Performance Performance ManagementManagement

© Nancy Brown © Nancy Brown Johnson, 2002Johnson, 2002

Performance Performance Management SystemManagement System

• A performance management system A performance management system defined, defined, ““formal, structured process used to formal, structured process used to

measure, evaluate, and influence measure, evaluate, and influence employee’s job related attributes, employee’s job related attributes, behaviors, and performance results.” behaviors, and performance results.” Jackson & SchulerJackson & Schuler

What do we hope to achieve through What do we hope to achieve through performance management?performance management?

• Improving the organization’s performanceImproving the organization’s performance• Ensure that employee’s activities congruent Ensure that employee’s activities congruent

with strategic objectiveswith strategic objectives– Communicating the organizational values Communicating the organizational values

and objectivesand objectives– Providing feedback to employeesProviding feedback to employees

• IncludesIncludes– defining performancedefining performance– measuring performancemeasuring performance– feedbackfeedback

What do we typically do?What do we typically do?

• We examine individual employee’s We examine individual employee’s performance.performance.

• We look at how well employees are We look at how well employees are doing their job.doing their job.

• Does this lead to increased Does this lead to increased organizational performance? organizational performance?

• When would it and when would it When would it and when would it not?not?

Do we get increased Do we get increased performance from assessing performance from assessing

individual employees?individual employees?• What factors might contribute to What factors might contribute to

poor performance?poor performance?• Technology & Work OrganizationTechnology & Work Organization• Individuals not being trainedIndividuals not being trained• Factors beyond employee’s control Factors beyond employee’s control

(resources, economy)(resources, economy)• Employee behaviorEmployee behavior• Deming calls it one of theDeming calls it one of the

“Deadly Diseases of Management” “Deadly Diseases of Management”

©a Times Mirror Higher Education Group, Inc., company, 1997a Times Mirror Higher Education Group, Inc., company, 1997

IRWIN

OrganizationalStrategy

Long & Shortterm goals and values

Individual Attributes

(skills,abilities)

Individual Attributes

(skills,abilities)

IndividualBehaviors

ObjectiveResults

SituationalConstraints- Culture- Economic conditions

SituationalConstraints- Culture- Economic conditions

ORGANIZATIONAL MODEL OF PERFORMANCE MANAGEMENT

What is Performance Appraisal?What is Performance Appraisal?

The ongoing process of The ongoing process of evaluating and managing evaluating and managing employee effectiveness.employee effectiveness.

Why is it Difficult?Why is it Difficult?

• Difficult to Conduct CorrectlyDifficult to Conduct Correctly• Personal Relationships Personal Relationships

InterfereInterfere• May Rate Irrelevant FactorsMay Rate Irrelevant Factors• Appraisers not Trained Appraisers not Trained • Appraiser not Familiar with JobAppraiser not Familiar with Job• Appraiser not Familiar with Appraiser not Familiar with

PerformancePerformance• SubjectiveSubjective

What Managers Say….What Managers Say….

One Manager from DEC Suggested One Manager from DEC Suggested

he would rather: he would rather: “...“...Kick bricks with his bare feet Kick bricks with his bare feet than do Performance Appraisals”than do Performance Appraisals”

Deming calls it one of theDeming calls it one of the “Deadly Diseases of “Deadly Diseases of Management” Management”

Objectives of AppraisalsObjectives of Appraisals

• Strategic – align individual and Strategic – align individual and organizational goalsorganizational goals

• Developmental-feedback and Developmental-feedback and guidance for performance guidance for performance improvementimprovement

• Administrative: Evaluation –pay Administrative: Evaluation –pay purposespurposes

Criteria for Judging Appraisal Criteria for Judging Appraisal EffectivenessEffectiveness

Validity: Are we measuring Validity: Are we measuring what we want to measure?what we want to measure?

Reliability: consistencyReliability: consistency

Acceptability: Do people Acceptability: Do people accept it?accept it?

