1. Performance Management Cycle
Performance Planning
Staff and the Organisation
Performance and Development
Reviewing
Enabling staff
to deliver
Taking stock of achievements, diagnostics
Setting Objectives, defining what is needed
Action
Reset objectives
Make changes

2. The Performance Cycle
» Major Areas of
Responsibility
» Individual Priorities
» Knowledge, Skills and
Behaviors
» Development plan
» Reaching agreement» End-of-cycle
review
» Continuous
progress and
development » Ongoing
Feedback
» Coaching
» Interim reviews

3. Alignment Model
Your
Organizational
Priorities
Your Major Areas of
Responsibility and
Individual Priorities
Mission
Values
Departmental
Priorities
Knowledge, Skills
and Behaviors
Performance Development Process
UNITOR
DEPARTMENT
HARVARDCOLLEGE
LIBRARY
PERSONAL
“What” “How”

4. The Performance Cycle
» 2001: December 21
» 2002: June-July
» 2002: May
» 2002: April-
May
» 2002: March
» 2002:
December-
January

5. What Is “Good Performance”?
• More than just activities, effort, good intentions, or results
• Working hard and staying busy are not necessarily
high performance
• Attending training sessions and studying hard does not
necessarily lead to good performance
• Strong commitment may not lead to good performance
• Even accomplishing some goals may not be high
performance

6. Performance Management –
Broader Than
Performance Appraisal
Begins with a look at goals &
strategies of the organization

7. Organizational Alignment
All efforts must be aligned with
overall goals and strategies of the
organization.
…a key to Performance
Management

8. Performance Management
a Cascading Process
• Mission, goals, and strategies should be
defined, and clearly understood by
everyone
• How do all tasks contribute to overall
plans for the organization?

9. Annual Plans Should Create
Performance Standards for
Each Department
• These should translate into performance
goals for each worker
• Quantity
• Quality
• Time
• Cost

10. What Are the Three Steps in
Performance Management?
Defining Performance
Facilitating Performance
Encouraging Performance

11. Performance Appraisal
Developmental and Administrative
Decision Processes

12. Performance Appraisal
continues to be one of the most
criticized HR functions in
organizations

13. Performance Appraisal
• We all measure our subordinates’
performance whether we do it formally or
informally
• Very important to document what we
evaluate
• Also necessary to show a clear link between
what we evaluate and job requirements

14. What Purposes Can P.A. Serve in
an Organization?
Any potential conflicts here? Explain.

15. How Frequently Should
Performance Appraisal Be
Done?
Why?

16. Performance Appraisal -
a Continuing Process
• Is not a once-a-year or once-a-quarter experience
• Effective appraisal occurs frequently
• There should be no surprises when an employee is
given his or her formal appraisal interview
• Essential for coaching & positive
motivation

17. The Main Point
Be sure that what is measured is
documented & can be shown to
match job expectations

18. A Key to All of This:
Supervisors must have
the support &
encouragement of higher
management to make all
this work

19. Behavior - Oriented Systems
• Ranking Methods
• Strait Ranking
• High-Low (Alternate Ranking)
• Paired Comparison
• Forced Distribution (similar to ranking)
• Graphic Rating Scales

20. Ranking Method
• Straight ranking
• Alternation ranking
• Paired comparison

21. Explain Each of the Ranking
Methods
Preference Among Them?

22. Attractions? Limitations?

23. Forced Distribution
• Design?
• Purpose?
• Do you recommend or not recommend?
• Why or why not?

24. Graphic Rating Scale
Single Most Popular Method of Appraisal

25. Graphic Rating Scale
• Explain how it works
• Give an example
• Potential strengths?
• Potential weaknesses?

26. Critical Incidents
• Based on Observation of Behaviors
• Positive
• Negative
• Written Notation of Behaviors is Made &
Placed in Each Employee’s File

27. Critical Incidents
• Each Observation is Discussed With the
Employee at the Time of Occurrence
• A Portfolio of Observed Events is Collected
Over Time

28. Any Problems With Critical
Incident Method for Appraisal?

29. Behaviorally Anchored Rating
Scales (BARS)
• A form of graphic rating scale
• How is different from traditional rating scale?

