Employee Performance Management Chapter 12 Employee Performance Management Stages in a performance management system (pp.270-274) • The nature of 360-degree feedback (pp.279- mid 281)

Performance Management Systems Increasingly seen as a way to manage employee performance Incorporates appraisal/review process Establishing a framework in which performance by human resources can be directed, monitored, motivated and refined, and that the links in the cycle can be audited (Clark 2005)

Advantages of Performance Management Systems Being tied closely to the objectives of the organisation Represent a more holistic view of performance Appraisal or review is integrated with performance planning Performance is assessed and successful performance rewarded and reinforced (Bevan and Thompson 1992)

Stages of a Typical PMS Figure 12.2 Stages of a typical performance management system

An Objective Setting Cascade Figure 12.3 An objective-setting cascade

A Shared View of Expected Performance Individual objectives derived from team objectives An agreed job description jointly devised Objectives are outcome or results oriented Objectives are tightly defined and include measures to be assessed Objectives designed to stretch individuals and offer potential for development

SMART Objectives Specific Measurable Appropriate Relevant Timed

Role of Objectives Allow the development of a shared understanding of what is expected, allowing for the employee’s contribution Allow employees to decide on an appropriate approach by using a ‘what’ rather than a ‘how’ statement Generate greater degree of ownership and thus commitment to achieving the objective

Problems with Objectives May be inappropriate ways of achieving a ‘what’ objective Appropriate levels of resource and support may not be available Employees may not always be able to control their outputs, so it is important to have some ‘how’ objectives

Delivering and Monitoring Performance The manager’s role Enabling role while staff are working to achieve the performance agreed Organising resources Organising off-job training Being accessible Providing ongoing coaching Providing support and guidance

Reviews Normally informal Need not be part of any formal system Can take place as needed Provide a forum for employee reward in terms of recognition of progress

Formal Performance Review and Assessment Need to concentrate on development issues to motivate Assess the extent to which objectives have been met – may affect pay Employee may be invited to draft initial assessment of performance May lead to a rating of performance although this is often unpopular with employees

Reward Some systems still include link to money May be unpopular and the amount may be too small to motivate Promotion and development often used as a reward

360-Degree Feedback Whole range of feedback sought from a range of people and sources, e.g.: Peers Subordinates More senior managers Internal customers External customers Individuals themselves

Reasons for 360-Degree Feedback Greater breadth than relying just on the line manager Captures the complexities of performance Argued to be more compelling and valid to those receiving the feedback Powerful information for the development of self- awareness

Formal Process of 360-Degree Feedback It is based on feedback Survey approach using questionnaire, contributor score on a given scale. May be off the self or organisation specific but should focus on behavioural competencies Contributors mark a score on a scale the extent to which an employee displays these behaviours Individual chooses contributors and gets aggregated anonymous feedback Feedback should be used to plan behaviour change and improve performance

Benefits of 360-Degree Feedback Stronger ownership of development goals Climate of constructive feedback Improved communication An organisation that is more open to change

Difficulties and Dilemmas Tension between using to drive development and to drive pay Rater confidentiality can be difficult to maintain Evaluation may be biased and there is a danger of collusion Demotivating without the resource to support identified development needs May not motivate individuals to act May lead to negative outcomes, e.g. reduced effort Requires appropriate organisational climate

Summary (1 of 2) Performance management systems include more than appraisals, and are linked to the strategic objectives of organisations There is conflict in many appraisal and performance management systems Measurement and rating systems can be problematical Objective setting is a fundamental part of performance management Current trends include greater employee ownership and involvement 360-degree feedback is becoming more widely use