Background and historical data – Nicole M (10/16)
Performance measurements are something that has dated back to the early 1900s around World War 1. Performance measurements began as an informal evaluation by WD Scott that was not highly recognized until about mid-century when formal systems were implemented by more businesses.
By the mid-1950s performance evaluations were more familiar to companies who were using personality-based systems but soon backfired as it wasn’t providing performance measurements. By the 1960s there was more focus on measuring objectives and goals. These performance measurements looked more at a person’s achievements towards their future than their personality.
In the 1970s there came some issues with the performance measures. The way evaluations were being conducted caused a lot of criticism. Some actions led to court, so companies took a step forward looking into using psychometrics and rating scales. Between the 1980s to early 2000s, you saw a jump in companies focusing more on employee engagement. They started to use metrics like; self-awareness, communication, teamwork, conflict reductions and the ability to handle emotions.
Performance measurement and evaluations are an essential key component in the business world. They give structure to employees in their personal growth and developmental goals. If the performance measurement and assessments were completed in a well-mannered way, the outcome would work out for both parties involved. A good result gives the supervisor an accomplishment that they are training their employees the correct way, as well as providing the employee encouragement that they are on the right track towards their goals.
Performance management evaluations are done on an annual basis; around June. Some may call this an event, but it’s a process. An effective performance evaluation process is made up of six steps: Step 1 – Define performance outcomes for company division or department; Step 2 – Develop employee goals, behavior, and actions to achieve results; Step 3 – Provide support and ongoing performance discussions; Step 4 – Evaluate performance; Step 5 – Identify improvements needed; and Step 6 – Provide consequences for performance results. For this process to be effective, it’s best that senior management see the process through until the time of the evaluations is due.
The first step of the process helps identify the goals or objectives. This critical step starts with understanding and determining the performance outcomes and or results. The results benefit the company all around with its customers, peers, team and it’s an organization as a whole. These goals or objectives should be engaging so that they align with the organization’s strategy and goals. Step two involves with the understanding of how to reach these goals mentioned in step one. The goals, behaviors, and activities should be agreed upon by both the manager and employee. These goals should be measurable so that they can be met, as well as, aligned with the employer’s job description. The next step, step three which involves organizational support is something that employees look to for the training and necessary tools, and constant communication between the manager and employee to keep the focus on accomplishments towards their performance. Both employee and manager need to accept the feedback they give and receive. Step four is the performance evaluation. The manager and employee discuss the targeted performance goals and the results. This performance review either takes place annually or biannual. For this to be more effective, it's best that the manager discusses these performance goals throughout the process and not just at the performance review. The final steps of the process involve the manager and employee by looking at the employee’s strengths and weaknesses (step 5) from the performance review and provide the consequences for achieving or failing performance outcomes (step 6). These final steps help identify if more training is needed, clarifying any feedback, and discuss the items that require more improvement.
As we step into today’s business world performance measurements, have evolved even further. Today companies use a 360-degree feedback system. Not only do employees provide a self-evaluation of their performance, but by using multiple feedback sources gives managers a “360-degree” overview of an employee’s performance.
Related Laws – Josh M. (11/19) ~ <updated>
An effective performance evaluation system can help you avoid legal problems by helping you stay on top of performance and conduct issues when they first surface, giving employees notice that they need to improve, and providing evidence of fair treatment if employees must be disciplined or fired. There are a few legal traps to watch out for, however. One of Human Resource Managers’ major challenges is the legal constraints imposed by the government. Human Resources and line managers need to understand legal requirements and prohibitions to manage in ways that are financially and ethically sound, and in so doing create a competitive advantage. Performance measures means the specific indicators that are employed to assess how well a person, business, organization, or a system is functioning. Generally, the performance of a business, organization, or person must be assessed consistently using fixed techniques. The common measures that are used for evaluating performance of a business include outputs, outcomes, and efficiency. However, except for some governmental and union employers, no employer is required by law to review employee performance. Various rules may require that governmental employers evaluate employee performance, and both governmental and private-sector employers with union contracts may have contractual obligations to do so. Another way to evaluate performance is through a contract. A performance contract is a contract that requires a party to act personally. Performance contract shall not allow any kind of substitution. People who provide unique personal services often make performance contracts. Performance contract allows the contractor to choose the means to achieve the end result. The product's specifications may be loose and allow the contractor’s judgment in deciding how to perform.
