Last week, we learnt about training and developing the workforce, this week we are focusing on how to evaluate, discuss and improve employees' performance.
Our textbook introduces performance appraisals as first. For me, this was an unknown word term so I did not know, what to expect. There are three steps in which appraisal process should be conducted. Those are identification (what will be measured and evaluated), measurement (evaluating itself and deciding on the quality of performance) and management (considering the measurement together with the employee and setting a future view).
Many companies nowadays still don't see the benefits of appraisals. However they are important to the company for two reasons; administrative reasons (for sufficient information and documentation- to ensure fair promotions, terminations and reward distribution) and developmental reasons (improving performance of employees and thus of the organization as a whole, deciding on the skills that will be important).
There are also positives for both, employees (receiving feedback as a basis for improvement and career development, fairness and motivation) and employers (erasing individual differences in performance, legal defense or implementation of strategic goals).
Let's have a deeper look at each of the phases mentioned above:
1. Identifying performance dimensions
This step covers deciding on what areas are important for the company and thus have to be measured. It should always be tied to business strategic goals and company's policies.
It can be very hard to determine the measured areas since the requirement are usually very complex. Modern approach has been focusing on competencies (competence covers skills abilities and knowledge in one term). To define the right competencies for each jobs, the company has to consider:
- the overall strategy of the organization
- the specifics of the job
- the global factors that may have impact on performance
At this point, it is good to mentioned the KPIs (Key performance Indicator) from the MindTools article. Determining and using them as a performance measure can be extremely useful for companies. By setting them, it is made sure that workers focus on the area on which they are supposed to focus and they are fulfilling company's agenda.
I can include my personal experience of how this worked in my former job. The business statement of the language school I worked for was Coach & Practice. The KPIs then were, whether the teacher lets the students come up with their own solutions- coaches them rather than lectures them and whether the teacher provides a lot of practice- has a lot of materials, sets homework, etc. Based on that we were supposed to have competencies such as creativity, preparedness, ability to navigate the students tot he right solution etc.
2. Measuring performance
After identifying what should be measured, the next step is measurement itself. The tools used for this can be classified based on the type of judgement that is required or by the focus of the measure.
In the first category, we have measuring with a relative judgement, which basically means not taking performance of each employee separately but comparing it to others and make a judgement based on this. The pros of this method is that there is some kind of differentiation among the workers, which can make it easier to make decisions about promotions. On the other hand this type of measurement doesn't give clear outcomes so the value of the feedback is questionable.
As oppose to that, absolute judgement is rating an employee based on given dimensions regardless the performance of the others. The problem here is that when working in teams, it is hard to determine the performance of each and every worker and a team might then received the same rating even though not everybody worked equally hard. A big advantage of this method is that if done well it can be used as a defense in legal issues.
I think most companies use a combination of these two approaches. On one hand we have personalized absolute judgments that serve as a basis for the feedback an employee receives but for administrative purposes, relative judgement is also used.
In the second category we evaluate employees based wither on their traits (ambiguous characteristics such as decisiveness, reliability or loyalty), or based on behavioral instruments, which are more specific than traits-> easier observable. It works so that the employers sets desired behavior related to the job, which is then evaluated on regular basis. The cons are that this process is time consuming and not very flexible towards future changing environment. Finally, there are also Outcome instruments, where employees are assessed based on the results they achieved. The approach of using these instruments is called Management by Objectives (MBO). This system is highly objective as it sets clear criteria and can be easily connected to the strategic goals of the company but it also doesn't consider unexpected events when the goals might not be fulfilled and it encourages 'unhealthy' competition among workers and approach 'result at any cost' which may cause ignoring quality or ethical standards.
When it comes to who should be entitled to do the evaluation, there is no straightforward answer. It is usually the supervisor as he is kind of responsible for the employee's work. But it may also be a colleague, subordinate, the employee himself or even a customer (which is what I used to receive as a teacher- most of my feedback came from our students since they were the ones spending the most time with us and directly seeing the outcomes of our job). If all of these points of view are combined, the employee receives a very detailed and reliable feedback called 360° feedback.
