Performance management midterm study notes
Performance Management Mid-Term
Chapter 1
Performance management – is a continuous process of identifying, measuring, and developing the performance of individuals and teams and aligning performance with strategic goals of the organization
Performance appraisal – is the systematic description of an employee’s strengths and weaknesses
Performance management contribution – a performance management system can make the following important contributions
1. Motivation to perform is increased
2. Administrative actions are more fair and appropriate
3. Employees become more competent
4. There is better protection from lawsuits
5. Supervisors views of performance are communicated more clearly
6. Organizational change is facilitated
7. Motivation, commitment, and intentions to stay in the organization are enhanced
Disadvantages’/dangers or poorly implemented PM systems
1. Increased turnover
2. Use of misleading information
3. Lowered self esteem
4. Wasted time and money
5. Damaged relationships
6. Decreased motivation to perform
7. Employee burnout and job dissatisfaction
8. Increased risk of litigation
9. Varying and unfair standards and ratings
Tangible returns – An employee’s compensation, includes cash compensation (i.e. base pay, cost of living and merit pay, short term incentive, and long term incentive and benefits (i.e. income protection, work/life focus, tuition reimbursement, and allowances)
Relational returns – also known as intangible returns, which include recognition and status, employment security, challenge work, and learning opportunities
Reward system is the set of mechanisms for distributing both tangible and intangible returns as part of an employment relationship
Base pay – Given to employees in exchange for work performed
Cost of living adjustments (COLA) – imply the same percentage increase for all employees regardless of their individual performance
Contingent pay – referred to as merit pay is given as an addition to the
Chapter 1
Performance management – is a continuous process of identifying, measuring, and developing the performance of individuals and teams and aligning performance with strategic goals of the organization
Performance appraisal – is the systematic description of an employee’s strengths and weaknesses
Performance management contribution – a performance management system can make the following important contributions
1. Motivation to perform is increased
2. Administrative actions are more fair and appropriate
3. Employees become more competent
4. There is better protection from lawsuits
5. Supervisors views of performance are communicated more clearly
6. Organizational change is facilitated
7. Motivation, commitment, and intentions to stay in the organization are enhanced
Disadvantages’/dangers or poorly implemented PM systems
1. Increased turnover
2. Use of misleading information
3. Lowered self esteem
4. Wasted time and money
5. Damaged relationships
6. Decreased motivation to perform
7. Employee burnout and job dissatisfaction
8. Increased risk of litigation
9. Varying and unfair standards and ratings
Tangible returns – An employee’s compensation, includes cash compensation (i.e. base pay, cost of living and merit pay, short term incentive, and long term incentive and benefits (i.e. income protection, work/life focus, tuition reimbursement, and allowances)
Relational returns – also known as intangible returns, which include recognition and status, employment security, challenge work, and learning opportunities
Reward system is the set of mechanisms for distributing both tangible and intangible returns as part of an employment relationship
Base pay – Given to employees in exchange for work performed
Cost of living adjustments (COLA) – imply the same percentage increase for all employees regardless of their individual performance
Contingent pay – referred to as merit pay is given as an addition to the