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Establishing and operationalising

performance management system

measuring performance-results andbehavior;

conducting performance reviewdiscussions;

harnessing performance managementsystem for performanceimprovement.

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Measuring performance

Measuring Results Expected fromyou

Measuring Behaviors Expected to be

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Measuring Results: Overview

Accountabilities

Objectives

Performance Standards

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Key questions

Where should each individual focusefforts? (Accountabilities)

What are the expected objectives?(Objectives)

How do we know how well theresults were achieved?(Performance Standards)

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Accountabilities

Broad areas of a job forwhich employee isresponsible for producingresults

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Determining Accountabilities

Collect information about job (JobDescription)

Determine importance of task or cluster of

tasks What percentage of employees time is

spent performing task / eachaccountability?

Would there be a significant impact onwork units mission, if performedinadequately?

Is there a significant consequence oferror?

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Determining Objectives

Purpose: to identify Outcomes

Limited number

Highly important

When achieved

dramatic impact on overall organization success

After objectives are set

Employees should receive feedback on theirprogress toward attaining objective

Rewards allocated

Employees who have reached their objective

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10 Characteristics of Good

Objectives

1. Specific and Clear (For eg Cut travel cost by 20 %)

2. Challenging (Stretch and but not impossible to achieve)

3.

Agreed Upon (Agreement between manager andemployee)

4. Significant (Critical Impact on success of organization,Employees performance and goals of organization, Value toorganization )

5. Prioritized (Unequal, hence tackle one by one)

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10 Characteristics of Good Objectives(continued)

6. Bound by Time (deadlines)

7. Achievable (doable by employees with their skills andtraining. If NOT then resources should be provided)

8. Fully Communicated (Make a awareness for the othermembers of the organization, who are link with theobjectives)

9. Flexible (needs changes with respect to work or business

environments)

10. Limited in Number (Few, between 5 and 10 objectivesper review period is manageable number, but can be changebased on position and organization in question)

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Performance Standards

Yardstick used to evaluatehow well employees haveachieved objectives

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Determining Performance

Standards

Standards refer to aspects ofperformance objectives, such as:

Quality How well the objective is achieved ? (Usefulness, Responsiveness,

Problem-solver, Acceptance rate, Error rate, and feedback fromusers and customers eg Customer complains and returns)

Quantity How much has been produced, how many, how often, at what cost

Time

Due dates, schedule, cycle times, deadlines (how quickly), time-tables, progress reports

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Standards must include:

Action

The desired result

A due date

Some type of indicator

Quality and/or

Quantity

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Good Performance Standards:

6 Characteristics

1. Related to Position (based on job key elements)

2. Concrete, Specific, Measurable (Observable andverifiable in order to avoid dispute)

3. Practical to Measure (Efficiency Time, Cost and Accuracy)4. Meaningful (Important but relevant to job purpose to achieve

organizations mission and objectives)

5. Realistic and Achievable (Accomplish but stretchable.Employees should reached the standards within specific time

frame)6. Reviewed Regularly (To determine whether employee has

reached the standard and if not, corrective action should betaken)

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Measuring Behaviors: Overview

Identify competencies

Identify indicators

Choose measurement system

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Types of Competencies

Differentiating Distinguish between superior and

average performance

Threshold Needed to perform to minimum

standard

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Identify Indicators

Observable behaviors

Used to measure extent to whichcompetencies are present ornot

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Necessary Components for

Describing Competencies

Definition

Description of specific behaviors

When competency demonstrated

When competency not demonstrated

Suggestions for developing thecompetency

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Choose Measurement System

Comparative system

Compares employees with each

other Absolute system

Compares employees with pre-

specified performance standard

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Comparative Systems

Paired comparisons (n(n-1) / 2,n = number of employees evaluated)

Job Ranking Table

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Comparative Systems

Forced distribution : Assumption basedmethod, depending upon percentage classification

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Advantages of Comparative

Systems

Easy to explain

Straightforward (Easy to see which employees are indistributions)

Compare to absolute systems, this is Bettercontrol for biases and errorsmade by ratingperformance

Leniency (Giving high scores to most employees)

Severity (Giving low scores to most employees)

Central tendency (not giving any above / belowexpectations ratings)

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Disadvantages of Comparative

Systems

Rankings may not be specific enough for

Useful feedback

Protection from legal challenge(Employees are not compared based on individual behaviors or

individual competencies, but are compared based on overallassessment of performance)

No information on relative distance betweenemployees (Ranking based method)

Specific issues with forced distribution method(Method is based on assumption some employeesperforming very high, some poor & majority in between .

