What is a disadvantage of using the results-oriented performance management method

• Define performance management systems.
• Define performance appraisal.
• Why is it important for HR to establish and communicate clear policies to handle performance issues?
• What is a mandated issue in the performance issue model?
• What type of performance issue may best be resolved with a casual conversation to let the employee know that what they did was inappropriate?
• Define checklist scale method (performance evaluations).
• Define critical incident appraisal.
• Define employment-at-will principle (EAW).
• Define grievance process.
• Define implied contract.
• Define work standards approach appraisals.

HRM should establish clear policies regarding job performance expectations and issues to benefit the employee and the organization.

For example, the discipline process should aim to help employees meet performance expectations rather than punish them. Policies need to be available and communicated to every employee, so they know what the company expects of them. Employees need to be treated fairly and with consistency.

A written policy ensures HRM and supervisors follow certain procedures when handling these complex issues; comply with applicable laws, rules, and regulations; and provide employees with a remedy for violations of any policies. Proper procedures can protect the employee and the organization.

Performance management systems refer to comprehensive processes involving employees, managers, and executive leadership to improve organizational effectiveness and accomplish the company's mission and goals.

Review how performance standards, performance measurement, reporting of progress, and quality improvement are interrelated in Figure 5.2: Performance Management System.

Performance Management System

The evaluation or appraisal process a company follows should align with its culture and business needs. For example, a manager may conduct annual evaluations because they feel more frequent meetings could be too disruptive or time-consuming, the job responsibilities are fairly static, or they know staff members regularly discuss progress and goals with each other in less formal ways.

If an employee breaks the rules or does not meet the performance appraisal expectations, the performance issue model can be used to correct the behavior.

HRM categorizes business performance issues in five progressive areas: 1. mandated, 2. single incident, 3. behavior pattern, 4. persistent pattern, 5. disciplinary intervention.

Businesses must address mandated issues immediately.

Examples include sharing information in violation of privacy laws, not following safety procedures, and engaging in sexual harassment. For example, a hospital employee who divulges patient information to unauthorized people violates patient privacy. HRM needs to address these indiscretions immediately to protect their patient's rights and the hospital. Company policies should express these issues and communicate them to every employee, such as through orientations, handbooks, and training. Employees need to acknowledge they have received this information in writing.

HRM can usually solve a single incident, a relatively minor infraction of the rules, with a casual conversation. After advising the employee that their behavior is inappropriate (such as using unacceptable language, running over budget, or submitting a project post-deadline), supervisors expect the employee behavior will improve, and no further discipline will be necessary.

For example, managers use a checklist scale method to mark feedback on employee job performance with a simple "yes" or "no". While this evaluation is easy and convenient, it does not record more detailed answers or analysis regarding employee performance.

For critical incident appraisals, managers provide specific examples of an employee's effective or ineffective behavior during the evaluation period. Unfortunately, managers who use this method tend to focus on negative incidents during the time period.

A work standards approach emphasizes productivity. The employee's performance evaluation is based on a minimum-level, results-focused approach. For example, a manager considers an employee who does not meet a minimum standard sales quota to be non-performing. Unfortunately, this method does not account for reasonable deviations from the minimum standard the manager set. The approach works best in long-term situations where managers consider a reasonable performance measure over a certain time period.

Some managers prefer to meet more frequently to confirm everyone shares the same understanding of what needs to be accomplished and has an opportunity to ask questions and make suggestions. Creating regular, formal lines of communication can be invaluable to employees who meet infrequently otherwise. For example, staff may require more frequent guidance when their job responsibilities change as they learn new skills or collaborate with other team members on multiple projects.

Note that HRM needs to treat employee-related concerns seriously, especially when issues are mandated by outside, legally-enforced rules, regulations, or industry-wide practices. These mandates can affect the entire company if HRM does not respond appropriately. HRM may be able to resolve single issues informally, but behavior patterns can develop when they do not address them correctly. We label these behavior patterns "persistent" when an employee has been corrected for their behavior but continues to disregard the warnings. At this stage, the employee must realize that the company will take further action if their unacceptable behavior continues.

In the United States, the employment-at-will principle (EAW) describes the legal rights an employer has to fire an employee and the right an employee has to leave an organization at any time, without giving any specific cause. In other words, the employer and employee have the freedom to terminate their relationship at any time. There are three exceptions to this principle: 1. public policy exception, 2. implied contract exception, and 3. good faith and fair dealing exception.

The Worker Adjustment and Retraining Notification Act (WARN) requires organizations with more than 100 employees who have worked at the organization for more than six months to give employees and their communities at least 60 days' notice of closure or layoffs that affect 50 or more full-time employees. The law does not apply in unforeseeable business circumstances.

Employers and employees create an implied contract through words and actions – in other words, the contract is not written or spoken. Although the parties have no written contract, the law creates an obligation in the interest of fairness, based on the parties' conduct or circumstances.

