1. Management Principles
Performance Management
Craig W. Fontaine, Ph.D.

2. Identifying and Measuring Employee Performance
Performance Management System
Processes used to identify, encourage, measure, evaluate, improve, and reward employee performance.
Performance
What an employee does and does not do.
Quantity of output • Quality of output
Timeliness of output • Presence at work
Cooperativeness
Job Criteria
Important elements in a given job

3. Linkage Between Strategy, Outcomes, and Organizational Results

4. Types of Performance Information
Trait-based Information
Behavior-based Information
Results-based Information
Job Performance?

5. Performance Standards
Expected levels of performance
Benchmarks
Goals
Targets
Characteristics of Well-defined Standards
Realistic
Measurable
Clearly understood

6. Terms Defining Standards on One Company

7. Uses of Performance Appraisal
Performance Appraisal (PA)
The process of evaluating how well employees perform their jobs when compared to a set of standards, and then communicating the information to employees.
Informal Appraisal
Day-to-day contacts, largely undocumented
Systematic Appraisal
Formal contact at regular time intervals, usually documented

8. Uses of Performance Appraisal (cont’d)
Giving Performance Feedback
Administering Wages and Salaries
Identifying Strengths and Weaknesses

9. Conflicting Roles for Performance Appraisal

10. Uses of Performance Appraisal (cont’d)
Criticisms of Performance Appraisal
Focus is too much on the individual and does little to develop employees.
Employees and supervisors believe the appraisal process is seriously flawed.
Appraisals are inconsistent, short-term oriented, subjective, and useful only at the extremes of performance.

11. Traditional Performance Appraisal: Logic and Process

12. Newest Best - 360 Degree Appraisals

13. Potential Issues – Peer Ratings
Advantages
Peers have opportunity to observe other peers.
Disadvantages
Can negatively affect working relationships.
Potential Issues - Employee Rating of Managers
Advantages
Helps in identifying competent managers
Serves to make managers more responsive to employees
Can contribute to the career development of managers
Disadvantages
Negative reactions by managers to employee ratings
Subordinates’ fear of reprisals may inhibit them from giving realistic (negative) ratings

14. Performance Appraisal Methods

15. Category Rating Methods
Graphic Rating Scale
A scale that allows the rater to indicate an employee’s performance on a continuum.
Job criteria scales
Behavioral scales
Drawbacks
Restrictions on the range of possible rater responses
Differences in the interpretations of the meanings of scale items and scale ranges by raters
Poorly designed scales that encourage rater errors
Rating form deficiencies that limit the effectiveness of the appraisal

16. Category Rating Methods (cont’d)
Checklists
A performance appraisal tool that uses a list of statements or work behaviors that are checked by raters.
Can be quantified by applying weights to individual checklist items.
Drawbacks
Interpretation of item meanings by raters
Weighting creates problems in appraisal interpretation
Assignment of weights to items by persons other than the raters

17. Comparative Methods Ranking
Listing of all employees from highest to lowest in performance.
Drawback
Does not show size of differences in performance between employees
Implies that lowest-ranked employees are unsatisfactory performers.
Becomes an unwieldy process if the group to be ranked is large.

18. Comparative Methods (cont’d)
Forced Distribution
Performance appraisal method in which ratings of employees are distributed along a bell-shaped curve.
Drawbacks
Assumes a normal distribution of performance.
Resistance by managers to placing individuals in the lowest or highest groups.
Providing explanation for placement in a higher or lower grouping can be difficult.
Is not readily applicable to small groups of employees.

19. Forced Distribution on a Bell-Shaped Curve
Figure 11–9

20. Narrative Methods Critical Incident
Manager keeps a written record of highly favorable and unfavorable employee actions.
Drawbacks
Variations in how managers define a “critical incident”
Time involved in documenting employee actions
Most employee actions are not observed and may become different if observed
Employee concerns about manager’s “black books”

21. Narrative Methods (cont’d)
Essay Method
Manager writes a short essay describing an employee’s performance.
Drawbacks
Depends on the managers’ writing skills and their ability to express themselves.
Field Review
Outside reviewer interviews the manager about the performance of each employee and develops a rating for the employees from the interview notes.

22. Behavioral/Objective Methods
Behavioral Rating Approach
Assesses employees’ behaviors instead of other characteristics
Consists of a series of scales created by:
Identifying important job dimensions
Creating statements describing a range of desired and undesirable behaviors (anchors)
Types of behavioral scales
Behaviorally anchored rating scales (BARS)
Behavioral observation scales (BOS)
Behavioral expectation scales (BES)

23. Customer Service Skills (BOS)

24. Management by Objectives
Specifying the performance goals that an individual and his or her manager agree to try to attain within an appropriate length of time.
Key MBO Ideas
Employee involvement creates higher levels of commitment and performance.
Encourages employees to work effectively toward achieving desired results.
Performance measures should be measurable and should define results.

