《绩效管理》

      赫尔曼·阿吉斯（Herman Aguinis），美国印第安纳大学凯利商学院组织行为与人力资源教授、全球组织效率研究所首任所长。美国心理学会、工业与组织心理学学会会士，美国管理学会研究方法分会会长。他在中国（北京、香港）、马来西亚、新加坡、澳大利亚、阿根廷、法国、波多黎各、南非以及西班牙的很多高校做过访问学者。他的教学、科研以及咨询活动涉及人力资本的获得、开发和使用等领域。阿吉斯博士著有Applied Psychology in Human Resource Management（与Wayne F. Cascio教授合著）和Regression Analysis for Categorical Moderators两本书，在Academy of Management Journal、Academy of Management Review、Applied Psychology Journal等学术期刊上发表论文90多篇。

Chapter 1—Performance Management and Reward Systems in Context

Learning Objectives

1.1 Compare and contrast the concepts of performance management and performance appraisal.

1.2 Appraise strategic, administrative, informational, developmental, organizational maintenance, and documentation purposes of performance management.

1.3 Create a presentation providing persuasive arguments to argue for the business case and benefits for employees, managers, and organizations of implementing a well-designed performance management system.

1.4 Assess the multiple negative consequences that can arise from the poor design and implementation of a performance management system.

1.5 Judge the extent to which dysfunctional performance ratings may be signs that the performance management system is broken.

1.6 Prepare a list of the key features of an ideal performance management system.

1.7 Propose relationships and links between performance management and other human resources functions, including recruitment and selection, training and development, workforce planning, and compensation

1.8 Assess the impact of globalization and technological and demographic changes on the design and implementation of performance management systems.

Chapter Outline

Overview
1. Definition of Performance Management
2. Purposes of Performance Management Systems
3. The Performance Management Contribution
4. When Performance Management Breaks Down: Dangers of Poorly Implemented Systems
5. Characteristics of an Ideal Performance Management System
6. Integration with Other Human Resources and Development Activities
7. The Future Is Now: Performance Management and the Nature of Work and Organizations Today

1. Definition of Performance Management (PM)
Continuous process of
Identifying performance of individuals and teams
Measuring performance of individuals and teams
Developing performance of individuals and teams
Aligning performance with the strategic goals of the organization

Teaching Strategies
 How did Sally’s behavior fit this description?
 Let’s take a survey here. Raise your hand if your company’s performance review system actually helps you improve your performance. How does our class compare with the Corporate Executive Board (CEB) finding that 66% percent of employees believe their company’s performance review system actually interferes with their productivity?

Performance Management is NOT performance Appraisal.
• Performance Management
o Strategic business considerations
o Driven by line manager
o Ongoing feedback
 So employee can improve performance
• Performance Appraisal
o Driven by HR
o Assesses employee
 Strengths
 Weaknesses
o Once a year
 Lacks ongoing feedback

Multimedia Resource
 Performance management is not performance appraisal

2. Purposes of Performance Management Systems
o Strategic purpose
o Administrative Purpose
o Informational Purpose
o Developmental Purpose
o Organizational Maintenance Purpose
o Documentation Purpose

Strategic Purpose
o Link individual goals with organization’s goals
o Communicate most crucial business strategic initiatives

Administrative Purpose
o Provide information for making decisions in reference to:
 Salary adjustments
 Promotions
 Retention or termination
 Recognition of individual performance
 Layoffs

Informational Purpose
o Communicate to Employees
 Expectations
• Organization
• Supervisor
 What is important
 How they are doing
 How to improve

Developmental Purpose
o Performance feedback/coaching
o Identification of individual strengths and weaknesses
o Identification of causes of performance deficiencies
o Tailor development of individual career path

Organizational Maintenance Purpose
o Plan effective workforce
o Assess future training needs
o Evaluate performance at organizational level
o Evaluate effectiveness of HR interventions

Documentation Purpose
o Validate selection instruments
o Document administrative decisions
o Help meet legal requirements

3. The Performance Management Contribution
For Employees
Clarify definition of job and success criteria
Increase motivation to perform
Increase self-esteem
Increase employee competence
Enhance self-insight and development
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
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
For Organization/HR Function
Clarify organizational goals
Facilitate organizational change
Administrative actions are more fair and appropriate
There is better protection from lawsuits

Teaching Strategies
 How did performance management help IBM switch to a customer service focus in the 1980s?

4. When Performance Management Breaks Down: Dangers of Poorly Implemented Systems
For Employees
Lowered self-esteem
Employee burnout and job dissatisfaction
Damaged relationships
Use of false or misleading information
For Managers
Increased turnover
Decreased motivation to perform
Unjustified demands on manages’ resources
Varying and unfair standards and ratings
For Organization
Wasted time and money
Unclear ratings system
Emerging biases
Increased risk of litigation

Teaching Strategies
 From the reading so far, give at least two examples of ways in which poorly implemented PM systems can hurt the organization.

Performance Ratings: The Canary in the Coal Mine
• Unfair or biased ratings are a sign of a poorly implemented performance management system
• Possible unseen reasons why performance ratings are biased, impractical, and cause more harm than good
o Ratings may be not be directly related to an organization’s strategic goals
o May not refer to performance dimensions under the control of the employee
o May take too long for supervisors to fill out complicated and convoluted evaluation forms

5. Characteristics of an Ideal Performance Management System

Overview
 Congruent with organizational strategy
 Thorough
 Practical
 Meaningful
 Specific
 Identifies effective and ineffective performance
 Reliable
 Valid
 Acceptable and Fair
 Inclusive
 Open
 Correctable
 Standardized
 Ethical

Strategically Congruent
o Consistent with organization’s strategy
o Aligned with unit and organizational goals

Contextually Congruent
o 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.

Thorough
o All employees are evaluated.
o All major job responsibilities are evaluated.
o Evaluations cover performance for the entire review period.
o Feedback is given on both positive and negative performance.

Practical
o Available
o Easy to use
o Acceptable to decision makers
o Benefits outweigh costs

Meaningful
o Standards are important and relevant.
o System measures ONLY what employee can control.
o Results have consequences (used for important administrative decisions).
o Evaluations occur regularly and at appropriate times.
o System provides for continuing skill development of evaluators.

Specific
o Concrete and detailed guidance to employees
 What’s expected
 How to meet the expectations

Identifies effective and ineffective performance
o Distinguish between effective and ineffective
 Behaviors
 Results
o Provide ability to identify employees with various levels of performance

Reliable
o Consistent
o Free of error
o Inter-rater reliability

Valid
o Relevant (i.e., measures what is important)
o Not deficient (i.e., doesn’t measure unimportant facets of job)
o Not contaminated (i.e., only measures what the employee can control)

Acceptable and Fair
o Perception of Interpersonal Justice
 Perceptions of quality of the design and implementation of the PM system
o Perception of Informational Justice
 Performance expectations and goals
 Feedback received
 Information given to justify administrative decisions

Teaching Strategies
 How can different cultures challenge this requirement in international companies?

Inclusive
o Represents concerns of all involved
 When system is created, employees should help with deciding
• What should be measured
• How it should be measured
 Employee should provide input on performance prior to evaluation meeting.

Open (No Secrets)
o Frequent, ongoing evaluations and feedback
o Two-way communications in appraisal meeting
o Clear standards and ongoing communication
o Communications are factual, open, and honest

Correctable
o Recognizes that human judgment is fallible
o Appeals process provided

Standardized
o Ongoing training of managers to provide consistent evaluations across
 People
 Time

Ethical
o Supervisor suppresses self-interest
o Supervisor rates only where he or she has sufficient information about the performance dimension
o Supervisor respects employee privacy

Teaching Strategies
 What did the Mercer study show could be the payoff if an ideal PM system were implemented?
 When you think about PM systems you have observed, what characteristics of an ideal system are most common?
 What characteristics of an ideal PM system seem most likely to be absent in systems you have observed?

6. Integration with Other Human Resources and Development Activities
Performance management provides information for:
o Development of training to meet organizational needs
o Workforce planning
o Recruitment and hiring decisions
o Development of compensation systems

7. The Future Is Now: Performance Management and the Nature of Work and Organizations Today

PM is changing rapidly due to:
 Technological Advancements
 Globalization
 Demographic Changes

Technological Advancements
o Use of cloud computing for real-time and constant feedback
o Availability of Big Data and use of Electronic Performance Monitoring (EPM)

Globalization
o Increasing prevalence of virtual teams located across the world
o Need to consider local norms—including societal and organizational cultural issues

Demographic Changes
o Retirement of baby boomers and influx of Gen X and Gen Y (Millennials)

Multimedia Resource
 Millennials in the Workforce
o Instructor Note: In many countries, Millennials are increasingly becoming a larger and larger part of the workforce. However, there are often a number of stereotypes associated with Millennials, and specifically about how to manage them. This is a comical look at managing the performance of Millennials. As such, Instructor should preface the video by clarifying the comedic nature of the video (i.e., the video should not be taken seriously).

Performance Management (PM) in Context: Summary
1. Definition of Performance Management
2. Purposes of Performance Management Systems
3. The Performance Management Contribution
4. When Performance Management Breaks Down: Dangers of Poorly Implemented Systems
5. Characteristics of an Ideal Performance Management System
6. Integration with Other Human Resources and Development Activities
7. The Future Is Now: Performance Management and the Nature of Work and Organizations Today

 
Worked Solutions for End-of-Chapter Cases
Exercise 1-1: Ideal versus Actual Performance Management System
1. Overall, the performance management system at ______________ (the company evaluated by student) fits/does not fit the characteristics of an ideal system.
 (Suggested points: 2, [1.5])
LO: 6
2. Possible characteristics identified:
• Strategic congruence; context congruence: thoroughness; practicality; meaningfulness: specific; plan discriminates among high, average, and low performers; reliable and valid; acceptable and fair; inclusive; open; correctable; standardized; and ethical
Possible influences on effectiveness:
• Lack of alignment with unit and organizational goals; buy-in and acceptance of system by employees; perception of fairness; decreases motivation of employees; discourages use of system by managers; not enough information presented to know if the standards that employees are rated on are relevant and under the employee’s control; legal challenges and ramifications; failure to discriminate among high, average, and low performers; insufficient information to evaluate whether the benefits of the system outweigh its costs; increased turnover;
(Suggested points: 3, [1.2])
LO: 6
3. Possible characteristics identified:
• Strategic congruence; context congruence: thoroughness; practicality; meaningfulness: specific; plan discriminates among high, average, and low performers; reliable and valid; acceptable and fair; inclusive; open; correctable; standardized; and ethical
Possible advantages/positive outcomes of characteristics on effectiveness:
• Increase employee motivation, commitment, and intentions to stay in organization
• 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
• Facilitate organizational change
• Fairer, more appropriate administrative actions
• Better protection from lawsuits
• Improved employee satisfaction and loyalty
• Increased trust between manager and employee
(Suggested points: 3, [1.2])
LO: 6
4. Possible characteristics identified:
• Strategic congruence; context congruence: thoroughness; practicality; meaningfulness: specific; plan discriminates among high, average, and low performers; reliable and valid; acceptable and fair; inclusive; open; correctable; standardized; and ethical
Possible steps for alignment:
• Evaluate strategic/contextual alignment between performance management system and organizational priorities
• Assess practicality and ease of administration of system in terms of thoroughness, coverage for all employees, and costs
• Gauge how well systems identifies differences between high, average, and low performers
• Solicit employee feedback regarding system
Possible responsible parties:
• Chief Executive Officer (CEO); Top management team; Human resources department; managers and supervisors; representative employees
(Suggested points: 8, [1.2])
LO: 6

Exercise 1-2: Distinguishing Performance Management Systems from Performance Appraisal Systems

A performance management system is a multidimensional concept. Performance management is a continuous process of 1) identifying, 2) measuring, 3) developing the performance of individuals and teams, and 4) aligning performance with the strategic goals of the organization.

