I once taught a legal writing course for approximately 78 first year law school students.
The school required that the average final grade point average for the class as a whole be between 2.75 and 3.0 on a 4.0 scale. This is not an uncommon practice for some institutions, particularly for large classes.
In your own words, describe the advantages and disadvantages of using the forced distribution appraisal method for college professors.
You should begin with a review of the forced distribution method and describe how the use of this method would impact the rating of students as well as their college professors.
need asapfollow directions
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Performance Management and
Appraisal
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This chapter gives an overview of the performance appraisal process and the different tools and methods available. The main topics covered include the performance management process, appraisal methods, appraisal performance problems and solutions, and the appraisal interview.
Despite lots of attention, money, and effort, performance appraisals remain an area with which few managers or employees are satisfied.
The following questions are worth considering with respect to why some managers and employees are dissatisfied.
Is it just that we don’t have a good enough system yet?
Is there an intrinsic problem with performance appraisals?
Is it just human nature to dislike them?
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Learning Objectives
Describe the appraisal process.
Define performance management and discuss how it differs from performance appraisal.
Develop, evaluate, and administer at least four performance appraisal tools.
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After studying this chapter, you will be able to:
1. Describe the appraisal process.
2. Define performance management and discuss how it differs from performance appraisal
3. Develop, evaluate, and administer at least four performance appraisal tools.
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Learning Objectives
Explain and illustrate the problems to avoid in appraising performance.
Perform an effective appraisal interview.
Explain how to “segment” employees for appraisal and reward purposes.
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After studying this chapter, you will be able to:
4. Explain and illustrate the problems to avoid in appraising performance.
5. Perform an effective appraisal interview.
6. Explain how to “segment” employees for appraisal and reward purposes.
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Describe the appraisal process.
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For this learning objective, we will discuss the need to have a performance appraisal process, provide continuous feedback and how to manage performance.
Effective appraisals begin before the actual appraisal, with the manager defining the employee’s job and performance criteria. Defining the job means making sure that you and your subordinate agree on his or her duties and job standards and on the appraisal method you will use.
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The Basics of Performance Management and Appraisal
The performance appraisal process steps
Sets work standards
Assesses performance
Provides feedback to the employee
Figure 9-1 sample
evaluation survey
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Performance appraisal means evaluating an employee’s current and/or past performance relative to his or her performance standards. You may equate appraisal forms like Figure 9-1 with “performance appraisal,” but appraisal involves more than forms. Many employers still base pay and promotions on employee appraisals.
Appraisals play an integral role in the employer’s performance management process. The appraisal lets the boss and subordinate develop a plan for correcting any deficiencies while reinforcing those things the employee does correctly. Appraisals are a useful career planning tool.
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Five reasons:
Used for pay, promotion, and retention decisions
Links performance management to company goals
The manager can correct deficiencies and reinforce strengths
With appraisals employee’s can review career plans
Training needs are identified
Performance Management and Appraisal
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9
Aligning the employee’s efforts with the job’s standards should be a continuous process. When you see a performance problem, the time to take action is immediately. Similarly, when someone does something well, the best reinforcement comes immediately, not six months later.
Performance management includes continuously adjusting how an organization and its team members do things. Team members who need coaching and training receive it, and procedures that need changing are changed.
We have briefly discussed the process of appraising performance results the steps and the need to do so.
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Pay and promotions
Planning
Career planning
Training and development
Ongoing feedback
Teamwork and change
Review
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Employers frequently use appraisals as a base for pay and promotions. Improvement and career development planning also originate with an effective appraisal system. In addition, training and development activities are based on the appraisal system. Finally, providing continuous feedback and making improvements to how employees and employers do things contributes to organizational goals and success.
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9-8
Define performance management and discuss how it differs from performance appraisal.
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Performance management has to do with creating an organizational system that is fair, effective, and widely understood by all. The goal of the system is to support the strategic aims of the firm by establishing a valid and reliable process connecting the employees to it.
Performance appraisal involves:
setting work standards,
assessing actual performance relative to those standards, and
providing feedback to the employee.
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Performance management definition
The continuous process of:
Identifying
Measuring
Developing performance
of individuals and teams
Aligning performance with the organization’s goals
Performance Management
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Performance management involves defining, measuring, motivating, and developing
the employee’s goal-oriented performance on a continuing basis.
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Performance Management
Six Elements
Direction sharing
Goal alignment
Ongoing performance monitoring
Ongoing feedback
Coaching and developmental support
Recognition and rewards
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Performance management’s six basic elements as follows:
● Direction sharing means communicating the company’s goals throughout the company
and then translating these into doable departmental, team, and individual goals.
● Goal alignment means having a method to help managers and employees to see the link
between their goals and those of their department and company.
● Ongoing performance monitoring usually includes using computerized systems that measure
and then e-mail progress and exception reports based on the person’s progress toward
meeting his or her performance goals.
● Ongoing feedback includes both face-to-face and computerized feedback regarding
Progress toward goals.
● Coaching and developmental support should be an integral part of the feedback process.
● Recognition and rewards keep the employee’s goal-directed performance on track.
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Information Technology Supports Performance Management
Assign financial and nonfinancial goals
Inform all employees of their goals
Use IT-supported scorecard software
Continuously take corrective action
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Many companies use information technology to automate performance management and to monitor feedback, and correct deviations in real time.
●Assign financial and nonfinancial goals to each team’s activities along the strategy map
chain of activities leading from the team’s activities up to the company’s overall strategic
goals. (For example, an airline measures ground crew aircraft turnaround time in terms
of “improve turnaround time from an average of 30 minutes per plane to 26 minutes per
plane this year.”)
● Inform all employees of their goals.
● Use IT-supported tools like scorecard software and digital dashboards to continuously
display, monitor, and assess each team’s and employee’s performance. (We discussed
these in Chapter 3, Human Resource Management Strategy and Analysis.) Figure 9-2
Presents an employee’s online performance management report.