Anti-discrimination laws during a P.E. would include:
The Equal Pay Act (EPA)
The EPA, which is part of the Fair Labor Standards Act of 1938, as amended (FLSA), and which is administered and enforced by the EEOC, prohibits sex-based wage discrimination between men and women in the same establishment who perform jobs that require substantially equal skill, effort and responsibility under similar working conditions.
The Americans with Disabilities Act (ADA) – 1990
The ADA is a civil rights law that prohibits discrimination divided into five titles (or sections) that relate to different areas of public life .It guarantees equal opportunity for individuals with disabilities in public accommodations, employment, transportation, state and local government services, and telecommunications. According to EEOC, a disability is a physical or mental impairment that “substantially limits one or more major life activity; a record or past history of such impairment; or being ‘regarded as’ having a disability by an employer whether you have one or not, usually in terms or hiring, firing or demotion. The purpose of the law is to make sure that people with disabilities have the same rights and opportunities as everyone else. The ADA gives civil rights protections to individuals with disabilities similar to those provided to individuals on the basis of race, color, sex, national origin, age, and religion.
Contact the employment attorney to discuss legal rights if you believe you've been subjected to P.E. Discrimination. Keep Records and all paperwork, especially a copy of the evaluation.
< Rough Draft>
Major lawsuits in this area and outcomes – ivan
There have been a variety of major lawsuits due to pay discrimination in the basis of sex and gender. A great deal of these lawsuits could have potentially been dismissed if the employer would have conducted adequate objective performance reviews. Some cases are still ongoing today. It is important that pay disparity for the same job function have a valid reason like a seniority system or a merit system.
The University of Denver is to pay $2.66 million and increase salaries to settle an equal pay lawsuit. Based on the EEOC’s lawsuit, as of October 2013, female professors were making significant less salaries than their male counterparts. Male professors were a making an average of almost $20,000 more than female professors. Despite the University of Denver recognizing this in 2013, they declined to take corrective action by adjusting the salaries of female professors. The University did not have adequate object methods and criteria to determine pay and compensation thus resulting in the settlement.
Nike is currently in hot water due to a gender discrimination class-action lawsuit. Women who worked at Nike are suing over pay discrimination. They lawsuit came about due to an informal survey led women who were alarmed over the departure of three high level executive female workers. The lawsuit against Nike demands that the company compensate women financially for harming their careers and for the illegal practice of paying women less than men for similar work. Nike is now creating mandatory manager training that reinforces the role of respect and accountability.
Both companies could have avoided a lawsuit if in fact they had performance evaluations that proved why certain individuals had a higher pay rate than others. By having scorecards, key performance indicators and metrics these companies could have proven that merit increases throughout the years were fair and objective. Due to lack of key performance evaluations, they are now facing the consequences. Rough Draft – More to come…
Changes needed in performance evaluations- Alexis
Performance measurement and evaluations are used in a company to track employee productivity and measure employee satisfaction. Performance reviews tend to be an alarming process for both managers and employees, but can be even more intimidating if the employee has no idea what to expect before the review takes place. In order to minimize their anxiety or the loss of a good employee, managers should reinforce positive feedback and constantly communicate the company’s goals, objectives, and show how their effort plays a role in the improvement of the organization (Fox 2009). Although companies implement their own strategies to motivate their employees during performance reviews, human resource managers must consider restructuring their performance review process so employees do not solely focus on the compensation portion of it, but the rating they are receiving for the course of the year. As discrimination and wrongful termination lawsuits arise due to the lack of frequent performance reviews or increased favoritism, other systems have been implemented into companies in order to diminish their liability.
