CH-7-8 Orientation, Training and Development, and Career Planning – Canadian Human Resource Management: A Strategic Approach : Book Guide

This Document Contains Chapters 7 TO 8 7 ORIENTATION, TRAINING AND DEVELOPMENT, AND CAREER PLANNING CHAPTER OBJECTIVES After studying this chapter, you should be able to: Explain the process of onboarding and why it is important List the key components of an employee orientation program Describe the importance of training as part of the long-range strategy of an organization. Explain the key steps in the training process Define strategic human resource development. (HRD) Explain the principles of learning and how this knowledge impacts the choice of training programs List the developmental strategies that impact employee development Describe how human resource departments encourage and assist career planning as well as support the learning management framework POWERPOINT® SLIDES Canadian Human Resource Management includes a complete set of Microsoft PowerPoint® files for each chapter. (Please contact your McGraw-Hill Ryerson representative to find out how instructors can receive these files.) In the lecture outline that follows, a reference to the relevant PowerPoint slide for this chapter is placed beside the corresponding lecture material. The slide number helps you to see your location in the slide show sequence and to skip slides that you don’t want to show to the class. (To jump ahead or back to a particular slide, just type the slide number and hit the Enter or Return key.) LECTURE OUTLINE (with PowerPoint® slides) Orientation, Training and Development, and Career Planning Slide 1 Onboarding Slide 2 Orientation Slide 3 Orientation Slide 4 Socialization Slide 5 ONBOARDING • Onboarding is the process of integrating and acculturating new employees into the organization and providing them with the tools, resources and knowledge to become successful and productive. It includes orientation, socialization, training and development activities. • It encompasses year -long activities that serve to integrate the new hire into the organization. • The outcomes of a successful program are greater retention, faster time to productivity, increased motivation and employee engagement. • See figure 7-1 Onboarding Model ORIENTATION • Orientation introduces to the new employee to the organization. • These programs familiarize new employees with their roles, the organization, its policies, other employees and HR related information The components of an orientation program are: • Organizational Issues -- Examples include history of employer, names and titles of key executives, overview of products/production process, policies, safety procedures -- Employee handbook—explaining key benefits, policies, and general information about the employer may be provided • Employee Benefits -- Examples include pay scales and paydays, vacations and holidays, rest breaks, training and education benefits, employer-provided services, counselling, etc. • Introductions -- To supervisor, co-workers, trainers, employee counsellor • Job Duties -- Examples include job location, overview of the job, job safety requirements, job tasks, job objectives, and relationship to other jobs ORIENTATION Orientation can serve several purposes: • Reduce employee turnover -- New employees may quit if they experience a difference between what they expect to find and what they actually find, i.e., cognitive dissonance • Reduce errors and save time -- Well-oriented employees knows what is expected and is likely to make fewer mistakes • Develop clear job and organizational expectations • Improve job performance -- Employees who establish good relationships tend to be more productive • Attain acceptable job performance levels faster -- Defining job performance standards eliminates uncertainty • Increase organizational stability -- By communicating policies and regulations to new employees • Reduce employee anxiety • Reduce grievances -- Grievances often result from ambiguous job expectations and unclear responsibilities • Result in fewer instances of corrective discipline -- Clarifies the rights and duties of employees, outlines disciplinary requirements and consequences SOCIALIZATION • Socialization is the continuing process by which an employee begins to understand and accept the values, norms, and beliefs held by others in the organization for recruitment usually belongs to the human resource department -- Involves turning outsiders into insiders -- May have taken place even before employees join organizations, e.g., summer job, formal education etc. Training and Development Slide 6 Purpose of training Slide 7 The Training System Slide 8 Employee Training – Needs assessment Slide 9 Employee training– Training Objectives Slide 10 TRAINING AND DEVELOPMENT HRD refers to a part of HRM that integrates the use of training and employee and career development efforts to improve individual, group and organizational effectiveness. The goal is to establish applicable learning interventions that will enable individuals to optimally perform current and future jobs. • Training is a planned effort by an organization to make possible the learning of job-related behaviour, i.e., to do their present jobs • Development involves preparing employees for future job responsibilities, i.e., prepare for future jobs • Training has a greater focus on short term skill enhancement and on the current job. Development is more long term and the focus is on the competencies and skills needed for future roles. • See figure 7-3 “differentiating training and development” on page 267 EMPLOYEE TRAINING Canadian companies have to compete in a global economy in a fast-changing business environment • Global competition has forced many Canadian companies to flatten structures and reduce employees. As a result, multi-skilled (or cross-trained employees are required to perform diverse tasks • The organizational environment needs to foster life-long learning in order to attract and retain multi-skilled employees • Due to high immigration levels training is required to ensure supervisors and employees work effectively with diverse employees with varying cultural values • Developments in information technologies, computer applications, multi-media training methods, etc., require new skills and training strategies The Training System • Sequence of events include needs assessment, objectives, content, learning principles, implementation of actual program, and evaluation • Employee benefits include skill improvement, self-development, strong self-confidence, sense of growth etc. • Organizational benefits include improved profitability through higher productivity, improved morale, lower costs, better corporate image NEEDS ASSESSMENT • Diagnoses present problems and future challenges that can be met through training or development -- Needs to consider each person -- Need may be determined by the human resource department, supervisors, or self-nomination -- Sources of information may include production records, grievances, safety reports, absenteeism and turnover statistics, performance appraisal, etc. TRAINING OBJECTIVES • Desired behaviour • Conditions under which it is to occur • Acceptable performance criteria Learning Principles Slide 11 Training techniques Slide 12 Web based training Slide 13 Web based tools Slide 14 Strategic HRD Slide 15 Developmental Strategies Slide 16 Evaluation of T&D Slide 17 Career Planning and development Slide 18 Factors affecting individual career choice Slide 19 HR department and career planning Slide 20 HR department and career planning Slide 21 LEARNING PRINCIPLES Learning cannot be observed; only its results can be measured. Learning principles are guidelines in the ways in which people learn most effectively • Participation -- Learning is usually quicker and more long-laster when the learner can participate actively, e.g., driving a car • Repetition -- Etches a pattern into our memory, e.g., learning the alphabet • Relevance -- Learning is helped when the material