Performance management

Presentation

Performance
Management Research
Report

Performance appraisal ... two words with the power to

strike fear into the hearts of managers and subordinates
alike.

A performance management system that combines planning

management and appraisal is called mixed model

Mixed models are particularly appropriate when

organizations are in uncertain and rapidly changing
environments and employees are not in control of the
results.

Despite of the detailed analysis in this article there is no

consensus on the ideal pm system.

Earlier organizations relied upon evaluations and ratings

provided by their employees.

Systemic Problems

Results can be invalid or inaccurate

One study reported less than 10% of companies expressed

confidence in their performance appraisal system

Sources of rater error

supervisors avoid, ignore, or delay the performance

appraisal process

Some supervisors inflate their ratings to avoid

demotivating or demoralizing their subordinates

Some employees evaluating their subordinates more

harshly than the normal.

Another source of rater error is lack of feedback.

The Search for Solutions

Further in-depth training of raters.

After the training raters can de divided into three categories

1) Wolf(1%)

Second-Level Supervisor Reviews

second-level supervisor reviews may uncover gross errors or even systematic

bias.

Second, the second-level supervisor may be the least accurate

because they have little opportunity to observe the performance of the

individual being evaluated.

2)Sloths(6%)

3)Eagles (93%)

Components of Successful Performance

Management Systems

Clear objectives

Ongoing communication

constructive feedback

self-appraisal

Personal goal setting

Appeal process

Employee participation in the planning process

Rewards and incentives

LEGAL

CONSIDERATIONS

Criteria for Success - Competencies

Researcher David C. McClelland introduced the concept of competencies in

the workplace in 1973.

According to McClelland competencies are independent of the job or position.

By 1991, it was estimated that competency assessments were being used by

more than 100 researchers in 24 countries.

Lyle and Signe Spencer, identified five types of

competency characteristics

1. Motives - drives toward certain actions or goals.

2. Traits - physical characteristics of a person (i.e., good

eyesight)

3. Self-Concept - a persons attitudes, values, or selfimage (i.e., self-confidence).

4. Knowledge - information a person has in specific

content areas

5. Skill - the ability to perform a certain tasks.

Competency Models

Competency models list the characteristics (competencies) found

common in superior organizational performers.

Competency models are developed through interviews, focus groups,

research, and surveys.

The competency modeling process identifies and validates the skills,

abilities, knowledge and behavior required for exceptional
performance within an organization or group.

The result of this processes is a validated competency

Without a clear understanding of these competencies the reliability

and validity performance appraisals are severely limited.

Constructing Competency Model

The competency modeling process typically involves six phases

1) The first phase includes establishing model parameters by meeting

with the organization.

2)The second phase involves benchmarking best practices.

3) Phase three identifies the criteria to be used to identify highperformers within the organization and high-performers recruited for
the process.

4)In phase four, a master list of competencies is generated by analyzing

and coding the raw data.

5) In phase five. The master competency list is converted to

questionnaire.

6) The final phase tests the validated competency model.

Organizational Uses for Competency

Models

Organizational uses for competency models for

employee management(assessment centers, team building, training,

seminars, 360 surveys)

selection (structured interview development, hiring decisions, succession

planning)

performance management (structured review processes, personal and/or

team development goals, coaching, compensation evaluation/decision
making).

Characteristics of Effective
Competency Models

Results driven

User ownership

Simple

Consistent with existing programs

Competency-Based Assessment
Methods

Behavioral Event Interviews

Tests - work-sample, personality, ability

Assessment Centers-simulated exercises designed to elicit desired behaviors

Biodata Interviews - generate facts about a persons life that provide

evidence of competency expression.

360-Degree

Measurement Systems

Performance Measurements

The important features of getting the job done, may include organizing and
planning, quality of work, quantity of work and job knowledge.

Criteria

1. Measurable through observation of behaviors on the job

2. Clearly defined

3. Job related

MBO

Objectives strategies entail the setting of mutually agreed upon, observable,

measurable objectives and goals between employees and their bosses.

Behaviorally Anchored Rating Scales (BARS)

BARS are descriptions provided on appraisal forms and surveys which describe
a precise level of performance

The Mixed-Standard Scale (MSS)

MSS disguises ordinal relationships among items so that the rater cannot
detect an order of merit in the items.

The MSS is superior to BARS in reducing leniency errors.

Peer Assessment/Peer Review

Peer assessment is defined as the evaluation of work performance by peers

or colleagues of equal rank against established performance criteria or
competencies.

There are three methods of peer assessment

Peer Nomination

specified number of group members (usually excluding themselves) as being

the highest and/or lowest in the group on a particular characteristic

Peer rating

Each group member rates every other group member on a given set of
performance.

Peer ranking

Each group member ranks all the others from best to worst on one or more
factors.

360-Degree Feedback

360-degree analyze input from the participants immediate supervisors, peers,

and direct reports, suppliers and customers (if applicable).

Model and Scoring Variations

M. Nowack identified five basic models of 360-degree instruments

1. Job analysis - measure knowledge, skills and abilities determined

through focus groups about tasks related to job.

2. Competency based - measure competencies which are determined

by identifying the behaviors of high performing employees.

3. Strategic planning- measure knowledge, skills and abilities required

based upon the organizations strategic plan.

4. Developmental theory - measure knowledge, skills and abilities

based on theoretical and conceptual models of employee growth and
development

5. Personality theory - measure knowledge, skills and abilities

associated with personality.

There are three different ways to score 360 degree survey

instruments

1. Ipsative scoring - where employees can track and compare their

own scores over time.

2. Normative scoring - employees compare their scores with the

scores of a representative group of similar employees (same job,
organization or industry).

3. Competency-based norms - are determined by surveying a group of

high performing employees

The Rating Team

Although 360-degree ratings team membership may vary,

all sources agree that rater anonymity must be
guaranteed.

Protecting the confidentiality of respondents helps to

ensure honest.

Many organizations use third party firms to collect and

analyze the data and prepare feedback reports

Self-Ratings

Many 360-degree survey instruments include self-ratings.

One advantage of self-ratings is that completing an

instrument helps participants to better understand the
behavior scales.

self-ratings examined on their own, tend to be more

lenient than others.

Peer Ratings

Peers are those employees found at the same organizational

level as the participant.

Peers may be in the best position to provide feedback on

skills such as working with others and teamwork.

CUSTOMER RATINGS
Customers, either internal or external are sometimes tapped
as sources of feedback
customers may be the best source of input on quality of work
and service orientation.

Reporting Feedback Results

Advantages and Disadvantages of

360 Degree feedback

Feedback

Incentives and Rewards

Cash Awards

Bonuses

Variable Pay

Variable pay can include group incentives, gain sharing, win sharing and lumpsum awards

Merit Pay

Merit pay focuses upon past, individual behavior,

presumably over the course of the prior year.

Non-Cash Awards

Non-cash incentives fall into one of six categoriesmerchandise, travel, vacation time, recognition, status
and a miscellaneous category

Broad-Based Incentives

1. Group Incentives - where rewards are based upon the

achievement of group, departmental or unit goals.

2. Broad-Based Stock Plans

3. Milestone Plans - are similar to group incentives in that

rewards are based upon the achievement of a goal. Milestone
plans differ in that they provide rewards for reaching interim
goals along the way.

Conclusion