Performance Management
Week 1
Article 1. A look back and a leap forward: a review and synthesis of the individual work
performance literature.
(Carpini, Parker & Griffin, 2017)
- Work performance is an essential concept for understanding an individual’s contribution to
the organization. Defined as individual behavior that generates value for the organization
(Campbell, McCloy, Oppler, & Sager, 1993), work performance is a primary dependent
variable in almost every area of management and organizational behavior.
- The relative importance of different forms of behavior is a function of uncertainty and
predictability in work requirements. When predictability is high, performance requirements
can be anticipated in advance and formalized through job descriptions and other formal and
informal processes (proficient performance), but when uncertainty is high, tasks cannot
always be prespecified and things change, so adaptive and proactive performance is required
to achieve organizationally functional outcomes (Griffin et al., 2007). These contextual
requirements help to differentiate the kind of antecedents that are important for motivating
and enabling each form of performance.
- Proficiency. In terms of individual capacity to perform proficiently, the most robust
antecedent has been cognitive ability, or the ability to learn (Schmidt, 2002; Schmidt &
Hunter, 2004). This result is likely due to the strong relationship between job knowledge and
general cognitive ability (Hunter, 1986), such that job knowledge allows an individual to
execute prescribe tasks to a high degree of proficiency (Schmitt et al., 2003).
- Adaptivity. Adaptive performance, or coping with and responding well to change, has been
predicted by several capacity factors, including knowledge and cognitive ability, but also—
and distinct from proficiency—meta-cognition, and adaptive experience (Jundt et al., 2015).
As Bell and Kozlowski (2008: 299) explain, “meta-cognitive activities include planning,
monitoring, and revising goal appropriate behavior.”
- Proactivity. Proactive performance is defined by self-initiated, future-focused, and change-
oriented behavior. As such, the role of capacity in predicting proactive performance has had
less attention relative to both proficiency and adaptivity. This trend makes sense because,
agency is often perceived as psychologically risky, and thus scholars have argued that
motivation is most crucial for proactivity (Parker et al., 2010). Nevertheless, individual
studies have shown a positive correlation between both education (e.g., Van Dyne & LePine,
1998) and cognitive ability (Frese & Fay, 2001) with proactive performance. Frese and Fay
(2001) argued that capacity matters for stimulating proactivity because—when individuals
possess knowledge and skill—they are more likely to experience feelings of mastery, which
in turn motivates proactive behavior. From this perspective, capacity is more of a motivational
resource. It is possible that capacity matters more when it comes to promoting highly
effectiveproactivity (e.g., Chan, 2006) and that it matters more for promoting highly creative
forms of proactive behavior (e.g., Wu, Parker, & de Jong, 2014).
Article 2. The economic impact of employee behaviors on organizational performance.
,(Cascio, 2006)
- From a business standpoint, absenteeism is "any failure of an employee to report for or to
remain at work as scheduled, regardless of reason."'" The term 'as scheduled" is very
significant, for it automatically excludes vacations, holidays, jury duty, and the like. It also
eliminates the problem of determining whether an absence is "excusable" or not. Medically
verified illness is a good example. From a business perspective, the employee is absent and is
simply not available to perform his or her job; that absence will cost money. How much
money? In 2003, the cost of unscheduled absences in U.S. workplaces was about $800 per
employee per year. For every 100 employees, that is $80,000.
- Surprisingly, the leading causes of absenteeism are family-related issues (e.g., lack of
childcare alternatives, eldercare responsibilities).'* Personal illness, the reason one might
expect to be the main justification for calling in sick, is actually true only in about one in five
cases. Other causes are personal needs (about one in five cases), stress (about one in six
cases), and entitlement mentality (about one in six cases).
- On the other hand, workers who come to work sick, when they should stay home instead,
cost their employers an average of $255 per year in reduced productivity due to
"presenteeism." Presenteeism refers to slack productivity from ailing workers.'^ It often
results from employees showing up but working at sub-par levels due to chronic ailments.'*
For example, the estimated productivity loss associated with depression is 6.4 percent. It is
4.9 percent for arthritis, and 3.2 percent for obesity. In the aggregate, economists estimate that
presenteeism costs U.S. businesses $180 billion annually.
- Savings for individual employees also translate into savings for companies. Yet there is
much that companies themselves can do to encourage healthier lifestyles among employees,
from educating employees about health- risk factors, to serving healthier food in company
cafeterias and vending machines, to instituting work/life programs to reduce stress levels
among employees.
