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Performance Management: “Why it Doesn’t Work! ...And How to Fix It”

A Review of Performance Management

  • To commence our discussion I will review some fundamental concepts of performance management to set the conceptual stage.

  • After this basic review I will move into the major reasons why it hasn’t work in many companies.

  • The final section of my presentation will focus on a few suggestions that can be done to improve the process to ensure better results.

Traditional Benefits of Performance Management

  • Links employee performance to unit objectives

  • Communicates performance goals to employees for shared understanding

  • Recognizes and acknowledges good performance

  • Recognizes areas where performance must be improved

The Basics of Performance Assessment

  • Performance and Development Planning

  • Clarify responsibilities and expectations

  • Establish objectives for the year

  • Interim Coaching

  • Formal Performance Appraisal and Development Review

Reviewing Job Duties and Setting Performance Targets

Review your employee’s job description:

  • Does it accurately describe current duties?

  • Are the job duties doable, observable, measurable?

  • Do they fully represent your expectations

The Task of Performance and Development Planning

  • Tie performance to unit goals

  • Identify evaluation criteria and expectations

  • Identify “gaps” in knowledge or skills

  • Determine specific development activities

  • Foster communication

Effective Performance Objectives are SMART!

  • Specific

  • Measurable

  • Attainable

  • Results-oriented

  • Time-bound and trackable

The Task of Coaching

  • Give performance feedback

  • Educate and develop

  • Counsel

  • Sponsor or mentor

  • Confront

Performance is Regularly Reinforced

  • What is expected of employees

  • How they are doing

  • When they are doing a good job

  • How they may improve

The Importance of Constructive Praising and Feedback

  • Should be immediate, genuine, and specific

  • Praise learners when performance is approximately right

  • Praise seasoned employees when performance is exactly right

  • Avoid assigning more work along with praise

When you Give Praise

  • Tell the employee what they did right

  • Pause to allow the praising to be felt

  • Encourage the employee to do more of the same

  • Reaffirm that you value the employee and their performance

Planning Performance Includes:

a. Setting Individual Objectives

b. Establishing Expectation

c. Aligning Objectives From the Top Down

d. Outlining Areas of Responsibility

Managing Performance Includes:

a. Coaching for Improved Performance

b. Providing Feedback on Performance

c. Collecting and Recording Performance Data

d. Observing Individual Performance

Reviewing Performance Includes:

a. Ensuring a Solid Performance Review Discussion

b. Evaluating Employee’s Performance

c. Preparing for the Performance Review

Rewarding Performance Includes:

a. Determining Salary or Merit Increases

b. Paying for Performance

c. Considering a Promotion or Change in Job

d. Implementing a Personal Development Plan

Performance Management Benefits

For the Individual

a. Improves performance, personal development and enhances individual feedback

b. Serves as a motivator

- Provides a sense of belonging

- Creates a challenge

- Encourages pay-for-performance

For the Organization

  • Improved organizational Effectiveness

  • Makes the best use of resources

  • Coordinates and integrates performance

  • Sets objectives and priorities

  • Changes the organization culture

  • Enhances management style

  • Develops management skills

Common Problems with Performance Management

1. Boss my feel

- Insecure

- Lack skill

- be threatened

2. Boss may resent

- inconvenience

- additional paper work and time

3. Boss may feel awkward in judging others

4. Boss may not know how to handle the employee’s negative reactions

5. Boss may not feel comfortable giving or receiving feedback

6. Boss may fear losing “nice guy syndrome”

7. Boss my see appraisal as a negative tool that stresses negative performance only

8. Halo Effect….ratings given to one area excessively influences rating on all other areas

9. Liberal ratings or leniency because of insufficient skills or feeling uncomfortable confronting employee about poor performance

10. Interpersonal bias. Employee who is personally liked by the boss will get high ratings. Employee who is disliked by the boss will get low ratings.

11. Organization culture:

- High ratings to justify salary increases or promotions

- When appraisal process stresses developmental needs boss focuses entirely on weaknesses

- If boss has to explain rating to employee the ratings tend to be higher

12. Understanding of rating standards:

- what is meant by “poor”, “fair”, “satisfactory”, “Good”, “Excellent”

13. Insufficient Knowledge:

-No previous valuation

- Don’t communicate with employee

- No standards of performance

14. Different Perceptions:

- Employees differ in life experience, values, religion, and behavior

Why PM Does not Work - Let Me Count the Ways!

  • The Performance management process, as we know it, has been around for the past sixty years and many companies have not been too successful in both implementing it as well as sustaining the results it had hoped to achieve.

  • Many companies today are abandoning it’s approach to performance management for a myriad of reasons some of which include the following:

  • One of the major reasons is the inordinate amount of overall time the entire process takes from beginning to end on a yearly basis

- Observing and documenting individual performance

- Setting specific individual objectives and gaining subordinate agreement to them

- Filling out all necessary forms for the individual and HR records

- Preparing for the performance discussion

- Implementing the performance discussion

- Preparing the individual development plan

- Monitoring the IDP

- Providing the ongoing observations with feedback

· Most managers have not had adequate training or skill to do an effective performance management review.

· Manager’s observation skills are lacking and there is limited consistency on what traits, behaviors and skills to observe on the subordinate plus there is the element of personal biases on the part of the rater that will never be eliminated involving culture, ethnicity, personal values etc.

· Most managers have not been trained on how to give performance feedback to an employee in an effective way plus receive negative feedback in terms of becoming a better manager from the employee without becoming defensive.

· Many managers do not do the adequate preparation necessary for an effective performance review discussion including completing the necessary forms, documenting needed improvement areas, identifying areas development improvement areas for the employee.

· Most managers don’t know how to build a good trust relationship with the employee, nor reduce the level of threat from the performance review process nor put the employee at ease at the start of the review discussion.

· Many managers don’t have a clear understanding or purpose of performance management is it for salary adjustment or development?

Suggestions to Improve the PM Process

  • Ensure the performance management process is used a developmental tool to improve employee job / attitude and behavior skills.

  • Keep the entire process simple…complexity of forms and overall time involved for both the manager and employee

  • Don’t make it a once-a-year happening…but provide performance observations and feedback to the employee as you observe them with specifics on how to improve.

  • Remember it is not what you say but how you say it. Feedback is like a gift and present! So when possible provide positive praise for a job well done.

  • Train the managers and supervisors on the definitive skills necessary to conduct and effective performance appraisal…

a. How to effectively prepare for the review discussion

b. How to build trust with the employee and reduce the level of threat

c. How to put the employee at ease by setting the stage

d. How to document the discussion and suggest a development plan

e. How to evaluate the review discussion with the employee and gain agreement for the ratings and follow-up

  • Before the review session get the employee’s input on his overall evaluation of his performance and potential development plan so that you can review it ahead of time.

  • If you negotiate specific job performance objectives with the employee make sure they are value-added and tied to your departments’ objectives and the company’s strategic business plan. The objectives must be specific and measurable.

  • Frequent follow-up and coaching is necessary with the employee to track progress and provide ongoing support.

  • Performance management is not a chore but a responsibility of every manager. Managers should be assessed on well they do it and rewarded accordingly in developing their subordinates.

  • Performance Management will only effectively work in a company when senior management is committed to it and participates in it actively holding their direct reports accountable for doing it.

  • Most senior management mandates down into the organization but never has had an appraisal done on themselves as individuals! Senior management must model the same behavior they expect from their employees!...and if not PM won’t work in the company!

  • Effective Performance management if done correctively will ensure that employees are motivated to the achieve the desired company objectives for its long-term survival because employees are the most important assets a company has!!

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