Performance Management System

-A tool for enhancing

Employee Productivity and
Retention

a workshop by

Aswani Kumar Kota

Ground Rules

Š Respect Confidentiality

Š Please “Silence” your cell phone

Š Be open to a discussion of the full range of

issues that may come up in a discussion of
performance management
W I I F M!

What’s In It For Me!

Objectives
Š At end of lesson, you will be able to

9 Design, Develop and implement a customized PMS

to suit your organization’s needs.

9 Clearly define parameters for measurement and help

individuals set objectives/goals

9 Define and develop appropriate tools for

Performance Management
9 Efficiently collect, compile and interpret outcomes of
a performance appraisal.

9 Define path forward-post appraisal.

9 Elevate the role of PMS from Measurement to

Career enhancement.
Workshop Agenda

Š Performance Plan

Š Difference between Performance Management Systems

and Performance Appraisal

Š Strategies for getting support from various departments

Š Approaches to a thorough and transparent appraisal.

Š Hindrances to an appraisal, how to overcome them

What Is Performance Management?
Š It is a systematic process of
– Planning work and setting expectations

– Continually monitoring performance

– Developing the capacity to perform

– Periodically reviewing performance

– Rewarding good performance consistently

The Performance Management Cycle

Performance
Planning
Ongoing
Coaching

Performance
Review

What: Key accomplishments or end results identified for the role

How: Skills and core behaviors needed to achieve the end results
How Does Individual Employee’s Performance Link
With organizational Goals?

Organization’s
Strategic Goals

Organization’s Annual
Performance Plan Goals

Work Unit
Products & Services

Individual Employee
Products & Contributions

Individual Employee’s
Performance Standards
Pre-Requisite
Š Organization’s Vision

Š Organizational Structure

Š Defined Jobs

Š Corporate Goals; Annual Goals

Performance Management Cycle

Planning Monitoring

Rewarding Developing

Rating
Performance Management Cycle

Planning

Planning
• Set Goals
• Establish and communicate
elements and standards
Performance Management Cycle

Monitoring

Monitoring
• Measure performance
• Provide feedback
• Conduct progress review
Performance Management Cycle

Developing
• Address poor performance
• Improve good performance Developing
Performance Management Cycle

Rating
• Summarize performance
• Assign the rating of record

Rating
Performance Management Cycle

Rewarding
Rewarding • Recognize and reward
good performance
What Is A Performance Plan?

A documented record of an employee’s critical and

non-critical elements and performance standards.
What Is A Performance Plan?
(cont’d)
Employee Performance Plan

Performance Elements Performance Standards

Tells employees WHAT they have to do Tells employees HOW WELL they have to do it

Critical Element Non-Critical Element

A major component of a job, A major component of a job
which consists of 1 or more that does NOT meet the
duties and responsibilities definition of a critical
that contribute to element, but is important
accomplishing enough to warrant appraisal
organizational goals and and assignment of an
objectives that is of such element rating
importance that
unacceptable performance
in the element would result
in unacceptable
performance in the position.
How To Develop A Performance Plan
Identify Job Tasks

Group Job Tasks

Determine What Is Missing

Critical or Non-critical

Develop Performance
Standards
Step 1: Identify Job Tasks
For The Position
Š Review the Position’s Description to identify
major job tasks
¾ What would a person in this position do?

¾ How do these tasks relate to your department’s

goals?

¾ How do these tasks relate to the organization’s

goals?
Job Descriptions Are A
Good Start But...
Š Can be outdated or incorrect
Š Can be too generic
Š Most job descriptions identify activities required
for job
Š Performance plans with elements and standards
measure accomplishments not activities
What Is A Performance Element?
Š Tells employees WHAT they have to do
Š Two types of performance elements

¾ Critical Elements

¾ Non-critical elements
What Are Critical And Non-critical
Elements?
Š Critical Element Definition
An assignment or responsibility of such importance
that unacceptable performance in that element would
result in a determination that the employee’s overall
performance is unacceptable.

