UNIT V STUDY GUIDE Performance Management Course Learning Outcomes for Unit V Upon completion of this unit, students should be able to: 9. Summarize key aspects of strategic performance management processes, including management of learning and development strategies. Reading Assignment Before completing your required reading assignment, watch the video that will briefly introduce some of the readings and unit concepts: Click here to access the Unit V Video. Click here to access the Unit V Script. Use the CSU Online Library to locate and read the following articles within the Academic OneFile database: Ethnic drive spurs sales: Steve Forster and Teresa Tarantino head south and east to visit Dayhoff LLC and Fiesta S.A. (2002). Professional Candy Buyer, 10(1), 40-42. Katic, D., Majstorovic, V., & Colak, I. (2011). Performance measurement review. Annals of DAAAM & Proceedings, 515-516. McDonnell, P. J. (2014). A contrarian view of employee turnover: Is culture of high performance in best interest of best medical practices? Ophthalmology Times, 39(3), 4. Pace, A. (2011). The performance management dilemma: Simplifying performance management processes may be the antidote to ongoing challenges. T+D, 65(7), 22. Powell, W. (2002). Above the bottom line: The link between an enterprise's investment in training and the performance of its stock has huge implications for the training industry. T+D, 56(4), 34-38. Rock, D., Davis, J., & Jones, E. (2013). One simple idea that can transform performance management. People & Strategy, 36(2), 16-19. Unit Lesson Contrary to common perception, performance management is much more than performance appraisals. The performance appraisal involves management assessing whether or not employees are meeting the organization's standards and goals. Many different members work together to define these goals, including human resources, management, and even the employee. As mentioned above, the appraisal is a part of performance management; however, managers have more responsibility than just a yearly evaluation. Performance is something that should be regularly communicated, and the employee and manager should be able to talk freely about the organization goals. When it comes time for the formal appraisal, the employee should already have an idea of how he or she is preforming. This also gives the employee opportunities to improve performance and develop skills. Effective performance management encourages communication, establishes standards for rating performance, and helps the organization identify top, mid-range, and poor performers. Additionally, formal performance management is imperative to help protect an organization against employment-related legal claims. MHR 6551, Training and Development 1 In today's workplace, appraising employee behaviors is extremely important. Most descriptions have UNITjob x STUDY GUIDE required competencies that may include required behaviors such as positive, can-do Title attitudes, courteous and friendliness to customers, or working well with others. The key is to be sure these competencies are attainable, observable, and measurable. Although many leaders think of managing performance as conducting performance appraisals with employees, managing people's performance actually involves multiple componentsnot only performance appraisals. It also involves selecting the best employees for positions, training them well, assigning them to teams and/or projects, keeping them motivated, supervising them in ways that do not irritate them, and rewarding them appropriately. Making sure you know what your mission is and what the objectives of the organization are should be the driving force for insuring that you are managing performance well. In addition, knowing what motivates certain employees and what does not seems to be a critical piece of the puzzle. Performance appraisals evaluate how well employees measure up to various performance standards. On the positive side, employees know what is expected of them and see a sense of equity (fairness) by their supervisor and the organization. The issues in this process center on reducing the human bias by training supervisors to conduct the performance meeting in a structured and scientific way. Something interesting to note is that some companies are actually doing away with the traditional performance appraisal. General Electric (GE), for example, used a traditional performance appraisal for many years; it was not until around 2005 that they realized a change was needed. Their traditional performance appraisal consisted of a numbering system that ranked employees, and the bottom 10% were terminated (Nisen, 2015). Their new system is now much less structured. In some cases it does away with ranking all together and provides frequent feedback via an app (Nisen, 2015). This idea may seem foreign to some, but it reflects the changes in the business world. Consider the following statement from Susan Peters, GE's head of human resources: The world isn't really on an annual cycle anymore for anything I think some of it to be really honest is millennial based. It's the way millennials are used to working and getting feedback, which is more frequent, faster, mobile-enabled, so there were multiple drivers that said it's time to make this big change. (Nisen, 