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MODULE 8 - Performance Management

Updated: May 7



The evolution of performance management in Human Resource Management signifies a shift from traditional command-and-control structures towards a facilitative leadership model. This shift emphasizes aligning individual performance with the organization's strategic goals and mission. Employees' objectives are derived from departmental goals, which, in turn, contribute to the organization's overarching mission.


The performance management process facilitates discussions between employees and managers regarding development goals and strategies for achievement. These plans should not only support organizational objectives but also foster the professional growth of employees. Moreover, adapting to the changing organizational environment is imperative. Factors such as demographic shifts, increased competition, and technological advancements necessitate a transition from bureaucratic to network-based organizational models.


Performance Management Process


The performance management process is dynamic and encompasses several key steps:


  1. Job Description & Strategic Plan: Job descriptions outline essential job functions and responsibilities, while strategic plans articulate the organization's mission, goals, and initiatives. Employees' responsibilities are aligned with strategic goals, ensuring their contributions drive organizational success.

  2. Standards of Performance: Performance standards define expected levels of performance for each job function or task. These standards are collaboratively developed with employees, providing a benchmark for evaluating performance.

  3. Performance Appraisal: Performance appraisal involves assessing, summarizing, and developing an employee's work performance. Ratings such as Exceptional, Above Expectations, Solid Performance, Improvement Needed, and Unsatisfactory guide the appraisal process.


Developing Written Performance Standards


Developing performance standards is a collaborative process that involves managers and employees.


Steps to develop effective performance standards:


  1. Collaborative Approach: Involve employees in developing performance standards for their positions. This collaborative effort ensures buy-in and alignment with organizational goals.

  2. Clear Communication: Explain the importance of performance standards and how they will be used. Encourage employees to provide input and address any concerns they may have.

  3. Writing Standards: Write clear and specific performance standards that describe the expected behaviors and outcomes. Use measurable terms and specify acceptable margins for error. Consider conditions under which tasks are performed and assess performance accordingly.

  4. Categories of Evaluation: Develop standards for significant performance dimensions such as initiative, teamwork, leadership, and decision-making. Tailor standards to reflect the unique requirements of each position and organizational needs.

  5. Supervisory Categories: For supervisory roles, collaborate to develop standards for leadership, delegation, employee development, performance counseling, and affirmative action.

  6. Complexity Levels: Performance standards may vary in complexity, depending on the level of specificity required. General standards provide flexibility, while specific standards offer clarity and precision.


Guidelines for Performance Standards


When crafting performance standards, adhere to the following guidelines:


  1. Relevance: Ensure that performance standards are directly related to the employee's assigned duties and job requirements.

  2. Measurability: Implement reporting systems capable of measuring and reporting quantitative data included in the standards.

  3. Specificity: Use clear and specific language to describe performance quality characteristics that are verifiable and align with expectations.

  4. Alignment: Incorporate organizational objectives, such as cost-control, efficiency improvement, or project completion, where applicable.


Checking Your Standards


After drafting performance standards, assess them against the following criteria:


  1. Realism: Standards should be attainable and consistent with job requirements. They represent the minimum acceptable level of performance.

  2. Specificity: Standards should clearly outline expected actions and results for employees.

  3. Measurability: Performance standards should be based on measurable data, observation, or verifiable information.

  4. Alignment: Ensure that standards align with organizational goals and contribute to mission success.

  5. Challenge: Standards may describe performance that exceeds expectations to motivate employees.

  6. Clarity: Standards should be written in clear, understandable language using job-specific terminology.

  7. Adaptability: Standards should evolve to reflect changes in organizational goals, technologies, or operations.


Observation and Feedback


Observing employee performance and providing feedback are integral components of the performance management process. Feedback should be based on observed or verifiable work-related behaviors, actions, and results. Effective feedback supports sustained good performance and facilitates skill development.


Observing Employee Performance


Observation involves noticing specific facts, events, or behaviors related to work performance and its results. These observations serve as raw data for providing effective performance feedback and identifying areas for improvement or development.


When You Can't Be Present to Observe Performance


In instances where direct observation isn't feasible, establish processes for obtaining input on employee performance. Options include evaluating output, conducting routine meetings, reviewing performance standards, requesting periodic reports, obtaining customer feedback, and delegating authority to observe performance in your absence. These processes should be transparent, fair, and understood by all parties involved.


Behavioral Feedback


Feedback serves as "information about past behavior, delivered in the present, which may influence future behavior." It holds significant influence, especially during performance appraisal periods, where regular feedback is crucial. Timely, frequent, and specific feedback enhances employees' understanding of expectations, encourages them to repeat successful performance, and aids in improving work quality when necessary.


