Notes from the reading Chapter 5: Conduct Performance Appraisals to Improve Individual and Firm Performance Appraisal Principles

s o Define Job performance Communicate what good performance is based on the firms strategy and values to the stakeholders. Performance can be based on task performance, organizational citizenship behaviors (actions going beyond task or technical performance), counterproductive work behavior (intentional acts that harm the well being of the organization and its members. Needs to be clearly defined to prevent criterion deficiency (appraisal based on incomplete information). o Observe and record performance frequently Due to competing demands in a managers time, it is important to adopt a mindset of observing performance whenever the opportunity arrives. Criterion contamination- occurs when the appraisal has biases and information other than performance is reflected in the performance appraisal. Keep performance logs of critical incidents and events so that it is easier to recall performance information more effectively and provide more accurate ratings

Utilize multiple sources of feedback Peers, self, subordinates, and customers can provide meaningful information that can aid with determining job performance. Assure anonymity so that the raters concerns of source finding out what was said about them can be reduced. Leads to more accurate responses. Feedback surveys can also aid in performance appraisals especially with management o Develop behaviorally based performance appraisal instruments Comparative approach- rater judges each individual against others in group and makes an overall ranking across all individuals. Normally causes a negative response because it does not facilitate feedback and rankings depend entirely on who else in the group at the time of rating as opposed to absolute standard performance. Graphic Rating Scale- 5 point rating focused on job related tasks Behavioral Approach- uses a scale but clearly defines each ranking number based on set behavior that most closely defines employees actions on the job. o Train raters- important because it improves accuracy and reduces rater errors Improving Performance o Goal setting

Goals that are specific and challenging yield greater improvement in performance than goals than that are easy or moderate. Reduces ambiguity in what is expected from the individual and makes the seemingly abstract or unachievable more concrete Employee needs to see the value in attaining goals. These goals setting session can make it easier to define job performance and give specific coaching.

Two-way communication Consistent communication before the appraisal and allowing the associate to answer for actions or behavior described. Ask for self- assessment Self-evaluation before the performance appraisal so the associate has the ability to reflect on performance throughout the year. This way, the manager and associate can discuss agreements and discrepancies with performance and it ultimately leads to a fairer process. Coach employees Goal setting, participative communication, and problem solving improves productivity. Manage the separation process of poor performers Reasons associates may give for poor performance- unaware, different standards for what is considered to be acceptable level of performance, argues that poor performance is beyond control due to on-job-constraints, didnt receive adequate training, believes manager holds a grudge against employee, experiencing personal problems outside of work. Manager needs to seek all possible alternative explanations other than the employee not having the ability or motivation to perform.

Chapter 9: Motivate Employee Performance through Goal Setting Principles of Goal Setting o Set challenging specific goals Challenging goals correlate with higher performance. Effort increases based on perceived difficulty. Benefit the associate psychologically and physiologically- increased self efficacy, personal effectiveness, recognition from peers, salary increase, a job promotion etc. Increases both job performance and job satisfaction o Provide feedback in relation to goals that which gets measured gets done Without feedback the positive benefit of goal setting is minimized. Goals direct effort and persistence. o Gain goal commitment

Focus on individuals outcome expectancies and self-efficacy Improve performance rather than focus on blame. 4 cell empathy box Outcomes and employee expects from committing to a goal Negative outcomes expected from goal commitment Positive outcomes expected from sticking with status quo Negative outcomes from doing so Self efficacy = Judgments of self worth from a task specific perspective High efficacy induced by enactive mastery, modeling, and persuasion from a significant other. o Provide resources needed to attain the goal Organizations need to provide the proper training to give people the knowledge and skill to attain the goal o Learning vs. performance goals People who lack the knowledge to master a task because they are in their early stages of learning need to be urge to do their best as opposed to setting specific difficult goals. Set learning goals so that people can raise their performance based on the utilizing the knowledge that they have required. o Environmental uncertainty o Stretch Goals On tasks that are complex for people performances increases when people are encouraged to make mistakes so that they can learn from them. Issues in Implementation o What goals should be set? SMART-specific, measurable, attainable, relevant, time-frame Frame goals positively in terms of something a person can learn to perform well o Who should set them? Goal commitment and subsequent performance is higher when employees participate in the goal setting When an authoritative figure sets a goal based on logic and rationale, the net results are positive o Training self regulation

Chapter 12: Pay for Performance Pay for performance: levels o Individual Traditional incentive based (piece-rate and sales commissions), variable pay (performance related and not permanent; part of pay is at risk based on desired performance metrics), merit based (rewards past work behavior and outcomes)

Pay plans that provide monetary rewards based on the measured performance of the group or team o Organizational Gain sharing, profit sharing, and stock options o Overall effects Pay for performance models have an impact on attraction and retention of associates What is required to make the principle work o Define performance o Communicate o Ensure competence o Make sure pay system commensurate with employees values o Use non-financial motivators too o Use money in conjunction with intrinsic motivation o Target the appropriate organizational level o Make pay commensurate with the level of risk employees are required to bear

Team

Chapter 13: Provide Recognition for Performance Improvement Cognitive theory of positive reinforcement (recognition) o Outcome utility of social recognition o Informative content of informal recognition o The regulatory mechanism: forethought Moderators of Informal Recognition o Type of organization o Effects with money and feedback Role of Recognition in Building Self- efficacy Formal Recognition Programs Drawn from Practical Experience