1JM21- Designing Effective Performance
Management Systems
,Table of Contents
WEEK 1 – GENERAL INFORMATION AND GOAL-SETTING THEORY .................................................................... 3
GENERAL INFORMATION ............................................................................................................................................ 3
GOAL-SETTING THEORY ............................................................................................................................................. 3
WEEK 2 – FEEDBACK INTERVENTION & PERFORMANCE APPRAISAL / PROMES ................................................ 5
FEEDBACK & PERFORMANCE APPRAISAL ...................................................................................................................... 5
NPI THEORY AND PROMES....................................................................................................................................... 8
WEEK 3 – PM IN TEAMS / PERSONALITY, COMPETENCIES & BEHAVIOR ........................................................ 11
PERFORMANCE MANAGEMENT IN TEAMS .................................................................................................................... 11
PERSONALITY, COMPETENCIES & BEHAVIOR................................................................................................................ 13
WEEK 4 – PAY-FOR-PERFORMANCE (PFP) (INDIVIDUAL EMPLOYEES) ............................................................. 15
WEEK 5 – PFP FOR TEAMS / IMPLEMENTATION AND FIT ............................................................................... 17
INDIVIDUAL AND GROUP REWARDS IN TEAMS ............................................................................................................... 17
COMBINING GOAL-SETTING AND PFP IN TEAMS ........................................................................................................... 17
IMPLEMENTING PFP .............................................................................................................................................. 18
WEEK 6 – STRATEGIC CONTEXT OF PERFORMANCE MANAGEMENT............................................................... 19
, Week 1 – General Informa0on and Goal-se4ng Theory
General informa,on
Human behavior is determined by:
- Direc6on
- Vigor / effort
- Persistence
Mo6va6on is influenced by direct (e.g. leadership ac0ons) and indirect (e.g. reward system
or organiza0onal design) factors.
In its core, a job consists of five dimensions:
- Skill variety
- Task iden6ty
- Task significance
- Autonomy
- Feedback
These dimensions influence psychological states which result in personal and work outcomes
of mo0va0on, performance, sa0sfac0on and absenteeism and turnover.
Cascading goals refer to the process of ver0cal goal alignment throughout an organiza6on in
a hierarchical manner. High-level goals are set at the top level of an organiza6on, such as the
overall company goals or strategic objec6ves. These goals are then broken down into smaller,
more specific goals at each subsequent level within the organiza6on. Each level of the
organiza6on aligns their goals with the higher-level objec6ves and sets their own targets that
contribute to the achievement of those objec6ves.
Performance management deals with the process of iden6fying, measuring, and developing
performance of teams and individuals and aligning their performance with strategic goals.
Performance appraisal is the formal evalua6on (measuring) on effec6veness of this job
performance.
Goal-se/ng theory
A goal is an explicit inten6on to obtain a certain level of performance or outcome (within a
certain 6me limit).
Specific, difficult goals lead to higher performance than specific, easy goals and do-your-
best goals.
The effect sized of specific, difficult goals vs. the others were iden6fied by Mento, Steel &
Karren (1987) as being respec6vely d=0.55 and d=0.42.
Specific goals lead to lower varia6on/differences in performance than do-your-best goals.
Goal mechanisms
Management Systems
,Table of Contents
WEEK 1 – GENERAL INFORMATION AND GOAL-SETTING THEORY .................................................................... 3
GENERAL INFORMATION ............................................................................................................................................ 3
GOAL-SETTING THEORY ............................................................................................................................................. 3
WEEK 2 – FEEDBACK INTERVENTION & PERFORMANCE APPRAISAL / PROMES ................................................ 5
FEEDBACK & PERFORMANCE APPRAISAL ...................................................................................................................... 5
NPI THEORY AND PROMES....................................................................................................................................... 8
WEEK 3 – PM IN TEAMS / PERSONALITY, COMPETENCIES & BEHAVIOR ........................................................ 11
PERFORMANCE MANAGEMENT IN TEAMS .................................................................................................................... 11
PERSONALITY, COMPETENCIES & BEHAVIOR................................................................................................................ 13
WEEK 4 – PAY-FOR-PERFORMANCE (PFP) (INDIVIDUAL EMPLOYEES) ............................................................. 15
WEEK 5 – PFP FOR TEAMS / IMPLEMENTATION AND FIT ............................................................................... 17
INDIVIDUAL AND GROUP REWARDS IN TEAMS ............................................................................................................... 17
COMBINING GOAL-SETTING AND PFP IN TEAMS ........................................................................................................... 17
IMPLEMENTING PFP .............................................................................................................................................. 18
WEEK 6 – STRATEGIC CONTEXT OF PERFORMANCE MANAGEMENT............................................................... 19
, Week 1 – General Informa0on and Goal-se4ng Theory
General informa,on
Human behavior is determined by:
- Direc6on
- Vigor / effort
- Persistence
Mo6va6on is influenced by direct (e.g. leadership ac0ons) and indirect (e.g. reward system
or organiza0onal design) factors.
In its core, a job consists of five dimensions:
- Skill variety
- Task iden6ty
- Task significance
- Autonomy
- Feedback
These dimensions influence psychological states which result in personal and work outcomes
of mo0va0on, performance, sa0sfac0on and absenteeism and turnover.
Cascading goals refer to the process of ver0cal goal alignment throughout an organiza6on in
a hierarchical manner. High-level goals are set at the top level of an organiza6on, such as the
overall company goals or strategic objec6ves. These goals are then broken down into smaller,
more specific goals at each subsequent level within the organiza6on. Each level of the
organiza6on aligns their goals with the higher-level objec6ves and sets their own targets that
contribute to the achievement of those objec6ves.
Performance management deals with the process of iden6fying, measuring, and developing
performance of teams and individuals and aligning their performance with strategic goals.
Performance appraisal is the formal evalua6on (measuring) on effec6veness of this job
performance.
Goal-se/ng theory
A goal is an explicit inten6on to obtain a certain level of performance or outcome (within a
certain 6me limit).
Specific, difficult goals lead to higher performance than specific, easy goals and do-your-
best goals.
The effect sized of specific, difficult goals vs. the others were iden6fied by Mento, Steel &
Karren (1987) as being respec6vely d=0.55 and d=0.42.
Specific goals lead to lower varia6on/differences in performance than do-your-best goals.
Goal mechanisms
