1. Performance Management
Managing People in a Global Environment
Wayne F. Cascio
October 10, 2008

2. Challenges of Performance Review
In forced ranking, all employees are ranked against each other and grades are distributed along a bell-shaped curve
Do you support the use of forced rankings?
If the criteria used to determine an employee’s rank are more qualitative than quantitative, does this undermine the forced-ranking system?
Suppose all the members of a given team are superstars. Can forced ranking deal with that situation?

3. Facts About Performance Appraisals
Employees are often less certain where they stand after the appraisal interview than before it
Employees tend to evaluate their supervisors less favorably after the interview than before it
Employees feel that the authoritarian, “tell-and-sell” approach to appraisal is out of sync with today’s democratic business structure

4. What is Performance Management?
A willingness and a commitment to focus on improving performance at the level of the individual or team every day

5. Key Elements of a P. M. System
Sr. Management involvement in the process
Employee involvement in the process
Common performance measures
An emphasis on coaching and feedback

6. Why Do P. M. Systems Fail? Focusing on the wrong things
Ignoring sr. managers, operating managers, and employees
Poor communication about the process and changes in it
Making the process difficult
Implementing “flavor-of-the-month” programs

7. Hewitt Assoc. Study of 437 Firms
Firms with successful P. M. systems outperformed those without them on every financial and productivity measure used in the study:
Profits
Cash flow
Stock market performance

8. Firms with Successful P. M. Systems
Measure what really matters
Foster open communication among employees about what really counts

10. Performance Appraisal
Systematic description of job-relevant strengths and weaknesses of an individual or group

12. How Often? Once or twice a year is not enough
Difficult to remember specifics over a 6- or 12-month period
Many organizations require more frequent, informal “progress” reviews
90-day plans

13. Effective Appraisal Systems Are
Relevant
Acceptable
Sensitive
Reliable
Practical

14. Acceptability Do raters use standardized procedures?
Do employees believe results are fair & accurate?
Does the form accommodate special or unique circumstances?
Do you get feedback

15. Acceptability Does the rater suggest how you could improve?
Do you get resources to improve?
Does management care about how appraisals are done?

16. Legal Issues in Appraisal
ID essential functions using job analysis
Base all ratings on essential job functions
Train supervisors
Have formal appeal mechanisms + higher-level review
Document appraisals + any reasons for termination
Provide counseling for poor performers

17. Strategic Dimension of Appraisal
What kind of behavior do you want to encourage?
Short-term: bottom-line results for current quarter
Long-term: customer satisfaction, market share
Remember: Managers get the kind of performance they reward!

18. Alternative Methods Essay Ranking/paired comparisons
Forced distribution
Behavioral checklist
Critical incidents
Graphic rating scales
Behaviorally-anchored rating scales
Management by objectives

19. Which Method Is Best?
None is an unqualified success when used for merit pay or promotion

20. Who Should Evaluate? Immediate supervisor Peers Subordinates
Self-appraisal
Customers
Computers

21. To Improve 360-Degree Feedback
Be clear about the purpose of the appraisal – employee development
Train raters to understand the overall process, show them how to complete forms, and to avoid common rating errors
Seek a variety of types of information about performance
Make all raters accountable to upper-level review

22. To Improve 360-Degree Feedback
Help employees interpret and react to the ratings, and include goal setting.
Implement 360-degree reviews regularly, so employees can track their progress over time
Take the time to evaluate the overall system

23. Managers Who Excel in This Area Do the Following
Listen well
Relinquish control, encourage employee participation + open communication
Approach “negative” information slowly and with caution

24. Managers Who Excel in This Area Do the Following
Focus on observable behavior & give specific examples
Avoid arguments; allow the employee to save face
Focus on problems and solutions, not on the employee’s personality

25. Things to Do Before Appraisal
Communicate frequently with subordinates about their performance
Get training in appraisal interviewing
Use a problem-solving approach, not “tell and sell”
Encourage subordinates to prepare for review sessions

26. Things to Do During Appraisal
Encourage participation
Judge performance, not personality and mannerisms
Be specific
Be an active listener
Set goals for future improvements
Avoid destructive criticism

27. Things to Do After Appraisal
Communicate frequently with subordinates about their performance
Periodically assess progress toward goals
Tie rewards to performance

28. How to Give Feedback Develop an agenda
Take the time to listen; no interruptions
Communicate that you genuinely want to help
Be accepting and non-judgmental
Watch for verbal and non-verbal cues

29. How to Give Feedback Focus on the future Summarize what was said
Record responses immediately
Never betray a confidence

30. Basic Rules of Performance Counseling
Be prepared
Be factual
Support the employee’s good performance
Help the employee improve performance
Plan for the future

31. How to Document Performance-Related Incidents
Describe what led up to the incident - the problem & the setting
What actually happened that was so effective or ineffective? (Names, dates, times, facts)
Describe the consequences of the effective or ineffective behavior

32. Managing Your Boss
Recognize that your boss needs you in order to do his or her job well
Understand his or her goals + how you can help the boss reach them
Appreciate the pressures & problems the boss faces
Tell the boss your aspirations & goals

33. Managing Your Boss Learn how the boss likes to receive information
Keep the boss informed about your successes & problems
Making working with you efficient & enjoyable for the boss
Make it easy for the boss to discuss problems & conflicts

34. Managing Your Boss Assess yourself + your needs:
Your strengths & weaknesses
Your personal style
Are you a dependent or an independent person?

35. Managing Your Boss Develop & maintain a relationship that:
Fits both your needs & styles
Includes mutual expectations
Keeps your boss informed
Is based on dependability & honesty
Uses your boss’s time & resources selectively

36. Do Not Assume That: The boss knows your aspirations, problems, & needs
You can talk to your boss only when he/she asks
The boss will start a discussion when there are problems
The boss gets paid so well that he/she doesn’t have to be thanked