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Chapter 8

Chapter 8 notes (book + slides)

Rotman Commerce
Course Code
Yu Wang

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Performance Management: ensuring that the employee’s activities match the
organizations goals.
Performance Appraisal: measurements of specific areas of an employee’s performance
Purposes of performance management:
-1. Strategic Purpose
oLink behaviour of employee with organization’s goals
Identify when expectations are not being met
Take corrective measures
-2. Administrative Purpose
oHow organization uses system to provide information for day to day
decisions regarding:
Recognition programs
Employee retention
-3. Developmental Purpose
oBasis for improving competencies
Identify areas of improvement for all employees through feedback
Job performance:
-Task performance: Behaviours that contribute to the production of goods or
provision of services
-Citizenship performance: Behaviours that contribute to the organization’s goals
by positively influencing its social and psychological environment
-Counterproductive performance: Voluntary behaviours that harm the well-
being of the organization
Criteria for measuring Performance Management methods:
odoes it measure what its intended to measure (see chart)
oInter-rater reliability: consistency of results among different testers
oTest Retake Reliability: consistence of results over time
-Fit with Strategy
oAim for behaviours aligned with company strategy

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oPractical, not too time consuming
oCommunicate w employees what is expected and how they can meet those
How to measure Performance:
Comparing Employees:
-Simple ranking
oDisadv: poor validity doesn’t define what exactly is effective /
ineffective about employees
-Forced distribution method
oAssigns ppl to categories
oEx: exceptional not acceptable
-Paired comparison method
oCompares each employee to each other so as to establish ranking
advantage: counteracts tendency to rate everyone favourably
disadvantage: often not linked to organizations goals
often subjective legal challenges
may hurt moral
Rating Employees:
-graphic rating scale
ouses scale to measure employees on a specific standard competencies
odisadv: subjective, low reliability
-mixed standard scale:
omanagement scores employees in terms of how they compare to each
-critical incident method:
obased on managements records of specific events
omay be classified into
BARS (behaviourally anchored rating scales): scale showing
different statements of behaviour that describe different levels of
BOS (Behavioural Observational Scale) : uses all behaviour
necessary for effective performance to rate performance of a task
- OBS (organizational behaviour modification) : plan for managing behaviour of
employees through a formal system of feedbacks and reinforcements
Management by Objectives: system in which ppl at each level of the organization set
goals in a process that flows from top to bottom so that employees at all levels are
contributing to the overall goals of the company.
360 Performance Appraisal: combines info from employees, managers, peers, direct
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