Identifying or predicting positive and negative   outcomes at Network Solutions, Inc. may be aided by the information on page   22 of the text where the author identifies the characteristics of an ideal   performance management system (PMS). For this discussion, read “Case   Study 1-2: Performance Management at Network Solutions, Inc.” in your   textbook. What do you think will be some of the advantages or positive   outcomes resulting from the implementation of the system? What do you anticipate   will be some of the disadvantages or negative outcomes? Why?

Be sure to support your statements with logic and   argument, citing any sources referenced. Post your initial response early,   and check back often to continue the discussion. Be sure to respond to your   peers’ posts as well.

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part one
Strategic
and General
Considerations

1-1

Copyright © 2019 Chicago Business Press

Herman Aguinis, University of Colorado at Denver

Part I: Strategic And General Considerations
Chapter 1: Performance Management in Context
Chapter 2: Performance Management Process
Chapter 3: Performance Management and Strategic Planning
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4-2

Herman Aguinis, University of Colorado at Denver

Chapter 1
Performance Management
in Context
1-3
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Herman Aguinis, University of Colorado at Denver

Overview
Definition of Performance Management (PM)
Purposes of PM
Contributions of PM
Disadvantages/Dangers of Poorly Implemented PM Systems
1-4
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Herman Aguinis, University of Colorado at Denver

Overview (continued)
Characteristics of an Ideal PM System
Integration with Other Human Resources and Development Activities
The Changing Nature of PM
1-5
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Herman Aguinis, University of Colorado at Denver

Definition of PM
1. Continuous process of …
Identifying
Measuring
Developing
… the performance of individuals and teams
2. Aligning performance with the strategic goals of the organization

1-6
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Herman Aguinis, University of Colorado at Denver

Definition of PM (continued)
Performance management (PM)
is NOT
performance appraisal (PA)
1-7
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Herman Aguinis, University of Colorado at Denver

Definition of PM (continued)
PM
Strategic business considerations
Driven by line manager
Ongoing feedback
So employee can improve performance
PA
Driven by HR
Assesses employee
Strengths
Weaknesses
Once a year
Lacks ongoing feedback
1-8
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Herman Aguinis, University of Colorado at Denver

Performance Appraisal vs. Performance Management
Performance Appraisal vs. Performance Management

What did you see?
What is wrong with the interaction between the supervisor and her direct report?
Is this performance appraisal? Is this performance management? Why?
1-9
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Herman Aguinis, University of Colorado at Denver

Purposes of PM Systems
1-10
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Herman Aguinis, University of Colorado at Denver

Purposes of PM Systems
Strategic Purpose
Link individual goals with organization’s goals
Communicate most crucial business strategic initiatives
1-11
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Herman Aguinis, University of Colorado at Denver

Note: the following is slide used before (some of this is not in Module 1)
Links employee activities with organization’s mission and goals
Identifies results and behaviors needed to carry out strategy
Maximizes extent employees exhibit those behaviors and results
Only 13% of organizations use PM to communicate organizational purpose and goals

Company Spotlight
Sears, one of the largest U.S. retailers, is using PM to reinvigorate the company’s culture
Steps include:
Revising duties and objectives
More frequent communication between supervisors and employees
Using PM to identify future leaders
1-12
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Herman Aguinis, University of Colorado at Denver

Purposes of PM Systems
Administrative Purpose
Provide information for making decisions regarding:
Salary adjustments
Promotions
Retention or termination
Recognition of individual performance
Layoffs
1-13
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Herman Aguinis, University of Colorado at Denver

Purposes of PM Systems
Informational Purpose
Communicate to employees:
Expectations
What is important
How they are doing
How to improve
1-14
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Herman Aguinis, University of Colorado at Denver

Purposes of PM Systems
Developmental Purpose
Performance feedback/coaching
Identification of individual strengths and weaknesses
Identification of causes of performance deficiencies
Tailor development of individual career path
1-15
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Herman Aguinis, University of Colorado at Denver

