Performance Management - Learning Management System

1 Performance ManagementThird EditionHerman AguinisKelley School of BusinessIndiana UniversityBostonColumbusIndianapolisNew YorkSan FranciscoUpper Saddle RiverAmsterdamCape TownDubaiLondonMadridMilanMunichParisMon trealTorontoDelhiMexico CitySao PauloSydneyHong KongSeoulSingapore TaipeiTokyoCredits and acknowledgments borrowed from other sources and reproduced, with permission, in thistextbook appear on the appropriate page within 2013, 2009, 2007 by Pearson Education, Inc., publishing as Prentice Hall. All rights in the United States of America. This publication is protected by Copyright, and permissionshould be obtained from the publisher prior to any prohibited reproduction, storage in a retrieval System , ortransmission in any form or by any means, electronic, mechanical, photocopying, recording, or likewise.

2 Toobtain permission(s) to use material from this work, please submit a written request to Pearson Education,Inc., Permissions Department, One Lake Street, Upper Saddle River, New Jersey 07458, or you may fax yourrequest to of the designations by manufacturers and sellers to distinguish their products are claimed astrademarks. Where those designations appear in this book, and the publisher was aware of a trademarkclaim, the designations have been printed in initial caps or all of Congress Cataloging-in-Publication DataAguinis, HermanPerformance Management / Herman Aguinis. 3rd : 978-0-13-255638-5 (alk. paper)ISBN-10: 0-13-255638-3 (alk. paper)1. Employees Rating Performance Title. '125 dc232011037274 Editorial Director:Sally YaganAcquisitions Editor:Brian MickelsonDirector of Editorial Services:Ashley SantoraDirector of Marketing:Maggie MoylanSenior Marketing Manager:Nikki Ayana JonesMarketing Assistant:Ian GoldEditorial Project Manager:Sarah HolleProduction Project Manager:Clara BartunekCreative Director:Jayne ConteCover Designer:Suzanne BehnkeCover Art: Fotolia: Teamwork Les CunliffeFull-Service Project Management :Kiruthiga Anand, Integra Software Services Pvt.

3 :Courier Companies, Printer:Lehigh /Phoenix - HagerstownText Font:10/12 PalatinoISBN 10: 0-13-255638-3 ISBN 13: 978-0-13-255638-510987654321 CONTENTSP reface viiiAcknowledgments xiiiDedication xivAbout the Author xivPA RT IStrategic and General Considerations 1 Chapter 1 Performance Management and Reward Systems in Definition of Performance Management (PM) The Performance Management Contribution Disadvantages/Dangers of Poorly Implemented PM Systems Definition of Reward Systems Base Pay Cost-of-Living Adjustments and Contingent Pay Short-Term Incentives Long-Term Incentives Income Protection Work/Life Focus Allowances Relational Returns Aims and Role of PM Systems strategic Purpose Administrative Purpose Informational Purpose Developmental Purpose Organizational Maintenance Purpose Documentational Purpose Characteristics of an Ideal PM System Integration with Other Human Resources and DevelopmentActivities Performance Management Around the World 24 CASE STUDY 1-1:Reality Check.

4 Ideal Versus Actual PerformanceManagement System28 CASE STUDY 1-2: Performance Management at Network Solutions, CASE STUDY 1-3:Distinguishing Performance Management Systems fromPerformance Appraisal Systems32 Chapter 2 Performance Management Prerequisites Performance Planning Results Behaviors Development Plan Performance Execution Performance Assessment Performance Review Performance Renewal and Recontracting 52 CASE STUDY 2-1:Job Analysis Exercise55 CASE STUDY 2-2:Disrupted Links in the Performance Management Processat Omega, Inc. 55 CASE STUDY 2-3: Performance Management at the University of Ghana56 Chapter 3 Performance Management and strategic Definition and Purposes of strategic Planning Process of Linking Performance Management to the StrategicPlan strategic Planning Developing strategic Plans at the Unit Level Job Descriptions Individual and team Performance Building Support 79 CASE STUDY 3-1:Evaluating Vision and Mission Statements at Pepsico82 CASE STUDY 3-2:Dilbert s Mission Statement Generator83 CASE STUDY 3-3:Linking Individual with Unit and OrganizationalPriorities84 CASE STUDY 3-4.

5 Linking Performance Management to Strategy at Procter & Gamble84 PART IISystem Implementation 87 Chapter 4 Defining Performance and Choosing a Measurement Defining Performance Determinants of Performance Implications for Addressing Performance Problems Factors Influencing Determinants of Performance Performance Dimensions Approaches to Measuring Performance Behavior Approach Results Approach Trait Approach 99 CASE STUDY 4-1:Diagnosing the Causes of Poor Performance101 CASE STUDY 4-2:Differentiating Task from Contextual Performance102 CASE STUDY 4-3:Choosing a Performance Measurement Approach atPaychex, CASE STUDY 4-4:Deliberate Practice Makes Perfect103 Chapter 5 Measuring Results and Measuring Results Determining Accountabilities Determining Objectives Determining Performance Standards Measuring Behaviors Comparative Systems Absolute Systems 118 CASE STUDY 5-1:Accountabilities, Objectives, and Standards126 CASE STUDY 5-2:Evaluating Objectives and Standards126 CASE STUDY 5-3:Measuring Competencies at the Department ofTransportation127 CASE STUDY 5-4.

