Performance Management

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Performance Management
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• What s holding back performance management
  success? The survey identified the top three
  challenges. The overwhelming leading reason
• Managers lack the courage to have difficult
  performance discussions, cited by 71 of the
  survey respondents.
• Performance management is viewed as an HR process
  (rather than one in which the whole organization
  is involved cited by 45)
• and poor goal setting (36).

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Factors Determining Human Performance
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Performance appraisal is not only a tool to judge
the competency of the people, it is an
intervention that can change almost everything in
the organization.
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Purposes of PM SystemsOverview

• Strategic
• Administrative
• Informational
• Developmental
• Organizational maintenance
• Documentation

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Strategic Purpose

• Link employee behavior with organizations goals
• Communicate most crucial business strategic
  initiatives

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Administrative Purpose

• Provide information for making decisions re
• Salary adjustments
• Promotions
• Retention or termination
• Recognition of individual performance
• Layoffs

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Informational Purpose

• Communicate to Employees
• Expectations
• What is important
• How they are doing
• How to improve

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Developmental Purpose

• Performance feedback/coaching
• Identification of individual strengths and
  weaknesses
• Causes of performance deficiencies
• Tailor development of individual career path

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Organizational Maintenance Purpose

• Plan effective workforce
• Assess future training needs
• Evaluate performance at organizational level
• Evaluate effectiveness of HR interventions

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Documentational Purpose

• Validate selection instruments
• Document administrative decisions
• Help meet legal requirements

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Contributions of PM For Employees

• The definitions of job and success are clarified
• Motivation to perform is increased
• Self-esteem is increased
• Self-insight and development are enhanced

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Contributions of PMFor Managers

• Supervisors views of performance are
  communicated more clearly
• Managers gain insight about subordinates
• There is better and more timely differentiation
  between good and poor performers
• Employees become more competent

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Contributions of PM For Organization/HR Function

• Organizational goals are made clear
• Organizational change is facilitated
• Administrative actions are more fair and
  appropriate
• There is better protection from lawsuits

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Disadvantages/Dangers of Poorly-implemented PM
Systems for Employees

• Lowered self-esteem
• Employee burnout and job dissatisfaction
• Damaged relationships
• Use of false or misleading information

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Disadvantages/Dangers of Poorly-implemented PM
Systems for Managers

• Increased turnover
• Decreased motivation to perform
• Unjustified demands on managers resources

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Disadvantages/Dangers of Poorly-implemented PM
Systems for Organization

• Wasted time and money
• Increased risk of litigation

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Performance Management

• Continuous Process of
• Identifying performance of individuals and teams-
  what to measure
• Asking people to set goals
• Measuring performance of individuals and teams
  how to measure and who should measure
• Developing performance of individuals and teams
• Aligning performance with the strategic goals of
  the organization
• Identifying obstacles in performance

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What to measure?

• Traits
• Behavior
• Results

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Approaches to Measuring Performance

• Trait Approach
• Emphasizes individual traits of employees
• Behavior Approach
• Emphasizes how employees do the job
• Results Approach
• Emphasizes what employees produce

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Trait Approach

• Emphasis on individual
• Evaluate stable traits
• Cognitive abilities
• Personality
• Based on relationship between traits performance

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Trait Approach (continued)

• Disadvantages
• Improvement not under individuals control
• Trait may not lead to
• Desired behaviors or
• Desired results

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Behavior Approach

• Appropriate if
• Employees take a long time to achieve desired
  outcomes
• Poor results are due to causes beyond the
  performers control
• Not appropriate if
• above conditions are not present

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Results Approach

• Advantages
• Data appear objective

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Management by Objectives (MBO)

• Involves setting specific measurable goals with
  each employee and then periodically reviewing the
  progress made.
• Set the organizations goals.
• Set departmental goals.
• Discuss departmental goals.
• Define expected results (set individual goals).
• Performance reviews.
• Provide feedback.