to be learned is meaningful, e.g., trainers explain the overall purpose of a job before explaining explicit tasks • Transference -- Application of training to actual job situations, e.g., pilots being trained using flight simulators • Feedback -- Gives learners information on their progress in order to adjust behaviour TRAINING TECHNIQUES In selecting a training technique, tradeoffs occurs between cost-effectiveness, desired program content, appropriateness of the facilities, trainee and trainer preferences and capabilities, and learning principles • On-the-Job Training—received directly on the job and is used primarily to teach workers how to do their present job e.g. Job rotation, apprenticeships, coaching • Off-the-Job Training—e.g., lecture and video presentations, role playing, case study, simulation exercises laboratory training, computer-based training (CBT), virtual Reality (VR), Internet or Web-based Training is also known as “virtual education,” or “eLearning,” Web based delivery systems • Web /computer – the program is loaded on the hard drive and the user interact with only one specific program • Web/electronic performance support – through a web connection, workers have access to databases, on line tools and discussion forums • Web/virtual synchronous- employers and trainers meet at a predetermined time. • Web/virtual asynchronous- this is a classroom on the internet. It is accessible anytime Popular Web based tools • A variety of methods have been developed: -- Blogs (Web Log) are web sites with a text and graphics -- RSS (Rich Site Summary) delivers regularly changing news -- Podcasts consist of audio or video clips -- Wikis are Web pages accessible to everyone, allowing changes -- Social networking websites -- Intranet training uses an intra-organizational computer network to deliver training, e.g., Royal Bank’s “Personal Learning Network” -- Video-conferencing is widely used for long-distance education, e.g., Queen’s Executive MBA program STRATEGIC HUMAN RESOURCE DEVELOPMENT The identification of essential job skills and the management of employees’ learning for the long-range future in relation to explicit corporate and business strategies • Benchmarking -- Comparing one’s own quality and production standards with those of industry leaders or competitor • Employee Development o – Process of enhancing an employee’s future value to the organization through careful career planning DEVELOPMENTAL STRATEGIES • Cognitive -- Concerned with altering thoughts and ideas i.e. knowledge, new processes -- Tends to increase the knowledge and expertise of individuals -- Probably the least effective strategy in employee development -- Includes relatively passive methods, e.g., lectures, seminars, academic education • Behavioural -- Attempts to change behaviour, e.g., management style -- Aims to make individuals more competent in interacting with their environment, i.e., colleagues, subordinates, customers -- Includes role-playing, behaviour modelling, team building, coaching, mentoring, etc. • Environmental -- Concerned with providing the organizational setting in which employees can thrive and develop -- Although the most promising developmental strategy it is the most difficult to implement -- Includes job rotation, organizational development, the learning organization concept, temporary assignments, project teams, etc. EVALUATION OF TRAINING AND DEVELOPMENT The lack of evaluation is the most serious flaw in most training efforts. There are several ways in which to evaluate the effectiveness of a program: • Reaction -- Also known as the happiness or smile sheet -- Most widely used criterion in training evaluation -- Usual question is “How satisfied are you with the program?” • Knowledge -- Very popular in learning institutions, i.e., use of exams -- Can be reliably assessed only if before and after tests are used • Behaviour -- Self-reports and observations by others are used to measure behaviour change, e.g., neutral observers, supervisors, customers etc. • Organizational results -- Would be ideal measurement except for the difficulty in determining the cause-effect relationship of training to organizational results -- Cost benefit analysis see Figure 7-9: training costs and benefits CAREER PLANNING AND DEVELOPMENT Career planning is closely linked to employee development. In order to achieve a career plan, action must be taken to achieve goal goals. • Career planning is the process through which someone becomes more aware of their interests and needs and motivations • Career management is a series of formal and less formal activities designed and managed by the org to influence the development f one or more employees • Career development is a long term process; a series of activities undertaken by individuals in pursuit of their careers • Employees want career equity, supervisory support, awareness of opportunities • Employees measure career success in several ways: -- Advancement, learning e.g., the acquisition of new skills, depth and breath -- Employability and psychological factors – recognition, engagement Factors affecting Individual career choices • Generational differences • Individual values and abilities and attitudes • Personality – job fit • See Figure 7-11 the RIASEC model HUMAN RESOURCE DEPARTMENTS AND CAREER PLANNING • Encourages Management commitment and support • Devise communication plans through HR tool to raise awareness of career options -- Workshops, seminars, career paths, job posting, career counseling • Aligns HR processes to facilitate career planning -- There are several HR processes that contribute to employee development -- Succession planning, human resource planning, training and development and performance management • Use technology to support career planning efforts -- Many organizations use the intranet for career counseling purposes -- Organizations use robust enterprise wide applications that have a career planning module. This application can display career paths and help design individual plans for employees -- Podcasts HR Contribution to Career Planning • Develops promotable employees, i.e., helps to develop internal talent • Lowers turnover, i.e., increased attention and concern for employees increases organizational loyalty • Taps employee potential, i.e., encourages employees to tap their potential abilities to realize specific career goals • Furthers growth, i.e., motivates employees to develop • Reduces hoarding, i.e., managers, and others in the organization become aware of employee qualifications • Satisfies employee needs, i.e., improved opportunities satisfies individual needs for recognition and accomplishment • Assists organizations meet legal requirement such as employment equity plans • Taps and optimizes employee potential ANSWERS TO REVIEW AND DISCUSSION QUESTIONS 1. "If employees are properly selected, there should be no need for an orientation program or training." Do you agree or disagree? Why? Disagree. Regardless of how experienced or knowledgeable an employee may be, that worker and the organization can benefit from an orientation that introduces the people, place, policies, and procedures of the organization. Even then, the employee may lack specific skills needed to perform satisfactorily. 2. What are the organizational and employee benefits that result form a comprehensive onboarding process? The employee benefits from having a comprehensive onboarding process are increased engagement, motivation and organizational commitment. Employees experience a lower level of anxiety about the new job,, they are able to feel an enhanced sense of confidence to perform their job effectively. In addition the company creates a more favorable image among new hires and turnover is reduced significantly. 