BMGT 360 Final Exam Chapter Review Chapter 10 Performance Management Systems Performance Management Systems they have performed on established goals must convey to employees how well o Feedback o Development Documentation a record of performance appraisal process outcomes o Important to ensure every employee is treated equally Difficulties in Performance Management Systems o Focus on the individual performance appraisal system barriers to a properly functioning appraisal process o Focus on the process the influence of emotions may skew the company policies and procedures may present 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 standards 2 Communicate expectations 3 Measure Actual Performance 4 Compare Actual performance with standards 5 Discuss the appraisal with the Employee Initiate Corrective Action if necessary 6 Appraisal Methods o Evaluating Absolute Standards measuring employee s performance against established standards Checklist appraisal Graphic rating scale Critical Incident Appraisal focuses on key behaviors that differentiate between doing a job effectively or ineffectively a rater checks off applicable employee attributes each Forced specific statements about an employee s work behavior 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 lists traits and a range of performance for Behaviorally Anchored rating scales the rater must choose between two choice appraisal 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 lowest to highest only one can be best counting the times any one individual is the preferred member when compared with all other employees o Using Achieved Outcomes to Evaluate Employees MBO ranking employees performance from ranking individuals performance by Paired comparison Management by Objective and evaluation based on the attainment of the specific objective Common elements of MBO Programs includes mutual objective setting 1 Specific goals 2 Participative Decision making 3 Specific time period 4 Performance feedback Stretch Goals produce higher output than no goals or generalized goals Factors that can Distort Appraisals Halo error Central tendency the tendency of a rater to give average ratings evaluating employees based on the way an evaluator evaluating employees against one s one value system the tendency to let our assessment of an individual on one trait Leniency Error influence our evaluation of that person on other specific traits Similarity error perceives himself or herself Inflationary pressure rating choices Inappropriate substitutes for performance closely approximate performance and act in its place but are often not completely related to completing a job enthusiasm perception of who is in control of an employee s performance appraisal o When appraiser attribute an employee s performance to internal low differentiation within the upper range of the a theory of performance evaluation based on the criteria that are supposed to Attribution theory control the judgment is harsher than when the same poor performance is attributed to external factors o 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 forces Creating More Effective Performance Management Systems Use Behavior Based Measures looking at specific behaviors eliminates Combine Absolute and Relative Standards substitutes and we increase the likelihood that two or more evaluators will see the same thing efficient appraisal process Provide ongoing feedback expectations and disappointments gives employees more of an opportunity to address issues and improve increasing the frequency of expressing one rater can lead to bias a combination will lead to a more co workers provide input into the employee s Use Multiple Rater o Peer evaluations performance o Upward appraisal feedback to their supervisors the like evaluate an individual o 360 degree appraisals Rate selectivity have job knowledge more accurate raters Train appraisers employees provide frank and constructive supervisors peers employees customers and appraisers should only rate in those areas in which they evidence indicates that training appraisers can make them The performance Appraisal meeting 1 Prepare and schedule in advance 2 Explain the purpose of the meeting in advance and create supportive environment Involve the employee in the appraisal discussion including self evaluation 3 Describe the purpose of appraisal to employees 4 5 Focus discussion on work behaviors 6 Support your evaluations with examples 7 Give both positive and negative feedback 8 Ensure that employees understand what was discussed in the appraisal 9 Generate development plan International Performance Appraisal Who performs the evaluation o Parent country vs host country Evaluation formats o Must determine which format for employees o Universal form Chapter 11 Establishing Rewards and Pay Plans satisfactions derived from the job itself such as pride in Introduction Intrinsic rewards one s work a feeling of accomplishment or being part of a team Job enrichment plan and control their work promotion or benefits Financial vs non financial rewards Extrinsic rewards benefits provided by the employer usually money enhancing jobs by giving employees more opportunity to o Financial wages bonuses or profit sharing or indirectly through employer subsidized benefits such as retirement plans paid vacations paid sick leaves and purchase discounts being able to dress casually work from home Performance based vs Membership Based Rewards rewards exemplified by the use of job title Business cards assistants parking space o Non financial o Performance based rewards commissions piecework pay plans incentive systems group bonuses or other forms of merit pay o Membership Based rewards group or organization s performance extended regardless of an individual Compensation Administration Compensation Administration compensation program the process of