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Who should measure?
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360 degree appraisal -Developing the tool
Ask participants to answer the following three
basic questions List down what you want to know
from your subordinates what are various areas on
which feedback would be of use to you and help
you to be a better manager List down what you
want to know from your seniors List down what you
want to know from your colleagues and internal
customers No names on sheets only write feedback
from subordinates
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Another layer
What are the different areas which you feel your
superiors should know about styles, impacts and
behavior. What are some functions, activities,
initiatives seniors are good at and which should
be continued and vice versa List various areas on
which you would want to give feedback to your
colleagues List various areas on which you would
want to give feedback to your subordinates
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Questions for subordinates
Do I help my subordinates understand clearly
their job, roles, and responsibilities? Do I
delegate satisfactorily? Do my subordinates feel
empowered? Do I adequately guide subordinates in
their job? Is my communication on company
policies and strategies clear? Is there freedom
to work? Do I critically look at the inputs given
by subordinates? Am I providing feedback to
subordinates? Can I be counted upon to assist
subordinates if they have a problem?
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Myths and Facts about 360 Degree Feedback

• The Power of 360 degree Feedback
• Rao and Rao

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Myth 1- Success of 360 depends on finding out the
exact source of the feedbackMyth 2- These are
my childhood problemsMyth 3- 360 degree
feedback is conclusive
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Myth 4- I am a high performer. Why for me?Myth
5- I already know what people have to sayMyth
6- I dont need counseling after 360 degree
feedback
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Myth 7- We are a very open organization. What
else it can give?Myth 8-Implementation brings
immediate revolutionary changes in
organizationMyth 9- It need not be linked with
any other system
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Myth 10- Meant for senior and top management
teamMyth 11- It enhances shareholder value or
brings down
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How to measure?
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Evaluation MethodsIndividual

• Graphic rating scale
• Oldest and perhaps most common
• Forced choice
• Essay evaluation
• Critical incident technique
• Checklists and weighted checklists
• Behaviorally anchored rating scales (BARS)
• Behavioral observation scales (BOS)

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Performance Appraisal Methods

• Graphic rating scale
• A scale that lists a number of traits and a range
  of performance for each that is used to identify
  the score that best describes an employees level
  of performance for each trait.

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Performance Appraisal Methods (contd)

• Alternation ranking method
• Ranking employees from best to worst on a
  particular trait, choosing highest, then lowest,
  until all are ranked.
• Paired comparison method
• Ranking employees by making a chart of all
  possible pairs of the employees for each trait
  and indicating which is the better employee of
  the pair.

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Alternation Ranking Scale
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Ranking Employees by the Paired Comparison Method
Note means better than. - means worse
than. For each chart, add up the number of 1s
in each column to get the highest-ranked employee.
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Performance Appraisal Methods (contd)

• Forced distribution method
• Similar to grading on a curve predetermined
  percentages of ratees are placed in various
  performance categories.
• Example
• 15 high performers
• 20 high-average performers
• 30 average performers
• 20 low-average performers
• 15 low performers
• Narrative Forms

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Performance Appraisal Methods (contd)

• Behaviorally anchored rating scale (BARS)
• An appraisal method that uses quantified scale
  with specific narrative examples of good and poor
  performance.
• Developing a BARS
• Generate critical incidents
• Develop performance dimensions
• Reallocate incidents
• Scale the incidents
• Develop a final instrument

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Example of a Behaviorally Anchored Rating Scale
for the Dimension Salesmanship Skill
SourceWalter C. Borman, Behavior Based Rating,
in Ronald A. Berk (ed.), Performance Assessment
Methods and Applications (Baltimore, MD
Johns Hopkins University Press, 1986), p. 103.
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Organizations use various methods for performance
management, with 54 reporting the use of a
five-point scale, 73 using an electronic
system, 28 using a specified range of
distributions, and 10 using forced
rankings. Written objectives are used by 73 of
the respondents to assess performance, and 73
also use job accountabilities, which identify the
specific outputs that are expected. Another 58
use behavioral competencies, and 47 use
quantifiable metrics. Just under one-third (31)
use some form of cross-manager calibration to
ensure managers are rating and distributing
related rewards consistently. HR Focus/October
2007
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Performance Analysis
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What is Performance Analysis

• Understanding the constituents of performance by
  breaking it into various elements and
  understanding the factors that cause performance
  is called performance analysis.

