Management Performance · 2017-04-25 · Performance Management Course Instructions ... Example/Case Study: Case Study: CRB, Inc. A very small car restoration business (CRB Inc.)

PerformanceManagement

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Performance Management

Course Instructions

Please read the instructions given below related to Course "Performance Management"

There are 5 sections in this course. All sections are mandatory.

In Section 1 of this course you will cover these topics:

Performance Management (Pm) In Context

Performance Management Process

Performance Management And Strategic Planning



Gathering Performance Information

Implementing A Performance Management System


Performance Management And Employee Development

Performance Management Skills


Reward Systems And Legal Issues

Managing Team Performance

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Performance Management > Section 1

Section 1- Instructions


Performance Management (Pm) In Context

Performance Management Process

Performance Management And Strategic Planning

You may take as much time as you want to complete the topic coverd in section 1.There is no time limit to finish any Section, However you must finish All Sections before semester end date.

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Performance Management > Section 1 > Topic 1

Topic 1: Performance Management (Pm) In Context

Topic Objective:At the end of this topic students will be able to:

Discuss the concept of performance management.Distinguish performance management from performance appraisal.Explain the many advantages and make a business case for implementing a well-designed performance

management system.Recognize the multiple negative consequences that can arise from the poor design and implementation

of a performance management system. These negative consequences affect all the parties involved:employees, supervisors, and the organization as a whole.

Understand the concept of a reward system and its relationship to a performance management system.Distinguish among the various types of employee rewards including compensation, benefits, and

relational returns.Describe the multiple purposes of a performance management system including strategic,

administrative, information, developmental, organizational maintenance, and documentation purposes.Describe and explain the key features of an ideal performance management system.Create a presentation providing persuasive arguments in support of why an organization should

implement a performance management system, including the purposes that performance managementsystems serve and the dangers of a poorly implemented system.

Definition/Overview:Performance management: Performance management helps organizations achieve their strategic goals.Rather than discarding the data accessibility previous systems fostered, performance managementharnesses it to help ensure that an organizations data works in service to organizational goals to provideinformation that is actually useful in achieving them and focus on the Operational Networking Processesbetween that performance levels. Key Points:

1. Definition of Performance Management(PM)

Continuous Process of:

o Identifying performance of individualsand teams

o Measuring performance of individualsand teams

o Developing performance of individuals

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and teamso Aligning performance with the strategicgoals of the organization

PM is NOT performance appraisalPM

o Strategic business considerationso Ongoing feedbacko So employee can improve performanceo Driven by line manager

Performance appraisal

o Assesses employeeStrengths Weaknesses

o Once a yearo Lacks ongoing feedbacko Driven by HR

2. The Performance ManagementContribution

For Employees

o Clarify definition of job and successcriteria

o Increase motivation to performo Increase self-esteemo Enhance self-insight and development

For Managers

o Supervisors communicate views ofperformance more clearly

o Managers gain insight aboutsubordinates

o There is better, more timely,5 of 76

identification of good and poor performanceo Employee performance improves

For Organization/HR Function

o Clarify organizational goalso Facilitate organizational changeo Administrative actions are more fair andappropriate

o There is better protection from lawsuits

3. Disadvantages/Dangers of Poorly-implemented PM Systems

For Employees

o Lowered self-esteemo Employee burnout and jobdissatisfaction

o Damaged relationshipso Use of misleading information

For Managers

o Increased turnovero Decreased motivation to performo Unjustified demands on managerialresources

o Varying and unfair standards andratings

For Organization

o Wasted time and moneyo Derivation of ratings is a mysteryo Biases can replace standardso Risk of litigation increases

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4. Definition of Reward SystemsSet of mechanisms for distributing

o Tangible returns

▪ Cash compensation▪ Benefits

o Intangible or relational returns

▪ As part of an employment relationship

o Tangible returns▪ Cash compensation

o Base payo Cost-of-living and contingent payo Incentives (shortand long-term)

▪ Benefits, such aso Income protectiono Allowanceso Work/life focus

o Intangible returns▪ Relational returns

o Recognition and statuso Employment securityo Challenging worko Learning opportunities

Returns and Their Degree of Dependency on the Performance Management System

o Return (Degree of Dependency)▪ Cost of Living Adjustment (Low)▪ Income Protection (Low)▪ Work/life Focus (Moderate)▪ Allowances (Moderate)▪ Relational Returns (Moderate)▪ Base Pay (Moderate)▪ Contingent Pay (High)▪ Short-term Incentives (High)▪ Long-term Incentives (High)

5. Aims and Role of PM SystemsPurposes of PM Systems (Overview)

o Strategic

o Administrative

o Informational

o Developmental

o Organizational maintenance

o Documentation

Strategic Purposeo Link employee behavior with organizations goals

o Communicate most crucial business strategic initiatives

Administrative Purposeo Provide information for making decisions in reference to:

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▪ Salary adjustments▪ Promotions▪ Retention or termination▪ Recognition of individual performance

o Merit increaseso Identification of poor performers

▪ LayoffsInformation Purpose

o Communicate to Employees

▪ ExpectationsOrganizationSupervisor

▪ What is important▪ How they are doing▪ How to improve

Developmental Purposeo Performance feedback/coaching

o Identification of individual strengths and weaknesses

o Causes of performance deficiencies

o Tailor development of individual career path

Organizational Maintenance Purposeo Plan effective workforce

▪ Anticipate/respond to future needs▪ Determine priorities and allocate resources▪ Perform talent inventory

o Assess future training needs

o Evaluate performance at organizational level

o Evaluate effectiveness of HR interventions

Documentation Purposeo Validate selection instruments

o Document administrative decisions

o Help meet legal requirements

Purposes of PM Systemso Strategic

o Administrative

o Informational

o Developmental

o Organizational maintenance

o Documentation

6. Characteristics of an Ideal PM SystemOverview

o Congruent with organizational strategyo Thorougho Practical

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o Meaningfulo Specifico Identifies effective and ineffectiveperformance

o Reliableo Valido Acceptable and Fairo Inclusiveo Openo Correctableo Standardizedo Ethical

Congruent with organizational strategyo Consistent with organizations strategy

o Aligned with unit and organizational goals

Thorougho All employees are evaluated

o All major job responsibilities are evaluated

o Evaluations cover performance for entire review period

o Feedback is given on both positive and negative performance

Practicalo Available

o Easy to use

o Acceptable to decision makers

o Benefits outweigh costs

Meaningfulo Standards are important and relevant

o System measures ONLY what employee can control

o Results have consequences (used for important administrative decisions)

o Evaluations occur regularly and atappropriate times

o System provides for continuing skill development of evaluators

Specific

o Concrete and detailed guidance to employees▪ Whats expected▪ How to meet the expectations

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Identifies effective and ineffective performanceo Distinguish between effective and ineffective

▪ Behaviors▪ Results

o Provide ability to identify employees with various levels of performance

Reliableo Consistent

o Free of error

o Inter-rater reliability

Valido Relevant (measures what is important)

o Not deficient (doesnt measure unimportant facets of job)

o Not contaminated (only measures what the employee can control)

Acceptable and Fairo Perception of Distributive Justice

▪ Work performed evaluation received rewardo Perception of Procedural Justice

▪ Fairness of procedures used too Determine ratingso Link ratings to rewards

Inclusiveo Represents concerns of all involved

▪ When system is created, employees should help with decidingo What should be measuredo How it should be measured

▪ Employee should provide input on performance prior to evaluation meetingOpen (No Secrets)

o Frequent, ongoing evaluations and feedback

o 2-way communications in appraisal meeting

o Clear standards, ongoing communication

o Communications are factual, open, honest

Correctableo Recognizes that human judgment is fallible

o Appeals process provided

Standardizedo Ongoing training of managers to provide

o Consistent evaluations across

▪ People▪ Time

Ethicalo Supervisor suppresses self-interest

o Supervisor rates only where he or she has sufficient information about the performancedimension

o Supervisor respects employee privacy

7. Integration with Other Human

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Resources and Development ActivitiesPM provides information for:

o Development of training to meet organizational needso Workforce planningo Recruitment and hiring decisionso Development of compensation systems

Example/Case Study:Case Study: CRB, Inc.A very small car restoration business (CRB Inc.) is interviewing you for a position as its human resourcesmanager on a part-time basis, working 20 hours per week, while you complete your degree. You would bethe first HR manager they have ever been able to afford to hire, and the husband/wife owners (Al and MaryBrown) have been operating the business for 10 years. In addition to you, they recently hired a part-timejanitor. This brought the paid staff to seven full-time employees: a foreman who is responsible forscheduling and overseeing the work, two autobody repair workers, a person who disassembles andreassembles cars, a painter, and a detail person who assists the painter with getting the car ready to paintand sanding and waxing it afterwards. Al Brown handles sales and estimating prices, runs errands andchases down parts, and visions the future. Mary has been doing the bookkeeping and general paperwork. The owners and employees are very proud of CRBs reputation for doing high quality work in the restorationof old cars, going back to the 1930s.CRB pays its employees based on flagged hours which are the number of paid hours that were estimated tocomplete the work. (For example, the estimate may say that it will take 3 hours to straighten a fender andprepare it for painting. When the autobody repair worker has completed straightening the fender, he wouldflag completion of 3 hours, whether it took him 2 hours or 6 hours to actually complete the work. It is to hisbenefit to be very fast and very good at what he does.) CRB pays the workers 40% of what it charges thecustomer for the flagged hours; the other funds are used to pay the employers share of the taxes andoverhead, with a small margin for profit. The foreman, who does some flagged hours autobody repairhimself, is also paid a 5% commission on all the labor hours of the other employees, after the car isaccepted as complete by the customer and the customer pays for the completed work.Employees are given feedback by Al, the foreman, and by customers on an infrequent basis. Right now,everything is going well and the employees are working as a team. In the past, the situation was lesscertain and some employees had to be fired for poor work. When an employee filed for government paidunemployment compensation saying that he was out of work through no fault of his own, CRB challengedthe filing and usually was able to prove that Al had given a memo to the employee requesting improvementsin quality or quantity of work. There has never been a formal planning or appraisal process at CRB.Mary Brown has read an article about performance management and is wondering whether CRB shouldimplement such a system. Questions:

Critically assess whether a performance management system would work for uch a small business. Discuss benefits that such a system would provide for us as owners and for our employees. Explain any dangers our company faces if we dont have a performance management system. What

could be a problem if we go with a poorly implemented system?Explain how we could tie our current reward system to a performance management system.What 10 characteristics, at a minimum, should we include in a performance management system?

Explain your answer with 1-3 sentences for each characteristic you recommend. Answers: 1. Although some descriptions of performance management might seem too complicated for a smallbusiness, the basic principles of performance management are important for every business. Performancemanagement links an individuals (and a teams) performance to the companys mission and goals byidentifying what is important in an individuals job, measuring that performance, and developing theindividuals (and teams) ability to provide better performance. Even when there are only seven employees, itis important to ensure that they are working effectively toward meeting the companys goals. A properlyimplemented performance management system should be very useful to the company.

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2. There are a number of benefits that a performance management system can provide to the company andto you as one of the owners, including:

You will clarify organizational goals to your employees.You and your foreman will be able to communicate your views of employee performance more clearly.There will be better, more timely identification of good and poor performance.Employee performance will improve.Your administrative actions will be fair and appropriate.You will have better protection from any possible lawsuits from employees.If you decide to make changes, the performance management system will help to make the changes

easier to implement.You might gain more insight about your employees.

In addition, the employees would reap the following benefits from the performance management system:Clarified definitions of their jobs and success criteria.Increased motivation to perform.Enhanced self-insight and development.Increased self-esteem.Improvement in pay as their performance improves

3. You may have seen some of these problems already in your company. They are similar to the problemsyou can face if you have a poorly implemented system. For you, as one of the owners, these dangers mayexist:

You may face litigation at any time.Employees may believe they are treated unfairly.Employee motivation to perform may decrease.Employees may quit (or slow down) when they think they are not treated fairly.You may realize that either you or the foreman is putting too much effort into getting performance out

of one or more employees. Employees may experience a lack of a performance management system (or a badly implemented one) inthis fashion:

They may gradually burnout and become dissatisfied with their jobs.Relationships among the employees and management may become damaged.They become vulnerable to rumors and false or misleading information about how their performance is

viewed.They may develop lower self-esteem.

4. There are 14 characteristics of an ideal performance management system and Mary Brown has requestedthat you identify at least 10 that would be necessary for her company. This is a matter of judgment anddetailed responses for any of the 14 should be accepted (example responses follow):

Congruent with organizational strategy. It is very important that the company identifies its goals andensures that employee goals are aligned with the company goals.

Thorough. All employees (including the foreman) should be evaluated. All major job responsibilitiesshould be evaluated and the evaluations should cover performance for the entire review period. Feedbackshould be given on both positive and negative performance.

Practical. Since it is a very small company, the system must be easy to use and accepted by the ownersand the foreman. The benefits must outweigh the costs of implementation.

Meaningful. The system must be meaningful to owners and employees, with measurement of importantand relevant standards that are within employee control. The results should have consequences,evaluations should occur regularly and reliably, and there should be continuing skill development for theevaluators.

Specific. Employees should be given concrete and detailed guidance regarding what is expected andhow to meet the expectations.

Identifies effective and ineffective performance. The company needs to distinguish between effectiveand ineffective behaviors and results. This will also provide the ability to identify employees with variouslevels of performance.

Reliable. The feedback should be consistent and free of error. Whether the owner or the foreman isconducting the evaluation, the results should be similar.

Valid. The system should be relevant (measuring what is important). The system should not bedeficient or contaminated; i.e., it should not measure unimportant facets of the job and it should only

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measure what the employee can control.Acceptable and Fair. Employees should be able to perceive distributive and procedural justice in the

system. The work performed should lead clearly to the evaluation received and to any rewards thatresult. They should see that the procedures to determine the ratings and determine the rewards are fair.

