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Human Resources
MHR 523
Nina Cole

Chapter 10Performance Management The Strategic importance of performance managementBetter performance management represents a largely untapped opportunity to improve company profitabilityPerformance management the process encompassing all activities related to improving employee performance productivity and effectiveness o Goal setting pay for performance training and development career management and disciplinary actionFoundation of performance management is the performance appraisal process o Appraising and coaching employees to instill in them the desire for continuous improvement Performance management processThe effective way for an organization to differentiate themselves is through the quality of their employees Five steps to the performance management process DPCDC1 Defining performance expectations and goals to make sure that job duties and job standards are clear to allHow their work makes a contribution to achieving business resultsObjectives and implementation plans 2 Providing ongoing feedback and coaching through open twoway communicationTalk about progressions towards goalsChange adapt goals to remain consistent 3 Conducting performance appraisal and evaluation discussionsat specific intervals Appraisal is conducted with the aid of a predetermined and formal methodGraphic 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 Alternation Ranking Method Ranking employees from best to worst on a particular traitPaired comparison method Ranking employees by making a chart of all possible pairs of employees for each trait and indicating the better employee of the pair Forced distribution method Predetermined percentages of rates are placed in various performance categories Critical incident method Keeping a record of uncommonly good or undesirable examples of an employees workrelated behavior and reviewing the list with the employee at predetermined times Narrative formsBehaviorally anchored rating scales BARS An appraisal method that aims to combine the benefits of narratives critical incidents and quantified ratings by anchoring a quantified scale with specific narrative examples of good and poor performance o Steps to developing a BARSGenerate critical incidentsDevelop performance dimensionsReallocate incidentsDevelop the final instrumentScale the incidentso Advantages More accurate measureIndependent dimensionsClearer standardsConsistencyFeedback Management by Objectives Involves setting specific measureable goals with each employee and then periodically reviewing the progress made o Steps to MBOSet the organizations goalsDefine expected resultsSet departmental goalsPerformance reviewsDiscuss departmental goalsProvide Feedbacko Problems to avoidSetting unclear unmeasurable objectivesMBO is time consuming Setting objectives may turn into a tug of war when determining goals Computerized and WebBased performance appraisals o Electronic performance monitoring EPM Having supervisors electronically monitor the amount of computerized data an employee is processing per day and thereby his or her performance Appraisal problems and solutionsValidity and reliability o Must be relevant to the job being appraised o Must be broad enough to cover all aspects of job requirements o Must be specificRating Scale problems o Unclear performance standards An appraisal scale that is too open to interpretation of traits and standards o Halo effect In performance appraisal the problem that occurs when a supervisors rating of employee on one trait biases the rating of that person on other traits o Central tendency A tendency to rate all employees in the middle of the scale o Strictnessleniency the problem that occurs when a supervisor has a tendency to rate all employees either low or high o Appraisal bias the tendency to allow individual differences such as age race and sex to affect the appraisal ratings that these employees receive o Recency Effect The rating error that occurs when ratings are based on the employees most recent performance rather than on performance throughout the appraisal periodo Similartome bias the tendency to give higher performance ratings to employees who are perceived to be similar to the rather in some ways Who should do the appraisingSupervisorsPeers
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