a

CHAPTER 6
Managing Employees’
Performance

McGraw-Hill/Irwin Copyright © 2009 by The McGraw-Hill Companies, Inc. All Rights Reserved. 8-1
 The Process of Performance
Management

• Performance Management is the process

through which managers ensure that
employees’ activities and outputs contribute
to the organization’s goals.

8-2
 Introduction

• Effective performance management can tell

top performers that they are valued,
encourage communication between managers
and their employees, establish uniform
standards for evaluating employees, and help
the organization identify its strongest and
weakest performers.
• “What is it you expect of me? How am I doing
at meeting your expectations?”
8-3
Figure 6.1: Stages of the Performance
Management Process

8-4
 Purposes of Performance
Management
• Organizations establish performance
management systems to meet three broad
purposes:
• Strategic purpose means effective
performance management helps the
organization achieve its business objectives.
• performance management has a developmental
purpose, meaning that it serves as a basis for
developing employees’ knowledge and skills.
8-5
 Continued

• The administrative purpose of a performance

management system refers to the ways in
which organizations use the system to provide
information for day-to-day decisions about
salary, benefits, and recognition programs.
• Performance management can also support
decision making related to employee retention,
termination for poor behavior and hiring or
layoffs.
8-6
Table 6.1:
Basic Approaches to Performance
Measurement

8-7
Measuring Performance:
Making Comparisons

8-8
 Measuring Performance:
Rating Individuals - Attributes
Graphic Rating Scale Mixed-Standard Scale
• Lists traits and provides a • Uses several statements
rating scale for each trait. describing each trait to
• The employer uses the scale produce a final score for
to indicate the extent to that trait.
which an employee displays
each trait.

8-9
 Measuring Performance:
Rating Individuals - Behaviors
Behaviorally Anchored Rating
Critical-Incident Method Scale (BARS)
• Based on managers’ records
• Rates behavior in terms of a
of specific examples of the
employee acting in ways that scale showing specific
are either effective or statements of behavior that
ineffective. describe different levels of
• Employees receive feedback performance.
about what they do well and
what they do poorly and how
they are helping the
organization achieve its
goals.

8-10
 Measuring Performance:
Rating Individuals – Behaviors (continued)
Behavioral Observation Scale Organizational Behavior
(BOS) Modification (OBM)
• A variation of a BARS which • A plan for managing the
uses all behaviors necessary behavior of employees
for effective performance to through a formal system of
rate performance at a task. feedback and
• A BOS also asks the reinforcement.
manager to rate the
frequency with which the
employee has exhibited the
behavior during the rating
period.

8-11
 Measuring Performance:
Measuring Results
• Management by Objectives (MBO): people at
each level of the organization set goals in a
process that flows from top to bottom, so that
all levels are contributing to the organization’s
overall goals.
• These goals become the standards for
evaluating each employee’s performance.

8-12
 Sources of Performance Information

• 360-Degree Performance Appraisal:

performance measurement that combines
information from the employees’:
– Managers
– Peers
– Subordinates
– Self
– Customers

8-13
 Summary
• Performance management is the process through
which managers ensure that employees’ activities
and outputs contribute to the organization’s goals.
• Organizations establish performance management
systems to meet three broad purposes:
– Strategic purpose
– Administrative purpose
– Developmental purpose
• Performance measures should fit with the
organization’s strategy by supporting its goals and
culture.

8-14