2015, para. 10) Susan Peters notes in that times are changing (a common theme in this course), and with that, so must management. Those entering the workforce are comfortable with feedback and with technology, a combination GE is using to their advantage. As you move through this unit, consider this change. Do you think more companies will adopt this approach? Uday Lele is an individual from India who created eight businesses and went from $20.00-$54 million; his most famous business being the Juicee Gummy Bear Company. Something that we can learn from Lele is his advice on how to manage employees effectively. He was of the opinion that you should only micromanage peoples' weaknesses and macro manage peoples' strengths (2009). Micromanaging occurs when a manger controls every step of the process, even those small steps, while macro managing takes a step back and allows the employ to have most of the control. He explained that what he meant is that people do not need to be managed on things that they are already good at. He was of the opinion that you just leave them alone; however, if they struggle with certain tasks, it is leadership's responsibility to know what these weaknesses are and to keep an eye on how they are doing in these areas (Lele, 2009). This concept is also called subordinate-readiness leadership, which we will discuss later in the course. Both micro and macro management are important in any organization, especially when it comes to training. As discussed, micromanaging can be useful in improving employee weaknesses, but could also hinder employee growth if a leader becomes too controlling. On the other hand, macro management allows employees to use their strengths, but can also make it more difficult for managers to notice weaknesses. Good micromanagers may ask questions of employees such as: When is the deadline of this project? How do you plan to tackle the next steps? MHR 6551, Training and Development 2 Good macro managers may ask questions of employees such as: UNIT x STUDY GUIDE Title What strengths can you bring to the team? You have always been really strong with customer service; can you take on this project and let me know the outcome? Although HR research may not necessarily address these issues in macro and micro management in particular, one would think that the ideas make a lot of sense. Certainly, it would seem that the HR manager should be involved in knowing about all of the major strategic activities of the organization and helping the organization measure and manage what is going on in these areas, without diminishing the performance of the individual or the organization along the way. Knowing how to manage these issues is critical. When it comes to rewarding employees, the field of compensation is an interesting but only semi-charted area. Uday Lele took a surprisingly strong stand when he said an employer should pay 30% more than the market if he or she like someone's work and really want to keep them with you. Otherwise, they will eventually leave the company for better opportunities. We cannot know for sure that 30% is the magical figure; however, his belief shows that he was aware of the importance of paying good money for someone you see as valuable to your organization. Thinking back to the appraisal process, some organizations have merit-based pay increases because of this very reason. Organizations want to provide incentives to the top employees to remain with the company and continue their efforts. It is interesting that many compensation experts talk in terms of coming up with flexible approaches to pay. The problem with these discussions, however, is that no one knows how best to design these flexible approaches and what you really get with them. It seems that organizations should be focusing more on what they consider to be the compensable factors for their organizationwhat the organization should be paying people well for those activities, knowledges, and skills that are considered to be critical aspects to performance management. References Lele, U. (2009). Learn to create new wealth with me! [Video file]. Retrieved from http://www.udaylele.com/video-1-hr.php Nisen, M. (2015). Why GE had to kill its annual performance reviews after more than three decades. Retrieved from http://qz.com/428813/ge-performance-review-strategy-shift/ Suggested Reading In this Unit Lesson, we discussed Uday Lele and his innovative approaches to management and business that have made him so successful. This video is a seminar that he gave on how to have a successful business. If you are interested in learning more about his tips, consider watching: Lele, U. (2009). Learn to create new wealth with me! [Video file]. Retrieved from http://www.udaylele.com/video-1-hr.php This unit discusses performance management and how to do it successfully. This video gives some advice on how this can be achieved: Actus. (2012). Employee performance managementWhat it is & why it's so important [Video file]. Retrieved from https://www.youtube.com/watch?v=J_Qe9MMDAms Additionally, this video explains six steps that managers can use to implement performance management: Karahalios, D. (2010). Performance management - 6 simple steps [Video file]. Retrieved from https://www.youtube.com/watch?v=IHpAacOQTk0 MHR 6551, Training and Development 3