In contrast, a performance appraisal system consists of only two of the elements of a performance management system (i.e., the identification and measurement of individual and team performance). In other words, a performance appraisal system is a non-continuous (e.g., once-a-year) systematic description of an employee’s strengths and weaknesses. It does not include any ongoing effort to provide goal-setting, development/coaching, or strategic alignment of employees’ performance with organizational goals. Therefore, a performance appraisal system is a component of a performance management system.

Clarifying the distinction between a performance appraisal system and a performance management system reveals three types of criticisms against a performance-related system. First, recall that two elements, a) the identification and b) measurement of individual/team performance, are included in both a performance appraisal system and a performance management system. However, other elements, that is, a) continuous process; b) development; and c) strategic alignment, are included only in a performance management system but not in a performance appraisal system. Given that these latter elements can be translated to benefits if managed appropriately, it follows that a performance management system has more potential benefits than does a performance appraisal system. Because a performance management system has a greater number of potential benefits than does a performance appraisal system, a person can criticize a performance appraisal system for offering a smaller number of potential benefits to an organization. Similarly, one can criticize a performance appraisal system on the basis that the system does not have a particular element that a performance management has, given that there are elements that a performance management system has but that a performance appraisal system does not. Either way, this type of criticism is directed against performance appraisal systems but not against performance management systems.

Second, note that a person can criticize the poor execution or management of an element that is included in a performance management system but not in a performance appraisal system. In this case, the criticism is directed against a performance management system but not a performance appraisal system.

Third, a person can criticize the poor execution or management of an element that is included in both a performance management system and a performance appraisal system. Accordingly, this criticism is directed against both a performance management system and a performance appraisal system.

Therefore, the following patterns of X’s are observed in the table below.

Criticisms Directed against performance appraisal systems Directed against both performance appraisal and management systems Directed against performance management systems
1  x 
2 x  
3 x  
4  x 
5  x 
6   x
7 x  
8   x
9  x 
10 x  
11   x
(Suggested points: 8, [1.1])
LO: 1

Case Study 1-1: Performance Management at Network Solutions, Inc.

1. Overall, the performance management system at Network Solutions fits the characteristics of an ideal system nicely.
 (Suggested points: 3, [1.5])
LO: 6
2. It has strategic congruence; it encourages a thorough and continuous evaluation process; the results will be used to make important decisions; expectations of employees are clearly communicated; the plan discriminates among high, average, and low performers; employee input is gathered before the meeting; and it encourages ongoing communication between manager and employee. However, there is not enough information presented to know if the standards that employees are rated on are relevant and under the employee’s control, or if there is an appeals process in place. Furthermore, reliability and validity information of the system will need to be assessed. Finally, data will be needed (possibly collected by the HR function) to assess whether employees see the system as fair, whether it is being used ethically, and whether the benefits of the system outweigh its costs.
 (Suggested points: 5, [1.5])
LO: 6
3. Advantages/positive outcomes of successfully implementing this system include:
• Raising the bar of performance and aggressively managing performance
• Cascading organizational goals to individual contributors, setting objectives to meet these goals, and planning development activities to ensure that objectives are met
• Ability to track talent profile and compare it to business performance
• Enhanced communication around employee development
• Improved employee satisfaction and loyalty
• Increased risk taking for innovation and technology breakthroughs
• Increased trust between manager and employee
• Increased collaboration
 (Suggested points: 3, [1.3])
LO: 3
4. Disadvantages of implementing this system include:
• Poor performers may be retained to meet the 10 percent quota
• Increased risk of discrimination litigation
• Hiring mediocre talent to satisfy the bottom 10 percent quota
• Promote internal competition, undermining team collaboration
• May drive unethical behavior, as employees do whatever it takes to compete
• Everyone takes a turn being a “token 3”
• The forced distribution may not reflect actual performance, and there may be penalization of (a) good performers in high performing teams and (b) good managers who hire well and manage all performers actively
 (Suggested points: 3, [1.3])
LO: 4

Case Study 1-2: Performance Management at CRB, Inc.

1. Although some descriptions of performance management might seem too complicated for a small business, the basic principles of performance management are important for every business. Performance management links an individual’s (and a team’s) performance to the company’s mission and goals by identifying what is important in an individual’s job, measuring that performance, and developing the individual’s (and team’s) ability to provide better performance. Even when there are only seven employees, it is important to ensure that they are working effectively toward meeting the company’s goals. A properly implemented performance management system should be very useful to the company.
(Suggested points: 10, [1.1])
LO: 1
2. There are a number of benefits that a performance management system can provide to the company and to you as one of the owners, including:
a. You will clarify organizational goals to your employees.
b. You and your foreman will be able to communicate your views of employee performance more clearly.
c. There will be better, more timely identification of good and poor performance.
d. Employee performance will improve.
e. Your administrative actions will be fair and appropriate.
f. You will have better protection from any possible lawsuits from employees.
g. If you decide to make changes, the performance management system will help make the changes easier to implement.
h. You might gain more insight about your employees.

In addition, the employees would reap the following benefits from the performance management system:
a. Clarified definitions of their jobs and success criteria
b. Increased motivation to perform
c. Enhanced self-insight and development
d. Increased self-esteem
e. Improvement in pay as their performance improves
 (Suggested points: 5, [1.3])
LO: 3
3. You may have seen some of these problems already in your company. They are similar to the problems you can face if you have a poorly implemented system. For you, as one of the owners, these dangers may exist:
a. You may face litigation at any time.
b. Employees may believe they are treated unfairly.
c. Employee motivation to perform may decrease.
d. Employees may quit (or slow down) when they think they are not treated fairly.
e. You may realize that either you or the foreman is putting too much effort into getting performance out of one or more employees.

Employees may experience a lack of a performance management system (or a badly implemented one) in this fashion:
a. They may gradually burnout and become dissatisfied with their jobs.
b. Relationships among the employees and management may become damaged.
c. They become vulnerable to rumors and false or misleading information about how their performance is viewed.
d. They may develop lower self-esteem.
 (Suggested points: 5, [1.4])
LO: 4
4. There are 14 characteristics of an ideal performance management system, and Mary Brown has requested that you identify at least 10 that would be necessary for her company. This is a matter of judgment and detailed responses for any of the 14 should be accepted (example responses follow):
a. Congruent with organizational strategy. It is very important that the company identifies its goals and ensures that employee goals are aligned with the company goals.
b. Thorough. All employees (including the foreman) should be evaluated. All major job responsibilities should be evaluated, and the evaluations should cover performance for the entire review period. Feedback should be given on both positive and negative performance.
c. Practical. Because it is a very small company, the system must be easy to use and accepted by the owners and the foreman. The benefits must outweigh the costs of implementation.
d. Meaningful. The system must be meaningful to owners and employees, with measurement of important and relevant standards that are within employee control. The results should have consequences, evaluations should occur regularly and reliably, and there should be continuing skill development for the evaluators.
e. Specific. Employees should be given concrete and detailed guidance regarding what is expected and how to meet the expectations.
f. Identifies effective and ineffective performance. The company needs to distinguish between effective and ineffective behaviors and results. This will also provide the ability to identify employees with various levels of performance.
g. Reliable. The feedback should be consistent and free of error. Whether the owner or the foreman is conducting the evaluation, the results should be similar.
h. Valid. The system should be relevant (measuring what is important). The system should not be deficient or contaminated; that is, it should not measure unimportant facets of the job, and it should only measure what the employee can control.
i. Acceptable and Fair. Employees should be able to perceive distributive and procedural justice in the system. The work performed should lead clearly to the evaluation received and to any rewards that result. They should see that the procedures to determine the ratings and determine the rewards are fair.
j. Inclusive. The system needs to represent the concerns of everyone involved. Employees should be involved in developing the system, providing input on what should be measured and how, as well as providing input on their own performance.
k. Open. There should be frequent evaluations and feedback. The employee should be able to feel comfortable sharing information in the evaluation meetings. There should be clear standards and ongoing communication. Communication should be open, factual, and honest.
l. Correctable. There needs to be a clear understanding that the system is based on human judgment and that humans make mistakes. There needs to be a process for appealing decisions.
m. Standardized. The system will need ongoing training of the managers to provide consistent evaluations across people and time.
n. Ethical. The system will need to protect employee privacy. The raters will need to suppress their own self-interest and rate only where they have sufficient knowledge about performance.
 (Suggested points: 5, [1.5])
LO: 6
5. Answers will vary, but students should highlight these purposes of the performance management system and link it to the reward system:
• Strategic purpose: What types of behaviors and results are valued and rewarded?
• Administrative purpose: How are decisions about monetary (e.g., salary, bonuses), and non-monetary (e.g., promotions) made?
• Documentation: Provides legal documentation of the basis used to make reward decisions

Additionally, students can refer to important characteristics of an ideal performance management system to elaborate on possible future steps. These may include:
• Meaningfulness
• Reliability
• Validity
• Acceptability and fairness

For example, an answer may be:
“Your current reward system includes both tangible returns (money and benefits) and intangible or relational returns. The contingent pay or commission that you pay the foreman has a direct relationship to performance; the 40% of labor hours charged to the customer also relate to performance, although this could lead to employee dissatisfaction if estimated hours are consistently inaccurate.

You mentioned that the employees are working well as a team; this would imply that they are getting relational returns from their work. It is important to clarify whether they are being rewarded for working well together or not.

One thing to consider is the meaningfulness of “flagged hours”. If repairs/situations beyond the control of the employee consistently lead to delays, paying them based on flagged instead of actual hours may negatively impact perceptions of the system.

Finally, while it is clear that the system is effectively fulfilling the documentation purpose, further efforts may be required to make the system more open and correctable, from the perspective of the employee.”
(Suggested points: 10, .5[1.2], .5[1.5])
LO: 2, 6

 
Additional Cases and Worked Solutions
Case Study: Our Civil Service

A state civil service hires a wide variety of employees, ranging in pay and educational levels from janitors and truck drivers to clerical staff at various levels and professionals in a wide variety of fields (such as engineering, law enforcement, and social work). These entry-level people report to supervisors, who report to program managers, who report to division directors, who report to department directors, who report to the governor. The department directors serve at the pleasure of the governor and are charged by the governor with strategically directing their departments to fulfill various campaign promises. The other employees take standardized tests and are hired and promoted on a civil service, merit-based plan.