Š Non-critical Element Definition

A dimension or aspect of individual team, or
organizational performance, exclusive of a critical
element, that is used in assigning a summary level
rating
Critical Element - Characteristics
Š A critical element can
9 Reflects basic purpose of position
9 Cause considerable adverse consequences if not
performed properly
9 Require large amount of position’s time
9 Be a grade-determining factor
9 Repeatedly be performed in some positions
9 Be used to describe only an individual
employee’s performance
Non-critical Element - Characteristics
Š A non-critical element is
9 Not based on performance actions

9 Used to measure group performance

9 The importance each supervisor places on non-

critical elements is one way to affect summary
ratings
Step 2: Group Tasks Into Several
Major Categories Of Tasks
Š Should have between 3 and 8 categories
Š These “categories” are the performance
elements
Š Examples of performance elements
– Customer Satisfaction
– Technical Administration
– Written Products
Step 3: Review/Determine If Any Job
Tasks/Elements Are Missing
Š Are there duties that a person in this position
must perform that are not on the list yet?
Š Are there duties that a person in this position will
perform on an infrequent basis, but are still
essential to their position?
– Example:
y Compile voucher processing data for quarterly and
annual reports
Step 4: Determine If Specific
Elements Are Critical/Non-critical
If a person in this position performed this element
in unacceptable manner, is it so critical that it
would result in a rating of unacceptable
performance for the position overall?

– If so, it’s a critical element

– If not, but it’s still essential to this position, it’s a non-

critical element
Exercise
Š Critical vs. Non-critical Elements
Š Objective: to learn how to distinguish between
critical and non-critical elements; to practice
taking an existing job description and writing
performance elements
What Is A Performance Standard?
Š Definition
– A statement of the expectations or requirements
established by the management for each critical and
non-critical element at the rating level “Met.”
Š Includes factors such as
– Quality
– Quantity
– Timeliness
– Manner of Performance
Performance Standards
Š Determining standards - focusing on outcomes
– Quality - Identify who will rate performance; list
factors that rater will look for; state what rater will use
to verify “Met”
– Quantity - List the units to be tracked and determine
range of number that represents “Met”
– Timeliness - Determine acceptable number of times
employee can fail and be “Met”
– Manner of performance - Best if addressed as part of
another element to avoid conduct or attendance
issues
Performance Standards
Š Performance standards must be
– Legally sufficient
– Developed with workload requirements of
organization and position in mind
– Reasonable, capable of being exceeded
– Adequate enough to inform employee
– Considered a “living document”
– Objective
 Performance Standards’ Link With
organizational Goals
Organization’s
Strategic Goals

Organization’s Annual
Performance Plan Goals

Work Unit
Products & Services

Individual Employee
Products & Contributions

Individual Employee’s
Performance Standards
What do employees feel about
performance appraisal ?
The Vicious Circle

Too Bad
Invidualistic, Communication
Managers
Remote & &
Do it
divisive training
badly

Inadequate
Motivational
Objectives Poor
Value & effort
Are unreal, Links with
involved
Soon outdated Reward system

Ratings are
Inconsistent Negative focus
& unfair
Performance Appraisals
Š Need of Performance Appraisals

Š Types of Performance Appraisals

Š Approach to a Performance Appraisal

Š Designing an Appraisal Form

Appraising Performance is About…
Š Taking stock
Š Measuring overall contribution
Š Continued dialogue and communication
Š Having a “no-surprises” discussion
Š Planning for growth and development
Š Increasing commitment
Performance Appraisal
(the ‘Old’ Way)

z Annual - One time event

z Retrospective Appraisal
z Short Term
z Vague Conclusions
z Focus on Person
z Correct Past Performance
z Largely about Deficiencies
z Filling out Form
z One-way communication
Performance Management
(the ‘New’ Way)

z Ongoing
z Continual Feedback
z Develop Future Performance
z Complete Process
z Long Term
z Clear Objectives
z Focus on Behavior
z Incremental Progress
z Planning & Setting Goals
z Two-way communication
Creating the environment

Š Select a suitable location free of distracting sights and

sounds. Silence your cell phone; forward calls.
Š Provide advance notice. Allow the employee time to
prepare for the review.
Š Create an informal atmosphere that promotes two-way
communication.
Š Position yourself to minimize barriers between you and the
employee (i.e. sit side by side instead of across a desk
from each other)
Difficult Evaluations
Š Describe unwanted performance/behavior
Š Sight specific examples of when the
performance/behavior has occurred in the past
Š Explain how it affects their future, team or customer
Š Describe the preferred behavior
Š Encourage employee feedback allowing the employee to
come up with solutions for correcting the issue/behavior
Š Ask for a commitment to correct the behavior and set a
date to meet for follow-up
Common Mistakes in Appraisals

ƒ Recency – Focus on recent behavior

ƒ Central Tendency – Rate everyone the same
ƒ Leniency – Shuns low ratings to avoid conflict
ƒ Horns/Halo Effect – Rate employees the same
on every trait
ƒ Similarity – Rate employees higher who have
similar values and interest to the reviewer
Rating Scale

Š Excellent – 4

Š Good – 3

Š Acceptable – 2

Š Unsatisfactory - 1
Excellent (Exceeds Standards)

• Clearly considered to be exceptional performers.