● Take corrective action on a continuous basis.
At the Hotel Paris, both Lisa and the firm’s CFO were concerned by the current disconnect between (1) what the current appraisal process was focusing on and (2) what the company wanted to accomplish in terms of its strategic goals. They wanted the firm’s new performance management system to help breathe life into the firm’s strategic performance. To see what they did, read the case on pages 288–289 of this chapter.
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IMPROVING PERFORMANCE:
HR Practices Around the Globe
GDAS makes products for the military, industrial, and commercial markets
Use scorecard reporting system
Team
Divisional
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Performance Management at General Dynamics Armament Systems (GDAS)
GDAS uses multiple Scorecards to display performance metrics, such as for team and for divisional performance. The Scorecards allow GDAS to maintain all of its crucial performance data in one system so managers can easily access the information anytime via the Intranet. The Scorecards provide GDAS with approximately 450 performance reports and charts. To produce these charts manually would require 13 full-time employees.
Instead, the Performance Measures Reporting System, at a cost of $1 million, generates the reports and charts automatically.
Discussion Question: Describe three examples of scorecard displays GDAS might show on their performance management system’s digital dashboard-type display.
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Defining the Employee’s Goals and Performance Standards
Manager assess:
Attaining numerical goals
Meeting quality and quantity criteria
Mastering competencies
Managers goals are SMART:
Specific
Measurable
Attainable
Relevant
Timely
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Both performance appraisal and performance management function by comparing “what should be” with “what is.” Managers use one or more of three bases—goals, job dimensions, and competencies—to establish ahead of time what the employees’ end results “should be.” Whichever you use, remember that employees need and expect to know ahead of time on what basis their managers will appraise them.
Employees appraised as having the requisite level of each skill are qualified to fill the position.
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IMPROVING PERFORMANCE:
HR as a Profit Center
Ball Corporation supplies packaging to manufacturers worldwide
Trained plant leaders on:
How to set performance goals
Track daily goal attainment
Use scorecards
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Setting Performance Goals at Ball Corporation
Plant employees received special coaching and training to ensure they had the skills required for achieving the goals. According to management, within 12 months the plant increased production by 84 million cans, reduced customer complaints by 50%, and obtained a return-on-investment of more than $3 million.
Discussion Question: Explain what performance management behaviors the Ball program included.
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IMPROVING PERFORMANCE:
HR Tools for Line Managers and Entrepreneurs
1. Should a manager tell employees what their
goals are or let them participate in setting the goals?
2. Write a short paragraph that addresses the question: “Why is it not a good idea to simply tell employees to ‘do their best’ when assigning a task?”
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How to Set Effective Goals
1. Assign specific goals. Employees who receive specific goals usually perform better than those who do not.
2. Assign measurable goals. Put goals in quantitative terms and include target dates or deadlines. If measurable results will not be available, then “satisfactory completion”—such as “satisfactorily attended workshop”—is the next best thing.
3. Assign challenging but doable goals. Goals should be challenging, but not so difficult that they appear unrealistic.
4. Encourage participation. Managers often face this question: Should I tell my employees what their goals are, or let them participate with me in setting their goals?
The evidence suggests that participatively set goals do not consistently result in higher performance than assigned goals, nor do assigned goals consistently result in higher performance than participative ones. It is only when the participatively set goals are set higher than the assigned ones that the participatively set goals produce higher performance. Because it tends to be easier to set higher standards when your employees participate, participation tends to lead to improved performance.
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Who Should Do the Appraising?
Peer appraisals
Rating committees
Self-ratings
Appraisal by subordinates
360-degree feedback
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Who should do the appraising? The immediate supervisor is usually in the best position to observe and evaluate the subordinate’s performance. He or she also is typically responsible for that person’s performance.
Peer appraisals are becoming more popular with firms using self-managing teams.
Rating committees consist of multiple raters, typically the employee’s immediate supervisor and three or four other supervisors.
Self-ratings tend to be higher than supervisor or peer ratings although input from the subordinate is always to be encouraged.
Appraisal by subordinates is also known as upward feedback. In this instance, subordinates anonymously rate their supervisor’s performance.
FIGURE 9-3 Online 360-Degree Feedback
360-degree feedback has become more widely used. Ratings are collected from the employee’s supervisors, subordinates, peers, and occasionally, internal or external customers. The best advice is that firms should carefully assess costs, train those giving feedback thoroughly, and not rely solely on 360-degree feedback.
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Review
Performance management’s definition
The six basic elements
Improving performance examples
Use IT to automate performance management
Performance standards
SMART goals
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We discussed Performance management’s definition and the six basic elements.
Many companies use information technology to automate performance management and to monitor, feedback,
and correct deviations in real time.
We reviewed the company specific Improving Performance examples.
We also discussed SMART goals that managers use with performance appraisals.
Lastly, we discussed who should do the appraisal.
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Review
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9
Use a check-list for performance reviews.
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Develop, evaluate, and administer at least four performance appraisal tools.
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Next, we will discuss and interpret performance appraisal tools.
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Techniques for Appraising Performance
Graphic rating scale method
What to rate?
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The graphic rating scale method is the simplest and most popular performance appraisal technique. First, a scale is used to list a number of traits and a range of performance for each. Then the employee is rated by identifying the score that best describes his/her performance level for each trait.
Managers must decide which job performance aspects to measure. Such aspects include generic dimensions, actual job duties, or behaviorally recognizable competencies.
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Performance Appraisal Tools
Alternation ranking
Paired comparison
Forced distribution
Critical incident
Narrative forms
Behaviorally Anchored Rating Scales (BARS)
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The Alternation Ranking Method ranks employees from best to worst on a specific trait, choosing highest, then lowest, until all are ranked.
The Paired Comparison Method involves ranking employees by making a chart of all possible pairs of employees for each trait. The manager then indicates which one is the better employee of the pair.