Differentiating between feedback based on observed or verifiable behavior and feedback derived from assumptions or judgments is crucial. Consider the following examples:


1. Judgmental Feedback: "That was a very poor report. I wish you were more committed to doing a good job."

2. Behavioral Feedback: "Your report was not formatted according to standard practice, and the content was based on data which is a year out of date."


In the first statement, the speaker judges the employee's commitment without providing actionable insights. Conversely, the second statement offers specific areas for improvement without passing judgment on the employee's character.


Guidelines for Giving Behavioral Feedback:


1. Specificity: Base feedback on specific, observable, or verifiable data, and deliver it as close to the event or behavior as possible. For example: "I noticed that you arrived at 8:30 on Monday, Tuesday, and Thursday rather than at 8:00."

2. Seek Input: After describing observations, invite the employee's input before interpreting behavior. For instance: "I'd like to talk with you about the reasons for your late arrival."

3. Discuss Impact: Discuss the impact or consequences of the performance without making threats or promises. For example: "As a result, other staff had to leave their work to cover our service desk."

4. Be Supportive: Communicate through words, body language, and tone of voice that feedback aims to be helpful. The goal is to reinforce or redirect performance for the employee's success.


Examples:


Feedback for Improvement:

  • Vague Feedback: "This was not your best work."

  • Behavioral Feedback: "This project was completed three weeks later than you originally estimated, resulting in our client considering bringing in an outside consultant. What will it take to deliver on time in the future?"

Feedback for Success: Generic Feedback: "Terrific job!"

  • Behavioral Feedback: "Everyone on the team appreciates the way you facilitated this meeting. You identified areas of confusion, summarized to keep us on track, and maintained your neutrality. As a result, we made a decision today."


Feedback, especially for performance improvement, is best delivered in private to avoid embarrassment. Similarly, acknowledging successful performance in private respects employees' preferences. Record-keeping of employee performance should focus on behavioral terms to avoid subjective judgment.


Regular exchanges of performance-related information between the performance manager and the employee foster problem-solving approaches. In cases of persistent performance issues, formal documentation and counseling may be necessary, following guidance from supervisors and HR professionals.


Performance Appraisal


Performance appraisal is a comprehensive process aimed at assessing, summarizing, and fostering the work performance of an employee. Before writing the appraisal, a meeting with the employee is conducted to ensure mutual understanding of the process, with the option for the employee to submit a self-appraisal, which is taken into consideration during the appraisal development.


To ensure effectiveness and constructive feedback, the performance manager should strive to gather as much objective information about the employee's performance as possible. The following steps outline the recommended process for performance appraisal:


Preparing:


  • Review the employee's job description, work record, and previous performance appraisals.

  • Gather performance feedback from relevant stakeholders, including colleagues and direct reports.

  • Consult with other performance managers if applicable, ensuring transparency regarding any performance issues.

  • Provide advance notice of the performance appraisal to the employee.


Preliminary Meeting:


  • Hold a private preliminary meeting with the employee to explain the appraisal process.

  • Review the job description, departmental goals, and identify areas for appraisal.

  • Schedule a follow-up meeting and invite the employee to prepare a written self-appraisal.


Writing:


  • Complete the Performance Appraisal Model form, considering each essential function, task, goal, or initiative.

  • Evaluate performance against established standards, confirming performance levels, supporting evidence, and impact.


Delivering:


  • Review your written appraisal and plan objectives for the formal performance appraisal meeting.

  • Meet privately with the employee to discuss the self-appraisal and review the draft performance appraisal form.

  • Recognize strengths, discuss areas for improvement, and establish strategies for development.

  • Modify the appraisal if necessary based on the employee's input.

  • Agree on any changes and set a deadline for the final draft.

  • Allow the employee to read, comment, and sign the Performance Appraisal Form.

  • Address any refusal to sign appropriately and encourage the employee to provide comments if desired.


Producing:


  • Provide a copy of the final signed performance appraisal to the employee for their records.

  • Use the performance appraisal as a guide for performance improvement and professional development.

  • Maintain open communication throughout the review period, discussing performance on an ongoing basis.


Probation:


  • Ensure that probationary performance meets or exceeds standards before the probationary period's end.

  • Conduct at least one performance appraisal during the probation period.


Annual Review Period:


  • Initiate the yearly cycle for performance appraisals following the completion of probation or at the beginning of the merit cycle.


Required Form and Records Retention:


  • Utilize approved performance appraisal forms adopted by the department.