Next, the textbook introduces the challenges of effective measurement. First of them are rater errors and bias caused by the person filling in the measurement. People are not machines and it may be difficult to realistically review a performance of everybody in detail. Usually these mistakes are made unaware and if a good training is provided and the rater is reminded to pay attention to unaware mistakes, they can be avoided. The problem of course is making aware mistakes that can be marked as discrimination.
It is also hard to eliminate the influence of liking since we naturally tend to differentiate people on those, who we like and those we don't.
What is very common in most companies is evaluating based on organizational politics. This means paying attention mainly to the outcomes of work and using appraisals only as a way to reward or punish certain performance. Often the process works so that first is set who deserves a reward/praise and the evaluation is filled according to this decision.
As in previous topics, also here we have to discuss the legal issues. All measurement must be done discrimination-free. If a company provides sufficient job analysis and written instructions, allows employees to view appraisal results, which are agreed among multiple raters, then the company should be 'all good' in case it would have to face legal defense.
Finally I am going to have a look at the final phase of the process I described at the beginning and that is Managing performance. The most common way is an appraisal interview. It is usually done by managers, who can use the help of HR. The two main parts that are discussed (performance & salary) are usually separated so that both, the manager and the employee can focus on the current issue.
Managers should be trained to make these appraisals effective and useful. Essential communication skills are following: non-verbal attending (positive body language), open and closed questions, paraphrasing ('so you are saying that'), reflection of employee's feeling and cultural sensitivity.
These interviews might be very frustrating for employees because they traditionally focus on gaps in performance and their fixing. Employees then feel like they are criticized for poor performance. The textbook suggest a different approach -> focus on strengths instead and highlight the good that has been brought to the company by the employee.
Appraisals as we know them usually take place only once or twice a year, so they are not sufficient to cover the performance. There should also be informal, day-to-day performance management, where the causes of performance problems are found and based on that an action plan is developed and communicate with particular individual or group.
As we could see in the case of Jerry Bumgarner, he didn't receive feedback for a long time for his work and then during one appraisal was criticized for his performance, which left him so frustrated that he almost left the company. His other problem was that the description of his work was unclear and he ended up doing much more than he initially had to. The solution for this situation is regular feedback where both, Jerry and his supervisor would express their point of view on the current performance situation and then come to a conclusion that would suit both of them.
It is important to understand that employees want to do the job they are asked for but if they don't get clear instructions and regular feedback it leads to frustration on both sides.
When identifying the cause of a performance problem, an actor/observer bias might occur- it means 'a chain of blaming' a higher manager blames a lower manager -> a lower manager blames an employee -> an employee blames external factors. To effectively reveal the cause, a manager should examine the ability, motivation and situational factors and then provide accurate solution.
The best solution possible is empowering employees to find and implement their own solution while the manager serves as a coach, who creates a supportive working environment.
Lastly, I will discuss how to communicate problems. Coming back to Jerry's case, it is unfair to keep employee doing a wrong task and then wait till the appraisal to kind of use it against him. A good manager should at first analyze the issue well, make sure he knows the cause and knows the solution. Then the discussion part should really be a discussion, not lecturing the employee about his mistakes. This discussion should be direct, pointed at the performance not at the person and the manager has to stay calm without getting emotional. This process should ensure smooth and quick solution to a performance gap.
Sources
Cascade Employers Association. A Performance Appraisal Horror Story. Available from: http://www.cascadeemployersblog.com/salarytrends/a-performance-appraisal-horror-story-with-a-happy-ending. Accessed 6.2.2018.
Gómez-Mejia, L. & Balkin, D. & Cardy, R. Managing Human Resources. Pearson Global Edition. 8th edition.
MindTools. Performance Management and KPIs. Available from: https://www.mindtools.com/pages/article/newTMM_87.htm. Accessed: 6.2.2018.
