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Organizational Psychology – Performance Management

Answers the Question

What is meant by job performance and what are the core elements of performance management?

How it Began

Organization Psychology focuses on assessing individual differences and developing a deeper understanding of the person, as opposed to simply the context within which an individual is operating.   Various topics that are examined in performance management are the individual skills required for a particular job and how individual differences influence an individual’s work performance. A goal of performance management is to improve organizational performance by placing the right people in the right jobs, thus enhancing the fit between the individual and the organization.  Performance Management covers such topics as selection, training, performance measurement, and evaluation.Performance management is more than an annual performance review meeting between a supervisor and employee, instead it includes ongoing coaching, feedback, and support from the supervisor.

Performance Management

Key Terminology

Performance Management – A continuous process of identifying, measuring, and developing the performance of individuals and teams and aligning performance with the strategic goals of the organization.

Job Performance – Something that People actually do and can be observed including those actions or behaviours that are relevant to the organization’s goals and that can be measured in terms of each person’s proficiency

Contextual Performance – Organizational Citizenship behaviours includes personal support, organizational support and conscientious initiative.

Task Performance – Goal-directed activities that are under that individual’s control.

Grit – a positive, non-cognitive trait, based on an individual’s passion for a particular long-term goal or end state coupled with a powerful motivation to achieve the objective.

In Brief

A central premise of performance management systems is that individual (and team) goals need to be closely aligned with higher level organizational goals.  At an individual level, goal setting is also an important element of effective performance management..  Perhaps the most central tenet of goal setting theory, illustrated in hundreds of studies, is that specific, difficult goals lead to higher performance than “do your best” goals.

There has been a paradigm shift from thinking of performance appraisal as a discrete event to a continuous process of performance management in which coaching is inherent in the process.  This draws away from the traditional appraisal research focused on measurement issues towards examining how job performance can be enhanced.

The management of performance is now being related to key issues such as the physical and mental well-being of employees. A meta-analysis of selection methods found that general mental ability was the best overall predictor of job performance and training performance.

But intelligence isn’t everything.  Motivation is another key component of job performance. Achievement motivation refers to a person’s drive to accomplish, to learn skills and concepts, to be in charge, and for quickly reaching a top standard (Murray, 1938). Those who are highly motivated to achieve more are more likely to be successful in realising their goals.

Discipline and talent are important. Simon (1998) coined the concept of “The 10-year rule”—the notion that those who are top in their fields spend 10 years of full-time, highly invested practice. Top scholars, students, and athletes have all been found to be talented, but also incredibly self-disciplined (Bloom, 1985).  Research is finding that self-discipline matters more than intelligence (Duckworth & Seligman, 2005, 2006).  In a longitudinal study of eighth-grade students, self-discipline measured in the fall accounted for more than twice as much variance as IQ in final grades, high school selection, school attendance, hours spent doing homework, hours spent watching television (inversely), and the time of day students began their homework. The effect of self-discipline on final grades held even when controlling for first-marking-period grades, achievement-test scores, and measured IQ. These findings suggest a major reason for students falling short of their intellectual potential: their failure to exercise self-discipline (Duckworth & Seligman, 2005, 2006).

Duckworth & Seligman further contend that equally talented people are separated by their grit, and the fervour and dedication they have for a long-term goal.  An individuals’ perseverance of effort develops the fortitude required to overcome obstacles or challenges that lay within a gritty individual’s path to accomplishment, and serves as a driving force in achievement realisation.

Commonly associated concepts include “perseverance,” “hardiness,” “resilience,”ambition,” and “need for achievement.” These constructs can be conceptualized as individual differences and have been studied in psychology since 1907, when William James challenged the field to further investigate how certain individuals are capable of accessing richer trait reservoirs, enabling them to accomplish more than the average person. Duckworth and colleagues (2007) believe this dual-component of grit to be a crucial differentiator from similar constructs. Grit is conceptualized as a stable trait that does not require immediate positive feedback. Individuals high in grit are able to maintain their determination and motivation over long periods of time despite experiences with failure and adversity. Their passion and commitment toward the long-term objective is the overriding factor that provides the stamina required to “stay the course” amid challenges and setbacks. Essentially, the grittier person has the fortitude for winning the marathon, not the sprint.

What does this mean for Organization Development?

Effective performance management systems offer many potential advantages.  These include: greater clarity about organizational goals, as well as the behaviours and results required for successful employees’ understanding of their strengths and weaknesses (and hence valuable developmental activities); increasing employees’ motivation, competence, and self esteem; better distinguishing between good and poor performers and thereby increasing the fairness of remuneration and reward decisions; protecting the organization from lawsuits; and facilitating organizational change.  Ineffective performance management systems have the potential to waste time and money, damage relationships, decrease motivation and job satisfaction, increase employee turnover, create perceptions of unfairness and thereby increase the risks of litigation.

The belief that behaviour must be understood from the point of view of the individual and the context within which the individual is behaving. Kurt Lewin’s famous statement that behaviour is a function of the person and the environment is the foundation on which OD operates.

Instead of focusing solely on the individual, OD emphasises the impact that social forces have on performance and the factors that result in similar individual behaviour across situations. A goal of OD is to ultimately improve organizational performance through the creation of a suitable social environment by focusing on such topics as motivation, rewards and recognition, leadership, group processes, conflict resolution, organizational culture, organizational change, and organizational performance.

In addition to analysing behaviour from the point of view of both the individual and the environment, it is important to utilise more than one perspective when completing an OD diagnostic of an organization.  It is important that an OD consultant examines organizational issues at the individual, the group, and the organizational levels. At the individual level the diagnosis might cover such areas as individual differences, motivation, and diversity. The group level might emphasises groups and teams and the dynamics involved and the organizational level might examine elements such as leadership, organizational culture, organizational change, and organizational effectiveness.  Each of these three levels must be taken into consideration when examining an organizational problem or issue so that it is possible to plan and intervention at the level(s) which is/are the most relevant to improving the overall performance of the organization.