BMGT 360 Final Exam Chapter ReviewChapter 10 – Performance Management Systems- Performance Management Systems - must convey to employees how well they have performed on established goalso Feedbacko Development- Documentation - a record of performance appraisal process outcomeso Important to ensure every employee is treated equally- Difficulties in Performance Management Systems o Focus on the individual - the influence of emotions may skew the performance appraisal systemo Focus on the process - company policies and procedures may present barriers to a properly functioning appraisal process- HRM performance management systems must be objective and job related (EEO)o The performance appraised must be conducted according to some established intervals and o Appraisers must be trained in the process- The Appraisal Process 1. Establish Performance standards2. Communicate expectations3. Measure Actual Performance4. Compare Actual performance with standards5. Discuss the appraisal with the Employee6. Initiate Corrective Action if necessaryAppraisal Methodso Evaluating Absolute Standards- measuring employee’s performanceagainst established standards Critical Incident Appraisal - focuses on key behaviors that differentiate between doing a job effectively or ineffectively Checklist appraisal - a rater checks off applicable employee attributes Graphic rating scale - lists traits and a range of performance for each Forced - choice appraisal - the rater must choose between two specific statements about an employee’s work behavior Behaviorally Anchored rating scales - generates critical incidents and develops behavioral dimensions of performance. The evaluator appraises behaviors rather than traits.o Relative Standard methods- evaluating an employee’s performance by comparing the employee with other employees Group order ranking - requires the evaluator to place employees into a particular classification such as the top 20% Individual ranking - ranking employees performance from lowest to highest. (only one can be best) Paired comparison - ranking individuals’ performance by counting the times any one individual is the preferred member when compared with all other employeeso Using Achieved Outcomes to Evaluate Employees- (MBO) Management by Objective - includes mutual objective setting and evaluation based on the attainment of the specific objective Common elements of MBO Programs 1. Specific goals2. Participative Decision making3. Specific time period4. Performance feedback “Stretch Goals” produce higher output than no goals or generalized goalsFactors that can Distort Appraisals- Leniency Error - evaluating employees against one’s one value system- Halo error - the tendency to let our assessment of an individual on one trait influence our evaluation of that person on other specific traits- Similarity error - evaluating employees based on the way an evaluator perceives himself or herself- Central tendency - the tendency of a rater to give average ratings- Inflationary pressure - low differentiation within the upper range of the rating choices- Inappropriate substitutes for performance - criteria that are supposed to closely approximate performance and act in its place but are often not completely related to completing a job (enthusiasm)- Attribution theory - a theory of performance evaluation based on the perception of who is in control of an employee’s performance appraisalo When appraiser attribute an employee’s performance to internal control, the judgment is harsher than when the same poor performance is attributed to external factorso When an employee performs satisfactorily, appraisers will evaluate the employee more favorably if the performance is attributed to the employee’s own efforts than if the performance is attributed to outside forcesCreating More Effective Performance Management Systems- Use Behavior Based Measures - looking at specific behaviors eliminates substitutes and we increase the likelihood that two or more evaluators will see the same thing- Combine Absolute and Relative Standards - a combination will lead to a more efficient appraisal process- Provide ongoing feedback - increasing the frequency of expressing expectations and disappointments gives employees more of an opportunity to address issues and improve- Use Multiple Rater - one rater can lead to biaso Peer evaluations - co-workers provide input into the employee’s performanceo Upward appraisal - employees provide frank and constructive feedback to their supervisorso 360-degree appraisals - supervisors, peers, employees, customers and the like evaluate an individual- Rate selectivity - appraisers should only rate in those areas in which they have job knowledge- Train appraisers - evidence indicates that training appraisers can make them more accurate ratersThe performance Appraisal meeting1. Prepare and schedule in advance2. Explain the purpose of the meeting in advance and create supportive environment3. Describe the purpose of appraisal to employees4. Involve the employee in the appraisal discussion, including self-evaluation5. Focus discussion on work behaviors6. Support your evaluations with examples7. Give both positive and negative feedback8. Ensure that employees understand what was discussed in the appraisal9. Generate development planInternational Performance Appraisal- Who performs the evaluation?o Parent country vs. host country- Evaluation formatso Must determine which format for employeeso Universal form?Chapter 11- Establishing Rewards and Pay PlansIntroduction- Intrinsic rewards - satisfactions derived from the job itself- such as pride in one’s work, a feeling of accomplishment, or being part of a team- Job enrichment - enhancing jobs by giving employees more opportunity to plan and control their work- Extrinsic rewards - benefits provided by the employer, usually money, promotion or benefits. - Financial vs. non-financial rewards -o Financial - wages, bonuses, or profit sharing – or indirectly through employer-subsidized benefits such as retirement plans, paid vacations, paid sick leaves and purchase discountso Non-financial - job title. Business cards, assistants, parking space, being able to dress casually, work from home- Performance-based vs. Membership-Based Rewards o Performance based rewards - rewards exemplified by the use of commissions,