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Final Exam Review

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Ryerson University
Human Resources
MHR 523
Nina Cole

MHR523 Final Examination Review CHAPTER 10: PERFORMANCE MANAGEMENT Performance Management: process encompassing all activities related to improving employee performance, productivity and effectiveness (Includes: Goal setting, Pay for performance, Training and development, Career management, Disciplinary action) Performance Appraisal Process: the foundation of performance management; purpose is to instill in employees the desire for continuous improvement The Performance Management Process The most effective way for firms to differentiate themselves in a highly competitive, service-oriented, global market is through the quality of their employees Contains Five Steps: 1) Defining Performance Expectations 2) Providing Ongoing Coaching and Feedback 3) Performance Appraisal and Evaluation Discussion 4) Determine Performance Rewards/Consequences (such as: promotions, salary, bonuses) 5) Career Development and Career Opportunities Discussions STEP ONE: DEFINING PERFORMANCE EXPECTATIONS Allows employees to understand how their work contributes to achieving business results Job descriptions often insufficient to clarify what employees are expected to do and how their duties are related to strategic objectives Job duties may vary amongst employees (Example: Although all sales associates are entitled to the same job, a more experienced sales associate may be entitled to a different personal selling price range from a less experienced sales associate) To clarify these expectations, standards related to strategic objectives should be developed for each position STEP TWO: PROVIDING ONGOING COACHING AND FEEDBACK Facilitates ongoing performance improvement Vital to have open two-way communication, both employee and the manager need to check in frequently throughout the performance management process to talk about progression towards goals In some organizations, strategies and objectives change quickly Employees are responsible for monitoring their own performance and asking for help This promotes employee ownership and control over the process STEP THREE: PERFORMANCE APPRAISAL AND EVALUATION DISCUSSION Formal Appraisal Methods (Evaluation Methods): The appraisal itself is generally conducted with the aid of predetermined and formal methods such as: 1) Graphing Rating Scale A scale that lists a number of traits and a range of performance for each The employee is then rated by identifying the score that best describes his or her level of performance for each trait 2) Alternation Ranking Method Ranking employees from best to worst on based on a particular trait 3) Paired Comparison Method More precise method For every trait, every employee is paired with and compared with every other employee 4) Forced Distribution Method Places predetermined percentages of rates in performance categories Example: o 15% high performers o 20% high-average performers o 30% average performers o 20% low-average performers o 15% low performers Similar to bell-curve grading, meaning, not everyone can get an A Method criticized as being demotivating for the portion of the workface that is classified as below average 5) Critical Indent Method Keeping a record of uncommonly good or undesirable examples of an employees work-related behavior Reviewing the list with the employee at predetermined times 6) Narrative Forms Identifying a performance issue and presenting a performance improvement plan Improvement plan identifies measurable improvement goals 7) Behaviorally Anchored Rating Scales Appraisal method that aims to combine the benefits of narratives, critical indents, and quantified ratings by anchoring a quantified scale with specific narrative examples of good and poor performance o Generate Critical Incidents job experts specify effective and ineffective performance o Develop Performance Dimensions: cluster the incidents into a smaller set of performance dimensions o Reallocate Incidents: different experts group incidents into same clusters and retain incidents similarly assigned twice o Scale the Incidents: rate the behavior described in the incident as to how effectively or ineffectively it represents performance o Develop the Final Instrument: a subset of the incidents is used as behavioral anchors for each dimension Advantages: more accurate measure, clearer standards, assists feedback, independent dimensions, consistency Disadvantages: time consuming Management by Objectives (MBO) 1) Set the organizations goals 2) Set departmental goals 3) Discuss departmental goals 4) Define expected results (individual goals) 5) Performance reviews: measure the results 6) Provide feedback 8) Computerized and Web-Based Performance Appraisal Enables managers to keep computerized notes on employees, combine these with rating on several performance traits, then generate written text to support each part of the appraisal Most web-based performance management systems provide advanced reporting capabilities, which allow managers to track the status of performance management initiatives easily Electronic performance monitoring (EPM) refers to having supervisors electronically monitor the amount of computerized data an employee is processing per day and thereby his or her performance Performance Appraisal Problems Validity and reliability Rating scale problems o Unclear performance standards o Halo effect o Central tendency o Leniency or strictness o Appraisal bias o Recency effect o Similar-to-me bias Who does the Appraising? Supervisors Peers Committees Self Subordinates 360-degree appraisal (all of the above) 360-Degree Performance Appraisals: the primary objective is to pool feedback from all of the employees customers Top Management (internal customer) Manager (internal customer) Reporting Employee (internal customer) Coworker or Team Members (internal customer) Other Department Representatives (internal customer) Client (external customer) Suppliers (external customer) Appraisal Interviews: an interview in which the supervisor and employee review the appraisal and make plans to remedy deficiencies and reinforce strengths 1) Satisfactory (promotable) make development plans
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