Performance Management Essentials

Performance Management
© www.asia-masters.com

What Is “Good
Performance”?
• More than just activities, effort, good intentions, or
results
• Working hard and staying busy are not necessarily
high performance
• Attending training sessions and studying hard does
not necessarily lead to good performance
• Strong commitment may not lead to good
performance
• Even accomplishing some goals may not be high
performance

Broader Than
Performance
Appraisal
Begins with a look at goals & strategies of the
organization

Organizational
Alignment
All efforts must be aligned with overall goals and
strategies of the organization.
…a key to Performance
Management

a Cascading Process
• Mission, goals, and strategies should be defined, and clearly
understood by everyone
• How do all tasks contribute to overall plans for the
organization?

Annual Plans Should Create
Performance Standards for
Each Department
• These should translate into performance goals for each worker
• Quantity
• Quality
• Time
• Cost

What Are the Three Steps in
Performance Management?
Defining Performance
Facilitating Performance
Encouraging Performance

Performance
Appraisal continues to
be one of the most
criticized HR functions
in organizations

Performance Appraisal
• We all measure our subordinates’ performance whether we
do it formally or informally
• Very important to document what we evaluate
• Also necessary to show a clear link between what we
evaluate and job requirements

How Frequently
Should Performance
Appraisal Be Done?
Why?

Performance Appraisal -
a Continuing Process
• Is not a once-a-year or once-a-quarter experience
• Effective appraisal occurs frequently
• There should be no surprises when an employee is
given his or her formal appraisal interview
• Essential for coaching & positive motivation

The Main Point
Be sure that what is measured is documented & can be
shown to match job expectations

A Key to All of This:
Supervisors must have the support &
encouragement of higher management
to make all this work

MBO
• Steps in development and usage?
• Potential strengths and weaknesses?

What Do You Think?
What Form of Performance Appraisal Would
You Recommend?
What Criteria Have You Used in Making
Your Recommendation?
What Limitations (As Well As Strengths)
Does Your Recommended Method Have?

Performance management
Definition:
Employee performance management is the process
of involving employees in accomplishing your
agency’s mission and goals.
Employee performance management includes:
planning work and setting goals, monitoring
performance, developing capacity, reviewing
performance, and rewarding good work.

Designing the performance
management system
• What will be the purpose?
• What will be the sequential stages?
• What performance will be measured?
• Who will assess employee performance?
• What will be on the form?
• Will a rating scheme be used?
• What support systems need to be in place?

Managing performance for …
Accountability
Performance target
setting and
outcome/results
review
AND / OR

Performance Management Cycle
Performance Planning
Staff and the Organisation
Performance and Development
Reviewing
Enabling staff
to deliver
Taking stock of achievements, diagnostics
Setting Objectives, defining what is needed
Action
Reset objectives
Make changes

Alignment Model
Your
Organizational
Priorities
Your Major Areas of
Responsibility and
Individual Priorities
Mission
Values
Departmental
Priorities
Knowledge, Skills
and Behaviors
Performance Development Process
UNITOR
DEPARTMENT
HARVARDCOLLEGE
LIBRARY
PERSONAL
“What” “How”

Managing performance for …
Employee
Development
Competence assessment
and development

Stages of performance management
Plan
Monitor
Develop
ReviewReward

Stage 1 – Individual Performance Planning
Stage 1 – Planning
•Work goals
•Competencies
•Learning
Performance planning at the start of the year and then
periodically is the core of the performance
management process. The performance plan should
be a written document.
Plan

Performance planning
• How is what I do on a
daily basis tied to the
success of this
organization?
• What are my
performance goals for
the next time period?
• How are my goals
aligned with the
organizational goals?

Performance Planning
• Performance results – the what
• Performance outcomes or standards – from job description
• Performance objectives for the next time period
• Performance behavior – the how
• Competencies, performance factors, or behavior expectations
• Development objectives

• MBO is a system in which specific performance objectives
are jointly determined by subordinates and their superiors,
progress toward objectives is periodically reviewed, and
rewards are allocated on the basis of this progress.

