1. 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)

2. 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

3. ELEMENTS OF ORGANIZATIONS
Product or Service
Financial Assets
Systems
Human Capital

4. 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

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

6. 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.

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

8. 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

9. 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

10. 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

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

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

13. Be Prepared

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

15. 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

16. 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.”

17. 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.

18. 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.

19. Employee Self Appraisal

20. Appraisal Form Example 1

21. Appraisal Form Example 2

22. Appraisal Form Example 3

23. Appraisal Form Example 4

24. Appraisal Form Example 5

25. Appraisal Form Example 5

26. Appraisal Form Example 6

27. 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.

28. 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.

29. 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.

30. 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

31. 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)