Purposes of PM Systems
Organizational Maintenance Purpose
Plan effective workforce
Assess future training needs
Evaluate performance at organizational level
Evaluate effectiveness of HR interventions
1-16
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Herman Aguinis, University of Colorado at Denver

Purposes of PM Systems
Documentation Purpose
Validate selection instruments
Document administrative decisions
Help meet legal requirements
1-17
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Contributions of
Performance Management
1-18
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Herman Aguinis, University of Colorado at Denver

Contributions of
Performance Management
For Employees
For Managers
For Organization/HR Function
1-19
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Herman Aguinis, University of Colorado at Denver

Contributions of Performance Management for Employees
Enhance self-insight and development
Increase self-esteem
Increase motivation to perform
Increase employee competence
Clarify definitions of
Job
Success criteria
1-20
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Herman Aguinis, University of Colorado at Denver

Contributions of Performance Management 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
1-21
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Herman Aguinis, University of Colorado at Denver

Contributions of Performance Management for Managers (continued)
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
1-22
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Herman Aguinis, University of Colorado at Denver

Contributions of Performance Management for Organization /
HR Function
Clarify organizational goals
Facilitate organizational change
Fairer, more appropriate administrative actions
Better protection from lawsuits
1-23
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Herman Aguinis, University of Colorado at Denver

Disadvantages/Dangers of
Poorly Implemented
PM Systems
For Employees
For Managers
For Organization/HR Function
1-24
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Herman Aguinis, University of Colorado at Denver

Disadvantages/Dangers of
Poorly Implemented
PM Systems
1-25
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Herman Aguinis, University of Colorado at Denver

Disadvantages/Dangers of Poorly Implemented PM Systems for Employees
Lowered self-esteem
Employee burnout and job dissatisfaction
Damaged relationships
Use of false or misleading information
1-26
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Herman Aguinis, University of Colorado at Denver

Disadvantages/Dangers of Poorly Implemented PM Systems for Managers
Increased turnover
Decreased motivation to perform
Unjustified demands on managers’ resources
Varying and unfair standards and ratings
1-27
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Herman Aguinis, University of Colorado at Denver

Disadvantages/Dangers of Poorly Implemented PM Systems for Organization/HR Function
Wasted time and money
Unclear ratings system
Emerging biases
Increased risk of litigation
1-28
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Herman Aguinis, University of Colorado at Denver

Disadvantages/Dangers of Poorly Implemented PM Systems for Organization/HR Function
Wasted time and money
Unclear ratings system
Emerging biases
Increased risk of litigation
1-29
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Herman Aguinis, University of Colorado at Denver

Company Spotlight
Yahoo was subject to a lawsuit due to a poorly implemented performance management system
Missteps include:
Forced ranking of employees
Unclear ratings and lack of openness
Biases including gender discrimination
1-30
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Herman Aguinis, University of Colorado at Denver

Company Spotlight
Adobe implemented a state-of-the-science performance management system
Benefits included:
Time savings (80,000 hours)
Increased morale
Decreased turnover
1-31
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Herman Aguinis, University of Colorado at Denver

Characteristics of an Ideal PM System
1-32
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Herman Aguinis, University of Colorado at Denver

An Ideal PM System:
15 Characteristics
Strategically Congruent
Consistent with organization’s strategy
Aligned with unit and organizational goals
1-33
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Herman Aguinis, University of Colorado at Denver

An Ideal PM System:
15 Characteristics
Contextually Congruent
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
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Herman Aguinis, University of Colorado at Denver

An Ideal PM System:
15 Characteristics
Thorough
All employees are evaluated
All major job responsibilities are evaluated
Evaluations cover performance for entire review period
Feedback is given on both positive and negative performance
1-35
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Herman Aguinis, University of Colorado at Denver

An Ideal PM System:
15 Characteristics
Practical
Available
Easy to use
Acceptable to decision makers
Benefits outweigh costs
1-36
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Herman Aguinis, University of Colorado at Denver

An Ideal PM System:
15 Characteristics
Meaningful
Standards are important and relevant
System measures ONLY what employee can control
Results have consequences
Evaluations occur regularly and at appropriate times
System provides for continuing skill development of evaluators
1-37
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Herman Aguinis, University of Colorado at Denver