MBO Principles
Cascading of organizational goals and objectives
Specific objectives for each member
Participative decision making
Explicit time period
Performance evaluation and feedback

Objectives should be specific, attainable, yet
challenging.
Is the objective appropriate for the business at this
time?
Does it take the organization in the direction it wants to
go?
Does it support the overall mission of the business?
Is it compatible and complementary with the other
objectives?
Is it acceptable and understandable to the majority
who will be charged with implementing it?
Is it affordable for the organization?
Is it measurable and achievable?
Is it ambitious enough to be challenging?

Hierarchy of objectives
Vision
Mission
Goals
Objectives
Policies
Procedures

MBO substitutes for good intentions a process that
requires rather precise written description of
objectives (for the period ahead) and time-lines
for their monitoring and achievement. The
process requires that the manager and the
employee agree to what the employee will
attempt to achieve in the period ahead, and (very
important) that the employee accept and buy into
the objectives (otherwise commitment will be
lacking).

SMART
Management by Objectives introduced the
SMART method for checking the validity of
Objectives,
'SMART':
• Specific
• Measurable
• Achievable
• Realistic, and
• Time-related.

Stage 2/3 – Monitor and Develop
Daily performance
management!
Monitoring includes
measuring performance
and giving feedback. Two
way communication
between the manager and
employee throughout the
performance period is
critical to the performance
management process.
Stage 2/3 – Monitor and
Develop
•Feedback
•Coach
•Adjust goals
Monitor
Develop

Daily performance
management
• Feedback and coaching –
informal
• Monitoring and tracking
performance against standards
and progress toward goals.
• Quarterly performance
planning and performance
discussions
• Development through
coaching, training, challenging
or visible assignments,
improving work processes

What performance will be
measured?
• Behaviors – how the work is done
• Performance factors / competencies
• Required behaviors
• Behaviors supporting desired organizational culture
• Results – what is achieved
• Performance outcomes
• Performance compared to job standards
• Performance goals and/or objectives

Stage 4 – Performance Review
The formal process of
documenting results the
employee has achieved
and behaviors and /or
competencies displayed
should occur at least
once a year.Stage 4 – Review
•At least annually
•Discuss
•Document
Review

Performance Review
• Summary of performance
over a period of time
• Evaluate performance
results and behaviors
• Conducted face-to-face
with a written record.
• While rating and ranking
has both pros and cons, a
summary rating of each
employee may be useful.

If a rating scheme will be used
• Number of levels: three, four, five, or six
• Rating labels
• Numerical: e. g. 1, 2, 3, 4, 5
• Behavioral frequency: e. g. always, usually, frequently, sometimes,
rarely
• Evaluation: e. g. distinguished, superior, competent, fair, marginal
• Performance against a standard: e. g. exceeds, meets, does not meet

Who will assess performance?
• Immediate supervisor
only
• In addition to the
immediate supervisor
• Employee (self)
• Peers and coworkers
• Internal and external
customers
• Subordinates
Choices include:

39
Performance Appraisal v. Performance Management
A Matter of Perspectives
Appraisal Management
One time event Ongoing
Retrospective Prospective
Short Term Long Term
Correction oriented Progress steps
Completing form Planning/goal setting

Approaches to designing an
appraisal form• Trait based
• Behavior based
• Competencies (or performance factors)
• Behaviors
• Results based
• Performance outcomes
• Objectives

What will be on the form?
• Identifying information
• Instructions
• Performance outcomes and/or results achieved (or not achieved)
on objectives
• Performance factors / competencies / work behaviors
• Employee signature and approvals

Other information
• Employee comments
• Summary of one to three major achievements
• Strengths / areas for development
• Overall rating
• Plan for development (if not elsewhere)
• Performance plan for next period (if not elsewhere)

Stage 5 – Reward
Good performance should be
rewarded. Recognition and
non-monetary rewards are an
important part of the reward
structure. These include job-
related rewards such as visible
project assignments. Even
thank you and recognition for a
job well done are rewards!!
Stage 5 – Reward
•Monetary
•Non-monetary
•Recognition
Reward

Rewards, recognition, and
compensation
• Recognizing employees for
performance
• Non-monetary rewards
• Informal and ongoing
acknowledgements of good work
• Compensation
• Merit increases?
• Pay to market?
• Increases added to base pay or lump
sum?
Separate conversation about pay from conversation about
performance!!!!!