Our textbook introduces performance appraisals as first. For me, this was an unknown word term so I did not know, what to expect. There are three steps in which appraisal process should be conducted. Those are identification (what will be measured and evaluated), measurement (evaluating itself and deciding on the quality of performance) and management (considering the measurement together with the employee and setting a future view).
Many companies nowadays still don't see the benefits of appraisals. However they are important to the company for two reasons; administrative reasons (for sufficient information and documentation- to ensure fair promotions, terminations and reward distribution) and developmental reasons (improving performance of employees and thus of the organization as a whole, deciding on the skills that will be important).
There are also positives for both, employees (receiving feedback as a basis for improvement and career development, fairness and motivation) and employers (erasing individual differences in performance, legal defense or implementation of strategic goals).
Let's have a deeper look at each of the phases mentioned above:
1. Identifying performance dimensions
This step covers deciding on what areas are important for the company and thus have to be measured. It should always be tied to business strategic goals and company's policies.
It can be very hard to determine the measured areas since the requirement are usually very complex. Modern approach has been focusing on competencies (competence covers skills abilities and knowledge in one term). To define the right competencies for each jobs, the company has to consider:
- the overall strategy of the organization
- the specifics of the job
- the global factors that may have impact on performance
At this point, it is good to mentioned the KPIs (Key performance Indicator) from the MindTools article. Determining and using them as a performance measure can be extremely useful for companies. By setting them, it is made sure that workers focus on the area on which they are supposed to focus and they are fulfilling company's agenda.
I can include my personal experience of how this worked in my former job. The business statement of the language school I worked for was Coach & Practice. The KPIs then were, whether the teacher lets the students come up with their own solutions- coaches them rather than lectures them and whether the teacher provides a lot of practice- has a lot of materials, sets homework, etc. Based on that we were supposed to have competencies such as creativity, preparedness, ability to navigate the students tot he right solution etc.
2. Measuring performance
After identifying what should be measured, the next step is measurement itself. The tools used for this can be classified based on the type of judgement that is required or by the focus of the measure.
In the first category, we have measuring with a relative judgement, which basically means not taking performance of each employee separately but comparing it to others and make a judgement based on this. The pros of this method is that there is some kind of differentiation among the workers, which can make it easier to make decisions about promotions. On the other hand this type of measurement doesn't give clear outcomes so the value of the feedback is questionable.
As oppose to that, absolute judgement is rating an employee based on given dimensions regardless the performance of the others. The problem here is that when working in teams, it is hard to determine the performance of each and every worker and a team might then received the same rating even though not everybody worked equally hard. A big advantage of this method is that if done well it can be used as a defense in legal issues.
I think most companies use a combination of these two approaches. On one hand we have personalized absolute judgments that serve as a basis for the feedback an employee receives but for administrative purposes, relative judgement is also used.
In the second category we evaluate employees based wither on their traits (ambiguous characteristics such as decisiveness, reliability or loyalty), or based on behavioral instruments, which are more specific than traits-> easier observable. It works so that the employers sets desired behavior related to the job, which is then evaluated on regular basis. The cons are that this process is time consuming and not very flexible towards future changing environment. Finally, there are also Outcome instruments, where employees are assessed based on the results they achieved. The approach of using these instruments is called Management by Objectives (MBO). This system is highly objective as it sets clear criteria and can be easily connected to the strategic goals of the company but it also doesn't consider unexpected events when the goals might not be fulfilled and it encourages 'unhealthy' competition among workers and approach 'result at any cost' which may cause ignoring quality or ethical standards.
When it comes to who should be entitled to do the evaluation, there is no straightforward answer. It is usually the supervisor as he is kind of responsible for the employee's work. But it may also be a colleague, subordinate, the employee himself or even a customer (which is what I used to receive as a teacher- most of my feedback came from our students since they were the ones spending the most time with us and directly seeing the outcomes of our job). If all of these points of view are combined, the employee receives a very detailed and reliable feedback called 360° feedback.