During their first year in their positions, these employees are employed on a probationary basis, with evaluations every 90 days. After the first year, supervisors evaluate employee performance once a year. The appraisal process is standardized, with the supervisor grading performance in five categories: quantity of work, quality of work, effort, teamwork, and adherence to procedure.

Due to a constitutional requirement that government employees be paid the same as comparable private sector employees, these civil service employees are paid at the mid- range for similar positions in the private sector. There is a seven-step pay system. Employees are hired at step one, and they receive a 5 percent step increase every year until they reach step six. They remain in step six for 5 years and then are moved to step seven as a seniority bonus. In addition, every year, if there is an increase in the cost of living, salaries are adjusted to match the cost-of-living increase. The civil service matches the mid-range of private sector insurance and retirement benefits. Some employees complain that they could probably get paid better in the private sector and often leave after a few years. Other employees care about the programs they are involved in, and other employees are grateful for the security of a government job.

The primary purpose of the entire civil service is to administer and enforce the laws of the state. You have been hired by the governor to examine the civil service institution and make recommendations to improve its responsiveness to the public. You want to recommend the implementation of a performance management system and have requested a meeting to discuss your recommendations. You are anticipating that the following questions will be asked, and you need to draft some good responses before the meeting.

1. Critically assess whether the state needs a performance management system. Discuss the purposes that such a system serves, and explain whether it would be better than the current system. Explain the advantages of implementing a performance management system for the employees and for our state.
 (Suggested points: 10, .4[1.3], .2[1.1], .4[1.2])
LO: 1, 2, 3
 Answer
A performance management system would provide a continuous process of identifying, measuring, and developing the performance of individuals and teams and aligning performance with the strategic goals of the organization. Although the civil service system is designed to administer and enforce the laws of the state, as the governor, you have goals that you have pledged to achieve for your constituents. A performance management system would assist you in linking employee performance to the overall goals of your administration.

You currently have an appraisal system, which assesses employee strengths and weaknesses once a year. Employees do not have a way of improving their performance through ongoing feedback that is linked through management directly to the strategy of your administration.

In contrast to an appraisal system, a performance management system serves six basic purposes: strategic, administrative, informational, developmental, organizational maintenance, and documentation.
• You need a way to communicate your most important strategic initiatives and link employee behavior directly to your goals.
• You need a system that can link information about employee performance to the hard decisions that are made about salary, promotions, retention and termination, and layoffs. In addition, you need solid information to use for employee recognition as well as ways to identify poor performers.
• You need a consistent way to inform all the employees about your expectations of their performance, both in terms of what is important and in terms of how they are doing and how to improve their performance.
• Your department directors need to have tools for identifying causes of poor performance and ways to assist employees to move forward on individual career paths through identification of individual strengths and weaknesses, followed by individualized feedback and coaching from their direct supervisors.
• At a macro level, you need to be able to plan for future strategic directions of the government, which requires an anticipation of priorities, resources, and future workforce and training needs. You need a way to evaluate the overall performance of your government and determine how effective your HR department is in helping you to get where you need to go.
• Finally, you need a way to document administrative decisions and meet legal requirements. Validation of selection instruments could help you determine whether you are getting the most qualified workforce in this merit system.

Thus, with a performance management system, you would have a more effective tool to help your administration meet its goals.

There would be advantages to both employees and management in implementing a performance management system. In addition, the citizens of the state would benefit from the fact that government service would be more closely aligned to their vision of what they would get when they elected you to administer and enforce the law. The advantages to the employees would include:
• Clarification of their job duties and success criteria, as they align their duties with the overall strategy of your administration
• Increased motivation to perform as they better understand how their jobs fit with the overall scheme
• Increased self-esteem as their performance improves
• Enhanced self-insight and development as they receive feedback and coaching

The advantages to the state would come from the following advantages that management would see:
• There would be clearer organizational goals.
• You would be better able to facilitate organizational change to meet your strategic goals.
• Administrative actions would be fairer and more appropriate.
• There would be better, more timely identification of good and poor performance.
• Supervisors would be able to communicate their views of performance more clearly.
• Employee performance would improve.

2. Explain any dangers of poorly implementing such a system. Evaluate the potential effect of such a system on the human resources department.
(Suggested points: 5, .7[1.4], .3[1.6])
LO: 4
Answer
There are dangers to the overall civil service system, managers, and employees from a poorly implemented performance management system. For the overall system, the dangers include:
• A waste of time and money.
• Derivation of employee performance ratings is considered a mystery.
• Biases can replace standards.
• There is an increased risk of litigation.

For managers, the dangers are:
• Employees may quit or slow down.
• Employee motivation to perform decreases.
• Standards and ratings vary and are unfair.
• Managers may find themselves spending an unjustified amount of time and resources dealing with the system.

Employees face the following dangers:
• They are vulnerable to false or misleading information about their performance.
• Relationships can be damaged.
• They face job burnout and dissatisfaction.
• Their self-esteem may be lowered.

Some of these dangers may already exist in your current performance appraisal system.

A performance management system is management-directed rather than HR-directed, although HR can be very helpful in developing the structure and training to implement the system. The performance management system would provide information to HR so that HR can develop training to develop your workforce for future needs. A good performance management system would help HR to anticipate upcoming recruitment and hiring needs; it could also assist with development of a more effective compensation system.
 

3. How much would something like this cost? Assess whether there might be some cost savings from implementation of a performance management system.
(Suggested points: 5, .5[1.3], .5[1.5])
LO: 4, 5
Answer
It is possible that implementation of a good performance management system would reduce the overall amount of time that managers spend dealing with citizen complaints and employee grievances. In addition, if you develop a reward system that is performance-based, there may be some budget savings. Initially, of course, there would be a substantial investment in structuring the system and providing management and employee training to ensure that the system is implemented successfully.

4. Evaluate whether the implementation of a performance management system would have any impact on employee rewards, considering the constitutional mandate that employees be paid comparably to private sector positions.
(Suggested points: 5, [1.5])
LO: 6
Answer
A large number of private sector businesses are beginning to implement performance-based pay systems. Because contingent pay and incentives have a strong relationship with a performance management system, it is possible that a performance management system could impact tangible rewards. In addition, and far easier to implement in the civil service, it is possible to develop a number of intangible rewards where performance can have a direct impact on relationships and work/life focus.

Case Study: Transition from Performance Appraisal to Performance Management

You are a passionate performance management consultant. Because of your expertise in performance management, you have been hired by the CEO of a large company to change a performance appraisal system to a performance management system. Because you are experienced in bringing about such transitions, you know better than anyone else that the success of such transitions depends heavily upon top managerial understanding of and support for the performance management system at hand. Thanks to your skills, you have managed to educate the top management of your client’s firm and correct their mistaken belief of equating performance appraisal with performance management.

Despite the clarified understanding of performance management, the top management team is still a hard sell, and they remain skeptical about whether your proposed performance management system is any different or more effective than the performance appraisal system that the company has had in place for decades. To make matters worse, the prevailing attitude across all levels of the organization seems to be characterized by the commonly heard statement: “We have been doing this for a long time, and it seems to work just fine.” Moreover, one of the managers has challenged your plan by voicing his concern that a performance management system might create or increase the demands (such as excessive paperwork) on managers’ and employees’ time and resources.

1. Describe at least four general strategies you would take to convince the client firm that the benefits of implementing a performance management system will far outweigh the costs and difficulties associated with the transition from a performance appraisal to a performance management system. For each strategy listed, provide sufficient detail so that the firm can implement your suggested strategies.
(Suggested points: 15, .5[1.2], .2[1.4], .3[1.3])
LO: 1, 2, 3, 4
Answer
Relevant and considerate responses should include at least some of the following strategies in an effort to promote the acceptance of a transition from a performance appraisal system to a performance management system.
• Strategy #1: Explain some of the advantages of adopting a performance management system. They include increased motivation to perform, facilitation of organizational change, and increased competence of employees.
• Strategy #2: Address what can be done to mitigate any identified disadvantages/dangers of a poorly implemented performance management system. For example, one major concern with adopting a performance management system is that it can overwhelm managers with cognitive load, paperwork, and generally more work to do. To mitigate this potential disadvantage, the performance management system can require that each appraisal form be completed on or around each employee’s annual anniversary date of hire rather than require that all appraisal forms be completed toward the end of the fiscal year. To further mitigate the paperwork burden, the company should encourage managers to communicate with employees regarding performance throughout the year so that filling out appraisal forms later will be easier and more natural.

• Strategy #3: Explain how a performance management system serves to further the organization’s strategic goals and thus leave a positive impact on the bottom line.
• Strategy #4: Performance management systems serve as important “feeders” to other human resources and development activities. For example, consider the relationship between performance management and training. Performance management provides information on developmental needs for employees. In the absence of a good performance management system, it is not clear that organizations will use their training resources in the most efficient way (i.e., train those who most need it in the most critical areas).
• Strategy #5: Involve employees in the design of the system. People support what they help create. The higher the level of participation is in designing the system, the greater the support for the system will be.
• Strategy #6: Repeat the information frequently. Because people can absorb only a small amount of information at a time, the information must be repeated often.

Case Study: Implementing a PM System

Some key members of an organization and an external consultant worked together to thoroughly communicate and actually implement a new performance management system. As one of the first steps to implement performance management, the CEO announced that he wanted to implement a forced distribution performance management system in which a set percentage of employees would be classified into each of several categories (e.g., a rating of 1 to the top 20 percent of performers; a rating of 2 to the middle 70 percent of performers; and a rating of 3 to the bottom 10 percent of performers). A global HR team was put in place to design and implement the new system. The first task for the design team was to build a business case of the new system by showing that if the new organizational strategy was carried down to team goals or objectives and team goals or objectives were translated into individual goals, then business goals would be met. Initially, the program was rolled out as a year-round people management system that would raise the bar on performance management at the company by aligning individual performance objectives with organizational goals and by focusing on the development of all employees. The desired outcomes of the new system included raising the performance level of all employees, identifying and retaining top talent, and identifying low performers and improving their performance. The firm also wanted the performance expectations for all employees to be clear.

The design team received the support of senior leadership by communicating that the performance management system was the future of the firm and by encouraging all senior leaders to ensure that those reporting directly to them understood the process and also accepted it. In addition, the design team encouraged senior leaders to use the system with all of their direct subordinates and to demand and utilize output from the new system. The team also explained the need for standardization of performance management across all divisions. Finally, the team asked senior leaders to promote the new program by involving employees in training of talent management and by assessing any needs in their divisions that would not be addressed by the new system. The company’s global performance management cycle consisted of the following process:

1. Goal cascading and team building
2. Performance planning
3. Development planning
4. Ongoing discussions and updates between managers and employees
5. Annual performance summary

Training resources were made available on the company’s intranet for managers and individual contributors, including access to all necessary forms. In addition to the training available on the intranet, one- to two-hour conference calls took place before each phase of the program began.

