Performance Management in Leadership and Managment

Performance Management in Leadership

1. After this class you should be able to: 6.1 Summarize the elements of effective performance management. 6.2 Explain how and why goal setting gives me an advantage. 6.3 Describe how monitoring and evaluation can improve my performance and ability to manage others. 6.4 Apply knowledge of feedback and coaching to review and improve performance. 6.5 Implement rewards to generate desired outcomes. 6.6 Use reinforcement and consequences to improve my performance. 6.7 Describe the Implications of performance management for you and managers.

2. Performance Management A set of processes and managerial behaviors that include defining, monitoring, measuring, evaluating, and providing consequences for performance expectations. PM is far more than performance Appraisal. PM operates through an organization’s managers and human resources policies and practices.

3. Figure 6.2 Effective Performance Management System More than just appraisals. SOURCE: Kinicki, Angelo J., Kathryn J. L. Jacobson, Suzanne J. Peterson, and Gregory E. Prussia. “Development and Validation of the Performance Management Behavior Questionnaire.” Personnel Psychology 66, no. 1 (Spring 2013): 1–45. https://doi.org/ 10.1111/peps.12013.  Access the text alternate for image.

4. Performance Management Used to: 1. Performance ratings. High, low, better, or worse than before or others. 2. Feedback. Generating the content and delivering it. 3. Development and performance improvement plans. Underperformers need to improve or be moved out. 4. Career planning. Linking expectation and performance to increased responsibilities. 5. Recommendations for employee-related decisions. Rewards, promotions, training, or termination. 6. Documentation for legal purposes. Sound decisions need appropriate supporting data

5. Performance Management When done well, leads to: higher profitability . 48% • higher productivity. 22% • higher employee engagement scores .30% • higher customer engagement scores .17% • lower turnover. 19%

6. Performance Management- What goes wrong?? Feedback is rare Lack of clarity on how to improve. Manager bias. Negative reactions.

7. Performance Management- What goes wrong?? 20% of employees feel their performance is managed in a way that motivates them. 29% perceive their employers’ PM system as fair. 26% agree they are accurate. Less than 40% of employees say their systems do not provide clear goals or generate honest feedback. • 66% of employees say it actually interferes with their productivity. • 58% of 576 HR executives surveyed graded their company’s performance management systems as a C or worse

8. Performance Management: It’s Hard to Do Well Many organizations fail to effectively management employee performance. Why? PM policies often fail to keep pace with organizational change leading to disconnects. Done well, project management can be time-consuming. Performance reviews are often too narrow and only measure a limited set of elements.

9. Step 1: Define Performance: Expectations and Setting Goals Why are goals important? Can lead to happier workers who achieve more. Provide focus. Enhance productivity. Bolster self-esteem. Increase commitment. Two types of goals Performance goals. Targets specific end results. Learning goals. Enhances skill and knowledge.

10. Step 1: Define Performance: Expectations and Setting Goals Why are goals important? Can lead to happier workers who achieve more. Provide focus. Enhance productivity. Bolster self-esteem. Increase commitment. Two types of goals Performance goals. Targets specific end results. Learning goals. Enhances skill and knowledge.

11. Managing the Goal-Setting Process Four-step process for goal implantation. Set goals. Promote goal attainment. Provide support, feedback. Create action plans. Setting SMART goals. S pecific. M easurable. A ttainable. R esults oriented. T ime bound.

12. Goal Commitment & Success

13. Table 6.3 Contingency Approach to Defining Performance Do what the situation requires , rather than a one-size-fits-all approach BEHAVIORIAL GOALS OBJECTIVE GOALS TASK OR PROJECT GOALS Can be used in most jobs. Best for jobs with clean and readily measured outcomes. Best for jobs that are dynamic, but in which nearer-term activities and milestones can be defined. Most relevant for knowledge work. Measure what matters, not just what can be measured. Similar to SMART goals. Example: Treat others with professionalism and respect; communicate clearly. Examples: sales quotes, production rates, error rates. Example: Complete your portion of team project by Tuesday.

14. Step 2: Monitor and Evaluate Performance How goals are measured should be consistent with the nature of the goal itself (e.g. behavioral, task oriented). Managers need to monitor and evaluate both progress toward the final goal and the ultimate achievement of the goal. This stage should be used as an opportunity to identify problems and recognize successes. It an also be used to identify opportunities to enhance performance.

