Expert answer:Reading ?’s
Solved by verified expert:READING 10.1: Effective Leadership Behavior: What We Know and What Questions Need More AttentionREADING 10.2: Managing the Life Cycle of Virtual TeamsWhat are the advantages and disadvantages of 360 degree feedback systems? How should an organization decide whose feedback to seek? (Critical Thinking Question 3, page 455, in the textbook.) Prepare a 600 word paper.READING 11.1: Exposing Pay SecrecyREADING 11.2: The Development of a Pay-for-Performance Appraisal System for Municipal Agencies: A Case StudyCOMPLETE Visit the Web site http://www.salary.com. Click on “salary trends” and then prepare a brief report on the latest developments in compensation practice. (Exercise 3, page 505, in the textbook.) Prepare a 600 word paper.
Reference:
Mello, J. A. (2015). Strategic human resource management (4th ed.). Boston, MA: Cengage.
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442 | Part 2
Implementation of Strategic Human Resource Management
evaluation is biased toward events and behaviors that happened immediately prior to the time the
evaluation is completed, with little or no consideration given to events occurring earlier in the evaluation period; central tendency error, in which the evaluator avoids the higher and lower ends of
performance assessment ratings in favor of placing all employees at or near the middle of the scales;
and leniency or strictness error, in which employees are generally all rated well above the standards
(making the supervisor look effective and/or attempting to appease employees) or well below the
standards (making the supervisor look demanding). Personal biases and organizational politics may
have a significant impact on the ratings employees receive from their supervisors.
There may also be a number of reasons why supervisors might intentionally inflate or deflate
employee ratings. For example, an empathetic supervisor might inflate the rating given to an
employee having difficulties with personal matters. Conversely, a supervisor who sees a subordinate as a threat to the supervisor’s job might intentionally deflate performance ratings. The performance management process can be inherently political in many organizations. In most instances,
when supervisors conduct performance evaluations, they personally have job and career issues at
D
stake in the ratings they give to their employees.
In addition to these errors, supervisors
A and subordinates may agree on levels of performance
but disagree on the causes for such performance. Research has shown that supervisors are much
more likely to place the responsibilityI for poor performance with the employee, whereas the
employee is likely to cite organizationalLfactors outside his or her control for performance deficiencies.6 Employees are much more likely to attribute their own job success to their own behaY as easy job assignments or assistance from others.
viors rather than to external factors, such
For these reasons, organizations have been moving away from traditional means of perfor,
mance feedback where only one assessment of an employee’s performance is conducted and completed by the immediate supervisor. In addition to supervisory input, performance feedback can
also be sought from peers, subordinates, customers, and/or the employee. Feedback from peers
R but peer feedback systems must be administered with
can be useful for developmental purposes,
care. They can be very political and self-serving
in organizations where employees compete with
Y
each other either formally or informally. When a peer has personal gain or loss at stake in the
A hardly be expected to exercise objectivity. Competitive
assessment of a colleague, he or she can
organizational cultures could cause a peer evaluation system to raise havoc throughout the organiN
zation by escalating conflict. This could have detrimental effects on morale and teamwork. Peer
feedback systems can only be effective when political considerations and consequences are minimized (meaning that peers have nothing at stake in their assessments of colleagues) and employees
have a sense of trust in the organization2and its performance measurement system.
6
7
Peer Assessment at Coffee & Power
5
Coffee & Power is a small San Francisco, California—based start-up where individuals can
“buy and sell” small jobs. As part of B
its performance management and rewards process, each
of its 15 full- and part-time employees is annually given 1,200 stock options to distribute to
U
their coworkers in whatever way they see fit. Options may be given entirely to one individual
or distributed to as many other coworkers as an employee decides. The only restrictions are
that employees cannot give shares to themselves or to the company founders.