The equal pay act is a legislation made to diminish gender discrimination in the workplace. As a result, businesses have set guidelines when situations such as merit pay or seniority come into play. Even after the equal pay act was set into motion, it has still not eliminated the wage discrepancies in the workplace. In order to resolve these issues, businesses should make changes through equal pay audits. Creating a uniform evaluation cycle assures managers that their system of reviews is fair and objective, only focusing on standard factors in relation to the job description and ensures consistency alongside other employees with similar job functions. If an employee is working harder than the other with a similar responsibility, they should be implementing a reward system while ensuring they can prove a type of numeric evidence that they are exceeding a set goal. Some managers tend to use a subjective measure but may lead biased reviews because they are judging the employee based on how they feel. Subjective measures may also lead people to believe that a manager does not understand the employee’s job description, thus cannot be comprehended by the employee. Instead, they should focus on objective reviews where employee success can be classified into numbers or physical output to determine if goals are being met. The Lilly Ledbetter pay act is also a factor that the government used to put an end to wage differences. This piece of legislation allows employees to challenge their pay if they feel they are not being paid similar to someone with the same job title within the company, even if they are unaware of what the person next to them is making. This eliminates any chances of women being unable to be discriminated against in the workplace.
Organizations can also improve their evaluations by using 360-degree evaluations. 360-degree evaluations are a confidential way to get feedback from people who work around you. These surveys are conducted by peers, managers, and from yourself with the purpose of grasping a better understanding of your strengths and weaknesses. Acquiring feedback from multiple perspectives is a more reliable and less biased way of being evaluated than by one person. With a 360-degree system, you are gathering an assessment of yourself from people who work with you on a day-to-day basis, making your reviews more accurate. With one perspective, you are only receiving data based on numbers and is one way, usually from supervisor to employee; however, with multiple perspectives, employees can identify their issues and find ways to resolve it.
Many believe performance evaluations should be a process that occurs once a year, from a manager to an employee; however, in order to accomplish corporate strategic objectives managers must be constantly engaging with everyone, setting a clear goal and providing feedback to employees about their performance. Situations such as these can best be used with a balance scorecard. A balanced scorecard follows a strategic map that splits into four equally important principles: Financial, Customer, Operational, and People. A strategic map allows for simple transmission of complex ideas from one another, hence supporting this tool as a favorable communication and problem-solving tool (Banker, Chang, Pizzini 2011). Instead of stating your objectives to employees, it is best to find strengths in each employee and align them to your goals. This allows more opportunity for growth for the company and for the employee to really see what they are capable of. Employees are also able to see how their contributions are making a difference to the business by demonstrating how their goals are making financial contribution, improving customer satisfaction, increasing operating efficiency, and bringing the company closer to their vision.
Banker, Chang, & Pizzini. (2011). The judgmental effects of strategy maps in balanced scorecard performance evaluations. International Journal of Accounting Information Systems, 12(4), 259-279.
Fox, A. (2009). Curing What Ails Performance Reviews. HR Magazine, 54(1), 52–56. Retrieved from http://search.ebscohost.com.lib-proxy.fullerton.edu/login.aspx%3fdirect%3dtrue%26db%3dbuh%26AN%3d36382764%26site%3dehost-live%26scope%3dsite
Implementation of changes: – Jessica (rough draft)(still working on it)
Action plans are important because they clarify what resources are required for an organization to reach their goal. It also gives the company a timeline as to when the specific tasks need to be completed.
Positive feedback is one, used to help motivate people to continue to do well and two, used to correct employees when they are not performing as well as they should. An action plan to reinforces positive feedback would be to make it personal, contingent, immediate, and frequent. When making it personal you need to decide what work for people. For example, most organizations use money as a way to reinforce people however it may not work for all people. Most people have everything they need and want so using money as a reinforcement does not work for those specific people. Making it contingent means that positive reinforcement must be earned. An effective way to do this would be to ask “What did the person have to do to earn the reinforcement?” (strategic discipline). Making positive feedback immediate means rewarding an employee for good work he or she does when it happens. An example of how not to do it would be when a child is throwing a fit and you give them a reward to make them stop that only lets them know that they will be rewarded every time they threw a fit making them more frequent instead of stopping them. So, the most effective way would be to give them positive feedback as soon as good work happens. And lastly making positive feedback frequent. When you give positive reinforcement on a day to day basis it motivates workers to keep up their good work because most incentives that involve yearly or even monthly reinforcement may not work as well.
