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Performance management dr. george taylor iii
1. Agenda
– Introduction
– Setting the Stage: Performance Management vs. Performance
Appraisal
– Elements of an Effective Performance Appraisal Process
– Capturing Performance objectives (job analysis vs. job dimensions
and competencies vs. tasks)
– Integrating and Incorporating Organizational Requirements
– Incorporating Shared Goal Setting within the Performance Appraisal
Process
– Role of Ethics in the Performance Appraisal Process
– Choosing the Right Methodology for Your Organization
2. Presentation Focus
Evaluation of Performance Management and Performance Appraisal process with
focus on Performance Appraisal
This is a research and practitioner presentation with a goal of distinguishing key
facts from beliefs or intuition
Focus on process not methodologies and format – though we will discuss pros(s)
and con(s) of both
Note: Understand that designing and administering effective performance
appraisals is not easy but it does not have to be extremely difficult. My goal is to
provide you advanced researched-based facts, practitioner best practices, and
my own consulting advise and experience. It is up to you decide what is the
right approach for you and your organization.
3. Setting the Stage
Performance Management
• Encompasses all systems and process
utilized to evaluate employee
performance against organizational
objectives
• Sources requirements based upon
organizational strategy
• Goal is to align employee behavior,
goals, and objectives with goals,
objectives, and requirements of
organization
• Metric-driven process in
organizations that focus/view on
alignment of individual behavior to
bottom-line profits and/or readiness
Performance Appraisal
• Component of Performance
Management that provides direct
feedback to employee
• Measures behaviors, traits, and
competencies of employee’s
performance based upon defined
scales, continuum, narratives, or
combination of all components
• Often utilized as basis for promotion,
demotion, pay increases , and
internal transfers
• Can serve as legal source document
on behalf of employer or employee
4. Key Differences
Performance Management
• Focuses on continuous and persistent
performance improvement and
development
• Effectively integrates individual
performance and sets expectations
with context of organizational goals
• Provides continuous feedback to
employees via formal and informal
sessions
• Produces essential documentation
required for performance appraisal,
pay raises, and negative and positive
employer actions
Performance Appraisal
• Provides feedback to employee on
performance over a defined, specific
period of time
• Utilized to provide in-depth feedback
to employees on performance, career
goals, training and development, and
pay*
• Ideally is interactive with clear
expectations on behalf of interviewer
and interviewee
• Sets the stage for future performance
and should directly link to
performance management systems
and tools, creating a cohesive whole.
5. Performance Management – A Dynamic Process
Performance
Management
Performance
Appraisal
Training and
Education
Coaching and
Mentoring
Performance
Standards
6. Perceptions and Reality
- Perception: Performance appraisal are no longer needed in
today’s business environment
- Reality: Performance appraisals are still needed in today’s
competitive business environment
- Perception: Performance interviews are a waste of time, causing
anxiety, confusion, and reduced morale
- Reality: Organizational processes, design, and method of
administering and conducting performance appraisals contribute
to supervisor-employee tension, confusion, and reduced morale
- Perception: Performance Management and Performance
Appraisal are on in the same
- Reality: Performance Management and Performance Appraisal
are two distinct processes
- Perception: Performance Appraisals are an HR function and
responsibility
- Reality: Performance Appraisals are a line management function
with design and expertise support provided by human resources.
8. Elements of An Effective Performance Appraisal
Performance
Appraisal
Organization,
Department,
and Division
Requirements
Job Analysis
Career
Planning
Compensation
and Rewards
System
Legal
Requirements
9. Job Analysis
Capturing Behaviors, Activities, and Outcomes
Key component of appraisal process
Captures job requirements, behaviors (tasks), activities, and outcomes of job and work
performed – framework for performance appraisal dimensions
Positions that require multiple “jobs” may require the development of a dimension set
– strongly recommended for supervisor to senior management positions
Developed and implemented with rigor and thorough analysis with subject matter
experts, senior leadership, and employees
Consistently evaluates desired outcomes that will influence behavior and performance
that link directly to department-division-organizational requirements – the
measurement of activities
Reviews requirements (knowledge, skills, attributes, behaviors, duties, and
responsibilities) of position with incumbent prior to and separate from the appraisal
process – goal is to impact subconscious behavior, provide employee with a scientifically
developed frame of reference in which work can be measured and found relevant to
organization requirements
10. Job Analysis
Capturing Traits, Behaviors, Activities, and Outcomes
Analysis
Key objective of job analysis: Define the specific needs, requirements, skills, of a job
Requirements of the job to include skill level, cognitive ability, training, education, and
behaviors
Can be skilled based or competency based: Important thing to remember is that
methodology must be directly related to optimal job performance
Should be built around the “normative” or “nominal” employee to ensure that
requirements are based on standard of “what is” not “what feels” - evaluation of
employee performance is against a job standard/requirement not a person
Our role as HR professionals is to effectively capture requirements of positions, rank
desirable and undesirable traits, behaviors, activities, and outcomes and develop job-
task statements that accurately capture performance requirements
Job Analysis process is the anchor of developing a validated,
well-defined performance appraisal process
11. Step 1 – Conduct, Develop, or Review Job Analysis
Activities Within Steps:
Decide on the type of job analysis methodology that you will utilize
Avoid advanced (and hard-to-define) differences between traits, behaviors, outcomes, activities
yet ensure that an agreed upon definition exists within organization
Establish a method of review to observe job activities and behaviors and define output measures
that define standards
Conduct, supervisor-employee review discussing key activities, optimal output, behaviors under
ideal and adverse environmental conditions, and defined outcomes – adjust/capture employee
input (diary, interview log, questionnaire log, etc.)