  • Ensure proper disposition of completed forms, including signatures and retention in official employee files.

  • Maintain records retention protocols, storing original, signed appraisals for three to five years following employee separation.


Adhering to these guidelines ensures a constructive and satisfying performance appraisal process, fostering employee development and organizational success.


Performance Development Plan


The development of employee performance serves to advance the organization's mission and elevate the quality of its workforce by fostering continuous learning and professional growth. It sustains performance levels meeting or surpassing expectations, enhances job-related skills, knowledge, and experience, and keeps employees competitive within the organization and the broader job market. Performance development plans are integral to each stage of the performance management process.


Continuous Learning


In today's dynamic workplace, the ongoing development of employee skills, knowledge, and experience is paramount. To remain competitive and uphold a reputation for excellence, employees must stay informed and adaptable, equipped to utilize new technologies, navigate organizational changes, and excel in collaborative settings. Recognizing the necessity for continuous learning empowers employees to excel in their current roles and prepare for future opportunities.


Preparing the Plan


Several key occasions warrant the consideration of a performance development plan:


1. After defining or reviewing performance standards.

2. As part of ongoing observation and feedback processes.

3. As a concluding element of the performance appraisal.

4. When an employee expresses interest in educational or developmental opportunities.


During these junctures, discussions with employees about training, education, or development opportunities should be initiated. Documenting a strategic plan entails outlining specific steps, identifying assisting parties, setting completion dates, and defining criteria for appraising success.


Development Opportunities


A myriad of activities can contribute to employee development, including but not limited to:


- Staff education and development classes

- Participation in affirmative action programs

- On-the-job training and cross-training

- External coursework or certificate programs

- Professional conferences or institutes

- Membership in professional organizations

- Coaching, mentoring, or consulting

- Writing professional articles or books

- Management development programs

- Self-study or computer-based training

- Participation in projects or committees


Considerations


Performance development plans should align with organizational and employee needs. Assessing future organizational goals enables the identification of development opportunities that benefit both employees and the organization. Distinguishing between position-related and career-related development options ensures relevance and effectiveness.


Supporting employee growth fosters motivation, commitment, and morale, benefiting the individual, the unit, and the organization at large. Consultation with supervisors and department heads aids in evaluating the feasibility and alignment of proposed development activities with organizational objectives.


Performance Manager's Responsibilities


- Assessment: Evaluate employee and organizational needs to develop effective performance development plans. Seek training opportunities to enhance assessment skills.

- Providing Information: Inform employees about career advancement options and potential barriers, facilitating informed decision-making.

- Referral: Connect employees with resources, mentors, or information sources conducive to their development goals.

- Guidance: Offer clear, practical guidance on career advancement, skill development, and accessing training opportunities.

- Development: Provide challenging tasks and opportunities for growth, delegate responsibilities conducive to employee development, and recommend relevant training programs or committee involvements.

By fulfilling these responsibilities, performance managers contribute to the professional growth and success of their employees, fostering a culture of learning and excellence within the organization.


Managing Team Performance


Definitions


Team: A team comprises a small group of individuals with diverse skills, committed to a common purpose, performance goals, and approach. Effective teams typically consist of no more than 15 members, fostering a collaborative environment where members hold themselves mutually accountable. The team's mission guides its priorities, conflict resolution, problem-solving, and decision-making processes. Teamwork thrives on open communication, trust, mutual respect, and a shared commitment to goals.


Natural Work Group: A traditional hierarchical group led by a performance manager, wherein employees collaborate to produce a product or service within the same unit or department. Authority and accountability are primarily vested in the performance manager, and the team's structure may not fully align with the characteristics of a formal team.


Cross-functional Team: A team assembled from various functional areas to revamp processes or products, or to make decisions regarding organizational matters. Unlike task forces, cross-functional teams embrace teamwork principles, drawing members from diverse backgrounds to share responsibility and authority. Their tasks may range from short-term projects to long-term initiatives, often involving stakeholders from within and outside the organization.


Self-directed Work Team: Comprised of employees who collectively manage the completion of a product, process, or significant task. These teams autonomously oversee their work performance, with members sharing responsibility for tasks. While a manager or leader may provide support and guidance, their role typically centers on facilitating rather than directing team efforts.


Issues in Managing Team Performance

Transitioning to a teamwork model presents several challenges for performance managers, including:


Shared Responsibility: Balancing collective commitment to shared goals with individual accountability poses a fundamental challenge. Determining the extent of employee involvement in performance management varies across team types.