After the transition into the new system, part of the training associated with the performance management system revolved around the idea that the development planning phase of the system was the joint year-round responsibility of managers and employees. Managers were responsible for scheduling meetings, guiding employees on preparing for meetings, and finalizing all development plans. Individual contributors were responsible for documenting the developmental plans. Both managers and employees were responsible for preparing for the meeting, filling out the development planning preparation forms, and attending the meeting.

With forced distribution systems, there were a fixed number of employees that had to fall into each rating classification. As noted, in the company system, employees were given a rating of 1, 2, or 3. Individual ratings were determined by the execution of annual objectives and job requirements as well as through a comparison rating of others within a similar level at the company. Employees receiving a 3, the lowest rating, had a specified time period to improve their performance. If their performance improved, then they were released from the plan, but they were not eligible for stock options or salary increases. If performance did not improve, they could take a severance package and leave the company, or they could start on a performance improvement plan, which had more rigorous expectations and timelines than did the original action plan. If performance did not improve after the second period, they were terminated without a severance package. Individuals with a rating of 2 received average to high salary increases, stock options, and bonuses. Individuals receiving the highest rating of 1 received the highest salary increases, stock options, and bonuses. These individuals were also treated as “high potential” employees and given extra development opportunities by their managers. The company also made significant efforts to retain all individuals who received a rating of 1.

Looking to the future, the company planned to continue reinforcing the needed cultural change to support forced distribution ratings. HR Centers of Expertise within the company continued to educate employees about the system to ensure that they understood that the company still rewarded good performance; they were just measuring it in a different way than in the past. There was also a plan to monitor for and correct any unproductive practices and implement corrective policies and practices. To do this, the company planned on continued checks with all stakeholders to ensure that the performance management system was serving its intended purpose.

Now that the new performance management system was implemented, the consultant decided to evaluate the system to see if and how further implementation of the performance management was needed. To do so, the consultant considered the following four questions that deal with characteristics of an ideal performance management system discussed in the chapter. Put yourself in the shoes of the consultant, and provide answers to these four questions:

1. What is your overall impression on the degree of overlap between the company’s system and the ideal system performance management system?
(Suggested points: 5, [1.5])
LO: 6
Answer
Overall, the performance management system at the company fits the characteristics of an ideal system nicely.

2. What are the specific features of the system implemented at the company that correspond to what was described in the chapter as ideal characteristics? Which of the ideal characteristics are missing? For which of the ideal characteristics do we need additional information to evaluate whether they are part of the system at the company?
(Suggested points: 5, [1.5])
LO: 6
Answer
It has strategic congruence; it encourages a thorough and continuous evaluation process; the results will be used to make important decisions; expectations of employees are clearly communicated; the plan discriminates among high, average, and low performers; employee input is gathered before the meeting; and it encourages ongoing communication between manager and employee. However, there is not enough information presented to know if the standards that employees are rated on are relevant and under the employee’s control and if there is an appeals process in place. Furthermore, reliability and validity information of the system will need to be assessed. Finally, data will be needed (possibly collected by the HR function) to assess whether employees see the system as fair, whether it is being used ethically, and whether the benefits of the system outweigh its costs.

3. Based on the description of the system at the company, what do you anticipate will be some advantages and positive outcomes resulting from the implementation of the system?
(Suggested points: 7, .3[1.5], .7[1.3])
LO: 3, 6
Answer
Advantages/positive outcomes of successfully implementing this system include:
a. Raising the bar of performance and aggressively managing performance
b. Cascading organizational goals to individual employees, setting objectives to meet these goals, and planning development activities to ensure that objectives are met
c. Ability to track talent profile and compare it to business performance
d. Enhanced communication centered on employee development
e. Improved employee satisfaction and loyalty
f. Increased opportunities for innovation and technology breakthroughs
g. Increased trust between managers and employees
h. Increased collaboration

4. What do you anticipate will be some disadvantages and negative outcomes resulting from the implementation of the system?
(Suggested points: 7, .3[1.8], .7[1.4])
LO: 4
Answer
Disadvantages of implementing this system include:
i. Poor performers may be retained to meet the 10 percent quota
j. Increased risk of discrimination litigation
k. Hiring mediocre talent to satisfy the bottom 10 percent quota
l. Promoting internal competition, undermining team collaboration
m. May drive unethical behavior, as employees do whatever it takes to compete
n. Everyone takes a turn being a “token 3”
o. The forced distribution may not reflect actual performance, and there may be penalization of (a) good performers in high performing teams and (b) good managers who hire well and manage all performers actively

Case Study: PM beyond Large Businesses

The table here summarizes the key characteristics of an ideal performance management system as discussed in Chapter 1. Think about three performance management systems you know—one in a large business, another in a small business (500 or less employees), and the last one in a governmental agency. One of such performance management systems could be the one implemented at your current (or most recent) job. If you don’t have information about such a system, talk to a friend or acquaintance who is currently working and gather information about the system used in his or her organization.

1. Use the Y/N column in the table to indicate whether each of the features is present (Y: yes) or not (N: no) in the system you are considering. In some cases, some elements may be present to a degree and may require that you include some additional information in the Comments column.
(Suggested points: 6, [1.5])
LO: 6
Answer

Characteristics Y/N Definition Comments
Strategic congruence  Individual goals are aligned with unit and organizational goals. 
Contextual congruence  The system is congruent with norms based on the organization’s culture. 
  The system is congruent with norms based on the culture of the region and country where the organization is located. 
Thoroughness  All employees are evaluated. 
  Evaluations include performance spanning the entire review period. 
  All major job responsibilities are evaluated. 
  Feedback is provided on both positive and negative performance. 
Practicality  It is readily available for use. 
  It is easy to use. 
  It is acceptable to those who use it for decisions. 
  Benefits of the system outweigh the costs. 
  Standards and evaluations for each job function are important and relevant. 
  Only the functions that are under the control of the employee are measured. 
Meaningfulness  Evaluations take place at regular intervals and at appropriate moments. 
  System provides for continuing skill development of evaluators. 
  Results are used for important administrative decisions. 
Specificity  Detailed guidance is provided to employees about what is expected of them and how they can meet these expectations. 
Identification of effective and ineffective performance  The system distinguishes between effective and ineffective behaviors and results, thereby also identifying employees displaying various levels of performance effectiveness. 
Reliability
 Measures of performance are consistent. 
  Measures of performance are free of error. 
Validity  Measures include all critical performance facets. 
  Measures do not leave out any important performance facets. 
  Measures do not include factors outside employee control. 
Acceptability and fairness  Employees perceive the performance evaluation and rewards received relative to the work performed as fair (distributive justice). 
  Employees perceive the procedures used to determine the ratings and subsequent rewards as fair (procedural justice). 
  Employees perceive the way they are treated in the course of designing and implementing the system as fair (interpersonal justice). 
  Employees perceive the information and explanations they receive as part of the performance management system as fair (informational justice). 
Inclusiveness  Employees’ input about their performance is gathered from the employees before the appraisal meeting. 
  Employees participate in the process of creating the system by providing input on how performance should be measured. 
Openness  Performance is evaluated frequently and feedback is provided on an ongoing basis. 
  Appraisal meeting is a two-way communication process and not one-way communication delivered from the supervisor to the employee. 
  Standards are clear and communicated on an ongoing basis. 
  Communications are factual, open, and honest. 
Correctability  There is an appeals process through which employees can challenge any unjust or incorrect decisions. 
Standardization
 Performance is evaluated consistently across people and time. 
Ethicality  Supervisors suppress their personal self-interest in providing evaluations. 
  Supervisors evaluate performance dimensions only for which they have sufficient information. 
  Employee privacy is respected. 

2. Next, briefly discuss the similarities and dissimilarities observed among the three performance management systems implemented in the three different contexts.
(Suggested points: 10, [1.5])
LO: 6
Answer
Answers should be judged based on the insightfulness of the comments. Good answers will demonstrate a clear understanding of each of the components of an ideal performance management system, and each comment should be relevant to the specific characteristic under which the comment is included. The key here is to understand the importance of each of the characteristics and how they may or may not have directly or indirectly affected the individual, group, or organization.

Chapter 2—Performance Management Process

Learning Objectives

2.1 Articulate that performance management is an ongoing and circular process that includes the interrelated components of prerequisites, performance planning, performance execution, performance assessment, and performance review.

2.2 Argue that the poor implementation of any of the performance management process components has a negative impact on the system as a whole and that a dysfunctional or disrupted link between any two of the components also has a negative impact on the entire system.

2.3 Assemble important prerequisites needed before a performance management system is implemented, including knowledge of the organization’s mission and strategic goals through strategic planning and knowledge of the job in question through work analysis.

2.4 Conduct a work analysis to determine the tasks; knowledge, technology and other skills, and abilities (KSAs), work activities, work context and working conditions of a particular job and produce a job description that incorporates the KSAs of the job and information on the organization and unit mission and strategic goals.

2.5 Distinguish results from behaviors and understand the need to consider both as well as development plans in the performance planning stage of performance management.

2.6 Critique the employee’s role in performance execution and distinguish areas over which the employee has primary responsibility from areas over which the manager has primary responsibility.

2.7 Recommend the employee’s and the manager’s responsibility in the performance assessment phase.

2.8 Be prepared to participate in appraisal meetings that involve the past, the present, and the future.

Chapter Outline

Overview
1. Prerequisites
2. Performance Planning
3. Performance Execution
4. Performance Assessment
5. Performance Review

1. Prerequisites
o Strategic Planning
 Knowledge of the organization’s mission and strategic goals
o Work (Job) Analysis
 Knowledge of the job in question

Strategic Planning
o Knowledge of the mission and strategic goals
 Purpose or reason for the organization’s existence
 Where it wants to be in the future
 Organizational goals
 Strategies for attaining goals
 Cascade effect throughout organization
Organization  Unit  Employee

Teaching Strategies
 Consider the level of strategic integration of the HR function in the Queensland public sector study

Multimedia Resource
 The power of vision, strategy, and talent

Work (Job) Analysis
o Knowledge of the job in question
• Work (job) analysis of key components
 Activities, tasks, products, services, and processes
• Job description with KSAs required to do the job
 Knowledge
 Skills
 Abilities

Teaching Strategies
 Give examples of KSAs for a Trailer Truck Driver

• Conducting the work (job) analysis
 Can be conducted using a variety of tools
o Interviews
o Observation
o Questionnaires (available on Internet)
 All incumbents should review information and provide feedback
o Frequency of tasks
o Criticality of tasks
 Biases that affect KSA-related information provided by individuals
o Self-serving bias
o Social projection and False consensus bias
o Carelessness responding
o Remedial measure: Web-based rater training program
• Writing the job description
o Job duties
o KSAs
o Working conditions
o Get generic job descriptions from Occupational Informational Network (O*NET) http://online.onetcenter.org/

Teaching Strategies
 How did Deaconess Hospital use information regarding the mission, strategic goals, and individual jobs in its PM system?