Forced Distribution Method – Predetermined percentages of employee ratings are placed in various performance categories, similar to grading on a curve.
Critical Incident Method – A supervisor keeps a record of uncommonly good and/or undesirable examples of an employee’s work-related behavior. The supervisor then reviews the record with the employee at predetermined times.
The Narrative Forms method involves rating the employee’s performance for each performance factor needed on the job. Written examples and an improvement plan is provided. The process then aids the employee in understanding where his/her performance was good or bad focusing on problem solving.
Behaviorally Anchored Rating Scales (BARS) is a method that combines the benefits of narratives, critical incidents, and quantified scales. It does so by anchoring a scale with specific behavioral examples of good or poor performance. The advantages of BARS include accuracy, clearer standards, feedback, independent dimensions, and consistency.
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Performance Appraisal Tools
Mixed standard scales
Management by objectives (MBO)
Computerized and web-based performance appraisal
Electronic performance monitoring (EPM)
Conversation Days
Using Multiple Methods
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Mixed Standard Scales are similar to BARS but generally list just three behavioral examples or standards for each of the three performance dimensions.
Management by Objectives (MBO) – The manager sets specific measurable goals with each employee and then periodically discusses the employee’s progress toward them. The process consists of six steps:
set organizational goals
set departmental goals
discuss
define expected results
conduct performance reviews
provide feedback
Having a conversation is focused on stretched goals and career interests there are no ratings.
Rating forms often merge multiple methods.
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Review
Alternation
Pairs
Distribution
Incidents
Narratives
BARS
Scales
MBO
Computerized
EPM
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For this learning objective, we have discussed various ranking and rating approaches. The alternation ranking requires managers to rank employees from high to low while paired comparisons examines employees one pair at a time. Forced distribution is similar to grading on a curve while critical incidents require managers to keep detailed notes throughout the year on each person’s critical behaviors. A narrative is similar to critical incidents in that it requires him or her to keep ongoing notes but in narrative format.
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Explain and illustrate the problems to avoid in appraising performance.
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Understanding problems to avoid gives managers guidance when its time to appraise their subordinates’ performance. We now turn to appraisal problems and how to solve them, and to several other appraisal issues.
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Dealing with Appraisal Problems and Interviews
Potential appraisal problems
Unclear standards
Halo effect
Central tendency
Leniency or strictness
Recency effects
Bias
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If standards are unclear, ambiguous traits and degrees of merit can result in an unfair appraisal.
The influence of a rater’s general impression on ratings of specific qualities is known as the halo effect.
Central tendency occurs when supervisors stick to the middle of the rating scales, thus rating everyone average.
Leniency or strictness occurs if supervisors have a tendency to rate everyone either high or low.
Recency effects involve letting what the employee has done recently blind the manager to the employee’s performance over the entire year.
Bias is a tendency to allow individual differences such as age, race, and sex affect employee appraisal ratings.
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Guidelines for Effective Appraisals
Know the problems
Use the right tool
Keep a diary
Get agreement on a plan
Ensure fairness
Appraisals and the law
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See TABLE 9-3 Important Advantages and Disadvantages of Appraisal Tools
See FIGURE 9-12 Check list of Best Practices for Administering Fair Performance Appraisals
Appraisals can be more effective by following these five guidelines:
Know the problem
Use the right appraisal tool
Keep a diary
Get agreement on a plan
Be fair
The courts have found that inadequate appraisal systems tend to be at the root of illegal discriminatory actions. In addition to being done legally, appraisals should be handled ethically and honestly.
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Review
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For this learning objective, we have covered various problems to avoid while appraising performance. These include the halo effect, bias, the effect of recency, the impact of leniency or strictness, unclear standards, and the impact of central tendency.
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Unclear Standards
Central Tendency
Halo Effect
Recency Effect
Bias
Leniency/
Strictness
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Problems
Tools
Records
Fairness
Legal
Ethics
Review
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For this learning objective, the best advice is to use common sense. Find out the real problem and use the right tool to address it. Keep a record, agree on a plan, be fair, and be aware of legal issues.
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Perform an effective appraisal interview.
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Most employees need and expect to know ahead of time on what basis their employer will appraise them. Let’s discuss how you can make this happen.
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How to Conduct the Appraisal Interview
Prepare
Plan
Coach
Be objective
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Useful interviews begin before the interview. Beforehand, review the person’s job description, compare performance to the standards, and review the previous appraisals.
Give the employee at least a week’s notice to review his or her work. Set a time for the interview. Interviews with lower level personnel like clerical workers should take less than an hour. Interviews with management employees often take 1 or 2 hours. Conduct the interview privately with no interruptions.
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How to Conduct the Appraisal Interview
Types of appraisal interviews
How to conduct the appraisal interview
Objective data
Don’t get personal
Encouragement
Agreement
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Supervisors face four types of appraisal interviews, each with its unique objectives:
Satisfactory – Promotable This is the easiest interview, the objective is to make development plans.
Satisfactory – Not Promotable This type of interview has the objective of maintaining performance when promotion is not possible.
Unsatisfactory – Correctable This has the objective to plan correction via the development and successful implementation of an action plan.
Prepare for the interview by assembling the data, preparing the employee, and choosing the time and place. Be direct and specific, using objective examples. Don’t get personal. Encourage the person to talk. Plan on reaching agreement.
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Managing the Appraisal Interview
Handling a defensive subordinate
Criticizing a subordinate
The formal written warning
Realistic appraisals
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Recognize that defensive behavior is normal. Never attack or belittle a person’s defenses; they are legitimate to him or her. Postpone action as appropriate and recognize your own limitations.
When required, criticize in a private and constructive manner that lets the person maintain his/her dignity and sense of worth.
