part one Strategic and General Considerations
Herman Aguinis, University of Colorado at Denver
Part I: Strategic And General Considerations
Chapter 1: Performance Management in Context
Chapter 2: Performance Management Process
Chapter 3: Performance Management and Strategic Planning
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Herman Aguinis, University of Colorado at Denver
Chapter 1 Performance Management in Context
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Herman Aguinis, University of Colorado at Denver
Overview
Definition of Performance Management (PM)
Purposes of PM
Contributions of PM
Disadvantages/Dangers of Poorly Implemented PM Systems
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Herman Aguinis, University of Colorado at Denver
Overview (continued)
Characteristics of an Ideal PM System
Integration with Other Human Resources and Development Activities
The Changing Nature of PM
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Herman Aguinis, University of Colorado at Denver
Definition of PM
1. Continuous process of …
Identifying
Measuring
Developing
… the performance of individuals and teams
2. Aligning performance with the strategic goals of the organization
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Herman Aguinis, University of Colorado at Denver
Definition of PM (continued)
Performance management (PM)
is NOT
performance appraisal (PA)
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Herman Aguinis, University of Colorado at Denver
Definition of PM (continued)
PM
Strategic business considerations
Driven by line manager
Ongoing feedback
So employee can improve performance
PA
Driven by HR
Assesses employee
Strengths
Weaknesses
Once a year
Lacks ongoing feedback
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Herman Aguinis, University of Colorado at Denver
Performance Appraisal vs. Performance Management
Performance Appraisal vs. Performance Management
What did you see?
What is wrong with the interaction between the supervisor and her direct report?
Is this performance appraisal? Is this performance management? Why?
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Herman Aguinis, University of Colorado at Denver
Purposes of PM Systems
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Herman Aguinis, University of Colorado at Denver
Purposes of PM Systems Strategic Purpose
Link individual goals with organization’s goals
Communicate most crucial business strategic initiatives
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Herman Aguinis, University of Colorado at Denver
Note: the following is slide used before (some of this is not in Module 1)
Links employee activities with organization’s mission and goals
Identifies results and behaviors needed to carry out strategy
Maximizes extent employees exhibit those behaviors and results
Only 13% of organizations use PM to communicate organizational purpose and goals
Company Spotlight
Sears, one of the largest U.S. retailers, is using PM to reinvigorate the company’s culture
Steps include:
Revising duties and objectives
More frequent communication between supervisors and employees
Using PM to identify future leaders
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Herman Aguinis, University of Colorado at Denver
Purposes of PM Systems Administrative Purpose
Provide information for making decisions regarding:
Salary adjustments
Promotions
Retention or termination
Recognition of individual performance
Layoffs
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Herman Aguinis, University of Colorado at Denver
Purposes of PM Systems Informational Purpose
Communicate to employees:
Expectations
What is important
How they are doing
How to improve
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Herman Aguinis, University of Colorado at Denver
Purposes of PM Systems Developmental Purpose
Performance feedback/coaching
Identification of individual strengths and weaknesses
Identification of causes of performance deficiencies
Tailor development of individual career path
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Purposes of PM Systems Organizational Maintenance Purpose
Plan effective workforce
Assess future training needs
Evaluate performance at organizational level
Evaluate effectiveness of HR interventions
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Purposes of PM Systems Documentation Purpose
Validate selection instruments
Document administrative decisions
Help meet legal requirements
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Contributions of Performance Management
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Contributions of Performance Management
For Employees
For Managers
For Organization/HR Function
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Herman Aguinis, University of Colorado at Denver
Contributions of Performance Management for Employees
Enhance self-insight and development
Increase self-esteem
Increase motivation to perform
Increase employee competence
Clarify definitions of
Job
Success criteria
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Herman Aguinis, University of Colorado at Denver
Contributions of Performance Management for Managers
Increase employee engagement
Encourage voice behavior
Minimize employee misconduct
Address declines in performance early
Increase employee motivation, commitment, and intentions to stay in organization
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Herman Aguinis, University of Colorado at Denver
Contributions of Performance Management for Managers (continued)
Communicate supervisors’ views of performance more clearly
Managers gain insight about subordinates
Better and more timely differentiation between good and poor performers
Employees become more competent
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Herman Aguinis, University of Colorado at Denver
Contributions of Performance Management for Organization / HR Function
Clarify organizational goals
Facilitate organizational change
Fairer, more appropriate administrative actions
Better protection from lawsuits
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Disadvantages/Dangers of Poorly Implemented PM Systems
For Employees
For Managers
For Organization/HR Function
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Disadvantages/Dangers of Poorly Implemented PM Systems
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Disadvantages/Dangers of Poorly Implemented PM Systems for Employees
Lowered self-esteem
Employee burnout and job dissatisfaction
Damaged relationships
Use of false or misleading information
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Herman Aguinis, University of Colorado at Denver
Disadvantages/Dangers of Poorly Implemented PM Systems for Managers
Increased turnover
Decreased motivation to perform
Unjustified demands on managers’ resources
Varying and unfair standards and ratings
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Herman Aguinis, University of Colorado at Denver
Disadvantages/Dangers of Poorly Implemented PM Systems for Organization/HR Function
Wasted time and money
Unclear ratings system
Emerging biases
Increased risk of litigation
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Herman Aguinis, University of Colorado at Denver
Disadvantages/Dangers of Poorly Implemented PM Systems for Organization/HR Function
Wasted time and money
Unclear ratings system
Emerging biases
Increased risk of litigation
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Herman Aguinis, University of Colorado at Denver
Company Spotlight
Yahoo was subject to a lawsuit due to a poorly implemented performance management system
Missteps include:
Forced ranking of employees
Unclear ratings and lack of openness
Biases including gender discrimination
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Herman Aguinis, University of Colorado at Denver
Company Spotlight
Adobe implemented a state-of-the-science performance management system
Benefits included:
Time savings (80,000 hours)
Increased morale
Decreased turnover
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Herman Aguinis, University of Colorado at Denver
Characteristics of an Ideal PM System
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An Ideal PM System: 15 Characteristics Strategically Congruent
Consistent with organization’s strategy
Aligned with unit and organizational goals
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An Ideal PM System: 15 Characteristics Contextually Congruent
Congruent with the organization’s culture as well as the broader cultural context of the region or country
Example: A 360-degree feedback is not effective where communication is not fluid and hierarchies are rigid
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Herman Aguinis, University of Colorado at Denver
An Ideal PM System: 15 Characteristics Thorough
All employees are evaluated
All major job responsibilities are evaluated
Evaluations cover performance for entire review period
Feedback is given on both positive and negative performance
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Herman Aguinis, University of Colorado at Denver
An Ideal PM System: 15 Characteristics Practical
