Creating a Performance Management Plan and Selecting the Best Performance Standards

1. Creating a Performance Management Plan and Selecting the Best Performance Standards • Prepared by Alan Soskel, RHIA • Independent Researcher • www.alan-soskel-rhia.com • (678) 517-8081 • See my other You Tube video: The Human Aspects of Creating Work Process Flow Charts

2. Creating a Performance Management Plan and Selecting the Best Performance Standards Reference Sources This presentation is a shortened and simplified version of: • Handbook for Measuring Employee Performance, US Office of Personnel Management, September 2011

3. Performance Management Plan 5 Key Components Performance management is the systematic process of: • Planning work and setting expectations • Continually monitoringperformance • Developingthe capacity to perform • Periodically ratingperformance in a summary fashion • Rewardinggood performance

4. Performance ManagementPlan 5 Key Components – a constant cycle • Set measures, establish & communicate standards • Measure performance, offer regular feedback, performance reviews • Recognize and reward good performance • Summarize employee performance, assign rating • Address poor and improve good performance

5. Performance Management Plan 5 Key Components Planning: • Set performance expectations and goals for groups and individuals • Channel efforts toward achieving organizational objectives • Get employees involved • Standards should be: • measurable • understandable • verifiable • equitable • achievable

6. Performance Management Plan 5 Key Components Monitoring: • Consistently measure performance • Provide ongoing feedback to employees and work groups

7. Performance Management Plan 5 Key Components Developing: • Increase capacity to perform through: • training • giving assignments that introduce new skills • giving assignments that offer higher levels of responsibility • improving work processes • employee involvement • or other methods

8. Performance Management Plan 5 Key Components Rating: • eval­uate employee performance against the elements and standards in an employee’s performance plan • assign a summary rating • should be based on work performed during an entire appraisal period

9. Performance Management Plan 5 Key Components Rewarding: • recognizing employees for their performance • acknowledging contributions to the department’s mission • ongoing, natural part of day-to-day experience

10. DEVELOPING EMPLOYEE PERFORMANCE PLAN 4 Stages Establish performance: • Elements – 3 to 7 key functions of employees • Measures - tell employees whatthey have to do • Standards - tell them how well they have to do it • Levels – up to 5 rating levels Must be: • understandable • measurable • attainable • fair • challenging

11. DEVELOPING EMPLOYEE PERFORMANCE PLAN Performance Elements 3 types of Performance Elements: • Critical Elements • FUNCTIONS that directly support department goals • between 3 and 7 critical elements are usually appropriate • cornerstone of individual accountability • Non-Critical Elements • Not performance based • Considered a group performance criteria • cannot be used in assigning an Unacceptable rating • Additional Performance Elements • not a critical element • not used in assigning a summary rating level

12. DEVELOPING EMPLOYEE PERFORMANCE PLAN Performance Elements Use only Critical Elements to create performance plan • Critical Elements • FUNCTIONS that directly support department goals • between 3 and 7 critical elements are usually appropriate • cornerstone of individual accountability • Examples: • Coded records - Deficiencies • Analyzed charts - Delinquencies • Completed transcription

13. DEVELOPING EMPLOYEE PERFORMANCE PLAN Performance Elements Selecting Performance Elements: Customer –Focused Method An easy way for administrative work units like a HIM department to select elements • Identify the following: • Customers of the work unit. • The products and/or services that those customers expect.

14. DEVELOPING EMPLOYEE PERFORMANCE PLAN Performance Elements EXAMPLE: Analysis unit • Customer: Physicians • Element: Timely reporting of deficiencies • Customer: Scanning / Indexing unit • Element: Properly prepared charts

15. DEVELOPING EMPLOYEE PERFORMANCE PLAN Performance Elements EXAMPLE: Transcription unit • Customer: Physicians • Element: Timely transcription of dictated reports • Customer: Analysis unit • Element: Timely transcription of dictated reports

16. DEVELOPING EMPLOYEE PERFORMANCE PLAN Performance Elements EXAMPLE: Scanning / Indexing units • Customer: Coding unit • Element: Readable and accurately indexed charts

17. DEVELOPING EMPLOYEE PERFORMANCE PLAN Performance Measures Measures: measures tell employees what they have to do; develop measures for every element • General measures • Quality: how well the employee performed the work • Quantity:how much work the employee produced • Timeliness:how quickly, when, or by what date employee produced the work • Cost Effectiveness:dollar savings or cost control • Specific measures • For each element, create 1 or more specific measures for each of the 4 general measures, as applicable (you may not always be able to apply all 4 general measures)

18. DEVELOPING EMPLOYEE PERFORMANCE PLAN Performance Measures Develop specific measures: • First, for each element, decide which general measures apply. Each element may have from 1 to all 4 general measures. • Second, determine how to measure quantity, quality, timeliness, and/or cost-effectiveness for each element. • If the element does not lend itself to being measured with numbers and can only be described, ask: • Who could judge that the element was done well? • What factors would they look for? • Write down or record the specific measures, including the units to be tracked or the descriptive factors.