Written warnings should identify the standards by which the employee is judged, make it clear that the employee was aware of the standard. Then specify any violation of the standard, and show that the employee had an opportunity to correct the behavior. You may place this in his or her permanent personnel file. If circumstances warrant, you may remove the warning after a specified amount of time, say 90 days or longer.
Be realistic and honest when giving an appraisal. It is important that a manager be candid when a subordinate is underperforming. Focus on specifics and allow opportunities to improve.
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How to Conduct the Appraisal Interview
Managing the Appraisal Interview
Type of interviews
Defensiveness
Criticism
Warnings
Realism
Review
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With this objective we have focused our energy on the types of appraisal interviews and how to conduct effective interviews. Using objective data, not getting personal, providing encouragement and obtaining agreement are key ingredients.
We also discussed subordinate defensiveness, handling criticism, using written warnings, and remaining realistic in the process.
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Explain how to “segment” employees for appraisal and reward purposes.
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To perform effective talent management we segment employees to emphasize active management
of high potential employees.
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Talent Management and Employee Appraisal
Appraising and Actively Managing Employees
Segmenting and Actively Managing Employees in Practice
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Talent management-oriented employers do use performance appraisal to evaluate how their employees are performing. However, they also segment their employees based on how critical the employees are to the company’s success. Then they focus more effort and resources on the company’s “mission-critical” employees.
Figure 9-16 illustrates this. Accenture uses a 4 × 4 strategic role assessment matrix to plot employees by Performance (exceptional, high, medium, low) and Value to the Organization (mission-critical, core, necessary, non-essential).
Segmenting employees is a way to emphasize successful management of high potential employees. It may include such activities as identifying top performers and assessing them for promotability, time-frame, and leadership potential. You also may limit the “high potential group in whom the company invests heavily to no more than 10% to 20% of managerial and professional staff.” One company appoints “career stewards” to meet regularly with “emerging leaders.” In all situations, the goal is to focus effort and extra resources by investing in a firm’s future leaders.
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Review
Talent management and employee appraisal
Segmenting and actively managing employees in practice
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Talent management requires actively managing decisions affecting employees and making certain they have input and a clear understanding of expectations. The traditional practice of allocating pay raises, development opportunities, and other scarce resources across the board does not make for a competitive, successful firm. Today, employers must focus their attention and resources on their company’s mission-critical employees essential to the firm’s strategic needs.
Segmenting and Actively Managing Employees in Practice: Several examples can illustrate how this works in practice.
● McKinsey & Co. recommends limiting the “high potential group in whom the company
invests heavily to no more than 10 to 20% of managerial and professional staff.”
● Unilever includes 15% of employees per management level in its high potential list each
year, and expects these people to move to the next management level within five years.
● GE prioritizes jobs and focuses on what it calls its employee “game changers.”
● Shell China appoints “career stewards” to meet regularly with “emerging leaders.” They
make sure they’re getting the right development opportunities.
See FIGURE 9-16 Accenture’s Strategic Role Assessment Matrix.
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Focus the appraisal on strategic goal achievement
Actions that achieve hotel goals
A performance management system with a focus on competencies and objectives
Job descriptions that include competencies
Improving Performance at The Hotel Paris
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Translating Strategy into HR Policies and Practices
Both Lisa and the firm’s CFO were concerned by the current disconnect
between (1) what the current appraisal process was focusing
on and (2) what the company wanted to accomplish in terms of its
strategic goals. They wanted the firm’s new performance management
system to help breathe life into the firm’s strategic performance, by
focusing employees’ behavior specifically on the performances that
would help the Hotel Paris achieve its strategic goals.
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1. Choose one job, such as front-desk clerk. Based on any information you have (including job descriptions you may have created in other chapters), write a list of duties, competencies,
and performance standards for that chosen job.
2. Based on that job, create a performance appraisal form for appraising that job.
Improving Performance at
The Hotel Paris
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Translating Strategy into HR Policies and Practices
In addition to the goals and competencies-based appraisals, other
Hotel Paris performance management forms laid out the development
efforts that the employee would undertake in the coming year. Instructions
also reminded the supervisors that, in addition to the annual and
semiannual appraisals, they should continuously interact with and update
their employees.
The result was a comprehensive performance management system:
The supervisor appraised the employee based on goals and competencies
that were driven by the company’s strategic needs. And, the actual appraisal
resulted in new goals for the coming year, as well as in specific development
plans that made sense in terms of the company’s and the employees’ needs
and preferences.
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Hotel Paris
Strategy
Chapter 9
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Hotel Paris Strategy Chapter 9
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Copyright
40
14TH
EDITION
GARY
DESSLER
HUMAN
RESOURCE
M
ANAGEM
ENT
www.pearsonhighered.com
ISBN-13:
ISBN-10:
978-0-13-354517-3
0-13-354517-2
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9 0 0 0 0
HUM
AN RESOURCE M
ANAGEM
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DESSLER
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EDITION
IMPROVING RESULTS
A proven way to help individual students achieve
the goals that educators set for their course.
ENGAGING EXPERIENCES
Dynamic, engaging experiences that personalize and
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AN EXPERIENCED PARTNER
From Pearson, a long-term partner with a true grasp
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Managing Employee
Retention, Engagement,
and Careers
10-1
4-
IBM recently celebrated 100 years since its creation. Few companies stay in business that long.
Most credit IBM’s longevity to its ability to adapt to changing customer needs.
Today, for instance, technology is changing so fast that IBM will soon need a workforce with dramatically
different skills than its current employees have.
In many companies, that would signal impending turnover and huge turnover costs, as new employees
replace old. What should IBM do to build that new workforce, and to retain the employees it needs to
move ahead? We’ll see what they did.
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Learning Objectives
Describe a comprehensive approach to retaining employees.
Explain why employee engagement is important, and how to foster such engagement.
Discuss what employers and supervisors can do to support employees’ career development needs.
