module 2 - conduct mid and end cycle performance review for senior managers and managers...

Module 2 - Conduct Mid and End Cycle Performance Review for Senior Managers and Managers

Performance, Development and Rewards Training

2 © 2008 Ernst & Young Australia. Liability limited by a scheme approved under Professional Standards Legislation.

Module 2 “Conduct Mid and End Cycle Performance Review” focuses on the course objectives outlined below

At the end of this session participants will be able to:

Discuss the purpose of performance reviews

Explain the Mid and End Cycle processes and where these processes fit into the PDR process

Effectively prepare to conduct a performance review

Apply performance ratings to performance objectives based on evidence and information provided in examples

Answer questions about performance ratings and the distribution process (including managing forced distribution)

Explain the resolution procedure

Discuss the importance of the final rating, in particular its linkage to rewards

State what needs to happen when communicating results


Before we begin, let’s discuss and explore a few concepts to do with performance reviews

What is the purpose of performance reviews?

What are some guiding principles for Performance Reviews?

Discussion


This module will focus on the Mid and End Cycle review phases, highlighted in red

Draft Performance Objectives

Agree Performance Plan – discussion

Manager Sign-off

Mar-Apr 09

Sept – Oct 09

Feb – Mar 10

Employee Performance Plan Review

Manager Performance Plan Review

Discussion and updates

Manager Sign-off

Employee Performance Review (and rating)

Manager Performance Review (and rating)

Performance Discussion

Performance Review Sign-off Faculty/Business Unit

Moderation Process Corporate Moderation

Process Incentive Modelling Final Performance Rating

Sign-off

Conduct Moderation Process

Develop Performance Plan

Performance Bonus Payments

May pay run

Conduct End Cycle Review

Conduct Mid Cycle Review

Mar – Apr 10

PDR Process


The Mid-Cycle Review checks progress against agreed objectives and planned development for an employee

Mid-Cycle Review Process

Review Performance

Plan

Dir

ect

Rep

ort

Man

ager

Collect Evidence

Document Performance

and Development

progress

Review Direct Report

Performance and Development

Plan

Assess progress towards

performance objectives and

development plan

Discuss progress with Direct Report

Does performanc

e plan require

updating?

Does Direct Report agree

with progress

assessment?

Resolution Process

YES

NO

NO

Request Performance Plan Amendment form

Schedule Performance

and Development

Review Meeting

HR

Notification trigger to all

employees of PDR review

cycle

Update Performance

Plan based on discussion and send to

Manager

Enter mid-cycle performance comments

YES

Receive Performance Plan and sign of Mid-Cycle

Review


Preparation on the part of the Manager and the Direct Report is the key to successful performance reviews

What inputs would you need to conduct a performance review?

How else might you prepare for the review?

What do you think your Direct Reports need to do prior to the meeting?

Discussion


There are a few things we think are really important to conducting a good performance review with your Direct Reports

PrepareOpening the discussion

Providing Feedback Closing the discussion

Preparation is the key! Review evidence of

progress towards objectives and employee self review.

Agree with your Direct Report who you may speak to about your Direct Report’s performance. For example, your direct report may have worked on a project and reported to a Project Manager 2 days a week. It is entirely appropriate to seek feedback on your direct report’s performance on the project relevant to a specific performance objective.

Prepare questions for your Direct Report to consider in the feedback meeting.

Consider how the Direct Report will react to feedback.

Schedule a mutually agreeable time for the meeting – and keep it!

Show your respect by switching off your mobile phone, diverting your work phone and being on time.

Discuss the purpose of the meeting.

Ensure the meeting will be free of interruptions and agree how much time is available for the discussion.

Ask your Direct Report for a self assessment of their performance using open questions.

Think about how their assessment compares with your view and possibly adapt your approach.

When discussing performance objectives, ask the Direct Report to review their achievements and identify what still needs to be done.

