Performance Management - Herman Augnis

1. Worked Solutions for End-of-Chapter Cases
Case Study 5.1: Accountabilities, Objectives, and Standards
Below is a job description for a sourcing and procurement internship position for Disney Consumer Products Studio.
Based on the information in the job description, create accountabilities, objectives, and standards for the job described.
Title: Graduate Associate, Sourcing & Procurement
Accountabilities:
 Provide analytical support for sourcing projects impacting business units. Successful analytical support will ensure
that project decisions are made on well-researched reasons. Poorly made project decisions may delay client
deliverables or damage the Disney brand. (20% of time)
 Benchmark current pricing models and develop new approaches to pricing/buying various products and services that
yield creative and business advantages. This is extremely important to the continued sustainability of Disney, and
will be critical to capture new portions of the market share. Incorrectly identifying pricing models would be crushing
to the Disney business and would directly impact the bottom line. (30% of time)
 Assist in the development of spend profiles, key stakeholder lists, savings opportunities where existing contracts are
leveraged, savings opportunities in commodity areas that have not been sourced, and sourcing and procurement
strategy. Will play a small role in these extremely important activities. Successfully developing spend profiles,
identifying key stakeholders, identifying savings opportunities, and developing a successful business strategy are keys
to the financial stability of Disney. (50% of time)
Objectives:
 Develop spend profiles, key stakeholder lists, and a sourcing and procurement strategy. These tasks need to be
completed by July 1, 2004. Identifying savings opportunities where existing contracts are leveraged and identifying
savings opportunities in commodity areas that have not been sourced are ongoing tasks. Report weekly on savings
identified.
 Benchmark current pricing models and develop new approaches to pricing/buying various products and services that
yield creative and business advantages. Benchmarking project due by August 1, 2008. Developing new approaches to
pricing is an ongoing project. Turn in bi-weekly reports on new findings to your manager by COB every other Friday.
 Provide analytical support for sourcing projects impacting business units. Ongoing project where information must be
delivered inside project deadlines and budget guidelines.
Performance Standards:
 Identified savings opportunities where existing contracts were leveraged and identified commodity areas that have not
been sourced on a weekly basis for total savings of 5% over previous quarter spending.
 Benchmarked current pricing models by August 1, 2008 in 80 hours or less of time billed.
 Submitted new approaches to pricing/buying various products and services on a weekly basis resulting in at least two
new pricing approaches being adapted by the company by September 1, 2008.
 Provided ongoing analytical support for sourcing projects as rated by monthly project evaluations conducted by the
relevant project managers and communicate0d to your manager on a monthly basis.
(Suggested points: 10, .4[5.2], .3[5.3], .3[5.4])
Case Study 5.2: Evaluating Objectives and Standards
Answers will vary based on objectives and standards met. The greater the number of boxes checked in the table, the
better the objectives and standards.
Objectives must have the following
characteristics: Comments
X Specific and clear
X Challenging
X Agreed upon
Have to assume that the manager and employee
agreed on all objectives.

2. X Significant
X Prioritized
X Bound by time
X Achievable
X Fully communicated
Again, have to assume that the supervisor
communicated objectives to subordinate and to
all stakeholders involved in objectives.
X Flexible
Assume that the manager takes into consideration
any valid reasons that the subordinate may not
have met the objectives
X Limited in number
Performance standards must have the
following characteristics: Comments
X Related to the position
X Concrete, specific, and measurable
X Practical to measure
X Meaningful
X Realistic and achievable
X Reviewed regularly
Case Study 5.3: Measuring Competencies at the Department of Transportation
Indicators of Learning and Strategic Systems Thinking:
Frequency
This employee engages in the following
behaviors:
Always
5
Very
often
4
Fairly
many
times
3
Occasionally
2
Never
1
Enrolls in training classes
Works to develop new skills
Takes into account all forms of transportation
and their role in the DOT when making
decisions
Solicits information from team members
Solicits information from customers
Volunteers relevant information to team
discussions
Able to explain role of each unit
Able to explain link between work units and
DOT
Indicators of Organizational Learning:
Agreement
This employee engages in the following
behaviors:
Very
much
5
Pretty
much
4
Moderately
3
Somewhat
2
Slightly
1
Demonstrates understanding of DOT culture
Accurately explains major products and
services offered
Demonstrates understanding of how work
units contribute to one another and the
organization as a whole
Establishes formal channels to accomplish

3. work
Establishes informal channels to accomplish
work
Understands and explains key policies,
practices, and procedures
Understands and communicates political
realities and implications to work
Case Study 5.4: Creating BARS-Based Graphic Rating Scales for Evaluating Business Student Performance in
Team Projects
1. Competencies:
 Teamwork: Ability to work with a team to finish all project deliverables on time and according to instructions.
