unexpected economic downturn. This would lead to setting less ambitious goals
for the upcoming review period.

The performance management process includes a cycle that starts with prerequisites and ends
with performance renewal and reconstructing.

Diagrammatically,
Pre – Performance
Requisites Planning

Performance Performance

Renewal and management

process Performance
Reconstructing
Execution

Performance
Performance
Assessment
Review

6. Performance Appraisal and Performance Management

A table depicted below shows a comparison between performance appraisal and performance
management (Guest, D E et al, 1996):

No Performance Appraisal Performance Management

1. Focus is on top down assessment Stresses on mutual objective setting through a
process of joint dialogue
2. Performed annually Continuous reviews are performed
3. Usage of ratings is very common Usage of ratings is less common

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 4. Focus is on traits Focus is on quantifiable objectives, values and
behaviors
5. Monolithic system Flexible system
6. Are very much linked with pay Is not directly linked with pay

7. Benefits of a Performance Management System

An effectively implemented performance management system can benefit the organization,
managers and employees in several ways as depicted in the table given below:

Organization’s Improved organizational performance, employee retention and

Benefits
Manager’s Benefits
Employee’s Benefits
loyalty, improved productivity, overcoming the barriers to
communication, clear accountabilities, and cost advantages
Saves time and reduces conflicts, ensures efficiency and
consistency in performance.
Clarifies expectations of the employees, self-assessment
opportunities clarifies the job accountabilities and contributes
to improved performance, clearly defines career paths and
promotes job satisfaction.

8. Objectives of performance management

A sound performance management system can serve two crucial objectives:

a. Evaluation Objectives
 To evaluate the readiness of the employees for taking up higher responsibilities
 To provide a feedback to the employees on their current competencies and the
need for improvement
 To like the performance with scope of promotions, incentives, rewards and career
development.

b. Developmental Objectives
The developmental objective is fulfilled by defining the training requirements of the employees
based on the results of the reviews and diagnosis of the individual and organizational
competencies. It also helps to Coach and counsel employees so that they can improve their
performance.

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9. Prerequisites for a Performance Management System
Some of the essential prerequisites without which performance management system will not
function effectively in an organization are:

A. Should attract very high levels of participation from all the members concerned in an
organization.
It should be a participative process.

B. Top management support and commitment is very essential for building a sound
performance culture in an organization.
C. Organizational vision, mission, and goals should be clearly defined and understood by
all levels so that the efforts are directed towards the realization of the organizational
ambitions.
D. Clear definition of the roles for performing a given job within the organizational
framework, which emanates from the departmental and the organizational objectives.

The system should also be able to explain the linkages of a role with other roles.

E. Open and transparent communication should prevail which will motivate the
employees for participating freely and delivering high performance.
F. Communication is an essential pre requisite for a performance management process
as it clarifies the expectations and enables the parties in understanding the desired
behaviors or expected results.
G. Identification of major performance parameters and definition of key performance
indicators
H. Consistency and fairness in application
I. A commitment towards recognition of high performance. Rewards and recognitions
should be built within the framework of performance management framework
J. Proper organizational training should be provided to the staff members based on the
identification of training needs from periodic evaluation and review of performance.

This will motivate the employees for a superior performance.

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10. Performance Management and Reward Practices
An efficient management of reward system may have a beneficial effect upon the performance in
several ways - instilling a sense of ownership amongst the employees, may facilitate long-term
focus with continuous improvement, reduces service-operating costs, promotes teamwork, and
minimizes employee dissatisfaction and enhanced employee interest in the financial performance
of the company.

Rewards can be a vital source of motivation for the employees but only if it is administered
under right conditions. Few strategies that improve the effectiveness of rewards are given below:
 Linking rewards with the performance
 Implement team rewards for the interdependent jobs
 Ensuring that the rewards are relevant
 Ensuring that the rewards are valued by the employees
 Checking out for the undesirable consequences of any reward practice

Besides the monetary rewards, the contemporary employees’ desire for non-monetary rewards,
this may be in the form of:

Better career opportunities

Skills development
Recognition programs
Study hint of the chapter

Elaborate/describe the following terminologies

 Performance
 Performance Standards
 Administrative purpose of Performance Management
 Communication purpose of Performance Management
 Developmental purpose of Performance Management
 Organizational maintenance purpose of Performance Management
 Evolution Performance Management
 Pre – Requisites
 Performance Planning
 Performance Execution,
 Performance Assessment
 Performance Review
 Performance Renewal and Reconstructing
 Declarative knowledge,

23
 Procedural knowledge
 “Achilles ’heel
 Performance Appraisal Vs Performance Management
 Objectives of performance management

24
 Chapter Two: Creating a High Performance Organizational Culture

'Many times in my life I have seen how one individual can make a big difference,
particularly when working in a great team. The quality of our people and of our
teams is our most valuable resource, particularly in today's changing world
where knowledge flows round the globe with lightning speed and is easily
available.'

Chief Executive Officer of Siemens, Klaus Kleinfeld:

1. Overview

What is a high performance organization?

Let us start with what is not a high performance organization. Have you ever watched a group
of people try to row a boat, but they struggle to get anywhere because their rowing is out of sync,
or everyone tries to steer? They expend a lot of energy, but their individual efforts end up hurting
he group’s progress. They go in circles or get passed up by other boats whose rowers who are in
sync with each other. This boat is the equivalent of a low performance organization.

A high performance organization is like the boat whose rowers who are in sync with each
other. It goes farther and faster in the desired direction because the rowers coordinate their
movements to reach a common goal. Individuals do not get tired out as quickly because their
hard work contributes to the group’s efforts instead of working against them. There is a
designated leader who steers the boat and always keeps an eye on what is ahead, but everyone
plays a crucial role in keeping the boat moving forward. The rowers might even take turns
paddling so that people have a chance to rest and renew their energy for the long haul.

Now imagine that you are “steering” or “rowing” in an organization that is known for infusing
excellence into everything it does. People in the organization understand their roles and
contribute to producing promised results. The organization stays true to its mission but adapts to
the changing environment in order to remain viable.

25
Open communication promotes harmonious working relationships and effective teamwork.
Everyone believes that continuous learning fosters excellence. You are working in a high
performance organization.

When we come to definition:

By definition, a high-performance organization is intentionally designed to

achieve excellence by bringing out the best in people, thereby increasing
organizational capacity to deliver sustainable results.

Or
A high performance organization is a company that is considered more successful
than its competitors in areas such as profitability, customer service, and strategy

2. Why does high performance matter?

In the business world, everyone understands the relationship between performance and the
bottom line (profit). If customers are not satisfied with the organization’s performance (results),
they take their business elsewhere.

However, in the non-profit world, the impact of performance on an organization’s bottom line
is often masked or delayed. Inefficient processes, poor service or difficulty delivering results –
which would spell doom for a business – often persist in non-profits because there is a high
demand for services and not enough time or resources to resolve the issues. Alternatively, so it
seems.

Note
The importance of high performance might be more apparent if you ask yourself, “What is the
cost of not building high performance practices into our organization?”

For example, think about what happens if your organization’s leadership and management
practices are rigid or do not help employees reach their full potential. Morale declines and
employees show how unhappy they are through their body language, words, and actions.
Unhappy employees have a hard time focusing on their work.

26
They use their mental and emotional energy to express their unhappiness, resist the established
way of doing business or influence decision-makers to make positive changes. They may show
up to work and do what is required of them, but eventually the quality of their work declines,
and they are less likely to deliver the results the organization has promised.

The cost of low productivity and providing intensive supervision may be the
least of your problems if funders or donors become dissatisfied with your
performance and decide to take their investments elsewhere.

Alternatively, employees may leave to find greener pastures, and you have to expend valuable
time and money to recruit, hire, and train new staff. Then there is no guarantee that they will
stay for long, especially if the original problem with your organization’s leadership and
management practices was never resolved.

Now, this does not mean that leaders and managers have to be at the mercy of their employees in
order to build a high performance organization. It does mean that leaders and managers have to
intentionally develop the kinds of systems, strategies, and skills that engage people in
contributing to the organization’s high performance.

3. The 5 Qualities of a High Performance Organization

While there are certainly more than five qualities that organizations must have in order to be
considered high performers, the following qualities emerge as consistent themes in literature
from both the non-profit and for-profit sectors.

i. Commitment to Excellence
High performance organizations integrate standards for excellence into their governance,
management, and program operations. People at all levels of the organization are introduced
to the standards for excellence from the moment they express interest in joining the
organization, and they make a commitment to meeting these standards. Standards are more than
just nice words hanging on a wall or pretty documents that are handed out during new employee
orientations (although it doesn’t hurt to have these things). Instead, standards are a dynamic
means for facilitating growth and improvement.

27
It is not enough to just establish standards, though. The organization’s systems and procedures
must be designed to foster excellence and promote accountability. People must receive
continuous support, coaching, and freedom to act in ways that are consistent with the
organization’s standards. Without these things, standards are reduced to nice words on a wall or
pretty documents that end up gathering dust on a shelf. When people at all levels of the
organization are committed to excellence and successfully implement systems for meeting high
standards, problems such as poor performance, low productivity, complaints and conflicts
become virtually non-existent. Even when these problems do arise, there are established methods
for handling them proactively and effectively so that they do not turn into crises.

ii. Clearly Stated Purpose and Desired Results

High performance organizations have well-defined missions that convey the reason for the
organization’s existence and inspire others to join the cause. A high performance
organization uses its mission statement as a tool for communicating with all of its customers (or
stakeholders), for making management and policy decisions and for raising funds.

People in high performance organizations are not only clear about the mission, but they
understand what results the organization is trying to achieve and what constitutes success.

They understand the connection between their individual roles and the organization’s
vision, mission, values and desired results. When this connection is established and strong,
everyone in the organization is “rowing” in the same direction.
iii. Effective Change Management Processes
It has been said that the only constant in life is change. This is certainly true for people in for-
profit organizations and non-profit organization. If an organization’s leadership, management,
and program practices do not co-evolve with the environment in which they exist, the
organization risks losing its “unique competitive advantage,” or the factor that makes it stand out
in a very crowded field.

This requires the ability to anticipate changes that will affect the organization’s ability to fulfill
its mission, to involve the appropriate people in planning and implementing changes in a way
that is consistent with the organization’s vision, mission, and values and to clearly communicate
the reason and process for making changes.

28
Change can be hard regardless of whether it is perceived as good or bad and strong leadership is
essential to ensuring that change results in high performance.

iv. Open, Multi-Directional Communication

High performance organizations establish effective systems and methods for communicating,
and everyone is expected to use them.

Information is shared in a relevant and timely manner with the appropriate people so that they
can make informed decisions. Communication flows from top to bottom, bottom to top, and
across peer groups.

People in high performance organizations utilize cross-functional teams, in which mix of

managers and line staff from various departments work together to discuss issues or implement
projects. This promotes a greater understanding of the whole organization by people at all levels.
It also encourages open communication across traditional hierarchical or departmental lines.

Organizations that have open, multi-directional communication are better equipped to

prevent or resolve problems effectively.

v. Culture of Continuous Learning

The absence or presence of this quality says a lot about an organization’s approach to high-
performance. An organization without a culture of continuous learning either does not value its
people enough to support their ongoing development or believes that it is trying to reach a
destination called High Performance, at which point the journey will end. As a result, the
organization and its people never reach their full potential.

