Chapter 10 Performance Appraisal and Career Management Learning Objectives After studying this chapter, the student should be able to: 1. Describe the purposes of performance appraisal in organizations. 2. Summarize the performance appraisal process in organizations. 3. Identify and describe the most common methods that managers use for performance appraisal. 4. Discuss other general issues involving performance appraisal in organizations. 5. Describe the nature of careers in organizations. 6. Discuss human resource management and career management. 7. Identify and discuss basic career-development issues and challenges. Chapter Outline Opening Case: “Investing in Talent” Some businesses see wages and salaries as an expense. Others see employees as vital resources that give them a real competitive advantage. Darden Restaurants falls clearly in the second set. The firm has about 180,000 employees and owns 1,900 restaurants. It was recently named the second-best firm to work for in America by Fortune magazine. It has lower than the industry’s average employee turnover, and many Darden top managers started at the bottom and worked themselves up the corporate ladder. The firm invests heavily in talent development. It offers extensive career planning to all employees along with an array of other meaningful benefits: a credit union that provides low-interest loans to employees, strong health-care packages, and substantial training and development opportunities. Darden recently announced plans to open 500 new restaurants in the next 5 years and hire almost 50,000 new employee. Introduction Virtually all businesses must focus some degree of attention on performance management. Performance appraisal systems are designed to provide organizations with the information to manage performance improvement. To develop employees to their full potential, however, organizations also must help employees manage their careers. Further, performance appraisals help provide employees with information on how they can best manage their own careers. Performance appraisal is the specific and formal evaluation of an employee to determine the degree to which the employee is performing his or her job effectively. Some organizations use the term performance appraisal for this purpose, and others prefer to use different terms such as performance evaluation, performance review, annual review, employee appraisal, and employee evaluation. The outcome of this evaluation is some type of score or rating on a scale. A related topic, performance management, refers to the more general set of activities carried out by the organization to change (improve) employee performance. Although, performance management typically relies heavily on performance appraisals, performance management is a broader, more encompassing process and is the ultimate goal of performance appraisal activities. I. Why Organizations Conduct Performance Appraisals Most people involved in performance appraisals tend to dissatisfied with them. This is true for the person being rated and the person doing the rating. But the fact that performance appraisals are so widely used in spite of this dissatisfaction is a strong indicator that managers believe that the performance appraisals are important and that they have a meaningful role to play in organizations. Organizations also hope to achieve several goals with performance appraisals. A. The Importance of Performance Appraisal The results of performance appraisals serve many important functions in organizations, and this is why they are still prevalent despite their problem. For example, appraisal results provide a benchmark for assessing the extent to which recruiting and selection processes are adequate; that is, appraisal results help managers assess the extent to which they are indeed recruiting and selecting the most appropriate employees. Performance appraisals are important for legal reasons. Organizations must be able to demonstrate that their promotions, transfers, terminations, and reward allocations are based on merit (or the lack of, thereof), as opposed to discriminatory factors such as gender or race. Appraisals play a role as part of the larger performance management process. The goal of performance management is to improve employee performance. Part of this process is letting employees know how well they are currently doing so they can correct their deficiencies, capitalize their strengths, and improve their overall contributions to their jobs. Finally, performance-appraisal information should be the basis of incentive pay systems and other performance-management interventions designed to improve motivation and performance. B. Goals of Performance Appraisal A basic goal of any appraisal system is to provide a valid and reliable measure of employee performance along all relevant dimensions. In other words, the appraisal results should reflect the true picture of who is and who is not performing well, and they should indicate the areas of specific strengths and weaknesses for each person being rated. Although it is extremely difficult to assess the extent to which an appraisal system accomplishes these goals, it is probably just as important that employees perceive appraisals to be fair and accurate. Although, documentation is another important goal of any appraisal process, the ultimate goal for any organization is to improve performance on the job. Accomplishing this goal requires that employees receive useful and accurate feedback about their job performance as well as guidance on how to improve. The goals also relies on the organization’s ability to make decisions about things such as raises and promotions on the basis of performance on the job. II. The Performance Appraisal Process Several tasks are necessary for the performance-appraisal process to be successful. Some should be done by the organization, some by the raters (the individuals who will be conducting the performance appraisal), and in many organizations by the ratee (the individuals whose performance is evaluated). In addition, follow-up and discussion should accompany the process. Figure 10.1 illustrates the actual performance-management system of one