Assists others as necessary and constantly seeks to further relationships with team members. Failure to develop
teamwork will result in reduced team effectiveness due to lack of communication and cooperation between team
members.
 Business knowledge: Aware of current business trends and applies relevant business research skills to projects at
hand. Always learning new skills, staying current on business news, and talking with business professionals.
Failure to develop business knowledge will result in a decrease in the quality of work produced by the team.
 Communication: Ability to articulate verbally or through written communication ideas on project deliverables.
Use of correct grammar, professional presentation, and clear and concise messages characterize good
communication. Failure to communicate well will result in the decreased performance of the team, because team
members will no longer understand ideas put forth.
2. Behavioral Indicators:
 Teamwork
o Friendly environment exists
o Team members’ input is accepted
o Offers to help other team members when necessary
 Business knowledge
o Student offers input when group is discussing business problems
o Actively researches solutions presented
o Reads business news sources on a daily basis to stay up-to-date on business trends
 Communication
o Clearly articulates points in meetings
o Uses correct grammar and word usage in written communications
o Professionally presents ideas and findings in project presentations
3. Critical Incidents:
Indicator High Performance Average Performance Poor Performance
Student offers input
when group is
discussing business
problems
Continuously provides
relevant input into group
discussions
Offers input on areas of
expertise in group
discussions
Does not offer input into
group discussions
Actively researches
solutions presented
Researches practical and
theoretical implications of
decision
Researches practical
implications of decision
Does not research
implications of business
decisions
Reads business news
sources on a daily
basis to stay up-to-
date on business
trends
Comments on a daily basis
on the status of ongoing
business developments of
interest
Comments on a weekly
basis on the status of
ongoing business
developments of interest
Does not comment on
the status of ongoing
business developments
of interest

4. Clearly articulates
points in meetings
Presents ideas in a clear and
concise manner and ensures
that team members
understand point
Presents ideas in a clear
and concise manner
Does not get point
across in meetings,
which results in
arguments with other
team members or
miseducation of team
members
Uses correct grammar
and word usage in
written
communications
Written communications are
clear, free of spelling and
grammatical mistakes
Clear use of language in
written reports
Poor spelling and
grammatical usage in
written reports
Professionally
presents ideas and
findings in project
presentations
Prepares presentation so
ideas are communicated well
and in a professional manner
Minimally prepares for
presentations, so
communication is rushed
or drags on
Does not prepare for
presentations
Friendly environment
exists
Takes an interest in team
members outside of project
Talks to team members to
complete tasks Withdrawn from team
Team members’ input
is accepted
Supportive of other team
members’ ideas
Solicits, but does not
support team members’
ideas
Does not solicit input
from other team
members
Offers to help other
team members when
necessary
Volunteers for extra
assignments so that team
members can finish projects
on time and to the highest
standards
Offers to help team
members if deadline is
approaching
Does not offer to help
team members
4. Scales:
Teamwork: Ability to work in a team to finish all project deliverables on time and according to instructions. Assists
others as necessary and constantly seeks to further relationships with team members. Failure to develop teamwork will
result in reduced team effectiveness due to lack of communication and cooperation between team members.
5 Exceptional: Takes an interest in team members outside of project.
3 Competent: Talks to team members to complete tasks.
1 Major Improvement Needed: Withdrawn from team.
5 Exceptional: Supportive of other team members’ ideas.
3 Competent: Solicits, but may not support team members’ ideas.
1 Major Improvement Needed: Does not solicit input from other team members.
5
Exceptional: Volunteers for extra assignments so that team members can finish projects on
time and to the highest standards.