On the other hand, an organization with a culture of continuous learning produces amazing
results. People continually seek out ways to learn new information and apply it in the work place.
They gather and share information on best practices, trends, and emerging needs. They acquire
skills to become more effective in their current jobs or to move into higher-level positions.
Perhaps the most important aspect of the learning cultures the recognition that building a high
performance organization is a never-ending process. This keeps people engaged in ongoing
learning and the continuous journey toward Excellence.

29
In high performance organizations, learning is encouraged at all levels of the organization
and takes place through a variety of methods. Trainings, classes, and reading are some of the
more traditional methods of learning. People in high performance organizations also view
everyday activities such as attendance at community meetings, supervision meetings, and
performance evaluations as learning opportunities instead of viewing them as burdensome tasks.

People in high performance organizations also assess their learning needs and create a
professional development plan.

Nicole M. Young
4. Characteristics of high performing individuals/teams/organizations

Different characteristics have been used to describe high-performance

individuals/teams/organizations. Despite varying approaches to describing high-performance
teams, there is a set of common characteristics that are recognized to lead to success. Some of this
is:
 Participative leadership- using a democratic leadership style that involves and
engages team members
 Effective decision-making- using a blend of rational and intuitive decision making
methods, depending on that nature of the decision task
 Open and clear communication- ensuring that the team mutually constructs
shared meaning, using effective communication methods and channels
 Valued diversity- valuing a diversity of experience and background in team,
contributing to a diversity of viewpoints, leading to better decision making and
solutions
 Mutual trust- trusting in other team members and trusting in the team as an entity
 Managing conflict- dealing with conflict openly and transparently and not allowing
grudges to build up and destroy team morale
 Clear goals- goals that are developed using SMART criteria; also each goal must
have personal meaning and resonance for each team member, building commitment
and engagement

30
  Defined roles and responsibilities- each team member understands what they must
do (and what they must not do) to demonstrate their commitment to the team and to
support team success
 Coordinative relationship-the bonds between the team members allow them to
seamlessly coordinate their work to achieve both efficiency and effectiveness
 Positive atmosphere- an overall team culture that is open, transparent, positive,
future-focused and able to deliver success.

5. Organizational culture and values

The culture of an organization is the typical way of doing things in the organization. It
particularly relates to behavior patterns and relationships. The culture of an organization
develops over time. It is created by the people that work for the organization its managers and
workforce. What the organization stands for (its values) and the dreams that it seeks to turn into
reality (its vision) are fundamental in creating a dynamic culture.
A 'high performance culture' exists when everyone in the organization shares the same vision
and where he or she trust and value each other's contribution.

According to the condensed knowledge from different scholars literatures and articles, high
performance organizational cultures can either directly or indirectly correlated with the
following factors

i. Delivering the human resource development strategy

Human resource development is all about helping people to fulfill themselves at work.
Development is concerned with encouraging employees to identify ways in which they want to
improve their careers and other aspects of their working lives. For example, they may want to
attend training courses, they may want to do more interesting work, or they may simply want to
have a better work/life balance. An organization is nothing without its people.

On the other hand, all organizations need to have a sense of direction, which is put into action
through a plan. This plan is referred to as a business strategy.
ii. What is 'engagement'?

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If people are properly managed, they will motivate themselves to do a good job. Siemens
believes in the full engagement of people in the workplace. Excellent people need to be
managed in an excellent way.

Scholars believes that engagement = commitment + organizational citizenship

iii. The importance of people in the organization

The part of the Siemens' business strategy that relates to people management is referred to as
People Excellence. At the heart of People Excellence is the building of a high performance
culture. Nothing helps an individual more than to be given responsibility and to know they are
trusted.

Almost without exception, people management theorists have shown that real motivation comes
from within an individual. Individuals develop such motivation when they feel that their efforts
are valued and that they are doing something worthwhile. This is why People Excellence at
Siemens is so important.

Feeling part of a successful team is part of the engagement process. Individuals who feel valued
want to contribute to the success of the organization.

iv. Setting a clear Team and individual targets

 A high performance team is one in which all members of the team work towards
shared targets and have a sense of shared responsibility for the results the team
achieves. As the team, performance improves over time, the better the results.

32
 Business level Target Results

Team level Target

Results

Individual level Target Results

Targets for individuals are related to targets for the whole business. Everyone plays their part in
achieving great results. This is why many scholars recommend that 'our business success
depends on the performance of each individual, our teams and the total organization'.

vi. Talent management - managing people

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Everyone has talent. For scholars, matching talent with tasks produces competitive advantage.
Talent management - managing people involves developing everybody that works for your
organization not just the high-fliers.
Most Japanese talent management philosophy involves making sure that every
employee is provided with the guidance and support to achieve their full
potential. This aids them to do their best, every day.

Everyone works together to achieve the organization’s objectives as well as meeting their own
personal goals. Everyone shares the same vision and dreams. Within this culture they are able to
progress and take on greater responsibility within the company.

Talent Management enables:

 job enrichment, where individuals are encouraged to take on extra tasks and
 responsibilities within an existing job role to make work more rewarding and
 Job enlargement, where the scope of the existing job is extended to give a broader
range of responsibility, plus extra knowledge and skills development.

6. Phases in Developing a Culture of Excellence

34
High-performance organizations do not take their culture for granted. They plan it, monitor it,
and manage it so that it remains aligned with they want to achieve. Do remember the famous
words of Peter Drucker: Culture eats strategy for breakfast

The key to moving your organization from the status quo to an expectation of excellence is your
corporate culture.

When you build a corporate culture of excellence, you create organizational capacity and a
structure that empowers, focuses and engages employees. You stop wasting a tremendous
amount of time and money nurturing an outmoded culture focused on problem solving. Instead,
you equip your teams with the right mindset and skills necessary to focus on creating the desired
results. Moreover, organizations need to help employees develop the flexibility and resilience
to deal with change, challenge, and uncertainty that may arise along the way.

By implementing a three-phase process, you can start building a new culture of excellence,
creating an organization where your employees feel empowered, inspired, and motivated.
Phase 1: Mindset of Excellence
The first step is to create a mindset that will engage and align every employee with your vision,
mission and values, and leave them speaking a common language of excellence. You will build a
new capacity for growth. Your employees will think in more creative and innovate ways, and
will be more able to deal with challenges and change.

Phase 2: Strategies for Excellence

With the new mindset of excellence in place, your teams will be ready to focus on achieving
their specific goals and plans for performance excellence. This phase is all about growth—
building the skills and competencies required to grow the business.

Phase 3: Sustaining Excellence

When the first two phases are complete, and you have a strong collective mindset of excellence
in place and alignment around performance goals, it’s time to focus on developing strong
leadership to ensure that the new mindset and performance skills learned are sustainable and
simply become the way things are done. This is a critical step often missed in organizations—but
is required to ensure that employees do not revert back to old habits.

7. Changing Expectations Key to High Performance Culture

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For those doubting the impact of culture on both existing and potential employees, consider
Google, a company that has crafted its identity on culture from the start, in addition, at one point
was fielding 3,000 new job applications every day.

Why? The reason Google has been able to attract so many top level people is that, for so many
years in a row, they were awarded for having the best workplace culture. Work hard, play
hard. Google has made it work with great conditions and a very high level of expectations
wherein excellence is quite simply expected.

Changing your expectations from mediocrity to excellence is essential to creating a culture of

high performance. The best news is that, once your new culture of excellence is in place, your
organization functions like a well-oiled machine. Your teams are motivated to create a vision
that is meaningful and inspiring and one that aligns with their own personal aspirations. They are
able to deal with change, uncertainty, and adversity, and they interact and collaborate to make
things happen. Best of all, you have created an organization that is positioned for long-lasting
success and prosperity.

36
Quick Assessment: Is Your Organization a High Performer?

Review this list and check the statements that you think are true for your organization.

Commitment to Excellence
 We have integrated standards for excellence into our governance, management, and
program operations.
 People are introduced to our standards when they express interest in joining our
organization.
 People at all levels of our organization are committed to meeting our standards for
excellence.
 Our organization’s systems and procedures foster excellence and promote
accountability.
 People at all levels of our organization act in ways that are consistent with our
standards.
Clearly Stated Purpose and Desired Results
 We have a well-defined mission statement that clearly conveys our organization’s
purpose.
 People within the organization share a common understanding of the organization’s
purpose.
 People outside of our organization have an accurate understanding of our organization’s
purpose.
 People at all levels of the organization understand what results we are trying to achieve.
 People at all levels of the organization understand the connection between their
individual roles and the organization’s vision, mission, values and desired results.
Effective Change Management Processes
 Our organization is able to adapt to changes in the environment.
 Our leaders anticipate changes that will impact the organization’s ability to meet its
mission.

37
  Our leaders involve the appropriate people in planning and implementing changes in
a way that is consistent with the organization’s vision, mission, and values.
 Our leaders clearly communicate the reason and process for making changes.
 Our organization’s leaders manage change effectively.

Open, Multi-Directional Communication

 People make decisions based on information that is shared in a relevant and timely
manner.
 Communication flows from “top” (Board/management) to “bottom” (line staff),
bottom to top and across peer groups.
 Our organization utilizes cross-functional teams to discuss issues or implement
projects.
 The communication systems and techniques used in our organization help prevent or
resolve conflicts effectively.
 People at all levels of the organization feel comfortable expressing their opinions to
others.
Culture of Continuous Learning
 People in our organization recognize that achieving high performance is a never-
ending process.
 People in our organization continually seek out ways to learn new information and
apply it in the work place.
 People in our organization gather and share information on best practices, trends, and
emerging needs.
 People in our organization assess their learning needs and then create professional
development plans.
 People at all levels of our organization are expected to continue their learning
process.

38
 Chapter 3: Managing Contextual Performance

1. Description of Contextual Performance

Although the way that we work today is very different from the way we worked twenty-year ago,
effective management of employee performance is still a key to organizational success. Our
rewards and recognition systems still focus primarily on task completion and goal achievement.

Nevertheless, there is another side to employee performance that is equally important but often
unrecognized and unrewarded, which is called Contextual performance. Contextual
performance refers to activities that are not task - or goal - specific but that make individuals,
teams, and organizations more effective and successful. Contextual performance includes
 Cooperating and helping others,
 Voluntarily performing extra - role activities,
 Persevering with enthusiasm and extra determination to complete assignments
successfully,
 Defending the organization’ goals, and adhering to organizational policies,
 Even when this is inconvenient

2. Contextual performance Vs task performance

Contextual performance can be distinguished from task performance in several ways.

I. Based on their contribution

Task - related behaviors contribute directly or indirectly to the technical core, that is, the
mechanisms by which the organization produces its goods and services (Borman & Motowidlo,
1993).

Contextual performance, on the other hand, influences and supports the social
and psychological environment of the organization, the environment in which
the technical core operates.

39
II. Based on whether prescribed or not/less prescribed
Task behaviors are typically delineated in a job or role description and are highly prescribed.
Unlike behaviors typically delineated in a job or role description,
contextual performance behaviors are discretionary behaviors that are
less likely to be prescribed.

(Borman &Motowidlo, 1993; Motowidlo & Van Scotter, 1994).