The system is designed to reward employee contribution, which might not always be
recognized by management and also holds workers accountable for managing relationships
with coworkers, a critical success factor in small start-ups where employees work closely
together over long hours. Because the company is still privately held, the options only hold
paper value at the present time. However, individual employee cash bonuses are tied in to
this allocation system. Employees learn of the options and bonuses they receive but not
who rewarded them. The owners prepare a distribution curve of all bonus grants without
attaching individual names to allow employees see the highest and lowest bonuses as well as
where they fit individually within the company distribution.7
9781305234758, Strategic Human Resource Management, Fourth Edition, Mello – © Cengage Learning All rights reserved No distribution allowed without express authorization
Chapter 10
Performance Management and Feedback | 443
Performance feedback from subordinates can provide insights into the interpersonal and
managerial styles of employees and can assist the organization in addressing employee developmental needs, particularly for high-potential employees. Subordinate evaluations are also excellent
measures of an individual’s leadership capabilities. However, subordinate evaluations can suffer
from the same political problems as peer evaluations. They can also be used by either the supervisor or subordinates to retaliate against each other. However, in assessing an employee’s ability to
manage others, valuable performance data pertaining to behavior and skills can be uniquely provided from subordinates.
Because our economy is becoming increasingly service oriented and because many organizations emphasize customer service as a key competitive and strategic issue, customers are increasingly being sought for feedback on employee performance. In most instances, customers can
provide the feedback that is most free from bias: They usually have little or nothing at stake in
their assessment of employees. Feedback from customers can be critical for facilitating employee
development and determining appropriate rewards because it is most clearly related to the organiD
zation’s bottom line.
Self-evaluations allow employees
A to provide their own assessments and measures of their own
performance. Although it should be obvious that self-evaluation can be self-serving, allowing
employees to evaluate their ownI performance has at least two important benefits for organizations.
First, it can be motivating because
L it allows the employee to participate in a critical decision that
impacts his or her employment and career. Second, the employee can provide insights, examples,
and a more holistic assessmentYof performance than that provided by supervisors or peers, who
generally spend a limited time observing and interacting with each employee. Individual employ,
ees are far more likely to remember significant examples of effective performance than their supervisors, and they can often provide specific examples of behaviors and outcomes rather than the
generalities often cited by supervisors. Individual employees may also be able to provide perforR may be unaware.
mance information of which others
Performance management Y
systems that solicit the input and advice of others besides the immediate supervisor are referred to as multirater systems or 360-degree feedback systems. These systems
A
can be beneficial because the organization
and employee gain multiple perspectives and insights into
the employee’s performance. Each of these sources of performance feedback can balance each other
N
relative to any inherent organizational politics that may be at play in the process. However, there is a
cost to such systems: They can be very time consuming and laborious to administer. Data from
numerous sources need to be analyzed, synthesized, and, occasionally, reconciled. There is inherently
a cost–benefit aspect to any type2of multirater performance feedback system. The more performance
data collected, the greater the overall
6 facilitation of the assessment and development of the employee.
At the same time, larger volumes of data are costly to collect and process. At some point, the collec7
tion of additional data will undoubtedly
provide diminishing returns.
5
B
Performance Management at Otis Elevator
U Otis Elevator is the world’s largest manufacturer, installer,
Farmington, Connecticut–based
and servicer of elevators, escalators, moving walkways, and other vertical and horizontal passenger transportation systems. Otis’s products are offered in more than 200 countries worldwide, and the company employs more than 63,000 people. Among its many installations are
the human transport systems of the Eiffel Tower, Sydney Opera House, Vatican, ON Tower
(Toronto), and Hong Kong Convention Center.
For years, the company had an ineffective performance management system that was
excessively time consuming and inspired little confidence among employees or managers. In
revamping its performance management, Otis moved toward a system that provided performance feedback based on critical strategic competencies related to the company’s new focus
on project teams. For this realignment into project teams to be successful, managers were
required to demonstrate specific competencies in both team leadership and project management as well as remain accountable for the financial and operating results of projects.