3. For each of the following occupations, which training techniques do you recommend? Why? (a) cashier in a grocery store (b) welder (c) assembly line worker (d) inexperienced supervisor Cashier. Training probably would begin with vestibule training on a cash register until the employee became proficient. Then training would continue on an on-the-job basis. Welder. A welder probably would go through an apprenticeship program to learn the basics of the trade. (At the same time, of course, the welder would receive job instruction training in how to perform specific welds.) Assembly worker. Most assembly line workers are given job instruction training. Inexperienced supervisor. Once a person has made supervisor, a superior should provide coaching. 4. Assume you were hired to manage a research and development department. After a few weeks, you noticed some researchers were more effective than others, and the less effective ones received little recognition from their more productive counterparts. What forms of training would you consider for both groups? Role-playing exercises may allow each side to learn how each group sees the other. Following this training, the better researchers might be enlisted to coach the less effective members to upgrade their performance. 5. What is the purpose of a cost-benefit analysis? A cost-benefit analysis is supposed to demonstrate that a planned capital investment, in this case in training, is justified by the benefits expected, e.g., higher profits, reduced waste, lower repair costs, etc. 6. Discuss why it is so important that there be a linkage between an organization's human resource development needs and its mission and strategy. An organization's strategy involves large-scale, future-oriented, integrated plans to achieve organizational objectives (Chapter 1). To make such plans work, future human resource needs have to be taken into account. Whatever a strategic plan wants to accomplish, it has to make sure future managers and employees have the necessary skills and competencies to achieve the company's objectives. 7. Explain the differences between the cognitive, behavioural, and environmental approaches to strategic management development. Cognitive management development is concerned with changing a manager's way of thinking. It implies constant learning and upgrading one's expertise. Behavioural management development attempts to change a manager's behaviour, i.e., management style. It aims to make individuals more competent in interacting with their environment, e.g., with colleagues, subordinates, or customers. Environmental management development tries to change a manager's attitudes and values. Creating a job environment that continuously reinforces desirable behaviour will eventually change the frame of reference of managers and ensure that changes (new approaches) become permanent. 8. In what way does a "learning" organization differ from a "traditional" organization? In a learning organization employees "continually expand their capacity to create the results they truly desire, where new and expansive patterns of thinking are nurtured, where collective aspiration is set free, and where people are continually learning how to learn together" (Senge). 9. Why should a human resource department be concerned about career planning, especially since employee plans may conflict with the organization's objectives? What advantages does a human resource department expect to receive from assisting in career planning? Through career planning employees may feel they have a career, not just a job, with the employer. The HR department can benefit from having a higher quality pool of internal applicants from which to draw in order to meet staffing needs. Moreover, problems of employee/organizational adjustment to socio-technological change, obsolescence, and employee turnover may be reduced. 10. Suppose you are in a management training position after completing university. Your career goal is not very clear, but you would like to become a top manager in your firm. What types of information would you seek from the human resource department to help you develop your career plan? Information about short- and long-run human resources needs would give some insight into preparations needed to attain future promotions. Having knowledge of career paths taken by present executives might indicate which functional or product areas are most likely to lead to top management positions. 11. Why is employee feedback an important element of any organization's attempt to encourage career development? Without feedback, employees have no way of evaluating how successful their career planning efforts have been. In time, the lack of feedback may cause employees to believe career planning is a useless expenditure of their time. 12. Suppose a hard-working and loyal employee is passed over for promotion. What would you tell this person? Assurance of the value of the employee should be communicated as well as consideration for future promotions. The reasons why this person was passed over should be explained. Finally, specific career development actions should be discussed that will increase the employee's likelihood of being promoted in the future. Of course, the employee should be told these actions do not guarantee promotion, but they will increase the likelihood of future career success. . ANSWERS TO CRITICAL THINKING QUESTIONS 1. Before you entered your college or university you had certain ideas about what your values and expectations would be as a student. How did the institution's socialization process change these values and expectations? Clearly, the answer will vary from one student to the next. Students should be encouraged to focus on their values and expectations relating to a number of items including: • work load • expectations of having a “fun time” in the institution • attitude toward students belonging to opposite sex, older students, students of other backgrounds, etc. • work-play relationship • role of instructions • care shown by others (students, professors, administrators, support staff) • career goals • ethical standards/values 2. Your company is desperately looking for a system analyst. You know that your competitor invested heavily in training and has a highly competent system analyst, who indicated to you privately that she would switch if you pay her $10,000 more. Your boss thinks that this is a bargain and tells you: “Get her!” It surely would hurt the competitor. What issues does this raise? Organizations are increasingly dependent on highly skilled and knowledgeable employees. Ultimately, an employee retains ownership of their intellectual capital and is able to utilize their specialized knowledge, skills, and experience to negotiate favourable employment terms. If your company is willing to pay this system analyst $10,000 more than she is currently earning she appears to be willing to resign her current position. Your competitor has invested in the development of this employee and the loss may be incalculable because of the knowledge and skills the employee will take with her. However, ultimately the human resource department of your competitor has responsibility to retain employees by meeting their needs. In addition, your competitor is responsible for utilizing succession planning to ensure sufficient candidates exist for key positions. 