Inclusive. The system needs to represent the concerns of everyone involved. Employees should beinvolved in developing the system, providing input on what should be measured and how, as well asproviding input on their own performance.

Open. There should be frequent evaluations and feedback. The employee should be able to feelcomfortable sharing in the evaluation meetings. There should be clear standards and ongoingcommunication. Communication should be open, factual, and honest.

Correctable. There needs to be a clear understanding that the system is based on human judgment andhumans make mistakes. There needs to be a process for appealing decisions.

Standardized. The system will need ongoing training of the managers to provide consistent evaluationsacross people and time.

Ethical. The system will need to protect employee privacy. The raters will need to suppress their ownself-interest and rate only where they have sufficient knowledge about performance.

5. Your current reward system includes both tangible returns (money and benefits) and intangible orrelational returns. The contingent pay or commission that you pay the foreman has a direct relationship toperformance; the 40% of labor hours charged to the customer also relate to performance, although thiscould lead to employee dissatisfaction if estimated hours are consistently inaccurate. Of course, theemployer costs for benefits, such as social security, medicare, and unemployment insurance, are not relatedto performance; however, the law requires these benefits. You mentioned that the employees are working well as a team; this would imply that they are gettingrelational returns from their work. It is important to keep them working well, because performance sufferswhen there are interrelational conflicts. You could establish an additional reward system to recognize the employee of the month or somethingsimilar to recognize exceptional performance or an employees additional contributions, over and above whatis expected. Whether it is a plaque on the wall or a restaurant gift certificate, it would be appreciated andcontribute relational returns, and possible tangible returns.

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Topic 2: Performance Management Process


Understand that performance management is an ongoing process including the interrelated componentsof prerequisites, performance planning, performance execution, performance assessment, performancereview, and performance renewal and recontracting.

Conduct a job analysis to determine the job duties, needed knowledge, skills, abilities (KSAs), andworking conditions of a particular job.

Write a job description that incorporates the KSAs of the job and information on the organization, unitmission, and strategic goals.

Understand that the poor implementation of any of the performance management process componentshas a negative impact on the system as a whole.

Understand that a dysfunctional or disrupted link between any of the performance management processcomponents has a negative impact on the system as a whole.

Understand important prerequisites needed before a performance management system is implementedincluding knowledge of the organizations mission and strategic goals and knowledge of the job inquestion.

Distinguish results from behaviors and understand the need to consider both in performancemanagement systems.

Describe the employees role in performance execution and distinguish areas over which the employeehas primary responsibility from areas over which the manager has primary responsibility.

Understand the employees and the managers responsibility in the performance assessment phase.Understand that the appraisal meeting involves the past, the present, and the future.Understand the similarities between performance planning and performance renewal and recontracting.

Definition/Overview:Performance Management Process: Performance management is an ongoing process. It never ends. Onceestablished in an organization, it becomes part of an organizations culture. The performance managementprocess includes six closely related components: (a) prerequisites, (b) performance planning, (c)performance execution, (d) performance assessment, (e) performance review, and (f) performance renewaland recontracting. Key Points:

1. PrerequisitesKnowledge of the organizations mission and strategic goalsKnowledge of the job in question

o Knowledge of mission and strategic goals

▪ Strategic planningo Purpose or reason for organizations existenceo Where organization is goingo Organizational goalso Strategies for attaining goals

▪ Cascade effect throughout organization▪ Organization Unit Employee

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o Knowledge of the job

Job analysis of key componentso Activities, tasks, products, services, processes

KSAs required to do the jobo Knowledge

o Skills

o Abilities

Job Descriptiono Job duties

o KSAs

o Working conditions

o Get generic job descriptions from Occupational Informational Network (O*Net)http://online.onetcenter.org/

Job Analysiso Can be conducted using a variety of tools

▪ Interviews▪ Observation▪ Questionnaires (available on Internet)

o All incumbents should review information and provide feedback

▪ Frequency of tasks▪ Criticality of tasks

2. Performance Planning ResultsKey accountabilitiesSpecific objectivesPerformance standards

o Key Accountabilities

▪ Broad areas of a job for which the employee is responsible for producing resultso Specific Objectives

▪ Statements of outcomes▪ Important ▪ Measurable

o Performance Standards

▪ Yardstick to evaluate how well employees have achieved each objectiveInformation on acceptable and unacceptable performance, such as:

o quality

o quantity

o cost

o time

o Behaviors

Measurable clusters of KSAso Knowledge

o Skills

o Abilities

Critical in determining how results will be achievedAreas that need improvementGoals to be achieved in each area of improvement

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3. Performance Execution Employee

ResponsibilitiesCommitment to goal achievementOngoing requests for feedback and coachingCommunication with supervisorCollecting and sharing performance dataPreparing for performance reviews

o Observation and documentation

o Updates

o Feedback

o Resources

o Reinforcement

4. Performance AssessmentManager assessmentSelf-assessmentOther sources (e.g., peers, customers, etc.)

o Increase employee ownership of process

o Increase commitment to system

o Provide information to be discussed at review

o Ensure mutual understanding of expectations

5. Performance Review

Overview of Appraisal Meetingo Past

▪ Behaviors and resultso Present

▪ Compensation to be received as a resulto Future

▪ New goals and development plansSix Steps for Conducting Productive Performance Reviews

o Identify what the employee has done well and poorly

o Solicit feedback

o Discuss the implications of changing behaviors

o Explain how skills used in past achievements can help overcome any performance problems

o Agree on an action plan

o Set a follow-up meeting and agree on behaviors, actions, and attitudes to be evaluated

6. Performance Renewal and

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Recontracting Same as/different from Performance Planning

o Uses insights and information from previous phases

▪ Includes review of and possible adjustment of goals in accordance with organizationsmission and strategy

▪ May require new accountabilities▪ May involve development of new competencies

o Cycle begins again

Example/Case Study:Case Study: Front Range Medical Associates (FRMA)Front Range Medical Associates (FRMA) is a small medical practice owned by four doctors who are generalpractitioners. The mission of FRMA is to provide the best healthcare and medical assistance for the familiesof Granite, a mid-sized city at the base of the Rocky Mountains. FRMA employs three clerical employees, fournurses, two physicians assistants, two laboratory technicians, and a custodian. Since this company is in theUnited States of America, one clerical employee spends most of his time identifying what insurance coverageis available to the various patients and negotiating costs with the various insurance companies. Althoughthe company has employed some of the employees since 1974, it has relied on generic job descriptions andthe institutional memory of Lenore, the head clerk, and Roseanne, the head nurse. However, Roseanneretired last summer and Lenore is planning to retire in a year. The nurses now report directly to the doctors,who also oversee the physicians assistants. The doctors have noticed that the previously well-rununderpinnings of their practice have developed some glitches. They have hired you to help them get thingsrunning smoothly again. Questions:1. Dr. Beasley, the senior member of the practice, tells you that he has heard that a performance

management system might be a good idea. He asks you to explain the key features of such a system tohim. Please provide him with a detailed discussion.

2. One of the problems at FRMA is that job duties are unclear. Discuss the information you would needto help FRMA resolve this problem and explain how you would get this information.

3. The following is part of a generic job description for registered nurses obtained from O*Net. 29-1111.00 Registered Nurses: Assess patient health problems and needs, develop and implement nursingcare plans, and maintain medical records. Administer nursing care to ill, injured, convalescent, or disabledpatients. May advise patients on health maintenance and disease prevention or provide casemanagement. Licensing or registration required. Expand this generic job description in the context ofFRMAs mission.

4. You are advising Dr. Beasley about developing a performance plan for the employees in the practice. What factors should he consider in developing this plan?

5. Explain the responsibilities of the supervisor and the employees during the performance execution andreview phases.

Answers:1. Performance management is an ongoing process.It never ends. Once established in an organization,

it becomes part of an organizations culture. The performance management process includes six closelyrelated components: (a) prerequisites, (b) performance planning, (c) performance execution, (d)performance assessment, (e) performance review, and (f) performance renewal and recontracting.

2. Part of the problem is that FRMA needs a more detailed mission. The mission statement explains thereason for FRMAs existence: to provide the best healthcare and medical assistance for the families ofGranite. However, it does not say anything about FRMAs goals or strategies; there is no cascade effectthroughout the organization. Thus, I would need to work with the doctors and staff to develop a moredetailed mission statement. Then, we need to do a job analysis for each job in order to develop up-to-date job descriptions. We canbegin with generic job descriptions from the Occupational Informational Network (O*Net athttp://online.onetcenter.org/) and then interview the doctors, any supervisors, and the employees todetermine the accuracy of the job descriptions. It is important to list job duties, KSAs (knowledge, skills,

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and abilities required to do the job), and working conditions. The incumbents should also review theinformation developed and provide feedback regarding the frequency and criticality of the tasks they do.

3. Assess patient health problems and needs, develop and implement excellent nursing care plans, andmaintain medical records for the families of Granite. Administer excellent nursing care to ill, injured,convalescent, or disabled patients. May advise patients on superior health maintenance and diseaseprevention or provide case management for the families of Granite. Licensing or registration required.

4. Performance planning includes the consideration of results and behavior, as well as a developmentalplan. A discussion of results needs to include key accountabilities (i.e., broad areas for which anemployee is responsible), specific objectives for each key accountability (i.e., goals to be reached), andperformance standards (i.e., what are acceptable and unacceptable levels of performance). A discussionof behaviors needs to include competencies (i.e., clusters of KSAs). Finally, the developmental planincludes a description of areas that need improving and goals to be achieved in each area.

5. During the performance execution phase, management is responsible for observation anddocumentation; updating employees; providing feedback to employees; providing employees with theresources they need to do their jobs; and providing reinforcement to the employees. Employees areresponsible for doing their jobs, with a commitment to achieving the goals developed during theperformance planning process. They should make ongoing requests for feedback and coaching andcommunicate regularly with their supervisors. They should collect and share performance data with theirsupervisors. They should also prepare for their performance reviews. During the performance review phase, the supervisor should review past behaviors and results, discussany rewards that will be provided in the present, and work with the employee to set new goals anddevelopment plans. The employee is responsible for having completed a self-assessment prior to theperformance review meeting. In addition, the employee should plan on participating actively in thediscussion of his or her performance and help with development of the new action plan.

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Topic 3: Performance Management And StrategicPlanning


Define strategic planning and its overall goal.Describe the various specific purposes of a strategic plan.Explain why the usefulness of a performance management system relies to a large degree on its

relationship with the organization and units strategic plans.Understand how to create an organizations strategic plan including an environmental analysis resulting

in a mission statement, vision statement, goals, and strategies.Conduct an environmental analysis that includes a consideration of both internal (strengths and

weaknesses) and external (opportunities and threats) trends.Understand how a gap analysis resulting from a consideration of internal and external trends dictates an

organizations mission.Define the concept of a mission statement and describe the necessary components of a good mission

statement.Define the concept of a vision statement and understand its relationship to the mission statement.Describe the basic components of a good vision statement.Create organizationand unit-level mission and vision statements.Understand the relationship between mission and vision statements, goals, and strategies.Understand the relationship between an organizations vision, mission, goals, and strategies, and each

of its divisions/units vision, mission, goals, and strategies.Understand the relationship between a units vision, mission, goals, and strategies and individual job

descriptions.Explain why job descriptions must be linked to the organizations and units strategic plans.Understand how a strategic plan determines various choices regarding performance management system

design.Explain why a consideration of strategic issues is a building block for creating support for a performance

management system. Definition/Overview:

Strategic planning: Strategic planning is anorganization's process of defining its strategy, ordirection, and making decisions on allocating itsresources to pursue this strategy, including itscapital and people.

Key Points:

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1. Process of Linking PerformanceManagement to the Strategic PlanOverview

Strategic Planning for the OrganizationDeveloping Strategic Plans at the Unit LevelJob DescriptionsIndividual and Team Performance

2. Strategic Planning: OverviewEnvironmental AnalysisMissionVisionGoalsStrategies

3. Definition and Purposes of StrategicPlanning

Definitiono Process

o Describes organizations destination

o Assesses barriers

o Selects approaches for moving forward

Goal o Allocate resources

▪ to provide organization▪ for competitive advantage

Purposeso Helps define the organizations identity

o Helps organizations prepare for the future

o Enhances ability to adapt to environmental change

o Provides focus and allows for better allocation of resources

o Produces an organizational culture of cooperation

o Allows for the consideration of new options and opportunities

o Provides employees with information to direct daily activities

5. Environmental AnalysisIdentifies external and internal trends

o To understand broad industry issues

o To make decisions using big picture context

External trendso Opportunities

▪ Environmental characteristics that can help the organization succeedo Threats

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▪ Environmental characteristics that can prevent the organization from being successfulSome factors to consider

o Economic

o Political/legal

o Social

o Technological

o Competitors

o Customers

o Suppliers

Internal trendso Strengths

▪ Internal characteristics that the organization can use for its advantageo Weaknesses

▪ Internal characteristics that can hinder the success of the organizationo Some factors to consider

▪ Organizational structure▪ Organizational culture▪ Politics▪ Processes▪ Size

6. Environmental Analysis includesconducting a Gap Analysis, whichanalyzes

External environment (opportunities and threats)Internal environment (strengths and weaknesses)

7. Gap analysis determines:

Opportunity + Strength = LeverageOpportunity + Weakness = ConstraintThreat + Strength = VulnerabilityThreat + Weakness = Problem

8. Environmental and gap analyses provide information for organizations to decide:

Who they areWhat they do

9. Mission

A good mission statement answers:o Why does the organization exist?

o What is the scope of the organizations activities?

o Who are the customers served?

o What are the products or services offered?