III. Based on the knowledge, skill, ability, or other attributes needed to perform those
behaviors.

Job - specific behaviors are more likely to be a function of knowledge, skills, and abilities
(KSAs) and the KSAs should vary depending on the job.

Contextual behaviors, on the other hand, are more likely to be a

function of other attributes related to personality and motivation and are
common across many jobs.

Many scholars have identified contextual performance as:

a. Interpersonal support
b. Helping behaviors
c. Civic virtue
d. sportsmanship
e. organizational support
f. Conscientiousness initiative
a. Interpersonal support includes helping others by offering suggestions, teaching them
useful knowledge or skills, directly performing some of their tasks, and providing
emotional support for some of their problems. Also, cooperating with others by accepting
suggestions, informing them of events they should know about, and putting team objectives
ahead of personal interests. Showing consideration, courtesy, and tact in relations with
others, as well as motivating, and showing confidence in them.

40
 b. Helping behaviors include helping others with or preventing the occurrence of work-
related problems. Helping is the broadest category and includes behaviors related to
altruism, peacekeeping, and cheerleading.
c. Organizational support includes favorably representing the organization by defending and
promoting it, as well as expressing satisfaction and showing loyalty by staying with the
organization despite hardships. Also, supporting the organization mission and objectives,
complying with organizational rules and procedures, and suggesting improvements.
d. Civic virtue includes behaviors demonstrating that an employee responsibly participates in,
and is concerned about, the life of the company.
e. Conscientiousness initiative includes persisting with extra effort despite difficult
conditions, taking initiative to do all that is necessary to accomplish objectives, even if they
are not normally part of one’s duties, and finding additional productive work to perform
when one’s duties are completed. Also, developing knowledge and skills by taking
advantage of opportunities within the organization and outside the organization through the
use of one’s own time and resources.
f. Sportsmanship includes a willingness on the part of the employee to tolerate less than ideal
circumstances without complaining.

3. Models of contextual performance

Generally, most literatures put the models of contextual performance in the following manner.
Diagrammatically,

41
 Antecedents
 Personality Key Behaviors
 Interpersonal Outcomes
 National culture  Organizational
 Organizational facilitation
 Organizational  Group
culture  Individual
 Leadership support
 Conscientiousness  Affective
 Initiative

Management Tools and Methods

to manage contextual performance
 Performance appraisal
 Recognizing and rewarding
 Feedback
 Career development
 Legal considerations

Remark
The organizational, group, and individual level outcomes of contextual performance followed
by affective outcomes.

A. Antecedents Of Performance Management

i. Personality and Contextual Performance

A Meta - analysis by Hurtz and Donovan (2, 000) showed that the five big personalities such as:
conscientiousness, agreeableness, and emotional stability are used as predictors of
contextual performance.

 extraversion/introversion – gregarious, outgoing, assertive, talkative and active

(extraversion); or reserved, inward-looking, diffident, quiet, restrained (introversion);
 emotional stability – resilient, independent, confident, relaxed; or apprehensive,
dependent, under-confident, tense;
 agreeableness – courteous, cooperative, likeable, tolerant; or rude, uncooperative,
hostile, intolerant;
 Conscientiousness – hard-working, persevering, careful, reliable; or lazy, dilettante,
careless, expedient;

42
  Openness to experience – curious, imaginative, willingness to learn, broad-minded;
or blinkered, unimaginative, complacent, narrow-minded

Note
For each of the above listed five big personality types, two poles can be developed.

Positive Pole of Extraversion/high extraversion

 Sociable  Spirit
 Gregarious  Spontaneity
 Assertive  Boisterousness
 Talkative  Conceit
 Active  Vanity
 Energetic  Sensuality
 Enthusiastic  Lower level of vigilance
 High sensation seekers  More liable to be involved in
 Experiencing positive accidents
 emotions (PA)  Decrement in performance
under monotonous conditions
Negative Pole of Extraversion /low extraversion
• Lethargy • Shy
• Aloofness • Inhibited
• Silence • Un aggressive
• Modesty • Passive
• Unfriendliness • Pessimist
• Reserved

I. Agreeableness

Positive Pole of Agreeableness/high agreeableness

 Courteous  Forgiving
 Flexible  Soft hearted
 Trusting  Tolerant
 Good natured  Appreciative
 Cooperative  Generous

43
  Kind  Friendly compliance
 Sympathetic  Having Humane aspect of
 Pleasant humanity
 Not defensive  Amiability
 Easy to get along  Moral
 Tactful  Warm
 Trust, compliance & altruism  Natural

Negative Pole of Agreeableness/low agreeableness

 Hostility  Rude
 Indifference to others  Cruel
 Self-centered  Pompous
 Spiteful  Irritable
 Jealous  Stubborn
 Hostile noncompliance  Distrusting
 Vindictive  Selfish
 Ill humor  Callous
 Disdainful  Cunning
 Over critical  Prejudiced
 Antagonist  Unfriendly
 Dogmatic  Volatile
 Belligerent  Stinging
 Bossy  Thoughtless

II. Conscientiousness
Positive Pole of Conscientiousness/high Conscientiousness
 Thoroughness in decision  Link with educational
making achievements
 Feeling of well being  Dependable
 Perception of good health  Careful
 Will  Thorough

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  Responsible  Graceful
 Organized  Mature
 Achievement oriented  Passionless
 Persevering  Logical
 Efficient  Conventional
 Planners  Punctual
 Reliable  Decisive
 Industrious  Dignified
 Evangelists (zealous)  Precise
Negative Pole of Conscientiousness/low Conscientiousness
 Negligent  Forgetful
 Rebellious  Reckless
 Irreverent (profane)  Aimless
 Provincial (awkward, unrefined)  Sloth
 Self-indulgent (excessive)  Frivolous
 Disorganized  Non conforming
 Inconsistent

Neuroticism/Emotional Stability

Positive Pole of Neuroticism /low Emotional Stability

• Distractible • Insecure
• Respond negatively to • Self petrifying
environmental stresses • Tense
• Negative world view • Touchy
• Anxious • Unstable
• Depressed • Fearful
• Angry • Instable
• Embarrassed • Envious
• Emotional • Gullible
• Worried • Timid

45
 • Immature
Negative Pole of Neuroticism/high Emotional Stability
• Placid • Brave
• Independent • Confident
• Emotionally stable • Secure
• Strong willed
Openness to Experience
Positive Pole of Openness to Experience/high extraversion
 Unconventional  Reflective
 Curious  Imaginative
 Cultured  Original
 Intelligent  Broad minded
 Openness to new ideas,  Insightful
 feelings  Artistic
 Flexibility of thought  Wide interests
 Readiness to indulge in  Political liberalism
 fantasy
Negative Pole of Openness to Experience/low extraversion
• Shallow
• Simple
• Dull
• Unimaginative
• Stupid
ii. National /organizational Culture
Hofstede (1984) defined several dimensions that describe national cultures Dimensions of
national cultures

 Power distance index (PDI): "Power distance is the extent to which the less powerful
members of organizations and institutions (like the family) accept and expect that power
is distributed unequally." Cultures that endorse low power distance expect and accept
power relations that are consultative or democratic.

46
 People relate to one another more as equals regardless of formal positions. Subordinates
are more comfortable with and demand the right to contribute to and critique the
decision making of those in power.

In high power distance countries, less powerful accept power relations that are more
autocratic and paternalistic. Subordinates acknowledge the power of others simply based
on where they are situated in certain formal, hierarchical positions.
As such, the power distance index Hofstede defines does not reflect an objective
difference in power distribution, but rather the way people perceive power differences.

 Individualism (IDV) vs. collectivism: "The degree to which individuals are integrated
into groups.” In individualistic societies, the stress is put on personal achievements and
individual rights. People are expected to stand up for themselves and their immediate
family, and to choose their own affiliations.

In contrast, in collectivist societies, individuals act predominantly as members of a

lifelong and cohesive group or organization (note: "The word collectivism in this sense
has no political meaning: it refers to the group, not to the state"). People have large
extended families, which are used as a protection in exchange for unquestioning loyalty.

 Uncertainty avoidance index (UAI): "a society's tolerance for uncertainty and ambiguity.”

It reflects the extent to which members of a society attempt to cope with anxiety by
minimizing uncertainty. People in cultures with high uncertainty avoidance tend to
be more emotional. They try to minimize the occurrence of unknown and unusual
circumstances and to proceed with careful changes step by step by planning and by
implementing rules, laws and regulations.

In contrast, low uncertainty avoidance cultures accept and feel comfortable in

unstructured situations or changeable environments and try to have as few rules as
possible. People in these cultures tend to be more pragmatic, they are more tolerant of
change.

47
  Masculinity (MAS) Vs femininity: "The distribution of emotional roles between the
genders.”

Masculine cultures' values are competitiveness, assertiveness, materialism,

ambition and power, whereas feminine cultures place more value on
relationships and quality of life. In masculine cultures, the differences between
gender roles are more dramatic and less fluid than in feminine cultures where men
and women have the same values emphasizing modesty and caring.

 Long-term orientation (LTO), vs. short-term orientation: First called

"Confucian dynamism", it describes societies' time horizon. Long term-oriented
societies attach more importance to the future. They foster pragmatic values
oriented towards rewards, including persistence, saving and capacity for adaptation.

In short, term oriented societies, values promoted are related to the past and the
present, including steadiness, respect for tradition, preservation of one's face,
reciprocation and fulfilling social obligations.

iii. Organizational cultures

Here organizational culture is concerned with the overall trend, norm, and value system of the
organization.
4. Outcomes of Contextual Behavior
 It enhance productivity
 It maximize Interpersonal support, such as sharing best practices
 It aids Interpersonal cooperatives and courteousness among workers
 Helps Employee compliance with organizational rules and procedures
 Suggesting for organizational improvements
 It can also contribute to customer satisfaction because conscientious employees
go beyond customer expectations.
5. Managing Contextual Performance
As with all employee performance, there are several fundamental aspects to managing contextual
performance including:

48
 A. Performance Appraisal, D. Feedback,
B. Recognition, E. Career Development, and
C. Rewards, F. Legal Considerations
A. Performance Appraisal

Contextual behaviors can influence performance appraisals in at least two ways. First, based on
the norm of reciprocity, supervisors might seek to repay employees for contextual performance
by giving more favorable evaluations (Mackenzie, Podsakoff, &Fetter, 1991, 1993).

Second, if managers have a schema (a mental representation) of a “good employee ” that

includes high contextual performance, then employees who demonstrate high levels of
contextual performance will be more likely to be rated favorably.

Generally, we evaluate the following dimensions of contextual performance.

 Teamwork  Leadership
 Coordination  Firm-Wide Commitment
 Locus of controls  Inclusivity
 Attitude  Others

Details of performance evaluation will be seen in the next chapter.

B. Recognizing and Rewarding Contextual Performance behavior

We can recognize people by either financial rewarded of non-financial reward.

i. Financial reward

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ii. None financial reward

C. Feedback on Contextual Performance

Feedback is a process in which information about the past or the present influences the
same phenomenon in the present or future. As part of a chain of cause-and-effect that
forms a circuit or loop, the event is said to "feed back" into itself.

Feedback generally, as "information about the gap between the actual level and the
reference level of a system parameter which is used to alter the gap in some way” is
emphasizing that the information by itself is not feedback unless translated into action.