19. DEVELOPING EMPLOYEE PERFORMANCE PLAN Summing up so far

20. DEVELOPING EMPLOYEE PERFORMANCE PLAN Performance Standards Calculate performance standard for each specific measure • “Performance standards are management-approved expressions of the performance threshold(s), requirement(s), or expectation(s) that employees must meet to be appraised at particular levels of performance.” Handbook for Measuring Employee Performance, US Office of Personnel Management, September 2011, pg. 52 • Standards should allow for movement between performance levels

21. DEVELOPING EMPLOYEE PERFORMANCE PLAN Performance Standards When identifying measures and calculating standards, make sure you’ll be able to monitor the performance cycle for data you’ll need • Determine what data to collect for each performance element, the source of the data, and whether to collect all the data or just a sample • Determine when to collect the data, who will collect it, and who will receive it • Review existing reports for possible source of feedback • Try to design processes that give feedback automatically

22. DEVELOPING EMPLOYEE PERFORMANCE PLAN Performance Standards Establish an average standard for each specific measure by observing a number of employees performing the same element • Utilize one of several methods: • Time Ladder Technique – this is a complicated procedure. I have created a tool kit that consolidates all needed forms. It can be found at: • www.alan-soskel-rhia.com/tools-aids.htm • Random Work Sampling • Create a simpler method (I know I am!)

23. DEVELOPING EMPLOYEE PERFORMANCE PLAN Performance Standards • You will need to know the number of levels your performance plan will use to appraise elements. • You also will need to know which performance level your department uses as a minimum retention standard.

24. DEVELOPING EMPLOYEE PERFORMANCE PLAN Performance Standards • If your performance plan uses five levels to appraise performance, the middle range would describe the middlestandard, lets call it Fully Successful • Performance that exceeds the top of that range would be appraised at the level(s) above Fully Successful • Performance below the bottom of that range would be appraised at the level(s) below Fully Successful.

25. DEVELOPING EMPLOYEE PERFORMANCE PLAN Performance Levels Performance Levels: • Usually set up using 5 levels • Unacceptable • Minimally Successful • Fully Successful • Exceeds Fully Successful • Outstanding • Using the average standard you calculated, determine 4 evenly distributed breakpoints, thus creating 5 levels • That forms your 5 levels as shown in next slide

26. DEVELOPING EMPLOYEE PERFORMANCE PLAN Performance Levels 4 Breakpoints create 5 levels Breakpoints Outstanding Unaccept-able Minimally Successful Fully Successful Exceeds Fully Successful

27. DEVELOPING EMPLOYEE PERFORMANCE PLAN Performance Standards So for the Coding Records element: (see table on slide 15) • You calculate an average quality standard of 85% of records coded correctly • You select breakpoints of 80%, 85%, 90%, 95% • Performance levels would then be: • Unacceptable - below 80% • Minimally Successful – 80-85% • Fully Successful – 86-90% • Exceeds Fully Successful – 91-95% • Outstanding – above 95%

28. DEVELOPING EMPLOYEE PERFORMANCE PLAN Performance Standards So for the Coding Records element: (see table on slide 15) • You calculate an average quantity standard of 7 records coded per hour • You select breakpoints of 5, 7, 9, 11 records • Performance levels would then be: • Unacceptable - below 5 records • Minimally Successful – 5-7 records • Fully Successful – 8-9 records • Exceeds Fully Successful – 10-11 records • Outstanding – above 11 records

29. DEVELOPING EMPLOYEE PERFORMANCE PLAN Performance Standards So for the Coding Records element: (see table on slide 15) • You calculate an average timeliness standard of 2 days to respond to and code a chart • You select breakpoints of 1, 2, 3, 4 days • Performance levels would then be: • Unacceptable – more than 4 days • Minimally Successful – 3-4 days • Fully Successful – 2 days • Exceeds Fully Successful – 1 day • Outstanding – within same day

30. DEVELOPING EMPLOYEE PERFORMANCE PLAN Performance Standards Summing up again…

31. Creating a Performance Management Plan and Selecting the Best Performance Standards • There you go – a system for creating a performance management plan and performance standards. • The key is to select the best critical elements – that is – FUNCTIONS that directly support department goals • After you pick the best critical elements to start from follow this process for each element. • The methods for calculating standards has not been discussed here – that is for another presentation.