The mission statement contains information on the organizationso Basic product/service to be offered

o Primary market/customer groups

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o Unique benefits and advantages of product/services

o Technology to be used

o Concern for survival through growth and profitability

The mission statement may contain information on the organizationso Values and beliefs

o Managerial philosophy

o Desired public image

o Self-concept of business adopted by

▪ Employees▪ Stockholders

10. Vision

Statement of future aspirations Focuses attention on what is important (eliminates unproductive activities) Provides context for evaluating

o Opportunities

o Threats

A Good Vision Statement is:o Brief

o Verifiable

o Bound by a timeline

o Current

o Focused

o Understandable

o Inspiring

o A stretch

11. GoalsPurpose of setting goals:

o Formalize expected 5+ years achievements

o Provide source of motivation

o Provide tangible targets to strive for

o Provide basis for good decisions

o Provide basis for performance measurement

12. Strategies

Create strategies or game plans or how to procedures Address issues surrounding:

o Growth

o Survival

o Turnaround

o Stability

o Innovation

o Leadership

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13. How the HR Function contributes:Communicate knowledge of strategic planProvide knowledge of KSAs needed for strategy implementationPropose reward systems

14. Developing Strategic Plans at the UnitLevel

Organizationo Mission statement

o Vision statement

o Goals

o Strategies

Must clearly align with and be congruent witho Every Units

▪ Mission statement▪ Vision statement▪ Goals▪ Strategies

15. Alignment of Strategic Plan withPerformance

Job Descriptionso Tasks and KSAs are congruent with Organization and Unit strategic plans

o Activities described support mission and vision of Organization and Unit

16. Individual and Team PerformanceOrganization and Unit mission, vision, goals lead to

o Performance management system, which

▪ Motivates employees to:o Display behaviors aligned with mission, vision, goalso Produce results to support mission, vision, goalso Aligns development plans with organization priorities

17. Strategic Plan leads to some Choices inPM System Design

Criteria (Behavior vs. Results)Participation (Low vs. High)Temporal Dimension (Short Term vs. Long Term)Level of Criteria (Individual vs. Team/Group)System Orientation (Developmental vs. Administrative)Rewards (Pay for Performance vs. Tenure/Position)

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18. Building Support

Top Managemento Help carry out vision

All levelso Involvement

o Participation (voice feedback and concerns)

o Understanding of organizational vision and goals

19. Performance Management and StrategicPlanning: Summary and Review

Definition and Purposes of Strategic PlanningProcess of Linking Performance Management to the Strategic Plan

o Strategic Planning

o Developing Strategic Plans at the Unit Level

o Job Descriptions

o Individual and Team Performance

Building Support Example/Case Study:Case Study: Homeowners Insurance Mutual Company (HIMCO)

Homeowners Insurance Mutual Company (HIMCO) is a small insurance brokerage with 25 employees andabout 5,000 clients. The company sells a variety of homeowners and automobile insurance and manages theprocessing of claims against the insurance sold. Some employees sell insurance (both in clients homes andin the office); some employees process claims; some employees inspect insured damages; other employeesare responsible for supervision and/or clerical support of the business. W ith the exception of the salespeople, who receive a base pay and commissions on their sales, the rest of the employees are paid basedon their positions and seniority in the company.

The owner of HIMCO retired and sold the business to one of the managers, John Thomas. John had a BA inbusiness and had been in the insurance business for 10 years. John wanted to make some changes in thebusiness operations when he took over, so in addition to his customer service and administrative duties, hetook on the task of implementing a performance management system. John scheduled several retreatsduring which all of the employees of the agency recommended company goals and a business plan. Duringthe retreats, John led discussions and facilitated projects meant to result in the basis for the company goalsand business plan. After the retreats were held, he published the following mission statement in thecompany brochures:HIMCO serves the families of this state by making sure that their assets are protected. We offercomprehensive and inexpensive Auto and Home insurance packages, including preferred auto and homeownerrates. We continuously search for the best rates and the best insurance policies to make certain that weare the leader in providing comprehensive and affordable insurance to the families of this state. Protectionof our clients assets is our primary concern. Questions:1. Critically evaluate the mission statement currently used for HIMCO.2. Using your understanding of what makes a good mission statement, revise the company mission

statement as appropriate.3. Develop a unit mission statement for the clerical unit using your understanding of what an office

support staff usually does for its organization. Explain how the mission statement that you have

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developed answers the questions normally answered by a mission statement and identify the keyfeatures of the mission statement.

Answers:1. In general, thorough mission statements include the following components: (Respondents are free toinvent appropriate answers as long as they include at least the first five key features in their missionstatements.)

Basic product/service to be offered (does what?)Primary markets or customer groups to be served (to whom?)Unique benefits and advantages of products/services (with what benefits?)Technology to be used in production or delivery Fundamental concern for survival through growth and profitability

Mission statements typically also include information on the organizations values and beliefs (which can beadded for extra credit), including:

Managerial philosophy of the organizationPublic image sought by the organizationSelf-concept of business adopted by employees and stockholders

In sum, a mission statement defines why the organization exists, the scope of its activities, the customersserved, and the products and services offered. Mission statements also include specific information such asthe technology used in production or delivery, and the unique benefits or advantages of the organizationsproducts and services. Finally, a mission statement can include a statement of values and beliefs, such asthe organizations managerial philosophy.The mission statement for HIMCO in the case study meets the requirements of a complete missionstatement, although it does not describe the technology used to provide services.

Basic product/service to be offered (does what?) comprehensive and inexpensive Auto and Homeinsurance packages

Primary markets or customer groups to be served (to whom?) families of this stateUnique benefits and advantages of products/services (with what benefits?) preferred auto and

homeowner rates--the best rates and the best insurance policiesTechnology to be used in production or delivery (this issue is missing)Fundamental concern for survival through growth and profitability --make certain that we are the leader

in providing comprehensive and affordable insuranceStatement of values and beliefs such as the organizations managerial philosophy. Protection of our

clients assets is our primary concern 2. (Respondents are free to invent appropriate answers as long as they include at least the first five keyfeatures in their mission statements.)HIMCO serves the families of this state by making sure that their assets are protected. We offercomprehensive and inexpensive Auto and Home insurance packages, including preferred auto and homeownerrates. Using the Internet, our comprehensive database, and the benefits of our membership in the primaryindustry organizations, we continuously search for the best rates and the best insurance policies to makecertain that we are the leader in providing comprehensive and affordable insurance to the families of thisstate. Protection of our clients assets is our primary concern.Sample mission statement for the clerical unit at HIMCO: (Another would be fine as long as it aligns withthe company mission statement and contains the components (or key features) of a mission statement)The clerical unit at HIMCO supports the HIMCO mission of protecting the assets of our customers and theirfamilies by providing excellent customer service. As the first representatives of the company that manyclients contact, we provide caring and competent greetings and direction to the appropriate personnel in thecompany. Using computers and the latest electronic technology, we provide word processing and filingsupport to the rest of the company, so that all documents represent the high quality of service provided bythe company and information can be recovered at a moments notice. We provide this support efficiently andeffectively, so that our company can remain in the leadership position, continuing to protect our clientsassets. 3. The clerical unit mission statement provides the following key features by answering the questions shownin parentheses:

Basic product/service to be offered (does what?) providing excellent customer service, greetings anddirection, word processing and paperwork filing support

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Primary markets or customer groups to be served (to whom?) clients and rest of the company Unique benefits and advantages of products/services (with what benefits?) We provide this support

efficiently and effectivelyTechnology to be used in production or delivery computers and other electronic technologyFundamental concern for survival through growth and profitability so that our company can remain in the

leadership positionStatement of values and beliefs such as the organizations managerial philosophy. The clerical unit at

HIMCO supports the HIMCO mission of protecting the assets of our customers and their families byproviding excellent customer service continuing to protect our clients assets.




Defining Performance And Choosing A Measurement Approach

Measuring Performance


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Topic 4: Defining Performance And Choosing AMeasurement Approach


Define what is and is not performance.Understand the situations under which a trait, behavior, or results approach to measuring performance

may be most appropriate.Understand the evaluative and multidimensional nature of performance.Identify the various factors that determine performance including declarative knowledge, procedural

knowledge, and motivation.Gather information about a performance problem and understand which of the three main determinants

of performance need to be addressed to solve the problem.Design a performance management system that includes both task and contextual performance

dimensions.Understand that performers should be placed within a context: a performer in aspecific situation

engaging in behaviors leading to specific results.Adopt a trait approach to measuring performance, which basically focuses on the performer and ignores

the situation, his behaviors, and the results produced.Adopt a behavior approach to measuring performance, which basically focuses on how the job is done

and ignores the performers traits and results produced.Adopt a results approach to measuring performance, which basically focuses on the outcomes of work

and ignores the performers traits, as well as how the work is done. Definition/Overview:Measurement: Measurement is the process of estimating the magnitude of some attribute of an object,such as its length, weight, or depth relative to some standard (unit of measurement), such as a meter or akilogram. The term is also used to indicate the number that results from that process.Performance: A performance, in performing arts, generally comprises an event in which one group of people(the performer or performers) behaves in a particular way for another group of people (the audience). Key Points:

1. Defining PerformanceWhat Performance is:

o Behavior

o What employees do

What Performance is NOT:o Results or outcomes

o What employees produce

Behaviors labeled as performance are:o Evaluative

▪ Negative▪ Neutral

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▪ Positiveo Multidimensional

▪ Many different kinds of behaviors▪ Advance or hinder organizational goals

Use of Resultso Not all behaviors are

▪ Observable▪ Measurable

o Results/Consequences are sometimes used▪ To infer behavior▪ As proxy for behavioral measure

2. Determinants of PerformancePerformance = Declarative Knowledge x Procedural Knowledge x MotivationDeclarative Knowledge

o Information about

▪ Facts▪ Labels▪ Principles▪ Goals

Procedural Knowledgeo Knowing

▪ What to do▪ How to do it

o Skills

▪ Cognitive▪ Physical▪ Perceptual▪ Motor

Motivationo Choices

▪ Expenditure of effort▪ Level of effort▪ Persistence of effort

Implications for Addressing Performance Problemso Managers need information to accurately identify source(s) of performance problems

o Performance management systems need both

o Measure performance

Factors Influencing Determinants of Performance:o Individual characteristics

▪ Procedural knowledge▪ Declarative knowledge▪ Motivation

o HR practices

o Work environment

3. Performance Dimensions

Types of multidimensional behaviors (overview)o Task performance

o Contextual performance28 of 76

▪ Pro-social behaviors▪ Organizational citizenship

Task performance (definition)o Activities that transform raw materials into the goods and services produced by the

organization

o Activities that help with the transformation process by

▪ replenishing the supply of raw materials▪ distributing its finished products▪ providing important planning, coordination, supervising, or staff functions

Contextual performance (definition):o Behaviors that contribute to the organizations effectiveness by providing a good environment in

which task performance can occur, such as:

▪ persisting with enthusiasm and exerting extra effort▪ volunteering to carry out tasks that are not part of the job▪ helping and cooperating with others▪ following organizational rules and procedures▪ Endorsing, supporting, and defending organizational objectives

Main Differences Between Task and Contextual Performanceo Task Performance

▪ Varies across jobs▪ Likely to be role prescribed▪ Influenced by

o Abilitieso Skills

o Contextual Performance

▪ Fairly similar across jobs▪ Not likely to be role prescribed▪ Influenced by Personality

Reasons to include Task and Contextual Performance Dimensions in a PM Systemo Global competition

o Teamwork

o Customer service

o Supervisor views

4. Approaches to Measuring PerformanceJob Performance in Context

o Trait Approach

▪ Emphasizes individual traits of employeeso Behavior Approach

▪ Emphasizes how employees do the jobo Results Approach

▪ Emphasizes what employees produceTrait Approach to Assessing Performance

o Emphasis on individual

▪ Evaluate stable traits▪ Cognitive abilities▪ Personality▪ Based on relationship between traits and performance

o Appropriate if

▪ Structural changes planned for organizationo Disadvantages

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▪ Improvement not under individuals control▪ Trait may not lead to desired behaviors or results

Behavior Approach to Assessing Performanceo Appropriate if

▪ Employees take a long time to achieve desired outcomes▪ Link between behaviors and results is not obvious▪ Outcomes occur in the distant future▪ Poor results are due to causes beyond the performers control

o Not appropriate if above conditions are not present

Results Approach to Assessing Performanceo Advantages

▪ Less time involved in defining/measuring results▪ Lower cost to track results▪ Data appear to be objective

o Most appropriate when

▪ Workers are skilled in the needed behaviors▪ Behaviors and results are obviously related▪ Results show consistent improvement over time▪ There are many ways to do the job right

Defining Performance and Choosing a Measurement Approach: Summaryo Defining Performance

o Determinants of Performance

o Performance Dimensions

o Approaches to Measuring Performance

Example/Case Study:Case Study: Lauras Sweet Stuff BakeryLaura Schulz has operated Lauras Sweet Stuff Bakery for the past 5 years. By 5:00 a.m. every weekdaymorning, customers are dropping in both to enjoy the cozy smells and to purchase fresh warm donuts andother goodies to enjoy with their coffee before going to work. After 5 years of this schedule where she wasbaking by 3:00 a.m., Laura is very tired. Laura has decided to hire an apprentice baker and a cashier to provide early morning counter help. Sheknows that she must stop treating her bakery as an extension of herself and begin operating a business. She has a friend with an MBA who told her to establish a performance measurement system so that she cantell whether her two new employees are good employees or not. It all seems so complicated. Laura has contacted the local Business School Co-op Program and asked foradvice. Your professor assigned you to answer Lauras questions for 20% of your grade. When you meetwith Laura, she tells you that she will need you to explain with examples related to her bakery because Imnot good at theory. She presents you with the following questions (to begin with): Questions:1. What is performance and how does this term relate to my employees?2. Why is all of this so complicated?3. Explain what kinds of performance I should be measuring and why. Answers:1. Performance is what your employees do on the job. It is their behaviors. It is not the results of theirbehaviors. So, performance would be what your baker does when she makes donuts and what your cashierdoes when she talks to customers and gives them their change. 2. It does seem complicated, because you will need to evaluate (or judge) their behaviors as to whetherthey are good, bad, or indifferent (positive, negative or neutral). So, if your cashier doesnt wash his handsbefore handling food, that would be bad/negative because the Health Department could fine you and

