HRM107 Study Guide - Final Guide: Job Performance, Reward System, Central Tendency
4 Jun 2018
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Week 09: Chapter 8
Managing performance
To be fully effective at the level of the individual employee, performance review should be
incorporated into a cycle that includes establishing performance criteria that are appropriate for
each role; regular performance monitoring and feedback; accurate assessment of performance
against criteria; provision of formal feedback by an informed and trained reviewer; counselling for
identified performance deficiencies; and action planning to address deficiencies.
Establishing an effective performance review program that is valid, reliable and accepted is one of
the many challenges facing HR professionals, as they attempt to show that they do indeed add value
rather than additional costs to their organisations.
Success/failure in PM depends on organisational philosophies and the attitudes and skills of those
responsible for its administration, together with the acceptance, commitment and ownership of
those being reviewed along with those performing the review.
A specific program's effectiveness may also be influenced by the notions of procedural fairness and
distributive justice. First concept refers to the employees' perception and is linked to the
perceptions of the fairness of associated rewards and recognition.
Challenges:
• Rapid and discontinuous change within organisations with more complexity and ambiguity
• Flattened structures with spans of control widened
• Self-managing teams and other employee involvement schemes are becoming more popular
• Matrix network structures focus with a greater use of project management teams and loose
relationships
• Increasing growth of specialised knowledge/skills
• Management of generational mixes, differences in expectations
A strategic approach:
Gather information > evaluated in the context of organisational strategies and needs > outcomes
communicated to employees to result in high levels of performance.
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Performance review programs:
Review systems have the capability to influence employee behaviour, thereby contributing to
improved organisational performance. Review provides the feedback essential to good performance.
Newer approaches to performance review emphasise learning as well as development and career
growth plans for employees. This recognises the role of a manager to improve job behaviour, not
simply to evaluate past performance. Performance review data shows effectiveness and is found to
be valuable measures of success used in validating selection tests and determining the relative
worth of jobs under a job evaluation program.
Managers must be actively involved in helping to establish the objectives for the review program. A
critical aspect of performance review is acceptance by all parties (employee participation). Common
objectives:
• Assessment of past performance
• Assessment of potential for promotion/transfer
• Improvement of motivation
• Strengthening of relationship between employee and manager
• Obtaining feedback to improve job design, working environment and career path planning
• Identification of employee development needs
• Link between performance and reward system
Performance review methods:
Can be classified as either relative judgement methods (individual behavioural rating scales and
comparison methods) or results-oriented approaches (top-down management by objectives and
goal-setting systems). Results-oriented approaches are more popular as they are more measurable.
Current and popular methods include peer, self and upward review and 360-degree feedback.
1. Behaviourally-based methods
Appraisals taken by supervisors are traditional methods but it has become increasingly
common for supervisory ratings to be combined with additional methods, peer/self/upward
review and 360-degree feedback.
• Peer review: Peers can identify leadership and interpersonal skills, along with strengths or
weaknesses, of their co-workers. Greater opportunity to observe the behavioural aspects. May
be more accurate and valid than reviews by supervisors. Resistance reasons to use this
method includes: managers reluctant to share control in review processes, risks of conflicts,
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may be influenced by popularity contest. Any breach of confidentiality can create
interpersonal rivalries bringing hostility and conflict among the workforce.
• Self review: self assessment seek to increase employees' involvement. During the interview,
the supervisor and the employee discuss job performance and agree on a final review. Often
used in combination with goal-setting and appropriate where a participative culture is in place.
• Upward review: give team leaders and other managers feedback on how their people view
them. These may include leadership, communication, empowerment, coordination of team
efforts, development of subordinates, planning and organising, budge control, creativity and
analytical ability. Resistance may appear from countries with high power distance national and
organisational cultures. Cultures with high power distance are more autocratic and
hierarchical.
• 360-degree feedback: multi-directional feedback is essential for overcoming leader blind spots
and enhancing their overall emotional intelligence. The final report is a compilation and
summary of six individual reports.
• Graphic rating scales: common method for recording performance observations. Each
trait/characteristic is represented by a scale which indicates the degree to which an employee
possesses that trait/characteristic. Subjectivity is reduced when the dimensions on the scale
are so strictly defined.
• Mixed standard scales: modification of basic rating scale. Rather than trait, 3 specific
behavioural descriptions relevant to each trait is given. Standards of high, medium and low
descriptions are given and supervisors evaluate employees accordingly.
• Behaviourally anchored rating scale (BARS): to improve reliability, descriptions along with
rating is more accurate. Provides many dimensions of performance. This consists of 5-10
vertical scales, one for each important dimension of job performance anchored by the
incidents judged to be critical. A critical incident occurs when employee behaviour results in
unusual success or unusual failure in their part of the job. Advantages: people outside HR
departments also participate in its development. Employee participation lead to greater
acceptance and sense of ownership. High degree of content validity as it covers all relevant
behavioural aspects of the job. Disadvantage: time consuming and effort to design. Objective
criterion descriptive and specific standards > aimed at each individual to assess performance.
Example of BARS:
2. Results-based methods:
Focuses on measurable outcomes achieved. 3 approaches:
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Document Summary
Establishing an effective performance review program that is valid, reliable and accepted is one of the many challenges facing hr professionals, as they attempt to show that they do indeed add value rather than additional costs to their organisations. Success/failure in pm depends on organisational philosophies and the attitudes and skills of those responsible for its administration, together with the acceptance, commitment and ownership of those being reviewed along with those performing the review. A specific program"s effectiveness may also be influenced by the notions of procedural fairness and distributive justice. First concept refers to the employees" perception and is linked to the perceptions of the fairness of associated rewards and recognition. Challenges: rapid and discontinuous change within organisations with more complexity and ambiguity. Self-managing teams and other employee involvement schemes are becoming more popular: matrix network structures focus with a greater use of project management teams and loose relationships.