Ramaprasad (1983)

A give feed back to B and vice-versa

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Remark
The feedback to be given should be:
i. Credible feedback, which emphasizes the importance of the supervisor ’ s expertise,
fairness, and trustworthiness as a feedback provider — making sure the supervisor is
familiar with the employee ’ s entire performance on the job;
ii. Quality feedback -the consistency and usefulness of feedback.
iii. Feedback delivery -the considerateness and tactfulness with which the feedback
messages presented by the supervisor;
iv. Feedback availability-the amount of contact the recipient has with the supervisor
and the effort the recipient needs to expend in order to receive feedback —whether
the supervisor is usually available when the rep ort seeks performance information;
v. Favorable/unfavorable feedback-generally, letting employees know when they do a
good job; making employees aware on those occasions when job performance is
below expectations;
vi. Promoting feedback seeking -supervisors should be reminded that they should be
consistently promoting feedback - seeking behaviors in their subordinates for
development purposes -encouraging the employee to ask for feedback whenever the
employee is uncertain about his or her job performance.

D. Career Development
Personal development includes activities that

 Improve awareness and identity,

 Develop talents and potential,
 Build human capital and facilitate employability,
 Enhance quality of life and contribute to the realization of dreams and aspirations.

When personal development takes place in the context of institutions, it refers to the methods,
programs, tools, techniques, and assessment systems that support human development at the
individual level in organizations.

Remarks:
At the level of the individual, personal development includes the following activities:
 Improving self-awareness

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 Improving self-knowledge
 Building or renewing identity
 Developing strengths or talents
 Improving wealth
 Spiritual development
 Identifying or improving potential
 Building employability or human capital
 Enhancing lifestyle or the quality of life
 Improving health
 Fulfilling aspirations
 Initiating a life enterprise or personal autonomy
 Defining and executing personal development plans
 Improving social abilities

Note: To bring personal development, formal and informal learning can be used.

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 Chapter 4: Diagnosing, Understanding, and Dealing With Counterproductive Work
Behavior
1. Definitions

Counterproductive work behavior (CWB) is employee behavior that goes against the goals of
an organization. These behaviors can be intentional or unintentional and result from a wide
range of underlying causes and motivations. It has been proposed that a person-by-environment
interaction can be utilized to explain a variety of counterproductive behaviors.

For instance,

An employee who steals from the company may do so because of lax supervision (environment)
and underlying psychopathology (person) that work in concert to result in the counterproductive
behavior.

1. Dimensional models of counterproductive work behaviors

The variety of acts that are considered CWBs has led to attempts by researchers to create a
coherent typology of CWBs. One four-class typology of CWBs divided the CWBs into the
following categories:
A. production deviance, involving behaviors like leaving early, intentionally working
slow, or taking long breaks;
B. property deviance, involving sabotage of equipment, theft of property, and taking
kickbacks;
C. political deviance, involving showing favoritism, gossiping, or blaming others; and,
D. Personal aggression, involving harassment, verbal abuse, and endangerment

2. Another typology

Another typology proposed the following factors:

 Abuse
 against others
 Production deviance
 Sabotage
 Theft

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  Withdrawal
 Theft of property
 Destruction of property
 Misuse of information
 Misuse of time resources
 Unsafe Behavior
 Poor Attendance
 Poor quality of work
 Alcohol use
 Drug use
 Inappropriate verbal action
 Inappropriate physical
 Action
 Ineffective Job Performance
 Job Turnover
 Theft
 Accidents
 Violence,
 Substance Use
 Sexual Harassment
 Anti-social behavior

 Others
Note
In the following sections, we will see some of the above listed terminologies:
A. Withdrawal
Employee withdrawal consists of behaviors such as absence, lateness, job turnover, social
loafing, and cyber loafing.

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i. Absence and lateness

Absence and lateness has attracted research as they disrupt organizational production, deliveries,
and services. Unsatisfied employees withdraw in order to avoid work tasks or pain, and remove
themselves from their jobs. Withdrawal behavior may be explained as employee retaliation
against inequity in the work setting. Withdrawal may also be part of a progressive model and
relate to job dissatisfaction, job involvement, and organizational commitment.

Absence is concerned with not showing up for work. Absenteeism is typically measured by time lost
measures and frequency measures. It is weakly linked to affective predictors such as job satisfaction
and commitment. Absences fit into two types of categories. Excused absences are those due to personal
or family illness; unexcused absences include an employee who does not come to work in order to do
another preferred activity or neglects to call in to a supervisor. Absence can be linked to job
dissatisfaction. Major determinants of employee absence are:

 Employee affect  Role Ambiguity

 Demographic characteristics  Feelings of tension
 Organizational absence culture
 Internal And External Features
 Organization absence policies
Of The Job
 Dissatisfaction With Role  Fatigue
Conflict

On the other hand, Absenteeism concerns employees who do not turn up for work and who
don’t have a legitimate reason. It is, therefore, largely about unauthorized absence from work.

There are various ways of calculating absenteeism – here is a popular formula:

55
Remarks
The important point to remember about absenteeism is that is represents a significant business
cost. Sickness absence alone costs UK businesses around £600 for each worker per year

Lateness is described as arriving at work late or leaving early. Problems associated with lateness
include compromised organizational efficiency.
Tardy and late employees responsible for critical tasks can negatively affect organizational
production. Other workers may experience psychological effects of the tardy employee including
morale and motivational problems as they attempt to "pick up the slack." Other employees may
begin to imitate the example set by the behavior of tardy employees.

Lateness costs US business more than $3 billion dollars annually.

ii. Turnover (employment):

In human resources context, turnover or staff turnover or labor turnover is the rate at which
an employer gains and loses employees. Simple ways to describe it are "how long employees
tend to stay" or "the rate of traffic through the revolving door.” Turnover is measured for
individual companies and for their industry as a whole. If an employer is said to have a high
turnover relative to its competitors, it means that employees of that company have a shorter
average tenure than those of other companies in the same industry. High turnover may be
harmful to a company's productivity if skilled workers are often leaving and the worker
population contains a high percentage of novice workers.

Employee turns over can be Internal versus external: Like recruitment, turnover can be
classified as "internal" or "external.” Internal turnover involves employees leaving their current
positions and taking new positions within the same organization.

Both positive (such as increased morale from the change of task and supervisor) and negative
(such as project/relational disruption, or the Peter Principle) effects of internal turnover exist, and
therefore, it may be equally important to monitor this form of turnover, as it is to monitor its
external counterpart. On the other hand, external turnover involves employees leaving their
current organization totally.

Notes:

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 Employee turns over can also be Voluntary versus involuntary. Practitioners can differentiate
between instances of voluntary turnover, initiated at the choice of the employee, and those
involuntary instances where the employee has no choice in their termination (such as long term
sickness, death, moving overseas or employer-initiated termination).

Labor turnover is equal to the number of employees leaving, divided by the average total
number of employees, multiplied by 100 (in order to give a percentage value). The number of
employees leaving and the total number of employees are measured over one calendar year.

For example, in a business with an average of 300 employees over the year, 21
of whom leave, labor turnover is 7%. This is derived from (21/300)*10

iii. Social loafing

Social loafing may occur when individuals are working in groups. When working in groups,
individuals often reduce their efforts and work outputs. Individual outputs can be reduced by as
much as 20% in-group tasks. Further, social loafing tends to increase with the size of the group..
Social loafing is maximized when group performance standards are unclear and other group
members are not expected to contribute their full efforts.

iv. Cyber loafing

Cyber loafing is a new phenomenon and form of CWB emerging in the last decade. Cyber
loafing can be defined as surfing the web in any form of non-job- related tasks performed by the
employee.

Surveys have shown that 64% of US workers use the internet for personal tasks
at work. The internet is responsible for a 30-40% decrease in employee
productivity and was estimated to have cost US business $5.3 billion in 1999.

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B. Anti-social behavior

Physical acts of aggression by members of an organization, committed in organizational settings

are considered as workplace violence. This can be reflected in either of the following manner:

i. Workplace incivility involves acting with disregard for others in the workplace, in
violation of workplace norms for respect...." The effects of incivility include increased
competitiveness, increases in sadistic behavior, and inattentiveness.

Two factors that seem to be associated with becoming a victim of incivility are low
levels of Agreeableness and high levels of Neuroticism. Affective Events Theory
suggests that individuals who experience more incidents of incivility may be more
sensitive to these behaviors and therefore more likely to report them.

ii. Bullying consists of progressive and systematic negative antisocial behavior and
psychological mistreat p9ent of one employee against another. It may include verbal
abuse, gossiping, social exclusion, or the spreading of rumors.

Note

The terms 'bullying' and 'mobbing' are sometimes used interchangeably, but 'bullying' is more
often used to refer to lower levels of antisocial behavior that do not include workgroup
participation. The costs of bullying include losses in productivity, higher absenteeism, higher
turnover rates, and legal fees when the victims of bullying sue the organization.

C. Sexual Harassment
Sexual harassment is bullying or coercion of a sexual nature, or the unwelcome or
inappropriate promise of rewards in exchange for sexual favors. In most modern legal contexts,
sexual harassment is illegal.

i. Harassment situations
Sexual harassment may occur in a variety of circumstances. Often, but not always, the harasser
is in a position of power or authority over the victim (due to differences in age, or social,
political, educational or employment relationships) or expecting to receive such power or
authority in form of promotion.

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ii. Forms of harassment
 The harasser can be anyone, such as a client, a co-worker, a parent or legal
guardian, relative, a teacher or professor, a student, a friend, or a stranger.
 The victim does not have to be the person directly harassed but can be a witness of
such behavior who finds the behavior offensive and is affected by it.
 The place of harassment occurrence may vary from school, university,
workplace, and other.
 There may be other witnesses or attendances, or not.
 The harasser may be completely unaware that his or her behavior is offensive,
constitutes sexual harassment, or may be completely unaware that his or her actions
could be unlawful.
 The harassment can take place in situations in which the harassed person may not
be aware of what is happening, such as during rituals with kids, or when entering
limbo.
 The harassment may be one time occurrence but more often it has a type of
repetitiveness
 Adverse effects on the target are common in the form of stress and social
withdrawal, sleep and eating difficulties, overall health impairment, etc.
 The victim and harasser can be any gender.
 The harasser does not have to be of the opposite sex.
 Misunderstanding: It can result from a situation where one thinks he/she is
making themselves clear, but is not understood the way they intended. The
misunderstanding can be either reasonable or unreasonable.
iii. Common effects on the victims of sexual harassment

Common effects on the victims of sexual harassment includes:

 Psychological stress and health impairment
 Decreased work or school performance as a result of stress conditions;
increased absenteeism in fear of harassment repetition

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  Firing and refusal for a job opportunity can lead to loss of job or career, loss of
income
 Having to drop courses, change academic plans, or leave school (loss of tuition) in
fear of harassment repetition and/or as a result of stress
 Being objectified and humiliated by scrutiny and gossip
 Having one's personal life offered up for public scrutiny—the victim becomes the
"accused," and his or her dress, lifestyle, and private life will often come under attack.
 Becoming publicly sexualized (i.e. groups of people "evaluate" the victim to
establish if he or she is "worth" the sexual attention or the risk to the harasser's career)
 Defamation of character and reputation
 Loss of trust in environments similar to where the harassment occurred
 Loss of trust in the types of people that occupy similar positions as the harasser or
his or her colleagues, especially in case they are not supportive, difficulties or stress
on peer relationships, or relationships with colleagues
 Effects on sexual life and relationships: can put extreme stress upon relationships
with significant others, sometimes resulting in divorce
 Weakening of support network, or being ostracized from professional or academic
circles (friends, colleagues, or family may distance themselves from the victim, or
shun him or her altogether)
 Having to relocate to another city, another job, or another school
 Loss of references/recommendations

D. Theft

Employee theft is defined as employees taking things not belonging to them from an
organization. Employee theft is estimated to account for billions of dollars of loss globally
each year.