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customers might look for a shop that has cleaner habits. This brings me to the multidimensional aspect of behaviors. Both of your staff members will have lots ofdifferent kinds of behaviors, some of which will be positive and others of which will be negative. Forexample, when you are evaluating how your baker performs (or behaves), youll be looking at how reliableshe is, how efficient she is, whether she follows your recipes properly, how careful she is about keepingtrack of supplies, how well she gets along with you and the cashier, cleans up after herself, etc. Each ofthese behaviors will have an impact on your business, along with lots of other behaviors.Since you are hoping to get some rest by hiring these two employees, you wont be able to watch all of theirbehaviors. In some cases, you will have to deduce their behaviors from the results of their actions.In addition, it will be important to look at two different facets or characteristics of performance: task andcontext. Tasks vary across jobs. The baker bakes and your cashier deals with customers. Both may pick upmuffins and other goodies and put them on trays or in bags. Contextual performance is defined as thosebehaviors that contribute to the organizations effectiveness by providing a good environment in which taskperformance can occur. Contextual performance includes behaviors such as persisting with enthusiasm andexerting extra effort as necessary to complete ones own task activities successfully (e.g., being punctualand rarely absent, expending extra effort on the job); volunteering to carry out task activities that are notformally part of the job (e.g., suggesting organizational improvements, making constructive suggestions),etc. Abilities and skills are used in Task Performance; personality has an impact on Contextual Performance. 3. To begin with, you need to think about each of your employees. They are performing in your bakery,doing certain behaviors that get various results. Ideally, you want some positive consistency in the results,such as good relationships with your customers, profits, having good employees stay so you dont have tospend time training new ones, etc. To get good results, you will need consistent, good performanceso youneed to decide what behaviors you want to see. Some of these behaviors will be on task, related to gettingyour products into your customers tummies. Some of the behaviors will be directed at putting smiles onyour employees and customers faces; e.g., helpful and friendly behaviors toward the customers and eachother so that customers enjoy being in your shop. So, youll need to define both task and contextualbehaviors that you want to see from your employees.Now, there are three ways of measuring performance. I dont recommend that you use the traits method,because it measures personality and abilities. Since people cant do much to change their personality or theirabilities, this method tends not to be seen as fair and can lead to poor morale with your employees. I thinka combination of the two remaining methods might work for you. One of these methods measures behaviorand I believe this will work for aspects of the job like friendliness toward customers and helping out ontasks that arent your job when theres a rush, etc. (contextual behaviors). Mostly, you should measureresults, since it will be easy to track attendance, production and sales, and whether you keep your repeatcustomers. If your employees know their jobs, are skilled in the procedures you set, and are motivated togo the extra mile for the bakery, you will be able to sleep in some mornings with a big smile on your face,knowing that your performance measurement system will alert you to any potential problems in plenty oftime.

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Topic 5: Measuring Performance


Adopt a behavior approach to measuring performance including the identification and assessment ofcompetencies.

Adopt a results approach to measuring performance including the development of accountabilities,objectives, and standards.

Determine accountabilities and their relative importance.Develop absolute performance measurement systems such as essays, behavior checklists, critical

incidents, and graphic rating scales, and understand their advantages and disadvantages.Develop comparative performance measurement systems such as simple rank order, alternation rank

order, paired comparisons, and forced distribution--being aware of the relative advantages anddisadvantages of each.

Develop competencies that are defined clearly, provide a description of specific behavioral indicatorsthat can be observed when someone demonstrates a competency effectively, provide a description ofspecific behaviors that are likely to occur when someone doesnt demonstrate a competency effectively(what a competency is not), and include suggestions for developing them further.

Identify objectives that are specific and clear, challenging, agreed upon, significant, prioritized, boundby time, achievable, fully communicated, flexible, and limited in number.

Identify performance standards that are related to the position, concrete, specific, measurable, practicalto measure, meaningful, realistic and achievable, and reviewed regularly.

Definition/Overview:Performance measurement: Performance measurement is the process whereby an organization establishesthe parameters within which programs, investments, and acquisitions are reaching the desired results. Thisprocess of measuring performance often requires the use of statistical evidence to determine progresstoward specific defined organizational objectives. Key Points:

1. Measuring ResultsKey Questions

o Where should each individual focus efforts? (Accountabilities)

o What are the expected objectives? (Objectives)

o How do we know how well the results were achieved? (Performance Standards)

Key AccountabilitiesBroad areas of a job for which employee is responsible for producing resultsObjectivesStatements of important and measurable outcomesPerformance StandardsYardstick used to evaluate how well employees have achieved objectivesDetermining Accountabilities

o Collect information about job (Job Description)

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o Determine importance of task or cluster of tasks

▪ Percent of employees time spent performing task▪ Impact on units mission if performed inadequately▪ Consequences of error

Determining Objectiveso Purpose: to identify

▪ Outcomeso Limited numbero Highly important

▪ When achievedo Dramatic impact on overall organization success

o Characteristics of Good Objectives

▪ Specific and clear▪ Challenging▪ Agreed upon▪ Significant▪ Prioritized▪ Bound by time▪ Achievable▪ Fully communicated▪ Flexible▪ Limited in number

Determining Performance Standardso Standards refer to aspects of performance objectives, such as:

▪ Qualityo How well the objective is achieved

▪ Quantityo How much, how many, how often, at what cost?

▪ Timeo Due dates, schedule, cycle times, how quickly

Standards must include:o A verb

o The desired result

o A due date

o Some type of indicator

▪ Quality and/or▪ Quantity

Characteristics of Good Performance Standardso Related to position

o Concrete, specific, measurable

o Practical to measure

o Meaningful

o Realistic and achievable

o Reviewed regularly

2. Measuring BehaviorsOverview

o Identify Competencies

o Identify Indicators

o Choose Measurement System

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Identify CompetenciesMeasurable clusters of KSAs (critical in determining how results will be achieved)

o Knowledge

o Skills

o Abilities

Types of Competencieso Differentiating

▪ Distinguish between superior and average performanceo Threshold

▪ Needed to perform to minimum standardIdentify Indicators

o Indicators are observable behaviors

o Indicators are used to measure the extent to which competencies are present or not

Describing Competencies: Necessary componentso Definition

o Description of specific behaviors

▪ When competency demonstrated▪ When competency not demonstrated

o Suggestions for developing the competency

Choose Measurement Systemo Comparative system compares employees with each other

o Absolute system compares employees with prespecified performance standard

o Comparative systems

▪ Simple rank order▪ Alternation rank order▪ Paired comparisons▪ Forced distribution

Advantages of Comparative Systemso Easy to explain

o Straightforward

o Better control for biases and errors found in absolute systems

▪ Leniency▪ Severity▪ Central tendency

Disadvantages of Comparative Systemso Rankings may not be specific enough for

▪ Useful feedback▪ Protection from legal challenge

o No information on relative distance between employees

▪ Specific issues with forced distribution methodo Absolute systems

▪ Essays▪ Behavior checklists▪ Critical incidents▪ Graphic rating scales

Essayso Advantage:

▪ Potential to provide detailed feedbacko Disadvantages:

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▪ Unstructured and may lack detail▪ Depends on supervisor writing skill▪ Lack of quantitative information; difficult to use in personnel decisions

Behavior checklistso Advantage:

▪ Easy to use and understando Disadvantages:

▪ Scale points used are often arbitrary▪ Difficult to get detailed and useful feedback

Critical incidentso Two kinds of measurement

o Report of specific employee behavior

▪ Allows focus on specific behavior▪ Very time consuming

o Examples of behavior illustrative of core competencies manager circles best description

▪ Easier to use▪ Describes behavior desired

Graphic rating scaleso Clear meaning for each response category

▪ Consistent interpretation by outside readerso Supervisor and employee should have same understanding of rating

Graphic rating scales: BARS improvementBehaviorally Anchored Rating Scales (BARS)

o Uses critical incidents as anchors

o Involves multiple groups of employees in development

▪ Identify important job elements▪ Describe critical incidents at various levels of performance▪ Check for inter-rater reliability

Example/Case Study:

Case Study: The College of Business at VIPUniversity

You are a newly hired professor with a Ph.D. in Human Resources Management. You have special interestsin both training and in performance measurement. You decide to develop a comparative performancemeasurement system to measure student performance in your HR Management classes. Questions:1. Critically assess the advantages and disadvantages of implementing such a system.2. Explain the kinds of systems that are available for you to consider. Choose one approach and provideboth a description of how you would implement it in a class of 30 students and an explanation of why thiswas the best choice of the variety of comparative systems.At the end of the school year, a student initiative calls for a revision of the grading system at VIPUniversity. Every professor will be required to develop an absolute performance measurement system. Theprocess is complicated by the fact that many students are distance learners who interact on the Internetrather than in person. 3. Describe how you will implement an absolute performance measurement system in your classes next year,recognizing that you can devote no more than 10 hours per week to preparing for each class, actuallyparticipating in the class, and developing and grading any homework and exams. What will you consider inchoosing a system and how will you go about implementing it? Answers:

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1. Comparative performance measurement systems are easy to explain, straightforward, and generallycontrol better for the leniency, severity, and central tendency biases and errors that can be found inabsolute performance measurement systems. However, rankings tend not to be specific enough to provideuseful feedback to students and they may subject the university or the professor to legal challenges. Thereis no information in such scales about the relative distance between student performances and there arespecific concerns about the usefulness (and appropriateness) of using the forced distribution method in auniversity setting. In addition, it may be difficult to assign letter grades to the various levels. 2. Comparative performance measurement systems compare employees with each other.

Simple rank order employees are ranked from best performer to worst performer.Alternation rank order in an alternation rank order procedure, the supervisor initially lists all students.

Then, the supervisor selects the best performer (#1), then the worst performer (#n), then the second best(#2), then the second worst (#n 1), and so forth, alternating from the top to the bottom of the list untilall students have been ranked.

Paired comparisons explicit comparisons are made between all pairs of students to be evaluated. Thenumber of pairs of students to be compared is computed by the following equation:

where n is the number of students to be evaluated.Forced distribution students are apportioned according to an approximately normal distribution. This

method assumes that performance scores are normally distributed, with some students performing veryhighly, some poorly, and the majority in between. However, this assumption may not hold true for allunits within an organization. Some units may have high performing culture and systems in place suchthat the majority of members perform at a very high level. Conversely, other units may have a majority ofmembers who perform at a below-expectations level. Another disadvantage of implementing a forceddistribution system is that this may discourage students from engaging in contextual performancebehaviors.

At the end of the school year, a student initiative calls for a revision of the grading system at VIPUniversity. Every professor will be required to develop an absolute performance measurement system. Theprocess is complicated by the fact that many students are distance learners who interact on the Internetrather than in person. 3. Absolute performance measurement systems compare students with prespecified performance standards. I considered the following approaches, including their advantages and disadvantages:

Essays: Here I could write an essay describing each students strengths and weaknesses, makingsuggestions for improvement. An advantage is that essays have the potential to provide detailedfeedback; disadvantages to essays include the fact that they are unstructured and may lack detail, theirusefulness depends on my writing skill, and they are difficult to use in grading decisions, partially due tothe lack of quantitative information provided. They are also quite time consuming, considering that eachinstructor may have thirty or more students per class.

Behavior checklists: I could use a form listing behavioral statements that are indicators of the variouscompetencies to be measured. An advantage is that such a checklist is easy to understand;disadvantages are that the scale points used are often arbitrary and it is difficult to get detailed anduseful feedback from the numerical rating.

Critical incidents: This approach involves gathering reports of situations in which students performedbehaviors that were especially effective or ineffective in accomplishing their learning objectives. Anadvantage is that this allows me to focus on actual student behavior rather than on vaguely definedtraits; the disadvantage is that collecting such information is very time consuming.

Graphic rating scales are considered the most popular tools to measure performance. It is important toensure that the response categories are clearly defined, that interpretation of the rating by an outsideparty would be clear, and that the student and I would both understand the rating.

Behaviorally Anchored Rating Scales (BARS) improve on graphic rating scales by using critical incidentsas anchors. Their development is dependent on active student involvement at several points, as well asfinal professor and student checking of items for dependability of the ratings.

