1 Performance management defined

1
16 PERFORMANCE MANAGEMENTContents

• 1 Performance management defined
• 2 Performance management five questions
• 3 The performance management cycle
• 4 The performance management sequence
• 5 What performance management is
• 6 What performance management is not
• 7 Performance management principles
• 8 Developments in performance management
• 9 Performance management activities
• 10 Performance agreement
• 11 Characteristics of good objectives
• 12 Agreeing competency requirements
• 13 Classification of performance measures
• 14 Performance measures criteria
• 15 Performance reviews key features
• 16 Preparing for the meeting the managers role
• 17 Preparing for the meeting the individuals
  role
• 18 What to find out at a review meeting
• 19 Conducting a review meeting

• 21 Listening
• 22 Giving feedback
• 23 Managing under-performers
• 24 Performance management at Astra-Zeneca (1)
• 25 Performance management at Astra-Zeneca (2)
• 26 Performance management at Astra-Zeneca (3)
• 27 Performance management at the Victoria
  Albert Museum
• 28 Performance management at Halifax
• 29 360-degree feedback definition and rationale
• 30 360-degree feedback model
• 31 360-degree feedback methodology
• 32 Example of 360-degree profile
• 33 Balanced scorecard
• 34 Introducing performance management
• 35 Performance management the big issues
• 36 Whats it for?
• 37 Do we have rating?
• 38 How do we get buy-in from line managers?
• 39 Performance management key considerations

2
PERFORMANCE MANAGEMENT DEFINED
A strategic and integrated approach to delivering
success to organizations by improving the
performance of the people who work in them and by
developing the capabilities of teams and
individual contributors.
3
PERFORMANCE MANAGEMENTFIVE QUESTIONS

1. What do we mean by performance?
2. Can we identify good or poor performance?
3. Can we establish the cause of good or poor
   performance?
4. How can we motivate people to perform well?
5. Can we do all this fairly and consistently?

4
THE PERFORMANCE MANAGEMENT CYCLE
PERFORMANCE AND DEVELOPMENT AGREEMENT
Managing performance throughout the year
Performance review
5
PERFORMANCE MANAGEMENT SEQUENCE
Structure Job description Tasks
Responsibilities Job Competencies
Corporate Strategy Business Plans Goals
Targets Company Competencies
Key Result Areas Competencies
Performance and Development agreement
Information to compare Performance and KPIs and
Competencies
Evaluation Performance against KPIs
Competencies
Feedback on Performance
Development Needs
Rating Potential Appraisal
Career Development Plan
Remuneration Consequences
Development Activities
6
WHAT PERFORMANCE MANAGEMENT IS ITS FEATURES
AND CONCERNS

• Aims performance improvement and personal
  development.
• Strategic concerned with how well the business
  functions in the longer term and with the
  creation of a culture of performance and
  continuous development.
• Integrated aligns individual goals and values
  with corporate goals and values.
• Focus on outcomes (results) and inputs
  (competencies).
• Management of expectations helps individuals to
  understand their roles and what they are expected
  to achieve in terms of both outcomes and
  competency levels.
• Measurement, feedback and review concerned with
  measuring performance (if you cant measure it
  you cant manage it), feedback to individuals
  (self-generated or provided by their manager) and
  the review of outcomes as a basis for planning
  action.
• Dialogue concerned with creating a climate in
  which a dialogue takes place between managers and
  individuals to define expectations, discuss
  outcomes, and agree development plans in order to
  achieve mutual understanding of what is to be
  achieved and developing people to ensure that it
  will be achieved.
• Continuous performance management takes place
  throughout the year.
• Motivation a powerful means of motivating
  people through feedback and recognition, and the
  identification of opportunities for growth (job
  enrichment), development (skills acquisition) and
  career progression.
• Role of line managers performance management is
  owned and delivered by line managers.

7
WHAT PERFORMANCE MANAGEMENT IS NOT

• The same as appraisal performance management is
  about dialogue, agreement and mutual
  understanding. It is not a top-down system for
  judging the performance of people. It does not
  exist simply to produce a performance rating.
• A system performance management is not a
  bureaucratic system that relies upon procedures
  and forms to generate outputs. It is a process
  that involves people (managers and individuals)
  working together continually to reach agreement
  on what needs to be done and how it should be
  done.
• A once-a-year event the theme of an effective
  performance process is managing performance all
  the year round.
• Synonymous with performance-related pay
  performance management may generate the
  information that informs performance-related pay
  decisions but can, and many people think should,
  be detached from the performance-related pay
  system so that the proper emphasis can be placed
  on its developmental purpose.
• Owned by the HR function it is for line
  managers and their staff.