30. Behaviorally Anchored Rating
Scales (BARS)
Attractions?
Limitations?

31. Results (Outcome) Based Appraisal
• Management by Objectives (MBO) in Some
Form is Commonly Used
• Focuses on Measurable Results of Mutually
Agreed-Upon Goals for a Work Cycle

32. MBO
• Steps in development and usage?
• Potential strengths and weaknesses?

33. Factors to Consider in Choice of a
P. A. System
• Cost
• Usefulness in employee development
• Usefulness in administrative decisions
• Validity

34. What Do You Think?
What Form of Performance Appraisal Would You
Recommend?
What Criteria Have You Used in Making Your
Recommendation?
What Limitations (As Well As Strengths) Does
Your Recommended Method Have?

35. Who Appraises?
• Supervisor
• Peers
• Subordinates
• Self Appraisal
• Customers

36. Usefulness of Each?
Explain

37. 360 Degree Appraisal
Best Known Book on the Subject:
Edwards & Ewen,
360 (degree) Feedback, Amacom,
1996.

38. Three Types of Appraisal
Interviews
• Tell & Sell
• Tell & Listen
• Problem Solving

39. Performance management
Definition:
Employee performance management is the process
of involving employees in accomplishing your
agency’s mission and goals.
Employee performance management includes:
planning work and setting goals, monitoring
performance, developing capacity, reviewing
performance, and rewarding good work.

40. Designing the performance
management system
• What will be the purpose?
• What will be the sequential stages?
• What performance will be measured?
• Who will assess employee performance?
• What will be on the form?
• Will a rating scheme be used?
• What support systems need to be in place?

41. Managing performance for …
Accountability
Performance target
setting and
outcome/results
review
AND / OR

42. Managing performance for …
Employee
Development
Competence assessment
and development

43. Stages of performance management
Plan
Monitor
Develop
ReviewReward

44. Stage 1 – Individual Performance Planning
Stage 1 – Planning
•Work goals
•Competencies
•Learning
Performance planning at the start of the year and then
periodically is the core of the performance
management process. The performance plan should
be a written document.
Plan

45. Performance planning
• How is what I do on a
daily basis tied to the
success of this
organization?
• What are my
performance goals for
the next time period?
• How are my goals
aligned with the
organizational goals?

46. Performance Planning
• Performance results – the what
– Performance outcomes or standards – from job
description
– Performance objectives for the next time period
• Performance behavior – the how
– Competencies, performance factors, or
behavior expectations
• Development objectives

47. Peter Drucker
Management by Objectives was first outlined by Peter
Drucker in 1954 in his book 'The practice of Management'.
According to Drucker managers should avoid 'the activity
trap', getting so involved in their day to day activities that they
forget their main purpose or objective. One of the concepts of
Management by Objectives was that instead of just a few top-
managers, all managers of a firm should participate in the
strategic planning process, in order to improve the
implementability of the plan. Another concept of MBO was
that managers should implement a range of performance
systems, designed to help the organization stay on the right
track.

48. • MBO is a system in which specific
performance objectives are jointly
determined by subordinates and their
superiors, progress toward objectives is
periodically reviewed, and rewards are
allocated on the basis of this progress.

49. MBO Principles
Cascading of organizational goals and
objectives
Specific objectives for each member
Participative decision making
Explicit time period
Performance evaluation and feedback

50. Objectives should be specific, attainable, yet
challenging.
Is the objective appropriate for the business at this time?
Does it take the organization in the direction it wants to go?
Does it support the overall mission of the business?
Is it compatible and complementary with the other
objectives?
Is it acceptable and understandable to the majority who will
be charged with implementing it?
Is it affordable for the organization?
Is it measurable and achievable?
Is it ambitious enough to be challenging?

51. Hierarchy of objectives
Vision
Mission
Goals
Objectives
Policies
Procedures

52. MBO substitutes for good intentions a process that
requires rather precise written description of
objectives (for the period ahead) and time-lines for
their monitoring and achievement. The process
requires that the manager and the employee agree to
what the employee will attempt to achieve in the
period ahead, and (very important) that the employee
accept and buy into the objectives (otherwise
commitment will be lacking).

53. SMART
Management by Objectives introduced the
SMART method for checking the validity of
Objectives,
'SMART':
• Specific
• Measurable
• Achievable
• Realistic, and
• Time-related.

