Chapter 1
Chapter 1
Chapter 1
Management
Overview
Definition of Performance Management (PM)
The Performance Management Contribution
Disadvantages/Dangers of Poorly
Implemented PM Systems
Definition of Reward Systems
Aims and Role of PM Systems
Characteristics of an Ideal PM System
Integration with Other Human Resources
and Development Activities
Definition of PM
1. Continuous Process of
Identifying
Measuring
Developing
with
Performance Management
• Strategic business considerations
• Driven by line manager
• Ongoing feedback
So employee can improve
performance
PM is NOT performance appraisal
Performance Appraisal
• Driven by HR
• Assesses employee
Strengths &
Weaknesses
• Once a year
• Lacks ongoing feedback
Contributions of Performance Management
For Employees
Clarify definitions of
job
success criteria
Increase motivation to perform
Increase self-esteem
Enhance self-insight and development
Performance
Management
For Employees
Lowered self-esteem
Employee burnout and job
dissatisfaction
Damaged relationships
Use of false or misleading
information
For Managers
Increased turnover
Decreased motivation to perform
Unjustified demands on managers’
resources
Varying and unfair standards and
ratings
For Organization
Wasted time and money
Unclear ratings system
Emerging biases
Increased risk of litigation
and
Intangible or relational returns
Cash compensation
Base pay
Cost-of-Living & Contingent Pay
Incentives (short- and long-
term)
Work/Life Focus
Allowances
Relational Returns
Base Pay
Contingent Pay
Short-term Incentives
Long-term Incentives
Available
Easy to use
Acceptable to decision makers
Benefits outweigh costs
Consistent
Free of error
Inter-rater reliability