8
PERFORMANCE MANAGEMENT PRINCIPLES

• performance management is managing the business
• a management tool which helps managers to manage
• driven by corporate purpose and values
• to obtain solutions that work
• only interested in things you can do something
  about and get a visible improvement
• focus on changing behaviour rather than paperwork
• its about how we manage people its not a
  system.

9
DEVELOPMENTS IN PERFORMANCE MANAGEMENT

• system
• appraisal
• outputs
• performance-related pay
• ratings common
• top-down
• monolithic
• bureaucratic
• owned by HR

• process
• holistic
• outputs/inputs
• development
• less rating
• 360 feedback
• adaptable
• flexible
• owned by users

10
PERFORMANCE MANAGEMENT ACTIVITIES

• Performance agreement an agreement between the
  manager and the individual on the latters
  objectives and the level of competency required
  (see slides 1015).
• Performance review a joint review of the
  performance of the individual by means of a
  dialogue between the individual and the manager
  (see slides 1624).
• Personal development planning an agreement on
  what the individual needs to do with the
  managers support to improve performance and
  develop skills (see slides in Section 18).
• Performance-related pay may be associated with
  performance management through rating but many
  organizations believe that performance management
  is essentially a developmental activity and
  therefore uncouple performance pay decisions (see
  slides in Section 23).

11
PERFORMANCE AGREEMENT

• The purpose of the performance agreement is to
• agree objectives and competency level
  requirements
• agree on methods of measuring performance
• agree on plans for performance improvement and
  personal development

12
CHARACTERISTICS OF GOOD OBJECTIVES
S specific/testing clear, unambiguous,
understandable and challenging M measurable
in terms of quantity, quality, time or money A
achievable challenging but within the reach of
a competent and committed person R
relevant to organizational objectives so that
they and the individuals goals are
aligned T time-framed to be completed within
an agreed time scale.
13
AGREEING COMPETENCY REQUIREMENTS

• Ideally, a role profile should be available (and
  regularly updated), which sets out the competency
  levels required for the role and is aligned to
  the organizations competency frameworks. The
  agreement and review of competencies can then be
  referenced to this profile.
• If a profile does not exist, the agreement should
  be related to the competency framework for the
  organization or the relevant part of the
  organization.
• In the absence of either a role profile or a
  relevant competency framework, the line manager
  and the individual have to discuss and agree
  competency levels for each of the main aspects of
  the role. The questions that needs to be answered
  for each aspect are
• What knowledge and skills are required to carry
  out this task well?
• How will you know that it has been done well?

14
CLASSIFICATION OF PERFORMANCE MEASURES

• Output measurable data on results achieved.
• Outcome (impact) attainment of defined standard
  (quality, level of service etc), changes in
  behaviour, completion of project or task, level
  of take up of service, successful innovation.
• Reaction judgement by others colleagues,
  internal or external clients or customers.
• Time speed of response or turnaround,
  achievements compared with timetables, amount of
  backlog.
• Finance income generated, added value, cost
  control.

15
PERFORMANCE MEASURES CRITERIA

• related to organizational critical success
  factors
• relevant to individual outcomes and competence
  requirements
• cover all aspects of performance
• focus on outputs and outcomes that can be clearly
  defined
• verifiable indicate the data or evidence that
  will be available as the basis for measurement
• provide basis for feedback and action.

16
PERFORMANCE REVIEWS KEY FEATURES

• forward looking not a post-mortem
• exchange of views (dialogue)
• measurement
• feedback
• positive reinforcement
• constructive
• leads to an agreement.

17
PREPARING FOR THE MEETING THE MANAGERS ROLE

• assess achievements performance and development
• decide on feedback
• consider factors affecting performance
• points for discussion
• future directions and objectives.

18
PREPARING FOR THE MEETING THE INDIVIDUALS ROLE

• identify achievements
• consider reasons for any shortcomings
• development and training needs
• areas where help or support would be useful
• future hopes.

19
WHAT TO FIND OUT AT A REVIEW MEETING

• what individuals have learned or need to learn
• where they have got to
• where they are going
• how they are going to get there
• what they believe they know and can do
• what help or guidance they require.

20
CONDUCTING A REVIEW MEETING

• encourage reviewee to do most of talking
• listen actively
• allow scope for reflection and analysis
• analyse performance not personality
• keep the whole period under review
• no surprises
• recognize achievement and reinforce strengths
• end meeting positively with agreed action plan.