• Consistently exceed the communicated expectations of the job
function, responsibility or goal.
• Demonstrate unique understanding of work beyond assigned area
of responsibility.
• Contribute to the organization’s success by adding significant value
well beyond job requirements.
• Identify needs and provide unique, innovative and workable
solutions to problems.
• Achievements and abilities are obvious to subordinates, peers,
managers and customers.
Good (Fully Meets Standards)

Š “On track” and fully achieve expectations.

Š Independently and competently perform all aspects of the job
function, responsibility, or goal.
Š Performance consistently meets the requirements, standards, or
objectives of the job.
Š Occasionally exceeds requirements.
Š Results can be expected which are timely and accurate.
Š Recognizes, participates in, and adjusts to changing situations and
work assignments.
Acceptable
(Usually Meets Standards)

Š Considered to be “satisfactory” performers.

Š Generally, meet expectations required for the position.
Š Competently perform most aspects of the job function,
responsibility or goal.
Š May require improvement in one or two areas of consistent
weakness.
Š Requires coaching in a weak area or may need additional resources
or training to meet expectations.
Š Improvement in weaker areas should be acknowledged and
documented.
 Unsatisfactory
(Fails to Meet Standards)

Š Fail to satisfactorily perform most aspects of the position.

Š Performance levels are below established requirements for
the job.
Š Requires close guidance and direction in order to perform
routine job duties.
Š Performance may impede the work of others and the unit.
Š Performance deficiencies should be discussed between the
employee and supervisor.
– Cont’d.
 Unsatisfactory
(Fails to Meet Standards) Cont ‘d.

Š This overall rating requires written supportive

information by the supervisor in the ‘Comments’ section
of the review form.
Š This overall rating requires the development of a
performance improvement plan.
Beware of These Comments

Š Young, solid performer

Š I hope we can keep the employee forever
Š Has done okay despite being overworked and underpaid
Š Has great attitude
Š Couldn’t run the department without him/her
Š Not bad for an old timer
Š Is attractive and has potential
Setting the Stage for
Future Performance

Š Review the job description with the employee.

Š Are tasks and responsibilities still relevant?

Š Ask employee for their perception of their job.

Š Give a detailed feedback on past performance.

Š Revise and update job description as necessary.

Š The job description becomes a working document that

creates/develops mutual understanding of the position.
Setting Goals & Objectives

Š Set specific goals and objectives for the coming year with the
employee

Š Set agreed upon time lines to break down goals into smaller
chunks

Š Document changes in the goals and objectives as the year

progresses and discuss these changes in ongoing performance
conversations
Creating SMART Goals

S pecific
M easurable
A chievable
R elevant
T ime-bound
 Connecting Goals

9 Connect goals with the organization’s larger

goals..
9 Eliminate tasks and activities that are unessential
to your primary mission and keep looking for ways
to add value.
9 Set goals & objectives that are mutually agreed
upon by the employee and the supervisor
9 Encourage and reward behaviors that are aligned
with organizational mission and goals.
9 Follow through on your commitments.
Goals Exercise
1. With a specific position/employee in mind think
of two goals you have for the next 3 months

2. Write those goals using SMART criteria

3. Find a partner and articulate these goals

4. Switch partners, repeat

Career Path Development
Performance Conversations
9 Develop a communication vehicle for ongoing dialogue and
feedback.

9 Regular performance conversations identify employee strengths

and areas for future development.

9 No surprises for the employee during appraisal

9 Keep discussion focused on actual behavior

9 Meet and discuss at least quarterly

to develop performance
 THE 8 STEP COACHING MODEL

8 Be
Supportive 1
Don’t Give Up

Define the
Topic and Need
7
2
Clarify
Consequence
s Fostering a Coaching Environment
Establish the
Impact
6
Confront 3
Excuses and
Resistance
Initiate a Plan
5
Get a 4
Commitment
Putting it All Together

Building Trust Goal setting

Clarification

Performance Frequent
Dialogue

Coaching Future
Honest
Performance
Corporate Planning and Performance
Management Cycle

Nov Dec Jan Feb Mar Apr May Jun Jul Aug S ep Oct
Performance
Management Cycle
Planning
M anaging
Ap p raising
Rating

Corporate Planning
Cycle
Planning Time table
Corp orate Guidelines
Plan Summary Docs
Business Plan Review
Budget Guidelines
Budget Reviews
Final Budget
Conclusion

Š What have I got out of this session?

Š What will I do tomorrow about Performance

Management?