major corporation. Although some firms might make minor modifications to reflect their philosophies more closely, these general steps are almost always followed. A. The Role of the Organization The organization, primarily through its human resource (HR) function, develops the general performance-appraisal process for its managers and employees to use. One of the first considerations relates to how the information gained from performance appraisal is to be used. For example, will it be used for developmental feedback only? Or will decisions about merit pay or other outcomes be based on these ratings as well. The organization also generally determines the timing of performance appraisals. Most organizations conduct formal appraisals once a year, although some organizations conduct appraisals twice a year or even more frequently for new employees. The most common alternatives are for appraisals to be done on the anniversary date of each individual employee’s hiring (which spreads out the need to do appraisals throughout the year but makes budgeting for raises more problematic) or for all appraisals throughout the organization to be conducted during a specified period of time each year (which makes budgeting and comparisons easier but requires a great deal of work during a short period of time). The organization is also responsible for ensuring that clear and specific performance standards are available to managers. The organizations should also ensure that these standards are communicated carefully to the employees. B. The Role of the Rater The rater (traditionally and most typically the supervisor of the employee being appraised) plays the largest role in the appraisal process. The organization is responsible for making sure that all raters have clear performance standards, but raters have to help develop and learn those performance standards. When making these decisions, the rater must consider the context in which performance occurs so that any extenuating circumstances can be taken into consideration. On a day-to-day basis, an employee behaves, or performs, on the job and exhibits many behaviors that might be relevant to performance on that job. The rater’s task is to collect information about these behaviors and translate that information into ratings themselves. Because most formal appraisals are conducted only once a year, the rater must also somehow store this information in memory, recall what has been stored at the appropriate time, and use the information to provide a set of ratings. Once the ratings have been completed, it is also usually the rater who must then communicate the results and consequences of the appraisal to the ratee. When the results are somewhat negative, this task may be uncomfortable, and it is often stressful for managers. This communication process should also include goals for the future and a performance plan for helping the employee improve, thus adding a positive element. Finally, the rater is ultimately responsible for preparing the employee to perform at desired levels. C. The Role of the Ratee Although attempts to improve appraisals often focus on the organization or the rater, the rate also has responsibilities in the appraisal process. First, for performance appraisals to work most effectively, a ratee should have a clear and unbiased view of his or her performance. Problems can occur during the appraisal process if there is disagreement between the rater and the ratee, so it is essential that both parties have all the information they can collect about the ratee’s performance. This approach may require the ratee to acquire information about the performance of co-workers and requires the ratee to gain an understanding about how his or her behavior affects performance. This approach should also allow the ratee to be more receptive to be more receptive to feedback from the rater (especially if it is somewhat negative), which in turn makes it more likely that the ratee will change his or her behavior in response to that feedback. D. Who Performs the Performance Appraisal? Another important aspect of performance appraisal is the determination of who conducts the appraisal and what information will be used. The most common appraisers are shown in Figure 10.2. Supervisors are perhaps the most frequently used source of information in performance appraisal. The assumption underlying this approach is that supervisors usually have the most knowledge of the job requirements and the most opportunities to observe employees performing their jobs. At the same time, it should also be recognized that supervisors are not necessarily a perfect source of information. A supervisor may have been promoted from another part of the organization and thus may have never performed the jobs that she or he is supervising and, in some job settings (such as outside sales jobs), the supervisor may not really have an adequate opportunity to observe employees performing their work. Supervisors are not always motivated to give the most accurate ratings they can. Supervisors might also choose to be inaccurate in their ratings because they feel threatened by a particular subordinate and want to prevent him or her from getting ahead, or because the supervisor wants to get rid of a problem subordinate and tries to do so by getting him or her promoted into a different department. In addition, supervisors may be concerned about team member relations and decide to rate all team members the same, regardless of what they deserve, to avoid jealousy or conflict. Peers, colleagues, and co-workers represent other important potential sources of information for performance appraisal systems. An advantage of using peers in such a process is that, by definition, they have expert knowledge of job content and may also have more opportunities than the supervisor to observe the performance of a given worker on a day-to-day basis. Of course, friendship, group norms, and other personal factors may intervene in this situation. Subordinates are an especially important source of information when the performance of their own manager is being evaluated, and this information is perhaps most useful when the appraisal is focused on the