21
PERFORMANCE REVIEW QUESTIONS

• Open encourage the individual to talk.
• Closed ask specific questions to elicit
  information.
• Probe ask for further details or explanations
  of achievements or problems.

22
LISTENING

• concentrate on the speaker
• respond quickly
• ask questions to clarify meaning
• comment as necessary to show understanding.

23
GIVING FEEDBACK

• build feedback into the job
• provide feedback on actual events
• describe, do not judge
• refer to specific instances
• ask questions rather than make statements
• get people to work things out for themselves
• select key issues focus on improvable areas
• show understanding.

24
MANAGING UNDER-PERFORMERS

• identify and agree the problem
• establish reason for shortfall
• decide and agree on action required
• resource the action
• monitor and provide feedback.

25
PERFORMANCE MANAGEMENT AT ASTRA-ZENECA
(1) Definition of performance management A
continuous cycle of discussions between the
employee and the manager to plan and review work
and development.
26
PERFORMANCE MANAGEMENT AT ASTRA-ZENECA (2)
Stage 1 Business roles
Plan Stage 2 Performance planning Evaluate
Stage 4 Stage 3
Performance Performance
measurement
development Do
27
PERFORMANCE MANAGEMENT AT ASTRA-ZENECA (3) Four
stages 1. Business role clarification clear
statement of role and objectives agreed. 2.
Performance planning agreement of targets to
achieve the plan-do-evaluate elements of
managing performance. 3. Performance development
agree skills required and prepare individual
development plan. 4. Performance measurement
provide ongoing feedback and an annual summary of
an employees performance (no overall ratings).
28
PERFORMANCE MANAGEMENT AT THE VICTORIA ALBERT
MUSEUM
Job description (updated)
Evidence (departmental)
Corporate plan
Evidence (individual)
Departmental objectives
Individual objectives
Performance standards
Attributes
Personal development plan
Ratings pay decisions
Assessment
Countersigning officer review
29
PERFORMANCE MANAGEMENT AT HALIFAX
30
360-DEGREE FEEDBACK DEFINITION AND RATIONALE
360-degree or multi-source feedback involves the
assessment of an individual by a number of
different people managers, colleagues,
subordinates and clients (external or internal
customers) as illustrated on the next slide. It
recognizes that the performance of people is best
seen from different viewpoints. The manager will
only have a top-down and therefore partial
impression while important characteristics, for
example managing people, leadership and
interpersonal relations with colleagues and
clients, may not be measurable.
31
360-DEGREE FEEDBACK MODEL
Manager
Individual
Customers/clients
Colleagues
Direct reports
32
360-DEGREE FEEDBACK METHODOLOGY

• 360-degree processes rely on questionnaires that
  ask for an evaluation such as How well does do
  ? The headings included in the performance
  management groups orbit 360-degree questionnaire
  are
• leadership
• team/player/manage people
• self-management
• communication
• vision
• organizational skills
• decision making
• expertise
• drive
• adaptability.
• Feedback may be provided by a profile as
  illustrated in the next slide. It is usually
  anonymous and may be presented by an external
  consultant who is available to give advice and
  counselling.

33
EXAMPLE OF 360-DEGREE PROFILE Gives useful
feedback Establishes good working
relationships Open to new ideas Values
others opinions Recognizes achievements
Scale 1 2 3 4
5
34
BALANCED SCORECARD
A method developed by Kaplan and Norton, which
is based on the philosophy that what you measure
is what you get and emphasizes that No single
measure can provide a clear performance target or
focus attention on the critical areas of the
business. Managers want a balanced presentation
of both financial and operational measures. The
balanced score card consist of four elements as
shown below (these elements are sometimes varied
in individual applications while still retaining
the principle of balance).
How do customers see us? (customer perspective) What must we excel at? (internal perspective)
Can we continue to improve and create value? (innovation and learning perspective) How do we look to shareholders? (financial perspective)
Source Kaplan, R S and Norton, D P (1992) The
balanced scorecard measures that drive
performance, Harvard Business Review,
JanuaryFebruary
35
INTRODUCING PERFORMANCE MANAGEMENT

• define purpose
• define approach
• involve line managers and staff in its
  development
• pilot test
• produce guidelines on the process
• inform all employees
• train managers and all other employees in the
  process and the skills required.

