Performance Management Overview

Aug 18, 2025

Summary

  • The meeting provided a comprehensive overview of performance management, including how to set goals, measure employee performance, and provide effective feedback.
  • Key methods for performance measurement and their benefits and drawbacks were discussed, along with common sources of performance information.
  • The importance of fairness, legal compliance, and developmental opportunities in performance management was emphasized.
  • No concrete action items or specific company decisions were discussed during this session; the content focused on conceptual and best practice approaches.

Action Items

  • No action items were identified during this session.

Performance Management Overview

  • Performance management is a continuous process to ensure employee activities and outputs contribute to organizational goals, not a one-time event.
  • The process consists of: identifying organizational goals, setting employee objectives, providing support and feedback, evaluating performance, and developing actionable improvement plans.
  • Effective performance management enhances competitive advantage, communication, and alignment with company goals.

Purposes of Performance Management Systems

  • Strategic: Aligns employee goals and behaviors with organizational objectives.
  • Administrative: Informs day-to-day decisions on salary, benefits, and recognition.
  • Developmental: Provides feedback to recognize and develop employee skills and knowledge.

Performance Measurement Methods

  • Ranking (simple, forced distribution, paired comparison): Compares employees against each other, but may lack specificity and fairness.
  • Attribute, behavior, and results-based measurement: Evaluates employees against defined standards or behaviors.
  • Critical Incident and Behaviorally Anchored Rating Scale (BARS): Uses specific behavioral examples to anchor performance ratings.
  • Management by Objectives (MBO): Sets cascading goals throughout the organization.

Sources of Performance Information

  • Managers, peers, subordinates, self-appraisal, and customers can provide performance feedback.
  • 360-degree appraisals combine multiple sources for a more complete assessment.
  • Each source has strengths and limitations (e.g., potential bias in peer reviews or reluctance in subordinate feedback).

Fairness, Validity, and Errors in Appraisal

  • Validity: Appraisal measures all relevant aspects and avoids irrelevant ones.
  • Reliability: Results are consistent.
  • Errors include similarity bias, contrast errors, distributional errors (leniency/strictness), and appraisal politics.
  • Raters should be trained to minimize bias and errors.

Feedback and Improvement

  • Feedback should be frequent, specific, behavior-focused, and two-way.
  • Employees should complete self-assessments before formal reviews.
  • Goal setting is essential at the end of feedback sessions, with clearly defined follow-ups.

Legal and Ethical Considerations

  • Systems must be legally defensible, based on valid job analysis, and communicate requirements clearly.
  • Use multiple raters, provide training for raters, and protect employee privacy.
  • Feedback and documentation should support employment decisions and provide opportunities for coaching and improvement, not just discipline.

Decisions

  • No formal decisions were made during this session.

Open Questions / Follow-Ups

  • No open questions or follow-ups were identified during this session.