Performance Management Responsibility: In natural work groups, performance management typically follows a traditional model, with the performance manager assuming authority and accountability for assessing individual performance. Conversely, self-directed work teams often engage in self-assessment and management to varying degrees, with mature teams taking greater ownership of performance management. Cross-functional teams, while operating without formal supervision, may appoint a team leader to facilitate operations, with members reporting to performance managers in their respective departments.


Navigating these issues requires performance managers to adapt their approaches based on the unique dynamics and maturity levels of the teams they oversee. Effective management involves striking a balance between fostering collective responsibility and supporting individual accountability within the team framework.


Managing Team Performance


Whose Performance Should be Managed?


In a team-oriented work environment, managing performance involves assessing both individual contributions and team accomplishments. When the focus is solely on individual performance, it can foster competitiveness at the expense of team cohesion. Recognizing and rewarding both individual and team performance enhances overall effectiveness.


Should Job Descriptions Include Team Responsibilities, Skills, and Knowledge?


The inclusion of team responsibilities, skills, and knowledge in job descriptions depends on various factors. These include the duration of team membership, the extent of time spent on team-related activities, whether team performance is formally evaluated, and organizational policies. Self-directed work teams often develop their own job descriptions within organizational guidelines, emphasizing dimensions such as active listening, feedback provision, meeting participation, problem-solving, and decision-making.


How Should Team Performance Standards be Developed?


Team performance standards should be developed collaboratively, considering factors such as realism, clarity, specificity, measurability, and relevance to the team's level. Involving all relevant stakeholders or a representative group ensures buy-in and accountability. Additionally, team standards should encompass both work-related metrics (e.g., cost, timeliness, quality) and interpersonal skills essential for effective teamwork.


Who Provides Observation and Feedback to Team Members?


Effective observation and feedback are crucial for team success. Whether teams are self-directed or report to performance managers, they benefit from regular feedback to manage group dynamics and work processes effectively. Feedback sources may include performance managers, team leaders, team members, customers, or external facilitators. Establishing feedback mechanisms in consultation with department heads and HR representatives ensures a comprehensive approach.


Whose Performance Should be Appraised?


Appraising both individual and team performance fosters a balanced approach to accountability and collaboration. Solely focusing on team performance may neglect individual contributions, while exclusively evaluating individual performance can undermine teamwork. Therefore, some organizations opt to appraise both dimensions to recognize the collective and individual efforts contributing to team effectiveness.


Who Should Appraise Team Performance?


The responsibility for appraising team performance typically aligns with the entity tasked with managing team performance. Input may also come from team members, customers, leaders, or sponsors, depending on the organization's structure. In self-directed work teams, members may engage in self-appraisal, with varying degrees of responsibility for evaluating team performance as the team matures. Cross-functional teams may involve self-directed elements, but the extent of self-evaluation varies based on team dynamics and organizational preferences.


What to Appraise?


When evaluating team performance, it's common to assess both the effectiveness of work processes and outcomes, as well as the team's ability to collaborate efficiently. These dimensions, often termed as the work of teams and teamwork, can be evaluated on an individual or team basis, or both, depending on the context.


Who is Responsible for Developing Team Members' Skills, Knowledge, and Experience?


Ensuring team members acquire both team-related and technical skills is a shared responsibility among management, performance managers, and team members themselves. Collaboratively identifying and addressing education, training, and development needs is essential. Departments with self-directed work teams should proactively support their members' growth and provide a framework for addressing development requests.


For members of cross-functional teams needing educational or training opportunities, determining the funding source becomes crucial. Whether the employee's home department covers costs or the team sponsors them depends on organizational policies and agreements. Authorization for release time remains subject to the department head's discretion, often in consultation with performance managers or other relevant stakeholders.


Summary of the Performance Management Process

The performance management process begins with job analysis and description, where essential functions and departmental goals are identified. Standards for minimum acceptable performance and, optionally, for exceeding expectations are set in collaboration with employees. Throughout the appraisal period, performance managers provide behavioral feedback to help employees succeed.


At the appraisal period's end, performance managers, in collaboration with employees, prepare, deliver, and finalize written performance appraisals. At any stage, identifying and addressing employee education, training, or development needs is encouraged.


Challenges in team performance management stem from diverse reporting relationships and the varying degrees of team autonomy, requiring adaptations of traditional performance management processes. By following these steps, managers can enhance communication with employees and achieve better organizational results.


In summary, effective performance management requires clear communication, collaboration, and alignment with organizational goals. By developing comprehensive performance standards, organizations can evaluate performance fairly and consistently, driving employee engagement and organizational success.


Dhaval Desai

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