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Chapter 7

Human Resources – Chapter 7

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McMaster University
Aaron Schat

Human Resources – Chapter 7: Managing Employee Engagement and Performance Introduction Retention rates among employees are related to retention rates among customers. Voluntary turnover – turnover initiated by employees (often whom the company would prefer to keep.) Involuntary turnover – turnover initiated by the organization (often among people who would prefer to stay.) Driving Engagement: Preventing Voluntary Turnover Process of Job Withdrawal Job withdrawal is a set of behaviors that dissatisfied individuals enact to avoid the work situation. Progression of withdrawal – theory that dissatisfied individuals enact a set of behaviors in succession to avoid their work situation. Job Satisfaction and Job Withdrawal Job satisfaction – a pleasurable feeling that results from the perception that one’s job fulfills or allows for the fulfillment of ones important job values. Job satisfaction is a function of values. Different employees have difference views of which values are important. Third important aspect of job satisfaction is perception. Sources of Job Dissatisfaction Key areas of improvement are recognition, career opportunities, effectiveness of management, development opportunities and compensation and benefits. Sources of job dissatisfaction most under the control of all employers include basic issues such as providing safe working conditions, pay and benefits, supervisors and co-workers and the tasks and roles the employee is assigned. Primarily supervisors and co-workers. There is a strong positive relationship between task complexity and job satisfaction. One of the major interventions aimed at reducing job dissatisfaction is job enrichment – enriches jobs that are boring, repetitive or low in scope through interventions such as ensuring workers have opportunities for input into important organizational decisions involving their work. Many job enrichment programs are based on the job characteristics theory.As well, the degree to which scheduling is flexible affects satisfaction. Most important in terms of generating satisfaction is the degree to which it is meaningfully related to core values of the worker. Prosocial motivation – the degree to which people are energized to do their jobs because it helps other people. Managing Performance Performance appraisal is now an annual ritual. Performance management – the means through which managers ensure that employees’ activities and outputs are congruent with the organization’s goals. It is central to gaining competitive advantage. An effective performance management system has 3 parts: defining performance, measuring performance and feeding back performance information. Performance appraisal – the process through which an organization gets information on how well an employee is doing his or her job. Performance feedback – the process of providing employees information regarding their performance effectiveness. An Organizational Model of Performance Management In the past, performance appraisal was used as a measurement technique. The goal was to measure individual employee performance reliably and validly. Individual’s attributes are the raw materials of performance. These aw materials are transformed into objective results through the employee’s behavior. Another important component in our organizational model of the performance management system is the organization’s strategy. Performance planning and evaluation (PPE) – any system that seeks to tie the formal performance appraisal process to the company’s strategies by specifying at the beginning of the evaluation period the types and level of performance that must be accomplished in order to achieve the strategy. Employees must have certain attributes to perform a set of behaviors and achieve certain results. To gain competitive advantage, the attributes and results must be ties to the company’s strategy. Purposes of Performance Management There are 3 purposes of performance management systems: strategic, administrative and developmental. Aperformance management system should link employee activities with the organization’s goals. Performance management is critical for companies to execute their talent management strategy. Organizations use performance management information in many administrative decisions: salary administration, promotions etc. Performance management is key to talent management. Performance management develops employees who are ineffective at their jobs. When people aren’t doing their best, PM seeks to improve their performance. Performance Measures Criteria Criteria to use to evaluate performance management systems – strategic congruence, validity, reliability, acceptability and specificity. Strategic congruence – the extent to which the performance management system elicits job performance that is consistent with the organization’s strategy, goals and culture. If a company focuses on something, then the performance management system should assess how well its employees are performing that something. Validity – the extent to which a performance measure assesses all the relevant and only the relevant aspects of job performance. Often called content validity. For a performance measure to be valid, it must not be deficient or contaminated. It’s deficient if it does not measure all aspects of performance.Acontaminated measure evaluates irrelevant aspects of performance or aspects that are not job related. Reliability – The consistency of a performance measure; the degree to which a performance measure is free from random error. Interrater reliability is the consistency among the individuals who evaluate the employee’s performance.A performance measure has interrater reliability if 2 individuals give the same evaluations. The measure should be reliable over time – test-retest reliability. Acceptability – the extent to which a performance measure is deemed to be satisfactory or adequate by those who use it. It is affected by the extent to which employees believe the performance management system is fair. Specificity – the extent to which a performance measure gives detailed guidance to employees about what is expected of them and how they can meet these expectations. It is relevant to both the strategic and developmental purposes of performance management. Approaches to Measuring Performance Approaches include: comparative, attribute, behavioral and results approaches to measuring and managing performance. The Comparative Approach This requires the rater to compare an individual’s performance to that of others.At least 3 techniques fall under the comparative approach: ranking, forced distribution and pair comparison. 1. Ranking – simple ranking requires managers to rank employees within their departments from highest performer to poorest performer. Alternation ranking consists of a manager looking at a master list of employees, deciding who is the best and placing that person as number one on a new list that will eventually rank all employees. Goes back and forth between best and worst. 2. Forced distribution – uses a ranking format, but employees are ranked in groups. This forces managers to categorize employees based on distribution rules determined by the company, not on their performance. 3. Paired comparison – requires managers to compare every employee with every other employee in the work group, giving an employee a score of 1 every time they are considered the higher performer. Manager then computes the number of times each employee received the favorable decision and this becomes the employee’s performance score. This tends to be time consuming. The Attribute Approach This focuses on the extent to which individuals have certain attributes believed desirable for the company’s success. • Graphic Rating Scales – the most common form.Alist of traits is evaluated by a 5 point rating scale. Manager considers one employee at a time. They can provide a number of different points (a discrete scale) or a continuum along which the rater simply places a beck mark (continuous scale). The Behavioral Approach This attempts to define the behaviors an employee must exhibit to be effective in the job. The techniques used for this approach define those behaviors and then require managers to assess the extent to which employees exhibit them. • Critical Incidents – requires
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