New Developments in Performance Management

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INTRODUCTION

The primary purpose of appraising and coaching employees is to instill in them the desire for continuous improvement. Yet the outcome of many performance appraisals is frequently a decrease rather than an increase in performance. Among the reasons for this decrease is the belief by employees that they are being evaluated on the wrong things, by the wrong person; that is, the person who is evaluating them lacks objectivity, and hence is not “fair.” Moreover, the feedback that is given to them is

LEGAL ISSUES

Human resource management came under legal scrutiny in 1964 with the passage of Title VII of the Civil Rights Act in the United States (U.S.). This act makes it illegal to allow sex, age, race, religion, or ethnicity to influence decisions regarding the recruiting, training, upgrading, compensating, demoting, or terminating of an employee. Legal issues are increasingly problematic for organizations as people are becoming more aware of their legal rights. In fact, there has been a 100% increase

THE APPRAISAL INSTRUMENT

The appraisal instrument is the foundation for appraising and coaching employees. It is the basis for making administrative decisions in a uniform and consistent way. As noted earlier, a primary reason for the frequent failure of a performance appraisal to bring about a positive change in a person's behavior is that many employees view the instrument as measuring the “wrong things.” Designing the “right” performance appraisal instrument improves both the accuracy of the instrument and employee

SOURCES OF APPRAISAL: WHO SHOULD COACH?

An appraisal instrument, no matter how carefully developed, is only as good as the people who use it. Hence the question: Who is the ideal coach? Is the answer the boss? What about one's peers or subordinates? How about people coaching themselves?

Appraisal Accuracy

Appraisals are more often a reflection of the appraiser's overall biases than they are of the performance of an employee. Appraisers from different populations (e.g., supervisors vs. subordinates) attach different weights to the same aspects of performance that they observe as a result of their different perspectives in the organization. A massive study involving over 4000 managers with appraisals from at least two supervisors, two peers, two subordinates plus self-appraisals indicated that the

ONGOING COACHING

In the past five years, there has been a shift in emphasis within the private and public sectors from performance appraisal to performance management, from being a performance appraiser to becoming a performance coach. The shift is from a discrete activity to one that is performed on an ongoing process. The shift is from being primarily an evaluator to becoming a developer of people.

Cyclical year-round performance management (i.e., feedback, analyzing results, setting goals) effectively

CONCLUSION

Peter Drucker noted that in the 20th century, great leaders gave great answers; in the 21st century, great leaders will ask great questions. In organizational settings, as is the case for their counterparts in professional sports, leaders may not necessarily be as adept or knowledgeable of the areas requiring coaching, as is the person who is being coached. Thus, becoming an expert on “the answers” is now, and will continue to be, all but impossible. The effective coach is one who questions and

SELECTED BIBLIOGRAPHY

Literature relevant to the material outlined here includes: G. P. Latham, D. Skarlicki, D. Irvine, and J. Siegel, “The Increasing Importance of Performance Appraisals to Employee Effectiveness in Organizational Settings in North America,” in C. Cooper and I. Robertson (Eds.), International Review of Industrial and Organizational Psychology, 1993, 87–132; G. P. Latham and S. D. Latham, “Overlooking Theory and Research in Performance Appraisal at One's Peril: Much Done, More to Do,” in C. Cooper

Gary Latham is the Secretary of State Professor of Organizational Effectiveness in the Joseph Rotman School of Management at the University of Toronto, 105 St. George Street, Toronto, Ont., Canada M5S 3E6 and a past president of the Canadian Psychological Association. He is a Fellow of the American Psychological Association, American Psychological Society and the Academy of Management (Tel.: +1 416 978 4916; fax: +1 416 978 4629; e-mail: [email protected]).

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Gary Latham is the Secretary of State Professor of Organizational Effectiveness in the Joseph Rotman School of Management at the University of Toronto, 105 St. George Street, Toronto, Ont., Canada M5S 3E6 and a past president of the Canadian Psychological Association. He is a Fellow of the American Psychological Association, American Psychological Society and the Academy of Management (Tel.: +1 416 978 4916; fax: +1 416 978 4629; e-mail: [email protected]).

Joan Almost is a doctoral student in the Faculty of Nursing at the University of Toronto. She has a Bachelor's of Science in nursing and a Master's of Science in nursing from the University of Western Ontario in London, Ont., Canada. Joan is interested in the antecedents and consequences of intragroup conflict in the work environment of hospital nurses.

Sara Mann is a doctoral student at the Rotman School of Management at the University of Toronto. Prior to that, she worked for three years in the private sector, while completing her M.B.A. at McMaster University. Sara is interested in job performance, performance appraisal and performance management, in addition to studying low wage and low skilled workers. She also has an Honours B.Com. from McMaster University.

Celia Moore spent seven years in the nonprofit and private sector, consulting to organizations on women's advancement and creating supportive work environments, before returning to pursue a Ph.D. at the Rotman School of Management. She is interested in how power structures influence organizational life, and the content and outcomes of abusive supervision. She has a B.A. from McGill University and an M.P.A. from Columbia University.

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