Highlight strengths and congratulate where appropriate.

Be open and honest with your feedback. If you have identified areas for development, ensure you have thought them through clearly and discuss them openly with your Direct Report.

Use the SBI model: Situation – explain the

context of the situation. Behaviour – describe

the behaviour observed (i.e. what your Direct Report said and did in the situation being discussed

Impact – discuss the achievement. Where development feedback is appropriate, discuss why the Direct Report should have behaved differently and provide examples of what else they could have done and said.

Agree clear actions for additional development activities and /or where performance objectives require modification.

Commit to a time to follow up any action items.

Reinforce key achievements and strengths.

Remember, the performance review discussion should always end positively with you Direct Report motivated to achieve their objectives.

Information Environment Honesty Moving Ahead


It is important that you get an opportunity to practice doing a performance review

In 2 groups, use the information provided to prepare for a mid cycle performance review

You will have 20 minutes to complete it as well as you can

Nominate a spokesperson who will present your answers to the group (10 mins per group)

Scenarios


The End-Cycle Review Process is very similar, with the addition of a rating for the year

End-Cycle Review Process

Review Performance

Plan

Dir

ect

Rep

ort

Man

ager

Collect Evidence

Self-assess performance

against objectives and assign rating

Review Direct Report

Performance and

Development Plan

Assess progress towards

performance objectives

and development

plan

Discuss performance, ratings and completion of

development activities with Direct Report

Does Direct Report agree

with performance

review?

Resolution Process

NO

Schedule Performance

and Development

Review Meeting

HR Notification trigger to all

employees of PDR review cycle

Update End-Cycle Review

comments and ratings

YES

Assign rating

against each

objective using cited evidence

Assess satisfactory

completion of development

plan

Moderation Process

10

© 2008 Ernst & Young Australia. Liability limited by a scheme approved under Professional Standards Legislation.

It is important that performance ratings are determined in line with Swinburne guidelines

Employees will self assess their performance and assign a rating to each of their performance objectives

Managers will meet with their employees to discuss the performance year and manage employee expectations as appropriate – this may require re-rating of performance objectives

Evidence of performance measures will be a key input to assessing employee performance

Managers will assign a performance rating to individuals as per agreed 1 to 5 rating scale against each performance objective using PDR guidelines to assess performance

SuccessFactors will calculate a final performance rating by multiplying each performance rating by the weighting percentage and adding each score

Performance Ratings are used to determine financial rewards and short-term incentive payments and thus getting them right is very important

Rating Performance

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The table below defines the Performance Ratings

Rating Definition

5 OutstandingPerformance consistently exceeds expected standards and objectives. Outputs are of a quality and level significantly above that which is expected of the grade and experience. Demonstrates performance of an exceptional quality in comparison with relevant peer group. Outputs have had a significant impact on the achievement of broader faculty / business unit objectives as defined by the faculty / business unit plan.

4 Exceeds ExpectationsPerformance meets expected standards and objectives and in many cases exceeds expected standards and objectives. Demonstrates performance of a very high quality in comparison with relevant peer group and outputs have had a considerable impact on the achievement of broader business unit / faculty goals as defined by the business unit / faculty plan.

3 Meets ExpectationsPerformance consistently meets expected standards and objectives. Demonstrates performance of a high quality consistent with relevant peer group and outputs have a positive impact on business unit / faculty plan

2 Needs ImprovementPerformance meets some expected standards and objectives. Demonstrates performance of a level that requires improvement in comparison with relevant peer group.

1 UnsatisfactoryPerformance generally fails to meet expected standards and objectives in all areas. Demonstrates performance of a level that requires significant and immediate improvement in comparison with relevant peer group.

NR Not Rated New joiner so unable to provide a Performance Rating (For example: up to six months only).

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Rating Performance Example – What ratings would you assign?