Specificity: Guidance for Specificity: Guidance for improving performanceimproving performance

©a Times Mirror Higher Education Group, Inc., company, 1997a Times Mirror Higher Education Group, Inc., company, 1997

IRWIN

JobPerformance

Measure

Actual JobPerformance

DeficiencyContamination Validity

Contamination & DeficiencyContamination & Deficiency

Performance Appraisal Performance Appraisal CriteriaCriteria

– Attributes: TraitsAttributes: Traits– BehaviorsBehaviors– CompetenciesCompetencies– Results: OutputResults: Output– Management by Objectives Management by Objectives (MBO)(MBO)

– 360 degree feedback360 degree feedback

Traits Traits Characteristics of the Person: Characteristics of the Person: Dependable, LoyalDependable, Loyal

• Subjective: Poor Inter-rater Subjective: Poor Inter-rater

ReliabilityReliability• Vague: Unclear as to How These Vague: Unclear as to How These

Traits Relate to JobTraits Relate to Job• Ineffective: Does not Tell the Ineffective: Does not Tell the

Employee How to ImproveEmployee How to Improve

Behaviors:Behaviors:Relates Job-Specific Tasks & Relates Job-Specific Tasks &

ResponsibilitiesResponsibilities• Relatively Objective CriteriaRelatively Objective Criteria• Identifies Specific Behaviors for Identifies Specific Behaviors for

Effective PerformanceEffective Performance• Provides Specific FeedbackProvides Specific Feedback• Informative: Conveys the Informative: Conveys the

Employer’s ExpectationsEmployer’s Expectations• Diagnostic: Identifies Training Diagnostic: Identifies Training

and Development Needsand Development Needs

CompetenciesCompetencies

• Can be traits (e.g., can do attitude)Can be traits (e.g., can do attitude)• Can also be skillsCan also be skills• If you can measure with test, If you can measure with test,

potentially usefulpotentially useful• If traits then the same issue arises If traits then the same issue arises

with traitswith traits

Critical Incidents TechniqueCritical Incidents Technique

• Generates list of good & bad Generates list of good & bad behaviorsbehaviors

• Uses this list for performance Uses this list for performance appraisalappraisal

Behaviorally Anchored Behaviorally Anchored Rating Scales (BARS)Rating Scales (BARS)

• Use critical incidents to generate Use critical incidents to generate measures of performancemeasures of performance

• Develop a scale of performanceDevelop a scale of performance• Develop Final InstrumentDevelop Final Instrument• AdvantagesAdvantages

– Clearer standardsClearer standards– Specific feedbackSpecific feedback– ConsistencyConsistency

Management by Management by ObjectivesObjectives

• Management & employee set goals Management & employee set goals togethertogether– Goals must be hard but achievableGoals must be hard but achievable– Goals must be related to strategyGoals must be related to strategy– Difficult to use for evaluation purposes Difficult to use for evaluation purposes

as each person’s goal is individualizedas each person’s goal is individualized

• AdvantagesAdvantages– Employee commitmentEmployee commitment– Performance objectives are measurablePerformance objectives are measurable

360 Degree Feedback360 Degree Feedback

• Performance information collected Performance information collected from everyone around individual from everyone around individual – Peers, superiors, customersPeers, superiors, customers

• Used for developmentUsed for development• Recognizes complexityRecognizes complexity• Expensive to gather informationExpensive to gather information• ComplexComplex• May be appropriate for some May be appropriate for some

employeesemployees

Output Output Measurable Performance:Measurable Performance:

Production, Sales, Quantifiable MeasuresProduction, Sales, Quantifiable Measures

• Objective: If Measures ExistObjective: If Measures Exist• Unequal: May Have Unequal InputsUnequal: May Have Unequal Inputs• Ineffective: Does not Tell Employee Ineffective: Does not Tell Employee

How to ImproveHow to Improve• Exclusive: Tends of Focus on the Exclusive: Tends of Focus on the

Measurable Output ExclusivelyMeasurable Output Exclusively

Appraisal Interview Appraisal Interview SuggestionsSuggestions

Feedback SpecificsFeedback Specifics• Note Good PerformanceNote Good Performance• Note Areas for ImprovementNote Areas for Improvement• Stick to Behaviors Stick to Behaviors • Avoid PersonalitiesAvoid Personalities• Consider Situational Constraints on Consider Situational Constraints on