Causes of employee theft include characteristics of the individual and environmental conditions
such as frustrating and unfair working conditions.

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E. Substance abuse

Substance abuse is a problem that can have an effect on work attendance, performance, and
safety and can lead to other injuries outside of work and health problems.

F. Employee sabotage

Employee sabotage is behaviors that can "damage or disrupt the organization's production,
damaging property, the destruction of relationships, or the harming of employees or customers."
Research has shown that often acts of sabotage or acts of retaliation are motivated by perceptions
of organizational injustice and performed with the intention of causing harm to the target.

6. Productive and Counterproductive Behaviors

According to Britt and "productive behavior is defined as employee behavior that contributes
positively to the goals and objectives of the organization.” Some of the most constructive forms
of productive behavior in organizations are:
i. Innovation
ii. Job performance
iii. Organizational citizenship behavior

i. Innovation in the organization can lead to improvements in procedures, products,

and performance levels. When an employee conceptualizes an original process that
saves production time, material cost, or work force hours his or her innovation
contributes to the goals of the company in a positive way. Organizational
citizenship behavior (OCB) refers to the behaviors that employees engage in that
may not be specifically spelled out in their individual job descriptions. These
behaviors typically include courtesy, altruism, civic virtue, sportsmanship, and
conscientiousness.
ii. Job performance includes several aspects that an organization assesses to evaluate
job performance. The primary measurable facets are effectiveness, or results of an
employee's performance, productivity, or the cost of achieving a certain level of
performance, and utility, or the value of a certain level of productivity, effectiveness,
or performance to the organization.

61
 Job performance has been measured in many ways over the years and has come to be
a moderate indicator employee satisfaction.

iii. Organizational Citizenship Behavior (OCB) has been studied since the late 1970s.
Over the past three decades, interest in these behaviors has increased substantially.
Organizational behavior has been linked to overall organizational effectiveness, thus
these types of employee behaviors have important consequences in the workplace.

7. Managing Counterproductive Behavior

Some scholars recommend that the following five steps formulas are very important to notice
and then manage counterproductive behavior effectively and efficiently:

A. Recognize the problem.

B. Do not turn your back on it
C. Document examples to help you in your discussion
D. Discuss performance
E. Explain how the employee's behavior has influenced you or others, and
F. How it affects co-workers if it continues.

Study hint on chapter three

Define/describe/elaborate the following terminologies:
 Counterproductive  Social loafing
work behavior  Cyber loafing
 Production deviance  Anti-social behavior
 Sabotage  Workplace incivility
 Theft  Bullying
 Withdrawal  Mobbing
 Job Turnover  Innovation
 Theft  Job performance
 Sexual Harassment  Organizational citizensh
 Withdrawal ip behavior
 Absence  Property deviance
 Lateness  Political deviance
 Fatigue  Personal aggression
 Absenteeism
 Turnover

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 Chapter 5: Performance Management in Multinational Companies

1. Definitions

A multinational corporation (MNC) or multinational enterprise (MNE) is a corporation that is

registered in more than one country or that has operations in more than one country. It is a large
corporation which both produces and sells goods or services in various countries. It can also be
referred to as an international corporation. They play an important role in globalization.
Arguably, the first multinational business organization was the Knights Templar, founded in
1120.

After that came the British East India Company in 1600 and then the Dutch East India Company,
founded March 20, 1602, which would become the largest company in the world for nearly 200
years.

2. Characteristics of multinational company

As I investigate it, following are the characteristics of a Micro Multinational Company.

A. Operates in several countries

B. Normally a small group of people runs it
C. People are scattered around the globe
D. Resources are limited
E. Many people wear several hats
F. Financing available for growth is not sufficient
G. Usually can be categorized as a small business
H. Adopts the new technologies very quickly
I. Heavily leverages the Internet for expansion
J. Uses resources very efficiently
K. Mostly managed by entrepreneurs with extensive technical backgrounds
L. Most of the people in the company are stake holders instead of employees on salary
M. Routine daily tasks are outsourced to countries with low cost technical labor
3. The International Environment
To be successful in the international stage, international managers must continually monitor the
political, legal, socio-cultural, economic, and technological environments.

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 I. The political environment
The political environment can foster or hinder economic developments and direct investments.
This environment is ever changing. As examples:

 The political and economic philosophies of a nation's leader may change overnight.
 The stability of a nation's government, which frequently rests on the support of the
people, can be very volatile.
 Various citizen groups with vested interests can undermine investment operations and
opportunities.
 Local governments may view foreign firms suspiciously.

For example, to protest Iraq's invasion of Kuwait in 1990, many world

governments levied economic sanctions against the import of Iraqi oil.

II. The legal environment

The American federal government has put forth a number of laws that regulate the activities of
U.S. firms engaged in international trade. However, once outside U.S. borders, American
organizations are likely to find that the laws of the other nations differ from those of the U.S.
Many legal rights that Americans take for granted do not exist in other countries; a U.S. firm
doing business abroad must understand and obey the laws of the host country.

III. The Economic Environment

Managers must monitor currency, infrastructure, inflation, interest rates, wages, and taxation. In
assessing the economic environment in foreign countries, a business must pay particular
attention to the following four areas:
 Average income levels of the population. If the average income for the population is
very low, no matter how desperately this population needs a product or service, there
simply is not a market for it.
 Tax structures: In some countries, foreign firms pay much higher tax rates than
domestic competitors. These tax differences may be very obvious or subtle, as in
hidden registration fees.

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  Inflation rates: In the U.S., for example, inflation rates have been quite low and
relatively stable for several years. In some countries, however, inflation rates of 30,
40, or even 100 percent per year are not uncommon. Inflation results in a general rise
in the level of prices, and impacts business in many ways.

For example, in the mid-1970s, a shortage of crude oil led to numerous

problems because petroleum products supply most of the energy required
to produce goods and services and to transport goods around the world.

 Fluctuating exchange rates: The exchange rate, or the value of one country's
currency in terms of another country's currency, is determined primarily by supply
and demand for each country's goods and services. The government of a country can,
however, cause this exchange rate to change dramatically by causing high inflation-
by printing too much currency or by changing the value of the currency through
devaluation. A foreign investor may sustain large losses if the value of the currency
drops substantially.

IV. The Socio-Cultural Environment

Cultural differences, which can be very subtle, are extremely important. An organization that
enters the international marketplace on virtually any level must make learning the foreign
country's cultural taboos and proper cultural practices a high priority. If a business fails to
understand the cultural methods of doing business, grave misunderstandings and a complete lack
of trust may occur.

Management differences also exist.

In China, a harmonious environment is more important than day-to-day

productivity.

In Morocco, women can assume leadership roles, but they are usually more self-
conscious than American women are.

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 In Pakistan, women are not often found in management positions, if they are in
the workplace at all.

In addition, the importance of work in employees' lives varies from country to country.

For example, the Japanese feel that work is an important part of their lives. This belief in
work, coupled with a strong group orientation, may explain the Japanese willingness to
put up with things that workers in other countries would find intolerable.

Likewise, culture may affect what employees find motivating, as well, as how they respond to
rewards and punishments.

For example, Americans tend to emphasize personal growth, accomplishment, and

“getting what you deserve” for performance as the most important motivators. However,
in Asian cultures, maintaining group solidarity and promoting group needs may be more
important than rewarding individual achievements.

V. The Technological Environment

The technological environment contains the innovations, from robotics to cellular phones, which
are rapidly occurring in all types of technology. Before a company can expect to sell its product
in another country, the technology of the two countries must be compatible.

VI. Consumer Safety in a Global Marketplace

The United States leads the world in spending on research and development. As products and
technology become more complex, the public needs to know that they are safe. Thus,
government agencies investigate and ban potentially unsafe products. In the United States, the
Federal Food and Drug Administration has set up complex regulations for testing new drugs. The
Consumer Product Safety Commission sets safety standards for consumer products and penalizes
companies that fail to meet them. Such regulations have resulted in much higher research costs
and in longer times between new product ideas and their introduction. This is not always true in
other countries.
4. Functions of the International Manager

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Although the international manager performs the same basic functions as the domestic manager,
he must adjust to more variables and environments. Therefore, each of the five basic
management functions must change when operating in a foreign market.

Planning
The first stage of international planning is to decide how to do business globally: whether to
export, to enter into licensing agreements or joint ventures, or to operate as a multinational
corporation with facilities in a foreign country.

To develop forecasts, goals, and plans for international activities, the manager must monitor
environments very closely. Key factors include:

 Political instability
 Currency instability
 Competition from governments
 Pressures from governments
 Patent and trademark protection
 Intense competition

Organizing
International businesses must be organized so that they can adapt to cultural and environmental
differences. No longer can organizations just put “carbon copies” or clones of themselves in
foreign countries. An international firm must be organized so that it can be responsive to foreign
customers, employees, and suppliers. An entire firm may even be organized as one giant
worldwide company that has several divisions. Above all, the new organization must establish a
very open communication system where problems, ideas, and grievances can quickly be heard
and addressed at all levels of management.

As an organization extends its operations internationally, it needs to adapt its structure. When the
organization increases its international focus, it goes through the following three phases of
structural change:

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1. Pre-international stage. Companies with a product or service that incorporates the latest
technology, is unique, or is superior may consider themselves ready for the international
arena. The first strategy used to introduce a product to a foreign market is to find a way to
export the product.

At this phase, the firm adds an export manager as part of the marketing department
and finds foreign partners.

2. International division stage. Pressure may mount through the enforcement of host country
laws, trade restrictions, and competition, placing a company at a cost disadvantage. When a
company decides to defend and expand its foreign market position by establishing
marketing or production operations in one or more host countries, it establishes a separate
international division. In turn, foreign operations begin, and a vice president, reporting
directly to the president or CEO, oversees the operations.

3. Global structure stage. A company is ready to move away from an international division
phase when it meets the following criteria:

 The international market is as important to the company as the domestic market.

 Senior officials in the company possess both foreign and domestic experience.
 International sales represent 25 to 35 percent of total sales.
 The technology used in the domestic division has far outstripped that of the
international division.
Staffing
Because obtaining a good staff is so critical to the success of any business, the hiring and
development of employees must be done very carefully. Management must be familiar with the
country's national labor laws. Next, it must decide how many managers and personnel to hire
from the local labor force and whether to transfer home-based personnel.

For example, U.S. firms are better off hiring local talent and using only a few key expatriates in
most cases, because the costs of assigning U.S.–based employees to positions overseas can be
quite expensive. Simply, expatriates (people who live and work in another country) are
expensive propositions even when things go well.

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Adding up all the extras-higher pay, airfare for family members, moving expenses, housing
allowances, and education benefits for the kids, company car, taxes, and home leave—means
that the first year abroad often costs the multinational company many times the expatriate's base
salary.