3. You are the Training and Development manager. Your president calls you in and tells you that the management development budget has to be cut because of the company's financial situation. What arguments can you use to persuade your boss that development money is well spent? The best argument is that without well-trained and up-to-date skilled employees the company will always be a runner-up to companies who train continuously. Well- trained staff is also more flexible in terms of possible assignments (especially if they are cross-trained), tend to be better motivated and have better morale, have less turnover, and have less absenteeism. Also, the quality of their output tends to be higher. ETHICS QUESTIONS Comments to Instructors There are no right or wrong answers to these questions. They are for class discussion purposes. WEB RESEARCH Comments to Instructors These exercises have been designed for students to demonstrate their computer and Internet skills to research the required information. Answers will vary CASE STUDY: MAPLE LEAF SHOES LTD. – DEVELOPING A TRAINING PROGRAM Answers to Discussion Questions 1. You are Russ. Describe the steps you would recommend to Reynolds to go through before actually designing the contents of the training. Ideally, before a training program begins, it is useful to assess the qualifications of the present employees. Performance appraisals are excellent sources of information on whether the employee performs at the expected level or, if not, whether it is the lack of job-related skills that is causing the low performance. Supervisors then would indicate what type of training would benefit the employee. As the text suggests, the human resource department has to verify these suggestions to determine whether requested training is really needed. A look at the job description and job specification may also be helpful since these documents outline the job responsibilities and skill requirements for fulfilling these responsibilities. Trainers may also look at production costs, quality control reports, grievances, safety reports, absenteeism and turnover statistics, and exit interviews. A well done needs assessment would also determine the training objectives in behavioural terms, the conditions under which the behaviour is to occur, and the criteria for the evaluation of the training program. To summarize the steps: (a) conduct a performance appraisal (b) allow supervisors to suggest the training needed (c) look at the other potential data listed above (d) determine training objectives based on the above data 2. What training methods would you suggest to be used to train production workers? (First you may ask: What determines the methods?) Methods are determined by developing behaviour based training objectives, which describe in detail what the trainee should be able to accomplish, under what conditions, and any limitations (e.g. time). If the objective describes production type behaviours, a logical training method may be on-the-job training. Other methods could be apprenticeship (a longer term affair), coaching, simulation, or virtual training. 3. How would you evaluate the training program to determine how effective it was? (What criteria would you use?) Figure 7-8, p. 291, describes the steps in the evaluation process. Ideally, a pre-test/post-test approach is used to determine the effectiveness of a training program. Since the evaluation criteria have been chosen through the training needs analysis and setting of training objectives, all that is needed is the application of the criteria. A reaction measure would indicate the degree of general satisfaction with the set-up and organization of the program. A written exam may be used to test improved knowledge. Changes in attitudes can be measured through attitude surveys. Improved job-related behaviour (skills) can be observed by superiors and colleagues (although this would have to be done on the job and some time after the completion of the training program). Finally, organizational results could be monitored to assess the long-range impact of the training program. Care would have to be taken to make sure that it was the training program that caused observed changes. 4. Do you think the first-line supervisors are the appropriate people to design the training program? Who else would you add, if anyone, to this group? It probably would be a good idea to include one or more job incumbents, since they would know best what is required to do the job effectively. Even if the supervisors came through the ranks and did the job themselves, chances are that a number of changes have taken place since they did the work themselves, and they may no longer know the details. CASE STUDY: MAPLE LEAF SHOES LTD.: CAREER PLAN Answer to Discussion Questions 1. Develop a career plan for Bernadine. What would she have to do to move up the ladder to the comptroller position, the chief financial officer of the company? It is advisable for Bernadine to enroll as soon as possible at the local university for a Bachelor of Commerce degree with a major in Accounting. Since she does not have the money to be a full-time student it will have to be on a part-time basis, which means that she can get her degree in three (if she uses summer sessions) or four years. If she works out her career plan with her supervisor and the human resource manager, she may be able to get some support from the company, especially if she consults with her supervisor about special courses she could take, which may be of special interest to the company, e.g., taxation, international accounting, or auditing. After obtaining her Bachelor's degree she has the choice of going for an MBA degree, which would be useful if she had interest in a broader management position. If she still feels comfortable staying in the accounting field, she may want to consider choosing an accounting designation, CA, CMA, or CGA. After five or six years she would be ready to be considered for an Assistant Comptroller position, preparing herself to take over when the current comptroller retires. CASE STUDY: CANADIAN PACIFIC AND INTERNATIONAL BANK Answers to Discussion Questions 1. You are Mary Keddy. Develop a proposal that Mr. Bennett could present to the board. Consider also the practicality of the plan. A proposal to evaluate the training should include assessing employee reactions, knowledge, attitudes, behaviour and impact on the organization. A number of subjective and objective methods can be used in combination. Evaluation should also include a cost-benefit analysis using the basic formula: revenue – cost = profit. 2. As a rule of thumb, five to ten percent of the cost of a training program should be used for the program’s evaluation, depending on the complexity of the assessment. Please develop a “cheap” and an “expensive” proposal. A brief description of your approach and reasons will suffice (why would one method be cheaper or more expensive than the other?). An inexpensive approach includes assessing employee reactions and attitudes immediately following their training. An expensive program would involve correlating training scores with job performance several months after the training. For the less expensive approach, the primary aim is to gauge how employees feel about the program but without drawing any conclusions about the impact on performance. For the more expensive approach, performance indicators can be quantified into productivity gain, which would allow CPIB to estimate the dollar return of the training (utility). 3. If you wanted to recommend a “foolproof” evaluation, e.g., rule out other causes of success than the training program itself, what approach would you suggest? To construct a “foolproof” evaluation method, an experiment with appropriate control group(s) should be put in place. If the trainees are randomly assigned to condition, then the post-test only design should be: T O (training group) O (control group) If the trainees are not randomly assigned to condition, a pre test, post-test should be used. O T O (training group) O O (control group) Because trainees may learn from the pre test independently of training, the design should be modified to include the groups where no pre test is given. O T O (pre-test, post-test training) O O (pre-test, post-test) T O (training, post-test) O (post-test only) 84 PERFORMANCE APPRAISAL CHAPTER OBJECTIVES After studying this chapter, you should be able to: Explain the purpose of performance management. Describe the characteristics of an effective performance measurement. Identify the issues that influence the selection of a performance appraisal system. Discuss rater biases in performance appraisals. Describe commonly used appraisal methods. Explain how the results of performance appraisal affect human resource management. Rate the performance appraisal mechanism in your organization. Describe the guidelines for effective performance evaluation interviews. POWERPOINT® SLIDES Canadian