10-2
4-
After studying this chapter, you will be able to:
1. Describe a comprehensive approach to retaining employees.
2. Explain why employee engagement is important, and how to foster such engagement.
3. Discuss what employers and supervisors can do to support employees’ career development needs.
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List and briefly explain the main decisions employers should address in reaching promotion and other employee life-cycle career decisions.
Explain each of the main grounds for dismissal.
Learning Objectives
10-3
4-
After studying this chapter, you will be able to:
4. List and briefly explain the main decisions employers should address in reaching promotion
and other employee life-cycle career decisions.
5. Explain each of the main grounds for dismissal.
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Describe a comprehensive approach to retaining employees.
10-4
4-
Experts from a top consulting company suggest building comprehensive retention programs around the steps below.
Using effective selection techniques
Offering professional growth opportunities
Providing career direction
Offering meaningful work and
Encouraging ownership of goals
Let’s discuss these in a bit more detail.
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IMPROVING PERFORMANCE:
HR as a Profit Center
10-5
Studies show link when turnover rates rise financial performance is at risk
HR practices can lower turnover
Opportunities
Training
Development
4-
Turnover and Performance
Combining voluntary and involuntary turnover produces some astounding statistics. For example, the turnover
in many food service firms is around 100% per year. In other words, many restaurants need to
replace just about all their employees every year!
The researchers say, “Organizations must recognize that when turnover rates rise, their workforce and financial performances are at risk.”
How to cut turnover? Another study focused on turnover intentions among government technology workers. It
concluded that human resource managers could influence turnover through practices such as promotion
opportunities, training and development, pay and reward satisfaction, and family-friendly policies. The bottom
line is that HR practices can have a big influence on employee turnover, and thereby on the company’s profitability.
Discussion Question 10-1: Discuss three steps you would take to reduce the need to dismiss employees.
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Managing Employee Turnover
Costs of turnover
Managing voluntary turnover
Reducing voluntary turnover
10-6
4-
Turnover is an expensive cost for organizations. Understanding more about the costs and causes of turnover is important.
There are tangible and intangible costs associated with turnover. Reducing turnover requires identifying and managing the reasons for both voluntary and involuntary turnover.
Voluntary turnover occurs for many reasons. Top reasons include job dissatisfaction, poor pay or health-care benefits, few promotional opportunities, and inadequate work-life balance.
See FIGURE 10-1 Reasons Top-Performing Employees Leave an Organization
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Identify issues with surveys
Compensation
Selection
Professional growth
Meaningful work/ownership
Managing Employee Retention
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Experts from the consulting company Development Dimensions International (DDI) and the employment
firm Robert Half International suggest building comprehensive retention programs around the following steps.
Any retention strategy begins with identifying the specific causes of turnover within a particular company.
Use exit interviews and surveys to identify issues.
Manage high performers and key employees with enhanced pay.
Remember, “retention starts up front, in the selection and hiring of the right employees.” The process begins with
a thorough understanding of the jobs to be filled. It includes a solid job analysis and an effective and efficient
hiring process.
Professional growth is a well-thought-out training and career development program that can provide a strong
incentive for staying with the company.
Providing career direction means discussing employee’s career preferences and prospects at your firm, and helping
them lay out potential career plans. Furthermore, “don’t wait until performance reviews to remind top employees
how valuable they are to your company.”
An important part of retaining employees is making it clear what your expectations are regarding their performance
and responsibilities. This helps employees “own” their behaviors and results. A job is meaningful if the incumbent
understands its relationship to the company goals and sees his or results as part of the bigger picture.
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Work–life balance
High engagement
Data analytics
Counter offers
Workforce planning
Managing Employee Retention
4-
Robert Half and careerbuilder.com surveys found employees are looking for flexible work
arrangements and telecommuting.
Employee empowerment, problem-solving groups, and self-directed teams has a positive
effect and reduced turnover.
It takes sifting through data to provide Nationwide Mutual Insurance Co. managers with
monthly “scorecards” of turnover data.
Employers who allow counter offers need a policy that specifies what people and positions
are eligible for counteroffers.
Identifying and preparing for skills gaps can help reduce the turnover that unexpected skills
gaps can trigger.
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IMPROVING PERFORMANCE:
HR Practices Around the Globe
IBM technology training program is improving
Employee retention
Minimizing layoffs
Resignations and
Turnover costs
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IBM Dodges an Employee Turnover Problem
IBM put in place an “on-demand” staffing strategy. This aims to ensure that its current employees get
the training and coaching they need to play roles in IBM’s future.
To do this, IBM budgeted $700 million per year to identify needed skills, spot gaps for skills that are in
short supply, and train and assess its executives, managers, and rank-and-file employees. IBM’s on-demand
staffing effort is supporting IBM’s strategy, which depends on offering the fast-evolving technological services
its customers need, at once, on demand.
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Talent Management and Employee Retention
Job withdrawal
Dealing with job withdrawal
Managing Employee Retention
4-
Talent management best practice suggests focusing augmented retention efforts on the company’s most important employees.
Job withdrawal is any action which places physical or psychological distance between the employee and the organization.
It’s a means of escape for someone who is dissatisfied or fearful. Managing the almost limitless reasons an employee can become
dissatisfied requires a complete and effective human resource system.
People tend to move toward situations that make them feel good, and away from those that make them feel bad. People
are repelled by situations that produce unpleasant, uncomfortable emotions, and are attracted to those that produce pleasant,
comfortable ones.
The manager can therefore think of withdrawal-reducing strategies in terms of reducing the job’s negative effects, and/or of raising
its positive effects.
Potential negatives include boring jobs, poor supervision, low pay, bullying, lack of career prospects, and poor working conditions.
Potential positives include job enrichment, supportive supervision, equitable pay/ family-friendly benefits, disciplinary/appeals
processes, career development opportunities, safe and healthy working conditions, and having high-morale colleagues. Interviews,
surveys, and observation can help identify issues to address.
