Performance Management

Chapter 20
Performance
Management
Objectives
Explain the importance of performance
feedback
Describe the process of performance
appraisal
Identify the components of effective
appraisals
Demonstrate the skills required for a good
appraisal
Organizational Behavior: An Experiential Approach 8/E 20 -1

Joyce S. Osland, David A. Kolb, Irwin M. Rubin and Marlene E. Turner
…Objectives
Describe 360-degree feedback
Explain the opposition to appraisal
systems
Distinguish between effective and
ineffective feedback

Performance Management
System - Defined
A performance management system is a

process of establishing performance
standards and evaluating performance to
ensure that goals are being effectively
accomplished

The Balanced Scorecard
 Customer perspective – How do customers
see the organization?
 Internal business perspective – What must
the organization excel at in order to succeed?
 Innovation and learning perspective –
How can the organization continue to
improve and create value?
 Financial perspective – How does the
organization look to shareholders?

Basics of Performance
Management
Develop rigorous systems that differentiate
between three groups of employees
Create conditions that foster goal

accomplishment
Establish a culture of accountability

Function Of Performance
Feedback
Contributes to self-concept
Reduces uncertainty about whether
employee is on track
Signals which organizational goals are
most important
Helps people master their environment
and feel competent

Manager’s Role?
Not a judge, but a coach

Not “gotcha” but “How can I help you do
better and achieve your goals?”
Managers’ attitude toward appraisal and

their skill in appraising and giving
feedback are crucial

Basic Objectives of Performance
Appraisal Systems
Provide employees with feedback
Provide management with data for
personnel decisions
Recognize skill acquisition and identify
skill deficits for further training and
development
Motivate employees to be more effective
Comply with equal opportunity regulations
and ensure fairness
The Appraisal Process
 Review legal requirements
 Translate organizational goals into job
descriptions
 Set clear job expectations
 Provide job training or coaching to meet
expectations
 Supply adequate supervision
 Acknowledge accomplishments, diagnose
strengths and weaknesses in interview
 Establish performance goals and development
plan
Bias and Appraisals
Incorrect attributions can bias appraisals
Potential for bias is reduced when:
 Employees make their work visible to the
appraiser
 Appraisers and appraisees together clarify
objectives and task responsibilities
 Appraisers use behaviorally-based appraisal
scales

Does Performance Appraisal
Work? Meta-analysis
results
Feedback generally improves

performance, but it can also diminish
performance
Appraisals used for developmental rather
than administrative reasons (e.g.,
promotions, bonuses) are more likely to
produce positive reactions

For Team Appraisals
Determine KSAs required for team’s task
and process-oriented skills
Identify who should be involved in the
appraisal
Use both individual and team performance
measures
Address social loafing
Ensure peers are trained in performance
appraisal
Multirater/Multisource
Feedback - Defined
Multirater or multisource feedback, such as

360-degree feedback, incorporates
feedback from various sources, such as:
superiors, peers, subordinates, suppliers,
and customers

360-Degree Multirater
Feedback
Superiors’ Manufacturers’ &
ratings Customers’ ratings
Other Team
Members’ Employee Subordinates’
Ratings ratings
Employee’s Suppliers’
self-rating ratings

For Effective 360-Feedback
Ratees are held accountable for using the
feedback
Raters are held accountable for the

accuracy or usefulness of their feedback
 Management provides resources to

support the ratee’s behavioral change
Eliminate Performance Appraisal
Deming’s criticisms of appraisals:
 Usually lack objectivity
 Ignore factors outside the employee’s control
 Encourage individual rather than team focus
 Promote short-sightedness and short-term focus
 Encourage employee to see boss as their
“customer” rather than the real customer, which can
result in fear, rivalry, and politics
The TQM solution: recognize outstanding

performers and coach poor performers; teams
continuously gather data on own performance
Forced Distribution Systems -
Defined
In forced distribution or forced ranking
systems, managers have to rank all
employees and fit them into a pre-determined
distribution with only a certain percentage of
employees allowed in each category

