Performance management midterm study notes

Topics: Strategic planning, Performance management, Organization Pages: 5 (1350 words) Published: November 1, 2013
Performance Management Mid-Term

Chapter 1
Performance management – is a continuous process of identifying, measuring, and developing the performance of individuals and teams and aligning performance with strategic goals of the organization Performance appraisal – is the systematic description of an employee’s strengths and weaknesses Performance management contribution – a performance management system can make the following important contributions 1.Motivation to perform is increased

2.Administrative actions are more fair and appropriate
3.Employees become more competent
4.There is better protection from lawsuits
5.Supervisors views of performance are communicated more clearly 6.Organizational change is facilitated
7.Motivation, commitment, and intentions to stay in the organization are enhanced Disadvantages’/dangers or poorly implemented PM systems
1.Increased turnover
2.Use of misleading information
3.Lowered self esteem
4.Wasted time and money
5.Damaged relationships
6.Decreased motivation to perform
7.Employee burnout and job dissatisfaction
8.Increased risk of litigation
9.Varying and unfair standards and ratings
Tangible returns – An employee’s compensation, includes cash compensation (i.e. base pay, cost of living and merit pay, short term incentive, and long term incentive and benefits (i.e. income protection, work/life focus, tuition reimbursement, and allowances) Relational returns – also known as intangible returns, which include recognition and status, employment security, challenge work, and learning opportunities Reward system is the set of mechanisms for distributing both tangible and intangible returns as part of an employment relationship Base pay – Given to employees in exchange for work performed Cost of living adjustments (COLA) – imply the same percentage increase for all employees regardless of their individual performance Contingent pay – referred to as merit pay is given as an addition to the base pay based on past performance Short term Incentives – are allocated based on past performance, however incentives are not added to the base pay and are only temporary pay adjustments based on the review period Long term incentives – attempt to influence future performance over a longer period of time, typically involve stock ownership or options to buy stocks at a pre-established and profitable price

Chapter 2
Prerequisites that is required before a performance management system is implemented 1.Knowledge of the organization’s mission and strategic goals 2.Knowledge of the job in question
Job analysis - is a fundamental prerequisite of any performance management system Results – refer to what needs to be done or the outcomes an employee must produce A consideration of results needs to include the Key accountabilities, or broad areas of a job Objectives – are statements of important and measurable outcomes, finally, discussing results also means discussing performance standards Performance standard – is a yardstick used to evaluate how well employees have achieved each objective Development plan – at minimum, this plan should include indentifying areas that need improvement and setting goals to be achieved in each area, performance planning includes the consideration of results and behaviors and the development plan Performance execution – The employee has primary responsibility and ownership of this process, at the performance execution stage, the following factors must be present 1.Commitment to goal achievement

2.Ongoing performance feedback and coaching
3.Communication with supervisor
4.Collecting and sharing performance date
5.Preparing for performance reviews
Supervisors have primary responsibility over the following issues 1.Observation and documentation

Performance assessment – in the assessment phase, both the employee and the manager are responsible for evaluating the extent to...
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