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Identify issues with surveys
Compensation
Selection
Professional growth
Meaningful work/ownership
Review
4-
As we discussed experts from the consulting company Development Dimensions International (DDI) and the
employment firm Robert Half International suggest building comprehensive retention programs around
the steps discussed here.
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Review
Work–life balance
High engagement
Data analytics
Counter offers
Workforce planning/ Talent Management
Job withdrawal
4-
We continued our discussion of the researched based steps for building comprehensive retention
programs.
Talent management best practice suggests focusing augmented retention efforts on the company’s
most important employees.
Lastly, this objective stated voluntary turnover is one way that employees withdraw. Withdrawal in
general means separating oneself from one’s current situation—it’s a means of escape for someone
who is dissatisfied or fearful. At work, job withdrawal has been defined as “actions intended to place
physical or psychological distance between employees and their work environments.”
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Explain why employee engagement is important, and how to foster such engagement.
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Engagement refers to being psychologically involved in, connected to, and committed to getting one’s job done.
Poor attendance, voluntary turnover, and psychological withdrawal often reflect diminished employee engagement.
Let’s discuss.
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IMPROVING PERFORMANCE:
HR Practices Around the Globe
Rio Tinto is a global mining corporation
Using metrics and measures, consulting firm Towers Watson conducted an employee engagement survey so Rio Tinto could take the steps to:
Employee engagement and
Performance
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Employee Engagement at Rio Tinto
The consulting firm Towers Watson conducted an employee engagement survey and analyzed the results.
They began by collecting extensive employee engagement survey data from Rio Tinto employees around
the world. The Towers Watson consultants then used a statistical process they called linkage analysis to
analyze how employee engagement measures related to dozens of performance and maintenance measures
in Rio Tinto’s plants and mines around the world.
The analysis compared Rio Tinto’s employee engagement scores with benchmark scores from other
companies in Towers Watson’s database. The engagement metrics focused on things like understanding
and support for the vision of the company, support for company values, “willingness to go the extra mile
to ensure business success.” Rio Tinto was better able to understand how taking specific steps to improve
employee engagement would translate into improved organizational performance.
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Managing Employee Engagement
Gallup survey
Business units that have employee engagement have 83% chance of performing above the company median
Those with the lowest employee engagement have a 17% chance
Watson Wyatt Worldwide survey
Highly engaged employees generate 26% higher revenue per employee
4-
Employee engagement is important because both employee behavior (including turnover) and
organizational performance reflect whether employees are “engaged.”
One study by Towers Watson, conclude that only about 21% of the global workforce is engaged,
while almost 40% is disengaged.42 In one large survey, 57% of respondents were disengaged
within 2 years after hiring.
See FIGURE 10-2 Employee Actions That Make Employees Feel More Engaged
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Employee Actions That Foster Engagement
Understanding how their department contributes to company success
Seeing how their efforts contribute to achieving company goals
Get a sense of accomplishment from work at the company
Managing Employee Engagement
4-
Employee participation also improves engagement. For example, Milliken & Co. uses employee participation safety teams at one plant. The safety process consists of 16 employees on the plant’s safety steering committee, which in turn governs 8 employee safety subcommittees. The program appears to produce high levels of safety engagement among employees, and significant improvements in the plant accident rates.
Perhaps the best way to improve engagement is to remember that engagement is a two-way street. Employees tend to be committed to and engaged in companies that are committed to them. Such companies demonstrate what psychologists call “perceived organizational support,” wherein the employee perceives that the employer values his or her contribution and cares about his or her well being. Researchers measure such organizational support with survey items such as, “The organization values my contribution to its well-being”; “The organization would understand a long absence due to my illness”; and “The organization really cares about my well being.”
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Review
Employee Engagement and Performance
Employee Actions That Foster Engagement
4-
Withdrawal and turnover often reflect diminished employee engagement. Engagement refers to being psychologically involved in, connected to, and committed to getting one’s jobs done. Engaged employees “experience a high level of connectivity with their work tasks,” and therefore work hard to accomplish their task-related goals.
As far as employee engagement is concerned, many employee behaviors, including turnover, reflect the degree to which employees are “engaged.”
We discussed the studies show engagement and performance are related and three actions that foster employee
engagement.
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Discuss what employers and supervisors can do to support employees’ career development needs.
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While each individual employee may have different interests and career aspirations, employers and managers should provide career development support and training. Let’s discuss these important concepts in more detail.
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Career terminology
Careers today
Psychological contract
The employee’s role
Career Management
4-
We may define a career as the “occupational positions a person has had over many years.”
Career management is a process for enabling employees to better understand and develop their career skills and interests and to use these skills and interests most effectively both within the company and after they leave the firm.
Career development is the lifelong series of activities (such as workshops) that contribute to a person’s career exploration, establishment, success, and fulfillment.
Career planning is the deliberate process through which someone becomes aware of personal skills, interests, knowledge, motivations, and other characteristics; acquires information about opportunities and choices; identifies career-related goals; and establishes action plans to attain specific goals.
What the employer and employee expect of each other is part of what psychologists call a psychological contract. The psychological contract identifies each party’s mutual expectations.
As in other parts of life, an individual must accept responsibility for his/her own career. He or she should assess his/her own interests, skill, and values. Finally, the employee must take the steps required to ensure a happy and fulfilling career. One of these steps is finding a mentor who can be a sounding board. Mentoring programs can be informal or formal.
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Career Management
The Employer’s Role
Depends on length of time employee is employed
Employer Career Management Options
Employee career planning form suggested
Managers Role
Actively train, mentor, review performance
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An experienced mentor who can help the person learn the ropes is recommended for employee career development.
Some employers create Web-based or offline libraries of career development materials, and offer career workshops and perhaps individual career coaches for career guidance. First USA Bank has its “Opportunity Knocks” program. In addition to career development training and follow-up support, the program includes career development centers at work sites that employees use on company time. The latter contain materials such as career assessment and planning tools. WorkforceVision from Criterion, Inc., supplies online systems that help the employer analyze an employee’s training
needs.