manager’s leadership potential. Of course, a major problem with using subordinates as input to the performance-appraisal process is that this approach may influence the manager’s behavior in the sense that she or he may be more focused on making workers happy and satisfied than in making them perform at a high level. Occasionally, appraisal information is obtained from the employee themselves. Although few (if any) organizations rely on self-evaluations for decision-making, it is often useful for the ratee to consider his or her own performance as part of the overall appraisal process. Finally, in some service organizations (such as Chili’s and Red Lobster), customers are formally brought into the process when they fill out feedback forms or mail surveys after using the services of the organization. In any event, it is important to realize that each source of performance-appraisal information is subject to various weaknesses and shortcomings. Organizations that use 360-degree appraisals gather performance information from people on all sides of the manager: above, beside, and below, and so forth. This approach allows them to match the strengths and weaknesses, the benefits and shortcomings, from each perspective and gain a more realistic, overall view of a person’s true performance. But this approach means that the manager has to reconcile different feedback and that the organization probably needs to use this ratings for feedback and development purpose only. If decisions are to be based on these evaluations, then the organization would have to decide how to weight the ratings from different sources. The rater must observe and then remember the relevant performance information over the entire rating time, but memories are not perfect. Fortunately, there may be a rather simple solution to this problem, such as having raters keep performance diaries (or performance logs). Performance diaries (electronic or otherwise) record the relevant performance information when the behavior actually occurs, so that the rater does not have to rely on imperfect memory to provide ratings. E. What Gets Rated? Many organizations choose to rate traits in conducting appraisals. Traits are abstract properties of individuals that generally cannot be observed directly but can be inferred from behavior. Ratings of attitudes, leadership, and initiatives are particularly popular traits for appraisals. Rating traits allows an organization to use the same appraisal instrument for all or most employees, and this approach is based on the assumption that similar traits underlie effective performance for all jobs. However, an analysis of court cases involving performance appraisals suggests that trait-based appraisals are the most difficult to defend because the courts tend to see them as more subjective than other systems. Also, feedback concerning rating traits is often less instructive and helpful than other types of feedback. In some cases, organizations base their appraisals on behaviors. These appraisals are still subjective, but they require the rater to evaluate behaviors that he or she can physically observe, so they seem more objective. Reliance on behaviors can also lead to an emphasis on processes underlying effective performance. Providing feedback about behaviors and processes can be instructive and useful because ti can help employees to understand how to improve their performance. The final commonly encountered option is to rate performance based on outcomes. Focusing on outcomes has the advantage of emphasizing the most objective measure of performance available. Also, these systems are usually tied to specific goals which have added benefit. Feedback can be relatively straightforward and easy to interpret (i.e., one did or did not meet one’s sales goal), although feedback is even more useful if it includes information on how to improve future performance. It is important to set the right goals (goals that help the organization achieve its objectives), and it is important to monitor the means by which employees meet their goals (i.e., to make sure that they act ethically and legally). F. Who Should be Rated? With work teams, the organization must decide whether to evaluate individual performance or team performance, and this issue can become quite complicated. If individuals are rated and rewarded based on their individual performance, they have less reason to cooperate with other team members to accomplish the team’s goals. In other team settings, though, it is critical that team members work together toward a common goal. In these cases, it is critical that performance be measured and rewarded only at the team level. Some employees are uncomfortable with this kind of system and believe they should be recognized for their individual efforts. Also, in such settings, it is possible for one employee to relax and let other team members carry the workload. This free-rider problem is a real challenge to work teams. III. Methods for Appraising Performance By their very nature, most appraisals are subjective—that is one must rely on a rater’s judgment of an employee’s performance. As a result, performance appraisals are also prone to problems of bias and rating errors. Raters tend to be uncomfortable passing judgment on employees, and employees generally do not care to be judged in this way. The simplest answer is that, for most jobs, and for all managerial jobs, straightforward objective measures of performance do not exist. Therefore a great deals of effort has been spent in trying as to make these subjective evaluations meaningful and as useful as possible.
