1. Erlet Shaqe www.dualibra.com
Performance Management Cycle
Erlet Shaqe

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

3. The Performance Cycle Major Areas of Responsibility
Individual Priorities
Knowledge, Skills and
Behaviors
Development plan
Reaching agreement
End-of-cycle review
Continuous progress and development
Ongoing Feedback
Ongoing Feedback
Coaching
Interim reviews

4. Alignment Model “How” “What” Performance Development Process Mission
Your
Mission
HARVARD COLLEGE LIBRARY
“What”
“How”
Organizational
Priorities
Values
DEPARTMENT
UNIT OR
Departmental
Priorities
Knowledge, Skills and Behaviors
Your Major Areas of Responsibility and Individual Priorities
PERSONAL
Performance Development Process

5. The Performance Cycle 2001: December 21 2002: June-July 2002: May
2002: April-May
Ongoing Feedback
2002: March
2002: December-January

6. 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

7. Performance Management – Broader Than Performance Appraisal
Begins with a look at goals & strategies of the organization

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

9. 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?

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

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

12. Performance Appraisal
Developmental and Administrative Decision Processes

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

14. 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

15. What Purposes Can P.A. Serve in an Organization?
Any potential conflicts here? Explain.

16. How Frequently Should Performance Appraisal Be Done?
Why?

17. 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

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

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

20. Behavior - Oriented Systems
Ranking Methods
Strait Ranking
High-Low (Alternate Ranking)
Paired Comparison
Forced Distribution (similar to ranking)
Graphic Rating Scales

21. Ranking Method
Straight ranking
Alternation ranking
Paired comparison

22. Explain Each of the Ranking Methods
Preference Among Them?

23. Attractions? Limitations?

24. Forced Distribution Design? Purpose?
Do you recommend or not recommend?
Why or why not?

25. Graphic Rating Scale
Single Most Popular Method of Appraisal

26. Graphic Rating Scale Explain how it works Potential strengths?
Give an example
Potential strengths?
Potential weaknesses?

27. Critical Incidents Based on Observation of Behaviors
Positive
Negative
Written Notation of Behaviors is Made & Placed in Each Employee’s File

28. Critical Incidents
Each Observation is Discussed With the Employee at the Time of Occurrence
A Portfolio of Observed Events is Collected Over Time

29. Any Problems With Critical Incident Method for Appraisal?

30. Behaviorally Anchored Rating Scales (BARS)
A form of graphic rating scale
How is different from traditional rating scale?

31. Behaviorally Anchored Rating Scales (BARS)
Attractions?
Limitations?

32. Results (Outcome) Based Appraisal
Management by Objectives (MBO) in Some Form is Commonly Used
Focuses on Measurable Results of Mutually Agreed-Upon Goals for a Work Cycle

33. MBO Steps in development and usage?
Potential strengths and weaknesses?

34. Factors to Consider in Choice of a P. A. System
Cost
Usefulness in employee development
Usefulness in administrative decisions
Validity

35. 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?

36. Who Appraises?
Supervisor
Peers
Subordinates
Self Appraisal
Customers

37. Usefulness of Each?
Explain

38. 360 Degree Appraisal Best Known Book on the Subject: Edwards & Ewen,
360 (degree) Feedback, Amacom, 1996.

39. Three Types of Appraisal Interviews
Tell & Sell
Tell & Listen
Problem Solving

40. 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.
Peter Scholtes used to say unpack your performance appraisal system. It does too much!!!!

41. 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?

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

43. Managing performance for …
Employee
Development
Competence assessment and development

44. Stages of performance management
Plan
Monitor
Develop
Review
Reward

45. Stage 1 – Individual Performance Planning
Stage 1 – Planning
Work goals
Competencies
Learning
Plan
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.

46. 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?

47. 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

48. Peter Drucker
Management by Objectives was first outlined by Peter Drucker in 1954 in his book 'The practice of Management'.  According to Drucker managers should avoid 'the activity trap', getting so involved in their day to day activities that they forget their main purpose or objective. One of the concepts of Management by Objectives was that instead of just a few top-managers, all managers of a firm should participate in the strategic planning process, in order to improve the implementability of the plan. Another concept of MBO was that managers should implement a range of performance systems, designed to help the organization stay on the right track.

49. 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.

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

51. 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?

52. Hierarchy of objectives
Vision Mission Goals Objectives Policies Procedures

53. 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).

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

55. 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.
Develop
Stage 2/3 – Monitor and Develop
Feedback
Coach
Adjust goals

56. 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

57. 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

58. 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.
Review
Stage 4 – Review
At least annually
Discuss
Document

59. 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.

60. 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

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

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

63. 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

64. 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)

65. 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!!
Reward
Stage 5 – Reward
Monetary
Non-monetary
Recognition

66. 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!!!!!

67. 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)

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

69. Sample schedule for the performance management cycle
Complete operating plan
Update quarterly performance plan form with major agency objectives
Conduct training for supervisors (and employees)
Communication before, during, after
Timeframe for completion of appraisal
Timeframes for quarterly performance plans
Interface with compensation schedule

70. Dissatisfaction with Appraisals
95% of companies use appraisals , majority
are dissatisfied with them (Wall Street Journal)
90% of appraisal systems unsuccessful
(SHRM, 1995, DDI, 1993)
“I’d rather kick bricks with my bare feet
than do appraisals” (manager at Digital Corp)
Many companies abolished ratings:
Pratt & Whitney Blockbuster IBM Albany Intern

71. 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

72. Performance Management
Reward or Take
Corrective Action
Reward or Take
Corrective Action
Set Standards
Measure
Performance
Provide Feedback

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

74. Requirements of Effective Performance Management
Relevant to job performance
Distinguishes Effective & Ineffective Performance
Fair & Acceptable

75. Performance Standards
Managers assume standards are clear
Communicate - What is to be done?
How well should it be done?

76. Performance Measures Objective Measures - Hard Criteria Weaknesses
$ Sales Personnel Data Tardiness
Units Produced Absence 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

77. Goal is to Accurately Appraise Performance
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

78. 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% % 40% % %
Poor Below Average Above Excellent
Average Average

79. 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

80. Police Officer: Job Knowledge
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

81. Progressive Disciplinary Systems
Steps
1) Counsel Employee about Performance Problem
2) Verbal Reprimand & Warning
3) Written Reprimand & Warning
4) Disciplinary Layoff (Short-term)
5) Discharge

82. Progressive Disciplinary Systems
Reasons to Avoid Discharge
Unfair Labor Practice (Legal & Contractual Restrictions)
Company Payments Toward Unemployment & Severance Pay
Strikes
Court Action - Back Pay Awards
Investment in Human Resources

83. Problems with Appraisals
Survey by Ernst & Young showed that 38% of employees say they are rated unfairly or not at all
Deming argues that Performance Appraisal is “A Deadly Disease in Organizations”
Disregards existence of system
Erroneously attributes variation in performance to individuals (85-15 rule)
Undermine teamwork, improvement
Focuses on short-term, end product

84. Appraisal Interviews Give Feedback daily Encourage participation
Judge performance not personality
Be specific - provide critical incidents
Set mutual goals