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Performance Management

A little boy went into a store, reached for a soda carton and pulled it over to the telephone. He climbed onto the carton so that he could reach the buttons on the phone and proceeded to punch in seven digits. The store owner observed and listened to the conversation. The boy asked, "Maam, Can you give me the job of cutting your lawn? The woman replied, "I already have someone to cut my lawn. "I will cut your lawn for half the price of the person who cuts your lawn now." replied the boy. The woman responded that she was very satisfied with the person who was presently cutting her lawn. The little boy was even more perseverant and said, "I'll even sweep your curb and your sidewalk, so on Sunday you will have the prettiest lawn in all of Palm beach, Florida." Again the woman answered in the negative. With a smile on his face, the little boy replaced the receiver. The store owner, who was listening to this conversation, walked over to the boy and said, "Son, I like your attitude; I like that positive spirit and would like to offer you a job. The little boy replied, "No thanks, I was just checking my performance on the job I already have. I am the one who is working for the lady I was talking to!

Using the results for different organizational decisions Appraisal Interview

Performance Planning & Goal setting

Performance
Management

Process
Performance Appraisal using a predetermined format

Observation of performance & continual feedback

Employee Performance Management

A system designed to assess, monitor, and enhance the performance of employees. It involves performance appraisal, formal training, day-today coaching, goal setting, feedback, as well as motivation and reward systems used to enhance employee performance. It is a continuous process and is focused on the future and not the past.

It is a joint process, development-oriented and is a transformational process.

Performance Appraisal
The identification, measurement, and management

of human performance in organizations; The formal assessment and rating of individuals by their managers at usually an annual review meeting. Objective is to determine whether employees are performing effectively. Operated as a top-down and bureaucratic process owned by the HR department.

Strategic Choices

Why - For what purposes will we use the appraisals? How frequently and When will we do the appraisal? What criteria will we use? Who will do the appraisal? How will we do the appraisal?

The PA Process
1. Establish performance standards 2. Communicate performance expectations to employees 3. Measure actual performance 4. Compare actual performance with standards 5. Discuss the appraisal with the employee

6. If necessary initiate corrective action

Appraisal
Uses

Administrative:Promotion, Increment, Transfer Developmental: Training, Job rotation, Career development

Informal evaluation Continuous Formal evaluation Annual or Biannual

Types

Appraisal Methods

Comparative

Absolute

Ranking Paired Comparison Forced Distribution Management By Objectives (MBO)

Objectives

Critical Incident Narrative Essay Checklist Graphic Rating Scale (GRS) Behaviorally Anchored Rating Scales (BARS) Behavioral Observation Scales (BOS) Forced Choice

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Comparative Methods
Ranking Paired

Comparison

Forced Distribution

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Actual 10 (High) 9 8 7 6 5 4

Ranked Work

Ranked Work Jill (1)

Ranked Work Frank (1) Julien (2)

Tom (2) Marcos (1) Uma (2) Sue (3)

Lisa (3)

Joyce (3)

Greg (4) Ken (5) Jolie (4) Steve (5)

3
2 1 (Low)

Bill (4)
Richard (5)

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Ranking Method
Listing

of all employees from highest to lowest in performance. Drawback

Does not show size of differences in performance between employees Implies that lowest-ranked employees are unsatisfactory performers. Becomes an unwieldy process if the group to be ranked is large.

Paired Comparison: For the trait Creativity

Arup Arup Bhawna Charles Dilip Ela

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+ -

+ -

Bhawna
Charles Dilip Ela

+
+ -

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Paired Comparison

Every subordinate to be rated is paired with and compared to every other subordinate on each trait. Measures the relative performance of employees in a group. Appropriate when the supervisor needs to find one outstanding employee in a group for a promotion or special assignment.

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Forced Distribution

It is a technique for distributing ratings. Requires a comparison among people in the work group under consideration. The ratings of employees performance are distributed along a bell-shaped curve/normal distribution. It assumes that the bell shaped curve of performance exists in a given group. Managers reward the top 20% richly so they dont leave.