15. Monitoring Factors to consider Timeliness. Was the work completed on time? Quality. How well was the work done? Quantity. How much? Financial metrics. What are the profits, returns, or other relevant accounting/financial outcomes? Improve monitoring by considering Be Transparent. Explain the what, where, how, and why. Monitor Only Work. Make work and nonwork boundaries clear and the ensure both parties abide by them Focus on Development, Not Punishment or Deterrence. Make it Fit and Fair. Be Flexible

16. Common Perceptional Errors

17. Common Perceptional Errors

18. Step 3: Reviewing Performance and the Importance of Feedback and Coaching Why is feedback important? Has the potential to boost performance. Given less often and less well than people would like. Dramatically underutilized. Feedback serves two functions. Instructional. Feedback instructs when it clarifies roles or teaches new behavior. Motivational. Feedback motivates when it serves as a reward, such as recognition for a job well done, or promises a reward

19. Sources of Feedback Others Peers. Supervisors. Lower-level employees. Outsiders. Task May provide a steady stream of feedback about how well or poorly one is doing. Self Self-serving bias may contaminate this source.

20. Feedback Is So Helpful, Why Don’t We Get and Give More? Potential strain on relationships Too little time. Lack of confidence. No consequences .

21. Role of Managers and Leaders Senior managers can: Seek feedback from others by creating an open and honest environment. Separate feedback from the performance review process. Create a mechanism to collect feedback anonymously.

22. Factors Affecting Perceptions of Feedback Self-serving bias. Fundamental attribution bias. Accuracy. Credibility of the sources. Fairness of the system. Performance-reward expectancies. Reasonableness of goals and standards.

23. Table 6.5 Feedback Do’s and Don’ts DON’TS DOS Don’t use feedback to punish, embarrass, or put someone down. Keep feedback relevant by relating it to existing goals. Don’t provide feedback that is irrelevant to the person’s work. Deliver feedback as close as possible to the time the behavior was performed. Don’t provide feedback too late to do any good. Provide specific and descriptive feedback. Don’t provide feedback about something beyond the individual’s control. Focus the feedback on things employees can control. Don’t provide feedback that is overly complex or difficult to understand. Be honest, developmental, and constructive.

24. Coaching Goes beyond mentoring and training and is a customized process between two or more people with the intent of enhancing learning and motivating change. Has specific performance goals. Developmentally focused. Involves self-reflection. Consistent with positive OB.

25. Step 4: Rewards and Consequences Figure 6.3 Key factors in organizational reward systems. Access the text alternate for slide image.

26. Rewards and Consequences General criteria for distributing rewards: Results. Behavior and actions. Nonperformance considerations. rewards linked to seniority or job title

27. Rewards and Consequences Total rewards encompass not only compensation and benefits, but also personal and professional growth opportunities and a motivating work environment that includes recognition, job design, and work–life balance.

28. Pay for Performance Works Best When: Merit pay is used to differentiate top performers. The ability to game the system is mitigated. Multiple measures of performance are used. Performance measures are accurate, consistent, and aligned with goals and outcomes. Pay for performance comprises merit and/or bonus pay based on individual-, group-, or organization-level measures and involving individual, group, or organization rewards.

29. When Rewards May Fail Too much emphasis is placed on monetary rewards. Overtime rewards are seen as entitlements. They foster counterproductive behaviors. A lag occurs between performance and reward. Reward structures are not tailored to goals, tasks. They have a short half-life. Organizational policies and practices are misaligned.

30. Performance Management: Putting It All in Context Figure 6.6 Organizing Framework for Understanding and Applying OB ©2021 Angelo Kinicki and Mel Fugate. All rights reserved. Reproduction prohibited without permission of the authors.  Access the text alternate for slide image.

31. Reinforcement and Consequences Law of Effect Behavior with favorable consequences tends to be repeated, while behavior with unfavorable consequences tends to disappear.

32. Figure 6.6 Contingent Consequences in Operant Conditioning Access the text alternate for slide image.

33. Reinforcement Consequences: The Power of Reinforcement Schedules Continuous reinforcement. Every instance of a target behavior reinforced. Great when learning a new skill. Can quickly lose its effect. Intermittent reinforcement. Involves reinforcement of some but not all instances. Can vary the ratio and interval. Works best with variable ratio and variable interval.

34. Test Your OB Knowledge 5 Julia wants to use positive reinforcement and decides to pay bonuses to her employees when a new customer contract is signed. Which type of reinforcement is Julia is using? Fixed ratio. Variable ratio. Fixed interval. Variable interval. Just-in-time.