MA GLOBAL BUSINESS

CORE COURSE IN
HUMAN RESOURCE MANAGEMENT IN THE GLOBAL ENVIRONMENT
Academic year
2007 - 2008

Dr. M. Pardo

Performance
Management
Objectives
After studying this unit, you should be able to:

1. Understand what is meant by performance 5. Choose the most effective performance

management and appraisal measurement approach for a given
2. Discuss the three general purposes of situation.
performance management. 6. Discuss the advantages and
3. Identify the five criteria for effective disadvantages of the different sources
performance management. of performance information.
4. Discuss the four approaches to 7. Choose the most effective source(s) for
performance, the specific techniques used performance information for any
in each approach, and the way these situation.
approaches compare with the criteria for 8. Distinguish types of rating errors and
effective performance management explain how to minimize each in a
systems. performance evaluation.
9. Conduct an effective performance
feedback session.
Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights
Dr.reserved.
M. Pardo

People in my family

My father Tom used to work as a first line employee at

the assembly line in Ford Motors Factory. Sue, my
mom, was the secretary of her sister Ellen, the Quality
Manager of a multinational company set here in
Valencia. My eldest brother Arthur preferred a
completely different kind of job and works as a
hairdresser at a small saloon. My youngest brother Ben
sells flats in a local estate agency, while I am a lecturer
at this university.

Dr. M. Pardo

1
 Answer about us
Tom Sue Ellen Arthur Ben Manoli
Assembly Secretary Quality Hairdresser Real estate University
line worker Manager agent lecturer

What does
performance
mean?

Why is it
useful to
measure
his/her
performance?
Who should
be responsible
of rating
his/her
performance?

How would
you measure
his/her
performance?
Dr. M. Pardo

What is Performance Appraisal

Formal evaluation of an employee’s job
performance in order to determine the
degree to which the employee is
performing effectively

What is Performance Management

Utilisation of the performance appraisal to
improve organizational effectiveness (by helping
the development policies, motivating employees
through feedback and linked rewards,...)

Dr. M. Pardo

An Organizational Model of Performance

Management

Organizational
Strategy
Long & Short
term goals
and values

Individual
Individual
Attributes Individual Objective
Attributes Behaviors Results
(skills,abilities)
(skills,abilities)

Situational
Situational
Constraints
Constraints
--Culture
Culture
--Economic
Economic
conditions
conditions

Dr. M. Pardo

2
 Purposes of Performance
Management

The purposes are:

„ Strategic: it should link employee
activities with organizational goals
„ Administrative: e.g. pay raises,
promotions, layoffs,…
„ Developmental: useful to develop
employees who are ineffective at their
jobs

Dr. M. Pardo

Performance Measures Criteria

•Strategic Congruence: extent to which the performance
management system elicits job performance that is congruent with the
organization’s strategy, goals, and culture.
•Validity (= content validity): Extent to which the performance
measure assesses all the relevant, and only the relevant, aspects of
performance.
•Reliability: consistency of the performance measure (internal and
over time).
•Acceptability: extent to which the people who use the performance
measure accept it.
•Specificity: extent to which the performance measure gives specific
guidance to employees about what is expected of them and how they
can meet these expectations. Dr. M. Pardo

Performance Measurement
Approaches Results
Results „„

zz ProMES(productivity
ProMES (productivitymeasurement)
measurement)
zz MBO(management
MBO (managementby byobjectives)
objectives)
„„ Comparative
Comparative
zz ranking
ranking
zz forceddistribution
forced distribution
pairedcomparison
zz paired comparison
„„ Attribute
Attribute
zz graphicrating
graphic ratingscales
scales
zz mixedstandard
mixed standardscales
scales
„„ Behavioral
Behavioral
zz criticalincidents
critical incidents
zz BARS(behaviorally
BARS (behaviorallyanchored
anchoredrating
ratingscales),
scales),
BOS(behavioral
BOS (behavioralobservation
observationscales),
scales),and
and
OBM (organizational behavior modification)
OBM (organizational behavior modification)
assessmentcenters
zz assessment centers

Dr. M. Pardo

3
 Comparison of Approaches to
Performance Measurement
Strategic
Congruence Validity Reliability Acceptability Specificity

Comparative

Attribute

Behavioral

Results

Dr. M. Pardo

WHO: Source for Performance

Measures
Supervisors
„„ Supervisors
Peers
„„ Peers
Subordinates
„„ Subordinates
Self 360 degree feedback
„„ Self
Customers
„„ Customers

Doeshe/she
„„ Does he/shehave
havean
anextensive
extensiveknowledge
knowledgeof
ofthe
thejob
jobassessed?
assessed?
Doeshe/she
„„ Does he/shehave
havethe
theopportunity
opportunityto
toobserve
observeemployees
employeesregularly
regularly
andclosely?
and closely?
Ishe/she
„„ Is he/shemotivated
motivatedto
tomake
makeaccurate
accurateratings?
ratings?
Ishis/her
„„ Is his/herfeedback
feedbackstrongly
stronglyrelated
relatedto
toperformance?
performance?
Mighthe/she
„„ Might he/shebe
bebiased?
biased?
Mighthis/her
„„ Might his/herappraisal
appraisalbe
bebetter/worse
better/worseaccepted?
accepted?
Dr. M. Pardo

Errors in Performance
Measurement
Rater Errors
„ Similar to me
„ Contrast
„ Distributional errors
z Leniency How to reduce them:
z Strictness
•Rater Error Training
z Central tendency
•Rater Accuracy Training
„ Halos / Horns
„ Unclear standards
Dr. M. Pardo

4
 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

Dr. M. Pardo