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Final

MHR 523 Study Guide - Final Guide: Career Management, Rating Scale, Job Performance


Department
Human Resources
Course Code
MHR 523
Professor
Nina Cole
Study Guide
Final

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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
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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:
o15% high performers
o20% high-average performers
o30% average performers
o20% low-average performers
o15% 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
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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
oGenerate Critical Incidents : job experts specify effective and ineffective performance
oDevelop Performance Dimensions : cluster the incidents into a smaller set of performance
dimensions
oReallocate Incidents : different experts group incidents into same clusters and retain
incidents similarly assigned twice
oScale the Incidents : rate the behavior described in the incident as to how effectively or
ineffectively it represents performance
oDevelop 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
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