36
PERFORMANCE MANAGEMENT THE BIG ISSUES
Whats it for?
Do we have rating?
How do we get fairness and consistency?
How do we get management buy-in?
37
WHATS IT FOR?
Essential to be clear about its purpose, eg
developmental, enhancing a performance culture,
and to communicate that purpose to everyone.
38
DO WE HAVE RATING?

• In many organizations ratings (eg A excellent,
  performs well above expectations, B performs
  above expectations, C meets expectations and D
  performs below expectations) are an essential
  part of performance management as a means of
  summing up judgements and providing the basis for
  performance-related pay.
• However a growing number of organizations reject
  ratings because
• they cannot convey the subtleties of the
  outcome of a thorough performance review
• they are judgemental and top-down based on
  managerial opinion (which can be biased and
  inconsistent) and which is passed down to the
  individual
• if they are linked directly to
  performance-related they divert the attention of
  both parties away from the primary purpose of
  performance management, ie performance
  improvement and development, to limited
  considerations of the financial outcome of the
  process.

39
HOW DO WE GET BUY-IN FROM LINE MANAGERS?

• The biggest issue in performance management is
  getting line managers to do it well (or even to
  do it at all). Many line managers plead that they
  havent enough time and its a waste of time
  anyhow (they claim that they are doing it already
  which may or may not be true). To overcome this
  problem it is necessary to
• obtain strong backing from the top one of
  the core values of the organization, which they
  should promote, should be that performance
  management processes play an essential part in
  the effective management of the organization
  and managers will be expected to support this
  value
• involve line managers in the development of
  the process to achieve ownership
• provide training, guidance and encouragement
  to line management (this is the role of HR)
• enlist the support of enthusiastic and capable
  line managers to act as coaches and mentors for
  their colleagues
• include the management of performance as a key
  performance criterion for line managers
• review the performance of line managers in
  this respect and require performance
  improvements (the responsibility of the managers
  manager right up to the top).

40
PERFORMANCE MANAGEMENTKEY CONSIDERATIONS

• performance management is about running the
  business, it is what managers do a natural
  process of management
• success depends on what the organization is and
  needs to be in its performance culture
• it is the process that is important not the
  system
• focus on development, not pay
• based on accepted principles but operates
  flexibly
• effective communication, involvement and training
  essential.

41
Your Experience

• As employee
• Positive
• Negative
• As manager
• Positive
• Negative
• Main Topics for Improvement ?

42
Performance Management Practice
43
Topics to discuss

• What is Performance Management
• What are methods
• What are procedures
• The use of Performance Management

44
What is Performance ?

• Performance f ( A, M, O)
• A Abilities (Knowledge, Skills, Competencies)
• M Motivation (Personality, Motivation, Drive,
  Interest)
• O Opportunities

45
Aims of Performance Management

• Overall
• Increase the performance of the employee and the
  team where he/she works, and by doing that,
  increase the performance of the organisation
  (remember the components of performance in the
  culture questionnaire)
• Specific 1
• Provide feedback to the employee about his/her
  performance against the competencies of the job
  and the organisation
• Specific 2
• Improve knowledge, skills, competencies
• Improve motivation, drive, interest and
  commitment
• Provide employee with opportunities to grow and
  to develop

46
Experience 1

• In many organisations completing the appraisal
  form is more important rather than the discussion
  with the employee about the performance
• Appraisal forms are mainly used for
  administrative purposes (checking if everybody is
  evaluated)
• The conclusions are used for remuneration
  purposes
• For many employees the process of performance
  management (or appraisal) is a black box

47
Experience 2

• Providing feedback is most important in
  performance management
• Focus on the performance review meeting
• Use forms and procedures as a tool and not as
  objectives in itself
• A blank sheet of paper with some comment could
  be
• more useful than a highly sophisticated form
  which is not discussed

48
Experience 3

• Most managers dont like it
• Esp. providing feedback to the employees
• It would take to much time for them
• Many HR managers / HR professionals see it as a
  necessary evil
• Esp. chasing the managers to do it and to provide
  them with the results
• Dealing with complaints from employees
• However, most employees like it !
• They are eager to get feedback and to develop
  (remember the graph with satisfaction at work and
  at organisation)

49
Performance Management Process
50
Roles and Responsibilities

• HRM
• Communication
• Preparing System Procedures
• Getting commitment of top management
• Providing forms
• Training managers
• Collecting forms after review meeting
• Administration
• Follow-up Activities

• Manager
• Completing forms
• Preparing meetings
• Conducting review meetings
• Summarising results
• Concluding marks
• Communicating with HR
• Monitoring improvement activities employee

