PERFORMANCE MANAGEMENT
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1 PERFORMANCE MANAGEMENT S E C O N D E D I T I O N Hermann Agninmins The Busines School University of Colorado Denver (PI Pearson Education International
2 BRIEF CONTENTS PART I: STRATEGIC AND GENERAL CONSIDERATIONS Chapter 1 Performance Management and Reward Systems in Context 1 Chapter 2 Performance Management Process 30 Chapter 3 Performance Management and Strategic Planning 50 PART II: SYSTEM IMPLEMENTATION 77 Chapter 4 Defining Performance and Choosing a Measurement Approach 77 Chapter 5 Measuring Results and Behaviors 94 Chapter 6 Gathering Performance Information 118 Chapter 7 Implementing a Performance Management System 153 PART III: EMPLOYEE DEVELOPMENT 179 Chapter 8 Performances Management and Employee Development 179 Chapter 9 Performance Management Skills 206 PART IV: REWARD SYSTEMS, LEGAL ISSUES, AND TEAM PERFORMANCE MANAGEMENT 239 Chapter 10 Reward Systems and Legal Issues 239 Chapter 11 Managing Team Performance 268
3 > - CONTENTS Preface xi Acknowledgments About the Author xvi xvi PART I: STRATEGIC AND GENERAL CONSIDERATIONS 1 CHAPTER 1 Performance Management and Reward Systems in Context 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 Development Activities 21 Case Study 1-1 Reality Check: Ideal Versus Actual Performance Management System 24 Case Study 1-2 Performance Management at Network Solutions, Inc. 26 CHAPTER 2 Performance Management Process 30 ( 2.1 Prerequisites Performance Planning 38
4 1 Contents vio Results Behaviors Development Plan Performance Execution Performance Assessment Performance Review Performance Renewal and Recontracting 44 Case Study 2-1 Job Analysis Exercise 47 Case Study 2-2 Disrupted Links in the Performance Management Process at "Omega, Inc." 47 Case Study 2-3 Performance Management at the University of Ghana 48 CHAPTER 3 Performance Management and Strategic Planning Definition and Purposes of Strategic Planning Process of Linking Performance Management to the Strategic Plan Strategic Planning Developing Strategic Plans at the Unit Level Job Descriptions Individual and Team Performance Building Support 69 Case Study 3-1 Evaluating Vision and Mission Statements at Harley-Davidson 73 Case Study 3-2 filbert's Mission Statement Generator 74 Case Study 3-3 Linking Individual with Unit and Organizational " *v v Priorities 74 PART II: SYSTEM IMPLEMENTATION 77 CHAPTER 4 Defining Performance and Choosing a Measurement Approach Defining Performance Determinants of Performance Implications for Addressing Performance Problems Factors Influencing Determinants of Performance Performance Dimensions Approaches to Measuring Performance Trait Approach Behavior Approach Results Approach 87 Case Study 4-1 Diagnosing the Causes of Poor Performance 91 Case Study 4-2 Differentiating Task from Contextual Performance 91 { Case Study 4-3 Choosing a Performance Measurement Approach at Paychex, Inc. 92
5 viii Contents CHAPTER 5 Measuring Results and Behaviors Measuring Results Determining Accountabilities Determining Objectives Determining Performance Standards Measuring Behaviors Comparative Systems Absolute Systems 106 Case Study 5-1 Accountabilities, Objectives, and Standards 113 Case Study 5-2 Evaluating Objectives and Standards 114 Case Study 5-3 Measuring Competencies at the Department of Transportation 114 Case Study 5-4 Creating BARS-Based Graphic Rating Scales for Evaluating Business Student Performance in Team Projects 115 CHAPTER 6 Gathering Performance Information Appraisal Forms Characteristics of Appraisal Forms Determining Overall Rating Appraisal Period and Number of Meetings Who Should Provide Performance Information? Supervisors *2 Peers >3h Subordinates "Self Customers Disagreement Across Sources: Is This a Problem? A Model of Rater Motivation Preventing Rating Distortion Through Rater Training Programs 141 Case Study 6-1 Evaluating the Appraisal Form Used by a Grocery Retailer 145 Case Study 6-2 Judgmental and Mechanical Methods of Assigning Overall Performance Score at The Daily Planet 147 Case Study 6-3 Minimizing Intentional and Unintentional Rating Errors 149 CHAPTER 7 Implementing a Performance Management System Preparation: Communication, Appeals Process, Training Programs, and Pilot Testing Communication Plan 155
6 Contents ox 7.3 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 170 Case Study 7-1 Implementing a Performance Management Communication Plan at Accounting, Inc. 175 Case Study 7-2 Implementing an Appeals Process at Accounting, Inc. 175 Case Study 7-3 Evaluation of Performance Management System at Accounting, Inc. 176 PART III: EMPLOYEE DEVELOPMENT 179 CHAPTER 8 Performance Management and Employee Development Personal Developmental Plans Developmental Plan Objectives Content of Developmental Plan Developmental Activities Direct Supervisor's Role Degree Feedback Systems Advantages of 360-Degree Feedback Systems Risks of Implementing 360-Degree Feedback Systems Characteristics of a Good System 198 Case Study^-l Developmental Plan Form at Old Dominion University 203 Case Study 8-2 Evaluation of a 360-Degree Feedback System Demo 203 Case Study 8-3 Implementation of 360-Degree Feedback System at Ridge Intellectual 204 CHAPTER 9 Performance Management Skills Coaching Coaching Styles Coaching Process Observation and Documentation of Developmental Behavior and Outcomes Giving Feedback Performance Review Meetings 226 Case Study 9-1 Was Robert Eaton a Good Coach? 233 / Case Study 9-2 What Is Your Coaching Style? 234 s Case Study 9-3 Preventing Defensiveness 236
7 x Contents PART IV: 1 REWARD SYSTEMS, LEGAL ISSUES, AND TEAM PERFORMANCE MANAGEMENT 239 CHAPTER 10 Reward Systems and Legal Issues 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 259 Case Study 10-1 Making the Case for a CP Plan at Architects, Inc. 264 Case Study 10-2 Selecting a CP Plan at Dow AgroSciences 264 Case Study 10-3 Possible Illegal Discrimination at Tractors, Inc. 265 CHAPTER 11 Managing Team Performance 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 Management System Prerequisites Performance Planning Performance Execution Performance Assessment Performance Review Performance Renewal and Recontracting Rewarding Team Performance 280 Case Study 11-1 Not All Teams Are Created Equal 282 Case Study 11-2 Team Performance Management at Duke University Health Systems 283 Case Study 11-3 Team-Based Rewards for the State of Georgia 285 Name Index 288 Subject Index 290 / Author Index 294
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