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10
Chapter
Management
Objectives
After reading this chapter, you should be able to:
Organizational
Strategy
Long & Short
term goals
and values
Individual
Individual
Attributes Individual Objective
Attributes
(skills,abilities) Behaviors Results
(skills,abilities)
Situational
Situational
Constraints
Constraints
--Culture
Culture
--Economic
Economic
conditions
conditions
8-3
Purposes of Performance
Management
The purposes are:
Strategic
Administrative
Developmental
8-4
Performance Appraisal
Developmental Administrative
PURPOSE:
PURPOSE: Improve Performance Information for:
pay increases
promotions
terminations
BASISFOR
BASIS FOR
COMPARISON::
COMPARISON Absolute Standard Relative Standard
APPRAISAL
APPRAISAL Results - Oriented Rating Scale
TECHNIQUE::
TECHNIQUE BARS
ROLEOF
ROLE OF
MANAGER::
MANAGER Counselor Judge
8-5
Performance Measures Criteria
•Strategic Congruence
•Validity
•Reliability
•Acceptability
•Specificity
8-6
Job Performance Measure:
Contamination, Validity and Deficiency
Comparativ
e
Attribute
Behavioral
Results
TQM
8-10
Comparison of Approaches to
Performance Measurement
Strategic
Approach Congruence Validity Reliability Acceptability Specificity
Supervisors
Supervisors
Peers
Peers
Subordinates
Subordinates
Self
Self
Customers
Customers
8-12
Errors in Performance
Measurement
Rater Errors
Similar to me
Contrast
Distributional errors
8-13
Reducing Rater Error
Two Approaches:
•Rater Error Training
•Rater Accuracy Training
8-14
Improving Performance
Feedback
Givefeedback
Give feedbackfrequently
frequently
Createthe
Create theright
rightcontext
contextfor
forthe
thediscussion
discussion
Haveemployee
Have employeedo
doself-evaluation
self-evaluationbefore
beforesession
session
Encourageparticipation
Encourage participationduring
duringsession
session
Praiseeffective
Praise effectiveperformance
performance
Focuson
Focus onsolving
solvingproblems
problems
Focusfeedback
Focus feedbackon
onbehavior
behavioror
orresults
results
Minimizecriticism
Minimize criticism
Setspecific
Set specificgoals
goalsand
andaadate
dateto
toreview
reviewprogress
progress
8-15
Managing the Performance of
Marginal Employees
Solid Performers
high ability and motivation
managers should provide development opportunities
Misdirected Effort
lack of ability but high motivation
managers should provide skill development activities such as training
Underutilizers
high ability but lack motivation
managers need to consider actions that focus on interpersonal problems
or incentives
Deadwood
low ability and motivation
managerial action, outplacement, demotion, firing .
8-16
Legal Requirements of
Performance Management Systems
Conduct aa valid
Conduct valid job
job analysis
analysis related
related to
to
performance
performance
Base system
Base system on
on specific
specific behaviors
behaviors or
orresults
results
Train raters
Train raters to
to use
use system
system correctly
correctly
Review performance
Review performance ratings
ratings and
and allow
allow for
for
employee appeal
employee appeal
Provide guidance
Provide guidance // support
support for
for poor
poor
performers
performers
Use multiple
Use multiple raters
raters
What causes problems at work?
Poor coordination of work activities
Inadequate information or instructions
Low-quality materials
Poor supervision
Inadequate training
Train Transfer
Redesign job Terminate
Identify and Correct
Effort Problems
Syndicate -9
In the 1970s and 1980s, organizational surveys focused more on satisfaction with
immediate leadership. Normally the surveys explored employee satisfaction with the
organization on several different dimensions including policies, procedures, work
environment, pay and benefits.
The 360 Degree Feedback (multi rate feedback) is also used for
management training, performance appraisal, professional development
and leadership development.
Upward feedback involves gathering feedback from only one source - the
individual's subordinates.
•You can think of the person being assessed as being in the middle of a circle,
•The peers respond to the survey from 90 degrees,
•Direct customer feedback and productivity reports from 180 degrees,
•Internal customers from 270 degrees,and
•Supervisors from 360 degrees,
Manager
Subordinates
360-DEGREE FEEDBACK:
RATERS IN 360 DEGREE
FEEDBACK
3. The third category are the individuals themselves who may be able to judge
their own performance.