Human Resource Management includes a complete set of Microsoft PowerPoint® files for each chapter. (Please contact your McGraw-Hill Ryerson representative to find out how instructors can receive these files.) In the lecture outline that follows, a reference to the relevant PowerPoint slide for this chapter is placed beside the corresponding lecture material. The slide number helps you to see your location in the slide show sequence and to skip slides that you don’t want to show to the class. (To jump ahead or back to a particular slide, just type the slide number and hit the Enter or Return key.) LECTURE OUTLINE (with PowerPoint® slides) Performance Management Slide 1 Performance Management Slide 2 Uses of Performance Data Slide 3 Characteristics of Effective Performance Management Slide 2 Performance Management System Goals Slide 5 Performance Management as part of managerial strategy Slide 6 Uses of Performance Appraisal Slide 7 Key Elements Slide 8 Appraisal Systems Slide 9 PERFORMANCE MANAGEMENT Performance management involves much more than just performance appraisal. To meet the organization’s strategic objectives, individual employees need to meet their individual performance goals; collectively employees meeting their goals help the organization to meet its goals. Performance management involves using performance data to mutually inform: • corporate culture • organizational benchmarks • human capital potential • systems and processes • resources • current policies • program directions • sharing results with shareholders • asking for shareholder's input EFFECTIVE PERFORMANCE MANAGEMENT HAS SEVERAL CHARACTERISTICS • Performance Objectives. This is a critical aspect of the organization’s overall strategy; if not fulfilled may result in undesirable organizational results • Performance Goals. Achievable and realistic targets to which actual outcomes can be compared • Performance Measurement. Assessing the efficiency of transforming resources into goods and services, their quality, client satisfaction, quality of decision making, and efficiency and effectiveness of management contributions • Output Measures. Quantity and quality assessment • Outcome Measures. Results of programs compared to preset targets PERFORMANCE MANAGEMENT SYSTEM GOALS Organizations concerned with running an efficient and effective performance management system will try to achieve the following objectives: • Transform organizational objectives into clearly understood, measurable outcomes that define success and are shared with stakeholders in and outside the organization • Provide instruments for measuring, managing, and improving the overall health and success of the organization • Include measures of quality, cost, speed, customer service, and employee satisfaction, motivation, and skills to provide an in-depth, predictive performance management system • Shift from prescriptive, audit- and compliance-based management to an ongoing, forward -looking strategic partnership between top and middle management and employees PERFORMANCE MANAGEMENT AS PART OF MANAGERIAL STRATEGY An important part of the performance management process is the assessment of strengths and weaknesses of the human resources in the organization • Performance appraisal is the process by which organizations evaluate employee job performance -- Provides data to assess the current skill, experience and performance level of every employee -- Impacts human resource planning, training & developing, career development, and compensation expense forecasts -- An effective performance appraisal system (valid performance appraisals) is critical in the performance management process • Balanced Scorecard -- Has become a very popular performance management approach -- Combines the performance measures of the total organization, integrating financial measures with other key performance indicators such as customer satisfaction, internal processes, learning, and innovation USES OF PERFORMANCE APPRAISAL • Feedback and performance improvement -- Performance feedback allows the employee, the manager, and human resource specialists to take appropriate action to improve performance • Administrative decisions -- Helps decision-makers determine who should receive pay raises, promotions, transfers, demotions, dismissals, etc. • Employee development and career planning -- Poor performance may indicate the need for training; good performance may indicate untapped potential -- Helps to guide a conversation around the employee’s desired career path and goals • Criteria for test validation -- We assess the success of training, recruitment, and selection efforts based on whether employees perform well • Training program objectives -- Set training objectives based on employee performance in specific domains • Job re-design -- Poor performance may indicate errors in job analysis information or other information that has resulted in inappropriate hiring, training, or counselling decisions, or may be a symptom of ill-conceived job designs ELEMENTS OF THE PERFORMANCE APPRAISAL SYSTEM • The human resource department usually develops performance appraisals for employees in all departments -- This centralization is meant to ensure uniformity in order to provide for useful results -- The employee’s immediate supervisor performs the actual evaluation 95% of the time The appraisal system should create an accurate picture of an individual’s job performance. To achieve this goal appraisal systems should be: • Job-related -- The system evaluates critical behaviours that constitute job success -- If the system is not job-related it is invalid and probably unreliable • Practical -- Is understood by evaluators and employees • Have performance standards -- Performance evaluation requires performance standards which are the benchmarks against which performance is measured -- Collected through job analysis • Have performance measures -- Performance evaluation also requires performance measures which are the ratings used to evaluate performance Performance Measures Slide 10 Characteristics for Effectiveness Slide 11 Characteristics for Effectiveness (cont’d) Slide 12 Past Performance: Noncomparative Slide 13 Past Performance: Comparative Slide 14 Future Performance Methods Slide 15 Other Developments Slide 16 PERFORMANCE MEASURES Direct versus Indirect Observation • Direct observation occurs when the rater actually sees the performance • Indirect observation occurs when the rater can evaluate only substitutes for actual performance (constructs) Objective versus Subjective • Objective performance measures are those indications of job performance that are verifiable by others and are usually quantitative • Subjective performance measures are those ratings that are not verifiable by others and usually are based on the rater’s opinions CHARACTERISTICS OF AN EFFECTIVE PERFORMANCE APPRAISAL SYSTEM • Validity is of utmost importance. The most valid criteria are results. Valid, or job-related, performance criteria must be based on a thorough job analysis • Reliability (consistency) is difficult to achieve because of different raters and changing work environments. However, valid criteria tend to reliable, but reliable criteria are not necessarily valid • Input into system development increases the probability of acceptance of the system by both supervisors and employees. It gives employees a sense of ownership • Acceptable performance standards mean the standards should be set based on the job analysis • Acceptable goals are derived from the strategic business plans of the organization, but must be operationalized by managers and made to be achievable by the employee • Control of standards, i.e., recognizes that jobs are highly interdependent. An employee must have control over meeting a standard of performance for it to be valid • Frequency of feedback—most appraisals take place once a year. Ideally, performance feedback would be given by the supervisor monthly, or quarterly, and immediately after effective or ineffective job behaviour was