A career planning workshop is “a planned learning event in which participants are expected to be actively involved, completing career planning exercises and inventories and participating in career skills practice sessions.” A typical workshop includes self-assessment exercises (skills, interests, values, and so on), an assessment of important occupational trends, and goal-setting and action-planning segments.
Career coaches generally help employees create 1- to 5-year plans showing where their careers with the firm may lead. Then, the employer and employee base the latter’s development plans on what he or she will need to move up.
The manager can support his or her subordinates’ career development needs by ensuring they have the right skills and scheduling a regular performance appraisal. Managers must also make expectations clear. Finally, managers must focus on the extent to which the employee’s current skills and performance match career aspirations.
Schedule regular performance appraisals; at these reviews, cover the extent to which the employee’s current skills and performance are consistent with the person’s career aspirations.
Provide the employee with an informal development plan like that in Figure 10-4. Keep subordinates informed about how they can utilize the firm’s current career related benefits, and encourage them to do so.
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Career terminology
Careers today
Psychological contract
The employee’s role
Employer’s and Manager role
Employer Career Management Options
Review
4-
We can define a career as the “occupational positions a person has had over many years.” Today, employees
often find themselves having to reinvent themselves.
A psychological contract is what the employer and employee expect of each other.
As in other parts of life, an individual must accept responsibility and take an active role in his/her own career.
Finally, we looked at career development and the role of the employer and manager.
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List and briefly explain the main decisions employers should address in reaching promotion
and other employee life-cycle career decisions.
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Promotions usually provide opportunities to reward the exceptional performance of tested and loyal employees. However, unfairness, arbitrariness, or secrecy can diminish the effectiveness of the promotion process for all concerned. Let’s discuss.
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Making Promotion Decisions
Is seniority or competence the rule?
How should we measure competence?
Is the process formal or informal?
Vertical, horizontal, or other?
4-
Employee Life-Cycle Career Management
An employee’s tenure with a firm tends to follow a life-cycle, from employment interview to first job, promotion, transfer, and perhaps retirement. We’ll look here at the latter three.
Four important rules impact the effectiveness of promotion decisions.
Decision 1: Is Seniority or Competence the Rule? Today’s focus on competitiveness favors competence. However, union agreements and civil service regulations often emphasize seniority.
Decision 2: How Should We Measure Competence? Start by defining the job, setting standards, and using one or more appraisal tools to record the employee’s performance. Then, use a valid procedure for predicting a candidate’s potential for future performance.
Decision 3: Is the Process Formal or Informal? Each firm will determine whether the promotional process will be formal or informal.
Decision 4: Vertical, Horizontal, or Other? Promotions can be vertical (within the same functional area) or horizontal (in different functional areas).
There are practical steps to take in formulating promotion policies. Establish eligibility requirements, for instance, in terms of minimum tenure and performance ratings. Require the hiring manager to review the job description, and revise if necessary. Vigorously review all candidates’ performance and history. Preferably hire only those who meet the job’s requirements.
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Making Promotion Decisions
The Gender Gap
Eliminate barriers
Improve networking, mentoring
Break the glass ceiling
Have flexible career tracks
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Today women constitute more than 40% of the workforce, but hold less than 2% of top management positions.
Women report greater barriers (such as being excluded from informal networks) than do men. They also have more difficulty getting developmental assignments and geographic mobility opportunities. Many call this combination of subtle and not-so-subtle barriers to women’s progress the glass ceiling. Organizations need to be aware of it and try to eliminate it.
In one example the flexible/reduced work schedule enabled many working mothers who might otherwise have left to stay with the firm and gave this group a flexible career path.
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Look at Practical Considerations
Managing transfers
Managing retirements
Making Promotion Decisions
4-
There are practical steps to take in formulating promotion policies. Establish eligibility requirements, for instance, in terms of minimum tenure and performance ratings. Require the hiring manager to review the job description, and revise if necessary. Vigorously review all candidates’ performance and history. Preferably hire only those who meet the job’s requirements.
Transfers are moves from one job to another, usually with no change in salary or grade. Frequent relocation of transferred employees has been assumed to have a damaging effect on transferees’ family life. Transfers are also financially costly.
Some employers are instituting formal pre-retirement counseling aimed at easing the passage of their employees into retirement. As you might suspect, a large majority of employees have said they expect to continue to work beyond the normal retirement age. For some, part-time employment is an alternative to outright retirement.
Finally, employers can benefit from retirement planning by becoming able to anticipate or plan for future labor shortages.
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Review
Look at Practical Considerations
Gender Gap
Managing transfers
Managing retirements
Promotion decisions
Measurement
Formal vs. informal
Vertical or horizontal
4-
The rules for promotion decisions include issues of seniority or competence, how to measure, and whether the process is formal or informal. In addition, consideration is given to whether the promotion is vertical or horizontal and who is eligible. Practical issues include bias such as the glass ceiling, legal compliance, and managing transfers and formal pre-retirement counseling.
Women have to be more proactive than men to get stretch assignments. Employers need to eliminate the barriers that impede women’s career progress. Some specific steps were discussed.
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Explain each of the main grounds for dismissal.
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Not all employee separations are voluntary. Some career plans and appraisals end not in promotion
or graceful retirement but in dismissal—involuntary termination of an employee’s employment
with the firm.
Many dismissals are avoidable. For example, many dismissals flow from bad hiring decisions. Using
assessment tests, background checks, drug testing, and clearly defined jobs can reduce such dismissals.
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Grounds for Dismissal
Avoiding Wrongful Discharge Suits
Supervisor Liability
Managing Dismissals
4-
There are four bases for dismissal: unsatisfactory performance, misconduct, lack of qualifications
for the job, and changed requirements of (or elimination of) the job.
