Performance Management Research Report

Performance Management Research Report Performance management Presentation Performance appraisal ... two words with the power to strike fear into the hearts of managers and subordinates alike.A performance management system that combines planning management and appraisal is called mixed model Mixed models are particularly appropriate when organizations are in uncertain and rapidly changing environments and employees are not in control of the results.Despite of the detailed analysis in this article there is no consensus on the ideal pm system.Earlier organizations relied upon evaluations and ratings provided by their employees.

Systemic Problems Results can be invalid or inaccurateOne study reported less than 10% of companies expressed confidence in their performance appraisal system

Sources of rater error supervisors avoid, ignore, or delay the performance appraisal process Some supervisors inflate their ratings to avoid demotivating or demoralizing their subordinates Some employees evaluating their subordinates more harshly than the normal.Another source of rater error is lack of feedback. The Search for Solutions Further in-depth training of raters.After the training raters can de divided into three categories1) Wolf(1%) 2)Sloths(6%) 3)Eagles (93%)

Second-Level Supervisor Reviews second-level supervisor reviews may uncover gross errors or even systematic bias.Second, the second-level supervisor may be the least accurate because they have little opportunity to observe the performance of the individual being evaluated.Components of Successful Performance Management Systems Clear objectivesOngoing communication constructive feedback self-appraisal Personal goal setting Appeal process Employee participation in the planning process Rewards and incentives

LEGAL CONSIDERATIONS

Criteria for Success - Competencies Researcher David C. McClelland introduced the concept of competencies in the workplace in 1973.

According to McClelland competencies are independent of the job or position.

By 1991, it was estimated that competency assessments were being used by more than 100 researchers in 24 countries.Lyle and Signe Spencer, identified five types of competency characteristics

1. Motives - drives toward certain actions or goals.2. Traits - physical characteristics of a person (i.e., good eyesight) 3. Self-Concept - a persons attitudes, values, or self-image (i.e., self-confidence).4. Knowledge - information a person has in specific content areas 5. Skill - the ability to perform a certain tasks.

Competency Models Competency models list the characteristics (competencies) found common in superior organizational performers.

Competency models are developed through interviews, focus groups, research, and surveys.

The competency modeling process identifies and validates the skills, abilities, knowledge and behavior required for exceptional performance within an organization or group.

The result of this processes is a validated competency

Without a clear understanding of these competencies the reliability and validity performance appraisals are severely limited.

Constructing Competency Model The competency modeling process typically involves six phases

1) The first phase includes establishing model parameters by meeting with the organization.2)The second phase involves benchmarking best practices.3) Phase three identifies the criteria to be used to identify high-performers within the organization and high-performers recruited for the process. 4)In phase four, a master list of competencies is generated by analyzing and coding the raw data.5) In phase five. The master competency list is converted to questionnaire.6) The final phase tests the validated competency model.Organizational Uses for Competency Models Organizational uses for competency models for

employee management(assessment centers, team building, training, seminars, 360 surveys)

selection (structured interview development, hiring decisions, succession planning)

performance management (structured review processes, personal and/or team development goals, coaching, compensation evaluation/decision making). Characteristics of Effective Competency Models Results driven

User ownership

Simple

Consistent with existing programs

Competency-Based Assessment Methods Behavioral Event Interviews Tests - work-sample, personality, ability Assessment Centers-simulated exercises designed to elicit desired behaviors Biodata Interviews - generate facts about a persons life that provide evidence of competency expression. 360-Degree

Measurement Systems Performance Measurements The important features of getting the job done, may include organizing and planning, quality of work, quantity of work and job knowledge.

Criteria 1. Measurable through observation of behaviors on the job 2. Clearly defined 3. Job related

MBO

Objectives strategies entail the setting of mutually agreed upon, observable, measurable objectives and goals between employees and their bosses.

Behaviorally Anchored Rating Scales (BARS)

BARS are descriptions provided on appraisal forms and surveys which describe a precise level of performance

The Mixed-Standard Scale (MSS)

MSS disguises ordinal relationships among items so that the rater cannot detect an order of merit in the items. The MSS is superior to BARS in reducing leniency errors.

Peer Assessment/Peer Review

Peer assessment is defined as the evaluation of work performance by peers or colleagues of equal rank against established performance criteria or competencies.There are three methods of peer assessment

Peer Nomination specified number of group members (usually excluding themselves) as being the highest and/or lowest in the group on a particular characteristic

Peer rating Each group member rates every other group member on a given set of performance.

Peer rankingEach group member ranks all the others from best to worst on one or more factors.

360-Degree Feedback 360-degree analyze input from the participants immediate supervisors, peers, and direct reports, suppliers and customers (if applicable).

Model and Scoring Variations M. Nowack identified five basic models of 360-degree instruments

1. Job analysis - measure knowledge, skills and abilities determined through focus groups about tasks related to job.2. Competency based - measure competencies which are determined by identifying the behaviors of high performing employees.3. Strategic planning- measure knowledge, skills and abilities required based upon the organizations strategic plan.4. Developmental theory - measure knowledge, skills and abilities based on theoretical and conceptual models of employee growth and development5. Personality theory - measure knowledge, skills and abilities associated with personality.

There are three different ways to score 360 degree survey instruments

1. Ipsative scoring - where employees can track and compare their own scores over time.

2. Normative scoring - employees compare their scores with the scores of a representative group of similar employees (same job, organization or industry).

3. Competency-based norms - are determined by surveying a group of high performing employees

The Rating Team Although 360-degree ratings team membership may vary, all sources agree that rater anonymity must be guaranteed. Protecting the confidentiality of respondents helps to ensure honest.Many organizations use third party firms to collect and analyze the data and prepare feedback reports Self-Ratings Many 360-degree survey instruments include self-ratings.One advantage of self-ratings is that completing an instrument helps participants to better understand the behavior scales.self-ratings examined on their own, tend to be more lenient than others.

Peer Ratings Peers are those employees found at the same organizational level as the participant. Peers may be in the best position to provide feedback on skills such as working with others and teamwork.

CUSTOMER RATINGSCustomers, either internal or external are sometimes tapped as sources of feedback customers may be the best source of input on quality of work and service orientation.22Reporting Feedback Results Advantages and Disadvantages of 360 Degree feedback

Feedback Incentives and Rewards Cash Awards Bonuses Variable Pay Variable pay can include group incentives, gain sharing, win sharing and lump-sum awards Merit Pay Merit pay focuses upon past, individual behavior, presumably over the course of the prior year.Non-Cash Awards Non-cash incentives fall into one of six categories-merchandise, travel, vacation time, recognition, status and a miscellaneous category Broad-Based Incentives

1. Group Incentives - where rewards are based upon the achievement of group, departmental or unit goals.

2. Broad-Based Stock Plans

3. Milestone Plans - are similar to group incentives in that rewards are based upon the achievement of a goal. Milestone plans differ in that they provide rewards for reaching interim goals along the way.

Conclusion