HR in the 21st Century: When is Acceptable Unacceptable? For year, General Electric has used a ruthlessly efficient method for evaluating the performance of its employees. The system is widely known informally as the ABC approach. Each year, managers are required to sort all of their subordinates into one of three categories. The best, as much as 10 percent of the workforce, makes up the A group; the next set as much as 80 percent includes those in the middle and is called the B group (this large group subsequently gets broken down into smaller groups). The lowest 10 percent, though, is called the C group—and these workers lose their jobs even if they are generally seen as exhibiting acceptable performance! It is no surprise, then, that a few other companies have tried to follow in GE’s footsteps. Goodyear was one of the first. Another big company that experimented with—but quickly dropped—the ABC method was Ford Motor Company. The firm paid handsomely for its brief experiment when it agreed to pay $10.6 million to settle an age-discrimination suit filed by a group of fired employees. One catalyst for the quick demise of the ABC system was when AARP, an advocacy group for Americans 50 years of age and older committed itself to providing legal resources to those suing Goodyear company.
A. Ranking Methods Versus Rating Methods Probably the simplest method of performance appraisal is the simple ranking method, which involves having the manager simply rank-order, from top to bottom or from best to worst, each member of a particular work group or department. A variation on the ranking method is the paired-comparison method of performance appraisal, which involves comparing each individual employee with every other individual employee, one at a time. The forced-distribution method involves grouping employees into predefined frequencies of performance ratings. An advantage of this system is that it results in a normal distribution of performance ratings, which many people see as inherently fair. Also, from the organization’s perspective, if employees are to receive merit pay increases, a force distribution ensures control over how much money is spent on merit pay. On the other hand, the distribution that is being imposed may have no relationship to the true distribution of performance in the work group. B. Specific Rating Methods A graphic rating scale simply consists of a statement or question about some aspect of an individual’s job performance. For example, one common set of responses to a graphic rating scale is strongly agree, agree, neither agree nor disagree, disagree, and strongly disagree. These descriptors or possible answers are usually arrayed along a bar, line, or similar visual representation, and this representation is marked with numbers or letters that correspond to each of the descriptors. Figure 10.3 illustrates a graphic rating scale. The rater assigns a score for each dimension rated and then can sum these to form a measure of overall performance, or the form might apply add an overall performance scale. The specific dimensions measured by graphic rating scales should be based on job analysis, but this approach is not typically taken. Instead, to have a single instrument that can be used with all or most employees in an organization, graphic rating scales typically measure performance relative to traits or behaviors such as initiative or problem-solving capabilities or even attitudes. A somewhat different type of rating instrument involves the use of the critical incident method. A critical incident method is simply an example or instance of especially good or poor performance on the part of the employee. Organizations that rely on this method often require raters to recall such instances on the job and then describe what the employee did (or did not do) that led to success or failure. Thus, this technique provides rich information for feedback to the employee and defines performance in fairly clear behavioral terms. In other cases, managers are asked to keep a log or diary in which they record example or critical incidents that they believe reflect good and bad performance on the part of individual employee. An advantage of the critical incident method is that it allows managers to provide individual employees with precise examples of behaviors that are believed to be both effective and less effective performance. On the other hand, the critical incident requires considerable time and effort on the part of managers because they must maintain a log or diary of these incidents. In addition, the method may make it difficult to compare one person with another. Another method for appraising performance involves the use of a behaviorally anchored rating scales (BARS). BARS appraisal systems (also known as behavioral expectation scales) represent a combination of the graphic rating scale and the critical incident method. They specify performance dimensions based on behavioral anchors associated with different levels of performance. Figure 10.4: presents an example of a BARS developed by one of the authors to measure one dimension of teacher performance: interpersonal skills. A BARS system has the significant advantage of dramatically increasing reliability by providing specific behavioral examples to reflect effective and less effective behaviors. Because the managers themselves develop the scales, they tend to be more committed to using them effectively, and the process of developing the scales helps raters develop clearer ideas about what constitutes good performance on the job. The process of developing a truly effective BARS is extremely expensive and time consuming, so these scales are rarely used in their pure form. A related measure of performance is the behavioral observation scale (BOS). Like a BARS, a BOS is developed from critical incidents. Rather than using only a sample of behaviors that reflect effective or ineffective behavior, a BOS uses substantially more of the behaviors to define specifically all the measures necessary for effective performance. A second difference between a BOS and a BARS is that a BOS allows managers to rate the frequency with which the individual employee has exhibited each behavior during the rating period. The manager then averages these ratings to calculate an overall performance rating for the individual. Although, the BOS approach is an improvement over the limitations of the BARS approach, it takes even more time and can be even more expensive to develop. It might be reasonable to evaluate an employee based on outcomes. In fact, another popular method of appraising performance that does focus on outcomes is a goal-based or management-by-objectives (MBO) system. In MBO system, a subordinate meets with his or her manager, and