2. Performance Planning
o Results
o Behaviors
o Development plan

Results
o What needs to be done or the outcomes an employee must produce
o Key accountabilities
o Specific objectives
o Performance standards

Teaching Strategies
 How are objectives different from performance standards?
 How might this be demonstrated in a professor’s performance plan?

o Key Accountabilities
 Broad areas of a job for which the employee is responsible for producing results

o Specific Objectives
 Statements of outcomes
 Important
 Measurable

o Performance Standards
 “Yardstick” to evaluate how well employees have achieved each objective
• Information on acceptable and unacceptable performance, such as
o Quality
o Quantity
o Cost
o Time

Behaviors
o How a job is done
o Competencies

Teaching Strategies
 Why might a salesperson prefer to be measured based on behaviors rather than results?

o Competencies
 Measurable clusters of KSAs
 Knowledge
 Skills
 Abilities
 Critical in determining how results will be achieved

Teaching Strategies
 What kinds of competencies could be measured in an online course?

Development Plan
o Areas that need improvement
o Goals to be achieved in each area of improvement

3. Performance Execution
The Employee’s Responsibilities
• Commitment to goal achievement
• Check-ins and performance touchpoints
• Collecting and sharing performance data
• Preparing for performance reviews

The Manager’s Responsibilities
• Observation and documentation
• Updates
• Feedback
• Resources
• Reinforcement

Teaching Strategies
 How does International Business Machines (IBM) emphasize the joint responsibilities of both employees and managers for performance execution?

4. Performance Assessment
• Manager assessment
• Self-assessment
• Other sources (e.g., peers and customers)

Multiple Assessments Are Necessary
• Increase employee ownership of the process
• Increase commitment to the system
• Provide information to be discussed at the review

Teaching Strategies
 How does Google reduce bias in their performance assessment process?

5. Performance Review
Overview of Appraisal Meeting
• Past
 Behaviors and results
• Present
 Compensation to be received or denied as a result
• Future
 New goals and development plans

Multimedia Resource
 Self-Assessment during the Performance Review meeting at "The Office"

Teaching Strategies
 How is this model different from the results of the survey of 150 organizations in
 Scotland?
 What kinds of fears and apprehensions might exist, and how might they be
 handled?
 If we did a survey here, in what ways, if any, would the results differ from the survey of Malaysian teachers?

Six Steps for Conducting Productive Performance Reviews
1. Identify what the employee has done well and has done poorly by citing specific behaviors.
2. Solicit feedback.
3. Discuss the implications of changing behaviors.
4. Explain how skills used in past achievements can help overcome any performance problems.
5. Agree on an action plan.
6. Set a follow-up meeting and agree on behaviors, actions, and attitudes to be evaluated.

Performance Management Process: Key Points
•  Ongoing process
•  Each component is important
o If one is implemented poorly, the whole system suffers
•  Links between components must be clear

Performance Management Process: Summary of Components
1. Prerequisites
2. Performance Planning
3. Performance Execution
4. Performance Assessment
5. Performance Review

Worked Solutions for End-of-Chapter Exercises and Cases
Exercise 2-1: Work (Job) Analysis
1. There are two main reasons for possible disagreements. First, different types of restaurants have different emphases in the various tasks assigned to “wait staff”. The disagreement may stem from true differences rather than any cognitive biases. Second, disagreement stems from cognitive biases that affect the accuracy of the information provided by the raters. Such cognitive biases include:

a. Self-serving bias (i.e., the tendency for people to report that their own behaviors and personality traits are more needed for successful job performance compared to behaviors and personality traits of others)

b. Social projection (i.e., the tendency for people to believe that others behave similarly to themselves and hence lead people to think about only themselves but not others when reporting KSAs for their job)

c. False consensus (i.e., the tendency for people to believe that others share the same beliefs and attitudes as themselves)

d. Carelessness bias (i.e., the tendency for people to differ in how carefully they attend to the job analysis rating tasks -such as how closely they read items, how appropriately they answer a specific question, and the extent to which they make needed distinctions between items- partially related to how people process information differently)
(Suggested points: 3, [2.1])
LO: 4
2. As one way to reduce disagreement stemming from true differences in emphases, people can create different job descriptions for different types of “wait staff”. Thus, in the case at hand, the case exercise participants can agree to focus on a particular type of “wait staff” rather than “wait staff" in general. For example, they may distinguish between experienced wait-staff and inexperienced wait-staff, they may also distinguish between “fast casual” and “fine dining” restaurants. As one way to reduce disagreement that stems from cognitive biases, participants can engage in a short (e.g., 15 minutes) Web-based training program designed to mitigate cognitive biases.
(Suggested points: 8, [2.1])
LO:4
3. A job description is part of the prerequisites of performance management system, which involves knowledge of the organization’s missions and goals, and knowledge of the job in question. The links between the various components of performance management system must be clearly established. For example, if we have good information regarding the job in question (prerequisites), it is easier to establish criteria for job success (performance planning). On the other hand, lack of knowledge of the organization’s mission and strategic goals, and the job in question, will not allow performance planning to be aligned with organization’s goals, which will lead to poor performance execution. Therefore, the links between the job description created by the student and the various components of the performance management system must be clearly established.

Here are key arguments that students may draw upon when discussing and justifying the (im)balance.

First, students may defend their job description by citing their restaurants’ mission and strategic goals. Clearly defining the goals the restaurants wants to achieve and the strategies it will use to attain these goals brings clarity to what each employee needs to do and achieve to help the organization get there.

Second, the job description provides the criteria that will be used in determining what needs to be done and how it should be done (performance planning). If emphasizing results, the job description should provide information regarding key accountabilities (broad areas of a job for which the employee is responsible for producing results), objectives (important and measureable outcomes) that the employee will achieve as part of each accountability, and a discussion of performance standards (yardsticks used to evaluate how well employees achieved each objective) such as quantity (e.g., how many tables they serve), cost, and time (e.g., table turnover).

On the other hand, students may justify the balance in results and behaviors by arguing that it gives an incomplete picture of employee performance. For example, students may argue that it is difficult to establish precise objectives and standards. Or, for example, that employees have control over how they do their jobs, but not over the results of their behavior (e.g., they may serve food in a short time, but do not have control over how much time customers choose to spend at the restaurant). A consideration of behaviors includes discussing competencies, which are measurable clusters of KSAs that are critical in determining how results will be achieved. Examples of competencies are customer service, written or oral communication, and dependability.

There are two important prerequisites that must exist before the implementation of a successful performance management system. First, there is a need to have good knowledge of the organization’s mission and strategic goals. This knowledge, combined with knowledge regarding the mission and strategic goals of their unit, allows employees to make contributions that will have a positive impact on the unit and on the organization as a whole. Second, there is a need to have good knowledge of the position in question: what tasks need to be done, how they should be done, and what KSAs are needed. Such knowledge is obtained through a work analysis. If we have good information regarding a job, then it is easier to establish criteria for job success.

 (Suggested points: 5, [2.1], [2.2])
LO: 2, 3, 4, 5
Exercise 2-2: Performance review meeting
* Instructor Note: This role play draws on the various concepts touched upon throughout this chapter. The aim is to provide a developmental exercise for students in terms of conducting a performance appraisal. Given its focus on skill development, there is no scoring guide.

There is no one right answer to this exercise. A useful way to conduct this exercise is to brief the class on elements to look for before the role-play. In addition, the instructor should ensure that there is a balance of positive and negative feedback for the role-play participants.

Factors that should be considered when evaluating the role-play include:
The performance assessment might include discrepancies, at which point the instructor can solicit student reaction on whether or not the inclusion of self-assessment reduced these discrepancies.  Other issues that the instructor might solicit from students is how well the direct report reacted to the feedback, how the manager managed any direct report reactions or defensiveness he or she may have had during the meeting.

In addition, the grader might take into account the following issues when discussing the performance review.

The performance review should include a discussion of the past (behaviors and results), present, (compensation to be received or denied as a result), and the future (new goals and development plans).

The performance review should also follow the six steps for conducting productive performance reviews.
• Identify what the employee has done well and has done poorly by citing specific behaviors.
• Solicit feedback.
• Discuss the implications of changing behaviors.
• Explain how skills used in past achievements can help overcome any performance problems.
• Agree on an action plan.
• Set a follow-up meeting and agree on behaviors, actions, and attitudes to be evaluated.
 
LO:8

Case Study 2-1: Disrupted Links in the Performance Management Process at Omega, Inc.

1. Presence and Form of PM Links:
1a. prerequisites  performance planning

There is no link between the first two phases of the process. Although the franchise owners laid out all of the prerequisites, they did not use them in performance planning. Although the employees and managers agreed on goals, because the link was broken, these goals did not relate to meeting the organization’s goal of customer service. Furthermore, they did not develop job descriptions that described what must be accomplished on the job, including the knowledge, skills, and abilities that are necessary.

1b. performance planning  performance execution

The link between planning and execution exists, as employees and managers both have an understanding of the goals, and feedback is given on how to reach those goals.

1c. performance execution  performance assessment

Currently, there is no link from execution to performance assessment. Employees have no way of assessing themselves on their goal attainment. Furthermore, because the key accountabilities and skills were never identified, the manager has nothing to document but results.

1d. performance assessment  performance review

Because there is currently no formal assessment, this disrupts the link to performance review. Although the manager and employee are meeting to discuss progress, they do not have a form to follow.

1e. performance review  performance prerequisites

Because, currently, the performance review is not a formal meeting where there is a specific form to follow or goals to discuss, it is hard to identify where performance is breaking down and where it is good. Thus, it will be hard to conduct performance prerequisites at the review cycle. Because there is no performance review, it cannot be linked to prerequisites.
(Suggested points: 5, .5[2.4], .5[2.5])
LO: 2
2. Fixing Disrupted PM Links:

2a. prerequisites  performance planning

The franchise owners can strengthen the link between prerequisites and performance planning by developing job descriptions and an appraisal form that lists all of the things that the employees are accountable for, explaining how performance will be judged. Furthermore, the organization’s mission of quality customer service needs to be communicated in the goals that are set and in the performance evaluated.

2b. performance planning  performance execution

This link currently exists; it will be even stronger when employees have a better idea of the performance they must provide in order to receive high performance ratings.

2c. performance execution  performance assessment

Employees need to be given regular updates on how many sales they have, any customer feedback that has been received, and feedback from their managers on how well they are performing the necessary tasks.

2d. performance assessment  performance review

The creation of a standardized appraisal form will improve the review phase and its link with the assessment phase.

2e. performance review  prerequisites

The manager and employee need to set a formal meeting time for performance review where there are written goals and a standardized appraisal form. At this meeting, they should reassess the goals set, brainstorm ideas where performance can be improved, check with Omega to ensure their needs are being met, and then begin the process again. The cycle is not over after the performance review. In fact, the process starts all over again: there need to be a discussion of prerequisites, including the updated organization’s mission and strategic goals and the updated job’s KSAs. Because markets change, customers’ preferences and needs change, and products change, there is a need to continuously monitor the prerequisites so that performance planning, and all the subsequent stages, are consistent with the organization’s strategic objectives.

