Learning Outcomes
1. Explain strategic value and importance of performance management
2. Discuss 5 steps in performance management process
3. Define contextual and task based performance and how they differ
4. Describe 5 performance appraisal methods and the pros and cons of each
5. Discuss major problems inhibiting effective performance appraisals
6. Discuss 360 degree appraisal from multiple sources
7. Describe 3 types of appraisal interviews
8. Discuss the future of performance management
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Formal Appraisal Discussions
o Supervisor and employee
Review appraisal and plan to remedy deficiencies and reinforce strengths
o Types of interviews
Satisfactory – promotable: development plans
Satisfactory – not promotable: maintain performance
Unsatisfactory – correctable: action plan to correct performance
How to conduct the interview
1. Be direct and specific: Use objective work data
2. Do not get personal: compare against standard
3. Encourage the person to talk: use open ended questions and listen
4. Develop an action plan: agree on future steps
How to Handle Criticism and Defensive Employees
1. Recognize that defensive behaviour is normal
2. Never attack a person’s defenses
3. Postpone action
4. Recognize human limitations
Ensuring Discussion Leads to Improved Performance
1. Notify unacceptable performance, explain minimum expectations
2. Ensure that expectations are reasonable
3. Explain the role of warnings in the process of establishing a just cause
4. Take prompt corrective measures
5. Avoid sending mixed messages
6. Provide a reasonable amount of time for improvement
7. Provide support to facilitate improvement
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Chapter 11: Total Employment Rewards
Strategic Importance of Total Employment Rewards
Employee Compensation includes all forms of pay going to employees and arising from their employment
Two Main Concepts
1. Direct financial payments
2. Indirect financial payments
The compensation plan should advance the firm’s strategic aims
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Stage 3 Establishing Pay Rates: Combine Job Evaluation and Salary Survey Information
Broadbanding
o Reducing the number of salary grades and ranges into just a few wide levels or bands, each of which
then contains a relatively wide range of jobs and salary levels
Advantage
o Greater flexibility in employee compensation
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Chapter 12: Pay-for-Performance and Financial Incentives
Money and Motivation
Fixed Pay
o Compensation independent of performance level
o Includes base pay, allowances
Variable Pay
o Any plan that ties pay to productivity or profitability
o May be in addition to base pay
Types of Incentive Plans
o Operations employees
o Senior managers and executives
o Salespeople
o Other managers and professional employees
o Organization-wide
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