What support systems need to
be in place?
• Senior management support
• Management accountability
• Communication about the process
• Training
• Process for new employees
• Process for dealing with poor performance
• Monitoring and evaluating the process (HR)
• Appeals process (HR)

Communication
• Timeframe for the
performance management
cycle
• Instructions for the
supervisor
• Instructions for the
employee
• Tie to other systems
• Support available

Performance Appraisal
Purpose
• Control Behavior
• Set Standard
• Measure Performance
• Compare Performance Against Standard
• If Discrepancy Exist, Take Corrective Action
• Used to Provide Feedback
• Used as Basis of Reward & Punishment Systems
• Used for System Improvement
© Dr. Dianna Stone

Reward or Take
Corrective Action
Reward or Take
Corrective Action
Set Standards
Provide Feedback
Measure
Performance
© Dr. Dianna Stone

Conflicts in Performance Appraisal
Conflicting Goals of Appraisal Create Problems
Organization Seeks
Information To
Improve Systems
Individual Seeks
Valid Performance
Feedback
Individual Seeks
Extrinsic Rewards
Organization Seeks
Information On Which
To Base Rewards
© Dr. Dianna Stone

Requirements of Effective
• Relevant to job
performance
• Distinguishes Effective &
Ineffective Performance
• Fair & Acceptable
© Dr. Dianna Stone

Performance Standards
• Managers assume standards
are clear
• Communicate - What is to
be done?
• How well should it be done?
© Dr. Dianna Stone

Performance Measures
• Objective Measures - Hard Criteria
$ Sales Personnel Data Tardiness
Units ProducedAbsence Rate
Error Rate Turnover
• Weaknesses
• Performance Modified by Situation - Opportunity Bias
• System Responsible for 96% of Variance - Person 4%
(Deming)
• Objective measures do not apply to all jobs
© Dr. Dianna Stone

Performance Measures
• Subjective Measures - Performance Measures
• Who Rates? Supervisors, Peers, Subordinates, Self
• Errors & Biases
• Halo Error
• Central Tendency
• Leniency (Positive & Negative)
Goal is to Accurately Appraise Performance
© Dr. Dianna Stone

Methods
• Ranking - Rank order ratees from highest to lowest
• Behavioral Checklist - Series of Descriptive
Statements of Job-Related Behavior
Example: ____ Comes to class on time
____ Courteous with clients
____ Sleeps on the job
• Forced Distribution
10% 20% 40% 20% 10%
Poor Below Average Above Excellent
Average Average
© Dr. Dianna Stone

Methods
• Advantages (Forced Distribution) : Decreases Central
Tendency & Leniency Errors
• Disadvantages (Forced Distribution): May not be
accurate reflection of performance
• Graphic Rating Scale - Most Widely Use
Quality
(1) (2) (3) (4) (5)
Poor Below Average Above Excellent
Average Average
• Behaviorally Anchored Rating Scale - Based on
critical incidents, Behaviors are anchors
© Dr. Dianna Stone

Methods
• Behaviorally Anchored Rating Scales
Police Officer: Job Knowledge
High (7, 8, 9) Follows correct procedures for
evidence preservation
Average (4, 5, 6) Seldom has to ask other about
points of law
Low (1, 2, 3) Misinforms the public about laws
© Dr. Dianna Stone

Performance Management Essentials

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Performance Management Essentials

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