Performance Management Process

Chapter 10: Performance Management

Performance Management | 10-1

Copyright © 2014 Pearson Canada Inc. All rights reserved.

Dessler, Chhinzer, Cole
Human Resources
Management in Canada
Canadian Twelfth Edition

Learning Outcomes

• DESCRIBE five performance appraisal methods and
the pros and cons of each.
• DISCUSS the major problems inhibiting effective
performance appraisals.



• EXPLAIN the five steps in the performance
management process.

Learning Outcomes

• DESCRIBE the three types of appraisal
interviews.
• DISCUSS the future of performance
management.


• DISCUSS 360-degree appraisal from
multiple sources.

Performance Management

• includes goal setting, pay for
performance, training and
development, career management, and
disciplinary action


The process encompassing all activities
related to improving employee
performance, productivity, and
effectiveness.

Performance Management
Process
Step 5: Conduct development and
career opportunity discussions

Step 3: Conduct performance appraisal and
evaluation discussions
Step 2: Provide ongoing feedback and
coaching
Step 1: Define performance expectations

reserved.
Copyright © 2014 Pearson Canada Inc. All rights reserved

Step 4: Determine performance
rewards/consequences

Step 1: Defining
Performance Expectations
Task performance
• direct contribution to job-related processes

• indirect contribution to the organization’s
social responsibility values
Legal considerations
• correlate performance expectations to job
activities


Contextual performance

Step 2: Providing Ongoing
Coaching and Feedback

• employee responsible for monitoring own
performance, and asking for help

• manager responsible for communicating
changing strategies and objectives if
applicable



• important to have open two-way
communication

reserved.

Performance Improvement
Plan (PIP)


continued

reserved.

Performance Improvement
Plan (PIP)


Step 3: Performance Appraisal
and Evaluation Discussion
Formal appraisal methods:

• graphic rating scale
• alternation ranking
• forced distribution
• critical incident
• narrative forms

• behaviourally anchored rating scales (BARS)
• management by objectives (MBO)


• paired comparison

Graphic Rating Scale

• the employee is given a rating that best
describes the level of performance for each
trait



• a scale that lists a number of traits and a
range of performance for each

reserved.

Graphic Rating Scale - Sample

continued

continued

reserved.


continued


reserved.


reserved.



reserved.

Alternation Ranking Method


Paired Comparison Method

• for each pair, indicate “+” for the higher
ranked employee, “-” for the lower ranked

• rank employees by trait based on number
of “+” scores



• for each trait, list all possible pairs of
employees

reserved.

Paired Comparison Sample


Forced Distribution Method
• predetermined percentages of ratees are
placed in various performance categories
•
•
•
•
•

15
20
30
20
15

percent
percent
percent
percent
percent


high performers
high-average performers
average performers
low-average performers
low performers


• example:

Keeping a record of uncommonly
good or undesirable examples of an
employee’s work-related behaviour
and reviewing the list with the
employee at predetermined times.



Critical Incident Method

reserved.

Critical Incident Sample


Narrative Forms
• free form report of performance


• may take form of performance
improvement plan


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.



Behaviourally Anchored
Rating Scales (BARS)

reserved.

Rating Scales Sample


Rating Scales (BARS)
Advantages

• a more accurate measure
• Assists in providing feedback

• independent dimensions
• Consistency
Disadvantage

• time-consuming


• clearer standards

Management by Objectives
(MBO)
Step 6: Provide feedback

Step 4: Define expected results (individual goals)
Step 3: Discuss departmental goals
Step 2: Set departmental goals

Step 1: Set the organization’s goals


reserved.

Step 5: Performance reviews: measure results

Use of Technology in Performance
Appraisals

• provides overall performance
management process

• provides employees with clear
development path
• advanced reporting capabilities
• electronic performance monitoring (EPM)


• enables managers to automate record
keeping and report writing

Performance Appraisal Problems
• validity and reliability

• unclear performance
standards
• halo effect
• central tendency


•
•
•
•

leniency or strictness
appraisal bias
recency effect
similar-to-me bias


• rating scale problems

reserved.

Example of Unclear Standards


reserved.

Advantages and Disadvantages of
Appraisal Methods


Who Should Do the Appraising?
• supervisors

• self
• committees

• subordinates
• 360-degree appraisal (all of the above)



• peers

reserved.

360-Degree Appraisal


360-Degree Appraisal Advice
• have performance criteria developed by
people familiar with the job

• provide training for all participants
• ensure confidentiality
• evaluate 360-degree system for fine-tuning



• be clear about who will have access to
reports

Formal Appraisal Discussions
• supervisor and employee:
• review appraisal, and plan to remedy deficiencies
and reinforce strengths

• satisfactory—promotable: development plans
• satisfactory—not promotable: maintain performance
• unsatisfactory—correctable: action plan to correct
performance



• types of interviews:

How to Conduct the Interview
1. Be direct and specific
• use objective work data

• compare against standard

3. Encourage the person to talk
• use open-ended questions, listen

4. Develop an action plan
• agree on future steps


2. Do not get personal

How to Handle Criticism and
Defensive Employees
1. Recognize that defensive behaviour is
normal

3. Postpone action
4. Recognize human limitations



2. Never attack a person’s defenses

Ensuring the Discussion Leads to
Improved Performance
1. Notify of unacceptable performance, explain
minimum expectations
3. Explain role of warnings in the process of
establishing just cause

4. Take prompt corrective measures
5. Avoid sending mixed messages
6. Provide a reasonable amount of time for
improvement
7. Provide support to facilitate improvement


2. Ensure that expectations are reasonable

Step 4: Determine Performance
Rewards/Consequences

• important aspects used to determine the
appropriate reward/consequence:
•
•

achievement of goals
how the employee meets the defined standards



• provide performance awards: merit
pay, extra pay

Step 5: Career
Development Discussion

• based on current job requirements or future
development

• business needs must be balanced with the
employee’s preferences



• manager and employee discuss
opportunities for development

Legal and Ethical Issues
• determine required characteristics through job
analysis

• ensure ratees and raters know performance
standards
• use clearly defined dimensions of performance
• avoid abstract trait names
• use subjective ratings as only one component


• use characteristics in rating system

Legal and Ethical Issues
• train supervisors

• allow raters regular contact with ratee
• use formal appeal mechanism
• document evaluations and reasons for
termination
• provide corrective guidance to lower
performers


• have more than one rater, if possible

The Future of Performance
Management

• linking individual goals and business strategy
• showing leadership and accountability
• ensuring close ties among appraisal
results, rewards, and recognition outcomes
• investing in employee development planning
• having an administratively efficient system with
sufficient communication support



• Effective performance management
involves:

Performance Management Process

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