54. Stage 2/3 – Monitor and Develop
Daily performance
management!
Monitoring includes
measuring performance
and giving feedback. Two
way communication
between the manager and
employee throughout the
performance period is
critical to the performance
management process.
Stage 2/3 – Monitor and
Develop
•Feedback
•Coach
•Adjust goals
Monitor
Develop

55. Daily performance
management
• Feedback and coaching –
informal
• Monitoring and tracking
performance against standards
and progress toward goals.
• Quarterly performance
planning and performance
discussions
• Development through
coaching, training, challenging
or visible assignments,
improving work processes

56. What performance will be
measured?
• Behaviors – how the work is done
– Performance factors / competencies
– Required behaviors
– Behaviors supporting desired organizational
culture
• Results – what is achieved
– Performance outcomes
– Performance compared to job standards
– Performance goals and/or objectives

57. Stage 4 – Performance Review
The formal process of
documenting results the
employee has achieved
and behaviors and /or
competencies displayed
should occur at least
once a year.Stage 4 – Review
•At least annually
•Discuss
•Document
Review

58. Performance Review
• Summary of performance
over a period of time
• Evaluate performance
results and behaviors
• Conducted face-to-face
with a written record.
• While rating and ranking
has both pros and cons, a
summary rating of each
employee may be useful.

59. If a rating scheme will be used
• Number of levels: three, four, five, or six
• Rating labels
– Numerical: e. g. 1, 2, 3, 4, 5
– Behavioral frequency: e. g. always, usually,
frequently, sometimes, rarely
– Evaluation: e. g. distinguished, superior,
competent, fair, marginal
– Performance against a standard: e. g. exceeds,
meets, does not meet

60. Who will assess performance?
• Immediate supervisor
only
• In addition to the
immediate supervisor
– Employee (self)
– Peers and coworkers
– Internal and external
customers
– Subordinates
Choices include:

61. Approaches to designing an
appraisal form
• Trait based
• Behavior based
– Competencies (or performance factors)
– Behaviors
• Results based
– Performance outcomes
– Objectives

62. What will be on the form?
• Identifying information
• Instructions
• Performance outcomes and/or results
achieved (or not achieved) on objectives
• Performance factors / competencies / work
behaviors
• Employee signature and approvals

63. Other information
• Employee comments
• Summary of one to three major achievements
• Strengths / areas for development
• Overall rating
• Plan for development (if not elsewhere)
• Performance plan for next period (if not
elsewhere)

64. Stage 5 – Reward
Good performance should be
rewarded. Recognition and
non-monetary rewards are an
important part of the reward
structure. These include job-
related rewards such as visible
project assignments. Even
thank you and recognition for a
job well done are rewards!!
Stage 5 – Reward
•Monetary
•Non-monetary
•Recognition
Reward

65. Rewards, recognition, and
compensation
• Recognizing employees for
performance
– Non-monetary rewards
– Informal and ongoing
acknowledgements of good work
• Compensation
– Merit increases?
– Pay to market?
– Increases added to base pay or lump
sum?
Separate conversation about pay from conversation about
performance!!!!!

66. What support systems need to be in
place?
• Senior management support
• Management accountability
• Communication about the process
• Training
• Process for new employees
• Process for dealing with poor performance
• Monitoring and evaluating the process (HR)
• Appeals process (HR)

67. Communication
• Timeframe for the
performance management
cycle
• Instructions for the
supervisor
• Instructions for the
employee
• Tie to other systems
• Support available

68. Sample schedule for the performance
management cycle
• Complete operating plan
• Update quarterly performance plan form with
major agency objectives
• Conduct training for supervisors (and employees)
• Communication before, during, after
• Timeframe for completion of appraisal
• Timeframes for quarterly performance plans
• Interface with compensation schedule

69. Dissatisfaction with Appraisals
• 95% of companies use appraisals , majority
are dissatisfied with them (Wall Street Journal)
• 90% of appraisal systems unsuccessful
(SHRM, 1995, DDI, 1993)
• “I’d rather kick bricks with my bare feet
than do appraisals” (manager at Digital Corp)
• Many companies abolished ratings:
Pratt & Whitney Blockbuster IBM Albany Intern