Performance ObjectivesStrategic Theme

Weight

Measures Evidence Rating

Reduce turnaround times of academic faculty requests for budgetary information from 5 days to 3 days

Entrepreneurial in Endeavours

60%

90% of all budget information requests are met within 3 working daysAverage score of 90% received across Satisfaction Surveys

90% of requests met within 2 working daysAverage score received 90%

Streamline budget template and roll out to 80% of client groups


10%

Single template rolled out to 80% of client groupsFeedback received from client groups

Single template rolled out to 80% of client groups, feedback received suggests some improvements, but basically happy

Process accounts receivable within 10 working days and reduce number of errors


20%

90% receivables processed within 10 working days and error rate <5% of receivables processed

Error rate 10%, only 80% of receivables processed within 10 working days

Achieve all performance objectives listed above in a manner that lives the Swinburne values: Teamwork & collaboration, Personal Integrity and Leading & Innovation

Swinburne Values and Behaviours

10%

Assessment based on observable behaviour and feedback received

Clearly demonstrates SUT values and behaviours, teams effectively at all levels, shares knowledge

Performance Rating Calculation:

(4 x 60%) + (3 x 10%) + (2 x 20%) + (4 x 10%) = 2.4 + 0.3 + 0.4 + 0.4 = 3.5

4

3

2

4

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In order to assign meaningful ratings and allocate rewards appropriately, ratings will be distributed using a bell curve

The same rating process applies to all levels of staff

Typically, we would only expect around 10% of our people to achieve a 5, 20% to receive a 4 and 60%, the majority, should receive a 3. This follows a normal distribution curve shown below

There will be some flexibility with these numbers. It is possible a Manager may rate more employees as a 4 or 5 rating; however the Manager will need to provide clear evidence to justify the case for dong so.

Performance Distribution

1's 2's 3's 4's 5's

0%

10%

20%

30%

40%

50%

60%

70%

1 2 3 4 5

Performance Rating

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Now that you understand how a performance review should be conducted, let’s discuss an important topic…

What are some things that may go wrong during a performance review and how might you handle these situations?

Discussion

15


Now you understand how to conduct a performance review, let’s discuss an important topic… How to Handle Difficult Situations

Situation Strategies

The person could start crying or get angry

Let them talk about what is upsetting or concerning them If they remain emotional, reschedule the review, don’t let them leave while still upset Calm them down by explaining that you are there to assist them, that the meeting is to

constructively discuss their performance Offer reassurance that the performance review process in not an inquisition Emphasise positive values of appraisal to employees and to the organisation, and initiate a

discussion on one of the employee’s achievements

The person overstates their achievements

Prepare beforehand so you have actual examples of behaviors to discuss, with data to back it up Give praise where it is due but be specific about the negative results/behaviors that have been

exhibited Get them to re-evaluate their performance in the light of the facts being presented Ensure that the person has a good understanding of what is required of them

The person is underperforming and does not realise it

Review their understanding of their role and ensure that this is in line with what is required of someone of their level and experience

Identify areas of lower performance and suggest ways that performance can be improved and enhanced

Ask “Why” the individual is not working to their full potential. Ensure that the person understands what is required of a good performer at their level

Change targets if necessary to include goals that are challenging but achievable Praise achievement and maintain the person’s morale Suggest training and development opportunities if required

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How to Handle Difficult Situations (continued)

Situation Strategies

The person discounts the whole review process and does not trust the process

Discuss the purpose of the performance review process emphasising the positive aspects of the process and how it can assist with the individual’s career development within the firm.

Say that together you can make it as positive an event as possible. Ensure that the person understands that you as the Manager are there to assist them.

Ask for their agreement to hold the discussion and make the most of it Identify their issues and ask them what could be done to make this process work for them Perhaps ask them for their ideas on how to manage and maximise their own performance.

The person does not feel challenged enough and wants a promotion or more responsibility

Give the employee the information on which judgments about promotion are made and let them come to their own understanding of how likely promotion will be.