together they set goals for the subordinate for a coming period of time, often one year. These goals are usually quantifiable, objective, and almost always written down. During the year, the manager and subordinate meet periodically to review the subordinate’s performance relative to attaining goals. At the end of the year, a more formal meeting is scheduled. Specifically, the kinds of behaviors specified in the goal-setting process are exactly what the employee will tend to focus on, so it is critical that the organization really wants to encourage these particular behaviors. One relatively new innovation in performance appraisal methods is the use of computer monitoring. Employees can now be monitored electronically to see how they spend their time and how productive they are. These systems are now used widely with customer-service representatives and reservations clerks. C. Which System Is Best? The ultimate reason for conducting performance appraisal is to improve performance. Therefore, it is difficult to suggest which system is best because it is difficult to predict how a set of employees will react to a given system. The HR manager must take what is known about each type of system and decide how well the system fits into the culture and operations of the organization. IV. Other Issues in Performance Appraisal A. Rating Errors Several rating errors have been identified that can affect performance appraisals. One such error is known as contrast error; it occurs when one compares people against one another instead of against an objective standard. One of the major criticisms that had been leveled against graphic rating scales is that they were especially prone to a series of distributional errors. A distributional error occurs when the rater tends to use only one part of the rating scale. Sometimes the distributional error may be severity, which occurs when the manager gives low ratings to all employees by holding them to an unreasonably high standard. The opposite error is leniency, which occurs when a manager assigns relatively high or lenient ratings to all employees. A central tendency distributional error occurs when the manager tends to rate all employees as average, using only the middle part of a rating scale. A different type of error that may occur is what is known as either halos or horns. A halo error occurs when one positive performance characteristic causes the manager to rate all other aspects of performance positively. The opposite of a halo error is a horns error. In this instance, the manager tends to downgrade other aspects of an employee’s performance because of a single performance dimension. As a result, organizations often do work to reduce rating error. One method for error reduction is to train managers to overcome these weaknesses, even when that means nothing more than pointing out to managers their tendency to commit distributional errors or contrast errors. Rater-accuracy training is usually more involved than that, however. Specifically, an approach known as “frame of reference training” attempts to emphasize for managers the fact that performance is multidimensional in nature and to train those managers with actual content of various performance dimensions. It is critical, therefore, that organizations do whatever they can to reward raters for doing a good job in performance appraisal by reinforcing that these appraisals are important. B. Contextual Performance Contextual performance refers to tasks an employee does on the job that are not required as part of the job but that nevertheless benefit the organization in some way. These behaviors might include willingly staying late at work to meet deadlines, helping co-workers get their work done, and performing any other task that benefits the general good of the organization. These behaviors are also often referred to as organizational citizenship behaviors. On the other hand, they are not required of anyone. As a result, some, especially union members, argue that it is inherently unfair to evaluate someone on something that is not part of his or her job. Perhaps, the assertion is true, but it seems that consciously or not, raters do take these behaviors into account in making appraisal decisions. C. Evaluating the Performance Appraisal Process Clearly, the organization must monitor the extent to which it is conducting its performance appraisals effectively, adequately, and appropriately. As with selection, performance appraisals must be free from bias and discrimination. Beyond these stipulations, however, the performance appraisal system must also help the organization identify its strongest performers, so that they can be appropriately rewarded and efforts can be made to retain them. It should also identify low performers so that their performance deficiencies can be remedied through training or other measures. Because performance appraisal feeds into the performance-management process, and because the ultimate goal of this process is to improve performance on the job, managers should be able to see real improvement in organizational performance if the process is working. This improvement may take the form of fewer errors in production, fewer returns in sales, improved performance appraisals, or lower levels of absenteeism or turnover. D. Legal Issues in Performance Appraisal When performance appraisals are used as the basis for human resource decisions (as in the case of merit pay or promotion decisions), they are considered the same as any other test under the law. Therefore, appraisals that show evidence of disparate impact must be validated the same as any selection technique. Performance-appraisal decisions are known to suffer from various types of biases and problems. The ratings based on traits tend to have ambiguous standards, and so they are probably more prone to biases. It is difficult to validate appraisal decisions using the methods. Therefore, it is critical that the organization can demonstrate that the ratings provided are in areas that are “job related,” that raters can observe the behaviors they are rating, and that raters received some training to help them do a better job with rating