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Forced Distribution (Contd.)

The manager places predetermined percentages of subordinates in performance categories, as when a professor grades on a curve. Sun Microsystems: Managers appraise employees in groups of about 30. There is a top 10%, a middle 70% and a bottom 10%. The bottom 10% can either take a quick exit package or embark on a 90 day performance improvement action plan.

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Forced Distribution (Contd.)

Disadvantages

A supervisor may resist placing any individual in the lowest (or the highest) group. No rational justification may be given to the employee why he/she was placed in one grouping and others were placed in higher groupings. Does not work well with small groups. The manager may make distinctions among employees that may not exist.

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Forced Distribution on a Bell-Shaped Curve

Figure 119

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Forced Distribution Curve

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Consider.
Leena has been absolutely dynamic in perking up the Chennai regions sales. She has increased sales an average of 8% for the past 11 months, while cutting costs of acquiring a sale by Rs. 20000 per sale. Letter after letter is received in HQ complimenting us for having Leena as a salesperson. The customers respect her work and style. She has also trained three new sales trainees in the use of the new spreadsheet inventory control system. Her enthusiasm is contagious, and she has been one of the bright lights in showing others how to sell with a smile and high energy. On two occasions, Leena blew up when asked to report in detail on two important service calls. She claimed that she lost her composure because the pressure was unbearable. Although she apologised to Gaurav, the sales district manager, Leena will have to learn that we operate on a closely controlled system. If she can control her quick-trigger temper, the sky is the limit for this outstanding sales star.

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Essay/Free Form

Manager writes a short essay describing an employees strengths, weaknesses, past performance, potential, identify developmental needs and also suggest courses of remedial action. The essay appraisal is often used along with other types of appraisals, notably graphic rating scales.

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The Process
A

job is broken up into various general dimensions. Each dimension is followed by some space where the rater has to write an essay on that dimension. These essays can either be composed alone or in collaboration with the appraisee. Open ended.

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Critical-Incident Appraisal

The supervisor keeps a log/record of incidents that show positive and negative ways the employee has acted; the supervisor uses this record to assess the employees performance. Focuses the raters attention on those critical or key behaviours that make the difference between doing a job effectively and doing it ineffectively. The rater plays the role of Observer rather than Judge. Judges performance rather than personality. This forms the basis for developing a lot of the other formats like the Checklist, GRS, BARS, BOS, Forced Choice Scales etc.

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Continuing Duties Schedule production for plant

Targets Full utilisation of personnel and machinery in plant; orders delivered on time

Critical Incidents Instituted new production scheduling system; decreased late orders by 10% last month; increased machine utilisation in plant by 20% last month

Supervise procurement of raw materials

Minimise inventory costs Let inventory storage while keeping adequate costs rise 15% last supplies on hand month; over-ordered parts A and B by 20%; under-ordered part C by 30%

Supervise machinery maintenance

No shut downs due to faulty machinery

Instituted new preventative maintenance system for plant; prevented a machine breakdown by discovering faulty part

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Appraising Salesclerks
1. 2. 3. 4. 5. 6.

Are supervisors orders usually followed? Does the individual approach customers promptly? Does the individual suggest additional merchandise to customers? Does the individual keep busy when not servicing a customer? Does the individual lose his/her temper in public? Does the individual volunteer to help other employees?

YES NO ----- ---------------------------------------------

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Checklist and Weighted Checklists

This method requires the rater to select statements or words that describe the employees performance and characteristics. Checklists consist of groups of statements that pertain to a given job. Raters check statements most representative of the characteristics and performance of an employee. A checklist performance, supervisor. appraisal is a record of not an evaluation by the

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Check all of those statements that are accurate descriptions of the behaviour and activities of __(Name)__ for the period _(Date)_ to _(Date)_ Check as many or as few as apply: ---- Is a decisive decision maker ---- Is concerned about the quality of the work completed ---- Is easy to work with ---- Is able to communicate guidelines for improving work ---- Is sensitive to the work of others ---- Is able to delegate a job to subordinate technicians ---- Tactfully corrects poor quality work of technicians Weights 10.0 10.0 8.2 7.9 6.3 6.5 8.5

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The Process

It contains a series of questions about the employees performance.

