Performance Appraisal Basics - continued MANA 4328 Dr. Jeanne Michalski

Results-Based Appraisal Uses future results as performance targets Challenge is setting goals and measures  Can the goals be quantified?  Unique goals for every individual Appraisal forms tend to be very simple Still need a rating scale

Results-Based Appraisal “Management by Objectives” or MBO  Linking individual goals with business strategy  Organizational goals flow down to depts. and employees  Focus on planning, action items, and interim reviews  Objectives negotiated and agreed upon by employees

Admissions Counselor Job Function: Recruit at high schools in the southern Texas region Standards: Make 2 visits per semester to each of the 7 high schools in your area. Prepare follow up packets to be sent to all students contacted during those visits. Send monthly update to the students indicating forms/ items still to complete.

Results-Based Appraisal Focus on results compared to specific behaviors  Should be clear and unambiguous  Requires alignment of expectations  May promote gaming of the system  Beware of results at any cost and excessive results orientation  Time consuming and needs constant updating

How to Judge Appraisal Types  Leads to desired behaviors  Minimizes negative behaviors  Reliability and validity  Perceived fairness (rater and employee)  Performance improvement and employee development  Flexibility and administrative cost

Comparison of Appraisal Forms Ease of Use Employee Development Legal Defensibility Traits HighLow Behaviors MediumHigh Outcomes LowMedium

Performance Management Cycle  Planning Performance for the Upcoming Period  Defining key results for each position (usually 5-8) that support the organization’s business strategy  Establishing performance standards against which key result areas will be measured  May assign a weight to each key result since all key results are NOT equal – adds complexity

Performance Management Cycle  Coaching Performance and Giving Feedback Throughout the Period  Structured feedback like mid-period, quarterly, or monthly progress reviews  Informal feedback throughout the process  Rating Performance for the Just Completed Period  One of the most challenging aspects is the approach for rating employee performance

360 Degree Feedback  Evaluation method that incorporates feedback from the:  worker,  his/her peers,  supervisors,  direct reports, and  customers.  Results of these confidential surveys are tabulated and shared with the worker.  Interpretation of the results, trends and themes are discussed as part of the feedback.

360 Degree Feedback Worker SupervisorPeersCustomers Direct Reports

360 Successful in Organizations When:

 Organizational climate fosters individual growth  Proper framing of feedback method by management  Assurance that feedback will be kept confidential  Development of feedback tool based on organizational goals and values  Feedback tool includes area for comments  Brief workers, evaluators and supervisors about purpose, uses of data and methods of survey prior to distribution of tool  Train workers in appropriate methods to give and receive feedback  Support feedback with back-up services or customized coaching

360 Degree Feedback Errors  Feedback tied to merit pay or promotions  Comments traced to individuals causing resentment between workers  Feedback not linked to organizational goals or values  Use of the feedback tool as a stand alone without follow-up  Poor implementation of 360-degree tool negatively affects motivation  Excessive number of surveys are required of each worker with few tangible results provided to individuals

Recommended 360 Degree Process  Leaders invite direct reports to evaluate them (if less than 5 direct reports, include second level direct reports)  Direct reports rate the leader through a survey tool (often web-based)  Outside consultant analyzes data and generates reports  Leaders and human resources consultant receive feedback report & have opportunity discuss results  Leaders give feedback to their direct reports through a facilitated high performing team session  Leaders create preliminary development plan and discuss with their supervisor

Key Questions to Consider When Receiving Feedback  Do I understand it?  Is it accurate/valid?  Is it important?  Do I want to change? At its heart feedback is only information. How you choose to think and feel about the feedback will determine the value you gain from it.

Possible Reactions To Feedback DENIAL ANGER / FLIGHT WITHDRAWAL ACCEPTANCE ANALYSIS ACTION PLANNING

Guidelines for Discussion with Direct Reports  Thank them for the feedback  Share 2-3 strengths and 2-3 development needs  Solicit additional insight or feedback  Use open-ended questions  Avoid defensiveness  Communicate areas you will address in development plan and solicit their support and on- going feedback

GOAL SETTING AND MOTIVATION

Goal Setting Basics 1.Specific 2.Challenging 3.Achievable 4.Participatively set  “SMART” Goals Specific, Measurable, Attainable, Realistic, Trackable  Set interim or subgoals.  Use action verbs.  Specific dates, times, and amounts.

Participation  No one knows the job better than those who do it.  Workers are more likely to accept the goals with input. Employee High Employee Low Management High ParticipationUnilateral Management Low Empowered / Self Managed No Goals

Why Do Goals Motivate?

Expectancy Theory Motivation = E X I X V Expectancy: The connection between behavior and the outcome Instrumentality: The connection between outcome and a reward Valence: Is the reward something that the individual values?  People are motivated by intrinsic and extrinsic rewards they desire.  People will only be motivated if outcome is possible.  People will only be motivated if outcome is contingent on behavior.  People will only be motivated if a reward is attached to the outcome.  “Line of sight” is the perceived link between individual behavior and the reward.

Goal Challenge and Performance Easy Moderately Difficult Extremely Difficult High Performance Low Performance Note: Not to scale

Call Center? Shipping?Sales?R&D? 1.What performance measures did Hiram put in place? 2.What were the outcomes of the measures?

What measures did Hiram put in place?

What were the outcomes of the measures?

Careful What You Wish For “You make the rules, we play the game.” What do we want employees to do differently? Why aren’t they doing it already? Don’t sacrifice long-term business success for short- term goals.

Types of Goals  Behavioral goals vs. Outcome goals  Often easier to observe outcomes  Gives employee discretion on how to achieve goals  Use Outcome Goals When:  Workers know how to achieve the goals  Workers have the necessary resources “Never tell people how to do things. Tell them what to do and they will surprise you with their ingenuity.” General George S. Patton

Linking Individual & Organizational Goals What are the ultimate goals?  Profits, Sales, Customer Service, Quality  Balanced scorecard  Don’t focus on intermediate goals unless they matter.  Consider the importance of coordination among employees or units.  Consult with business leaders and employees on appropriate goals