Performance Management

1. Performance Management Performance management involves: • the establishment of performance standards (organisational, group and individual • monitoring of actual performance • and the construction of action plans to review standards, deal with problem areas and take appropriate steps to improve performance.

2. Performance Appraisal defined • Systematic approaches to evaluating employee performance, characteristics and/or potential with a view to assisting decisions in a wide range of areas such as pay, promotion, employee development and motivation • Usually conducted with the use of performance appraisal interview

3. Corporate Mission & Strategies Dept. Objectives & Strategies Performance Agreement Action Performance Performance Review Performance Management System

4. Performance Appraisal Objectives • To review past performance • To facilitate career counselling/development • To improve future performance • To set performance objectives • To identify training needs

5. Performance Appraisal Objectives (cont’d) • To aid salary review • To improve communications • To assist manpower planning/recruitment • To assess potential • To provide feedback

6. Performance Appraisal Benefits • Organisational level: • Vertical integration - linking and aligning business, team and individual objectives • Functional integration - linking functional strategies in different parts of the business • HR integration - linking different aspects of HRM e.g. organisational development, human resource development, compensation and benefits, manpower planning

7. Management (supervisor) level: • opportunity to learn about employee’s future intentions in the organisation (i.e. career expectations • opportunity to clarify and reinforce important goals and priorities • opportunity to motivate staff • opportunity to receive feedback about his/her ability as a manager and the employee’s concerns, ideas etc. about the job

8. Individual (employee) level: • translates corporate objectives into individual goals • allows individual to receive feedback on how his/her performance measure against expected performance • encourages the generation of an individual development plan • two-way communication and involvement

9. Problems & Pitfalls • Rating biases: • Horns/halo effect • Leniency • Central tendency • Recency effect • Subjectivity • Lack of two-way communication • Mutually agreed outcomes? • Pre-determined rating? • Appraiser - judge versus helper?

10. Styles of appraisal interviewing • Tell & sell • appraiser is directive and acts as judge who communicated evaluation and instructs steps for improvement • Tell & listen • appraiser is consultative and acts as a judge/counsellor who communicates evaluation, listens to response and deals with reactions

11. Styles of appraisal interviewing (cont’d) • Joint problem-solving • appraiser is participative, facilitating two-way discussion, jointly tackles problems and jointly agrees remedial action • Which is most effective approach?

12. Conducting performance appraisal interviews • The following section outlines the key issues which result in effective performance appraisal interviews: • Before • During • After

13. Before • Reflect on purpose • What do you want to achieve? • Your objectivity? • Mutually agree time and place (interruptions, seating etc.) • Joint preparation • past performance, future objectives • Plan interview structure

14. During • Establish rapport, ice-breaker • Outline interview objective and structure • invite input • Clear note-taking • Self-reflection synopsis • Start with positives • Active listening, questioning, body language etc.

15. During (cont’d) • Facts v’s personality • Address each issue as per appraisal form • Identify training needs & agree development plan • Keep objectives SMART • S - specific • M - measurable • A - agreed • R - realistic • T - time-bound

16. After • Follow-up on action items • Self-reflection to see where you can improve

17. Contemporary Developments • Self-appraisal part of most performance appraisal forms • Move to multiple raters rather than just the boss i.e. 360-degree or multi-source feedback • Many firms now have more than one annual appraisal – some are quarterly

18. To summarise • PA = The evaluation of actual job performance against previously set and agreed performance goals should take place at agreed time intervals. • It requires careful preparation by the appraiser which should facilitate a constructive dialogue between appraiser and appraisee. • Actual performance is evaluated in terms of targets set, strengths and weaknesses and action plans.

19. To summarise (cont’d) • The communication flow should be two-way. Interviewee/appraisee should have plenty opportunity to discuss issues • The approach should be participative, with praise and criticism given as appropriate. • Performance targets for the future should be agreed.