If Omega’s needs are being met, and the organizational goals remain unchanged, then the prerequisites are in place to begin the process again. If the needs are not being met, organizational goals and individual job descriptions need to be changed to meet the newly defined needs.

Overall, the discussion during the appraisal meeting focuses on the past (what has been done and how), the present (what compensation is received or denied as a result), and the future (goals to be attained before the upcoming review session).

 (Suggested points: 5, .20[2.1], .20[2.2], .20[2.3], .20[2.4], .20[2.5])
LO: 2
Case Study 2-2: KS Cleaners (KSC)
1. The prerequisites to implementing a performance management process are knowledge of the organization’s mission and knowledge of the job(s) in question. Neither of the prerequisites is in place officially; however, there is some information in the description that could be used to begin to develop these prerequisites.

For example, the mission will probably include some of the following information, because this is what the company is about:

a. KSC specializes in low-cost volume, promising that dry cleaning will be returned to its customers the day after it is turned in
b. Customer satisfaction
c. Quick turnaround

There is some information about the jobs involved, but more will be needed before a performance management process can be implemented.
 (Suggested points: 10, [2.1])
LO: 3
2. Each job requires a job analysis (dry cleaner, seamstress, general duty employee, and manager). Note: Kevin is currently the manager of this shop, but, because he intends to open a new shop, he will need to define those duties and hire a manager for one of the shops; the manager will be reporting to Kevin.

The job analysis will include a description of job duties, required knowledge, skills, and abilities (KSAs), and working conditions. I would collect data from current incumbents and their supervisor (Kevin), both by interviewing and observing them.

I would check the information I gained against the information that is online at the Occupational Informational Network (O*NET at http://online.onetcenter.org/gen_search_page) to see if I’ve left out anything important or if I need to get more information. (Note: It is not necessary to know the URL. It is provided because some people are more likely to remember the URL than the name of the network … either response is fine.)

When I have this information, it will be important to incorporate the company and unit missions, when they have been developed.

(Suggested points: 10, .7[2.1], .3[2.1])
LO: 4
3. Performance planning includes the consideration of results and behaviors as well as a developmental plan for each individual employee. Note that results and behaviors must be within the employee’s control.

A discussion of results needs to include key accountabilities (i.e., broad areas for which the employee is responsible), specific objectives for each key accountability (i.e., goals to be reached), and performance standards (i.e., what are acceptable and unacceptable levels of performance).

A discussion of behaviors needs to include competencies (i.e., clusters of KSAs—knowledge, skills, and abilities).

Finally, the developmental plan includes a description of areas that need improving and goals to be achieved in each area.

For example, in terms of results, the dry cleaner is responsible for (accountability) ensuring that clothes are spotted and cleaned promptly. Perhaps a specific objective would be that all incoming clothes should be cleaned before the end of the day and an acceptable performance standard would be that 10 loads per day are cleaned and no more than two items per day need to be re-cleaned.

The dry cleaner might be responsible for displaying competency in some of the following: knowledge of chemicals necessary to use for cleaning specific fabrics; skill in determining causes of stains and deciding what cleaning methods to use; and ability to communicate with general duty employees to keep them productive.
 (Suggested points: 10, [2.2])
LO: 4, 5
4. (Note: Evaluate responses based on how clearly the standards are defined. Do they consider quality, time, cost, or quantity? Is the standard within the employee’s control? Have they provided information on what it takes to meet the standard? How will we know if the standard has not been met?)

Sample response:
Hanging clothes: Performance is acceptable if the employee, on average, removes and hangs up at least 60 items of clothing per hour. No more than one item every two hours should have wrinkles from being left in the dryer too long or from being incorrectly hung. The quantity standard has not been met if the employee, on average, removes and hangs less than 60 items of clothing per hour. If more than four items per day have wrinkles from being incorrectly hung or being left in the dryer too long, the employee has not met this standard for quality.

(Suggested points: 10, [2.2])
LO: 4
5. (Note: Evaluate responses based on how clearly the standards are defined. Are the standards within the employee’s control? Have they provided information on what behaviors and competencies are required to meet the standard? How will we know if the standard has not been met?)

Sample response:
Working directly with the public: It is important to consider the behaviors that will be necessary for the employee to meet the goal of “customer satisfaction.” The KSAs described above are necessary for the employee to work at the counter, dealing with customers. It is important to describe behaviors and competencies that are within the employee’s control. Thus, the employee should be competent in talking to the customer and determining what services the customer needs. The employee should be able to listen to the customer and understand information the customer provides. The employee should be able to determine if the customer is having trouble and look for ways to help him or her receive satisfactory service. For example, one competency-related performance standard might be a requirement for good manners in dealing with strangers.
 (Suggested points: 10, [2.2])
LO: 4
6. The manager is responsible for observing and documenting the general duty employees’ performance, providing updates and resources to do the job, giving feedback, and reinforcing positive behavior.

In addition to a commitment to actually doing the job and achieving planned goals, the general duty employees have an ongoing responsibility to ask their manager for feedback and coaching. They need to communicate with the manager, collect and share performance data regarding how they are doing, and prepare for the performance reviews.
 (Suggested points: 2, [2.3])
LO: 6
7. In addition to using his own observation and documentation, Kevin should ask the general duty employees to assess their own performance and to assess their fellow employees’ performance. He should also use feedback he has received from the dry cleaner, the seamstress, and the customers regarding each employee’s performance. When they know that their assessments are based on multiple sources of feedback, employees feel that they have more ownership of the process and become more committed to the performance management system. The feedback that Kevin gathers will provide information that can be discussed at the review meeting; it will help Kevin and the individual employees to have a mutual understanding of expectations.
 (Suggested points: 10, [2.4])
LO: 7

Additional Cases and Worked Solutions

Case Study: Front Range Medical Associates (FRMA)

Front Range Medical Associates (FRMA) is a small medical practice owned by four doctors who are general practitioners. The mission of FRMA is to provide the best health care and medical assistance for the families of Granite, a mid-size city at the base of the Rocky Mountains. FRMA employs three clerical employees, four nurses, two physicians’ assistants, two laboratory technicians, and a custodian. Because this company is in the United States, one clerical employee spends most of his time identifying what insurance coverage is available to the various patients and negotiating costs with the various insurance companies. Although the company has employed some of the employees since 1974, it has relied on generic job descriptions and the institutional memory of Lenore, the head clerk, and Roseanne, the head nurse. However, Roseanne retired last summer and Lenore is planning to retire in a year. The nurses now report directly to the doctors, who also oversee the physicians’ assistants. The doctors have noticed that the previously well-run underpinnings of their practice have developed some glitches. They have hired you to help them get things running smoothly again.

1. Dr. Beasley, the senior member of the practice, tells you that he has heard that a performance management system might be a good idea. He asks you to explain the key features of such a system to him. Please provide him with a detailed discussion.
(Suggested points: 2, [2.1])
LO: 1
Answer
(Note: The following is taken directly from the summary in the text (p.59). It is important to use correct vocabulary in describing the concepts.)

“Performance management is an ongoing process. It never ends. Once established in an organization, it becomes part of an organization’s culture. The performance management process includes five closely related components: (1) prerequisites, (2) performance planning, (3) performance execution, (4) performance assessment, and (5) performance review.”

2. One of the problems at FRMA is that job duties are unclear. Discuss the information you would need to help FRMA resolve this problem, and explain how you would get this information.
(Suggested points: 10, .5[2.1], .5[2.1])
LO: 3, 4
Answer
Part of the problem is that FRMA needs a more detailed mission. The mission statement explains the reason for FRMA’s existence: to provide the best health care and medical assistance for the families of Granite. However, it does not say anything about FRMA’s goals or strategies; there is no cascade effect throughout the organization. Thus, I would need to work with the doctors and staff to develop a more detailed mission statement.

Then, we need to do a job analysis for each job in order to develop up-to-date job descriptions. We can begin with generic job descriptions from the Occupational Informational Network (O*NET at http://online.onetcenter.org/) and then interview the doctors, any supervisors, and the employees to determine the accuracy of the job descriptions. It is important to list job duties, KSAs (knowledge, skills, and abilities required to do the job), and working conditions. The incumbents should also review the information developed and provide feedback regarding the frequency and criticality of the tasks they do.

3. The following is part of a generic job description for registered nurses obtained from O*NET.
29-1111.00 - Registered Nurses: Assess patient health problems and needs, develop and implement nursing care plans, and maintain medical records. Administer nursing care to ill, injured, convalescent, or disabled patients. May advise patients on health maintenance and disease prevention or provide case management. Licensing or registration required.

Expand this generic job description in the context of FRMA’s mission.
(Suggested points: 10, [2.1])
LO: 3
Answer
This is a sample expansion: Assess patient health problems and needs, develop and implement excellent nursing care plans, and maintain medical records for the families of Granite. Administer excellent nursing care to ill, injured, convalescent, or disabled patients. May advise patients on superior health maintenance and disease prevention or provide case management for the families of Granite. Licensing or registration required.

4. You are advising Dr. Beasley about developing a performance plan for the employees in the practice. What factors should he consider in developing this plan?
(Suggested points: 5, [2.2])
LO: 5
Answer
Performance planning includes the consideration of results and behavior as well as a developmental plan. A discussion of results needs to include key accountabilities (i.e., broad areas for which an employee is responsible), specific objectives for each key accountability (i.e., goals to be reached), and performance standards (i.e., what are acceptable and unacceptable levels of performance). A discussion of behaviors needs to include competencies (i.e., clusters of KSAs). Finally, the developmental plan includes a description of areas that need improving and goals to be achieved in each area.

5. Explain the responsibilities of the supervisor and the employees during the performance execution and review phases.
(Suggested points: 5, .5[2.], .5[2.5])
LO: 6, 8

Answer
During the performance execution phase, management is responsible for observation and documentation; updating employees; providing feedback to employees; providing employees with the resources they need to do their jobs; and providing reinforcement to the employees. Employees are responsible for doing their jobs, with a commitment to achieving the goals developed during the performance planning process. They should make ongoing requests for feedback and coaching and communicate regularly with their supervisors. They should collect and share performance data with their supervisors. They should also prepare for their performance reviews.

During the performance review phase, the supervisor should review past behaviors and results, discuss any rewards that will be provided in the present, and work with the employee to set new goals and development plans. The employee is responsible for having completed a self-assessment prior to the performance review meeting. In addition, the employee should plan on participating actively in the discussion of his or her performance and help with development of the new action plan.

Case Study: The Worst Possible Performance Management System

Founded in 1990 in Englewood, CO, the A-Team Company now faces numerous resource challenges in a highly competitive global environment. In particular, the CEO of the A-Team Company realizes that the firm lacks the necessary human resource capacity to serve an increasingly internationally diverse and demanding customer base. Thus, the CEO wants Parker, the head of the HR department, to take the strategic role of implementing an effective performance management system; the firm currently has a performance appraisal system. Parker is thrilled and eager to use this opportunity to prove to his colleagues that HR is indeed of strategic importance rather than being the firm’s bureaucrats or police.