observed • Rater training in observation techniques and categorization skills as well as to be familiarized with potential rating errors • Ratee training to ensure the performance appraisal system is well-understood and accepted by employees • Input into interview process increases employee satisfaction and morale • Appraisal consequences are required to maintain effectiveness and ensure employees and supervisors see that appraisal results are taken seriously and followed up on. There is also a crucial link to a merit pay system • Different sources (raters) will have different but valid views of a job and the performance of the employee and reduces the risk of biases (rating errors) METHODS OF EVALUATING PAST PERFORMANCE Noncomparative evaluation methods do not compare one employee against another, but use scales or reports with performance criteria • Rating Scale is perhaps the oldest and most widely used form of performance appraisal -- Rater provides a subjective evaluation of an individual’s performance along a scale from low to high -- Responses may given numerical values to enable calculation of an average score -- Although inexpensive to develop and administer there are many disadvantages including rater biases and omissions of specific performance criteria in order to be useful to a variety of jobs • Behaviourally Anchored Rating Scales (BARS) attempt to reduce the subjectivity and biases of subjective performance measures by using descriptions of effective and ineffective performance provided by a variety of sources -- Specific examples of behaviours are placed along a scale -- BARS are job-related, practical, and standardized for similar jobs -- Serious limitation is that only a limited number of performance categories are included -- Similar to BARS, Behavioural Observation Scales (BOS) involve making judgements on the frequency at which observed behaviours occurred • Performance Tests and Observations may include paper-and pencil tests or an actual demonstration of skills -- Must be valid (i.e., job-related) and reliable to be useful • 360-Degree Performance Appraisals involve using multiple sources of performance appraisal ratings including self, peer, supervisor, subordinate, and even client or customer ratings. Comparative evaluation methods compare one person’s performance with that of co-workers • Ranking method has the rater place each employee in order from best to worst -- Although easy to administer and explain, this method is subject to the halo and recency effects • Forced distributions require raters to sort employees into different categories or classifications -- Usually a certain proportion must be put into each category -- Although this method overcomes the biases of central tendency, leniency, and strictness, some employees and supervisors dislike this method because they feel some employees are rated lower than they think to be correct METHODS TO TARGET FUTURE PERFORMANCE Future-oriented appraisals focus on future performance by evaluating employee potential or setting future performance goals. Techniques include: • Management-by-Objectives Approach -- Employee and supervisor jointly establish performance goals for the future -- Ideally, these goals are mutually agreed upon and objectively measurable • Assessment Centre Technique -- Evaluation of future potential that relies on multiple types of evaluation and multiple raters -- Usually used for groups of middle-level managers with potential OTHER DEVELOPMENTS • Web-based performance appraisal -- Now the mainstream standard for all sizes of firms -- These systems are: developed by experts, adaptable to an organization’s needs, easy to use, and they allow for data to be easily analyzed, stored, and retrieved. -- Ideally performance appraisal software is part of an enterprise-wide software system including other HR software (e.g., application data, interview guides for selection, computer-based training, and payroll) and software for other organizational functions such as finance, purchasing, distribution, manufacturing, and more. • Competencies -- Historically, it was the performance standards set in job descriptions that guided supervisors in their assessment; now there is a tendency to focus more on skill levels than job performance. -- One problem within performance appraisal still to be addressed is evaluating the performance on contingency workers Implications of Appraisal: Training Slide 17 Implications of Appraisal: Evaluation Interviews Slide 18 Effective Evaluation Interviews Slide 19 Effective Evaluation Interviews (contd) Slide 20 Human Resource Management Feedback Slide 21 Legal Aspects of Performance Appraisal Slide 22 • Talent Management is emerging within the HR field. It involves identifying and developing specific individuals who are seen as having high potential -- It comes from recognizing that employees who are top performers are not necessarily the people with the highest potential for working at key organizational positions or areas, or for moving up in the organization. -- Tools such as the 9 box grid provide for assessments of employee potential along with performance, and guide conversations around which employees to target for remedial training, employee development, and future promotion. IMPLICATIONS OF APPRAISAL • Training Raters -- Raters need knowledge of the system and its purpose -- Require training not only focused on rating errors, but also on the cognitive aspect of the rating process i.e., ability to make judgments based on relatively complex information • The Recency Effect—occurs when ratings are strongly affected by the employee’s most recent actions (either good or bad) • Contrast Errors – occur when raters compare employees to each other rather than to a performance standard EVALUATION INTERVIEWS • Evaluation interviews are performance review sessions that give employees feedback about their past performance or future potential – Can use tell-and-sell, tell-and-listen, or problem-solving approaches -- The interview should be a positive, performance-improving dialogue GUIDELINES FOR EFFECTIVE PERFORMANCE EVALUATION INTERVIEWS 1. Emphasize positive aspects of employee performance 2. Tell each employee that the evaluation session is to improve performance, not to discipline 3. Provide immediate positive and developmental feedback in a private location, and explicitly state that you are providing performance feedback 4. Review performance formally at least annually and more frequently for new employees or those who are performing poorly 5. Make criticisms specific, not general and vague 6. Focus criticisms on performance, not on personality characteristics 7. Stay calm and do not argue with the person being evaluated 8. Identify specific actions the employee can take to improve performance 9. Emphasize the evaluators willingness to assist the employee’s efforts and to improve performance 10. End the evaluation session by stressing the positive aspects of the employee’s performance and reviewing plans to improve performance HUMAN RESOURCE MANAGEMENT FEEDBACK The performance appraisal process also provides insight into the effectiveness of the human resource management function. -- If poor performance is widespread, many employees are excluded from internal promotions and transfers, or they may be terminated. -- Unacceptably high numbers of poor performers may indicate errors elsewhere in the human resource management function (e.g., the selection process may be screening candidates poorly, job analysis information may be incorrect, or the HR department may be failing to respond to the challenges of the external environment) LEGAL ASPECTS OF PERFORMANCE APPRAISAL A performance appraisal form is a legal document. -- Raters must use only performance criteria that are relevant to the job, and performance criteria must be valid and used consistently. -- Nonrelevant criteria can be avoided if performance standards are established through a thorough job analysis and recorded in a job description. -- A reasonable time frame must be set for performance improvement with the length of time depending on the job. -- Well-documented performance shortcomings can avoid serious embarrassments, and feedback interviews have been viewed favourably in court or with arbitrators. ANSWERS TO REVIEW AND DISCUSSION QUESTIONS 1. Discuss the differences between performance management and performance appraisal. Performance management looks at a number of variables of which performance appraisal is just one. Performance management looks at how organization strategy can be met through the performance of every member within the organization. 