PerformancePerformance• Focus on Development & Problem-Focus on Development & Problem-

SolvingSolving

Problem-Solving ApproachProblem-Solving Approach

• InterviewerInterviewer– Takes Role of HelperTakes Role of Helper– Discusses New Ideas & Discusses New Ideas &

Mutual InterestsMutual Interests– Uses Exploratory Uses Exploratory

Questions, Reflects Ideas & Questions, Reflects Ideas & ListensListens

Problem-Solving ApproachProblem-Solving Approach

Use Two-Way Use Two-Way CommunicationCommunication– active listening active listening – mirror responses mirror responses – paraphrases paraphrases – avoids leading avoids leading

responses: responses: advice-giving, advice-giving, threatening threatening

Keep ReviewKeep Review– objectiveobjective– job-centeredjob-centered– positivepositive– avoid angeravoid anger– adapt to the adapt to the

specific type of specific type of performerperformer

– accept accept responsibility as responsibility as reviewerreviewer

Factors Affecting Factors Affecting Evaluator CredibilityEvaluator Credibility

• Knowledge of JobKnowledge of Job• Observes PerformanceObserves Performance• Remembers PerformanceRemembers Performance• Separate Performance from Separate Performance from

PersonalityPersonality• Stick to Job BehaviorsStick to Job Behaviors• Prepare for InterviewPrepare for Interview• Allows Subordinates to ParticipateAllows Subordinates to Participate

Develop Action PlanDevelop Action Plan

• Set up plan of what the employee Set up plan of what the employee should work on in futureshould work on in future

• Create an implementation planCreate an implementation plan• Discuss how the appraiser will Discuss how the appraiser will

follow-up with employeefollow-up with employee• Used to work on deficienciesUsed to work on deficiencies

Errors in Performance Errors in Performance AppraisalAppraisal

• LeniencyLeniency• Central TendencyCentral Tendency• StrictnessStrictness• Halo/Horns EffectHalo/Horns Effect• Similar-to-MeSimilar-to-Me• Primacy and RecencyPrimacy and Recency• Perceptual SetPerceptual Set

Organizational JusticeOrganizational JusticeAffects Organizational Citizenship BehaviorsAffects Organizational Citizenship Behaviors

• Distributive Justice: Satisfaction with Distributive Justice: Satisfaction with the Outcomes the Outcomes

• Procedural Justice: Satisfaction with Procedural Justice: Satisfaction with the Processthe Process

• Interactional Justice: Satisfaction Interactional Justice: Satisfaction with Interpersonal Relations During with Interpersonal Relations During the Performance Appraisal Processthe Performance Appraisal Process

Appeals ProcessAppeals Process

Objectives:Objectives:– Gives the Employee a VoiceGives the Employee a Voice– Enhances Employees’ Enhances Employees’

Organizational CommitmentOrganizational Commitment– Legal Support for Appraisal Legal Support for Appraisal

ProceduresProcedures– Evidence that Existence of Appeals Evidence that Existence of Appeals

Process Leads to a Decline in Process Leads to a Decline in LawsuitsLawsuits

Consideration for AppealsConsideration for Appeals

• Independent ReviewersIndependent Reviewers– OmbudsmanOmbudsman– Elected Employee RepresentativesElected Employee Representatives– ArbitrationArbitration

• Protection from Managerial Protection from Managerial RetaliationRetaliation

• Clear ProceduresClear Procedures• Face to Face vs. Independent Face to Face vs. Independent

ReviewReview

ProblemProblem

• What to do if managers don’t do What to do if managers don’t do themthem

• Most common complaint is that they Most common complaint is that they never get onenever get one

• Most employees feel they have done Most employees feel they have done a good job and want to be told so.a good job and want to be told so.