6 Creating BARS-Based Graphic Rating Scales forEvaluating Business Student Performance in team Projects128 Chapter 6 Gathering Performance Appraisal Forms Characteristics of Appraisal Forms Determining Overall Rating Appraisal Period and Number of Meetings Who Should Provide Performance Information? Supervisors Peers Subordinates Self Customers Disagreement Across Sources: Is This a Problem? A Model of Rater Motivation Preventing Rating Distortion Through Rater TrainingPrograms 153 CASE STUDY 6-1:Evaluating an Appraisal Form Used in Higher Education157 CASE STUDY 6-2:Judgmental and Mechanical Methods of AssigningOverall Performance Score at The Daily Planet162 CASE STUDY 6-3:Minimizing Intentional and Unintentional Rating Errors164 CASE STUDY 6-4:Minimizing Biases in Performance Evaluation at ExpertEngineering, 7 Implementing a Performance Management Preparation.

7 Communication, Appeals Process, Training Programs, and Pilot Testing Communication Plan Appeals Process Training Programs for the Acquisition of Required Skills Rater Error Training Frame of Reference Training Behavioral Observation Training Self-Leadership Training Pilot Testing Ongoing Monitoring and Evaluation Online Implementation 188 CASE STUDY 7-1:Implementing a Performance ManagementCommunication Plan at Accounting, CASE STUDY 7-2:Implementing an Appeals Process at Accounting, CASE STUDY 7-3:Evaluation of Performance Management System atAccounting, CASE STUDY 7-4:Training the Raters at Big Quality Care193 PART IIIE mployee Development 195 Chapter 8 Performance Management and Employee Personal Developmental Plans Developmental Plan Objectives Content of Developmental Plan Developmental Activities Direct Supervisor s Role 360-Degree Feedback Systems Advantages of 360-Degree Feedback Systems Risks of Implementing 360-Degree Feedback Systems Characteristics of a Good System 215 CASE STUDY 8-1:Developmental Plan Form at Old Dominion University220 CASE STUDY 8-2:Evaluation of a 360-Degree Feedback System Demo220 CASE STUDY 8-3:Implementation of 360-Degree Feedback System at RidgeIntellectual221 CASE STUDY 8-4:Personal Developmental Plan at Brainstorm, Inc.

8 Part I221 CASE STUDY 8-5:Personal Developmental Plan at Brainstorm, Inc. Part II222 Chapter 9 Performance Management Coaching Coaching Styles Coaching Process Observation and Documentation of Developmental Behavior and Outcomes Giving Feedback Disciplinary Process and Termination Performance Review Meetings 248 CASE STUDY 9-1:Was Robert Eaton a Good Coach?256 CASE STUDY 9-2:What Is Your Coaching Style?257 CASE STUDY 9-3:Preventing Defensiveness259 CASE STUDY 9-4:Recommendations for Documentation260 PART IVReward Systems, Legal Issues, and TeamPerformance Management 263 Chapter 10 Reward Systems and Legal Traditional and Contingent Pay Plans Reasons for Introducing Contingent Pay Plans Possible Problems Associated with Contingent Pay Plans Selecting a Contingent Pay Plan Putting Pay in Context Pay Structures Job Evaluation Broad Banding Performance Management and the Law Some Legal Principles Affecting Performance Management Laws Affecting Performance Management 284 CASE STUDY 10-1:Making the Case for a CP Plan at Architects, CASE STUDY 10-2.

9 Selecting a CP Plan at Dow AgroSciences289 CASE STUDY 10-3:Contingency Pay Plan at Altenergy LLC290 CASE STUDY 10-4:Possible Illegal Discrimination at Tractors, 11 Managing team Definition and Importance of Teams Types of Teams and Implications for Performance Management Purposes and Challenges of team Performance Management Including team Performance in the Performance ManagementSystem Prerequisites Performance Planning Performance Execution Performance Assessment Performance Review Performance Renewal and Recontracting Rewarding team Performance 307 CASE STUDY 11-1:Not All Teams Are Created Equal309 CASE STUDY 11-2: team Performance Management at Duke UniversityHealth Systems310 CASE STUDY 11-3: team -Based Rewards for the State of Georgia312 CASE STUDY 11-4: team Performance Management at Bose313 Index 3151 Generating buzz: Idaho Power takes on Performance Management to prepare for workforce aging.

10 (2006,June). Power Engineering. Retrieved November 26, 2010 from Performance is top HR priority. (2005). T+D, 59(7), AND INTRODUCTIONIn today s globalized world, it is relatively easy to gain access to the competition s technology andproducts. Thanks to the Internet and the accompanying high speed of communications, technolog-ical and product differentiation is no longer a key competitive advantage in most industries. Forexample, most banks offer the same types of products ( , various types of savings accountsand investment opportunities). If a particular bank decides to offer a new product or service( , online banking), it will not be long until the competitors offer precisely the same product. Asnoted by James Kelley, Performance Management project leader at Idaho Power, technology is afacilitator, but not a guarantor, of effectiveness or efficiency of a company s workforce.