An Ideal PM System:
15 Characteristics
Specific
Concrete and detailed guidance to employees
What’s expected
How to meet the expectations
1-38
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Herman Aguinis, University of Colorado at Denver

An Ideal PM System:
15 Characteristics
Identifies effective and ineffective performance
Distinguish between effective and ineffective:
Behaviors
Results
Provide ability to identify employees with various levels of performance.
1-39
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Herman Aguinis, University of Colorado at Denver

An Ideal PM System:
15 Characteristics
Reliable
Consistent
Free of error
Inter-rater reliability
1-40
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Herman Aguinis, University of Colorado at Denver

An Ideal PM System:
15 Characteristics
Valid
Relevant (i.e., measures what is important)
Not deficient (i.e., doesn’t measure unimportant facets of job)
Not contaminated (i.e., only measures what the employee can control)
1-41
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Herman Aguinis, University of Colorado at Denver

An Ideal PM System:
15 Characteristics
Acceptable and Fair
Perception of Distributive Justice
Work performed  Evaluation received  Reward
Perception of Procedural Justice
Fairness of procedures used to:
Determine ratings
Link ratings to rewards
1-42
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Herman Aguinis, University of Colorado at Denver

An Ideal PM System:
15 Characteristics
Acceptable and Fair
Perception of Interpersonal Justice
Perceptions of quality of the design and implementation of the PM system
Perception of Informational Justice
Performance expectations and goals
Feedback received
Information given to justify administrative decisions
1-43
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Herman Aguinis, University of Colorado at Denver

An Ideal PM System:
15 Characteristics
Inclusive
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.
1-44
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Herman Aguinis, University of Colorado at Denver

An Ideal PM System:
15 Characteristics
Open (No Secrets)
Frequent, ongoing evaluations and feedback
Two-way communications in appraisal meeting
Clear standards and ongoing communication
Communications are factual, open, and honest
1-45
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Herman Aguinis, University of Colorado at Denver

An Ideal PM System:
15 Characteristics
Correctable
Recognizes that human judgment is fallible
Appeals process provided
1-46
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Herman Aguinis, University of Colorado at Denver

An Ideal PM System:
15 Characteristics
Standardized
Ongoing training of managers to provide consistent evaluations across:
People
Time
1-47
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Herman Aguinis, University of Colorado at Denver

An Ideal PM System:
15 Characteristics
Ethical
Supervisor suppresses self-interest
Supervisor rates only where (s)he has sufficient information about the performance dimension
Supervisor respects employee privacy
1-48
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Herman Aguinis, University of Colorado at Denver

Integration with other Human Resources and Development Activities
PM provides information for:
Development of training to meet organizational needs
Workforce planning
Recruitment and hiring decisions
Development of compensation systems
1-49
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Herman Aguinis, University of Colorado at Denver

Changing Nature of PM
PM is changing rapidly due to:
Technological Advancements
Globalization
Demographic Changes
1-50
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Herman Aguinis, University of Colorado at Denver

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

1-51
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Changing Nature of PM
Globalization
Increasing prevalence of virtual teams located across the world
Need to consider local norms—including societal and organizational cultural issues
1-52
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Herman Aguinis, University of Colorado at Denver

Changing Nature of PM
Demographic Changes
Retirement of baby boomers and influx of Gen X and Gen Y (Millennials)
1-53
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Herman Aguinis, University of Colorado at Denver

Millennials in the Workforce
Millennials in the Workforce

What are some of the stereotypes associated with Millennials and how would you manage them?
Which of these stereotypes have been particularly exaggerated?
1-54
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Herman Aguinis, University of Colorado at Denver

Definition of Performance Management (PM)
Purposes of PM Systems
Contributions of PM
Disadvantages/Dangers of Poorly Implemented PM Systems
Characteristics of an Ideal PM System
Integration with Other Human Resources and Development Activities
Changing Nature of PM
Quick Review
1-55
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Herman Aguinis, University of Colorado at Denver

All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior written permission of the publisher. Printed in the United States of America.
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