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Gathering Performance Information

Implementing A Performance Management System


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Topic 6: Gathering Performance Information


Understand the need to include each of several basic components in the appraisal form.Design effective appraisal forms.Compute an overall employee performance score based on information found on the appraisal form.Select an appropriate time period to document performance as part of a performance review.Determine the number of formal meetings needed between the subordinate and supervisor to discuss

performance issues.Understand advantages and disadvantages of using supervisors, peers, subordinates, self, and

customers as sources of performance information.Know how to deal with potential disagreements involved with different sources evaluating the

performance of the same employee.Understand the psychological mechanisms leading to the inflation and deflation of performance ratings.Understand that the implementation of training programs can address intentional and unintentional

rating distortion. Definition/Overview:Information retrieval (IR): Information retrieval (IR) is the science of searching for documents, forinformation within documents and for metadata about documents, as well as that of searching relationaldatabases and the World W ide Web. Key Points:1. Appraisal Forms

Major Components of Appraisal Forms (1)o Basic Employee Information

o Accountabilities, Objectives, and Standards

o Competencies and Indicators

o Major Achievements and Contributions

o Stakeholder Input

o Employee Comments

o Signatures

Major Components of Appraisal Forms (2)o (which could be included in a separate form)

o Developmental Achievements

o Developmental

▪ Needs▪ Plans▪ Goals

2. Characteristics of Appraisal Forms

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Desirable Features of All Appraisal Formso Simplicity

o Relevancy

o Descriptiveness

o Adaptability

o Comprehensiveness

o Definitional Clarity

o Communication

o Time Orientation

3. Determining Overall Rating

Judgmental strategyo Consider every aspect of performance

o Arrive at defensible summary

Mechanical strategyo Consider scores assigned to each section

o Add weighted scores to obtain overall score

4. Appraisal Period and Number of Meetings

Appraisal periodo Meetings

▪ Annualo May not provide sufficient opportunity for supervisor/employee discussion

▪ Semi-annualReview to be completed

o Anniversary date

▪ Supervisor doesnt have to fill out forms at the same time▪ Cant tie rewards to fiscal year

o Fiscal year

▪ Rewards tied to fiscal year▪ Goals tied to corporate goals▪ May be burden to supervisor, depending on implementation

Six Types of Formal Meetings (can be combined)o System Inauguration

o Self-Appraisal

o Classical Performance Review

o Merit/Salary Review

o Development Plan

o Objective Setting

5. Who Should Provide Performance Information?

Employees should be involved in selectingo Which sources evaluate

o Which performance dimensions

When employees are actively involvedo Higher acceptance of results

o Perception that the system is fair

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First-hand knowledge of employee performanceo Supervisors

o Peers

o Subordinates

o Self

o Customers

Supervisorso Advantages

▪ Best position to evaluate performance vs. strategic goals▪ Make decisions about rewards

o Disadvantages

▪ Supervisor may not be able to directly observe performance▪ Evaluations may be biased

Peerso Advantages

▪ Assess teamworko Disadvantages

▪ Possible friendship bias▪ May be less discriminating

Subordinateso Advantages

▪ Accurate when used for developmental purposes▪ Good position to assess some competencies

o Disadvantages

▪ Inflated when used for administrative purposes▪ May fear retaliation (confidentiality is key)

Selfo Advantages

▪ Increased acceptance of decisions▪ Decreased defensiveness during appraisal interview▪ Good position to track activities during review period

o Disadvantages

▪ May be more lenient and biasedCustomers (external and internal)

o Advantages

▪ Employees become more focused on meeting customer expectationso Disadvantages

▪ Time▪ Money

Disagreement Across Sourceso Expect disagreement

o Ensure employee receives feedback by source

o Assign differential weights to scores by source, depending on importance

6. A Model of Rater Motivation (see book for model)

Types of Rating Errorso Intentional errors

▪ Rating inflation▪ Rating deflation

o Unintentional errors

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▪ Due to complexity of taskMotivations for Rating Inflation

o Maximize merit raise/rewards

o Encourage employees

o Avoid creating written record

o Avoid confrontation with employees

o Promote undesired employees out of unit

o Make manager look good to his/her supervisor

Motivations for Rating Deflationo Shock employees

o Teach a rebellious employee a lesson

o Send a message to employee that he/she should consider leaving

o Build a strongly documented, written record of poor performance

7. Preventing Rating Distortion through Rater Training ProgramsRater Training Programs should cover:

o Information how the system works

▪ Reasons for implementing the performance management system▪ Information on the appraisal form and system mechanics

o Motivation Whats in it for me?

▪ Benefits of providing accurate ratings▪ Tools for providing accurate ratings

o Identifying, observing, recording, and evaluating performance

▪ How to identify and rank job activities▪ How to observe, record, measure performance▪ How to minimize rating errors

o How to interact with employees when they receive performance information

▪ How to conduct an appraisal interview▪ How to train, counsel, and coach

Example/Case Study:Case Study: Our Civil ServiceIn the state civil service, employees are promoted on a civil-service, merit based plan. At the StateEmployment Service, a number of employment counselors were hired during a special recruiting effort eightyears ago in 1998. They formed a cohort, going through training together and getting graduate hours invocational counseling together. About a year ago, Jane Midland, the first member of the cohort to get promoted, tested into a supervisoryposition at one of the Job Service Centers. Two of the eleven employees who report to her are members ofthe 1998 cohort. Barb Rick and George Malloy deeply respect her abilities and have a strong affection forher. In fact, Barb Rick has spent time at Janes home watching their children play together and helping withthe remodel of Janes house. George, Jane, and Barb get together for lunch regularly. Recently, they havebeen considering attending evening classes together to get a Masters degree in Human ResourceManagement.Yesterday, Jane received a memo from her management that it is time to complete the annual appraisalforms for her staff. Questions:1. Provide a detailed discussion of the intentional and unintentional rating distortion factors that may comeinto play in this situation.2. Evaluate the kinds of training programs that could minimize the factors you have described. What do yourecommend and why?

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Answers:1. It is possible that Jane may intentionally inflate the ratings she gives to Barb and George because shedoesnt want to confront them about any areas where performance improvement is necessary. She mayworry that giving an accurate rating could jeopardize her relationship with one or both of them. On theother hand, she may unintentionally distort the ratings that she gives to various employees, because she isresponsible for supervision of eleven different people. Observing information about performance, storingthis information in memory, and then recalling it when its time to fill out the appraisal form is a complexcognitive task. It is very difficult to remember all of the behavior and results of ones own performance, letalone such information about eleven different people. 2. Different kinds of training could assist Jane in providing more objective appraisals, although none of theprograms can guarantee perfect results. Appraisals are inherently subjective. The training program shouldprovide basic information on the appraisal form and how the system works. In addition, the benefits ofaccurate appraisals (whats in it for me?) and tools for providing such ratings should be provided. Jane willneed training in:

how to identify and rank job activitieshow to observe, record, and measure performancehow to minimize rating errors

Finally, she will need assistance in how to interact with employees when they receive performanceinformation, including how to conduct an appraisal interview and how to train, counsel, and coach. Increased experience added to the training should help her to provide the supervision and performanceappraisal all of her employees need, including her friends Barb and George.

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Topic 7: Implementing A Performance ManagementSystem


Understand that there are crucial steps that must be taken before the performance management systemis launched, including implementing a communication plan, establishing an appeals process, runningtraining programs for raters, and pilot testing the system to fix any glitches.

Understand the importance of conducting a pilot test before the performance system is implementedorganization-wide.

Conduct a pilot test of the performance management system using a selected group of employees andmanagers from the organization.

Once the performance management system is in place, collect various measurements that will provideinformation regarding the systems effectiveness and the extent to which it is working the way it shouldand whether it is producing the expected results.

Design a communication plan that answers the key critical questions, such as: what is performancemanagement, where does performance management fit in the organizations strategy, how does everyonebenefit from the system, how does the performance management system work, what are employees andsupervisors key roles and responsibilities in implementing the system, and how is performancemanagement related to other key organizational initiatives?

Design a communication plan that will include features aimed at reducing the effect of cognitive biaseson how the performance management system is perceived and help minimize the impact of intentionalrating errors.

Be aware of cognitive biases that affect how people take in, use, and recall information, includingselective exposure, selective perception, and selective retention.

Understand that setting up an appeals process helps gain support for the performance managementsystem.

Design an appeals process including two levels: Level 1, which involves the HR Department in the roleof mediator, and Level 2, which involves a panel of managers and peers and, possibly, a senior levelmanager in the role of arbitrator and final decision maker.

Describe unintentional and intentional types of errors raters are likely to make in evaluatingperformance.

Implement training programs such as Rater Error, Frame of Reference, and Behavior Observation thatwill minimize the impact of unintentional rating errors.

Implement a Self-leadership training program that will allow supervisors to increase confidence in theirskills to manage the performance management process and, consequently, allow them to minimize ratingerrors.

Definition/Overview:Performance Management System: A management technique intended to holistically consider theperformance of (usually a group of) employees or machines to work towards optimum performance of aparticular task or (more frequently) a group of tasks. Key Points:1. Preparation

Need to gain system buy-in through:

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o Communication plan regarding Performance Management system

▪ Including appeals processo Training programs for raters

o Pilot testing system

Ongoing monitoring and evaluation to show benefits

2. Communication PlanCommunication Plan answers:

o What is Performance Management (PM)?

o How does Performance Management fit in our strategy?

o Whats in it for me tangible benefits for all parties?

o How does it work various steps in process?

o What are our roles and responsibilities?

o How is Performance Management related to other initiatives?

Cognitive biases that affect communications effectivenesso Selective exposure

o Selective perception

o Selective retention

To minimize effects of cognitive biases:o Consider employees

▪ Involve employees in system design▪ Show how employee needs are met

o Emphasize the positive

▪ Use credible communicators▪ Strike first create positive attitude▪ Provide facts and conclusions

o Repeat, document, be consistent

▪ Put it in writing▪ Use multiple channels of communication▪ Say it, then say it again

3. Appeals ProcessPromote employee buy-in to PM system

o Amicable/non-retaliatory

o Resolution of disagreements

Employees can question two types of issues:o Judgmental

▪ (validity of evaluation)o Administrative

▪ (whether policies and procedures were followed)Recommended Appeals Process

o Level 1

▪ HR reviews facts, policies, procedures▪ HR reports to supervisor/employee▪ HR attempts to negotiate settlement

o Level 2

▪ Arbitrator (panel of peers and managers) and/or▪ High-level manager final decision

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4. Rater Training ProgramsOverview

o Content areas to include

▪ Information▪ Identifying, observing, recording, evaluating▪ How to interact with employees

o Choices of training programs to implement

▪ RET (Rater Error Training)▪ FOR (Frame of Reference)▪ BO (Behavioral Observation)▪ SL (Self-Leadership)

Content Areas to be Included in Rater Training Programso Information how the system works

▪ Reasons for implementing the performance management system▪ Information

o the appraisal formo system mechanics

o Identifying, observing, recording, and evaluating performance

▪ How to identify and rank job activities▪ How to observe, record, measure performance▪ How to minimize rating errors

o How to interact with employees when they receive performance information

▪ How to conduct an appraisal interview▪ How to train, counsel, and coach

Choices of Training Programs to Implemento Rater Error Training (RET)

o Frame of Reference Training (FOR)

o Behavioral Observation Training (BO)

o Self-leadership Training (SL)

Rater Error Training (RET)o Goals of Rater Error Training (RET)

▪ Make raters aware of types of rating errors they are likely to make▪ Help raters minimize errors▪ Increase rating accuracy

Intentional rating errorso Leniency (inflation)

o Severity (deflation)

o Central tendency

Unintentional rating errorso Similar to me

o Halo

o Primacy

o First impression

o Contrast

o Stereotype

o Negativity

o Recency

o Spillover

Possible Solutions for Types of Rating Errors

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o Intentional

▪ Focus on motivation▪ Demonstrate benefits of providing accurate ratings

o Unintentional

▪ Alert raters to different errors and their causesFrame of Reference Training (FOR)

o Goal of Frame of Reference Training (FOR)*

▪ Raters develop common frame of referenceo Observing performance

▪ Evaluating performanceo Expected Results of Frame of Reference (FOR) Training

▪ Raters provide consistent, more accurate ratings▪ Raters help employees design effective development plans

Behavioral Observation Training (BO)o Goals of Behavioral Observation Training (BO)

▪ Minimize unintentional rating errors▪ Improve rater skills by focusing on how raters:

o Observe performanceo Store information about performanceo Recall information about performanceo Use information about performance

Self-leadership Training (SL)o Goals of Self-leadership Training (SL)

▪ Improve rater confidence in ability to manage performance▪ Enhance mental processes▪ Increase self-efficacy

5. Pilot Testing

Pilot Testing before system is implementedo Provides ability to

▪ Discover potential problems▪ Fix problems

Pilot Testing benefitso Gain information from potential participants

o Learn about potential difficulties/obstacles

o Collect recommendations on how to improve system

o Understand personal reactions

o Get early buy-in from some participants

o Get higher rate of acceptance

Implementing a Pilot Testo Roll out test version with sample group

▪ Staff and jobs generalized to organizationo Fully implement planned system

▪ All participants keep records of issues encountered▪ Do not record appraisal scores▪ Collect input from all participants

6. Ongoing Monitoring and Evaluation

When system is implemented, decide:o How to evaluate system effectiveness

o How to measure implementation

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o How to measure results

Evaluation data to collect:o Reactions to the system

o Assessments of requirements

▪ Operational▪ Technical

o Effectiveness of performance ratings

Example/Case Study:

Case Study: St. Jessicas Urban MedicalCenter

Based on your performance in helping the Board of Directors at St. Jessicas Urban Medical Center toestablish a performance measurement approach, the Board has asked you to stay on as a consultant to helpthem implement their new performance management program. You understand that this is not the first timethat St. Jessicas Urban Medical Center has attempted to implement a performance management program. From your conversations with various managers and employees, you have heard that many people expectthis program to be a dismal failure, just as past programs have been. The scuttlebutt is that those pastprograms were unfair. You have a sense that employees at various levels had no idea what the goals of theprogram were and you have an uneasy feeling that, unless a number of activities precede implementation ofthe new program, it is destined for failure, too. Question:Write a memo to the Board describing what actions must be taken before the program can be effectivelyimplemented. Discuss the primary goal of each of these interventions and explain how you will know thatthese goals have been met. Answer:(Note to Grader: The following is a sample response any response will suffice as long as it covers all of theLearning Objectives covered in Suggested Points above. This is primarily a test of knowledge.)Thank you for your confidence in hiring me to help you implement the new performance managementprogram. The purpose of this memo is to caution you that immediate implementation of the program wehave designed may lead to the kinds of problems you have experienced in the past with other programs. W ithout some preliminary steps, many employees may feel that this is a repeat of old situations which theyhad determined were not in their best interests. Motivation could be lowered and there will probably be abasic lack of trust and enthusiasm for the program. I would like to recommend taking the following stepsbefore we actually implement our program:Implement a communication plan which answers the following key questions for every employee:

What is performance management?How does performance management fit in our organizational strategy?Whats in it for me? For everyone else?How does the system work?What are my responsibilities? Other peoples responsibilities?How is performance management related to other organizational initiatives?

