INTRODUCTION
“Never confuse effort for results. If you're measuring effort as progress, you're not measuring the right thing”
Anonymous
What is a Performance Management Program?
A Performance Management Program is….. an ONGOING process between a manager and an employee that involves establishing clear expectations about:
• essential job functions
• what “doing the job well” means in concrete terms
• defining how job performance will be measured
• employee progress in meeting established goals and objectives
• identifying and addressing barriers to performance – inadequate training
– significant increase or change in scope of responsibilities – critical data/information not provided
• employee development and career path options A Performance Management Program is NOT…
• the completion of a performance appraisal form once a year
• something that is used only for poor performers
• something that the manager does to an employee
• “surprising” an employee with issues or complaints
• a process to assign blame
Why a Performance Management Program?
A Performance Management Program provides opportunities to:
• review and clarify job expectations
• ensure that the current job description is accurate
• ensure employee understands how they contribute to the overall organization
• provide feedback on achievement of established goals and objectives
• identify performance strengths, as well as areas requiring further development
• identify performance issues and to establish a plan to address them
• identify training and development needs for the individual and the organization
• develop a career path for the employee
• guide the organization’s succession plan
Module VI:
Establishing Goals &
Managing Employee Performance
The Performance Management Cycle:
The Performance Management cycle includes various milestones over the review period, and the review period commonly established in organization aligns with the calendar year, fiscal year, or the life a specific project. The cycle begins by establishing goals with the employee.
STEP 1: ESTABLISHING GOALS
In developing goals and objectives for the review period, use “SMART” goals.
For more information about establishing SMART goals and objectives go to:
http://management-elements.com/2011/03/08/smart-goals/
Linking Results to
"Pay-for-Performance
Incentives” Establishing Goals
Formal Feedback on Employee Performance Documentation
Conducting the Employee Performance
Review Meeting
Ongoing Coaching &
Informal Feedback
Specific set concrete goals that are easy to understand Measureable If you can’t measure it, you can’t manage it Attainable Ensure the goal is achievable, but challenging Relevant Ensure goal(s) stay relevant to the changing conditions Time-based Set expectations and limits; all goals have a delivery date
Other considerations, in developing specific employee goals and objectives for the review period:
• Alignment of employee goals and objectives with overall organizational goals, objectives, strategy, and business plan.
• Understand there may be “core” goals and objectives for all employees that may not be negotiable.
• Clearly identify and communicate the areas where employees WILL have an opportunity for input in developing goals and objectives.
• Generally, four – six goals should be established for the review period.
• Document established goals for ongoing review.
Examples of ineffective goals and objectives…
• Increase revenue
• Improve client relations
• Become proficient in additional software programs and/or IT applications
• Develop leadership competencies
• Expand industry network and contacts
Examples of “SMART” goals and objectives:
• Increase revenue by 5% (or $ 50,000) within existing client base prior to the end of the fiscal year
• Ensure response to all client inquiries within 24 hours, and review unresolved client issues with manager on a weekly basis along with recommended action
• Incorporation of Project Management software:
– completion of training during first quarter of fiscal year
– implementation of software prior during second quarter of fiscal
– full utilization prior to the end of the fiscal year and discontinuation of existing project management system
• Develop leadership competencies through participation on volunteer board of directors for the duration of the fiscal year
• Expand industry network and contacts through:
– creation of a Linked-in profile by end of first quarter with ongoing development throughout the fiscal year – monthly participation in industry or professional sponsored events
STEP 2: ONGOING COACHING & INFORMAL FEEDBACK
Ensure review of employee goals and objectives on a regular basis throughout the review period:
• Follow-up meetings with employee (monthly or quarterly)
• Staff/team meetings
• Informal discussion and day-to-day interaction
• Listen to employee and provide feedback frequently
• Recognize achievement of goals and objectives during the review period
Identification and early intervention, for employees having difficulty in achieving goals and objectives is critical.
STEP 3: FORMAL FEEDBACK ON EMPLOYEE PERFORMANCE
Determining formal feedback mechanisms regarding employee performance:
Traditionally, formal feedback on employee performance reviews has been based solely on the information provided by the direct manager. Now, in many organizations, performance reviews incorporate performance feedback from the employee themselves, along with coworkers, team members, managers, and other individuals employees may have contact with during the course of their job responsibilities.
Expanding the range of feedback does provide for a broader perspective on employee performance, however, soliciting more feedback also increases time, structure, and cost to do so.
Most organizations can easily incorporate Employee Self Evaluation and Manager Evaluation components into their Performance Management program initially, and work toward incorporating 360 performance mechanisms at a later date.
