Managing Employee Performance, Certification link.
1. Introduction of performance management
Performance Management’s Role: It is considered a major contributor to organizational effectiveness, essential for developing employees and ensuring a return on investment. Positive Outcomes: Effective performance management leads to better task behavior, customer satisfaction, operational efficiency, and financial results.
Key Elements of Performance Management:
- Alignment: For performance management to be effective, it must align with the organization’s mission, strategies, and goals.
- Employee Development: Focuses on understanding employees’ knowledge, skills, and motivations to enhance engagement and performance.
- Data Utilization: Collecting data for workforce planning, training needs, and succession planning.
- Performance Differentiation: Accurately assessing employee performance to identify top talent and areas for improvement.
- Legal Documentation: Maintaining accurate performance records to protect against legal issues.
- Administrative Needs: Keeping employee files updated for promotions and references.
- Data for Rewards: Using performance data to inform compensation and rewards.
Strategic Performance Management: This approach emphasizes continuous improvement and involves several key components:
- Foundation: Establishing a strategic plan, mission statement, and clear organizational goals.
- Performance Planning: Ensuring accurate job descriptions, performance standards, and training for managers.
- Ongoing Activities: Encouraging two-way communication, timely feedback, and coaching throughout the year.
- Documentation: Keeping records to support effective performance reviews.
- Multi-Rater Assessments: Gathering feedback from various sources for a comprehensive view of employee performance.
- Follow-Up: Regularly revisiting performance objectives to ensure continuous improvement.
Strategic Process: Mission, Vision, SWOT, Goals, Strategies, Implementation, Communicate.
2. Implementing Performance Management System
2.1 Define Performance
Performance is defined as the behaviors of employees rather than just the results.
- Good behaviors and poor result, is possible.
- Poor behaviors and positive result. should not be encouraged.
In the current lecture on performance management, the focus is on understanding the performance equation, which consists of three key components:
- Declarative Knowledge (What): This refers to the facts, principles, and goals necessary for a job. It’s essential to know your job description and task requirements to succeed.
- Procedural Knowledge (How): This involves the skills needed to perform effectively, including cognitive abilities, physical skills, perception, motor skills, and interpersonal skills.
- Motivation (Why): Understanding the reasons behind tasks enhances motivation. When employees see how their work aligns with organizational goals, their commitment and effort increase.
The lecture emphasizes that all three components must be present for optimal performance. Additionally, organizational support and effective HR practices are crucial for enhancing performance. The concept of conscious practice and the importance of feedback are also highlighted, along with the idea that becoming an expert requires significant practice, often cited as the 10,000-hour rule.
2.2 Measuring Performance and Developing Objectives
Three approaches to assessing employee performance:
- Trait Approach:
- Evaluates individual traits that contribute to performance, such as energy, creativity, and patience.
- Effective for hiring but not recommended for promotions or terminations.
- Behavior Approach:
- Looks at how employees perform their tasks, including punctuality, teamwork, and communication.
- Useful in long-term roles like R&D, where results may take time to manifest.
- Results Approach:
- Focuses on the outcomes produced by employees, such as profits or customer satisfaction.
- Effective when employees have the necessary skills and when there’s a clear link between behaviors and results.
The lecture emphasizes the importance of aligning individual objectives with departmental and organizational goals, ensuring clarity, measurability, and flexibility in setting these objectives. It also highlights the need for clear communication and mutual agreement on objectives to enhance employee motivation and performance.
- Goals:
- Tend to be longer-term and more broad.
- Focus on the big picture and overall direction (e.g., “I want to be a successful HR manager”).
- Often not measurable or tangible.
- Objectives:
- Are shorter-term and specific.
- Must be measurable and tangible (e.g., “I will complete the HR People Management Certification Program by September 2016”).
- Help in holding individuals accountable for their performance.
Performance Standards are more about behaviors and specific actions, while objectives focus on goals and outcomes (1) Quality: Ensuring the quality of work. (2) Time: Timeliness in completing tasks. (3) Quantity: Measuring the volume of work produced.
2.3 Measuring Results and Behaviors
Accountabilities <-> Performnance standards <-> Objectives <-> Goals + Methods for measuring performance
(1) Comparative Methods:
- Simple Ranking: Employees are ranked from top to bottom.
- Alternating Ranking: Alternates between top and bottom performers.
- Forced Distribution: Employees are categorized into percentages across performance levels.
(2) Absolute Methods:
- Essays: Written evaluations of performance.
- Behavior Checklists: Ratings on specific behaviors using a scale.
- Critical Incidents: Documenting significant positive and negative performance events.
- Graphic Rating Scales: A scale with defined performance levels for various dimensions.
(3) Results Methods: Management by Objectives (MBO): Employees and managers agree on objectives and review performance against these goals.
| Aspect | Comparative Methods | Absolute Methods | Results Methods (MBO) |
|---|---|---|---|
| Definition | Employees are compared against each other. | Employees are evaluated against predefined standards. | Employees are evaluated based on the results achieved against jointly set objectives. |
| Pros | - Easy to explain and understand - Clear results - Identifies performance levels - Encourages managerial evaluation |
- Suitable for various organization sizes - Higher employee acceptance - Clear criteria - Facilitates development - Consistency |
- Aligns with corporate strategies - Facilitates monitoring - Clear expectations - Employee development - Measures real results |
| Cons | - Poorly designed rankings - Legal challenges - No relative distance - Time-consuming |
- Grading errors - Time-consuming - Inconsistency - Manager dependency |
- Overlooks behaviors - Requires strong management skills - Regular review necessary |
| Specific Types | - Simple Ranking - Alternating Ranking - Forced Distribution |
- Essays - Behavior Checklists - Critical Incidents - Graphic Rating Scales |
- Setting objectives jointly - Reviewing performance against objectives |
| Best Suited For | - Small to medium-sized organizations - Situations where relative performance is important |
- Organizations of any size - Situations where clear standards are available |
- Organizations focused on results - Situations requiring clear objectives and outcomes |
| Implementation Complexity | - Moderate to high (especially in large organizations) | - Moderate (can be time-consuming to develop and implement) | - High (requires strong management skills and regular reviews) |
3. Tools for effective performance management
3.1 Effective Review
- Discuss the importance of the review process.
- Explanation of meeting purpose.
- Jointy discuss goals and accomplishments with rationale.
- Developmental and future goals discussion.
- Summarize.
- Set date for follow up.