Chapter 7: Answers to End-of-Chapter Questions
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1 This is a sample of the instructor resources for Fundamentals of Human Resources in Healthcare by Bruce J. Fried and Myron D. Fottler. This sample contains the instructor notes and PowerPoint slides for Chapter 7. The complete instructor resources consist of 94 PowerPoint slides, 53 pages of instructor notes, and a test bank. If you adopt this text you will be given access to complete materials. To obtain access, your request to hap1@ache.org and include the following information in your message: Book title Your name and institution name Title of the course for which the book was adopted and season course is taught Course level (graduate, undergraduate, or continuing education) and expected enrollment The use of the text (primary, supplemental, or recommended reading) A contact name and phone number/ address we can use to verify your employment as an instructor You will receive an containing access information after we have verified your instructor status. Thank you for your interest in this text and the accompanying instructor resources. 1
2 Chapter 7: Answers to End-of-Chapter Questions 1. The term performance management refers to the full range of activities involved in measuring and improving employee performance. This set of activities includes defining job requirements, working with employees to set goals, measuring goal achievement, reviewing performance with employees, designing strategies to overcome difficulties and improve performance, and coaching employees and providing feedback on an ongoing basis. Performance appraisal refers primarily to the process of obtaining information on job performance. While some authors extend the meaning of performance appraisal to include elements of performance management, the term performance management has been adopted as a more inclusive term. 2. A primary role of Joint Commission accreditation is to ensure patient safety and high-quality care. In accrediting a healthcare organization, attention is given largely to measures of structure and process. Among the most important aspects of structure and process are having trained staff, procedures for identifying areas of staff weakness, and processes for performance improvement. Employing staff with the appropriate credentials and training is absolutely necessary, but it is insufficient to ensuring that staff are actively engaged in performance review and improvement. The Joint Commission recognizes the importance of measuring both individual and organizational performance, and performance management is a key procedure to help improve individual performance. 3. Continuous quality improvement and performance management are both databased processes, and both are important for individual and organizational improvement. Among the key elements of continuous quality improvement are process analysis and process improvement. Continuous quality improvement is built on the premise that process improvement is the key to achieving improvements in quality and efficiency. Virtually every process in healthcare involves a significant human component. While process improvement analysts can analyze and measure the performance of a system, it is people who carry out any improvement strategy. Employees may also be involved in the process analysis. The effectiveness of process improvements may be limited by the ability of staff to carry out improvement strategies. In fact, a cause of
3 dysfunctional processes may be lack of training for staff. Employees are embedded in any process improvement effort, and it is difficult to conceive of a serious process measurement and improvement strategy without a corresponding effort at measuring and improving individual performance. 4. Considerable debate surrounds the topic of including conversations of compensation in a performance review. If an organization has made a decision to link performance to compensation, discussing compensation may be a motivator for employees. However, if an employee is concerned primarily with the compensation aspect of the performance review, he may be less attentive to issues of performance. Should an employee receive little or no bonus compensation, the employee may be discouraged and feel little interest in hearing about performance issues and improvement strategies. It is important to consider the opportunities and costs associated with pay for performance. For a good discussion about the negative side of linking compensation to performance, see the work of Alfie Kohn at He has published extensively on the subject, including Punished by Rewards: The Trouble with Gold Stars, Incentive Plans, A's, Praise, and Other Bribes (Houghton-Mifflin, 1999). Perhaps the best advice on the subject is that a suitable gap in time should occur between the performance review discussion and communicating compensation decisions to employees. In this way, the performance review discussion can productively address performance issues without being contaminated by discussions about money. For example, a performance review might be conducted in June and compensation information communicated in December, prior to the new year. Thoughts of compensation may still permeate the discussion, but such thoughts are difficult to avoid if an organization embarks on a performance-based compensation system. 5. We can think of rating errors as attributable to psychological factors associated with the rater. For example, a rater who tends to rate most employees at midrange may have a strong desire to avoid any conflict with employees and thus try to avoid any differences in rating among employees. An individual who rates an individual inappropriately low after conducting reviews of very high performers may be unaware that her objectivity is hindered by contrast errors. However, basing performance evaluations on political factors tends to be a more explicit and conscious effect. For example, a manager may rate an employee lower than is warranted as a way of justifying a termination. In other words, rating errors
4 tend to be unconscious and based in one s psychological preferences and attitudes, while politically motivated errors tend to be conscious and strategic. In fact, a manager who believes in the political objective of altering an appraisal may not consider such an act an error at all. In discussion of these issues, it should be pointed out that neither type of error is acceptable. They must be discussed because they are common problems with performance evaluations and it is important for managers to be conscious of them. 6. We often think of the annual review as just that: a yearly review of performance with employees. However, use of this term can be misleading. First, an annual review does not mean that this is the only time performance is discussed with employees. As noted in the chapter repeatedly, feedback and coaching are continuous processes, and the annual review is intended as a time to formally review the year s performance and plan for the future. A second problem is that formal reviews may need to be conducted more often for certain employees. One way of thinking about this problem is to recognize that some performance reviews are developmental in nature and as such are generally focused on strong performers. For marginal performers, we may think of reviews as remedial in nature. In this case, more appraisals than the annual review are warranted. Managers should understand that in general, an annual review is appropriate for most employees. It is during this session that overall performance is reviewed, goals established, and developmental activities planned, such as training and promotion possibilities. However, this session should not take the place of ongoing feedback and discussions of performance. For marginal employees, more frequent reviews may be necessary, and for employees at risk of termination, reviews may be frequent. 7. Employee participation in the performance management process is important for several reasons. First, employees often have a good idea of the problems they are facing in their work, and they usually have solutions to these problems. Without their participation, management may not know about those problems and solutions. Second, when management establishes goals for employees, rather than with employees, misunderstandings about expectations occur. Involving employees in the goal-setting process maximizes the probability that misunderstandings will be minimal and the details of strategies and goals unambiguous. Establishing goals with employees also helps ensure mutual understanding about timelines, measures of performance, and other essential details.