9781305234758, Strategic Human Resource Management, Fourth Edition, Mello – © Cengage Learning All rights reserved No distribution allowed without express authorization
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Chapter 10
Performance Management and Feedback | 445
The third basis for performance feedback is to assess outcomes or results. Results-based measures focus on specific accomplishments or direct outcomes of an employee’s work. These might
include measures of number of units sold, divisional profitability, cost reduction, efficiency, or
quality. Unlike traits and behaviors, results-based measures are often criteria that can be measured
objectively. More important, results are generally more meaningful to the organization due to their
more direct correlation with performance relating to the divisional or organizational strategy.
Although results may be a more significant measure of performance than traits or behaviors,
there are some imitations to the utilization of results-based feedback measures. First, it may be difficult to obtain results for certain job responsibilities. Any tasks that involve dealing with the future
(i.e., forecasting and planning relative to competition or assessing other dimensions of the external
environment) will not show immediate results nor will the quality or accuracy of the work be assessable until sometime in the future. Second, results are sometimes beyond an individual employee’s
control. Budget cuts and resource availability may be at the discretion of others, but they may
impact the employee’s ability to generate specific performance objectives. Third, results—taken by
themselves—focus on the ends D
or outcomes while ignoring the means or processes by which the
results were obtained. An employee
A might achieve targeted goals but do so in an unproductive way
by incurring excessive costs, alienating coworkers, or damaging customer relations. Finally, results
I into some critical areas—such as teamwork, initiative, and openare limiting in that they fail to tap
ness to change—of performanceLfor modern organizations. The need for organizations to remain
flexible and responsive to change in their environments requires them to have internal processes to
Y measures would ignore these processes.
facilitate internal change. Results-based
As can be seen, all three types of performance measures have some limitations. However, the
,
strengths of one approach can offset the limitations of the others. Nothing prevents an organization
from utilizing any combination of traits, behaviors, and results-based measures in attempting to
develop a performance feedback system that is in sync with the organization’s strategic objectives.
In short, the decision of what toR
evaluate is contingent upon what the organization seeks to achieve.
In addition to traits, behaviors,
Y and outcomes, one area that employers are beginning to measure is the job performance competencies the employee displays. Competencies can often be
closely tied to an organization’sA
strategic objectives and therefore provide a more critical measure
of performance—as well as more valuable feedback for employees in their careers. A competencyN
based performance management program can take a tremendous amount of time to establish,
must be communicated clearly to employees, and should also tie in with the organization’s reward
structure. A recent survey conducted by the Society for Human Resource Management found that
69 percent of employers utilize2
organization-wide competency models and 61 percent have devel10
oped organization-wide competency
6 models, which allow variation in competencies by job level.
Core competencies should be limited in number to those most central to the organization’s suc7
cess, and corresponding opportunities
should be established by which employees can obtain and
build on these competencies. Exhibit 10.5 presents a sample competency model for managers that
5
cuts across organization size and industry.
B
U
Competency-Based Performance and Development at Capital One
Capital One, one of the world’s fastest growing consumer credit companies, utilizes a
competency-based performance management system, known as the Success Profile, which is
designed to support the organization’s strategy and long-term growth objectives. The Success
Profile is designed to provide specific measurable performance feedback as well as to allow
employees to plan their own professional development activities. The Success Profile contains
23 competencies that are seen as critical to the mission and objectives of Capital One. These
competencies are grouped together into five access factors, as illustrated in Exhibit 10.6. Each
competency is measured on a behavioral-based rating scale containing up to four stages.
Employees receive detailed performance feedback and work with their managers to develop
a personal development plan for the future.
9781305234758, Strategic Human Resource Management, Fourth Edition, Mello – © Cengage Learning All rights reserved No distribution allowed without express authorization
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458 | Part 2
Implementation of Strategic Human Resource Management
behavior items for a questionnaire is usually influenced by
preconceptions about effective leadership or the desire to
develop a measure of key behaviors in a leadership theory.