3 Competent: Offers to help team members if deadline is approaching.
1 Major Improvement Needed: Does not offer to help team members.
Business Knowledge: Aware of current business trends and applies relevant business research skills to projects at hand.
Always learning new skills, staying current on business news, and talking with business professionals. Failure to develop
business knowledge will result in a decrease in the quality of work produced by the team.
5 Exceptional: Continuously provides relevant input into group discussions.
3 Competent: Offers input on areas of expertise in group discussions.
1 Major Improvement Needed: Does not offer input into group discussions.
5 Exceptional: Researches practical and theoretical implications of decisions.
3 Competent: Researches practical implications of decisions.
1 Major Improvement Needed: Does not research implications of business decisions.

5. 5
Exceptional: Comments on a daily basis on the status of ongoing business developments of
interest.
3
Competent: Comments on a weekly basis on the status of ongoing business developments of
interest.
1
Major Improvement Needed: Does not comment on the status of ongoing business
developments of interest.
Communication: Ability to articulate verbally or through written communication ideas on project deliverables. Use of
correct grammar, professional presentation, and clear and concise messages characterize good communication. Failure to
communicate well will result in the decreased performance of the team, because team members will not understand ideas
expressed.
5
Exceptional: Presents ideas in a clear and concise manner and ensures that team members
understand point.
3 Competent: Presents ideas in a clear and concise manner.
1
Major Improvement Needed: Does not get point across in meetings, resulting in arguments
with other team members or miseducation of team members.
5 Exceptional: Written communication is clear, free of spelling and grammatical mistakes.
3 Competent: Clear use of language in written reports.
1 Major Improvement Needed: Poor spelling and grammatical usage in written reports.
5
Exceptional: Prepares presentation so ideas are communicated well and in a professional
manner.
3 Competent: Minimally prepares for presentations, so communication is rushed or drags on.
1 Major Improvement Needed: Does not prepare for presentations.
(Suggested points: 5, .5[5.6], .5 [5.8])
Additional Cases and Worked Solutions
Case Study: St. Jessica’s Urban Medical Center
The Board of Directors at St. Jessica’s Urban Medical Center has hired you as a consultant to guide them in establishing a
results approach to measuring performance.
1. Discuss the key features of a results approach to measuring performance. Use the job description for a
Registered Nurse that was provided in “Case Study: St. Jessica’s Urban Medical Center Emergency Room”
(Instructor’s Manual, Chapter 4) to develop an example of each of these factors.
After reviewing your proposal, the management at St. Jessica’s realizes that, in some aspects, the hospital’s
employees do not have control over many results, so they convince the Board to include a behavior approach to
measuring some aspects of performance.
2. The Board asks you to provide them with a discussion of the key features required to include a behavior approach
to performance measurement. Use the job description for a Registered Nurse that was provided in “Case Study:
St. Jessica’s Urban Medical Center Emergency Room” to develop an example of each of the key features of a
behavior approach to performance measurement.
Answers:

6. 1. (Note to instructors: The student may use any examples relating to the job description of Registered Nurse in
Module 4 as long as they are pertinent and demonstrate ability to apply the material in the text. Examples given
are for illustration only.)
To fully implement a results approach to measuring performance, the Medical Center management must be able to
answer the following questions:
 What are the different areas in which this individual is expected to focus efforts? (key accountabilities)
 Within each area, what are the expected objectives?
 How do we know how well the results have been achieved? (performance standards)
A. Actual implementation of the results approach will require you to develop key accountabilities. Accountabilities
are determined to identify a limited number of highly important results that, when achieved, will have a dramatic
impact on the overall success of the organization. The first step will be to collect information about the job and
identify areas of the job where the employee is responsible for producing results and their relative degree of
importance; e.g., percent of time spent performing the accountability, consequences of inadequate performance,
and consequences of error. For example, in the job description for Registered Nurse, one of the accountabilities
might be:
Documentation: Maintaining accurate, detailed reports and records. An RN might spend 30% of his/her time
on recording and maintaining information in patient records. If the records are not complete and accurate, it
would be possible for a doctor to order inappropriate medication, which could lead to deterioration of the
patient’s condition or even death.