70. Performance Appraisal
Purpose
• Control Behavior
• Set Standard
• Measure Performance
• Compare Performance Against Standard
• If Discrepancy Exist, Take Corrective Action
• Used to Provide Feedback
• Used as Basis of Reward & Punishment Systems
• Used for System Improvement
© Dr. Dianna Stone

71. Performance Management
Reward or Take
Corrective Action
Reward or Take
Corrective Action
Set Standards
Provide Feedback
Measure
Performance
© Dr. Dianna Stone

72. Conflicts in Performance Appraisal
Conflicting Goals of Appraisal Create Problems
Organization Seeks
Information To
Improve Systems
Individual Seeks
Valid Performance
Feedback
Individual Seeks
Extrinsic Rewards
Organization Seeks
Information On Which
To Base Rewards
© Dr. Dianna Stone

73. Requirements of Effective
Performance Management
• Relevant to job
performance
• Distinguishes Effective &
Ineffective Performance
• Fair & Acceptable
© Dr. Dianna Stone

74. Performance Standards
• Managers assume
standards are clear
• Communicate -
What is to be done?
• How well should it
be done?
© Dr. Dianna Stone

75. Performance Measures
• Objective Measures - Hard Criteria
$ Sales Personnel Data Tardiness
Units Produced Absence Rate
Error Rate Turnover
• Weaknesses
– Performance Modified by Situation - Opportunity Bias
– System Responsible for 96% of Variance - Person 4%
(Deming)
– Objective measures do not apply to all jobs
© Dr. Dianna Stone

76. Performance Measures
• Subjective Measures - Performance Measures
• Who Rates? Supervisors, Peers, Subordinates, Self
• Errors & Biases
• Halo Error
• Central Tendency
• Leniency (Positive & Negative)
Goal is to Accurately Appraise Performance
© Dr. Dianna Stone

77. Methods
• Ranking - Rank order ratees from highest to lowest
• Behavioral Checklist - Series of Descriptive
Statements of Job-Related Behavior
Example: ____ Comes to class on time
____ Courteous with clients
____ Sleeps on the job
• Forced Distribution
10% 20% 40% 20% 10%
Poor Below Average Above Excellent
Average Average
© Dr. Dianna Stone

78. Methods
• Advantages (Forced Distribution) : Decreases Central
Tendency & Leniency Errors
• Disadvantages (Forced Distribution): May not be
accurate reflection of performance
• Graphic Rating Scale - Most Widely Use
Quality
(1) (2) (3) (4) (5)
Poor Below Average Above Excellent
Average Average
• Behaviorally Anchored Rating Scale - Based on
critical incidents, Behaviors are anchors
© Dr. Dianna Stone

79. Methods
• Behaviorally Anchored Rating Scales
Police Officer: Job Knowledge
High (7, 8, 9) Follows correct procedures for
evidence preservation
Average (4, 5, 6) Seldom has to ask other about
points of law
Low (1, 2, 3) Misinforms the public about laws
© Dr. Dianna Stone

80. Progressive Disciplinary Systems
• Steps
1) Counsel Employee about Performance Problem
2) Verbal Reprimand & Warning
3) Written Reprimand & Warning
4) Disciplinary Layoff (Short-term)
5) Discharge
© Dr. Dianna Stone

81. Progressive Disciplinary Systems
• Reasons to Avoid Discharge
• Unfair Labor Practice (Legal & Contractual
Restrictions)
• Company Payments Toward Unemployment
& Severance Pay
• Strikes
• Court Action - Back Pay Awards
• Investment in Human Resources
© Dr. Dianna Stone

82. Problems with Appraisals
• Survey by Ernst & Young showed that 38% of
employees say they are rated unfairly or not at all
• Deming argues that Performance Appraisal is
“A Deadly Disease in Organizations”
• Disregards existence of system
• Erroneously attributes variation in performance to
individuals (85-15 rule)
• Undermine teamwork, improvement
• Focuses on short-term, end product
© Dr. Dianna Stone

83. Appraisal Interviews
• Give Feedback daily
• Encourage
participation
• Judge performance
not personality
• Be specific - provide
critical incidents
• Set mutual goals
© Dr. Dianna Stone