The total bill for an average overseas stay of four years can easily top $1 million
per expatriate. In any case, managers need to closely examine how to select and
prepare expatriates.
Directing
Cultural differences make the directing function more difficult for the international manager.
Employee attitudes toward work and problem solving differ by country. Language barriers also
create communication difficulties. To minimize problems arising from cultural differences,
organizations are training managers in cross-cultural management. Cross-cultural management
trains managers to interact with several cultures and to value diversity.

In addition, the style of leadership that is acceptable to employees varies from nation to nation.

Controlling
Geographic dispersion and distance, language barriers, and legal restrictions complicate the
controlling function. Meetings, reporting, and inspections are typically part of the international
control system.

Controlling poses special challenges if a company engages in multinational business because of

the far-flung scope of operations and the differing influences of diverse environments.
Controlling operations is nonetheless a crucial function for multinational managers.

In many countries, bonuses, pensions, holidays, and vacation days are legally
mandated and considered by many employees as rights.

4. Methods of Entering in to the Multinational Corporation

If a company wants to venture into the international marketplace, it can use several different
methods. In each case, the levels of risk and control move together. The four most common
approaches include the following:

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 Exporting: The selling of an organization's products to a foreign broker or agent is known
as exporting. The organization has virtually no control over how products are marketed
after the foreign broker or agent purchases them. Because the investment is relatively small,
exporting is a low-risk method of entering foreign markets. The only real danger here is
what the foreign agent might do with the products to hurt the organization's or product's
image.
 Licensure agreement: This approach allows a foreign firm to either manufacture or sell
products, or the right to place a brand name or symbols on products. Disney World, for
example, has licensure agreements with many foreign firms. This approach provides more
control than an export sale, as a firm can require that certain specifications be met, yet it is
still not the manufacturer in the foreign market.
 Other Multinational approach: With this approach, a firm is willing to make substantial
commitment to a foreign market. Normally, products or services are modified to meet the
foreign market demands, and in many cases, substantial fixed investments are made in
plants and equipment. The most common ways to become a multinational firm are to form
joint ventures or global strategic partnerships, or to establish wholly owned subsidiaries.
 Joint ventures occur when a company forms a partnership with a foreign firm to
develop new products or to give each other access to local markets. Normally, the
roles and responsibilities of each organization are clearly spelled out in the joint-
venture agreement. This approach increases both control and risk.
 Global strategic partnerships are much larger than a simple joint venture. Two
firms join and make a long-term commitment, in the form of time and investments,
to develop products or services that will dominate world markets. This approach
does not modify products for a particular market but develops a single product
market strategy that can be utilized in all markets in hopes of dominating the
worldwide market for that product.
 Wholly owned subsidiaries occur when a firm purchases either controlling interest
or all of a foreign firm. Often, the subsidiary firm is given considerable freedom in
terms of how to operate in the foreign market, and heavy use of foreign managers
and employees is very common. The owning firm does have the most control, but it
also has substantial investment risk.

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  Vertically integrated wholly owned subsidiaries exist where a firm owns not only
the foreign manufacturer but the foreign distributors and retailers as well. Again,
the main emphasis is on dominating a worldwide product or service area with a
single product market strategy.

True global products are very difficult to develop, and it is even more
difficult to dominate all global markets.

5. Characteristics of multinational company

Common characteristics of successful multinational corporations include the following:

 Creation of foreign affiliates

 Global visions and strategies
 Engagement in manufacturing or in a restricted number of industries
 Location in developed countries
 Adoption of high-skills staffing strategies, cheap labor strategies, or a mixture of
both

6. Difference between a Global Transnational, International and Multinational Company

International companies are importers and exporters; they have no investment outside of their
home country.

Multinational companies have investment in other countries, but do not have coordinated
product offerings in each country. More focused on adapting their products and service to each
individual local market

Global companies have invested and are present in many countries. They market their products
through the use of the same coordinated image/brand in all markets. Generally, one corporate
office that is responsible for global strategy. Emphasis on volume, cost management and
efficiency

Transnational companies are much more complex organizations. They have invested in foreign
operations, have a central corporate facility, but give decision-making, R&D and marketing
powers to each individual foreign market.

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Advantages and Disadvantages of Multinational Companies

Investment
Advantages: The companies bring much needed money into the country. Although most of their
profits do return to the company’s country of origin, the local economy does benefit.

Disadvantages: The wages paid to local workers are often low and some companies have been
accused of exploiting the local workforce rather than benefiting it. There are often tax incentives
for these companies to locate in countries in the Developing World. This added to the fact that
they take most of their profits out of the country, means that the actual economic benefit to the
country could be minimal.

Technology
Advantages: The companies help the development of the country by bringing in technology and
knowledge that the host country does not possess.

Disadvantages: Unless the company actively participates in a program to educate local

companies in the new technologies, the country’s industry will not really benefit. Multi-national
companies might be worried by sharing too much information, as they could find themselves
with increased competition from local companies.

Transport
Advantages: The new companies often help to improve transport links around the area.

Disadvantages: The transport links that do receive financial help from the multi-nationals often
only serve the direct routes and needs of that company, not the wider area as well.

Employment
Advantages: They create jobs for the local population.

Disadvantages: Often the jobs are highly skilled and so the company brings in their own people
to do them. In addition, the technological nature of many of these companies means that there are
not as many jobs as there might have been.

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Growth poles
Advantages: The new multi-national companies act as growth poles for other similar companies.
They could encourage more companies to locate in that country once they see the benefits that it
brings.

Disadvantages: Only a limited range of companies find that moving to a Developing World
location is beneficial. They will only move there if it makes economic sense for the country.
They do not consider the potential benefits to the host country.

Environment/Safety
Advantages: Companies bring with them the technology and expertise to reduce harmful
pollution and create a safe working environment.

Disadvantages: Many multi-national companies have very poor records on pollution and worker
safety. They have been accused of trying to cut corners with both safety and pollution in order to
keep costs down

Study hint

Discuss the following terminologies

 multinational corporation (MNC)  Licensure agreement

 Characteristics of multinational
company
 The International Environment
 Functions of the International
Manager
 Pre-international stage
 International division stage
 Exporting
 Other Multinational approach
 Joint ventures
 Global strategic partnerships
 Wholly owned subsidiaries
 Vertically integrated wholly-
owned subsidiaries
 Multinational vs. Transnational

Chapter 6: Performance Management and Coaching

1. Definitions

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Etymologically, the English term “coach” is derived from a medium of transport that traces its
origins to the Hungarian word kocsi meaning “carriage” that was named after the village where it
was first made. The first use of the term coaching to mean an instructor or trainer arose around
1830 in Oxford University slang for a tutor who "carries" a student through an exam. Coaching
thus has been used in language to describe the process used to transport people from where they
are, to where they want to be. The first use of the term in relation to sports came in 1831.

Coaching is a teaching, training or development process via which an individual is supported

while achieving a specific personal or professional result or goal. The individual receiving
coaching may be referred to as the client or coachee. Occasionally, the term coaching may be
applied to an informal relationship between two individuals where one has greater experience
and expertise than the other and offers advice and guidance as the other goes through a learning
process.

The structures, models, and methodologies of coaching are numerous, and may be designed to
facilitate thinking or learning new behavior for personal growth or professional advancement.
There are also forms of coaching that help the coachee improve a physical skill, like in a sport or
performing art form.

Some coaches use a style in which they ask questions and offer opportunities that will challenge
the coachee to find answers from within him/her.

This facilitates the learner to discover answers and new ways of being based on their
values, preferences, and unique perspective.

When coaching is aimed at facilitating psychological or emotional growth it should be

differentiated from therapeutic and counseling disciplines, since clients of coaching, in most
cases, are considered healthy (i.e. not sick). The purpose of the coaching is to help them move
forward in whatever way they want to move, not to 'cure' them.

In addition, the therapist or counselor may work from a position of authoritative doubt, but
cannot claim the position of ignorance so vital for coaching, because of the assessment
knowledge that underpins their work.

2. Various dimensions of coaching

There are various dimensions of coaching:

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A. Life coaching

Life coaching draws upon a variety of tools and techniques from other disciplines such
as sociology, psychology, positive adult development, and career counseling with an aim
towards helping people identify and achieve personal goals. Specialty life coaches may have
degrees in psychological counseling, hypnosis, dream analysis, marketing, and other areas
relevant to providing guidance. However, they are not necessarily therapists or consultants;
psychological intervention and business analysis may lie outside the scope of some coaches'
work.

Many life-coach training schools and -programs operate worldwide, providing options
(classroom attendance or home study) for the individual who wants to gain a certificate or
diploma and to take up paid work in the field of life coaching. Many certificates and a few
diplomas are available within the profession.

B. Control Theory of coaching

Multiple factors affect coaching such as motivation, cultural differences, goals, and feedback.
Control theory focuses on goals and feedback. The basic premise of control theory is that
people attempt to control the state of some variable by regulating their own behavior.

With behavioral regulation, first compare the goal with feedback. After comparing the
two, you can now evaluate if there is a behavior that can be changed to increase
performance, which will help reach your goal.

C. Expat and global executive coaching

Expat and global Executive coaching deals specifically with the unique set of challenges created
from crossing cultures following an international or domestic relocation.

This niche of coaching tends to center around adapting to a new culture, identity issues created
within relocating families, difficulties attaining professional goals amidst a changing political
and social structure, and other social and personal hurdles unique to each individual.

This method of coaching is either individual or group-based and helps the client gain
fulfillment, success and a sense of identity in the areas that are coached.

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D. Career coaching

Career coaching focuses on work and career or issues around careers. It is similar in nature
to career counseling and traditional counseling. Career coaching is not to be confused with life
coaching, which concentrates on personal development. Another common term for a career
coach is career guide, although career guides typically use techniques drawn from not only
coaching, but also mentoring, advising and consulting.

E. Financial coaching

Financial coaching is an emerging form of coaching that focuses on helping clients overcome
their struggle to attain specific financial goals and aspirations they have set for themselves. At its
most basic, financial coaching, is a one-on-one relationship in which the coach works to provide
encouragement and support aimed at facilitating attainment of the client's financial plans?
Recognizing the array of challenges inherent in behavior change, including all too human
tendencies to procrastinate and overemphasize short-term gains over long-term wellbeing, they
monitor their clients’ progress over time and hold the client accountable. This monitoring
function is hypothesized to boost clients’ self-control and willpower.

Previous studies in psychology indicate that individuals are much more likely to follow through
on tasks when others monitor them, rather than when they attempt to ‘self-monitor’.

Note

In contrast to financial counselors and educators, financial coaches do not need to be

experts in personal finance because they do not focus on providing financial advice or
information to clients.

F. Personal coaching

Personal coaching is a process, which is designed and defined in a

relationship agreement between a client and a coach. It is based on the client's expressed
interests, goals, and objectives.

A professional coach may use inquiry, reflection, requests and discussion to help clients identify
personal and/or business and/or relationship goals, and develop action plans intended to achieve
those goals.

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The client takes action, and the coach may assist, but never leads or does more than the client
does. Professional coaching is not counseling, therapy, or consulting. These different skill sets
and approaches to change may be adjunct skills and professions.