performance. V. The Nature of Careers A. The Meaning of Career One can define a career as the set of experiences and activities in which a person engages related to his or her job and livelihood over the course of a working life. Most people have historically thought of the various components making up a person’s career as having some degree of interrelation. This perspective stems from the fact that, in the past at least, people generally wanted to work for a single organization and spent most of their work life within that organization. Presumably, if they performed effectively and were successful at their work, they advanced up the organizational hierarchy. In recent times, however, conceptualizations of careers have become considerably more general. Because of organizational downsizing efforts and innovations in strategies such as outsourcing and shared services, considerably more change has occurred in the work patterns of individuals than in the past. More and more frequently, people are taking breaks from their work. These breaks include sabbaticals, discretionary periods of unemployment, and similar activities that make a positive contribution to a person’s overall work life but do not involve formal employment by an organization. B. Traditional Career Stages One traditional view, shown in Figure 10.5, suggests a typical individual progresses through four career stages: The first stage is called exploration. During this period in people’s lives, they try to identify the kind of work they are interested in doing. This period of a typical person’s career starts in a person’s mid- to late teens and lasts through the mid- to late twenties. The second stage of a typical career is called the establishment stage. During this period, an individual begins to create a meaningful and relevant role for herself and the organization. The maintenance stage is the next stage in a typical career. During this period, the individual begins to reach a level in the organization that optimizes his talents or capabilities. Finally, the fourth stage of a typical career is the disengagement stage. During this period, the individual gradually begins to pull away from her work in the organization, her priorities change, and work may become less important to her. C. New Views of Career Stages Of course, in the contemporary era of downsizing and layoffs, sometimes people go through these four stages of career development in a relatively short period of time. Many experts agree that even though the traditional model of careers summarized above still has conceptual value, new perspectives on careers are better reflections of today’s realities. Some experts, for instance, argue that people should think about career ages (how long a person has been on a job) rather than career stages or even chronological age. This perspective also suggests that employees face different types of challenges at each step. At the beginning of one’s career there are issues about making the transition from a student to an employee. This involves questions about one’s self-identity, and these questions also influence decisions about exactly what career someone plans to enter. Individuals may choose to enter certain careers because they are considered “hot,” or because of general economic trends. They also choose careers because they are more consistent with their own interests, education and values. Once a career has been chosen and the person begins to build on that career, the issues that emerge often deal with trying to establish the proper balance between work and family life. It is at this point in one’s career when these issues becomes more salient and the individual must deal with the potential trade-off between working hard to build and advance a career and establishing lasting relationships with others, including building a strong family life. The decision as to how best to advance one’s career in terms of moving is, of course, also tied to the growing importance of balancing work and family. By the time a person reaches some sort of midcareer point, there are often questions concerning, and new questions about self-identity emerge (sometimes leading to a so-called midlife crisis). D. Issues Facing Older Workers and the Decision to Retire Persons age forty and older are protected by the Age Discrimination in Employment Act, but the fact remains that many people assume that job performance decline with age. In fact, the evidence regarding such declines is rather mixed and generally weak. In any event, eventually older workers must confront the decision to retire. In truth, however, the decision is not to retire is not as simple as it once was. The person can actually retire, take a pension, and begin some nonwork activities (take the traditional view of retirement), but this is becoming less common. More commonly, individuals retire and then take on full-time work at other organizations, or they retire and take on part-time work or work as consultants either at their former employers or elsewhere. Individuals are more likely to retire when they have the financial resources needed to maintain their preretirement lifestyles, and are more likely to retire when their health makes continuing to work excessively burdensome. Individuals are also more likely to retire when their spouses have retired. Many people tend to continue with some type of “bridge work,” and these people generally adjust well to retirement. Also, individuals who have structured leisure activities and those who do volunteer work tend to adjust better to retirement. But, one of the important factors related to adjustment is one’s health. It is important to realize that these and any other issues relating to the decision to retire are likely to become much more important for HR managers as the workforce continues to ages and as lives and productive work careers expand. VI. Human Resource Management and Career Management Part of the responsibility for career planning resides with the organization, and the feedback from the appraisal process is a critical factor in this process. But the individual her- or himself must also play a role in this process. This section examines the organizational