In addition, the plan should include features that reduce various cognitive biases that will affect how peopleperceive the program. Some ways of doing this would include:

Employee involvementEmployee needsStrike first create a positive attitude toward the new PM system before any negative attitudes and

rumors are createdProvide facts and consequencesPut it in writingUse multiple channels of communication

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Use credible communicatorsSay it, then say it again

Another step that we will need to take will be the development of an appeals process (preferably two-level),so that employees can trust that any concerns or disagreements about the system and its implementationwill be handled fairly and without retaliation.Since raters can make a variety of intentional and unintentional errors when they rate employeeperformance, it will be important to conduct training to both teach them about the performance managementprocess and to alert them to the possibility of such errors, so that they can avoid making them. They willneed to learn

how to use the formshow to identify and rank job activitieshow to observe, record, and measure performancehow to minimize rating errorshow to conduct an appraisal interviewhow to train, counsel, and coach their employees

Finally, it will be very important to pilot-test the program we have developed, to identify any glitches andfix them. There are several advantages to conducting such a pilot program, as well:

Well gain information from potential participantsWell learn about possible difficulties and obstaclesWell collect information from the participants on how to improve the systemWell understand personal reactions to the systemWell get early buy-in from some participantsThis will lead to a higher rate of acceptance when we roll out our new and improved program!




Performance Management And Employee Development

Performance Management Skills


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Topic 8: Performance Management And EmployeeDevelopment


Describe the importance and benefits of including a development plan as part of the performancemanagement system.

Describe the various short-term and long-term objectives of a development plan.Design a high quality development plan.Learn about the key activities that will help the successful implementation of a development plan.Understand the role that the direct supervisor plays in the design and implementation of a development

plan.Implement a 360-degree feedback system with the goal of providing feedback and improving

performance.Implement an on-line 360-degree feedback system.Understand the advantages, as well as risks, of implementing a 360-degree feedback system.Evaluate the quality of a 360-degree feedback system.

Definition/Overview:Employee Development: This activity focuses upon the activities that the organization employing theindividual, or that the individual is part of, may partake in the future, and is almost impossible to evaluate. Key Points:

1. Personal Developmental PlansStakeholders in the Development Process

o Employees

▪ Help plan their own development▪ Improve their own performance

o Managers

▪ Help guide the process of development▪ Support success of process

Personal Developmental Plans o Specify actions necessary to improve performance

o Highlight employees

▪ Strengths▪ Areas in need of development

Personal Developmental Plans Answer:o How can I continuously learn and grow in the next year?

o How can I do better in the future?

o How can I avoid performance problems of the past?

Overview of Personal Developmental Plans Sectiono Developmental Plan Objectives

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o Content of Developmental Plan

o Developmental Activities

Developmental Plan Objectiveso Overall Developmental Plan Objectives

▪ Encourage:o Continuous learningo Performance improvemento Personal growth

o Specific Developmental Plan Objectives

▪ Improve performance in current job▪ Sustain performance in current job▪ Prepare employees for advancement▪ Enrich employees work experience

Content of Developmental Plano Development objectives

▪ New skills or knowledge▪ Timeline

o How the new skills or knowledge will be acquired

▪ Resources▪ Strategies

o Based on needs of organization and employee

o Chosen by employee and direct supervisor

o Taking into account:

▪ Employees learning preferences▪ Development objective in question▪ Organizations available resources

Developmental Activities on the jobo On-the-job-training

o Mentoring

o Job rotation

o Temporary assignments

Developmental Activities in addition to on the jobo Courses

o Self-guided reading

o Getting a degree

o Attending a conference

o Membership or leadership role in professional or trade organization

2. Direct Supervisors RoleIn Developmental Plan Meeting

o Explain what is necessary for desired performance

▪ Steps to take▪ Probability of success

o Refer employee to appropriate developmental activities

▪ Mentors▪ Reading materials▪ Courses, etc.

o Review and make suggestions re: development objectives

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▪ Assure that goals are:o achievableo specifico doable

Ongoingo Check on employees progress

o Provide motivational reinforcement

3. 360-degree Feedback SystemsDefinition:

o Tools to help employees improve performance by using:

▪ Performance information▪ Gathered from many sources

o Superiorso Peerso Customerso Subordinateso The employee

o Anonymous feedback

o Most useful when used

o For developmento NOT for administrative purposes

o Internet used for collecting data

Necessary organizational norms include:o Cooperation

o Openness and trust

o Input and participation valued

o Fairness

Overview of Discussion re: 360-degree Feedback Systemso Advantages of 360-degree Feedback Systems

o Risks of 360-degree Feedback Systems

o Characteristics of a Good 360-degree Feedback System

Advantages of 360-degree Feedback Systemso Decreased possibility of biases

o Increased awareness of expectations

o Increased commitment to improve

o Improved self-perception of performance

o Improved performance

o Reduction of undiscussables

o Increased employee control of their own careers

Risks of 360-degree Feedback Systemso Unconstructive negative feedback hurts.

o Are individuals comfortable with the system?

▪ User acceptance is crucial.o If few raters, anonymity is compromisedo Raters may become overloadedo Stock values may drop

Characteristics of a Good 360-degree Feedback System

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o Anonymity

o Observation of employee performance

o Avoidance of survey fatigue

o Raters are trained

o Used for developmental purposes only

o Emphasis on behaviors

o Raters go beyond ratings

o Feedback interpretation

o Follow-up

Example/Case Study:

Case Study: Customer Service Supervisor forHoffman Airlines

Harry Patterson is the customer service supervisor for Hoffman Airlines at the Kiowa Airport in Colorado. Hesupervises ten employees who are responsible for helping customers with lost baggage, dealing withdelayed or missed flights, finding hotel rooms for stranded passengers, etc. Hoffman Airlines has beenconsidering implementing a 360-degree feedback program for the employees and has hired you to help themdevelop such a program. Management has decided to test the concept by using it as a developmental toolfor Harry Patterson. Questions:1. What might be the benefits of implementing 360-degree feedback as a developmental tool for this

supervisor?2. What might be the dangers of implementing 360-degree feedback as a developmental tool for this

supervisor?3. Using the information at http://online.onetcenter.org/link/summary/43-1011.01, complete the followinggrid (Note: table is designed to expand to fit contents):

What performance dimensions would you define?Who should be the sources for the feedback?What dimensions would be measured by each source?

a. PerformanceDimensions

b.Source:

b.Source:

b. Source:

b.Source:

b.Source:

Answers:

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1. Harry might have a better understanding of what others expect of his performance. If he gets feedbackfrom a variety of sources, he may be more likely to trust its accuracy (rather than assuming some kind ofbias on the part of a supervisor, for example) and he might make more of a commitment to improve hisperformance. In addition, when Harry understands how his performance affects others (for example, causingsomeone else more work), he will be more likely to change it for the better. When he understands how hisown perception of his performance relates to others perceptions, he will gradually improve his understandingof his own performance.It will be easier for others to give both positive and negative feedback when it is anonymous and comesfrom a variety of sources. Given the above information, Harry will have more information with which to takecontrol of his own career, understanding both his strengths and weaknesses. His performance shouldimprove. 2. Harry is unlikely to make positive changes unless he believes that he will be rated honestly and treatedfairly. Depending on the number of raters, Harry may be able to figure out who has provided what ratings. If theraters are concerned that they may be identified (especially Harrys direct subordinates), it is possible thatthe feedback will be distorted to protect the raters. On the other hand, if subordinates and others feelcomfortable that they wont be identified and there is inadequate training in giving constructive feedback orsome sort of malicious intent non-constructive and negative feedback can be very hurtful. Negative feedbackcan be hurtful, especially if it is not offered in a constructive way. If, after the concept testing has been completed, management decides to implement a 360-degree feedbacksystem for everyone, some raters may become overloaded with forms to fill out because they have toprovide feedback for a large number of people. 3. Using the information at http://online.onetcenter.org/link/summary/43-1011.01, complete the followinggrid:

What performance dimensions would you define?Who should be the sources for the feedback?What dimensions would be measured by each source? (marked in grid with xxx)

a. PerformanceD i m e n s i o n s (Note: these dimensions weretaken from the WorkActivities section of thej o b description atONET; anotheracceptable source forperformancedimensions would beunder Tasks)

b.Source: Self

b.Source: Peers

b. Source: Employees

b. Source: Customers

b.Source: Manager

StaffingOrganizational UnitsRecruiting,interviewing, selecting,hiring, and promotingemployees in anorganization

xxx xxx xxx xxx

Guiding, Directing,a n d MotivatingSubordinates Providingguidance and directiont o subordinates,including setting

xxx xxx xxx xxx

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performance standardsand monitoringperformanceCommunicating withSupervisors, Peers, orSubordinates Providinginformation tosupervisors, co-workers, andsubordinates bytelephone, in writtenf o r m , e-mail, or inperson

xxx xxx xxx xxx

Establishing andMaintainingInterpersonalRelationshipsDeveloping constructiveand cooperativeworking relationshipswith others, andmaintaining them overtime

xxx xxx xxx xxx

Scheduling Work andActivities Schedulingevents, programs, andactivities, as well asthe work of others

xxx xxx xxx xxx

Documenting/Record-i n g InformationEntering, transcribing,recording, storing, ormaintaining informationin written orelectronic/magneticform

xxx xxx xxx xxx xxx

Resolving Conflictsa n d Negotiating withOthers Handlingcomplaints, settlingdisputes, and resolvinggrievances andconflicts, or otherwisenegotiating with others

xxx xxx xxx xxx xxx

Getting InformationObserving, receiving,and otherwiseobtaining informationfrom all relevantsources

xxx xxx xxx xxx xxx

Coordinating theWork and Activities ofOthers Gettingmembers of a group towork together toaccomplish tasks

xxx xxx xxx xxx

Coaching andDeveloping Others

xxx xxx xxx xxx

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Identifying thedevelopmental needsof others and coaching,mentoring, or otherwisehelping others toimprove theirknowledge or skills

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Topic 9: Performance Management Skills


Understand that managers need several key skills to manage the performance of their employeeseffectively including skills regarding coaching, giving feedback, and conducting performance reviewmeetings.

Implement several recommendations that will lead to documenting performance in a useful andconstructive manner.

Understand the purposes served by feedback on performance regarding the achievement of developmentgoals and performance in general.

Implement several recommendations that will lead to creating useful and constructive feedbacksystems.

Understand why people do not feel comfortable giving negative feedback and recognize what happenswhen managers refuse to give negative feedback.

Understand the various purposes served by performance review meetings and the various types ofmeetings that can be conducted.

Understand the signs of employee defensiveness, implement suggestions to minimize employeedefensiveness before a performance review meeting takes place, and deal with defensiveness during theperformance review meeting.

Define coaching and describe its major functions including giving advice, providing guidance and support,and enhancing employee confidence and competence.

Identify behaviors that managers need to display to perform the various coaching functions.Understand that a managers personality and behavioral preferences determine his or her coaching style.Understand your own coaching style and the need to adapt ones coaching style to the situation and your

subordinates preferences.Describe the coaching process and its components including setting development goals, identifying

development resources and strategies, implementing strategies, observing and documenting developmentbehavior, and giving feedback.

Understand the time, situational, and activity constraints involved in observing and documenting anemployees progress toward the achievement of development goals and good performance in general.

Implement a communication plan and training programs that will minimize the impact of constraintspresent when observing and documenting performance.

Describe the benefits of accurate documentation of an employees development activities andperformance.

Definition/Overview:Skill: A skill (also called talent) is the learned capacity to carry out pre-determined results often with theminimum outlay of time, energy, or both. Skills can often be divided into domain-general and domain-specific skills. For example, in the domain of work, some general skills would include time management,teamwork and leadership, self motivation and others, whereas domain-specific skills would be useful only fora certain job. Skill usually requires a certain environmental stimuli and situation to assess the level of skillbeing shown and used. Key Points:

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1. CoachingDefinition of Coaching

o Manager

▪ Interacts with employee▪ Takes active role and interest in performance

o Collaborative ongoing process involving

▪ Directing employee behavior▪ Motivating employee behavior▪ Rewarding employee behavior▪ Also concerned with long-term performance

Major Coaching Functionso Give advice

o Provide guidance

o Provide support

o Give confidence

o Promote greater competence

Key Coaching Behaviorso Establish developmental objectives

o Communicate effectively

o Motivate employees

o Document performance

o Give feedback

o Diagnose performance problems

o Develop employees

The Good Coach Questionnaireo Do you listen to your employees?

o Do you understand their individual needs?

o Do you encourage employees to express their feelings openly?

o Do you give tangible and intangible support for development?

o Do your employees know your expectations about their performance?

o Do you encourage open and honest discussions and problem solving?

o Do you help your employees to create action plans that will solve problems and create changes?

o Do you help your employees to explore potential areas of growth and development?