Plan work for them which is not critical (if they do not succeed) but which will be the sort of work they will have to do at the next level up. Give them information so they can evaluate their own performance.

Manage perception early on. Give them honest, constructive feedback on their capability and promotion readiness

Do not encourage unrealistic expectations – it is far easier to give unwanted news earlier on than to manage disappointments when a promotion is not achieved.

The person does not want to change their behaviour or style even after significant negative feedback

Invite them to summarise the performance evaluation in their own words. Revisit the issues and explore further. Find a few areas that you agree on that require

improvement. Explain carefully to ensure they understand the improvement needed. Get them to say how they intend to reach the standard. Agree on a written plan of action with a schedule for reviewing progress.

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There may be instances where disagreements arise between you and your Direct Reports

There are a number of checks and balances within the PDR process to facilitate fairness, transparency and objectivity;- Regular reviews and meetings between a Manager and Direct Report - open and honest two

way communication is necessary

- To reduce ambiguity and increase consistency and transparency, all performance ratings will be subject to the Moderation process. This process involves Senior Managers reviewing the ratings and objectives to ensure all performance ratings have been applied fairly and consistently.

- As we get more familiar with the process, our skills for honest communication and clarity of objective setting will improve

Nevertheless, there may be some instances where the Manager - Direct Report relationship may experience difficulties and a Direct Report disagrees with your assessment of their performance

If you and your Direct Report cannot reach agreement when setting performance objectives and measures, or the Direct Report disagrees with your assessment of their performance, they are able to request your Manager to intervene and mediate.

The process is outlined on the next page

The Resolution Process

18


If there are disagreements between you and your Direct Report about performance, the Resolution Process is followed

The Resolution Process

Informs Manager that they would like to start the

Resolution Process as dissatisfied with ratings or performance assessment

Dir

ect

Rep

ort

Man

ager

Discuss with Manager

reasons for disagreement

Agreement reached?

NO

YES

Meeting with Direct Report, Manager and

2nd Level Manager

Moderation Process

2nd Level Manager makes

decision on resolution

2nd L

evel

M

anag

er

19


Communication transparency is important in regards to ratings and incentive framework - payments should remain confidential

Ensure that your Direct Report is aware that the initial ratings discussed in your end-cycle review may be moderated at the Moderation process (either up or down)

Once the Moderation process has been conducted, you should inform your Direct Report in person of their final rating.

IMPORTANT: Final performance outcomes cannot be communicated employees prior to Performance Round Table Panel Chair sign-off

Communication of Ratings

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In pairs, write down the answers to the following quiz on the answer sheets provided without referring to your notes

Question 1:

What are the two review processes called?

Question 2:

How many performance ratings are there?

Question 3:

What is the descriptor for a 3 rating?

Question 4:

What percentage of people should, on average, rate as a 3?

Question 5:

What are ratings based upon? (3 factors)

Question 6:

When do the mid and end-cycle performance reviews happen?

Quick Quiz

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Let’s review our course objectives to see if we have covered off all required topics

You should now be able to: Discuss the purpose of performance reviews

Explain the Mid and End Cycle processes and where these processes fit into the PDR process

Explain preparation requirements: the inputs, how to prepare for a performance review, what you’d expect to see from staff and when

Apply performance ratings to performance objectives based on evidence and information provided in examples

Answer questions about performance ratings, the distribution process (including managing forced distribution)

Discuss the importance of the final rating, in particular its linkage to rewards

State what needs to happen when communicating results

Explain the resolution process

Course Objectives - Review

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Thinking about what we have learned is an effective method of retaining information…so

Individually, write down your top 3 learnings from this module

Thank you for your attention!

Key Learnings

module 2 - conduct mid and end cycle performance review for senior managers and managers...

Documents

employee performance

managers performance

end cycle performance

performance ratings

purpose of performance

midcycle performance

evidence document performance

end cycle review phases