Download - Performance management
Basic Concepts in Performance
Management and Appraisal
Performance Appraisal:Setting work standards, assessing
performance, and providing
feedback to employees to
motivate, correct, and continue
their performance.
Performance Management:An integrated approach to
ensuring that an employee’s
performance supports and
contributes to the organization’s
strategic aims.
Comparing
Performance Appraisal
and
Performance Management
2
Components
Goal Setting and
Expectations
1
Talent Development
Opportunities
2
Review Cycle3
Descriptions
Alignment of individual and
organizational goals in consideration
of individual capabilities, career goals,
business function and level
Formal and informal learning and
development opportunities that support
an individual in achieving his or her
goals
A clear and transparent process for
evaluating employees against
individual goals and expectations
Performance management is a strategic and integrated process of setting, tracking and
measuring individual performance objectives against organizational goals and
competencies to develop the capabilities of individuals and teams to help deliver
sustained success to organizations.
Objectives
Key Components of Performance Management
Reinforce organizational priorities
Communicate clear measures and
performance targets
Connect jobs to business strategy
Improve performance through
continuous feedback &development
Train managers to be people
developers and engage employees
Inform decisions about raises,
promotions, and transfers
Recognize staff accomplishments
Career Development
Definition of Performance Management
3
Objectives of the
Performance Appraisal System (PAS)
• Help Individuals
– Develop Role Clarity
– Plan their Work
– Understand their Strengths and Weaknesses
– Follow Methods to Overcome Weaknesses
• Improve Mutuality between Reporting Manager and
Reportee
• Identify Training and Developmental Needs of an
Individual
• Provide basis for merit increase and incentives
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Components of your Performance objectives
Performance Area
KPI
KPI Measure
Target Achievement
Relative Weightage
•Financial
•Customer
•Process
•People
• These should highlight what is expected from “On Target” performance
• Set by manager and agreed by employee
•Based on the criticality of the KPI’s to your role as well as the effort required
•Allocated in discussion with your manager
• Specific performance goals
• Role based
• No more than 6-8 performance
objectives should be identified
• These should measure success against
the KPI
• should be as objective & measurable
as possible
The KPI’s should be as objective and measurable as possible and will be created based
on a KPI Dictionary available for your reference.
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How does it help a Manager?
Drive performance of individual by focusing on results
Provide meaningful measurement
Effective feedback
Design development goals
7
What does it mean for an employee?
Feedback: An employee is interested to know their performance for the year, this is the most important thing for him/her
Motivation: Let the employee know what his/her strengths are and help them in reinforcing positive behaviors
Trust: Create an environment of trust and openness.
Career Planning
Performance Appraisal Roles
• Supervisors
Usually do the actual
appraising.
Must be familiar with
basic appraisal
techniques.
Must understand and
avoid problems that can
cripple appraisals.
Must know how to
conduct appraisals fairly.
Performance Appraisal Roles (cont’d)
• The HR Department
Serves a policy-making and advisory role.
Provides advice and assistance regarding the appraisal tool to use.
Trains supervisors to improve their appraisal skills.
Monitors the appraisal system effectiveness and compliance with
relevant laws and guidelines.
Designing the Appraisal Tool
• What to Measure?
Work output (quality and quantity)
Personal competencies
Goal (objective) achievement
• How to Measure?
Generic dimensions
Actual job duties
Behavioral competencies
Appraisal Tools
Tool Advantages Disadvantages
Graphic rating
scale
Simple to use; provides a
quantitative rating for each
employee.
Standards may be unclear; halo
effect, central tendency, leniency,
bias can also be problems.
BARS Provides behavioral “anchors.”
BARS is very accurate.
Difficult to develop.
Alternation ranking Simple to use (but not as simple as
graphic rating scales). Avoids central
tendency and other problems of
rating scales.
Can cause disagreements among
employees and may be unfair if all
employees are, in fact, excellent.
Forced distribution
method
End up with a predetermined number
or % of people in each group.
Employees’ appraisal results depend
on your choice of cutoff points.
Critical incident
method
Helps specify what is “right” and
“wrong” about the employee’s
performance; forces supervisor to
evaluate subordinates on an ongoing
basis.
Difficult to rate or rank employees
relative to one another.
MBO Tied to jointly agreed-upon
performance objectives.
Time-consuming.
Management by Objectives (MBO)
• A comprehensive and formal organizationwide goal-setting and
appraisal program requiring:
1. Setting of organization’s goals.
2. Setting of departmental goals.
3. Discussion of departmental goals.
4. Defining expected results (setting individual goals).
5. Conducting periodic performance reviews.
6. Providing performance feedback.
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DRAFT DOCUMENT – FOR DISCUSSION PURPOSES ONLY
Performance Rating Scale
The State rating scale includes five performance ratings:
PoorFails to meet requirements consistently and/or by a wide margin
Frequently fails to meet requirements; much room for improvement
SatisfactoryUsually meets requirements; Completes requirements as expected
Very GoodConsistently meets and sometimes exceeds requirements
OutstandingExceeds requirements consistently and/or by a wide margin; nearly ideal
Needs Improvement
Manage
Review
Plan
TIP: The rating should support the comments and examples that demonstrate proficiency, accuracy, and effort in each area. Start by filling out the comments and THEN assign the rating that best reflects the description above.