But the CEO wants some accountability from Parker who will thus not be given a blank check to do whatever he wants to do right away. The CEO comes up with a creative way of achieving greater accountability. Before any steps are made to implement Parker’s plan, a third party HR consultant who has little to no emotional ties to the concept of performance management, and certainly none to Parker, is hired and assigned the task of describing the worst possible performance management system. The CEO will then ask how Parker plans to make sure that the performance management system at the A-Team Company will not become anything close to the worst possible performance management system. Also, the CEO intends to assess the future performance of Parker partly based on the similarity or dissimilarity between the actual performance management system implemented and the worst possible performance management system that the consultant will have described.

You are the consultant that the CEO has hired. What would the worst possible performance management system look like? What effects would it have on the individual, group, or organization? In short, describe a scenario. Be specific.
(Suggested points: 10, .2[2.1], .2[2.2], .2[2.3], .2[2.4], .2[2.5])
LO: 1, 2

Instructions:

In describing your worst possible performance management system, keep in mind that the performance management process largely consists of five components: 1) Prerequisites; 2) performance planning; 3) performance execution; 4) performance assessment; 5) performance review.

Also, be careful not to create a performance appraisal system and then argue that your system is the worst possible performance management system. See Chapter 1 and Exercise 1-2 to learn how to more carefully distinguish between performance appraisal and performance management. If your instructor did not assign or go through Exercise 1-2 in class, make sure to ask him or her for a copy or lecture on the answer to Exercise 1-2.

Finally, do not simply copy or paraphrase vague, general principles from the book. Rather, describe specific characteristics of your worst possible performance management system and provide concrete examples. Please use the following “worst possible performance management system” as an example of how specific your scenario should be:

“… the performance management system does try to tie the organization’s mission, vision, and strategic goals all the way down to job descriptions and individual’s goals. However, during the implementation process, the HR team that was assigned the task of implementing the performance management system did a poor job in making unit-level managers and employees accept individual level goals that are more congruent with the organization’s goals. For example, John Stubborn, a 20-year employee with the Troubled Company, continued to use the old job descriptions and existing goals for individual employees. Also, even though John was asked to expand and rate the outcomes-oriented tasks more heavily than behavior-oriented ones, John refused and continued to consider more heavily the behavior-oriented tasks, because he believed that the outcomes-orientation was ‘inhumane.’ Such resistance from lower level managers and employees to fully accept the company’s effort to tie the organization’s strategic goals and orientation to those of individual employees continues to make the performance management system ineffective. To make matters worse, in some work units, the firm’s strategy has been communicated and understood inaccurately, even though those work units were eager to follow the firm’s strategy more closely. As a result, those highly responsive and cooperative employees (who also happen to be some of the best employees that the company has) are being directed to do things that are often directly contrary to the firm’s strategy …
… but the emphasis on making performance management an ongoing process as part of the performance management system seems to have been over- or wrongly emphasized. Managers and their employees have been given so much paperwork and been forced to engage in so many formal meetings throughout the year that many of them are finding it difficult to get their assigned operational tasks completed on time. To make matters worse, because many of the managers vying for promotion opportunities are strongly aware of the fact that the performance management system initiative has the backing of the CEO and other powerful members of the firm’s top management, those managers are afraid to voice their concerns and complaints …
… the lack of training on coaching and employee development is also causing the implemented system to harm the company … coaches too often direct their seemingly well-intentioned comments in terms of the employees themselves rather the employees’ specific behaviors. These kinds of comments are misdirected in that they often cause employees to simply get discouraged and angry, because there is little that a person can do to change him- or herself rather than his or her actions …
… yet goals are not set right. They are often too vague or too ambitious. For example, one of the managers believed that ‘do your best by the end of year’ was an effective goal he had set for his employees …
… The forms that the employees are rated on contain vague items such as ‘general behavior.’ The forms include no specific definition of what ‘general behavior’ is or examples explaining to employees (or managers) what would lead to a high or a low rating in this category …
 … Overall, because the performance management system at hand has been so poorly designed and implemented, it is strongly believed that the current performance management system is causing more harm than the previous, narrower performance appraisal system used to …”

Hint: If you are having a hard time coming up with ideas for your worst case scenario, consider getting together with several classmates or at least others who have some knowledge in HR to brainstorm ideas.

Answers
Due to the general nature of the question asked in the case, students will most likely come up with all kinds of different, specific scenarios. Thus, there is no one right answer to this exercise. Nonetheless, the instructor may look for the presence and strength of the following factors in students’ scenarios:

1) Was the description of the worst possible performance management system specific—even more specific than the sample provided in the instructions for the case exercise? Were many examples supplied?

2) Did the student make sure to clearly distinguish between performance appraisal and performance management such that (s)he did not end up describing a worst possible performance appraisal system?

3) Did the student describe how things can go badly in all five components of the performance management system? Recall that the five components are 1) prerequisites; 2) performance planning; 3) performance execution; 4) performance assessment; 5) performance review

Of course, the instructor may choose to grade the students’ scenarios based on additional criteria such as clear writing, creativity, and theoretical soundness. The above three factors are just recommendations.

Case Study: Performance Management System in the Classroom

Morgan is a performance management system expert. She is used to doing consulting work (i.e., helping leaders implement performance management systems in their organizations) for companies and governmental agencies. This time, she has been asked to do consulting work for a rather unusual client, a university professor who teaches large introductory business courses. How might Morgan go about designing a performance management system for a university classroom environment where students are likened to employees?
(Suggested points: 15, .3[2.1], .3[2.2], .3[2.3], .3[2.4], .3[2.5])
LO: 1, 2

Instructions:

In designing the system, make sure that the following components of a performance management system are included and discussed in your design:

• Prerequisites
o Knowledge of the organization’s mission and strategic goals
o Knowledge of the job in question
o Linkage between the organization’s goals and individual job descriptions
• Performance planning
o Results, behaviors, and development plan
• Performance execution
o Commitment to achieving set goals
o Ongoing performance feedback and coaching from supervisor to subordinate
o Communication from subordinate to supervisor
o Collecting and sharing performance data
o Preparing for performance reviews
• Performance assessment
o Self-appraisal and appraisal from supervisor
• Performance review
o How many times during the semester?
o Discussion of any disagreement between self-appraisal and appraisal from supervisor
o Feedback on both positive and negative aspects of subordinate’s performance
o Overall rating/discussion of rewards to be received and rewards to be denied
• Additional considerations

Answers

There is no one right answer to this exercise. Nevertheless, the grader might take into account the following sample answers.

• Prerequisites

o Knowledge of the organization’s strategic goals: If the student’s department or college has established quality goals for each major, it is important to have each student, depending on his or her major, identify such quality goals as his or her “strategic goals.” In the alternative, if the student has more specific career aspirations (e.g., become a successful marketing manager at a mid-size company), then a generic job description (perhaps obtained through O*NET) can be treated as his or her strategic goals. A student’s strategic goals, once identified, need not be recreated from scratch for every course taken in the future. Instead, the student can use the exact same set of strategic goals for every class until the time comes to make adjustments/updates to his or her strategic goals.

o Knowledge of the job in question: Each student brainstorms all tasks and KSAs required by the student “job.” In doing so, the student must make the judgment of how much emphasis will be put on behaviors and results in the list of tasks. The student then rates his or her list of tasks; list of knowledge; list of skills; and list of skills in terms of frequency and criticality. Then, the lists’ elements are reordered according to the rating results. As a result, the student will have completed a thorough and accurate student job description. This process of creating a student job description is repeated for every sufficiently distinct class the student takes. Treatment of each sufficiently distinct class as a distinct job is necessary, because sufficiently different classes have different sets of work (or tasks) and thus different sets of KSAs.

o Linkage between the organization’s goals and individual job descriptions: The student considers both his or her strategic goals and his student job description. More specifically, any necessary adjustments are made to the student job description by taking into account (i.e., seeking alignment with) the strategic goals.

• Performance planning/goal-setting

o Results, behaviors, and development plan: Setting goals with an emphasis on results is not recommended in the educational environment, because doing so is likely to cause excessive anxiety, narrowed mindset, excessive competition with classmates, or grade inflation. Setting goals with an emphasis on behaviors is also not recommended in the classroom setting, because doing so may cause students to develop more interest in narrower, more extrinsic outcomes such as earning higher grades. On the other hand, setting goals with an emphasis on long-term development goals (i.e., mastery goals) is more likely to make students interested in the more intrinsic rewards of learning to gain the skills needed for success in the major or future job. Thus, with his or her student job description for a course, the instructor and the student work to set specific, challenging, and developmental goals to be achieved throughout the semester. In turn, with regard to grading, the student performance management system that is advocated here strongly focuses on each student’s distinct development goals that are not graded. The actual grading will be based on a uniform behaviors- and outcomes-oriented set of criteria to maintain the perception of fairness.

• Performance execution

o Commitment to achieving set goals: One way to enhance commitment is to allow the employee (or student) to be an active participant in the process of setting goals during the performance planning/goal-setting stage of the performance management process. Because the student performance management system that is advocated here strongly focuses on each student’s distinct development goals that are not graded (the actual grading will be based on a uniform behaviors- and outcomes-oriented set of criteria), the active participation of each student in his or her goals should not be problematic.

o Ongoing performance feedback and coaching from supervisor and peers to subordinate: Students can be encouraged or required to 1) keep ratings on how well their developmental goals are being met; 2) share those performance logs with one another; and 3) provide feedback to one another based on the performance logs.

o Communication from subordinate to supervisor: Students are encouraged to meet with their advisors when needed.

o Collecting and sharing performance data: Encourage students to write down verbal feedback and save written feedback for their own good (i.e., fulfillment of strategic goals).

o Preparing for performance reviews: The feedback that the student has been collecting should be reviewed by the student before any performance assessment or review is conducted.

• Performance assessment

o Self-appraisal and appraisal from supervisor: Before the performance review takes place, it is ideal that the students are given the chance to rate themselves. Why? Self-appraisals can reduce the student’s defensiveness during the next performance review meeting and increase the employee’s satisfaction with the performance management system as well as enhance perceptions of accuracy and fairness and therefore acceptance of the system.

• Performance review meeting

o How many times during the semester? The meeting can occur only once during the semester. Or, the instructor and the student can meet twice during the semester, such that a mid-term performance review meeting and a final meeting are held during the semester.

o Discussion of any disagreement between self-appraisal and appraisal from supervisor: This part of the performance review meeting should largely consist of the student venting and talking in order to create the perception that the meeting was a two-way communication, given that such perception can reduce the student’s defensiveness during the remainder of the performance review meeting and increase the employee’s satisfaction with the performance management system as well as enhance perceptions of accuracy and fairness and therefore acceptance of the system.

o Feedback on both positive and negative aspects of a subordinate’s performance: It is vital that the instructor does not shy away from providing negative feedback. In providing negative feedback, the instructor should make certain that the feedback is constructive.

o Overall rating/discussion of rewards to be received and rewards to be denied: Once feedback is given to the student with regards to development goals, the instructor should provide feedback on how well the student did with the uniform behaviors- and outcomes-related goals. For example, this may be represented by the assignment of a specific letter grade. Discussions of the development goals should precede discussions of the behavior- and outcome-related goals to increase student’s satisfaction with the course and acceptance of his or her letter grade.