These represent all levels of effectiveness. The supervisor checks boxes to answer the questions yes or no.

After completion, it is usually evaluated by the staff personnel department, not the rater. Are quantified by applying weights to individual checklist items according to their importance. The analyst has a key for scoring the items resulting in a rating of the employees performance. He then hands it back to the rater for discussion.

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Checklist Appraisal

Advantages

It is easy to complete. Bias is less comparatively as the rater and the scorer are different.
The checklist can be difficult to prepare, and each job category will probably require a different set of questions. There is no way for the supervisor to discern and adjust the answers. Different Interpretation of item meanings by different raters.

Disadvantages

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Graphic Rating Scale (GRS)

The rater assesses a ratee on performancerelated characteristics and personality characteristics, ie. factors like quantity of work, dependability, job knowledge, cooperativeness, ability to lead, interpersonal skills, etc. by using a rating scale. Can indicate an employees performance also on a continuum.

Job criteria scales Behavioral scales

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The Process

Issues while construction includes selecting the characteristics to evaluate:

Deciding the number of points on the scale Focusing on the job description Providing descriptions for each criteria and
each point on the scale

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GRS - Advantages
Relatively easy to use. Less time consuming to develop and administer. Facilitates quantitative analysis and comparison. Standardisation of items across diverse job categories.

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GRS - Disadvantages

The ratings themselves are subjective. What one supervisor considers excellent may seem just average to someone else. Quantifying the additional descriptive information. Different raters may disagree about the meaning of the scale points. Different factors are grouped together with one box to check.

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BARS Dimension: Quality of Group Member Input

Effective 5 4 Group member has read all agreed-upon material Group member has read some agreedupon material

Group member participates in discussions, though not always prepared

Group member does little work and offers no valuable ideas or feedback Group member does not attend any meeting

2
Ineffective 1

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BARS for Grocery Checkout Clerks

Performance dimensions

Knowledge and judgement Skill in Human Relations Skill in operation of register Skill in bagging Skill in monetary transactions Observational ability

39 Excellent

7 6

By knowing the price of items, this checker would be expected to look for mis-marked or unmarked items. One can expect this checker to be aware of items that constantly fluctuate in price. One can expect this checker to know the various sizes.

When in doubt, this checker would ask the other clerk if the item is taxable. This checker can be expected to verify with another checker a discrepancy between the shelf and the marked price before ringing up that item.
When operating the quick check, if the lights are flashing this checker can be expected to check out a customer with 15 items. One could expect this checker to ask the customer the price of an item that he or she does not know. In the daily courser of personal relationships, he/she may be expected to linger in long conversations with a customer or with another checker. In order to take a break, this checker can be expected to block off the check stand while people wait in line.

2 1

Extremely Poor

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Customer Service Skills

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Behaviorally Anchored Rating Scales

Here, the employee is rated on quantified scales with specific behavioural examples of good and bad performance in several areas. Relies on critical incidents to serve as anchor statements. A series of continuous graphic rating scales arranged vertically. The supervisor selects the statement that best describes how the employee performs. Each job title in the organization has a different set of rating statements. Also called Behavioural Expectation Scales

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For each behaviour listed use the following:

5 represents 95 - 100% of the time 4 represents 85 - 94% of the time 3 represents 75 - 84% of the time 2 represents 50 - 74% of the time 1 represents 0 -4 9% of the time

Is accurate in preparing cost reports for Johnson project crew. Almost never 1 2 3 4 5 Almost Always

Practices sound energy conservation in supervising project crews.