The sample of respondents is seldom systematic, and the
accuracy of most behavior questionnaires is seriously reduced
by respondent biases and attributions. Finally, the basic
assumptions of factor analysis (high correlation among
examples from the same category) do not apply very well
when a behavior category includes several alternative ways
to achieve the same objective and a leader needs to use only
one or two of them. The limitations of this method may help
to explain the substantial differences among leader behavior
taxonomies.
Another common method for identifying distinct
behavior categories is to have subject matter experts sort
behavior descriptions into categories based on similarity of
purpose and content, but this method also has limitations.
The selection of categories may be biased by prior assumptions and implicit leadership theories, and disagreements
among subject matter experts are not easily resolved. A
behavior taxonomy is more likely to be useful if it is based
on multiple methods and is supported by research on the
antecedents and outcomes of the behaviors.
From 1950 to 1980 most of the research on leadership
behavior was focused on explaining how leaders influence the
attitudes and performance of individual subordinates. In the
early survey research, factor analysis of leadership behavior
questionnaires found support for two broadly defined behavior categories involving task-oriented and relations-oriented
behaviors. Different labels were used for these metacategories, including initiating structure and consideration
(Fleishman, 1953; Halpin & Winer, 1957), productioncentered and employee-centered leadership (Likert, 1961),
instrumental and supportive leadership (House, 1971), and
performance and maintenance behavior (Misumi & Peterson,
1985). The specific behaviors defining the two metacategories varied somewhat from one taxonomy to another,
and some relevant behaviors were not adequately represented
in any of these taxonomies. Finding the two meta-categories
was a good start, but researchers failed to conduct systematic
follow-up research to build on the initial discoveries.
Leadership behaviors directly concerned with encouraging and facilitating change did not get much attention in the
early leadership research. Change behaviors are more relevant for executives than for the low-level leaders studied in
much of the early research, and they are more important for
the dynamic, uncertain environments that have become so
common for organizations in recent decades. In the 1980s
one or two specific change-oriented behaviors were included
in questionnaires used to measure charismatic and transformational leadership, but leading change was still not explicitly recognized as a distinct meta-category. Researchers in
Sweden and the United States (Ekvall & Arvonen, 1991;
Yukl, 1999; Yukl, Gordon, & Taber, 2002) eventually found
evidence for the construct validity of a leading-change metacategory. The classification of change-oriented behavior as a
distinct and meaningful meta-category provided important
new insights about effective leadership.
In most of the early research on leadership behavior the
focus was on describing how leaders influence subordinates
and internal activities in the work unit. Leader behavior
descriptions were usually obtained from subordinates who
had little opportunity to observe their leaders interacting
with people outside the work unit. Thus, it is not surprising
that few leadership studies examined external (“boundaryspanning”) behavior, and only a few leader behavior taxonomies included any external behaviors (e.g., Stogdill,
Goode, & Day, 1962). However, in the late 1970s and early
D descriptive research on managers found that it is
1980s,
important
to influence bosses, peers, and outsiders as well
A
as subordinates (Kaplan, 1984; Kotter, 1982; Mintzberg,
I and later research on teams found that boundary1973),
spanning
behavior is important for effective team perforL
mance (e.g., Ancona & Caldwell, 1992; Joshi, Pandey, &
Y 2009; Marrone, 2010). The importance and uniqueness
Han,
of external leadership behavior provides justification for clas,
sifying it as a separate meta-category.
R
Y
The hierarchical taxonomy proposed in this article describes
A
leadership
behaviors used to influence the performance of a
team, work unit, or organization. The four meta-categories
N
and their component behaviors are shown in Table 1. Each
Hierarchical Behavior Taxonomy
meta-category has a different primary objective, but the
objectives all involve determinants of performance. For
2
task-oriented
behavior the primary objective is to acc …
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