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Objectives of PA
Identify the factors that help achieve
performance Identify factors that hinder
performance Identify factors that the appraisee
can do something about Identify development
needs Gaining a better understanding about the
appraises his environment
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Methodology

1. Appraisee should periodically keep reflecting and
   recording about how well he is progressing
2. Whenever he comes across success experience he
   should record facilitating factors
3. Similarly, whenever he comes across failure, he
   should record inhibiting factors
4. At the end of the performance period, he
   considers his performance and based on these
   factors rates himself
5. After rating he should list in detail those
   factors
6. After listing factors should be categorised as
   explained in the next slide (methodology
   continued)

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Facilitating Factors
Personal or individual facilitating
factors Facilitating factors attributable to the
reporting officer Facilitating factors
attributable to organization and its
systems Facilitating factors attributable to
subordinates Facilitating factors attributable to
external environment
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Inhibiting Factor
Same as in the previous slide
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Methodology
7. Facilitating factors he would like to maintain
or strengthen and inhibiting factors that he
would like to overcome 8. List support that could
be extended by his reporting officer to maintain
the external facilitating factors and to reduce
the inhibiting factors 9. Submit the appraisal to
the reporting officer
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Characteristics of an Ideal PM System
Thorough Practical Meaningful Specific Reliable Va
lid Acceptable and Fair Inclusive Open Correctable
Standardized
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Potential Errors in Performance Appraisals

• Leniency - when a managers ratings are grouped
  at the positive end of the scale
• Central Tendency - when a manager rates most
  employees performance in the middle of the
  performance scale
• Recency - rating of work performance on an
  employees most recent work rather than the
  entirety of the work
• Halo Effect - the rater allows a single prominent
  characteristic of an employee to influence each
  item on the performance appraisal of the employee

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From where do you get information about appraisal?

• Job analysis

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Support task
Main task
High
Criticality
Casual task
Routine task
Low
Low
High
frequency
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Appraisal Myths

• Assumptions
• One appraisal process can effectively serve
  several functions at the same time
• A one size fits all can work well for everyone
• You can get commitment from a forced process
• It is possible to objectively and reliably
  evaluate
• It is required by law

• Alternative assumptions
• Multiple purposes of appraisal can be achieved
  through separate processes
• Jobs widely differ in nature and change over time
• Commitment can best be nurtured through a
  supportive work environment
• Evaluation processes are largely subjective
• Employers can defend against employee lawsuits by
  documenting serious deficiencies

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Appraisal Myths

• Ratings are motivating and let people know where
  they stand
• Feedback, development, and performance
  improvements are annual or quarterly events
• People withheld efforts if they are not
  extrinsically rewarded
• Inspecting individual leads to improved
  performance

• Because of subjectivity in evaluation, it may
  demotivate
• The best time for feedback etc is variable and
  depends on the situation, individuals needs etc
• Healthy people are intrinsically motivated
• Improving systems and processes improves the
  performance

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The Feedback Process

• Stage 1 Describe current behavior
• Stage 2 Identify situations
• Stage 3 Describe impacts and consequences
• Stage 4 Identify alternative behavior

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The Feedback Process

• Describe current behavior
• Disruptive behavior to avoid
• Attacker
• Judge
• Rambler
• Hit-and-run
• Dumper
• Laggard
• Inconsiderate

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The Attacker

• Attackers challenge personal traits instead of
  specific behavior.
• A Your office is a mess. You are awful
• R ( Defense) You know how much work I have to
  handle here
• Cite specific Behavior

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The Judge

• Everything in his world fits into right or
  wrong.J You are such a bad guy
• R You have drawn a wrong conclusionBe
  descriptive

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The rambler

• He delivers long -winded lectures. Do you know
  why it did not work? I will tell you why. Let me
  tell you what I did when I was in your
  position. Blah, Blah, Blah.
• R Forgets where they were going.Be Brief

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The Hit-And-Run

• He makes a quick and vague point and disappears,
  not available for questions and answers.
• H You must improve your performance. OK. Good
  day.
• R Misconstrues the feedback.Be available to
  share and discuss your observations.