Broader range of feedback regarding employee performance Increased structure, time, and cost needed to solicit feedback
Preparing for the Formal Performance Review:
1. Prepare Employees
Communicate to employees upon hire, or to all employees when a Performance Management program is
introduced/revised. Generally however, preparing employees for the performance review process should not be time consuming, and can easily be incorporated as part of a regular staff meeting or conference call, to discuss with employees:
• Why the program is important to them
• The duration of the review period (calendar, fiscal year, other)
• Their role in developing goals and objectives
• How goals and objectives will be measured (quantitative vs. qualitative measures, self appraisal, 360 feedback, man- ager evaluation, other)
• The importance of ongoing feedback and coaching during the review period and how that will take place
• Confirm if performance review/results are tied to a “pay for performance” program Manager Evaluation Employee
Self Evaluation
Interim Multipoint Feedback Formal 360 Performance Review
• direct manger provides evaluation and feedback of employee progress based on established goals and objectives
• employee provides self evaluation and feedback of progress based on established goals and objectives
• an informal multipoint feedback assessment may be suitable for SME organizations as a interim performance review, or in situations where a formal program is not an option due to time or other resource contraints
• a structured or formal multipoint feedback process to solicit responses from employee, coworkers, clients, manager, and other individuals regarding employee performance and progress related to established goals and objectives
• often also used for employee development
• Specific information regarding the formal Performance Review process/meeting:
– What will be discussed and what input they are expected to provide
– What kind of questions will be asked and what decisions will be made as a result of this meeting – What kind of preparation will they need to do
– When will these meetings take place and approximate duration 2. Gather Information
As the performance review process is an ongoing process throughout the review period, most information should be easily accessible or already compiled, including:
• Organizational mission and vision
• Organizational goals and objectives, strategy
• Current business plan
• Employee job description
• Performance evaluations previously completed with the employee
• Employee progress on established goals & objectives, as well as any performance action plans previously identified with the employee during the review period
• Feedback from employee self appraisal, or 360 Feedback (team members, clients, referral sources, or other individuals) if applicable
• Discussions and meetings that have taken place during the review period with employee
3. Document your initial thoughts
This stage of the employee review period is generally an investment of one hour for each employee. As you are beginning to compile your thoughts and comments, keep in mind:
• Remember that most employees do appreciate honest feedback
• Be specific in providing examples with your ratings
• Focus on results, behaviour and performance, not the individual
• Be constructive in your feedback – focus on future growth
• Determine if there were any barriers, or extenuating circumstances which were out of the employees control and which may have impacted their ability to perform
• Did the employee have the training, resources and tools to perform their job
Be aware of common biases that occur when providing formalizing performance feedback:
• “halo effect:”: overrating an employee’s overall performance because we like them personally; they are really good at one aspect of their job; they have been with the organization for a long time
• “horns effect”: underrating an employee’s overall performance because their personal style may be different from our own; one particularly negative incident during the review period; poor performance at one aspect of their job
• “central tendency”: rating employees’ overall performance as neither good or poor – always average, even when there are employees who perform exceptionally well or poorly
• “recency effect”: allowing recent employee performance to influence the feedback provided for the entire review period. An employee who just prior to their review meeting, experiences a negative encounter with a client, but has demonstrated exemplary judgement for overall review period, should not necessarily receive a poor rating.
4. Scheduling the initial meeting:
• Schedule the meeting 1–2 weeks in advance
• Arrange a mutually agreeable time with the employee being evaluated
• Select a location and time where you will have privacy and encounter minimal interruptions
• Provide the employee being evaluated a “draft” copy of the performance review at least one week in advance (note: the future goals and objectives section of the document – will be completed together with the employee at a later date)
STEP 4: CONDUCTING THE EMPLOYEE PERFORMANCE REVIEW MEETING
1. Conducting the meeting:
• Allow for adequate time (generally 1–1.5 hours for each meeting)
• Allow for privacy – no disruptions (you may want to consider going off-site)
• Let the employee start off with what he/she wants to talk about – listen to what they have to say – then bring up what was missed
• Provide specific feedback with concrete examples
• Be honest in your examples – frame issues in the context of future growth and development
• Assist employees in finding solutions to issues – they will be more committed to success if they are involved in the plan
2. Dealing with Difficult Situations:
• Remain professional and calm – don’t get caught up in the emotion
• Listen to concerns and ask questions
• Reinforce with additional examples
• Work to find mutual solutions – how can performance be improved and this is an opportunity to reinforce expectations
STEP 5: DOCUMENTATION
Documentation of employee performance related to achievement of established goals and objectives whether in hard copy, or, e-copy format is critical for a variety of reasons:
• Establishing a documented performance history for each employee is vital information for promotions, employee development, or succession planning initiatives