2. Coaching Styles More Assertive Less Assertive

Task & Fact Oriented DRIVER ANALYZER

People Oriented PERSUADER AMIABLE

Adaptive coaches use all styles according to employee needs

o Sometimes providing direction

o Sometimes persuading

o Sometimes showing empathy

o Sometimes paying close attention to rules and established procedures57 of 76

3. Coaching ProcessSteps covered

o Setting developmental goals

o Identifying resources and strategies needed to implement developmental goals

o Implementing developmental goals

Overview of remaining stepso Observation and Documentation of Developmental Behavior and Outcomes

o Giving Feedback

▪ Praise▪ Negative Feedback

Observation and Documentation of Developmental Behavior and Outcomeso Constraints

▪ Time▪ Situation▪ Activity

Organizational activities to improve documentation of performanceo Good communication plan to get manager buy-in

o Training programs

▪ Rater error training▪ Frame-of-reference training▪ Behavioral observation training▪ Self-leadership training

Reasons to document performanceo Minimize cognitive load

o Create trust

o Plan for the future

o Legal protection

Recommendations for documentationo Be specific

o Use adjectives and adverbs sparingly

o Balance positives with negatives

o Focus on job-related information

o Be comprehensive

o Standardize procedures

o Describe observable behavior

Giving Feedbacko Main purposes

▪ Help build confidence▪ Develop competence▪ Enhance involvement▪ Improve future performance

Potential costs of failing to provide feedbacko Employees are deprived of chance to improve their own performance

o Chronic poor performance

▪ Employees dont recognize performance problems▪ Employees feel justified in continued poor performance

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o Employees have inaccurate perceptions of how their performance is regarded by others

To be effective, feedback should:o Be timely

o Be frequent

o Be specific

o Be verifiable

o Be consistent (over time and across employees)

o Be given privately

o Provide context and consequences

o Describe first, evaluate second

o Cover the continuum of performance

o Identify patterns

o Demonstrate confidence in employee

o Allow for both advice and idea generation

Guidelines for Giving Praiseo Be sincere only give praise when it is deserved

o Give praise about specific behaviors or results

o Tie praise to context of future performance

o Take your time and be comfortable with act of praising

o Emphasize the positive

Giving Negative Feedbacko Managers avoid giving negative feedback due to:

▪ Negative reactions and consequences▪ Negative experiences in the past▪ Playing God▪ Need for irrefutable and conclusive evidence

Negative feedback is most useful when it:o Identifies warning signs and performance problem is still manageable

o Clarifies unwanted behaviors and consequences

o Focuses on behaviors that can be changed

o Comes from a credible source

▪ Using straight talk▪ Calm

o Is supported by data

Feedback Sessions should always answer:o How is your job going?

o What can be done to make it better?

▪ Job▪ Product▪ Services

o How can you better serve your customers?

▪ Internal▪ External

4. Performance Review MeetingsSupervisory roles in managing performance

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o Judge

▪ Evaluate performance▪ Allocate rewards

o Coach

▪ Help employee solve performance problems▪ Identify performance weaknesses▪ Design developmental plans

Performance Review Formal MeetingsPossible defensive behaviors of employees

o Fight response

▪ Blaming others▪ Staring at supervisor▪ Raising voice▪ Other aggressive responses

o Flight response

▪ Looking/turning away▪ Speaking softly▪ Continually changing the subject▪ Quickly agreeing without basis▪ Other passive responses

To prevent/reduce defensive behaviorso Establish and maintain rapport

o Be empathetic

o Observe verbal and nonverbal cues

o Minimize threats

o Encourage participation

Example/Case Study:Case Study: Henrys Commercial Sales and LeasingHenry is the owner of a small real estate agency that handles the sale and leasing of commercial property. He has two real estate agents working in the office, along with himself. He also has two customer servicerepresentatives (CSRs), each of whom has a real estate license, and one receptionist who has worked forthe company for about three months. Henry has recently decided that he needs another customer service representative (CSR). He has noticedthat the receptionist, Tara, is very smart, seems to learn quickly, and is very good in dealing with clients. He has decided to promote Tara to CSR and hire a new receptionist. In order to familiarize Tara with hernew duties, Henry has assigned Martin, the senior CSR in the company, to be her direct supervisor and coachher. Questions:1. In the context of this topic, provide a critical analysis of the decisions that Henry has made.2. Provide a detailed discussion of Martins new role as coach.Three months into Taras training program, she seems constantly upset and has expressed concerns that sheis not able to learn the information and feels she may be in over her head. Henry knows that Tara iscapable of the work required and is confident that she will be a very good CSR, so he talks to her aboutwhat she feels is going wrong. Some of Taras comments include information that Martin is very short withher, and rather than explaining why certain procedures are required and what certain procedures are givencertain circumstances, he simply directs her to do certain things. 3. Critically assess Martins coaching and style. 4. Discuss possible solutions to help Tara become an effective CSR. At a minimum, what should Martin be

doing to help her? Answers:

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1. There is no indication that Henry has consulted either Tara or Martin regarding this plan. In general, itsbest to allow a mentor and subordinate to choose each other rather than to assign them. There is also noindication that Tara wants to proceed in this way, since this promotion may be contrary to her career goals. If Henry wants to proceed in this plan regardless of the above information, then he absolutely must giveMartin the appropriate training in supervision and coaching in order to ensure that Martin has the tools heneeds to be successful in his part of the plan.2. Giving advice, providing guidance, providing support (facilitation, being there when needed but notmonitoring and controlling all of Taras actions), giving Tara confidence, helping Tara gain greatercompetence, establishing development objectives, communicating effectively, motivating Tara, documentingher performance, giving feedback (both positive and negative), diagnosing performance problems, developingTaras competence by providing financial support and resources for Tara as needed. 3. Martin is displaying (at least based on the information given) a driver style of coaching, primarilyproviding direction. Given Taras confidence levels, Martin is not doing most of the required tasks of acoach. In fact, it appears that he only provides guidance. Martins performance as a coach is notsatisfactory.

4. There are numerous possible remedies, including choosing a different coach for Tara (with her involvementthis time), providing training to Martin regarding appropriate coaching behaviors, and/or coaching Martin inhis new role. Martin needs to sit down with Tara and help her set development goals. Martin and Tara should work withHenry to identify development resources and strategies for Tara to meet the goals. As time passes, Martinwill need to observe and document Taras behaviors (positive and negative) as she performs CSR duties. Hewill then need to give her effective feedback so that she can continue doing effective behaviors and makeany necessary changes in less effective behaviors.




Reward Systems And Legal Issues

Managing Team Performance


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Topic 10: Reward Systems And Legal Issues


Distinguish between traditional and contingent pay plans and how each of these reward systems relatesto the performance management system.

Understand the role played by five legal principles in the implementation of performance managementsystems: employment at will, negligence, defamation, misrepresentation, and adverse impact.

Identify when a performance management system is causing illegal discrimination.Know what type of evidence employees need to provide to prove illegal discrimination and what type of

evidence employers need to provide to prove lack of illegal discrimination.Know the impact of key laws prohibiting discrimination based on race, sex, religion, age, disability

status, and sexual orientation on the design and implementation of performance management systems.Design a performance management system that is legally sound.Understand the reasons for the popularity of contingent pay plans.Describe how contingent pay plans can help improve employee motivation and performance.Be aware of reasons why contingent pay plans can fail.Design a contingent pay plan taking into account key variables such as the organizations culture and

strategic business objectives.Understand that pay is only one of many tools that can be used to motivate employees.Use rewards effectively so they produce the intended effects.Know the principles of how to design an organizations pay structure including the conduct of a job

evaluation.Understand the advantages of a broad-banding approach to designing a pay structure.

Definition/Overview:Reward Systems: In neuroscience, the reward system is a collection of brain structures which attempts toregulate and control behavior by inducing pleasurable effects.Negligence: If organization documents describe a system and it is Not implemented as described,employee can challenge evaluation, charging negligenceDefamation: Disclosure of performance information that is untrue and unfavorableMisrepresentation: Disclosure of performance information that is untrue and favorable Key Points:

1. Reward Systems: OverviewTraditional and Contingent Pay (CP) Plans

o Reasons for Introducing CP Plans

o Possible Problems Associated with CP

o Selecting a CP Plan

Putting Pay in ContextPay StructuresTraditional and Contingent Pay (CP) Plans

o Traditional Pay

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▪ Salary and salary increases are based ono Positiono Seniority

o Contingent Pay

▪ Salary and salary increases are based on job performanceo Also called: Pay for Performance

o If not added to base pay, called variable pay

Reasons for Introducing CP Planso Performance management is more effective when rewards are tied to results

o CP Plans force organizations to:

▪ Clearly define effective performance▪ Determine what factors are necessary

o CP plans help to recruit and retain top performers

o CP plans project good corporate image

CP plans can help improve motivation when:o Employees see a clear link between their efforts and resulting performance (Expectancy)

o Employees see a clear link between their performance level and rewards received(Instrumentality)

o Employees value the rewards available (Valence)

▪ motivation = expectancy x instrumentality x valencePossible Problems Associated with CP

o Poor performance management system

o Rewarding counterproductive behavior

o Insignificant rewards

o The reward becomes the driver

o Extrinsic vs. intrinsic motivation

o Disproportionately large rewards for executives

Selecting a CP Plan: Issues to considero Culture of organization

o Strategic direction of organization

Culture of organizationo Types of organizations

▪ Traditionalo Top-down decision makingo Vertical communicationo Jobs that are clearly defined

▪ Involvemento Shared decision makingo Lateral communicationso Loosely defined roles

▪ CP systems that work well in:o Traditional organizations

▪ Piece rate▪ Sales commissions▪ Group incentives

o Involvement organizations▪ Profit sharing▪ Skill-based pay

CP Plans to enhance strategic directionso Employee development

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▪ Skill-based payo Customer service

▪ Competency-based pay▪ Gainsharing

o Overall Profit

▪ Executive pay▪ Profit or stock sharing

o Productivity

▪ Individualo Piece rateo Sales commissions

▪ Groupo Gainsharingo Group incentives

▪ Teamworko Team sales commissionso Gainsharingo Competency-based pay

Putting Pay in Contexto A reward is something that increases the chances that:

▪ Specific behaviors and results will be repeated, or▪ Employee will engage in new behavior and produce better results

o Rewards can include:

▪ Pay▪ Recognition▪ Public▪ Private▪ Status▪ Time▪ Trust and Respect▪ Challenge▪ Responsibility▪ Freedom▪ Relationships

o How to Make Rewards Work

▪ Define and measure performance first and then allocate rewards▪ Only use rewards that are available▪ Make sure all employees are eligible▪ Rewards should be both▪ Financial▪ Non-financial▪ Rewards should be:

o Visibleo Contingento Timelyo Reversible

Pay Structureso Job Evaluation

o Broad-banding

o An organizations pay structure

▪ Classifies jobs into categories based on their relative worth▪ Is designed by job evaluation methods

o Job Evaluation

▪ Method of data collection

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o Determine the worth of various jobso Create a pay structure

▪ Consideration ofo KSAs required for each jobo Value of job for organizationo How much other organizations pay for similar jobs

Types of job evaluation methodso Ranking

o Classification

o Point

Ranking Methodo Create a job description: job duties, KSAs, working conditions

o Compare job descriptions in terms of value to organization

o Rank jobs from most valuable to least valuable

Advantages of using ranking methodo Requires little time

o Minimal effort needed for administration

Disadvantages of using ranking methodo Criteria for ranking may not be clear (evaluators may not share frame of reference)

o Distances between each rank may not be equal (pay differences may not reflect unequaldistances)

Classification Methodo A series of classes or grades are created

▪ Unique label▪ Detailed description of work performed

o Each job is placed within a job class

Advantages of using classification methodo Jobs can be quickly slotted into structure

o Employees accept method because it seems valid

Disadvantages of using classification methodo Requires extensive time and effort for administration

o Differences between classification levels may not be equal

Point Methodo Identify compensable factors (job characteristics)

▪ Add value to organization▪ Organization is willing to pay

o Scale factors (e.g., on a scale of 1 5)

▪ Clear narrative description of each score on scaleo Assign a weight to each factor so the sum of the weights for all factors = 100%

Advantages of using point methodo Helps to establish worth of each job relative to all other jobs within organization

o Involves comprehensive measurement of relative worth of each job in organization

o Ranking of jobs is easy to do once total points are known for each job

Disadvantages of using point methodo Requires extensive administrative

▪ Time▪ Effort

Does job evaluation method matter?o Fairness

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o Evaluators

▪ Impartial▪ Objective

Compensation surveyso Information on base pay

o All other types of compensation, such as

▪ Bonuses▪ Benefits

o Conducted in-house or by consultants, such as:

▪ www.salary.com or www.haypaynet.comPay structure that collapses job classes into fewer ( 5) categories

o AdvantagesProvides flexibility in rewarding people

▪ Reflects changes in organization structure▪ Provides better base for rewarding growth in competence▪ Gives more responsibility for pay decisions to managers▪ Provides better basis for rewarding career progression

Legal Issues: Overviewo Performance Management (PM) and the Law

o Some Legal Principles Affecting PM

o Laws Affecting PM

Performance Management and the Lawo Performance management systems are legally sound, if they are fair:

▪ Procedures are standardized▪ Same procedures are used with all employees

Some Legal Principles Affecting PM: Overviewo Employment-at-will

o Negligence

o Defamation

o Misrepresentation

o Adverse Impact

o Illegal Discrimination

Employment-at-willo Employment relationship can be ended at any time by

▪ Employer▪ Employee

o Exceptions

▪ Implied contract▪ Possible violation of legal rights

Adverse Impact or Unintentional Discriminationo PM system has unintentional impact on a protected class

o Organization must demonstrate

▪ Specific KSA is a business requirement for the job▪ All affected employees are evaluated in the same way▪ Organization should review ongoing performance score data by protected class to

implement corrective action as necessaryIllegal Discrimination or Disparate Treatment (in PM context)

o Raters assign different scores to employees based on factors that are NOT related toperformance

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o Employees receive different treatment as a result of such ratings

o Employees can claim they were intentionally and illegally treated differently due to their status

Employee claim of illegal discriminationo Direct evidence of discrimination, or

o Evidence regarding the following:

▪ Membership in protected class▪ Adverse employment decision▪ Performance level deserved reward/different treatment▪ How others were treated (not in protected class)