B. When all the key accountabilities are identified, the second step is to set objectives for each. Objectives should
be: (a) specific and clear, (b) challenging, (c) agreed upon, (d) significant, (e) prioritized, (f) bound by time, (g)
achievable, (h) fully communicated, (i) flexible, and (j) limited in number. For example, two objectives that
could be developed for the Registered Nurse accountability of documentation might be:
 Provide prompt updates in the patient’s record of any changes in condition, medication, and vital signs.
 Ensure that all written documentation is clear, legible, and can be understood by other medical personnel.
C. Finally, the third step involves determining performance standards. These are yardsticks designed to understand to
what extent the objective has been achieved. In creating standards, we must consider the quality, quantity, and
time dimensions. Good standards are: (a) related to the position, (b) concrete, specific, and measurable, (c)
practical to measure, (d) meaningful, (e) realistic and achievable, and (f) reviewed regularly. For example, a
performance standard for one of the objectives given for Registered Nurse might be:
Prompt Updates: Each entry in a patient’s record will be made within 20 minutes of the action or
observation. The patient’s hospital number, room number, the time of the observation, and the name of
the person taking action will be included with the description of the action or observation.
2. (Note to instructors: The student may use any examples relating to the job description of Registered Nurse in
Module 4 as long as they are pertinent and demonstrate ability to apply the material in the text. Examples given
are for illustration only.)
A. In measuring performance adopting a behavior approach,
a. The first step involves identifying competencies. Competencies are measurable clusters of KSAs
(knowledge, skills, abilities) that are critical in determining how results will be achieved. For example, in
the job description for Registered Nurse, one of the competencies might be customer service, which
includes knowledge (of principles and processes for providing customer needs assessment, meeting
quality standards for services, and evaluation of customer satisfaction), the skills of active listening and
speaking, and the ability to identify problems.
b. The second step involves identifying indicators that will allow us to understand the extent to which each
individual possesses the competency in question. These indicators are behavioral manifestations of the
underlying (unobservable) competency. An indicator that could be developed for the Registered Nurse

7. competency of customer service might be, for example (adapted from the job description for Registered
Nurse), customer service includes the use of active listening, which is described as: “Giving full attention
to what other people are saying, taking time to understand the points being made, asking questions as
appropriate, and not interrupting at inappropriate times.”
c. The third step involves describing behavioral indicators showing the absence of the competency; for
example (adapted from the job description for Registered Nurse), customer service includes the use of
active listening. Failure to use active listening would include interrupting a patient, looking at a watch,
tapping a foot, looking away from the patient, sighing and rolling eyes, changing the subject without
responding to the patient’s comment, etc.
d. Fourth, list suggestions for developing the competency; for example (adapted from the job description for
Registered Nurse), the competency of customer service can be developed through attending various
training courses. One popular definition of customer service is “exceeding the customer’s expectations.”
Note: If management wants to develop a culture of such customer service, such expectations must be
spelled out and consistently supported throughout the organization.
B. Once the indicators are identified, the last step includes choosing an appropriate measurement system:
comparative or absolute.
a. Comparative systems base the measurement on comparing employees with each other and include simple
rank order, alternation rank order, paired comparisons, and forced distribution. Comparative systems are
easy to explain and the resulting data are easy to interpret, which facilitates administrative decisions. On
the other hand, employees are usually compared to each other in terms of one overall single category
instead of in terms of specific behaviors or competencies. This produces less useful feedback that
employees can use for future improvement. For example, in the case of the Registered Nurse, such a
measurement system could be used to let each nurse know his or her ranking among the other nurses.
b. Absolute systems include evaluations of employees’ performance without making direct reference to
other employees. Such systems include essays, behavior checklists, critical incidents, and graphic rating
scales. For example, in the case of the Registered Nurse, such a measurement system could be used to
describe his or her behavior in terms of what is expected.
Case Study: The College of Business at VIP University
You are a newly hired professor with a Ph.D. in Human Resources Management. You have special interests in both
training and in performance measurement. You decide to develop a comparative performance measurement system to
measure student performance in your HR Management classes.