Next, the textbook introduces the challenges of effective measurement. First of them are rater errors and bias caused by the person filling in the measurement. People are not machines and it may be difficult to realistically review a performance of everybody in detail. Usually these mistakes are made unaware and if a good training is provided and the rater is reminded to pay attention to unaware mistakes, they can be avoided. The problem of course is making aware mistakes that can be marked as discrimination.
It is also hard to eliminate the influence of liking since we naturally tend to differentiate people on those, who we like and those we don't.
What is very common in most companies is evaluating based on organizational politics. This means paying attention mainly to the outcomes of work and using appraisals only as a way to reward or punish certain performance. Often the process works so that first is set who deserves a reward/praise and the evaluation is filled according to this decision.
As in previous topics, also here we have to discuss the legal issues. All measurement must be done discrimination-free. If a company provides sufficient job analysis and written instructions, allows employees to view appraisal results, which are agreed among multiple raters, then the company should be 'all good' in case it would have to face legal defense.
Finally I am going to have a look at the final phase of the process I described at the beginning and that is Managing performance. The most common way is an appraisal interview. It is usually done by managers, who can use the help of HR. The two main parts that are discussed (performance & salary) are usually separated so that both, the manager and the employee can focus on the current issue.
Managers should be trained to make these appraisals effective and useful. Essential communication skills are following: non-verbal attending (positive body language), open and closed questions, paraphrasing ('so you are saying that'), reflection of employee's feeling and cultural sensitivity.
These interviews might be very frustrating for employees because they traditionally focus on gaps in performance and their fixing. Employees then feel like they are criticized for poor performance. The textbook suggest a different approach -> focus on strengths instead and highlight the good that has been brought to the company by the employee.
Appraisals as we know them usually take place only once or twice a year, so they are not sufficient to cover the performance. There should also be informal, day-to-day performance management, where the causes of performance problems are found and based on that an action plan is developed and communicate with particular individual or group.
As we could see in the case of Jerry Bumgarner, he didn't receive feedback for a long time for his work and then during one appraisal was criticized for his performance, which left him so frustrated that he almost left the company. His other problem was that the description of his work was unclear and he ended up doing much more than he initially had to. The solution for this situation is regular feedback where both, Jerry and his supervisor would express their point of view on the current performance situation and then come to a conclusion that would suit both of them.
It is important to understand that employees want to do the job they are asked for but if they don't get clear instructions and regular feedback it leads to frustration on both sides.
When identifying the cause of a performance problem, an actor/observer bias might occur- it means 'a chain of blaming' a higher manager blames a lower manager -> a lower manager blames an employee -> an employee blames external factors. To effectively reveal the cause, a manager should examine the ability, motivation and situational factors and then provide accurate solution.
The best solution possible is empowering employees to find and implement their own solution while the manager serves as a coach, who creates a supportive working environment.
Lastly, I will discuss how to communicate problems. Coming back to Jerry's case, it is unfair to keep employee doing a wrong task and then wait till the appraisal to kind of use it against him. A good manager should at first analyze the issue well, make sure he knows the cause and knows the solution. Then the discussion part should really be a discussion, not lecturing the employee about his mistakes. This discussion should be direct, pointed at the performance not at the person and the manager has to stay calm without getting emotional. This process should ensure smooth and quick solution to a performance gap.
Sources
Cascade Employers Association. A Performance Appraisal Horror Story. Available from: http://www.cascadeemployersblog.com/salarytrends/a-performance-appraisal-horror-story-with-a-happy-ending. Accessed 6.2.2018.
Gómez-Mejia, L. & Balkin, D. & Cardy, R. Managing Human Resources. Pearson Global Edition. 8th edition.
MindTools. Performance Management and KPIs. Available from: https://www.mindtools.com/pages/article/newTMM_87.htm. Accessed: 6.2.2018.
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