G. Systemic coaching

Systemic coaching is a form of counseling that employs constructivist conversation, aimed at

human problem resolution. Systemic coaching recognizes that in order for two or more persons
to interact effectively in a social system, any one individual or group of individuals within that
system, each as an element of the whole, may require or benefit from coaching aimed at restoring
equilibrium or creating a new alignment.

H. Health coaching

In the world of health and wellness, a health coach is an emerging new role. Health coaching is
becoming recognized as a new way to help individuals "manage" their illnesses and conditions,
especially those of a chronic nature. The coach will use special techniques, personal experience,
expertise, and encouragement to assist the coachee in bringing his/her behavioral changes about.

I. Sports coaching

In sports, a coach is an individual that teaches and supervises, which involves giving directions,
instruction and training of the on-field operations of an athletic team or of individual athletes.
This type of coach gets involved in all the aspects of the sport, including physical and mental
player development. Sports coaches train their athletes to become better at the physical
components of the game, while others train athletes to become better at the mental components
of the game.

J. Dating coaching

Dating coaches are coaches whose job is to direct and train people to improve their success in
dating and relationships. A dating coach directs and trains his/her clients on various aspects of
meeting and attracting long-term partners and meeting prospects that are more compatible. The
focus of most programs is on confident and congruent communication.

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K. Conflict coaching

Conflict coaching may be used in an organizational context or in matrimonial and

other relationship matters. Like many other techniques of this nature, it is premised on the view
that conflict provides an opportunity to improve relationships, to create mutually satisfactory
solutions and attain other positive outcomes when differences arise between and among people.

L. Victimization coaching

Victimization coaching is a type of life coaching that educates people who consider themselves
as victims of crime or those who fear victimization. Coaches work with groups of people to
assist them on how to identify and approach potentially hazardous situations.

3. Coaching ethics and standards

One of the challenges in the field of coaching is upholding levels of professionalism, standards,
and ethics. To this end, many of the coaching bodies and organizations have codes of ethics and
member standards and criteria according to which they hold their members accountable in
order to protect coaching clients' interests.

4. Viability as a career

Coaching as a career has become increasing popular over the past 15 years. the research
undertaken, for, example, by Suzanne Falter-Barnes and David Wood demonstrated in a 2007
survey of 3,000 coaches that more than 50% are earning less than $10,000 a year. However,
the survey canvassed a mixture of full-time and part-time coaches.

5. Seven Steps to Coaching Your Employees to Success

These seven steps, when followed, can help create a positive environment for providing
feedback.

Step 1: Build a Relationship of Mutual Trust

The foundation of any coaching relationship is rooted in the manager's day-to-day relationship
with the employee. Without some degree of trust, conducting an effective coaching meeting is
impossible.

Step 2: Open the Meeting

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In opening a coaching meeting, it is important for the manager to clarify, in a non-evaluative, no
accusatory way, the specific reason the meeting was arranged. The key to this step is to restate --
in a friendly, nonjudgmental manner-the meeting purpose that was first set when the appointment
was scheduled.

Step 3: Get Agreement

Probably the most critical step in the coaching meeting process is getting the employee to agree
verbally that a performance issue exists. Overlooking or avoiding the performance issue because
you assume the employee understands its significance is a typical mistake of managers. To
persuade an employee a performance issue exists, a manager must be able to define the nature of
the issue and get the employee to recognize the consequences of not changing his or her
behavior. To do this, you must specify the behavior and clarify the consequences.
The skill of specifying the behavior consists of three parts.

 Cite specific examples of the performance issue.

 Clarify your performance expectations in the situation.
 Asks the employee for agreement on the issue
The skill of clarifying consequences consists of two parts. You should:

 Probe to get the employee to articulate his or her understanding of the consequences
associated with the performance issue.
 Ask the employee for agreement on the issue.

Step 4: Explore Alternatives

Next, explore ways the issue can be improved or corrected by encouraging the employee to
identify alternative solutions. Avoid jumping in with your own alternatives, unless the employee
is unable to think of any. Push for specific alternatives and not generalizations. Your goal in this
step is not to choose an alternative, which is the next step, but to maximize the number of
choices for the employee to consider and to discuss their advantages and disadvantages.

This requires the skill of reacting and expanding. You should acknowledge the employee's
suggestion, discuss the benefits and drawbacks of the suggestion, ask for and offer additional
suggestions, and ask the employee to explain how to resolve the issue under discussion.

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Step 5: Get a Commitment to Act
The next step is to help the employee choose an alternative. Do not make the choice for the
employee. To accomplish this step, the manager must be sure to get a verbal commitment from
the employee regarding what action will be taken and when it will be taken. Be sure to support
the employee's choice and offer praise.

Step 6: Handle Excuses

Employee excuses may occur at any point during the coaching meeting. To handle excuses,
rephrase the point by taking a comment or statement that was perceived by the employee to be
blaming or accusatory and recast it as an encouragement for the employee to examine his or her
behavior. Respond empathically to show support for the employee's situation and communicate
an understanding of both the content and feeling of the employee's comment.

Step 7: Provide Feedback

Effective coaches understand the value and importance of giving continual performance
feedback to their people, both positive and corrective.
There are a few critical things to remember when giving feedback to others. Feedback should:

 Be timely. It should occur as soon as practical after the interaction, completion of the
deliverable, or observation is made.
 Be specific. Statements as if "You did a great job" or "You didn't take care of the clients'
concerns very well" are too vague and do not give enough insight into the behavior you
would like to see repeated or changed.
 Focus on the "what," not the "why." Avoid making the feedback seem as if it is a
judgment. Begin with "I have observed..." or "I have seen..." and then refer to the
behavior. Focus on behavior and not the person. Describe what you heard and saw and
how those behaviors influence the team, client, etc.
 Use a sincere tone of voice. Avoid a tone that exhibits anger, frustration,
disappointment, or sarcasm.

Positive feedback strengthens performance. People will naturally go the extra mile when they
feel recognized and appreciated. When corrective feedback is handled poorly, it will be a

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significant source of friction and conflict. When it is handled well, people will experience the
positive effects and performance is strengthened.

6. Better Way to Coach Employees

Coaching is more than just giving advice. Use this process to help your team members hone their
own behavior.

Coaching is the process of preparing your employees to succeed. Good coaches can create the
mental resources; emotional resilience, business skills, and career development that employees
need to achieve their goals.

Unfortunately, while coaching is a well-established part of the sports world, it is a neglected art
in the world of business. Much of the time, coaching is relegated to a five-minute conversation at
the end of a yearly performance review.

A. Ask for a self-assessment.

Ask the employee's opinion of a recent event (e.g. meeting, interaction, and project) in which the
employee was involved. Do not accept a pat response like, "Uh, it went fine." Instead, ask
additional questions that help lead employee to discover both the strengths and weaknesses of the
employee's performance. If the employee says something like "You're the manager, what do you
think?" respond with, "I want you think this through, and then I'll give my ideas."

B. Give balanced feedback.

Start with honest praise for the employee's strengths and your perspective on how those strengths
were an asset during the event in question. Then identify one or two key areas where you feel
improvement would have helped the employee's performance.
You are not providing advice, just identifying areas. It is important to limit the discussion to one
or two areas, by the way--more than that and you will be "flooding the engine."
C. Check for agreement.
Resolve any differences between your understanding of the event and the employee's perception
of the event. Gain agreement on the area where there was a gap between the employee's
performance and how the employee would have liked to handle the event. It is crucial to come
to agreement at this point, because otherwise the subsequent steps will be off-kilter.

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D. Identify the obstacle.
Ask the employee to identify the obstacle that he or she feels is keeping him or her from better
performance. Ask what he or she suggests to remove the obstacle, and what might be done to
address that aspect. Then provide your perspective on the obstacle and your ideas to address that
obstacle. Decide together what needs to be done in order to improve the performance.

E. Set the next step

For each obstacle that is identified, establish an action step with a period for follow-up. Provide
positive input and express confidence in the employee's ability to succeed. Then revisit the issue
at the agreed-upon time. According to Linda, this coaching method works for several reasons:
 It reduces the amount of time that the manager must spend coaching. Because the
coaching process addresses only one or two of the most important skill areas, a
typical coaching session need take no more than 15 minutes.
 It encourages the employee to become more independent, because the employee
gradually learns the self-assessment technique and is more likely to buy into the
solution.
 It puts the action items in the hands of the employee, leading your worker to become
more independent and more likely to internalize the training into daily habits.
 It strengthens the relationship between the manager and the employee through
mutual success, and builds rapport throughout the entire process.
 It provides a structure that is easily followed and can apply to virtually any business
situation or problem.
 It is not confrontational, thereby making it much easier for the manager and
employee to participate in the process.
7. What are coaching and mentoring?

Coaching is…
"A process that enables learning and development to occur and thus performance to improve. To
be a successful a Coach requires a knowledge and understanding of process as well as the variety
of styles, skills and techniques that are appropriate to the context in which the coaching takes
place"
Mentoring is...
"Off-line help by one person to another in making significant transitions in
knowledge, work or thinking"

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Mentoring, particularly in its traditional sense, enables an individual to follow in the path of an
older and wiser colleague who can pass on knowledge, experience, and open doors to otherwise
out-of-reach opportunities.

Coaching on the other hand is not generally performed on the basis that the
coach has direct experience of their client’s formal occupational role unless the
coaching is specific and skills focused.

A mentor has a one-on-one relationship with the person who is being mentored. Their position is
not so much a job, but more a friend with a higher-level experience, helping someone along the
way. Usually, the mentor will use their own expertise t help guide their postage on the right
course through business and personal decisions. They offer advice and constructive criticism
allowing the person to learn from their mistake and success. Though mentoring programs are
usually set up for the benefit of the mentored individual, many mentors find that they learn and
grow through out their experience.

A coach will observe the routines, activities, or strategies of their pupil and will
provide them with feedback the will help them to make necessary decisions to
create a successful environment. The main job of a coach is to find and correct
any problems of weaknesses within a person and their performance. Coaches will
help to build skills and increase knowledge, with in a specific area. Generally, a
coach is an outsider, who has no personal relationship with a people with whom
they are working. For most, the job of coach is a career choice, and they may
work with several people within the same parameters at a time.

8. Advantages of both coaching and mentoring?

Both coaching and mentoring are processes that enable both individual and corporate clients to
achieve their full potential. Coaching and mentoring share many similarities so it makes sense to
outline the common things coaches and mentors do whether the services are offered in a paid
(professional) or unpaid (philanthropic) role.
 Facilitate the exploration of needs, motivations, desires, skills, and thought processes
to assist the individual in making real, lasting change.
 Use questioning techniques to facilitate client's own thought processes in order to
identify solutions and actions rather than takes a wholly directive approach
 Support the client in setting appropriate goals and methods of assessing progress in
relation to these goals

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  Observe, listen and ask questions to understand the client's situation
 Creatively apply tools and techniques, which may include one-to-one training,
facilitating, counseling, & networking.
 Encourage a commitment to action and the development of lasting personal growth &
change.
 Maintain unconditional positive regard for the client, which means that the coach is at
all times supportive and non-judgmental of the client, their views, lifestyle and
aspirations.
 Ensure that clients develop personal competencies and do not develop unhealthy
dependencies on the coaching or mentoring relationship.
 Evaluate the outcomes of the process, using objective measures wherever possible to
ensure the relationship is successful and the client is achieving their personal goals.
 Encourage clients to continually improve competencies and to develop new
developmental alliances where necessary to achieve their goals.
 Work within their area of personal competence.
 Possess qualifications and experience in the areas that skills-transfer coaching is
offered.
 Manage the relationship to ensure the client receives the appropriate level of service
and that programs are neither too short, nor too long.