Employer response to claim of illegal discriminationo Legitimate and non-discriminatory reason for action

o Related to performance

Laws Affecting PMo During the past few decades, several countries have passed laws prohibiting discrimination

based on:

▪ Race or Ethnicity▪ Sex▪ Religion▪ National Origin▪ Age▪ Disability status▪ Sexual orientation

Examples of some of these laws:o United Kingdom

▪ Equal Pay Act of 1970▪ Race Relations Act of 1976▪ Sex Discrimination Act of 1975▪ Disability Discrimination Act of 1995▪ Employment Equality (Sexual Orientation) Regulations 2003▪ Employment Equality (Religion or Belief) Regulations 2003

o United States of America

▪ Equal Pay Act of 1963▪ Civil Rights Act of 1964▪ Age Discrimination in Employment Act of 1967 (as amended in 1986)▪ Americans with Disabilities Act of 1990

Characteristics of Legally Sound Performance Management Systemso Organization

▪ The system is formally explained and communicated to all employees▪ The system includes a formal appeals process▪ Procedures are standardized and uniform for all employees within a job group▪ The system includes procedures to detect potentially discriminatory effects or biases

and abuses in the systemo Management

▪ Supervisors are provided with formal training and information on how to manage theperformance of their employees

▪ Performance information is gathered from multiple, diverse, and unbiased raters▪ The system includes thorough and consistent documentation including specific examples

of performance based on first-hand knowledgeo Employees

▪ Performance dimensions and standards are:o Clearly defined and explained to the employeeo Job-relatedo W ithin the control of the employee

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▪ Employees are giveno Timely information on performance deficiencies o Opportunities to correct them

▪ Employees are given a voice in the review process and treated with courtesy and civilitythroughout the process

Example/Case Study:Case Study: Belles Feuilles North America (BFNA)Belles Feuilles North America (BFNA) is the United States and Canada branch of Belles Feuilles ConstructionGroup, an international construction company with branches throughout the world. The Roads Group of BFNAhas built highways and bridges throughout North America.Joe Salazar and Carol Pryblowski have worked as civil engineers at BFNA since they graduated from theColorado School of Mines in 1993. Their careers have paralleled each other, as first one, then the other, washired into the Design Unit. Both have served as project engineers in Construction Units overseeing highwayconstruction on projects of similar size and complexity. Each has received good to excellent evaluationsfrom a succession of supervisors. Friendly competitors, they have attended similar training sessions andenjoy an occasional social lunch together. When the opportunity to apply for a promotion to supervisor of an engineering unit came up, they bothapplied. Joe was hired. Carol is bewildered because she truly believed she was better qualified for theposition. A friend encourages her to see a work discrimination lawyer because Carols description of theprocess leads the friend to believe that illegal discrimination has occurred. Questions:1. Based on the information in the case, evaluate whether Carol will be able to provide the lawyer with allthe information necessary to prove illegal discrimination.2. You are the HR Director at BFNA. Discuss the main characteristics of the performance managementsystem that you have implemented to withstand legal challenges such as Carols. Answers:1. Carol will need to show that she is a member of a protected class (female).She will also need to show that she suffered an adverse employment decision as a result of a performanceevaluation and that her performance warranted a positive decision. She will have to show that the promotion was given to someone who is not a member of the same protectedclass (Joe, who is not female.) According to the case, Carol and Joe received similar performance evaluations. In addition, there is noevidence that performance evaluations were considered in the decision regarding who got the promotion. Thus, Carol may experience difficulty providing the lawyer with enough evidence to pursue a case of illegaldiscrimination.

2. Sample answer follows.At the organizational levelProcedures are standardized and uniform for all employees within a job group, such as engineers.The system includes procedures to detect potentially discriminatory effects or biases and abuses in thesystem. For example, where there are only a few of a specific group, we carefully monitor whether personneldecisions and performance ratings have an adverse impact on members of that group. In the case of clericalemployees, for example, which are predominantly female, we monitor whether there is an adverse impact onthe males in the system.The system includes a formal appeals process, where an employee can go beyond his or her supervisor toget a decision that, hopefully, is more objective.The system was formally explained and communicated to all employees.From a management standpointOverall, the system includes thorough and consistent documentation. Initially, we provided supervisors withformal training and information on how to manage the performance of their employees. This training isrepeated and updated every two years. In general, performance information is gathered from multiple,diverse, and unbiased raters (such as peers, supervisor, customers when appropriate, and other employees)who provide specific examples of performance based on first-hand knowledge. Employees

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Performance dimensions and standards are clearly defined and explained to the employee, job-related, andwithin the employees control. Employees are given a voice in the review process and treated with courtesyand civility throughout the process. Employees are given timely information on performance deficiencies andopportunities to correct any deficiencies.

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Topic 11: Managing Team Performance


Know the definition of a team and the pervasiveness of teams in todays organizations worldwide.Understand the importance of managing team performance in addition to individual performance.Understand the various types of teams and how different types of teams may require different types of

performance measurement.Be aware of challenges associated with the design and implementation of performance management

systems that include a team component.Extend guidelines on how to design performance management systems that consider individual

performance to systems that include both individual and team performance components.Design and implement a performance management system that focuses on (a) individual performance,

(b) individual performance that contributes to team performance, and (c) team performance.Extend principles regarding how to reward individual performance to how to reward team performance.

Definition/Overview:Team Performance: Team performance management is the concept of adjusting the composition, contextor direction of a team or work group in order to increase the effectiveness of the team or group as measuredby:

Organizational benchmarks for teamsComparison with expected progress or outcomes of the team's work

Key Points:1. Definition and Importance of Teams

Definition of Teamso Two or more people

▪ Interacto Dynamicallyo Independently

▪ Share common and valuedo Goal, objective, or mission

Importance of Teamso Global pressures

o Flexibility in flatter organizations

o Complexity of products and services

o Rapidly changing environments

Performance Management and Teamso PM systems should target:

▪ Individual performance▪ Individuals contribution to team performance▪ Performance of entire team

General Principles of PM Relating to Teamso Design and implement best possible system

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o Strategic congruence, thorough, practical, meaningful, reliable, acceptable, ethical, etc.

o Consider dangers of poorly implemented system

Managing for Improved Team Performanceo Dont limit team processes with other task or organizational requirements

o Provide good team design and organizational support

o Give feedback only on processes that the team members can control

2. Types of Teams and Implications for PM

Types of Teamso Classified by

▪ Complexity of task▪ Membership configuration

Complexity of task ranges from routine to non-routineo Routine

▪ Well defined▪ Few deviations in how work is done▪ Outcomes easily assessed

o Non-routine

▪ Not defined well▪ No clear specifications on how to do the work▪ Outcomes are long term and difficult to assess

Membership configuration includeso Length of time team is expected to work together

o Stability of team membership--ranging from static to dynamic

o Types of Teams: Work or Service Teams, Project Teams, Network Teams

Work or Service Teamso Intact--people who have worked together for a while and know each other well

o Routine tasks

o Share similar skill sets

Project Teamso Assembled for specific purpose

o Tasks outside core product or service of organization (less routine)

o Include members from different functional areas

▪ Who dont know each others specialties▪ Who depend on each others knowledge and skill sets

Network Teamso Membership not constrained by

▪ Time or space▪ Organizational boundaries

o Teams may include

▪ Temporary or full-time workers▪ Customers▪ Vendors▪ Consultants

o Work is extremely non-routine

3. Purposes and Challenges of Team PM

Purposes of Team PM

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o Traditional goals of any PM System

▪ Strategic▪ Administrative▪ Informational▪ Developmental▪ Organizational maintenance▪ Documentation

o Specific to team performance

▪ Make all team members accountable▪ Motivate all team members to have a stake in team performance

Challenges of Team PMo How do we assess relative individual contribution?

o How do we balance individual and team performance?

o How do we identify individual and team measures of performance?

4. Including Team Performance in the PM SystemIncluding Team Performance in the PM System: Overview/Review

o Prerequisites

o Performance Planning

o Performance Execution

o Performance Assessment

o Performance Review

o Performance Renewal and Recontracting

Prerequisiteso Knowledge of organizations and teams mission

o Knowledge of job to be performed by the team, including KSAs

▪ Task▪ Contextual

o Communicationo Decision-makingo Collaboration

Performance Planningo Results expected of the team

▪ Key team accountabilities▪ Specific objectives for each key accountability▪ Performance standards

o Acceptable levelso Unacceptable levels

Behaviors expected of team memberso Include competencies

o Clusters of knowledge, skills, abilities (KSAs)

Developmental objectives to be achieved by team and its memberso Areas that need improving

o Goals to be achieved

▪ Team performance▪ Individual performance that will benefit team performance

Performance Executiono Team responsibilities

▪ Commit to goal achievement▪ Seek feedback from

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o Each othero Supervisor (if there is one)

o Communicate openly and regularly

o Conduct regular and realistic peer-appraisals

Supervisor responsibilities (if there is one)o Observe and document

▪ Team performance▪ Relative contribution of team members

o Update team on any changes in goals of the organization

o Provide resources and reinforcement

Performance Assessmento Types of Assessments

▪ Self-appraisals▪ Peer evaluations▪ Supervisor evaluation

o Individual performanceo Team performance

o Outsider appraisals (if appropriate)

Kinds of Performance to be Assessedo Individual task performance

o Individual contextual performance

o Team performance

Dimensions of Team Performance to Assesso Effectiveness

▪ Quality▪ Quantity▪ Cost▪ Time

o Efficiency

▪ Communication▪ Coordination▪ Collaboration▪ Decision making

o Learning and growth

▪ Innovation▪ Documented learning▪ Best practices, process improvements

o Team member satisfaction

▪ Team member perceptions of how teamwork contributes to their growth and personalwell-being

Performance Reviewo Two meetings with supervisor or review board

▪ Team meetingo Discuss overall team performance and results

▪ Information comes from:o Team memberso Other teams/outsiderso Supervisors evaluation

o Individual meeting

▪ Discuss how individual behavior contributed to team performance▪ Information comes from:

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o Self-appraisalo Peer ratingso Supervisors evaluation

o Emphasis on past, present, and future

▪ Past: performance during review period▪ Present: any changes in compensation, depending on results obtained▪ Future: goals and development plans for team and individual members

Performance Renewal and Recontractingo Make adjustments to performance plan

▪ Using information gathered during review period▪ May include new key accountabilities and competencies▪ May adjust goals upward or downward▪ Include plan for individual performance as it affects team functioning

Including Team Performance in the PM System: Summaryo Prerequisites

o Performance Planning

o Performance Execution

o Performance Assessment

o Performance Review

o Performance Renewal and Recontracting

5. Rewarding Team Performance

Making Team-based Rewards Effectiveo All employees should be eligible

o Rewards should be

▪ Visible▪ Contingent▪ Reversible

o Avoid factors which cause reward systems to fail

o Consider variable pay systems (in addition to individual bonuses)

▪ Bonus based on team performance from company-wide pool▪ Teams self-fund bonus based on cost and efficiency savings

Example/Case Study:Case Study: Freds Airfoil CompanyFred's Airfoil Company is a small manufacturer of private airplanes. The company does all the work involvedin designing, testing, and manufacturing the planes, as well as selling the planes to individual buyers. FredHoffman, the owner of the company, has decided that it is time for a brand new design. He has establisheda team of engineers and mechanics to work on this project. Fred remembers past projects where the design of the new aircraft was inefficient because, as the designprogressed, previously finished items had to be redesigned to fit in with newer ideas. Fred feels that theprocess could run more smoothly if the team worked together better and has hired you to design a team-based performance management system. He is hoping that your system will address the project team wejust discussed, as well as other teams involved in his business. Question:Please provide a detailed description of the key features of the system you would recommend.

Answer:The first step in this process is to determine the goals and mission of the company. For this particular case,a good sample mission statement would be:Freds Airfoil Company offers uniquely designed personal aircraft for private pilots all over the world by

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designing innovative airfoils at affordable prices. Airfoils are created, from the original design andengineering, all the way to the sales floor, exclusively by Freds Airfoil Company.Once the mission is agreed upon, the next step is to decide upon goals. For the purposes of this exercise,lets focus on the efficient design of new projects. From the information in the case, it appears that differentpeople are creating designs for different components of the aircraft and that they are not communicatingvery well. This is a problem for team work and may be resolved through a team-based performancemanagement system. W ith specific goals for performance in mind, a system must be developed for individual performance, whichwill include the development of specific job requirements. For this task we will use O*net to find generic jobdescriptions for each of the members of our team. We will then revise the descriptions to meet our specificgoals for this company. Once the performance goals for each employee have been determined, it will benecessary to include information on how each member of the team should be expected to contribute to theteam. Given the goal of efficient design and manufacture of the new aircraft, at least part of theperformance goals in this case should include the team communicating effectively at each step of theproject, and with the development of each individual aircraft part. Rather than a team that includesengineers only during the initial design and then morphs into manufacturers only, all team members shouldbe included in the project from beginning to end to ensure that each team member owns the project andthat there is feedback from different aspects of the design and manufacture of the craft. This team will probably benefit little from peer assessments, as different team members have differentskills. Assessment of peer performance should be limited to the types of behaviors that ensure good teamperformance; for example, communication and task completion. Once the specific behaviors for each teammember are agreed upon, they should be added to the performance management program for eachemployee.Finally, goals for the entire team must be developed and specific criteria must be developed. The entireteam must be evaluated on these criteria as well. Performance evaluations should be completed somewhat frequently, perhaps once a month or so, since thisproject is not likely to take more than about a year, and problems can quickly take the project off track.

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Documents

Management Performance · 2017-04-25 · Performance Management Course Instructions ... Example/Case Study: Case Study: CRB, Inc. A very small car restoration business (CRB Inc.)