Unsatisfactory performance refers to a persistent failure to perform assigned duties or to
meet prescribed standards on the job.96 Specific reasons include excessive absenteeism,
tardiness, a persistent failure to meet normal job requirements, or an adverse attitude.
Misconduct is deliberate and willful violation of the employer’s rules and may include stealing
and rowdy behavior.
Lack of qualifications for the job is an employee’s inability to do the assigned work, although
he or she is diligent. Because this employee may be trying to do the job, it is reasonable to
try to salvage him or her—perhaps by assigning the employee to another job.
Changed requirements of the job is an employee’s incapability of doing the job after the nature
of the job has changed. Similarly, you may have to dismiss an employee when his or her job is
eliminated. Again, the employee may be industrious, so it is reasonable to retrain or transfer
this person, if possible.
Insubordination, a form of misconduct, is sometimes the grounds for dismissal. The two basic
categories of insubordination are unwillingness to carry out the manager’s orders, and disrespectful
behavior toward the manager.
To avoid suits: First allow the employee to explain why he (or she) did what he did.
Second, have a formal multistep procedure (including warning) and an appeal process.
Third, the person who actually does the dismissing is important. Fourth, dismissed employees
who feel they’ve been treated unfairly financially are more likely to sue.
Wrongful discharge (or termination) occurs when an employee’s dismissal does not comply with
the law or with the contractual arrangement stated or implied by the employer.
To avoid liability: First, have employment policies including grievance procedures that help show
you treat employees fairly. Second, review and refine all employment-related policies, procedures,
and documents to limit challenges. Follow outlines procedural steps and ask the questions in
Figure 10-6.
Have a security checklist to collect all keys, laptops and also security measure need to include disabling
passwords.
To avoid having personal liability become an issue.
● Follow company policies and procedures. An employee may initiate a claim against a
Supervisor who he or she alleges did not follow policies and procedures.
● Administer the dismissal in a manner that does not add to the employee’s emotional hardship
(as would having the employee publicly collect his or her belongings and leave the office).
● Do not act in anger, since doing so undermines the appearance of objectivity.
● Finally, utilize the HR department for advice regarding how to handle difficult dismissal
situations.
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The Exit Process and Termination Interview
Layoffs and the Plant Closing Law
Adjusting to Downsizings and Mergers
Managing Dismissals
4-
Follow company guidelines for the termination interviews. Have exit interviews with employees leaving the firm.
These are interviews, usually conducted by a human resource professional just prior to the employee leaving.
Senior management plans all aspects of a layoff. A layoff, in which the employer sends workers home for a time for lack of work, is usually not a permanent dismissal.
Downsizing means reducing, usually dramatically, the number of people employed by a firm. The basic idea is to cut costs and raise profitability.
1. First is making sure the right people are let go; this requires having an effective appraisal
system in place.
2. Second is compliance with all applicable laws, including WARN.
3. Third is executing the dismissals in a manner that is just and fair.
4. Fourth is security, for instance, retrieving keys and ensuring that those leaving don’t take
prohibited items with them.
5. Fifth is reducing the remaining employees’ uncertainty and addressing their concerns.
This typically involves a post-downsizing announcement and program, including meetings
where senior managers field questions from the remaining employees.
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Managing dismissals
Avoiding suits
Liability
Exit process
Downsizing and mergers
Review
4-
We discussed steps to manage dismissals, avoid suits, and avoid supervisor liability.
The exit process can be organized with the steps outlined.
Turnover is especially disruptive, so it may be particularly important to avoid layoffs. Options here include:
Implement pay freezes or cuts; introduce a hiring freeze before reducing the workforce; provide candid
communications about the need for the downsizing; give employees an opportunity to express their
opinions about the downsizing; and be fair and compassionate in implementing the downsizing.
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Improving Performance at The Hotel Paris
“Many hotel jobs are ‘dead end’; for example, maids and valets with no aspirations to move up, or are using these jobs temporarily, for instance, to help out with household expenses.”
First, do you agree with this statement—why, or why not? Second, list three more specific career activities you would recommend Lisa implement for these employees.
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The New Career Management System
If the hotel wanted satisfied guests, they had to have engaged employees who did their jobs as if they owned the company, even when the supervisor was nowhere in sight. But for the employees to be engaged, Lisa knew the Hotel Paris had to make it clear that the company was also committed to its employees.
From Lisa’s experience, she knew that one way to do this was to help her employees have successful and satisfying careers, and she was therefore concerned to find that the Hotel Paris had no career management process at all.
Lisa and her team knew that they already had most of the building blocks in place, thanks to the new performance management system they had instituted just a few weeks earlier. For example, the new performance management system already required that the supervisor appraise the employee based on goals and competencies that were driven by the company’s strategic needs; and the appraisal itself produced new goals for the coming year and specific development plans for the employee. These development plans had to make sense in terms of both the company’s and the employee’s needs and preferences.
In addition to the new performance management elements already in place, Lisa and her team created an online “Hotel Paris Career Center.” With links to a choice of career assessment tools such as the Self-Directed Search, www.self-directed-search.com, and wizard-based templates for developing one’s own career plan, the site went far toward providing the Hotel Paris’s employees with the career assistance that they required.
Also on the site, a new “International Job Openings” link made it easier for Hotel Paris employees to identify positions for which they might be qualified. The results exceeded Lisa and the CFO’s expectations. Virtually every employee produced a career plan within the first 6 months. The appraisal interviews often turned into animated, career-oriented development sessions, and soon the various measures of employee commitment and guest service were trending up.
Questions
Build on the company’s new system by recommending two more specific career development activities the hotel
should implement.
2. What other specific career development activities would you recommend in light of the fact that the Paris’s hotels
and Employees are disbursed around the world?
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Hotel Paris
Strategy
Chapter 10
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Hotel Paris Strategy Chapter 10
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Copyright
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