Total Quality Management Total Quality Management & PA& PA

• TQM Against PATQM Against PA• Calls it one of theCalls it one of the

– “ “Deadly Diseases of Management”Deadly Diseases of Management”

• Performance Variation Function of Performance Variation Function of Systems - not IndividualsSystems - not Individuals

• Blame Unfairly Placed on Blame Unfairly Placed on IndividualsIndividuals

• Quality Information is for Problem Quality Information is for Problem SolvingSolving

Management by FearManagement by Fear

• Tendency to focus on things we can Tendency to focus on things we can measure, hindering quality of workmeasure, hindering quality of work

• People tend to be bitter and People tend to be bitter and despondent following an appraisaldespondent following an appraisal

• Undermines teamworkUndermines teamwork• Discourages risk takingDiscourages risk taking

SummarySummary

• Determine whether PA is even Determine whether PA is even neededneeded

• Approach PA as a problem-solving Approach PA as a problem-solving sessionsession

• Focus on behaviors, not personalityFocus on behaviors, not personality• Be prepared and knowledgeable of Be prepared and knowledgeable of

job and employee performancejob and employee performance• Be specificBe specific• Be careful out thereBe careful out there

Workplace Behavior Workplace Behavior ProblemsProblems

• Performance appraisal is designed to Performance appraisal is designed to improve performanceimprove performance

• Discipline is a system designed to deal Discipline is a system designed to deal with performance problemswith performance problems– Ineffective performanceIneffective performance– Drug & alcohol abuseDrug & alcohol abuse– Breaking company rulesBreaking company rules– Attendance and tardinessAttendance and tardiness– InsubordinationInsubordination– Dangerous behaviorsDangerous behaviors– Illegal behaviorsIllegal behaviors

Progressive DisciplineProgressive Discipline

• Increasing level of penalties for Increasing level of penalties for behaviorbehavior

• Provides fair noticeProvides fair notice• Oral & written warningOral & written warning• SuspensionSuspension• Discharge or terminationDischarge or termination

Egregious ConductEgregious Conduct

• Some conduct is construed to be so Some conduct is construed to be so egregious that no formal rule is egregious that no formal rule is requiredrequired

• Common senseCommon sense

Just CauseJust CauseQuestions: If answer no, weakens the case for just causeQuestions: If answer no, weakens the case for just cause

1.1. Notice: forewarning or knowledge of consequences of Notice: forewarning or knowledge of consequences of misconductmisconduct

2.2. Reasonable Rule or Order: orderly, safe Reasonable Rule or Order: orderly, safe operation of the businessoperation of the business

3.3. Investigation: did the employer investigate whether Investigation: did the employer investigate whether the employer did violate the rulethe employer did violate the rule

4.4. Fair Investigation: was the investigation fairFair Investigation: was the investigation fair5.5. Proof: evidence of guilt obtainedProof: evidence of guilt obtained6.6. Equal Treatment: has the employer applied rules even Equal Treatment: has the employer applied rules even

handedlyhandedly7.7. Penalty: discipline related to the seriousness of the Penalty: discipline related to the seriousness of the

crime and employees record of servicecrime and employees record of service

Regulation of employee’s Regulation of employee’s behavior on the jobbehavior on the job

Business Relatedness: legitimate objective of Business Relatedness: legitimate objective of managementmanagement– Employee’s ability to perform job efficiently & safelyEmployee’s ability to perform job efficiently & safely– Effective functioning of supervisorsEffective functioning of supervisors– Employee not undermining general goals of Employee not undermining general goals of

organizationorganization– Personal security of employeesPersonal security of employees– Security of employer’s product and propertySecurity of employer’s product and property– Generally, absenteeism, tardiness, sleeping on the Generally, absenteeism, tardiness, sleeping on the

job, negligence, intoxication, insubordination & theftjob, negligence, intoxication, insubordination & theft

SummarySummary

• There are different levels of performance There are different levels of performance managementmanagement

• SystemsSystems• IndividualIndividual

– Performance AppraisalPerformance Appraisal– Discipline & DischargeDiscipline & Discharge– SelectionSelection

• Must recognize that performance Must recognize that performance appraisal is not necessarily taking care of appraisal is not necessarily taking care of all performance issuesall performance issues