• Additional considerations: Granted, this proposed student performance management system involves more work for instructors who are generally already too busy with their existing workload. To mitigate the problem of work overload of instructors, TAs and even fellow graduate/undergraduate students can serve as coaches who help students go through all five components of the student performance management process: 1) prerequisites; 2) performance planning; 3) performance execution; 4) performance assessment; and 5) performance review. This solution has additional benefits. First, the coaches (especially the undergraduates who are generally in need of whatever “real-world” experience they can get) gain practical skills that are generally useful across employment settings and life in general. Second, the students get another source of feedback. This type of peer coaching program is not at all unrealistic and is implemented in both professional and academic setting. For example, the Kelley School of Business at Indiana University–Bloomington maintains an undergraduate coaching program where undergraduate business majors coach fellow undergraduates in their career development efforts.

Case Study: Work Analysis Exercise

Please conduct a work analysis for the position “graduate student enrolled in a master’s program in the general field of business.” This job analysis may benefit from interviewing incumbents (i.e., other students) as well as supervisors (i.e., faculty). In addition, of course, you can rely on your own knowledge of the “job.” By the end of your job analysis, follow the O*NET format to create a summary description for the position as well as a list of tasks, knowledge, skills, and abilities needed for successful performance. Use the box “Summary Report for Tractor-Trailer Truck Drivers (from O*NET)” as a template.
(Suggested points: 10, [2.1])
LO: 4

Sample Response:

Description: Attends class and engages in active learning and memorization to complete assignments and meet objectives of the class; performs tasks such as taking notes, voicing opinions and questions, researching companies or current business practices, interacting with team members, and balancing time to get all assignments complete; and may also give oral presentations, analyze balance sheets or economic trends, and defend recommendations given on a company’s operating procedures. Problem-solving skills and originality are also needed.

Tasks
• Attend class
• Complete homework
• Participate in group/team projects
• Write papers
• Conduct research
• Participate in extracurricular activities

Knowledge
• Language: Knowledge of the structure and content including the meaning and spelling of words, rules of composition, and grammar.
• Mathematics: Knowledge of arithmetic, algebra, geometry, statistics, and their applications.
• Computers: Knowledge of computers including hardware, software, and applications.
• Administration and Management: Knowledge of business and management principles involved in strategic planning, resource allocation, human resources modeling, leadership technique, production methods, and coordination of people and resources.
• Psychology: Knowledge of human behavior and performance; individual differences in ability, personality, and interests; and learning and motivation.
• Communications and Media: Knowledge of media production, communication, and dissemination techniques and methods. This includes alternative ways to inform and communicate via written, oral, and visual media.

Skills
• Reading Comprehension: Understanding written sentences and paragraphs in work-related documents.
• Active Listening: Giving full attention to what other people are saying, taking time to understand the points being made, asking questions as appropriate, and not interrupting at inappropriate times.
• Writing: Communicating effectively in writing as appropriate for the needs of the audience.
• Speaking: Talking to others to convey information effectively.
• Mathematics: Using mathematics to solve problems.
• Critical Thinking: Using logic and reasoning to identify the strengths and weaknesses of alternative solutions, conclusions, or approaches to problems.
• Active Learning: Understanding the implications of new information for both current and future problem solving and decision making.
• Learning Strategies: Selecting and using training/instructional methods and procedures appropriate for the situation when learning or teaching new things.
• Monitoring: Monitoring/assessing performance of oneself, other individuals, or organizations to make improvements or take corrective action.
• Complex Problem Solving: Identifying complex problems and reviewing related information to develop and evaluate options and implement solutions.
• Judgment and Decision Making: Considering the relative costs and benefits of potential actions to choose the most appropriate one.
• Time Management: Managing one’s own time and the time of others.

Abilities
• Oral Expression: The ability to communicate information and ideas verbally so that others will understand.
• Speech Clarity: The ability to speak clearly so that others can understand.
• Written Comprehension: The ability to read and understand information and ideas presented in writing.
• Oral Comprehension: The ability to listen to and understand information and ideas presented through spoken words and sentences.
• Written Expression: The ability to communicate information and ideas in writing so that others will understand.
• Fluency of Ideas: The ability to come up with a number of ideas about a topic. Deductive Reasoning: The ability to apply general rules to specific problems to produce answers that make sense.
• Mathematical Reasoning: The ability to choose the right mathematical methods or formulas to solve a problem.
• Information Ordering: The ability to arrange things or actions in a certain order or pattern according to a specific rule or set of rules (e.g., patterns of numbers, letters, words, pictures, or mathematical operations).
• Originality: The ability to come up with unusual or clever ideas about a given topic or situation, or to develop creative ways to solve a problem.
• Number Facility: The ability to add, subtract, multiply, or divide quickly and correctly.
• Inductive Reasoning: The ability to combine pieces of information to form general rules or conclusions. (This includes finding a relationship among seemingly unrelated events).
• Memorization: The ability to remember information such as words, numbers, pictures, and procedures.
• Selective Attention: The ability to concentrate on a task over a period of time without being distracted.
• Time Sharing: The ability to shift back and forth between two or more activities or sources of information (such as speech, sounds, touch, or other sources).

Case Study: Performance Management at the University of Ghana
The University of Ghana in Legon, Ghana, was established in 1948 as an affiliate college of the University of London called University College of the Gold Coast. In 1961 the university was reorganized by an act of Parliament into what it is today: the independent, degree-granting University of Ghana (http://www.ug.edu.gh/).
The Balme Library is the main library in the University of Ghana library system. Situated on the main Legon campus, it coordinates a large number of libraries attached to the university’s various schools, institutes, faculties, departments, and halls of residence, most of which are autonomous. The library was started as the College Library in 1948 and was then situated in Achimota College, about 8 kilometers from the present Legon campus. In 1959 the College Library moved into its brand-new buildings at the Legon campus and was named after the University College of the Gold Coast’s first principal, David Mowbrary Balme.
As in the case of many other modern university libraries worldwide that face resources challenges and the need to serve an increasingly diverse customer base, the Balme Library has implemented numerous initiatives. One such initiative is a performance management system. However, several of the components of the performance management process at the Balme Library are in need of improvement. First, there is no evidence that a systematic job analysis was conducted for any of the jobs at the library. Second, the forms that the employees are rated on contain vague items such as “general behavior.” The forms include no specific definition of what “general behavior” is or examples explaining to employees (or managers) what would lead to a high or a low rating in this category. In addition, all library employees are rated on the same form, regardless of their job responsibilities. Third, there is no evidence that managers have worked with employees in setting mutually agreed-upon goals. Fourth, there is no formal or informal discussion of results and needed follow-up steps after the subordinates and managers complete their form. Not surprisingly, an employee survey revealed that more than 60% of the employees have never discussed their performance with their managers. Finally, employees are often rated by different people. For example, sometimes the head of the library rates an employee, even though he may not be in direct contact with that employee.
Based on the above description, please answer the following questions.
1. Please identify one component in the performance management process at the Balme Library that has not been implemented effectively (there are several; choose only one).

Answers provided after question 2.

2. Describe how the poor implementation of the specific component you have chosen has a negative impact on the flow of the performance management process as a whole.

Answers
(Note: This response is provided for a potential grader and thus attempts to identify EVERY flaw and possible resolutions. In question 1, the student is only asked to identify ONE flaw. The responses include a discussion of how poor implementation of the component has a negative impact on the flow of the process as a whole—a discussion which is requested in question 2.)

1. and 2. An important flaw of the Balme library performance management system is that the prerequisites were not taken care of before the process was implemented. There is no mention of the mission of the library. Furthermore, there is no mention of each individual department and how each contributes to the library’s mission. Second, there is no documentation on the key components of each job. Employees do not know what tasks need to be done or how they should be completed. The employees also do not know what KSAs are needed. Without this information, managers cannot establish criteria for job success.

Thus, because the groundwork of the performance management process was not laid before the system was implemented, the rest of the system is likely to fail. Performance planning cannot be accomplished without the prerequisites. Without knowledge of the library’s goals, the manager cannot explain to each employee how his/her input leads to the accomplishment of those goals. Furthermore, in the absence of a job analysis and a resulting job description, managers cannot discuss with their employees what they were responsible for or how they should perform their work. Finally, performance standards cannot be set if accountabilities are not specified, and development plans cannot be written without performance standards.

Without prerequisites and planning, performance execution will not be successful. Employees and supervisors cannot agree on or engage in dialogue surrounding performance expectations that were never set. Similarly, without execution, performance assessment is impossible. Neither managers nor employees can evaluate performance, because neither party knows what it takes to do the job, what dimensions the employees should be measured on, and what goals the employees were supposed to reach.

Performance review is meaningless unless there is a performance evaluation or appraisal form to discuss. Finally, employees and managers cannot conduct performance prerequisites for the next review cycle because they were not engaging in the process to begin with, so they do not know what was effective and what needs to be adjusted.

For question 1: (Suggested points: 3, [2.1])
LO: 1

For question 2: (Suggested points: 5, .5[2.4], .5[2.5])
LO: 2

 3. Discuss what should be done to improve the implementation of the component you have chosen in question 1
Answer
(Note: The student was asked to identify one problem. This response addresses all of the problems identified in the responses to questions 1 and 2 above. It is only necessary for the student to recommend solutions to the specific problem identified.)

To correct these problems, Balme library must first set organizational goals. Next, a job description is needed for each job in the organization. Then, the library needs to communicate to each employee how his or her job responsibilities tie into the organizational goals (prerequisites). Next, managers need to explain to the employee his or her key accountabilities, then set specific objectives for each accountability. Also, performance standards need to be determined. Finally, the manager and employee need to write a developmental plan that includes a description of areas that need improving and goals to be achieved in each area (planning).

Next, there is a need to create employee commitment toward achieving the goals and toward proactively seeking feedback from his or her supervisor. The supervisor must observe and document the employee’s performance, update the employee on any changes in the goals of the library, and provide resources and reinforcement to the employee so the employee is motivated and successful in meeting his or her goals (execution).

Both the employee and the supervisor must evaluate employee performance (evaluation). Next, the employee and the manager must meet to discuss employee performance, what the employee has done effectively and ineffectively, and what changes need to be made to improve performance (review).

During the final component of the PM process, employees and managers use information gathered to discuss prerequisites, including the updated organization’s mission and strategic goals and the updated job’s KSAs. Because markets change, customers’ preferences and needs change, and products change, there is a need to continuously monitor the prerequisites so that performance planning, and all the subsequent stages, are consistent with the organization’s strategic objectives.
Executing these steps in the order described will help the Balme library staff get their performance management system on track. 

(Suggested points: 5, [2.1])
LO: 2