Performance Management

Performance Management Dan Robbins

Overview • Define performance management • Describe the process of developing a performance management system • Discuss benefits and concerns • Participate in a simulation • Q & A

What Is Performance? • Performance is the behaviors employees engage in while at work that contribute to the goals of the organization (J.Campbell,1990)

What Is Performance Management? • “Performance management is the organized method of monitoring results of work activities, collecting and evaluating performance to determine achievement of goals, and using performance information to make decisions, allocate resources and communicate whether objectives are met” (www.shrm.org)

Performance Management Is An Integrated Process • Outlining goals • Establishing means to measure progress • Setting standards for assessing results • Tracking progress towards results • Exchanging feedback about progress • Developing reinforcement activities or interventions for results (www.managementhelp.org)

Three Stages of Performance Management • Performance Plan • Performance Appraisal • Development Plan

Performance Plan: Step 1 • Identify the domain • The domain is employee, group or department that will be the focus of the performance management process (www.managementhelp.org)

Performance Plan: Step 2 • Review organizational goals to associate preferred organizational results in terms of units of performance, that is, quantity, quality, cost or timeliness • Performance Management translates goals into results • Results are primary products or services desired from the performance process (www.managementhelp.org)

Performance Plan: Step 3 • Specify desired results to the domain • Results should be SMART • This step is also called “goal-setting” (www.managementhelp.org)

Performance Plan: Step 4 • Ensure that the domain’s desired results directly contribute to the organization’s results • Example: Factory worker- does the employee’s goal of completing a new training program contribute to the organization’s goal of increasing productivity 15%? (www.managementhelp.org)

Performance Plan: Step 5 • Weight or prioritize the domain’s desired result • Using percentages or rankings • Example: Factory worker- 80% of employee’s time should be spent running the machine, 10% in training, 10% in maintenance (www.managementhelp.org)

Performance Plan: Step 6 • Identify measures to assess if and how well the domain’s desired results were achieved • Generally specified in terms of quality, quantity, cost or timeliness • Identifying measures is typically the hardest part of the performance management process (www.managementhelp.org)

Performance Plan: Step 7 • Identify standards for evaluating how well the domain’s results were achieved • Standards are measures of how well the goal was met • Example of a standard- if the goal was to produce 500 units in a month, then 500 would be “meets expectations”. 600 would be “exceeds expectations.” (www.managementhelp.org)

Performance Plan: Step 8 • Document the plan including desired results, measures and standards • The “performance plan” gives the domain the desired results, weighting of the results, how the results will be measure, and what standards those used to evaluate them (www.managementhelp.org)

Performance Appraisal: Step 9 • Conduct on-going observations and measurements to track performance • Supervisors should monitor how the goals are being achieved and keep in contact with both the employee and upper management • Documentation is important so that formal appraisals are accurate (www.managementhelp.org)

Performance Appraisal: Step 10 • Exchange ongoing feedback about performance • Good feedback is timely, feasible and understood • Ideal feedback addresses key activities to improve or reinforce performance • Generally, the more sources of feedback, the more accurate and helpful the information will be (i.e. 360° feedback) (www.managementhelp.org)

Performance Appraisal: Step 11 • Conduct a performance appraisal • Includes documentation of results, standards of performance, progress towards achieving results, how well they were achieved, examples indicating achievement, suggestions to improve performance, and how those suggestions can be followed • The appraisals should be carried out at regular intervals as performance tracking is underway (www.managementhelp.org)

Performance Appraisal: Step 12 • If the performance meets the desired standards then reward it • This can be in the form of recognition or compensation or other benefits (www.managementhelp.org

Development Plan: Step 13 • If performance does not meet the desired performance standards, develop or update a performance development plan to address the performance gap • This plan clearly conveys: • how the conclusion was made that there was inadequate performance • what actions are to be taken and by whom and when • when performance will be reviewed again and how • An intervention should be provided to assist in reaching the desired level (www.managementhelp.org)

Development Plan: Step 13 Considerations • It is important to note that inadequate performance is not always the fault of the domain • Performance standards may be unrealistic or the domain may have insufficient resources • Similarly the overall strategies or the organization, or its means to achieving its top level goals, may be unrealistic or have insufficient resources (www.managementhelp.org

Development Plan Utility • Development plans can be used in a variety of situations • When performance appraisal indicates improvement is needed • To “benchmark” the status of improvement so far in a development effort • As part of a professional development for an employee or group of employees, in which case there is not a performance gap as much as a “growth gap” • As part of succession planning to help an employee be eligible for a planned change in role in the organization, in which case there is also not a performance gap as much as an “opportunity gap” • To “pilot”, or test, the operation of a new performance management system (www.managementhelp.org)

Step 14 • Repeat steps 9-13 until performance is acceptable, standards are changed, the domain is replaced, management decides to do nothing, etc. (www.managementhelp.org)

Key Benefits of Performance Management • Focuses on results rather than behaviors and activities • For example an employee may look very busy and committed but they’re work has little utility to the company • Aligns organizational activities and processes to the goals of the organization • Performance management identifies goals, results needed to achieve those goals, measures of effectiveness and efficiency, and means to achieve them • Cultivates a system-wide, long-term view of the organization • Provides means for long term development that will ultimately make employees more committed and productive • Produces meaningful measurements • Can be useful for benchmarking, or setting standards for comparison of best practices. They provide consistency for comparison during internal change. They indicate results during improvement efforts. They help ensure fair treatment. (www.managementhelp.org)

Major Concerns of Performance Management • The most general concern of performance management is that it seems extraordinarily difficult and often unreliable to measure something as complex as performance • It is the role of the OD practitioner to ease these concerns through sound methods and ethical practices (www.managementhelp.org)

Simulation • I am the CEO of a multi-national trillion dollar company • My company specializes in the molecular reconfiguration of materials • Recently, we’ve seen a drop in profits • I have hired your OD firm to come in and design a new performance management system for me that will get me back on track • Warning: the information will not come easy! • You have to ask specific questions to get specific answers • Good Luck

Questions?

Performance Management