Conduct a review of job analysis data with subject-matter-expert and senior leadership, revalidate
requirements if needed based upon review of employee feedback
Communicate purpose, scope, and utility of job analysis to employees; ensure employee buy-in
and understanding
Rigorous and Thorough Job Analysis is Essential to the
Performance Appraisal Design Process
12. Sample Supervisory Scale – Based on Dimension (Set) Job Analysis
6
5
4
3
2
1
Provides subordinates with highly useful guidance to
enhance to improve professional development; clearly
defines expectations, provides feedback to subordinates
and team members, actively participates in subordinates
growth and career
Typically provides subordinates with direction and
guidance regarding professional development; advice
not always constructive. Usually provides subordinates
with clear expectations regarding performance;
expectations are not always relevant. Provides some
developmental opportunities and shows modest
interest in professional growth and career
7
Does not provide guidance or provides too much
guidance on subordinates career assignments resulting
in decreased performance; poorly defines expectations
to subordinates and offers very little to no feedback.
Does not provide developmental opportunities and
shows little interest in subordinates professional growth
and career.
7
13. Capturing Organizational, Department, Divisional Requirements
and Goals
Organizational requirements add context to technical and functional job requirements
from job analysis related to present-day targets and goals
Ensures performance appraisal remains dynamic without requiring readjustment and
revision of forms
Carefully sourced from organizational and department/division goals , business plans,
policies, and objectives RELEVANT to the position
Wording must be behavior and/or task specific
When capturing organizational requirements, keep language specific yet
encompassing to withstand iterative /subsequent changes to organizational goals,
plans, and policies,
14. Step 2 – Ensure Alignment of Organizational Goals and Employee
Behavior
Activities Within Steps:
Review organizational, business unit, and divisional-departmental goals and objectives against job
analysis (Note: Steps 1 and 2 are interchangeable depending on organizational practices and
methodologies)
Refine output and behaviors of job analysis based upon organizational requirements to job
specific levels (organizational requirements aligned to job incumbent output)
Conduct a review of job analysis data with subject-matter-expert and senior leadership, revalidate
requirements if needed
Communicate purpose, scope, and utility of job analysis to employees; ensure employee buy-in
and understanding
Remember: Primary goal of performance appraisal is to align
employee behavior to accomplish organizational goals and
mission
15. Sample Leadership Dimension - Organizational Readiness
6
5
4
3
2
1
Significantly improves customers relations through consistent
timely consultation, cooperation, and communication with
internal and external customers. Proactively reviews internal
and external feedback forms and survey results to seek
improvement,. Demonstrates ability to manage programs with
defined fiscal targets and conducts work aligned with cost
targets
Measurably improves customer relations by offering
consultation that is often timely; usually cooperates and
communicates with internal and external customers. Reviews
internal and external feedback when prompted . Majority of
programs managed are within defined fiscal targets and
reviewed work aligned with cost.
7
Does not improve customer relations or foster
cooperation. Communication skills with internal and
external customers frequently causes confusion or
misunderstanding resulting in delays or lost relations.
Does not review internal and external feedback forms
and survey results. Does not demonstrate an ability to
manage programs, frequently coming in over defined
fiscal targets and costs .
7
16. Performance Appraisal: Cooperative Goal Setting
Cooperative goal setting makes performance expectations real for employees.
Goal of cooperative goal setting is to promote dialogue between employee and supervisor
regarding job role, performance expectations, build trust, and set performance goals.