and individual perspectives on careers as shown in Figure 10.6. A. Organizational and Individual Perspectives on Careers Clearly, it is in the organization’s best interests to take an active role in career management for people in the firm, and for this reason career management is often part of the larger performance-management process. The organization can take steps from the outset to facilitate career management. If an organization does indeed help its employees plan and manage their careers more effectively, it can expect to find itself with a larger pool of talented individuals who are generally more satisfied and motivated. On the other hand, if an organization does a poor job with managing the careers of people in the organization, then it will find that the quality of its talent pool might vary in inefficient ways. In addition, the workforce of such organization might be more dissatisfied and unmotivated because people are not given appropriate promotion opportunities or are not placed in appropriate positions. When the organization needs to transfer people or lay people off, it may be unsure about who can handle the new assignments. Individuals obviously have an important stake in their own careers. They experience most directly the benefits and rewards of successful careers and incur the costs and frustrations of less successful careers. People who understand and carefully monitor their careers are likely to understand the reasons behind their successes and failures. In addition, people who accept responsibility for managing their careers will also be better prepared to deal with unanticipated career setbacks such as job losses and demotions. Unfortunately, many people are surprisingly uninformed about and uninvolved in their own careers. B. The Importance of Career Planning Usually, HR managers represent the organization in the career-planning process. In general, most career-planning systems involve the steps shown in Figure 10.7. In the individual assessment phase, individuals need to analyze carefully what they perceive to be their own abilities, competencies, skills, and goals. At the same time, the HR manager should be developing a potential career path an employee many take up the corporate ladder. Communication is also important part of this process. The final step in effective career planning is career counseling. As the term suggests, career counseling involves interaction between an individual employee or manager in the organization and either a line manager or a human resource manager. Even though career planning is important to both organizations and individuals, and effective career planning benefits both, everyone should also recognize that career planning has limitations and potential pitfalls. For example, no amount of sophisticated forecasting can predict with absolute certainty the level of talent, expertise, motivation, or interest a given individual will have in the future. The organization’s future human resource needs can also change. Similarly, individuals sometimes find new opportunities at unexpected times. Unanticipated mergers and acquisitions can also result in changes in career opportunities. VII. Career-Development Issues and Challenges Regardless of the career stages for individual employees, many organizations who are sincerely interested in more effective career management for their employees deal with and address various issues and challenges. A. Career-Counseling Programs Formal career-counseling programs usually take the form of workshops, conferences, and career development centers. In some cases, the organization establishes general-purpose career-counseling programs that are available to all employees. They may also create special programs targeted for certain categories of employees. Organizations also have informal counseling programs. Much of this counselling takes the form of one-to-one interactions between an employee and his or her supervisor and typically occurs during the performance-appraisal period. B. Dual-Career and Work–Family Issues The entire process of career planning must take into consideration the fact that another career must often be managed simultaneously. Perhaps related to this trend is the growing concern over balancing family needs with the demands of work. First, concerns over family-friendly work practices (such as childcare, eldercare, and flexible work schedules) have an influence over the choices that employees make concerning where to work. It is also increasingly clear that concerns at home and with the family affect an employee’s behavior at work. Relieving these pressures allows the employee to concentrate more on the job and thus better realize his or her career potential. Finally, evidence shows that work stressors influence family stress, which in turn is related to long-term health. As the workforce becomes more diverse, organizations thus will have to recognize dual-career issues and concerns over work–family balance will become increasingly important factors for determining career success and must be considered as part of career management. C. Evaluating Career-Management Activities The ultimate goals of career management are to have employees reach their full potential at work, enjoy productive and satisfying work careers, and then make a successful transition to retirement. But as employees are increasingly unlikely to spend their entire careers in a single organization, success in retirement is much more likely to be a function of the individual’s own career-management efforts. Therefore, career-management activities can be judged only by their success at any one point in time. If an employee is satisfied with his or her career at this point, then career management must be judged successful up to that point. Although organizational career-management efforts are important, the successful management of one’s career depends heavily on the employee’s efforts to assess his or her own abilities and interests accurately and to formulate a plan for what a successful career should look like. Instructor Manual for Human Resources Angelo Denisi, Ricky Griffin 9781285867571
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