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The Dumper

• The dumper unloads on people. He does not put
  criticism into context-he just lists. He stores
  them in gunny sacks and then dumps them all on
  your head.
• There are two points I want to make and yes there
  are two more points I want to make.
• R Feels chewed upProvide feedback gradually

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The Laggard

• He dilly-dallies. Gives you feedback when he
  remembers.
• Now that you have mentioned it, let me tell
  you.
• R Starts applying motives.Be prompt

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The Inconsiderate

• He gives no thought to time and place. You are
  about to begin your presentation, when he comes
  in and says, You must..
• R Finds you insensitive and inhumane.Be
  sensitive to time and place

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Stage 2- Identify situation

• Provide two to three clear and specific
  situations when the current behavior was actually
  observed. Base your feedback on direct
  observation and solid facts

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Describe Impacts and Consequences

• The parent
• The punisher
• The psychologist

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The Parent

• The parent often relies on personal likes and
  dislikes when choosing behaviors to criticize or
  praise. He wants others to be like him. He
  belittles.
• Why are you fighting me on this? I am just
  trying to tell you what is good for you.
• R Why should I follow you?
• Accept differences if there are no negative
  consequences or explain the consequences

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The Punisher

• The punisher focuses only on downside, extreme
  negative consequences.
• This will get you fired. It is your choice.
  Dont come to me if something goes wrong.
• R May give up but is not convinced
• Keep a positive focus. Your objective is to
  improve, not punish

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The Psychologist

• He is obsessed with why to seek deep underlying
  motives and intentions.
• I know why you acted that way. It is because..
• R Gives explanation
• Rather than saying I know, say may I ask you why
  did you.Seek information rather than assigning
  motives

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Identify alternative behaviour

• The Imposer
• The quick fixer
• The abandoner
• The pessimist

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The Imposer

• The imposer mandates his opinions as if they were
  law. He pushes solution down to your throat to
  kill a discussion.
• If youd set your alarm to go off ten minutes
  earlier, you wont be ten minutes late
• R Takes it as an attack and proves you wrong by
  being late next time, passes responsibility on
  to you.

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The Quick Fixer

• He does not take much time in identifying problem
  and offering solution
• Your problem is that you do not participate in
  discussion and see it is so simple- open you
  mouth and start it.
• R Had it been so simple!

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The Abandoner

• He knows of only one solution
• This is the only way you can get promotion
  here.
• R Is kept in doubt.

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The Pessimist

• Sees no hope for change or improvement.
• There is nothing you or I can do, except live
  with it.
• OR
• You need to do it but I know you shall not be
  able to do it.
• R Then why should he tell me this?

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• Giving Feedback
• Indirect vs. Direct Expression of Feelings
• Interpretation vs. Description of Behavior
• Evaluative vs. Non-evaluative Feedback
• General vs. Specific Feedback
• Pressure to change vs. Freedom of choice to
  change
• Delayed vs. Immediate
• Imposed vs. Solicited
• Unmodifiable vs. Modifiable Behaviour
• Motivation to hurt vs. Motivation to help

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Indirect vs Direct

• You are a likeable person
• You are driving too fast
• (I am anxious because you are driving too fast)
• Indirect statements often begin with I feel that
  and finish with a perception of opinion
• (I feel that you are angry)

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Interpretation vs Description

• William is fidgeting in his chair and shuffling
  his feet
• You are anxious (may be he wants to go to the
  toilet)
• Marie could say, You are hostile, or You do
  not like me

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Evaluative vs Non evaluative

• You are stupid or insensitive.
• If someone acts stupidly, it does not mean that
  he is stupid. The person making the evaluation
  assumes that he can distinguish between right
  and wrong and that if the receiver does not
  exemplify these values, the sender will be
  unhappy with him.

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General vs Specific

• You are stupid.
• You are a warm person.
• It does not allow the receiver to know that
  specific behavior that is perceived as warm

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• Receiving Feedback
• Denial vs. Owning
• Quick Acceptance vs. Data collection
• Rationalisation vs. Self-analysis
• Withdrawal vs. Expressing Feelings
• Aggression vs. Help-seeking
• Humour vs. Concern
• Generalisation vs. Experimentation