2. Explain why Wal-Mart is a good example of effective performance management. What did management do to make it one of the most efficient and profitable companies in the world? One of the reasons of Wal-Mart's success was the introduction of bar codes, which allowed tracking of items for instant feedback on sales. 3. What are the uses of performance appraisals? Figure 8-2, p. 304, summarizes the uses of performance appraisals. It may be worth indicating to students that the performance appraisal also provides feedback on how well the human resource department is performing. 4. Suppose a company for which you work uses a rating scale. The items on the scale are general personality characteristics. What criticism do you have of this method? A rating scale is very subject to rater biases. When the scale uses general personality characteristics, biases are more likely to appear. Furthermore, it is very unlikely that personality characteristics bear much of a relationship to actual job performance. 5. If you were asked to recommend a replacement for the rating scale, what actions would you take before selecting another appraisal technique? Students should seek a performance appraisal technique that is job-related, practical, and standardized. Additionally, the method selected should consider the nature and availability of performance standards and measures that are available for evaluating performance. 6. Why are direct and objective measures of performance usually considered superior to indirect and subjective measures? Direct measures are based on actual observation of job behaviour, i.e., the supervisor has opportunities to see an employee in action. Indirect measures are substitutes for direct observation, e.g., a test substituted for direct observation. Objective measures are verifiable, e.g., counting mistakes. Subjective measures are not verifiable, e.g., the opinion of a supervisor regarding the performance of an employee. Opinions may be biased. 7. If your organization were to use subjective measures to evaluate employee performance, what instructions would you give evaluators about the biases they might encounter? The various biases should be reviewed and their causes discussed. Evaluators should be instructed to justify their evaluations based on the employee's actual performance. 8. Describe how you would conduct a typical performance evaluation interview. The three major approaches to conducting a performance evaluation interview outlined in the chapter include tell-and-sell, tell-and-listen, and problem solving. Figure 8-11, p. 320, provides specific guidelines for conducting the interview itself, regardless of the approach selected. 9. How do the results of performance appraisals affect other human resource management activities? Performance appraisals can be viewed as providing feedback on the entire range of human resource activities discussed in this book. Poor performance may be indicative of just that -- poor employee performance. However, it may reveal problems in the way the human resource department defines its objectives; meets external challenges; deals with employment equity; helps with job design; collects job analysis information; conducts human resource plans; handles recruitment; proceeds through the selection process; provides orientation, training, and development; assists with career planning; deals with change in the organization; or designs and implements performance appraisal techniques. 10. Describe the characteristics of a 360-degree performance appraisal. A 360-degree performance appraisal is a combination of self, peer, supervisor, and subordinate feedback, sometimes even from customers. Advantage: different perspectives. It proves very useful in flat organizations, with fewer managers who have to supervise more employees, making it more difficult to assess individual performance. 11. In what ways is the Balanced Scorecard approach a useful performance appraisal instrument? The balanced scorecard concept combines the performance measures of the total organization instead of relying on independent measures of its parts. It provides a view or an organization’s overall performance by integrating financial measures with other key performance indicators around customer satisfaction, internal organizational processes and growth, learning, and innovation. 12. What is the relationship between a performance appraisal system and a selection system? No selection system can be validated without a valid performance appraisal. Validation would be done by correlating selection scores (interview, tests) with performance scores. 13. Explain the legal aspect of a performance appraisal system. Under what circumstances could it become a crucial document? Dismissals are often based on grounds of low performance. Many low performance assessments are poorly documented and based often on the opinion of a supervisor, which have no validity in a court of law or with an arbitrator. However, if low performance is well documented, management usually has no problems ridding itself of a poor performer. It could also be a crucial document if an organization has to prove that its selection system is valid. This can be done only with a valid performance appraisal system. 14. What are the minimum requirements of a due process appraisal system? 1. Valid criteria 2. Consistent use 3. Reasonable time frame 4. Well-documented See p.321 for details. . ANSWERS TO CRITICAL THINKING QUESTIONS 1. If the dean of your faculty asked you to serve on a committee to develop a performance appraisal system for evaluating the faculty, what performance criteria would you identify? Of these criteria, which ones do you think are most likely to determine the faculty members' success at your school? What standards would you recommend to the dean regardless of the specific evaluation instrument selected? To students, the primary performance criterion is teaching ability. If students are encouraged, they may identify many individual criteria that comprise effective teaching. Examples might include fair grading, reasonable tests, interesting classroom presentations, freedom from annoying mannerisms, and others. The criteria most likely to determine success at your college or university are probably unique to your institution, and depend on whether the school is considered to have a teaching, research, or community service orientation. In turn, this orientation affects the specific standards a student is likely to recommend. 