• It is important to have a record of employee performance in the event the individual moves to a different department within the organization, or a new manager becomes responsible for the employee
• Achievement, or failure to achieve, established goals and objectives may be linked to monetary rewards
• In the event the employee leaves the organization, an employment reference may be provided based on documented employee performance
• Continued failure of the employee to achieve established goals and objectives and documentation may be required to reinforce the organization’s decision to terminate the employment relationship
Paper/Hard Copy Documentation Web Based Programs
• traditionally hard copy/paper forms have been used in employee performance management programs
• low cost
• e-forms and web based programs are becoming increasingly popular for globally based, or "virtual offices"
• Ease of use and timely exchange of information, along with interfacing with other HR software makes web based programs an increasinly popular choice
e-forms, or web based programs generally effective in providing more timely reviews, and for use in geographically dispersed employee groups or “virtual offices”. Potentially there is an increased cost associated with web-based programs, however, wider use is gradually making this a more cost effective option to consider
Finalizing Documentation:
• Ensure forms are competed, reviewed, and signed by both the employee and manager
• It is common for completed employee performance review forms to require a second level review and approval, by either a more senior manager, or the human resources department
• Retain copy on employee file
Developing a Plan (future goals and objectives):
• This portion of the review may be completed at a later date (within 1–2 weeks of the review meeting)
• Focus goals and objectives on the critical disciplines required in the employee’s position
• In the event the employee has achieved many/all of the objectives of their current role, consider: developing goals and objectives for other roles within personal development objectives
Refer to: Tools 19, 20, 21
STEP 6: LINKING RESULTS TO “PAY-FOR-PERFORMANCE INCENTIVES”
Increasingly, it is common to for a component of employee compensation (generally up to 30% of base pay) to be allocated upon employee attainment of identified goals and objectives. In the event an organization does have a
“Pay for Performance” component as part of their compensation plan, it is critical that SMART goals and objectives are:
1. Clearly established at the beginning of the review period
2. Clearly communicated to the employee. Specifically how identified goal(s), and subsequent performance measures will impact level of incentive
3. Measured and ongoing feedback and coaching taking place for the duration of the review period regarding the status of established goals and objectives
4. Formalized and documented for future reference
The Performance Management Cycle:
The Performance Management Cycle begins once again with the establishment of employee goals and objectives and is an ongoing process.
RESOURCES/TOOLS/TEMPLATES:
2010 Study on the State of Performance Management:
http://www.worldatwork.org/waw/adimLink?id=44473
Management Library: The online integrated library for personal, professional, and organizational development. Employee Performance Management:
http://www.managementhelp.org/emp_perf/emp_perf.htm
http://www.managementhelp.org/emp_perf/perf_rvw/perf_rvw.htm Smart Goal Setting:
http://www.smart-goals.org/
Performance Management Process Checklist:
http://humanresources.about.com/od/performancemanagement/a/perfmgmt.htm 360 Feedback: The Good, the Bad, and the Ugly:
http://humanresources.about.com/od/360feedback/a/360feedback.htm Performance Appraisals:
http://www.businessballs.com/performanceappraisals.htm Performance Improvement Plan:
http://www.technocompetences.qc.ca/en/human Linking Results to
"Pay-for-Performance
Incentives” Establishing Goals
Formal Feedback on Employee Performance Documentation
Conducting the Employee Performance
Review Meeting
Ongoing Coaching &
Informal Feedback
TOOL 19: PHASE 1 CHART – DISCUSSION AND MUTUAL AGREEMENT/PERFORMANCE EVALUATION
What are the objectives for the coming year?
Do you have any specific training needs?
What are your career objectives (short and long-term)?
Additional Notes
Employee identification
Employee’s name: Date:
Employee title:
Immediate supervisor:
TOOL 20: PHASE 2 CHART – PROGRESS MEETING/PERFORMANCE EVALUATION
Employee strengths Areas requiring improvement
Attainment of objectives
Additional support to be provided
Additional Notes
Employee signature Signature of immediate supervisor
Employee identification
Employee’s name: Date:
Employee title:
Immediate supervisor:
TOOL 21: PHASE 3 CHART – ANNUAL MEETING/PERFORMANCE EVALUATION
KNOWLEDGE SCORING SCALE
The employee knows the main characteristics ++ + +/– – N/A Comments and observations
of the organization and has the necessary qualifications for his or her position.
To be determined in accordance with the set objectives and the functions of the employee’s position
Legend (check appropriate column)
++= highly satisfactory += satisfactory +/– = needs improvement –= unsatisfactory N/A column = does not apply
Employee identification
Employee’s name: Date:
Employee title:
Immediate supervisor:
SELF-MANAGEMENT SKILLS SCORING SCALE
The employee has demonstrated abilities and has ++ + +/– – N/A Comments and observations exhibited behaviour allowing him or her to relate to
others and to effectively perform his or her work.
To be determined in accordance with the set objectives and the functions of the employee’s position
KNOW-HOW SCORING SCALE
The employee has the technical competencies and the ++ + +/– – N/A Comments and observations skills required to use the tools and methods necessary
for his or her work.
To be determined in accordance with the set objectives and the functions of the employee’s position
TOOL 21: PHASE 3 CHART – ANNUAL MEETING/PERFORMANCE EVALUATION (continued)
Employee strengths Areas requiring improvement
Attainment of objectives
Necessary additional support
Additional Notes
Employee signature Signature of immediate supervisor
* Return this sheet to the employee file.