Cooperative goal setting is an open discussion allowing employees to provide perspective on job
performance, work environment, organizational goals and objectives, and accomplished and plan
career path
Additional benefit of shared goal setting:
•Employee empowered to provide tangible input into performance goals at the individual and
department/divisional levels
•Experience increased trust and perception of fairness , and increase trust in performance
appraisal process.
17. Performance Appraisal: Shared Goal Setting
Forming Realistic Expectations – Key Research Findings You Should Know
• Advanced research has proven that shared goal setting does not necessarily correlate to
increased or decreased workplace performance
• Negative and positive feedback should be required and expected
• The goal should be to increase understanding of performance appraisal on behalf of supervisor
and provide insight on behalf of employee
• Should not be viewed as a “cure all” to performance, but rather as a “buy-in” of the process
18. Performance Appraisal: Shared Goal Setting
Elements of Shared – Cooperative Goal Sharing
• Workplace issues, concerns, and problems are openly discussed in a productive manner
• Opposing viewpoints are explored and discussed
• Joint planning occurs when and where practical in context of job role
• Result in a successful performance review session
Benefits of Shared – Cooperative Goal Setting
• Build Trust
• Promote Dialogue
• Develop Expectations
• Provide two-way feedback
19. Step 3: Conduct a Cooperative Goal Setting Session with
Employees
Activities within Steps:
Goal Setting session is separate and apart from job analysis and performance review
sessions
Review all organizational documents that impact employee’s performance and career:
Relevant strategic organizational objectives and goals, unit-department-divisional goals
and objectives, job description, training plan and career path documentation , and
blank copy of performance appraisal
Engage employee to express views, opinions, systems, and processes that relate to job,
performance on the job, and achievement of organizational objectives
Take notes and provide follow-up on recommendations to measures-metrics,
processes, job description- analysis process
Schedule follow-up sessions separate and apart from performance review
session/interview
Developing Trust and Effective Performance Appraisal
Processes Requires Persistent and Consistent Communication
20. Performance Appraisals: Role in Career Planning
• Performance Appraisals should provide a bottom-line career
recommendation consistent with career path of employee (i.e. front-line
operations supervisor recommended for operations manager or quality
control specialist or production supervisor)
• Recommendations must be based upon outcomes and behaviors of current
performance and requirements and competencies for lateral and vertical
positions within organization – resulting from shared goal setting
• Performance Appraisals is ONE of the tools that should be utilized in career
planning – a robust performance management process allows performance
to be put into holistic context – (i.e., some companies follow the “best
practice” of developing a ‘Performance Index”
21. Performance Appraisals: Role in Career Planning
Performance appraisals from employee viewpoint should be forward-looking
based upon current performance
During performance appraisal feedback-interview session it is important for rater to
discover the goals of employee and provide feedback on where the employee stands
Performance Appraisals
22. Step 4
Develop validated performance dimensions and accompanying performance standards
based upon the job definition developed during the job analysis process. Check for the
following:
- Dimensions are directly related to the job
- Dimensions are free of extraneous factors not critical for overall success job
performance
- Dimensions are properly weighted placing proper emphasis
- Standards are defined in quantitative and qualitative terms
- Rater and Ratee are in agreement as to acceptable and non-acceptable
levels of performance defined by performance standards
- Be specific, measurable, and/or recognizable
After validation of performance dimensions and standards and well-defined, (ideally
occurring during job analysis and/or initial appraisal design, integration of this
appraisal dimensions and standards should be accomplished. Common instruments
include pay adjustment matrix and salary guide charts.
Well Designed and Validated Performance Appraisals
Instruments = Bridge to Effective Compensation Systems
23. Performance Management – A Dynamic Process
Remember This Chart?
Performance
Management
Performance
Appraisal
Training and
Education
Coaching and
Mentoring
Performance
Standards
Career Planning: Is a product of a rigorous, holistic
performance management system
24. Performance Appraisal: Pay Design
• Performance Appraisal design, validity, and consistent employment is critical in
determining merit-pay/pay-for-performance and short term incentive programs
• Perceived lack of rigor and subjective nature of ob appraisals and performance reviews by
employees and employers are leading to several researchers, practitioners, and senior
executives debating the validity and usefulness of performance appraisals as the basis for
making pay decisions
• Performance appraisals should be designed to answer the following questions:
– Who is eligible for a pay increase and why?
– How much should an employee’s pay increase be?
– Is the merit pay and performance appraisal processes fair, objective, and consistent? Are they
linked?
– Does our performance appraisal process include performance goals and measures that tie directly
into organization, business unit, and departmental-divisional goals
– Are the drivers of performance appraisal linked and consistent with the drivers of pay?