The fundamental concept of multi-source appraisal or 360° feedback is the
involvement of a number of rating sources in the performance appraisal
process.
1 The supervisor;
2 Peers;
3 Subordinates; And
4 Self.
Upward Feedback
•One of the main concerns for organizations using, or contemplating the adoption of,
upward appraisal is the effect that it may have on employee attitudes and morale.
BENEFITS
• The subordinates are in the best position to evaluate a manager's performance for
certain competencies, for example, leadership capabilities,clarity of directions,
performance feedback and sensitivity to the needs of the subordinates".
•The use of subordinate appraisals provides more reliable ratings in measuring
these competencies.
•Increases employee participation and enhances their sense of importance in the
company.
DISADVANTAGES
•Upward appraisal can be perceived to undermine supervisor authority.
•Some managers perceive that subordinates lack the expertise to rate their
performance accurately.
Peer feedback
•In a 360° feedback model, the peer/ co-worker appraisal component represents a
180° view of the focal individual's performance.
•Peer appraisal is defined by as the "process of having the members of a group judge
the extent to which each of their fellow group members has exhibited specified traits,
behaviours or achievements".
Peer Ratings -Each group member rates each other group member on a given
set of performance or personal characteristics using a rating scale.
Peer Rankings- Peer ranking occurs where group members rank each other
from best to worst on one or more factors.
BENEFITS
Peers are better than supervisors at evaluating skills that lead to improved
performance.Peer appraisals can foster a more participative culture in an
organization.
DISADVANTAGES
The problem of popularity contests inherent in upward appraisal is also a problem for
peer appraisals. Individuals vie for higher scores based on their friendship and
personal relationship with the raters.
The self appraisal are found to be more accurate in their ratings of certain performance
dimensions.
Provides a way of identifying major discrepancies between self and other ratings, and
thus increases self-awareness.
Self-appraisals increases ratee participation in the feedback process which leads them to
be more committed to performance goals.
DISADVANTAGES
Leniency bias refers to the degree to which raters hand out undeservedly high scores to
themselves.
THE STAGES OF 360-DEGREE FEEDBACK
STAGE 1:
DETERMINING THE OBJECTIVES
STAGE 3:
COMMUNICATION
• The aims and objectives of the programme are communicated to everyone
in the organization.
• Ensuring that everyone understands what 360-degree feedback is and how
it will be used helps to secure commitment and enables the organization to
address any concerns early on.
STAGE 4:
GATHERING FEEDBACK
• Questionnaires and instruction packs are distributed to participants, who
issue them to their chosen respondents and complete a self-assessment
questionnaire.
STAGE 5:
ANALYZING RESULTS
Completed questionnaires are returned for processing. All feedback
is analyzed and summarized into feedback reports.
STAGE 6:
FEEDBACK
Results are fed back, discussed and development plans are drawn
up.
STAGE 7:
SUPPORT
Development plans are followed up. Progress is monitored and
advice and guidance provided where necessary.
PURPOSE OF 360-DEGREE FEEDBACK PROCESS
INDIVIDUAL BENEFITS
Encourages self-development;
Enhances teambuilding.
ORGANISATIONAL BENEFITS
Values to behavior,
Customer service,
Continuous learning, and
Project accomplishment.
DESIGNING A 360-DEGREE FEEDBACK SYSTEM
• Individual development
• Appraisal
• Performance-related pay
• Recruitment & selection
• Organizational development
The assessment process through the feedback system is concerned with a
manager's job performance in eight skill clusters which are as follows:
Studies report that 360° feedback does not change feedback recipients' behavior
and performance, which suggests that 360° feedback may have no effect on an
organization-wide basis.
The Johari Window
Known to Others
Not Known to
Others
The Johari Window, named after the first names of its inventors, Joseph Luft
and Harry Ingham, is one of the most useful models describing the process of
human interaction.
Criterion Traditional performance appraisal 360 degree feedback
Purpose To provide feedback to subordinates on past To provide feedback on
performance and future potential from one performance, behaviour and
perspective only development needs from a
variety of perspectives
Linkages Performance appraisal often linked to pay, Typically only used for the
with other merit bonuses, promotions, task assignment, identification of training and
HR decisions transfers, training and development etc. development needs and the
exploration of career issues
There was a need for a handy tool which took care of the above
needs of the HRD.
