STRATEGIC HUMAN RESOURCES: Performance Management We have allotted 1 ½ hours for you to speak.  We have been tossing around the topic of Performance Management.  However, not all of our HR group actually performs employee appraisals themselves. Maybe we could look at how can HR assist managers and help them in the process? J. Gay Albright Assistant Teaching Professor and Director of International Relations University of Missouri 307D Cornell Hall (573) 882-2860 Albrightj@Missouri.edu

WHY IS HR CRITICAL? “Managers at all levels are becoming increasingly aware that a critical source of competitive advantage often comes not from having the most ingenious product design or service, the best marketing strategy, state-of-the-art technology, or the most savvy financial management but from having the appropriate systems for attracting, motivating, and managing the organizations’ human resources.” --Jeffrey Mello

ELEMENTS OF ORGANIZATIONS Product or Service Financial Assets Systems Human Capital

HUMAN RESOURCES ALIGNMENT Provides employees with the skills to meet current and future job demands. Aligns HR activities with organization's vision, mission, goals, and values. Organizational Strategic Goals HR Systems, Activities and Programs Business Results

BASIC STRATEGIC HRM COMPONENTS HUMAN CAPITAL POOL Knowledge Skills Ability PEOPLE MANAGEMENT PRACTICES EMPLOYEE RELATIONSHIPS AND BEHAVIORS

Performance Appraisals Performance Management Paradigm Shift Performance Appraisals Emphasis on completing forms, ratings, pay-decisions under deadline Process driven by management and “done to” employees. “Other duties as assigned” syndrome. Performance information is hard to access and yields limited ideas for growth and development. Performance Management On-going feedback, meaningful communication & clear performance messages. Interactions and conversations about performance are initiated by both employees and managers. Clearly defined employee objectives linked to organizational objectives. Performance information is highly accessible and yields robust ideas for growth and development.

Performance Management On-going process: Planning Observation, coaching and feedback Performance appraisals Performance development

Planning – Cascading Throughout Organization to Individual Position Begin with organizational / functional goals Define essential job functions and relate them to org goals Develop performance standards Communicate expectations

Observation, Coaching and Feedback Supervisors/managers daily Focus on continuous improvement Correct performance deficiencies Reinforce appropriate behavior Teach employee new skills Motivate high performance Mentor employees

Effective Feedback Giving feedback is a learned skill Feedback is specific and descriptive, not judgmental Focused on behavior, not personal characteristics or “attitude” Feedback is timely

Positive Feedback Describe the situation or task Describe the employee action Describe the result

Feedback for Improvement Describe the situation or task Describe the employee action Describe the result Ask for/describe alternatives Discuss desired results

Be Prepared

Performance Appraisal Time period and instrument defined Employee evaluates self Supervisor evaluates employee Appraisal is reviewed Employee and Supervisor discuss appraisal

SOURCES OF EMPLOYEE VALUE Functional Business / Customers Processes / Systems Technical Knowledge Openness to New Ideas Acquisition of Knowledge and Skills Ability to Learn and Grow Motivation Decision-Making Capabilities Commitment Leadership Ability Interpersonal Skills Teamwork

Appraisal Systems Numerical rating scales Descriptive rating scales MBO BARS Rating systems can measure effort, results, or knowledge. Often the system is based on a Rating scale that shows employees how they’re doing relative to goals and/or other employees. Rating scales can also help you make more informed decisions about compensation, promotions, and so forth. Numerical rating scales clearly state the numbers’ meaning. For example, a 1-5 scale could define 1 as below standards, 3 as good performance, and 5 as so extraordinary that it’s rarely used. Scales using descriptive terms may be used for jobs where there’s no chance to be extraordinary and a below-par performers can’t be kept on. For example, “doesn’t achieve standard,” “achieves standard,” “exceeds standard.” MBO, or Management by Objectives, ratings measure results in terms of specific goals. For example, make 20 sales calls per week; complete two projects during review period. To be effective, goals must be realistic and employee must have sufficient control over workflow and organization to be able to achieve objectives. Behaviorally Anchored Rating Scales, or BARS, measure effort in terms of observable behavior. For this rating system to be effective, however, behaviors must be clearly defined—for example, “Answers calls on first ring” or “Consistently hands in reports on time.”

Appraisals Without Rating Scales Critical incidents Narratives Some measurement systems don’t use rating scales. For instance, you can record critical incidents that demonstrate the employee’s successes or failures. It’s important to note that critical incident logs must be maintained all through the review period to be meaningful. You can also use narratives. A written narrative can describe performance and strengths and weaknesses in great detail and in the context of the whole job. This approach works best when you’re focusing on employee development.

Focus on…… Results – goals and measurements Effort Knowledge Teamwork In addition to measuring how well an employee performs the particular procedures and functions of the job, you will also want to look at three other key aspects of performance. Success in any job depends on effort on the part of the employee. And effort is observable and can be measured. Often, an employee’s performance can be measured in terms of the results he or she achieves. Again, results are observable and therefore measurable. And for many jobs you will also want to take into account knowledge that the employee applies to the job in terms of educational or technical competence.

Employee Self Appraisal

Appraisal Form Example 1

Appraisal Form Example 2

Appraisal Form Example 3

Appraisal Form Example 4

Appraisal Form Example 5

Appraisal Form Example 5

Appraisal Form Example 6

Using Performance Measurement to Compare Employees Raises Promotions Bonuses and incentives Mentoring Teambuilding Comparing employees’ measurements puts individual performance in context. This is useful as a guide for making salary and merit raise decisions. It can also be helpful in deciding who should get a promotion. You can use performance comparisons when selecting employees for year-end bonuses or other special incentives. Comparing employees’ job performance can also help you set up an informal mentoring program, pairing employees who are performing very well with those who need extra help you don’t always have time to give. And comparisons can also help when it comes to teambuilding. Comparing the skills, abilities, and special talents of different employees can help you put together well-balanced teams.

Be Fair and Consistent Use the same measures Apply the system to everyone Back up your measurements Explain the system Whatever measurement system you use, use it fairly and consistently. Use the same measures and criteria of performance for all employees in the same job. Make employees aware that the system applies to everyone, equally. Back up measurements with your records of observed behaviors and recorded results. Explain the system to employees. Make it clear what rating level puts an employee’s job in jeopardy.

Performance Management System Performance Management is the continuous process of identifying, measuring, and evaluating the performance of individuals and teams and aligning their performance with the goals of the organization. It is a system that significantly affects organizational success by having supervisors and employees work together to set expectations, review results, and reward performance.

Take a long time to write Don’t make a difference Salary increases are low, so evaluations don’t matter Everybody gets the same They are biased

Only 29% of employees are actively engaged in their jobs 84% of highly engaged employees feel that they can move their organization forward compared to only 31% of the disengaged (Study completed by Gallup)