Optional chapter

Chapter 7: The Role of Formal and Informal Learning in Performance

Management

2. Learning
Many scholars argue that knowledge, skill, and ability play a strong role in enhancing the
performance of individuals and organizations particularly in this knowledge era. To develop once

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own KSA, individuals, groups and /or organizations should able to continuously learn both
formally and/or informally.

Learning is acquiring new, or modifying existing, knowledge, behaviors, skills, values, or

preferences and may involve synthesizing different types of information. The ability to learn is
possessed by humans, animals and some machines. Progress over time tends to follow learning
curves. Learning is not compulsory; it is contextual. It does not happen all at once, but builds
upon and is shaped by what we already know. To that end, learning may be viewed as a process,
rather than a collection of factual and procedural knowledge.

3. Gardner's Seven Knowledge Types

Howard Gardner (1983, 1999) developed a theory of multiple knowledge based upon research in
the biological sciences, logistical analysis, and psychology. He breaks down knowledge into
seven types:

A. Logical-mathematical intelligence: the ability to detect patterns, think logically,

reason and analyze, and compute mathematical equations (e.g., chemists, economists,
engineers)

B. Linguistic intelligence: the mastery of oral and written language in self-expression

and memory (e.g., journalists, lawyers, politicians)
C. Spatial intelligence: the ability to recognize and manipulate patterns (large or small)
in spatial relationships (e.g., architects, pilots, sculptors)
D. Musical intelligence: the ability to recognize and compose musical quality (pitches,
tones), and content (rhythms, patterns) for production and performance (e.g.,
composers, conductors, musicians)
E. Kinesthetic intelligence: the ability to use the body, or parts of the body to create
products or solve problems (e.g. athletes, dancers, surgeons)
F. Interpersonal intelligence: the ability to recognize another's intentions, and feelings
(e.g., managers, sales people, social workers)
G. Intrapersonal intelligence: the ability to understand oneself and use the information
to self-manage (e.g., entrepreneurs, psychologists)

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Notes

Gardner's theory purports that people use these types of intelligence according to the type of
learning that is necessary, their personal strengths and abilities, and the environment in which the
learning takes place.

4. Types of learning
According to Conner, “most learning happens through processes not structured or sponsored by
an employer or a school.” Informal learning is the term she uses to describe what happens the
rest of the time.
Formal Vs informal

5. Learning and Human Capital

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An interesting perspective on the importance of learning to an organization and the economy in
general is provided by labor economists. Their view is that learning contributes importantly to
the growth of human capital. Becker (1993, p. 12), explaining the expanding interest in human
capital, stated, “The main motivating factor has probably been a realization that the growth of
physical capital, at least as conventionally measured, explains a relatively small part of the
growth of income in most countries. The importance of human capital to the wealth of a society
is substantial, especially in advanced countries. The wealth of a nation can be divided into
human and nonhuman capital, where the latter includes a nation’ natural resources, buildings,
equipment, and other tangible objects. In 1994, the per capita wealth—human and nonhuman
—in North

America was $ 405,000. Most of that wealth (76 percent) was attributable to
human capital (Ehrenberg & Smith, 2006, p. 276). In less developed countries,
the portion due to human capital is smaller (60 percent), but still substantial.

According to labor economists again, human capital comprises the skills and knowledge a
worker possesses and “rents out” to an employer for a period of time (Ehrenberg & Smith,
2006,p. 276). Workers and employers both invest in human capital. The worker invests through
efforts at formal and informal learning. The employer invests through formal and informal
learning (on - the - job training).

The employer benefits from human capital investments through increases in productivity, and
the worker benefits from investments in his or her own human capital, although not right away,
by increases in earnings. For both workers and employers, the benefits of formal and informal
learning are delayed, just like any investment. Workers are willing to forego higher current
earnings while they acquire additional skills and knowledge. Employers are willing to sacrifice
productivity and incur costs while the worker is gaining skills and knowledge while on the job.

6. Factors That Enhance formal and/or Informal Learning

a. Characteristics of the Workplace

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If organizations wish to achieve Singe’s vision and become learning organizations, then they
need to take actions to create a work environment that facilitates informal learning. If managers
want to provide successful developmental opportunities following completion of a performance
management process, then they must provide a work environment that supports formal and/or

Informal Learning
Researchers have examined the characteristics of organizations that facilitate formal and/or
Informal Learning

In a study of factors that assist or inhibit learning of new job assignments(Morrison & Brantner,
1992) examined job characteristics, work context, and work environment factors that
influenced formal and informal job learning.
i. job characteristics that influenced learning were
 role complexity,
 job significance
 job challenge
ii. Work factors that influenced informal learning of the job were
 the organization’s climate (for example, cooperation of leaders and
competence of peers and subordinates)
 place of work
iii. Work context factors
 Task variation
 Feedback
 Job mobility
 Role autonomy
 Role complexity, challenges
 Participation in temporary teams
 Access to experts in and outside of the organization
 Opportunity to use new skills and knowledge
 Social support in work setting
 Incentives in sharing knowledge

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 Pace of work
 Competence of peers
 Exposure to customer and manager demands

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Characteristics of the Worker That Influence Informal Learning
Characteristics of the worker have been shown to be important to formal and informal learning.
Some of these factors include:
 penne’s to experience  Valence
 Cognitive ability  Job involvement
 Extraversion  Teamwork
 Locus of control  Communication
 Conscientiousness  Adaptability
 Anxiety  Organizational
 Age awareness
 Self-efficacy  Commercial awareness
Study hint
Describe/elaborate the following terminologies:
 Learning
 Logical-mathematical intelligence
 Linguistic intelligence
 Spatial intelligence
 Musical intelligence
 Kinesthetic intelligence
 Interpersonal intelligence
 Intrapersonal intelligence
 Formal Vs informal
 Learning and Human Capital
 Factors That Enhance/hinder Learning

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 Oromia State University
Human Resource Management and Leadership Team HRML
Course outline on Performance Management I (week-end Program)

E+R=O
Event + Response = Outcome

1. General Information
 Course Title: Performance Management
 Code: HRML 341
 Credit hours 3chrs
 Course Category: Major Course
 Course producer : Tarekegn J

2. Introduction
Performance management is a system designed to identify the ways to achieve organizational
goals through constant assessment and feedback leading to improvement of employee
performance. Performance management, unlike the performance appraisal or annual evaluation
process, is an ongoing assessment of employees in a manner geared to match their goals to the
organizational goals. It also makes strong use of goal setting and metrics to identify progress and
areas of individual strengths.

Performance management systems, in various forms, have been employed for nearly two
millennia. In the third century AD, the Chinese were not only using performance appraisal
systems but were analyzing each other’s biases in their evaluations of their employees (Murphy
and Cleveland, 4; Evans, 3). During the Industrial Revolution of the 18 th century, factory
managers became aware of the importance of their employees’ performance on their production
outputs (Grote and Grote, 3; Murphy and Cleveland, 4). The development of the philosophy of
performance evaluation systems in America has been attributed to such researchers and
philosophers as Peter Drucker and Douglas McGregor, who developed ideas of management by

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objectives (MBOs) and employee motivation (Evans, 4; Murphy and Cleveland, 3). Spiegel
reported in 1962 that by the early 1960s more than 60% of American organizations had a
performance appraisal system. The system’s popularity stemmed from the Army’s
implementation of a performance management system for its officers (Murphy and Cleveland,
3). Since then, researchers have continued to develop theories of how different performance
evaluation methods can contribute to the success of the organization.

Generally, we will critically elaborate the concept of performance and performance management,
high performing organizational culture, contextual per4formances, counterproductive behaviors,
performance of multinational organization, coaching, performance, and informal learning and
performance.

3. Objectives
The objectives of Performance Management are to:
 Describing the term performance and performance management
 Elaborating the concept of high performing organizational culture
 Describing the concept of contextual performance
 Describing counterproductive behaviors
 Describing performance in multinational companies
 Elaborating the relationship between learning and performance
 Relating coaching with performance
 Increase two-way communication between supervisors and employees
 Clarify mission, goals, responsibilities, priorities and expectations
 Identify and resolve performance problems
 Recognize quality performance
 Provide a basis for administrative decisions such as promotions, succession and strategic
planning, and pay for performance.

4. Course content
 Chapter 1: overview of performance and performance management
 Chapter Two: Creating a High Performance Organizational Culture
 Chapter 3: Managing Contextual Performance

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  Chapter 4: Diagnosing, Understanding, and Dealing With Counterproductive Work
Behavior
 Chapter 5: Performance Management in Multinational Companies

 Chapter 6: Performance Management and Coaching

 Chapter 7: The Role of Formal and Informal Learning in Performance Management

(Optional chapter)

5. Summary Of Assessment Methods

 Quizzes=20%
 Discussions and debations=20%
 Case review=20%
 Final exam=40%

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References
1. (1997). 360-degree Assessment: An Overview, United States Office of Personnel
Management Performance Management and Incentive Awards Division.
2. Ahn, H. (2005). Measuring business excellence, Emerald Group Publishing Ltd, Vol. 9,
No. 1, pp. 5-12
3. Andersen, B., Henriksen, B. & Aarseth, W. (2006).Holistic performance management: an
integrated framework, International Journal of Productivity and Performance
Management, Vol. 55, No. 1, pp. 61-78.
4. Artley, W., Ellison, DJ. & Kennedy, B. (2001). The performance-based management
handbook: Establishing and maintaining a performance-based management program, Oak
Ridge Associated Universities.
5. Billikopf, G. (2003). Labor Management in Agriculture: Cultivating Personnel
Productivity, University of California.
6. Busi, M. & Bititci, U. S. (2006). Collaborative performance management: present gaps
and future research, International Journal of Productivity and Performance Management,
Vol. 55, No. 1, pp. 7-25.
7. Danielle S. W., Et Al (1998). The Evolution of the Performance Appraisal Process.
Journal of Management History, Vol. 4, No. 3, 233-249.
8. de Waal A.A. & Gerritsen-Medema, G. (2006). Performance management analysis: a
case study at a Dutch municipality, International Journal of Productivity and Performance
Management Vol. 55, No. 1, pp. 26-39
9. Decotiis, T. & Petit, A. (1978). The Performance Appraisal Process: A Model and Some
Testable Propositions. The Academy of Management Review, Vol. 3, No. 3, 635-646.
10. Gibbons, F. X. & Kleiner, B. H. (1994). Factors That Bias Employee Performance
Appraisal. Journal of Work Study, Vol. 43, No. 3, 10-13.
11. Heneman III, H. G., Et Al (1989). Personnel/Human Resource Management, 4th Edition,
Richard D. Irwin, Inc., USA.
12. Ivancevich, J. M. & Glueck, W. G. (1989). Foundations of Personnel/Human Resource
Management, 4th Edition, Richard D. Irwin, Inc., USA.

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13. Mathis, R. L. & Jackson, J. H. (1997). Human Resources Management, 8th Edition, West
Publishing Company, USA.

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