360-degree evaluations are surveys conducted by peers, managers, and from yourself with the purpose of grasping a better understanding of your strengths and weaknesses. 360 degree evaluations sometimes this creates hostility within the firm. An action plan for providing a better understanding of 360-degree evaluations letting your employees and employers know that it is completely confidential, that way the people giving the evaluation can be honest and give constructive feedback. And you would also need to make sure it is known that only HR and the employee being evaluated will be shown the evaluation. This will help the employees feel more at ease. Another action plan you can take in ensuring that this works would be to train all staff so that it is understood what is to be done in a 360-degree evaluation. This includes proper training on providing constructive feedback.
The Equal Pay Act was set into motion to provide equal pay for men and women. However, it has still not eliminated the wage discrepancies in the workplace.An action plan for ensuring equal pay would be to use an equal pay audit. An equal pay audit works by first deciding if the audit would be done internally or externally, getting help from people outside the organization, the second step would be to determine if the men and women are doing equal work, the third step is collecting pay data, the last step is finding the cause of gender pay difference. After this has been done organizations can either change the starting salaries or change their performance management systems to ensure that workers are being paid equally.
An action plan to protect yourself from equal pay liabilities would be to use reward systems such as merit pay, merit bonus, profit sharing, and gainsharing. Merit pay is a program where annual base pay increases are usually linked to performance appraisal ratings. However not all employers like to increase base pay, instead they would rather use it as merit bonus. A merit bonus takes the base pay increase from merit pay and uses it as a bonus, this way employer’s able to “define and reward a broad range of performance dimensions” (pg 514). Another reward system would be profit sharing. Profit sharing is kinda like a bonus the only difference is the company must make profit in-order to share it with its employees, this payment is received in either stocks, bonds, or cash. One last form of a reward system is gainsharing, this is similar to profit sharing the only difference is it’s “a form of group compensation based on group or plant performance that does not become part of the employees based salary”(pg 524). Meaning bonuses are tied to how well a group does in the organization. Gainsharing combines the best features of profit sharing, the encouragement of broader goals, and merit pay, the way it motivates its employees. (note 524 question).
PERFORMANCE EVALUATION ACTION PLAN:
Conclusion: Natalie
Performance measurement has impacted many organizations as it has been around for many decades. To recap, performance measurement is defined as a process in which organizations can check or evaluate the company from different angles on how they perform in their specific field. It gives the company easier access to a feedback system regarding its consistency in achieving their goals and providing them with options on better ways to improve their current process. Companies that implement performance evaluations have shown that it has been more effective to improving performance and production as opposed to those who do not do performance evaluations on their employees. The importance of performance measurement and evaluations system simply lies on not only improving performance with employees, but also its productivity by reducing costs and increasing its revenue.
In order for performance evaluations to be effective, businesses must comply with the following six steps in the process: (1) Define performance outcomes for the company, (2) Develop employee’s goals and behavior, (3) Provide support and ongoing performance discussions, (4) Evaluate performance, (5) Identify improvements needed, and (6) Provide consequences for performance results. An effective performance management process can enable managers to evaluate and measure employee’s performances. The road to a successful business is to collaborate with employees by setting long-term goals that will positively impact job satisfaction, employee retention, and loyalty.
Although it required by some governmental and union employers to review performance measurements, it is not required by law for any company/organization to do so. This falls under the Fair Labor Standards Act (FLSA). However, some companies may have set policies and procedures outlining how performance reviews are to be conducted. If certain companies make employees feel obligated to participate in unreasonable performance review, the employee is covered under the Equal Opportunity Act 2010 in which it prevents unlawful discrimination in employment activity. Majority of lawsuits in businesses are due to pay discriminations in the basis of sex and gender. For example, Nike is currently being sued due to pay discrimination. It was said that a woman (search more into).