Results of Forced Distribution
Systems
Employee skepticism
Lower morale
Less collaboration
Lower productivity

Develop Strengths, Not
Weaknesses
Focusing on Flaws Focusing on

 Evokes negative Strengths is more
memories/emotions productive
 Creates self-doubt  Discover each
employee’s unique
 Lowers motivation, strengths
energy, productivity
 Capitalize on them
and self-assurance
 Work around their
Organizational Behavior: An Experiential Approach 8/E
weaknesses 20 -19
Effective Vs. Ineffective
Feedback
 Effective  Ineffective
 Descriptive  Evaluative
 Specific, data-based  General
 Directed at controllable  Directed at personality
behaviors traits
 Solicited  Imposed
 Immediate  Delayed
 Suggests ways to  Prescribes ways to
improve improve
 Intended to help  Intended to punish
 Occurs when receiver is  Occurs when giver is
ready to listen ready
Steps in the Interview Process
Explain the format and purpose
 Discover employee opinions regarding
performance and career goals
 Provide supervisor’s appraisal
 Problem solve about performance if
necessary
 Plan for next period
Employee presents self-appraisal

...Steps in the Interview Process
 Respond to employee self-appraisal and convey
feedback
 Ask about conditions or problems that hinder
performance
 Problem solve about what both could do to
improve employee performance
 Together set objectives and design plan for next
period
 Discuss long-term career goals and
development needs
When Does Culture Matter
in Performance Appraisal?
Different cultures have different perceptions

about the purpose of performance appraisal
and how it should be carried out

Culture and Performance
Appraisal
Harmony and face-saving
 In Eastern cultures, negative feedback is
likely to be interpreted as a loss of face and
public humiliation
Power distance
 In low power-distance cultures, employees
are more willing to question superiors
 In high power-distance cultures, employees
are more fearful of disagreeing with their boss
…Culture and
Performance Appraisal
Uncertainty avoidance
 In cultures characterized by high
uncertainty avoidance, appraisal
systems are more formalized with more
detailed regulations and procedures

…Culture and Performance
Appraisal
Individualistic Cultures Collectivist Cultures
emphasize emphasize
 Individual achievement  Group achievement
 Individual incentive  Group incentive
schemes schemes
 Formal appraisal  Informal appraisals
processes with  Hire and fire based on
feedback on loyalty and seniority
performance
 Merit-based hiring and
promotion

Performance Management

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Chapter 20

Organizational Behavior: An Experiential Approach 8/E 20 -1

Organizational Behavior: An Experiential Approach 8/E 20 -2

A performance management system is a

Organizational Behavior: An Experiential Approach 8/E 20 -3

Organizational Behavior: An Experiential Approach 8/E 20 -4

Create conditions that foster goal

Establish a culture of accountability

Organizational Behavior: An Experiential Approach 8/E 20 -5

Organizational Behavior: An Experiential Approach 8/E 20 -6

Not a judge, but a coach

Managers’ attitude toward appraisal and

Organizational Behavior: An Experiential Approach 8/E 20 -7

Organizational Behavior: An Experiential Approach 8/E 20 -10

Feedback generally improves

Organizational Behavior: An Experiential Approach 8/E 20 -11

Multirater or multisource feedback, such as

Organizational Behavior: An Experiential Approach 8/E 20 -13

Organizational Behavior: An Experiential Approach 8/E 20 -14

Raters are held accountable for the

 Management provides resources to

The TQM solution: recognize outstanding

Organizational Behavior: An Experiential Approach 8/E 20 -17

Organizational Behavior: An Experiential Approach 8/E 20 -18

Focusing on Flaws Focusing on

Organizational Behavior: An Experiential Approach 8/E 20 -21

Different cultures have different perceptions

Organizational Behavior: An Experiential Approach 8/E 20 -23

Organizational Behavior: An Experiential Approach 8/E 20 -25

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