5 The second part of this question is intended to stimulate discussion and to reinforce the importance of employee participation. The point is that it is virtually impossible to think of a situation where employee participation is not important. Some students may bring up potential scenarios, but other students will likely contradict them. If they are not contradicted, the instructor should intervene. Even in situations where a job s content is very stable and the employee s performance exemplary, participation is important for developmental purposes and for identifying challenges or changes in the future. Furthermore, a manager may feel that employee participation is unnecessary, but the employee may wish to explore issues or problems. Without employee participation, the manager may never discover these issues.
6 Chapter 7: Experiential Exercise In discussing this case, the following points should be discussed: 1. The challenges faced in developing an instrument to assess team performance. Students should be asked to identify how they would measure team performance, where they would obtain the information, and how they would ensure the reliability and validity of the information. Students may point to the need for peer appraisals of team behavior and the problems associated with peer evaluation. 2. The usefulness of multisource appraisal. This appraisal format has relevance for evaluating team performance, but as the chapter indicates, it also poses problems. 3. The problematic nature of engaging contract employees. How do we engage people whose commitment to the organization may not be at the same level as that of fulltime employees? 4. Students consideration of how their team behaviors are assessed in their classes. Students have likely experienced some type of peer evaluation, and they will point out the problems with such approaches, such as lack of anonymity, reluctance to honestly assess others performance, and lack of trust. 5. Implementation s impact on existing processes. Employees may oppose this type of measurement for several reasons. For example, they may feel it is subjective and not based on solid data. It would be useful to point out to students that before team performance evaluation is begun, they would need to ensure that team responsibilities are included in job descriptions. The job description provides the basis for performance evaluation, and if team-related issues are not listed, evaluating employees on this criterion is unfair.
7 Chapter 7 Performance Management Scope of Performance Management Graphic Rating Scale Behavioral Anchored Rating Scale Ranking Critical Incident Management by Objectives The Cynicism About Performance Management SMART Goals
8 Performance Management Defined An ongoing process that includes: Setting performance goals with employees Monitoring employees progress toward their goals Designing improvement strategies with employees Providing ongoing feedback and coaching
9 Key Elements of Performance Management Linked with all other human resources management functions An ongoing process that is not limited to the annual review A relevant process for employees at all levels Use of performance criteria is critical to successful performance management
10 Performance Appraisal Criteria Performance standards refer to indicators of what a job is intended to accomplish, how performance is measured, and expected levels of performance Some common problems with appraisal criteria: Criterion deficiency Criterion contamination Poor reliability Poor validity
11 Reliability and Validity of Appraisal Criteria Reliability refers to the consistency with which a manager rates an employee in successive ratings Consistency with which two or more managers rate performance when they have comparable information Validity The extent to which appraisal criteria actually measure the performance dimension of interest Validity may be particularly problematic when measuring attitudes or other job-related factors that are difficult to measure in an objective manner
12 Sources and Uses of Job Performance Information Can be used for administrative decisions and employee development purposes Self-appraisal Subordinate appraisal Team-based appraisal Team citizenship appraisal Multisource appraisal
13 Methods of Organizing Job Performance Information Graphic Rating Scale Behavior Anchored Rating Scale (BARS) Behavioral Observation Scale Ranking Critical Incidents Management by Objectives
14 The Performance Review Gives employees the opportunity to discuss performance and performance standards Addresses employee strengths and weaknesses Identifies strategies for improving employee performance Provides an opportunity to discuss personnel decisions, such as compensation, promotion, training, and termination Provides an opportunity to discuss regulatory requirements and compliance issues
15 Attitudes and Cynicism About Performance Management Perception that performance management is subjective Process is uncomfortable and has high emotional content Performance appraisal is traditionally thought of as a negative, punitive process Managers are prone to rating errors
16 Rating Errors Distributional Leniency Strictness Central tendency Halo effect Personal bias Similar-to-me bias Contrast bias Political factors sometimes promote deliberate distortion of appraisals
17 Conducting Performance Management Interviews SMART goals: specific, measurable, achievable, relevant, and timebound Provide feedback on an ongoing basis Evaluate the frequency of formal performance appraisals Prepare for the interview Use multiple sources of information Encourage employee participation Focus on future performance and problem solving Focus on behavior and results, not personal traits Reinforce positive performance Ensure that performance management is supported by senior management Plan and implement follow-up activities
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