The measurement of performance continues to be an important aspect to businesses as it gives the ability to provide useful information about its products, processes, and services that are being produced within the business. It may be intimidating for performance reviews to take place, but without them can make employees feel less appreciative and unable to voice their concerns.
Murholme, M. (n.d.). Are Performance Reviews Mandatory? Retrieved November/December, 2018, from https://www.employmentlawonline.com.au/are-performance-reviews-mandatory/ (natalie)
Jessica’s sources used:
Reinforce positive feedback
http://strategicdiscipline.positioningsystems.com/bid/94227/4-Rules-of-Positive-Reinforcement
Reward systems (Ch12)
Equal pay https://www.equalityhumanrights.com/en/advice-and-guidance/how-can-i-achieve-equal-pay
360 degree:
https://www.apa.org/monitor/2012/11/360-evaluations.aspx/
https://www.forbes.com/sites/forbeshumanresourcescouncil/2016/11/22/tips-and-tactics-for-a-successful-360-degree-feedback-program/#30cec0da3fd1
Josh’s Sources used:
EEO
Noe, R. A., Hollenbeck, J. R., Gerhart, B., & Wright, P. M. (2015). Human Resource Management, 10e), McGraw-Hill Irwin. ISBN 978-1-259-57812-0.
ADA / EPA
Izzi, Matthew. “Performance Evaluation Discrimination Laws.” LegalMatch Law Library, 14 Mar. 2018, www.legalmatch.com/law-library/article/performance-evaluation-discrimination.html
Conducting P.E.
Guerin, Lisa. “How to Avoid Legal Trouble When Conducting Performance Reviews.” Lawyers.com, Lawyers.com, www.lawyers.com/legal-info/labor-employment-law/human-resources-law/performance-reviews-and-employee-rights.html.
Legal Action
US Legal, Inc. “Performance Contract Law and Legal Definition.” Fraud Law and Legal Definition | USLegal, Inc., definitions.uslegal.com/p/performance-contract/.
Nicole’s Sources:
Performance Management – Brief History and Development. (n.d.). Retrieved from https://www.linkedin.com/pulse/performance-management-brief-history-development-chandel
Noe,R. A., Hollenbeck, J. R., Gerhart, B. A., & Wright, P. M. (2017). Human resource management: Gaining a competitive advantage. Dubuque: McGraw-Hill Education.
Presentation December 12th
Alexis Medrano, Emily Storc, Natalie Rodriguez, Joshua Moran, Nicole Montes, Jessica Fernandez, Ivan Estrada
Mgmt343 Group project
9. Performance measurement and evaluations
Group Project details:
1. Background and historical details (US and or International) – Nicole
2. Current events, statistics, demographics – emily
3. Related laws – josh
4. Major lawsuits in this area and outcomes – ivan
5. Changes needed in this area – alexis
6. Implementation of changes (action plan) – jessica
7. Summary and conclusion – natalie
One project paper per group will be submitted during the last week of class (before finals). Paper must be 16 to 20 pages, with standard margins, double spaced, edited for grammar and in APA style. A bibliography of 7 or more sources will be required, so please keep track of your research by capturing the URL and article names and authors for reference. Peer evaluations will be conducted and will be due on the day of your presentation.
Josh’s Power ‘Points’
P.E. are not required but they are advised
Keep tabs on performance throughout the year
Ex: high quality work or missed deadlines
Also, include employees in the review (ownership)
Document Everything !
Don’t undo at-will employment
Fired at any time , for any reason
that is not illegal
Ex: Discrimination or Promises of job security
Be consistent and fair
Same standards and procedures to review everyone’s P.E.
Ex: latinos getting disciplined quicker or hold employees with disabilities to higher standards
Avoid retaliation
Cannot take action against an employee because they complained
Ex: harassment , safety violations, wage or hour issues
“They are not a team player”