This assumption may not hold true for all units within the

organization )

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Absolute Systems

Essays

Behavior checklists

Critical incidents Graphic rating scales

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Behavior checklists

Employers task is to indicatecheck statements that describedemployee is being rated

Example of Behavior checklist item

The Employee arrives at work on time

1 2 3 4 5

Never Sometimes Often Fairly Often / Rarely Always

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Categories for Behavior

checklists Scales

Frequency Amount Evaluation

Seven-PointScale

Five-PointScale

Seven-PointScale

Five-PointScale

Always Always All All Terrible

Constantly Very Often Anextraordinaryamount of

An extremeamount of

Unsatisfactory

Often Fairly Often A greatamount of

Quite a bit of Decent

Fairly Often Occasionally Quite a bit of Some Good

Sometimes Never A moderateamount of

None Excellent

Once in awhile

Somewhat

Never None

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Behavior checklists

Advantage: Easy to use and understand

Disadvantage: Scale points used are often

randomly used

Difficult to get detailed and usefulfeedback

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Critical incidents

Kind of measurement that involvesgathering reports of situations in whichemployees exhibited behaviors that are

especially effective or ineffective infulfilling their jobs

For example, following incident isrecorded by a high school principalregarding performance of Tom Jones, thehead of disability services office:

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Critical incidents

A sophomore with learningdisabilities was experiencing difficultyin writing. Her parents wanted a

laptop computer for her. Tom Jonesordered a computer and it wasdeliver to students teacher. No

training was provided to the child,her teacher, or her parents. Thelaptop was never used.

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Critical incidents

Report of specific employee behavior

Allows focus on specific behavior

Very time-consuming

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Competency Adaptability /

Flexibility

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Graphic rating scales

Clear meaning for each response category

(ratings of behavior)

Consistent interpretation by outside readers(party)

Supervisor / Employer and employee shouldhave same understanding of rating

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Importance of Job Ratings for Job (Number)

Knowledge (K)

Skills (S)

Abilities (A)

Performance= KSA

Exceptional (5) : High level of JobKnowledge. Others employees requires training

Advanced (4) : High level of Job Knowledge.Consistently completes all normal tasks. Employeemay seek guidance in some areas.

Competent (3) : Average level of JobKnowledge. Help in completing difficult task

Improvement Needed (2) : Not meetingdeadlines or complete tasks require for this job.

Does not attempt to acquire new skills orknowledge to improve performance

Major Improvement Needed (1) :Performs tasks incorrectly or not at all. Employeehas no appreciation for improving performance

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Example of

Graphic rating scales

Project Manager

Knowledge of Project Management planning, updating status,working within budget and delivering project on time and within

budget

2 2 3 4 5

UnawareOrnot

interested

Needsadditionaltraining

Aware ofresponsibilities

ExcellentKnowledge

andperformance

of skills

Superiorperformance

of skill;ability to train

others

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G

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Graphic rating scales:

BARS improvement

Behaviorally Anchored RatingScales (BARS)

Use critical incidents as anchors

Involves multiple groups of employeesin development

(First Group) - Identify important jobelements

(Second Group) - Describe criticalincidents at various levels of performance

Defined clearly for the rater (Employeesand Employers)

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High Point Performance (3) : Shows technicalfoundation, Application of job, able to identify

problems.

Mid - point Performance (2) : Can resolveissues, application of fine tuning knowledge, can

identify major problem areas.

Low - Point Performance (1) : Weak knowledge,Difficulty in identifying problems

Graphic rating scales:

BARS improvement

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Measuring Performance

Several types of methods

Differ in terms of:

Practicality (time and effort)

Usefulness (quantifiable)

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Quick Review

Measuring Results

Identify accountabilities

Set objectives

Determine standards ofperformance

Measuring Behaviors

Identify competencies

Identify indicators

Choose measurement system

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Case I Appraisal meeting

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Case II

Appraisal meeting

Jason is the manager in the large accounting firm, and Susan is one of the

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Jason is the manager in the large accounting firm, and Susan is one of theemployees on his team. He chooses conference room with privacy awayfrom other offices.

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Six Steps for Conducting

Productive Performance Reviews

1. Identify what the employee has done welland poorly (about positive and negative behaviors)

2. Solicit feedback (Behaviors, Listen for reactions andexplanations)

3. Discuss the implications of changingbehaviors (Positive feedback is best, but what willhappen if any poor performance continues)


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Productive Performance Reviews

4. Explain how skills used in pastachievements can help overcome anyperformance problems

5. Agree on an action plan (Encourage employee toimproves his performance by asking questions such asWhat ideas do you have for and Whatsuggestions do you have for ?)

6. Set a follow-up meeting and agree onbehaviors, actions, attitudes to be

evaluated

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Seq ence for Performance

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Sequence for Performance

Improvement

Identify an organizational problem.

Articulate a relationship between the problem andhuman performance.

Determine a quantifiable performance gap betweenthe desired level of performance and the actual level ofperformance.

Conduct an analysis of the root causes to reveal thereasons for the performance gap.

Implement a series of solutions to address the rootcauses.

performance improvement targets for productivity, costreduction, stock turn etc;

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Documents

3.6 A TASK 2 - PERF MGT