Advent of Balance
Scorecard
The balance scorecard was created by Kaplan and Norton in early 1990’s to enrich
experiences from the past with analysis of the present and the future.
Financial perspective was extended with the internal process perspective, customer
perspective and Learning growth and training perspective.
The financial perspective keeps checking the past. Customer and processes is for the
present and Learning growth and training for the future.
What is a Balanced
Scorecard
The Balanced Scorecard is an approach to performance measurement
that combines traditional financial measures with non -financial
measures to provide managers with richer and more relevant
information about activities they are managing.
What is a Balanced
Scorecard
How is a balanced scorecard
designed?
Mission and vision determine the companies existence.
These determine the goal and further the strategic
directions for the firm.
These could be applied across all functional areas.
Thus, design measures to determine the achievements of
the above strategic directions.
Vision identified.
Strategic directions identified as per the functional areas.
Percentages allotted to the 4 areas of financials, customer
service, internal processes and employee relations and
growth perspectives.
The percentages of the perspectives are further allotted
weight age for achieving targets desired by the company.
Rating and measurement system to be decided.
XYZ Company
Cascading Organizational
Overall
Overall
Organizational
Objectives Objectives
Objectives
Divisional
Divisional
Objectives
Objectives Consumer Products Industrial Products
Division Division
Departmental
Departmental Sales
Objectives
Objectives
Production Customer Marketing Develop
Service Research
Individual
Individual
Objectives
Objectives
MBO and Balance scorecard
Similarities
Both linked to rewards and incentives which are useful for
motivation.
They take care of core goal and visions of the company.
Dissimilarities
Balance scorecard is quite explicit.
MBO is quite open ended, balance scorecard is more
focused
What is a balanced scorecard
5 % below target - 5,
Control of Food Cost 8.0% 0- 4.9% Below target - 4,
On target -3,
0% - 4.9% above target - 2 ,
Banquet function costing 5.0% 5.0% or above target - 1
4.0%
Rev Par (Net Inclusive of Meals) 5 % above target - 5,
0- 4.9% above target - 4,
No. of days debtors 5.0% 0-4
Inventory level 5.0%
Recipe costing 4.0% If both are set up by Aug '00 - 5.0 pts
Reduction of 0.5 points for each month delay
(Continuity after set-up will also be a criterion)
Costs 10.0%
Fixed Costs incl. A&P local 5 % below target - 5,
0- 4.9% Below target - 4,
(Represents Payroll, Power, Prop Ops, On ta
A&G excluding TAC / CC)
5 % above target - 5,
Adjusted PBT - Rs. Lacs 12.0% 0- 4.9% above target - 4,
0-4
Service Indices
Courtesy Index 5.0%
Courtesy Competence of FO Staff
Welcome at the Porch
Coutesy, Comp & Resp of BC Staff
Only Excellent rating to be considered from IMRB
Courtesy, Comp & Resp of Tele-Operators report Top box of the last financial quarter to be
Courtesy, Comp & Resp of Chauffeur considered for final assesment of 2002-03 as per
Courtesy, Comp & Resp of travel desk Staff mentioned scale
scores between 26 - 30 =1 , 31 - 35 = 2, 36 - 40 = 3,
41 - 45 = 4 46 and above = 5
Efficiency Index 5.0%
Ease & Speed of Check out
Accuracy of billing at check out
Ease & Speed of Check-in
Promptness of message delivery
Baggage Delivery / Porter Service
Total 40.0%
What is a balanced scorecard
Internal Perspective
Towards the attainment of decided functional
improvements.
Responsibility towards the superiors.
Co –relation and maintenance of relations within the
organisations.
Internal Processes Exeutive Housekeepers
10.0%
What is a balanced scorecard
Training manhours & training 16 hours of exposure rate per employee per
conducted/manager 2.0% department
Trg. To be calculated on inhouse Program, External
nomination, Special program in units & CTD provided
the same are reported in monthly HR report throug out
the year
ESS ( Corporate Survey ) 5.0% Overall Index less than 55 is 2.5 , 56-70 = 3, 71- 80 =
3.5, 81-85 = 4, 86 and above = 5
HR compliance audit .
HR audit & Traning Audit 3.0% Training audit as per COE
15% and above budget = 1 , 0 - 14% above Budget =
2, Within budget =3, 0-14% below
Manpower Planning / Employee retention growth 5.0% budget = 4, 15% and below=5
Total Human Resources 20.0%
Limitations