2. Your organization has dismissed an employee for not performing up to par. She sues the company for unjust dismissal, claiming that the company's performance appraisal instrument is not a valid assessment tool, since no woman had served on the committee responsible for developing it. Are you able to persuade a judge that despite the fact that no woman served on the committee, your appraisal instrument is valid? The employee would have to demonstrate that the instrument is gender sensitive, i.e., discriminates against women (or men), which would be unusual. It is much more common that biases originate from raters. However, the issue here is whether the performance appraisal instrument is valid, because no woman was involved in its development. If proper development rules have been followed (see Figure 8-4, p. 307), and if job-relevant performance criteria were developed, then it really does not matter whether women were involved in the instrument's development or not. 3. Can one performance appraisal instrument be used for all levels in an organization, i.e., executives, middle managers, and employees? Why or why not? It is unlikely that one instrument could be used effectively for different job groups. The text emphasizes the importance of job-relevant performance criteria which, by definition, would be different for each job. It is true that often one performance appraisal systems is used for different groups, but this is at the expense of its validity. It is possible to use one part of a performance appraisal instrument for different jobs, if the latter contain similar job elements, e.g., managers may have common decision making skill requirements. The other part of the appraisal instrument would then use job specific criteria. Such elements the above jobs do not have in common. As an example, a manufacturing manager probably requires some manufacturing-related specific skills, which would be different from the skill requirements of a marketing manager, but both jobs may have some common management/supervisory skills. ETHICS QUESTION Comments to Instructors There is no right or wrong answer to this question. It is for class discussion purposes. WEB RESEARCH Comments to Instructors These exercises have been designed for students to demonstrate their computer and Internet skills to research the required information. Answers will vary. INCIDENT 8.1: THE MALFUNCTIONING REGIONAL HUMAN RESOURCE DEPARTMENT Incident Comments The main value in this incident is that it identifies some of the potential problems that can emerge if careful attention is not paid to the organization's performance appraisal process. The incident also underscores the interdependency of various human resource activities. 1. What do you think is the major problem with the performance appraisal process in the regional office? In a word, feedback. The survey indicates that many employees felt feedback was insufficient. Still others apparently never saw their evaluations, another sign of limited feedback. Even those who did see their evaluations felt the standards were irrelevant and unfair, an indication that these employees do not understand the standards. 2. What major problems do you think exist with the regional office's (a) job analysis information? (b) human resource planning? (c) training and development? (d) career planning? Job analysis information may not have identified accurate performance standards; if those standards were accurate, they may be outdated. Human resource planning may not be addressing the organization's future human resource needs, as indicated by the perceived high proportion of outsiders used to fill job openings. Training and development may be insufficient, since few employees showed any improvement on their performance ratings from one year to another. Career planning also may be insufficient, since employees complain about a lack of career opportunities within the organization. EXERCISE 8-1: DEVELOPING A PERFORMANCE APPRAISAL SYSTEM 1. Define at least three performance criteria for the instructor. To students, the primary performance criterion is teaching ability. Individual criteria that comprise effective teaching may include fair grading, reasonable tests, and providing effective classroom presentations. Additional criteria may include research and publication results, and community involvement. The criteria most likely to determine success at your college or university are probably unique to your institution, and depend on whether the school is considered to have a teaching, research, or community service orientation. 2. How would you measure them so that the results would be useful for a tenure and promotion decision? Objective, job-related performance measures should be used to ensure that tenure and promotion decisions are made in a non-discriminatory manner. 3. Which type of instrument or method do you suggest? Why? Recommended methods or instruments include use of BARS to assess teaching ability. BARS is job-related and could be standardized for the instructor job. 360-degree performance appraisal could also be used to gather diverse perspectives including student assessments of performance. Other criteria such as fair grading and reasonable tests could be assessed through the use of performance tests or the use of an assessment center to provide objective assessments. Criteria such as research and publication could be measured using specific, quantifiable results e.g. number of publications, research funds generated, etc. using a MBO approach. Consideration should also be given to the balanced scorecard approach as a means to integrate and balance the institution’s overall performance measures. 4. Who should be the appraisers? Appraisers may include members of the Faculty Evaluation Committee, supervisors (i.e., Dean or Associate Dean), students, other instructors and/or teaching experts from a university or college teaching/education discipline. 5. Time permitting, compare the results in your group with those of another group. Students should compare performance criteria, instruments, and who was chosen to be raters. CASE STUDY: MAPLE LEAF SHOES LTD., PERFORMANCE APPRAISAL ISSUES Answers to Discussion Questions 1. You are Tim Lance. Please write an assessment of Maple Leaf Shoes' performance evaluation system. The strength of the present evaluation system is that it is easy to use and that 10 percent of the supervisors are trying, seriously trying, to make it work as intended. The weaknesses, however, are numerous. For the majority of supervisors, the system is not worth the paper it is written on. First, the criteria are vague and the standards are unspecified. Second, the supervisors do not seem to have received any training in using it or had its importance impressed upon them. Third, the employees generally receive no feedback and have indifferent or mixed feelings about the system. Fourth, the senior management do not consult the evaluation results for promotions or raises. So it has become a useless system carried on by untrained people. 2. What changes would you recommend to the company? Why? The only recommendation here is for the company to formally dissolve the system and start training the supervisors in the art and science of performance appraisal. Supervisors should hold periodic conferences with their subordinates to give them feedback as to how they are doing. At the next stage, perhaps a formal evaluation form with specific criteria may be devised, and a format such as BARS or MBO can be established in consultation with the supervisors and employees. In the third stage, an attempt might be made to link salary decisions to performance appraisal. The linkage should perhaps be a qualitative one rather than a quantitative one. CASE STUDY: CANADIAN PACIFIC AND INTERNATIONAL BANK Answers to Discussion Question 1. How can the bank develop a system that will be legally foolproof? The appraisal system should accurately reflect the performance criteria and standards of the job, and the ratings should indicate the level of performance in the appraisal itself. One way to make it foolproof is to document the specific behaviours that are deemed as unacceptable, and why they are considered mistakes relative to the specified standards. This can be done through BARS, which is based on writing in specific critical incidents that indicate whether the employee meets the performance standards on each performance criteria. This means that the relevant performance dimensions and standards should be determined a priori (i.e., what behaviours would indicate mistakes and why), and that they be incorporated in the BARS measure. This system allows for documenting concrete, overt behaviours, which reflect the relevant performance requirements of the job, and thus is legally defensible. Solution Manual for Canadian Human Resource Management: A Strategic Approach Hermann F. Schwind, Hari Das, Terry H. Wagar, Neil Fassina, Julie Bulmash 9780071051552, 9781259066665