25. Common Rater Errors

26. Performance Appraisals and the Law
Legally Defensible PA System
Appraisal criteria based on job analysis
Absence of disparate impact and evidence of validity
Formal evaluation criterion that limit managerial discretion
Formal rating instrument linked to job duties and responsibilities
Personal knowledge of and contact with ratee
Training of supervisors in conducting appraisals
Review process to prevent undue control of careers
Counseling to help poor performers improve

27. Performance Management System
Effective PMS systems are:
Consistent with the strategic mission of the organization
Beneficial as development tool
Useful as an administrative tool
Legal and job-related
Viewed as generally fair by employees
Effective in documenting employee performance

28. Effective PMS systems are:
Competency Models
Effective PMS systems are:
Consistent with the strategic mission of the organization
Beneficial as development tool
Useful as an administrative tool
Legal and job-related
Viewed as generally fair by employees
Effective in documenting employee performance

29. Competency Models
Competency Modeling: A process of systematically identifying a set of competencies that are necessary for successful performance in a particular job or job family.
Behavioral indicators are associated with each competency.
Behavioral Indicators: The observable actions an employee uses to achieve job-specific results.

30. Competency Example
SPEAKS EFFECTIVELY - The ability to express and present thoughts and complex ideas clearly, succinctly, and in an understandable manner individually and in groups including adjusting language or terminology to the characteristics and needs of the audience.
Speaks frankly and clearly and insures that others understand the meaning of what is being communicated
Listens to and responds to the ideas of others
Is direct and to the point in communication delivery
Listens to questions; anticipates impact of decision before providing a factual answer or recommended options
Balances courtesy with being firm
Demonstrates effective nonverbal communication
Makes the subject as interesting as possible for the audience

31. Competency Example - 2
ANALYSYS/REASONING: Examines data to grasp issues, draw conclusions, and solve problems.
Identifies key facts in a range of data. Notices when data appear wrong or incomplete, or need verification. Distinguishes information that is not pertinent to a decision or solution.
Breaks down complex information into component parts. Sorts and groups data, and applies causal relationships. Sees underlying principles, patterns, or themes in an array of related information.
Applies logic and complex layers of rules to analyze and categorize complicated information. Sees relationships between information in varied forms and from varied sources.
Goes beyond analyzing factual information to develop a conceptual understanding of the meaning of a range of information. Integrates diverse themes and lines of reasoning to create new insights or levels of understanding for the issue at hand. Thinks in terms of generalized models rather than concrete details.

32. Competency Assessment Tool Guide
_________________________________
For
Human Resource
Business Partners

33. How to Use the Tool
Be sensitive to raters (peers and/or direct reports) who have multiple assessments. The number following the rater’s name indicates the number of open assessments they have to complete.

34. How to Use the Tool You can Edit Raters, Clear Raters and
even Delete an Assessment for a ratee
if necessary.

35. How to Use the Tool You can check on the progress of your
assessments by using any one of these three search criteria:
Employee, Competency Model/Close Date Range, or Supervisor.
Click on “Submit” after data entry.
The status of assessments appears here.

36. How to Use the Tool You can check for your own results,
assessments for you to complete, and also
initiate an assessment for yourself.

37. How to Use the Tool (What “raters” see)
Raters will see the selected competency model
with rating choices on a “1-5” scale plus a N/A
choice. They enter choices by clicking on the scale
radio buttons. There is room for comments. Raters may save the assessment as Draft until they are ready to “Save as Final.”

38. Working with the Results

39. Working with the Results
Employee clicks here to get started on the Employee Development Plan

40. The Employee Development Plan
Begin the Employee Development process here

41. The Employee Development Plan
MSWord alternate version of EDP

42. Creating an Employee Development Plan
Summarize what each respondent is saying. Consider what single theme or idea is expressed in the feedback from your supervisor, peers, direct reports and other stakeholders.
Choose a starting point for development.
Keep it simple. For the short term, focus only on one or two areas for development. Don’t be overwhelmed by too many goals.

43. Employee Development Plan
Once employees have identified “strengths and gaps,” they can consider
priority areas for development. They can select from a
learning resource database mapped to each competency
within a competency model or even from learning resources
not mapped to that particular model. They can select from
instructor-led courses, intranet courses, readings and
suggested on-the-job activities. From these they can build
their development plan. They should review this plan with their
manager to ensure their agreement and support.

44. Employee Development Plan
When you select a learning resource area for a competency,
as in the “Courses” area above, a list will appear. To select
an item for your development plan, just place a check mark
in the “Add Resource” column. Then click “Save” to add it
to your development plan for that competency.