– Ate the drivers of performance appraisals and pay known by employees
25. Step 5
Develop validated performance dimensions and accompanying performance standards
based upon the job definition developed during the job analysis process. Check for the
following:
- Dimensions are directly related to the job
- Dimensions are free of extraneous factors not critical for overall success job
performance
- Dimensions are properly weighted placing proper emphasis
- Standards are defined in quantitative and qualitative terms
- Rater and Ratee are in agreement as to acceptable and non-acceptable
levels of performance defined by performance standards
- Be specific, measurable, and/or recognizable
After validation of performance dimensions and standards and well-defined, (ideally
occurring during job analysis and/or initial appraisal design, integration of this
appraisal dimensions and standards should be accomplished. Common instruments
include pay adjustment matrix and salary guide charts.
Well Designed and Validated Performance Appraisals
Instruments = Bridge to Effective Compensation Systems
26. Performance Appraisals: Legal Implications
• The courts have considerable influence in how performance appraisals are designed and
implemented.
• Title VII of the Civil Rights Act of 1974 and Equal Employment Opportunity Commission have
two important criteria that weigh heavily on how organizational performance appraisals are
designed:
– Any paper-and-pencil or performance measure used in making employment decisions is a test
– A test must be fairly administered and empirically validated
• Taking into considerations the EEOC guidelines and landmark court cases setting key
precedent, the following are considerations that must be taken into account:
– Rating performance on job requirements
– Mutually developed and clear communication of performance standards between employee and
supervisor
– First hand knowledge of employee performance by rater and standardized appraisal process
– Appraisal methodologies should be supported based on a rigorous job analysis process
– Criterions should not cause disparate impact
27. Performance Appraisal: Ethical Implications and
Responsibilities
Ethical in Performance Appraisals Play Two Roles
Ethical Measures and Ethical Decision-Making
•Ethics in business receiving increased attention due to recent scandals such as recent
crisis in mortgage, auto, and insurance industries, and Enron and Tyco Scandals
• Most appraisal systems and forms focus on performance measurement and performance
outcomes absent of ethical process and consideration – how measurements and outcomes are
derived
• Increased emphasis on cognitive information processing over format leading to some
organizations focusing on ethical performance cues – how is work being accomplished; does means
justify the end
• Early incorporation and experiments focusing on incorporating ethical and legal implications in
existing performance dimensions
28. Performance Appraisal: Ethical Implications and
Responsibilities
Ethical in Performance Appraisals Play Two Roles
Ethical Measures and Ethical Decision-Making
Ethical implications must be considered during performance appraisal rating and
subsequent interview
Ethical rating considerations:
• Manipulation of performance measures to support pay increases, promotion, and
assignments
•Manipulation of performance measures to hold true to employee perception held by rater
(i.e., measuring employees high on all dimensions as a result of the halo effect)
•Manipulation of performance measures due to surface performance (i.e., strong performer
unethical behavior is ignored due to her hitting financial targets)
•Advanced studies have shown that underperformers generally receive “benefit of the doubt”
while high performers are graded more accurately
29. Step 6
Incorporating and Promoting Ethics and Legal Compliance in
Performance Appraisal
Train raters on the process (means) of achieving a specific target, outcome, or accomplishment of
key activities – this is a senior leadership-line manager with HR professionals providing expertise
and guidance
Beware of personal bias that may impact your rating of an employee
Focus on consistency of employee job performance and self-evaluate your perception of
employees
Measures should focus on performance requirements that are in control of the employee; be
aware of external factors that impact performance not in control of employee
For multisource appraisals look for consistency of employee’s performance among peers,
supervisors-managers, and external-internal customers – validation
Behaviors, outcomes, and activities directly tied to financial performance and pay should be closely
evaluated – the means to the outcome is just as important as the outcome
Incorporating Ethical Process Dimensions = New and Critical
Component of Performance Appraisals
30. Performance Appraisal:
Closing Thoughts/Summary
Developing effective performance appraisals is hard work, but critical to successful performance
management and aligning employee behavior to accomplish organizational goals
Performance appraisal is a single tool and does not define the entire performance management
process – strive to provide employee feedback that contributes to development and is consistent
with organizational goal and objectives
Do not underestimate the value of rigorous job analysis – the foundation of measuring the right
activities, task, behaviors, and outcomes
Focus on feedback that fosters goal setting and development – be objective, fair, and hones t and
focus on behaviors; focus on connection of current performance and future goals
Pay reviews and shared-goal setting are components of the performance appraisal process and
should be provided in separate settings/sessions