Rating Scales
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DRAFT DOCUMENT – FOR DISCUSSION PURPOSES ONLY
Common Rating Pitfalls
Letting a good or bad rating on one performance area influence scores in other areas
Halo Effect
Rating all subordinates’ performance at a similar, average score, regardless of differentiating performance or behavior
Central Tendency
Scoring a subordinate generously to make the employee feel good or to make the manager look good to leadership
Leniency
Scoring a subordinate’s performance relative to teammates rather than individually
Comparative Rating
Scoring a subordinate poorly because the manager has extra strict standards or wants to appear tough
Strictness
Manage
Review
Plan
Evaluating based on personal feelings toward the employee rather than on professional performance
Relationship Bias
Rating performance primarily on most recent tasks rather than across the complete time period
Recent Work Focus
Rating performance based on his/her physical appearance. If appearance affects work, still focus on the performance.
Appearance Bias
Rating a subordinate based on the effort put into the job rather than actual results and performance
Effort Rating
Who Should Do the Appraising?
Self-Rating
Subordinates
360-Degree
Feedback
Potential
Appraisers
Immediate
Supervisor
Peers
Rating
Committee
Matching Talent to Reward
1. High potential –Individuals who deliver differential value as evidenced by past performance and have the potential (the ability, engagement, and aspiration) to rise to and succeed in more senior, critical positions
*Good Managers Focus on Employees' Strengths, Not Weaknesses: Knowledge@Wharton
http://knowledge.wharton.upenn.edu/article.cfm?articleid=1223)
2. Critical workforce segments –highly-skilled, highly-trained individuals who drive the highest proportion of revenue growth
3. Natural strengths of all employees – employeesare unique individuals who naturally think, feel, and behave in different ways, resulting in divergent strengths and weaknesses. “A great manager is brilliant at spotting the unique differences that separate each person and then capitalising on them”*
Value creation of high potential employeesSpecialists
Critical Workforce Segments
Critical Workforce Segments
Core WorkforceFlexible Labour
531 2 4
5
3
1
4
2
Value ( £s)
Sca
rcit
y o
f s
kills
SpecialistsCritical Workforce
Segments
Critical Workforce Segments
Core WorkforceFlexible Labour
531 2 4
5
3
1
4
2
Value (
Sca
rcit
y o
f s
kills
Average performers
Top performers
Fast food restaurant
Average
performers
Top
performers
Investment banker
2X
8X
100
800
Software developer
Average
performers
Top
performers
Low complexity jobs
Medium complexity jobs
High complexity jobs
– ‘
Productivity increase
Pro
fita
bili
ty i
ncr
eas
e
12.5%
8.9%
Sample size = 90,000 employees
Before strength-based intervention
After strength-based intervention
Source: 2008 Gallup Organization, Princeton, NJ. Gallup Management Journal http://gmj.gallup.com /
After identifying the critical employee groups that support strategy and drive business success, their values in the workplace environment and how that impacts commitment and Performance, we identify the appropriate Total Reward levers and principles that apply to these
workforce segments and thereby support business strategy and help drive value.
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DRAFT DOCUMENT – FOR DISCUSSION PURPOSES ONLY
Tips for the Performance Review Conversation
Managers play a critical role in this process, and their approach can have a significant positive or negative impact on results. To ensure successful Performance Review dialogues, managers should:
Give Specific and Targeted Feedback
Remain Positive about Opportunity Areas
• Research has shown that focusing on performance strengths during the Performance Review can have a positive impact of more than 36 percent on performance
TIP: Don’t confuse performance strengths with personality strengths. Both are important components of the Performance, but try to keep your feedback separate and specific to each component.
Focus on Strengths
• By providing specific feedback regarding the outcomes of the formal review, managers can positively impact performance by 6.6 percent
TIP: Ensure the feedback you provide is specific and actionable
• Addressing performance gaps is critical to managing performance; however, do not over-emphasize. Findings indicate that an emphasis on performance weaknesses during the review can actually reduce employee performance.
TIP: When discussing a performance weakness, be sure to provide specific suggestions for improving performance and balance the dialogue with both strengths and weaknesses
Manage
Review
Plan
Open and closed questions
• Closed – ‘yes’ or ‘no’
answers
• Open - respondents
open up
– What?
– Why?
– How?
– Where?
– When?
– Who?
Bored Betty
• Forms – a starting box, not a finishing line
• Talk to the person behind the employee
• Discuss long term development, not just short term targets
Defensive Dennis
• Leave out the character analysis
• Create an informal set-up
• Stick to the evidence