• Employee
• Preparing review meeting
• (sometimes completing the form)
• Listening and commenting the feedback
• Making agreements for coming year
• Undertaking actions to improve performance

51
Performance Review Meeting

• Agreed actions last appraisal meeting
• Competencies with examples of behaviour,
  conclusion and motivation
• Conclusion for
• Remuneration
• Training Development activities
• Specific points to discuss
• Agreements about performance improvement
• Agenda for next year

52
Topics to discuss

• Performance agreement
• Abilities (Knowledge, Skills, Competencies)
• Motivation, Satisfaction, Drive, Ambition
• Opportunities in and beyond work environment
• New performance agreement

53
Conclusions in the Performance Review

• Rating on Performance
• Rating on Potential
• Use of Ratings

54
Ratings on Performance 1
A Outstanding performance in all aspects
B Superior performance, significantly above normal job requirements
C Good, all-round performance, which meets the normal requirements of the job
D Performance not fully up to requirements. Clear weaknesses requiring improvement have been identified
E Unacceptable performance of many aspects of the job is below an acceptable standard
55
Comment

• When a manager would conclude with a rating E,
  unacceptable, in an appraisal, he didnt do the
  right job himself when people fail in their job,
  action should be taken at the time. That action
  could be demotion, transfer to another job or
  discharge.

56
Ratings on Performance 2
Very Effective Exceeds all objectives and requirements. Achievements are notable and outstanding and are far beyond the expectations of the job
Effective Achieves required objectives and standards of performance and meets the normal expectations of the job
Developing A contribution which is stronger in some aspects of the job than others where most objectives are met but where performance improvements should still take place
Basic A contribution which on the whole meets the basic standards required, although a number of objectives are not met and there is clearly room for improvement in several definable areas
57
Performance Potential

• Performance appraisal or performance assessment
  is used to evaluate someones performance against
  the requirements and standards of the job or
  position filled at the moment
• Key performance indicators (KPIs), balance score
  cards (BSC) and performance interviews are useful
  and effective methods and tools to support
  performance assessment

• Potential assessment is an assessment against
  higher level standards and requirements it is
  about the ability and power to grow to higher
  levels in the organisation
• Present Estimated Performance tool is an
  effective and efficient approach for potential
  management

58
Performance and Potential

• Questions
• Is someone with superior performance promotable
  to a higher job ?
• What is the difference ?

59
Ratings for Promotability
A Is promotable to a higher job on the short term (within 1 to 2 years)
B Is promotable to a higher job on the longer term (within 3 to 5 years)
C Is not promotable to a higher job, if needed a transfer to another job could be considered
60
Combining Performance and Promotability
Not Promotable Promotable on long term Promotable on short term
Very effective
Effective
Developing
Basic
61
Combining Performance and Promotability
Not Promotable Promotable on long term Promotable on short term
Very effective Reward them in special way Top stars (retention!) Super stars (retention!)
Effective The mainstay of the business Stars (retention!) Top stars (retention!)
Developing Pay attention Pay attention Future Stars ?
Basic Extra attention needed (up or out) Question mark investigate Question marks investigate
62
Strategic Review on Performance Management
Potential
Performance

• Objectives
• Improving performance
• Compensate for contribution
• Measure Present capabilities

• Objectives
• Succession Planning
• Career Development
• Measure Growth of individual

63
Performance

• Performance related Competencies are
• Commercial Awareness
• Influencing and inspiring people
• Planning and Organising
• Analysing and Solving Problems
• Decision Making
• Delivering Results
• Directing and Supporting people
• Etc.

64
Potential

• Potential related Competencies are
• Ambition
• Energy
• Abstract and Strategic thinking
• Creativity Innovation
• Receptiveness to feedback
• Adapting and Leading Change
• Learning ability
• Coping with setbacks

65
Link of Performance Management to other HR
activities

• Feedback on Recruitment and Selection
• Basis for remuneration and performance related
  pay
• Basis for training Development
• Basis for staff- and succession planning
• Source of information for retention-policy

66
Exercises

• Make a performance management model adapted to
  your organisation
• Define aims, objectives and methods
• Describe how it works procedures
• Make forms for performance appraisal
• Practice conducting performance interviews (3
  role plays as manager, employee and observer)
• Identify how to use performance appraisal results
  of the whole organisation

67
The Dos and Donts for Performance Management

• Dos
• .
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• .
• .
• .
• .

• Donts
• .
• .
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