Many collective bargaining agreements include a grievance process that outlines the procedure employees can follow to submit a complaint about something their employer has administered incorrectly according to their contract.

Review Appraisal Methods, Managing Employee Performance, HR Basics: Performance and Rewards, and Developing Employees: Performance Assessment.

5b. Conceptualize HR strategies to improve overall organizational success

• Define performance evaluation system.
• What is the importance of setting employee goals, tracking the progress of these goals, and rewarding employees when goals are met?
• HR professionals should develop a set of policies that deal with performance issues. What is the advantage to the organization of having these policies?
• Define the progressive discipline process.
• Define rightsizing.
• Define Worker Adjustment and Retraining Notification Act (Warning).
• Define severance package.
• Define span of control.
• Define whistleblowing.
• Define a 360° (degree) performance appraisal.
• Describe the concept of management by objectives (MBO).
• Define SMART goals.
• Define a behaviorally-anchored rating scale (BARS).

A performance evaluation system (also called performance appraisal or assessments) is the systematic procedure businesses follow to examine and measure how well their employees perform according to their expectations. HRM should plan a system that allows managers and employees to provide formal feedback about their job performance.

Businesses implement a systematic performance evaluation system to:

1. Encourage positive performance and behavior.
2. Satisfy employee curiosity as to how well they are performing in their job.
3. Develop the knowledge, skills, and abilities of employees.
4. Provide a basis for pay raises, promotions, and legal disciplinary actions.

The final step in the performance issue model is to provide disciplinary intervention: a series of steps or corrective action a business takes before terminating an employee who continues to be non-performing.

Progressive discipline typically includes five steps:

1. First offense: The employer issues an unofficial verbal warning, provides counseling, and issues a restatement of expectations.
2. Second offense: The employer issues an official written warning that is documented in the employee's file.
3. Third offense: The employer issues a second official warning and may develop an improvement plan documented in the employee's file.
4. Fourth offense: The employer suspends employment or issues another form of punishment documented in the employee's file.
5. Fifth offense: The employer may terminate the employee and begin the process of alternative dispute resolution.

Downsizing (or rightsizing) describes the process businesses follow to reduce their number of employees to decrease expenses or meet other business needs. Employers may offer departing employees a severance package, with pay, benefits, and other compensation, when they leave the organization due to layoffs or retirements. Severance contracts often stipulate the employee will not sue the employer for wrongful termination.

Span of control refers to the number of subordinates a manager or supervisor can directly control. The most effective number of subordinates often depends on the amount of supervision workers require, the supervisor's capabilities, similarity, volume, and type of tasks. The timing of appraisals, such as yearly or semi-annually, may depend on how many employees the manager has in their span of control.

A whistleblower refers to an employee who divulges ethical infractions or legal violations of their business or organization to the public. Federal employment laws in the United States protect whistleblowers from employer retribution. Congress granted this protection in 1989 and extended these provisions in the Sarbanes-Oxley Act of 2002.

Performance appraisal (also called performance evaluations and performance assessments) describes the methods businesses use to examine how well employees perform in their job and obtain other types of feedback.

For example, some companies invite managers and co-workers to evaluate each other's job performance via 360° Feedback, which is especially useful when staff members work on teams and collaborate on projects. In this performance appraisal method, everyone can share their understandings and expectations about how to work together effectively, complement each other's skills and abilities, and how to meet expected goals, outcomes, and the mission of the organization.

Management by objectives (MBO) is a results-oriented approach that invites managers and employees to discuss and formulate mutually-accepted goals and objectives. The employee has "buy-in" because they participate in the process and can use the evaluation to further their skill development.

The written objectives should be SMART goals, or 1. specific, 2. measurable, 3. attainable, 4. result-oriented, and 5. time-limited.

According to the BARS (Behaviorally Anchored Rating Scales) appraisal method, reviewers base their evaluation on specific behaviors required for each position in the company. BARS compare an individual's performance (often collected by a critical incidents system) against specific examples of behavior anchored to numerical ratings.

Review these types of performance appraisal methods and their advantages and disadvantages. Note that no one performance appraisal is best, so most companies use various methods to ensure the best results.

Advantages and Disadvantages of Each Performance Appraisal Method

Review HR Basics: Performance and Rewards, Managing Employee Performance, Employee Assessment, and Employee Assessment.

Unit 5 Vocabulary

• 360° (degree) performance appraisal
• Behaviorally-anchored rating system (BARS)
• Checklist scale method (performance evaluations)
• Critical incident appraisal
• Employment-at-will principle (EAW)
• Grievance process
• Implied contract
• Management by objectives (MBO)
• Performance appraisal
• Performance evaluation system
• Performance issue model
• Performance management system
• Progressive discipline process
• Rightsizing
• Severance package
• SMART goals
• Span of control
• Whistleblowing
• Work standards approach appraisals
• Worker Adjustment and Retraining Notification Act (WARN)

Page 2

Page 3