Almost never

Almost Always

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Behavioral Observation Scale (BOS)

Describes specific behaviors and asks raters to indicate the frequency with which a worker performs the behaviors. Like BARS is based on critical incidents. Rating of frequency of critical incident based on recollection of rater. Concentrates on critical behaviors that are actually performed. Critical incident frequency ratings are summed for an overall rating. The firm must determine the meaning and importance of the total score for its ratees.

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3600 Feedback
PEERS

SUPERIOR CUSTOMERS

TEAM SELF

SUBORDINATES

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FEEDBACK SOURCES
10

= Self or Superior or Both

900

= + Colleague/Peer
= + Subordinate

1800 3600

= + Team + Customers (Internal & External)

7200 = ?

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360-degree Feedback

Combines assessment from all round an employee. The information is collected and feedback is provided in full circular fashion-top to bottom and back to the top. Example: British Aerospace.

The upward portion of the feedback program involves an anonymous system whereby team members provide information about their supervisors, using a questionnaire. Then these results are collated so that a report can be prepared for the manager. Anonymity is generally maintained.

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The Process
Makes

use of survey questionnaires. Computerized systems then compile all this feedback into individualized reports that are prepared and presented to the ratee. The ratees then meet with their own supervisors and sometimes with their subordinates and share the information they feel is pertinent for the purpose of developing a self-improvement plan.

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Organizations using 3600

NIIT,

Tisco, Telco, Philips, Wipro, Aditya Birla Group, Motorola The objective is mostly developmental. Most organizations use it for top management only. Some of the most common dimensions assessed are: communication, customer orientation, initiative, team skills.

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360 Degrees
Positive Negative
Multiple perspectives of a persons Feedback from multiple sources can performance. be overwhelming. Ratings can evaluate person based on Rater can hide in a group of raters and actual contact and observation. provide harsh evaluations. Feedback is provided from multiple Conflicting ratings can be confusing directions-above, below and peer. and frustrating. Upward feedback when anonymous Providing feedback that is constructive results in full participation. requires a plan and well-trained raters. This is not typically found in organizations. Learning about weaknesses strengths is motivation. and

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Types of Rating Errors

Leniency or Severity/Central Tendency/Strictness: everyone is rated the same. E.g., words like satisfactory, average and excellent. Halo Error: One aspect of an individuals performance influences the evaluation of his/her entire performance. E.g., an attractive or a popular employee might be given a high rating. Rater Effect: includes favoritism, stereotyping and hostilities. E.g., gender, age, race and rapport biases. Spillover Effect: allowing past performance ratings to unjustifiably influence current ratings. Performance Dimension Order: similar ratings for 2 similar dimensions placed closely on the scales.

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Primacy and Recency Effects: the raters ratings are heavily influenced either by behaviour exhibited by the ratee during the early stages of the review period (primacy) or by outcomes, or behaviour exhibited by the ratee near the end of the review period (recency). E.g., a salesperson capturing an important contract/sale just before the completion of the appraisal, notwithstanding his earlier overall performance. Perceptual Set: the raters assessment is influenced by previously held beliefs. E.g., the supervisor believing that the employees hailing from a particular region is intelligent and hard working, his subsequent ratings of other employees from that region is favourably high. Status Effect: overrating employees in higher level job held in high esteem and underrating employees in lower-level jobs held in low-esteem.

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Appraisal Interview Hints

Figure 1113

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Feedback as a System
Data Evaluation of Data

Feedback System

Action Based on Evaluation

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Legally Defensible Appraisals

Develop appraisal criteria from documented job analyses. Communicate performance standards to employees in writing. Base appraisals on separate evaluations of each of the jobs performance dimensions. One appraiser should never have absolute authority to determine a personnel action. Train supervisors in the use of the appraisal instruments. Review process to prevent undue control of careers. Counseling to help poor performers improve.