1. Critically assess the advantages and disadvantages of implementing such a system.
2. Explain the kinds of systems that are available for you to consider. Choose one approach and provide both a
description of how you would implement it in a class of 30 students and an explanation of why this was the best
choice of the variety of comparative systems.
At the end of the school year, a student initiative calls for a revision of the grading system at VIP University. Every
professor will be required to develop an absolute performance measurement system. The process is complicated by the
fact that many students are distance learners who interact on the Internet rather than in person.
3. Describe how you will implement an absolute performance measurement system in your classes next year,
recognizing that you can devote no more than 10 hours per week to preparing for each class, actually participating
in the class, and developing and grading any homework and exams. What will you consider in choosing a system
and how will you go about implementing it?
Answers:

8. 1. Comparative performance measurement systems are easy to explain, straightforward, and generally control better
for the leniency, severity, and central tendency biases and errors that can be found in absolute performance
measurement systems. However, rankings tend not to be specific enough to provide useful feedback to students
and they may subject the university or the professor to legal challenges. There is no information in such scales
about the relative distance between student performances and there are specific concerns about the usefulness
(and appropriateness) of using the forced distribution method in a university setting. In addition, it may be
difficult to assign letter grades to the various levels.
2. Comparative performance measurement systems compare employees with each other.
a. Simple rank order--employees are ranked from best performer to worst performer.
b. Alternation rank order--in an alternation rank order procedure, the supervisor initially lists all students.
Then, the supervisor selects the best performer (#1), then the worst performer (#n), then the second best
(#2), then the second worst (#n - 1), and so forth, alternating from the top to the bottom of the list until all
students have been ranked.
c. Paired comparisons--explicit comparisons are made between all pairs of students to be evaluated. The
number of pairs of students to be compared is computed by the following equation:
2
)1( nn
(Where n is the number of students to be evaluated.)
d. Forced distribution--students are apportioned according to an approximately normal distribution. This
method assumes that performance scores are normally distributed, with some students performing very
highly, some poorly, and the majority in between. However, this assumption may not hold true for all
units within an organization. Some units may have a high performing culture and systems in place such
that the majority of members perform at a very high level. Conversely, other units may have a majority
of members who perform at a below-expectations level. Another disadvantage of implementing a forced
distribution system is that this may discourage students from engaging in contextual performance
behaviors.
3. Absolute performance measurement systems compare students with prespecified performance standards. I
considered the following approaches, including their advantages and disadvantages:
a. Essays: Here I could write an essay describing each student’s strengths and weaknesses, making
suggestions for improvement. An advantage is that essays have the potential to provide detailed feedback;
disadvantages to essays include the fact that they are unstructured and may lack detail, their usefulness
depends on my writing skill, and they are difficult to use in grading decisions, partially due to the lack of
quantitative information provided. They are also quite time consuming, considering that I expect to have
thirty or more students per class.
b. Behavior checklists: I could use a form listing behavioral statements that are indicators of the various
competencies to be measured. An advantage is that such a checklist is easy to understand; disadvantages
are that the scale points used are often arbitrary and it is difficult to get detailed and useful feedback from
the numerical rating.
c. Critical incidents: This approach involves gathering reports of situations in which students performed
behaviors that were especially effective or ineffective in accomplishing their learning objectives. An
advantage is that this allows me to focus on actual student behavior rather than on vaguely defined traits;
the disadvantage is that collecting such information is very time consuming.
d. Graphic rating scales are considered the most popular tools to measure performance. It is important to
ensure that the response categories are clearly defined, that interpretation of the rating by an outside party
would be clear, and that the student and I would both understand the rating.
e. Behaviorally Anchored Rating Scales (BARS) improve on graphic rating scales by using critical incidents
as anchors. Their development is dependent on active student involvement at several points, as well as
final professor and student checking of the items for dependability of the ratings.
Since I have already developed class syllabi that outlined required student behaviors and what was necessary to
earn various grade levels, I opted to use the essay format to further explain my grading system and how student
strengths and weaknesses (as displayed in their papers, exams, and Internet class participation) contributed to their
final grades. I would like to use BARS sometime, but this is an expensive and time-consuming undertaking that
would involve full university support and participation in developing the response categories and identifying how
critical incidents could be used productively in a distance learning arrangement.