- We use the terms training and development interchangeably. Training consists of planned
programs designed to improve performance at the individual, group, and/or organizational
levels. Improved performance, in turn, implies that there have been measurable changes in
knowledge, skills, attitudes, and/or social behavior. Such changes may be evaluated at the
level of the individual (e.g., reactions to the training, demonstrated new knowledge or skills,
changes in behavior), at the level of a team (e.g., improved ability to function effectively in a
collective effort), or at the level of the organization, in terms of the overall return on
investment of a training and development program.
- A large body of research has shown that the economic gains in productivity that are
associated with the use of valid staffing procedures far outweigh the cost of those
procedures.'^ This means that people who score high (low) on such procedures also tend to do
well (poorly) on their jobs. High scores suggest a close "fit" between individual capabilities
and organizational needs, while low scores suggest a poor fit. By hiring or promoting those
who score high on valid measures of performance (and rejecting those who score poorly)
productivity, quality of work life, and the bottom line all stand to gain.
- In terms of best practices, firms that excel in employee retention seem to do three other
things well: • Each is a company that people want to work for. Management inspires
,commitment to a clear vision and definite objectives, or as Bill Gates recently noted, "It's
important to work at a place where you are connected to a dream." " They get new employees
off to a great start, beginning with proactive management of the first 90 days (orientation and
socialization). They recognize that most employee turnover occurs early in the employment
relationship, and so they provide the kind of information, support, and tools that employees
need to do their jobs well. They never stop communicating how each employee's work is vital
to the organization's success, and they ensure that each new employee has a performance
agreement. That agreement clearly identifies expectations, time frames for performance, and
the standards that will be used to measure performance. • They provide regular coaching and
rewards to sustain commitment. To do that, they proactively manage the performance
agreement, they recognize results regularly, and they give employees the tools they need to
take charge of their own careers.
What can organizations do to control or reduce absenteeism? A comprehensive review of
research findings in this area revealed that absence-control systems can neutralize some forms
of absence behavior, but at the same time they may catalyze others.'* For example, research
shows that punishments, or stricter enforcement of penalties for one type of absence, tend to
instigate other forms of missing work. This is not to suggest, however, that absence-control
policies should be lenient. Lenient policies convey a relaxed norm about absenteeism, and
research evidence clearly indicates that those norms can promote absence-taking. A first step
is to assess the problem correctly so that the organization knows where to apply control
mechanisms. Organization-wide absenteeismcontrol methods (such as rewards for good
attendance, progressive discipline for absenteeism, daily attendance records) may be
somewhat successful, but they may not be effective in dealing with specific individuals or
work groups that have excessively high absenteeism rates. Special methods (such as flexible
work schedules, job redesign, and improved safety measures) may be necessary for them. It is
the careful analysis of detailed absenteeism research data that can facilitate the identification
of these problems and suggest possible remedies." With regard to presenteeism, companies
, such as Comerica Bank, Dow Chemical, and J.P. Morgan Chase are among those that have
put programs in place to help employees avoid or treat seasonal or chronic health conditions,
or at least to stay productive in spite of them."" To ensure employee privacy, for example,
Comerica Bank used a third party to survey its employees and found that about 40 percent of
them said they suffered from irritable bowel syndrome (IBS), which can involve abdominal
discomfort, bloating, or diarrhea.
At first glance, it might appear that changing employees' unhealthy lifestyles is a win-win for
employers and employees. Perhaps, but beware of violating the Americans with Disabilities
Act (ADA)! Employers violate the ADA if they require employees to submit to wellness
initiatives, such as health-risk appraisals (questionnaires about one's health history and current
lifestyle) and assessments (physical and biomedical tests that screen for specific health
conditions). This is so because the ADA forbids employers from conducting mandatory
medical exams once an employee is hired, unless the inquiry is "job-related and consistent
with business necessity." Employers also must be careful when tying financial incentives or
disincentives (such as cash bonuses or reduced health insurance contributions) to test results.
The employer can offer an incentive only upon verification that the employee went for the
test. The incentive cannot be tied to the test results.
Conclusion:
- As we have seen, the behavior of individual workers has important financial consequences
for organizational performance and productivity, as well as for employees themselves. We
have examined just a few of the many possible areas where the control of costs associated
with employee behaviors (e.g., turnover, absenteeism, presenteeism, unhealthy lifestyles) and
the benefits associated with wise management of employees (promotion of positive employee
attitudes, training and development programs targeted to strategic challenges, use of valid
staffing practices for hiring and promotion) can increase productivity and decrease operating
expenses. These are things employers can do now. Comprehensive audits of human resource
policies at all levels of employees and managers may well reveal opportunities for even
greater gains.
