HRM544

PERFORMANCE
MANAGEMENT

CHAPTER 5
Measuring Results and
Behaviors

RZ/FBM 1
Measuring Results: Overview

1. Accountabilities
2. Objectives
3. Performance Standards

RZ/FBM 2
 Key questions
1. What are the different areas in which
this individual is expected to focus
efforts? (where)

2. What are the expected objectives?

3. How do we know how well the results

were achieved?

RZ/FBM 3
 1. Accountabilities

 Broad areas of a job for which

employee is responsible for
producing results

RZ/FBM 4
 Determining Accountabilities

 Collect information about job (Job Description)

 Determine importance of task or cluster of tasks
1. % of employee’s time spent performing task
2. Impact on unit’s mission if performed
inadequately
3. Consequences of error

RZ/FBM 5
Example:

RZ/FBM 6
 2. Objectives

 Statements of important and

measurable outcomes

RZ/FBM 7
 Determining Objectives

 Purpose: to identify
a. Outcomes
• Limited number
• Highly important results

b. When achieved
• dramatic impact on overall
organization success
RZ/FBM 8
 Types of objectives
1. Ongoing role or work objectives – what has to be
done and why it has to be done

2. Targets - define the quantifiable results to be

attained as measured in such terms as output,
income, sales,

3. Tasks/ projects - completion of tasks or projects

by a specified date or to achieve an interim result.
RZ/FBM 9
 Types of objectives
4. Behavioral expectations - desirable and undesirable
behaviour

5. Values - ensure that espoused values become values in

use.

6. Performance improvement - define what needs to be

done to achieve better results

7. Developmental/ learning - specify areas for personal

development and learning in the shape of enhanced
knowledge and skills RZ/FBM 10
 10 Characteristics of Good
Objectives
1. Specific and 6. Bound by Time
Clear 7. Achievable
2. Challenging 8. Fully
Communicated
3. Agreed Upon 9. Flexible
4. Significant 10.Limited in
5. Prioritized Number

RZ/FBM 11
 SMART
S Specific/ clear, unambiguous, straightforward,
stretching understandable and challenging.
M Measurable quantity, quality, time, money.
A Achievable challenging but within the reach of a
competent and committed person.
R Relevant relevant to the objectives of the
organization so that the goal of the
individual is aligned to corporate goals.
T Time framed to be completed within an agreed
RZ/FBM 12
timescale.
 3. Performance Standards

 Yardstick used to evaluate how well

employees have achieved objectives

RZ/FBM 13
 Determining Performance
Standards
Standards refer to aspects of performance objectives, such
as:
a. Quality
 How well the objective is achieved

b. Quantity
 How much, how many, how often, at what cost

c. Time
 Due dates, schedule, cycle times, how quickly

RZ/FBM 14
 Standards must include:

1. A verb
2. The desired result
3. A due date
4. Some type of indicator
– Quality and/or
– Quantity

RZ/FBM 15
 Good Standards: 6 Characteristics

1. Related to Position
2. Concrete, Specific, Measurable
3. Practical to Measure
4. Meaningful
5. Realistic and Achievable
6. Reviewed Regularly

RZ/FBM 16
Measuring Behaviors: Overview

1. Identify competencies
2. Identify indicators
3. Choose measurement system

RZ/FBM 17
 1. Identify Competencies

• Measurable clusters of KSAs

– Knowledges
– Skills
– Abilities
• That are critical in determining how
results will be achieved

RZ/FBM 18
 Types of Competencies
1. Differentiating
 Distinguish between superior and
average performance

2. Threshold
 Needed to perform to minimum
standard
RZ/FBM 19
 2. Identify indicators

• Used to measure extent to which

competencies are present – or not
• Observable behaviors

RZ/FBM 20
Examples of indicators

RZ/FBM 21
Examples of indicators

RZ/FBM 22
 Necessary Components for
Describing Competencies
1. Definition
2. Description of specific behaviors when
competency demonstrated
3. Description of specific behaviors when
competency not demonstrated
4. Suggestions for developing the
competency
RZ/FBM 23
3. Choose Measurement System

1. Comparative system
– Compares employees with each other

2. Absolute system
– Compares employees with pre-
specified performance standard

RZ/FBM 24
 Comparative Systems

1. Simple rank order

2. Alternation rank order
3. Paired comparisons
4. Forced distribution

RZ/FBM 25
4. Forced Distribution on a Bell-
Shaped Curve

RZ/FBM 26
 Advantages of Comparative
Systems
1. Easy to explain
2. Straightforward
3. Better control for biases and errors
found in absolute systems
– Leniency
– Severity
– Central tendency
RZ/FBM 27
 Disadvantages of Comparative
Systems
1. Rankings may not be specific enough
for
 Useful feedback
 Protection from legal challenge
2. No information on relative distance
between employees
3. Specific issues with forced distribution
method RZ/FBM 28
 Absolute Systems

1. Essays
2. Behavior checklists
3. Critical incidents
4. Graphic rating scales

RZ/FBM 29
 1. Essays
• Advantage:
– Potential to provide detailed feedback

• Disadvantages:
– Unstructured and may lack detail
– Depends on supervisor writing skill
– Lack of quantitative information; difficult to
use in personnel decisions
RZ/FBM 30
 2. Behavior checklists
• Advantage:
– Easy to use and understand

• Disadvantage:
– Scale points used are often arbitrary
– Difficult to get detailed and useful
feedback
RZ/FBM 31
 3. Critical incidents
• An unusual event that denotes superior or
inferior employee performance in some
part of the job
• The manager keeps a log or diary for each
employee throughout the appraisal period
and notes specific critical incidents related
to how well they perform.

RZ/FBM 32
 Examples of Critical Incidents for Assistant
Plant Manager

Continuing Duties Targets Critical Incidents

Schedule production 90% utilization of Instituted new production
for plant personnel and machinery scheduling system; decreased
in plant; orders delivered late orders by 10% last month;
on time increased machine utilization in
plant by 20% last month

Supervise procurement Minimize inventory costs Let inventory storage costs rise
of raw materials and while keeping adequate 15% last month; over-ordered
on inventory control supplies on hand parts “A” and “B” by 20%; under-
ordered part “C” by 30%

Supervise machinery No shutdowns due Instituted new preventative

maintenance to faulty machinery maintenance system for plant;
prevented a machine breakdown
by discovering faulty part

9–33
 3. Critical incidents
Kinds of measurement
1. Report of specific employee behavior
• Allows focus on specific behavior
• Very time-consuming
2. Examples of behavior illustrative of core
competencies
• Easier to use
• Describes behavior desired
RZ/FBM 34
 4. Graphic rating scales
• Graphic Rating-Scale Method
– A trait approach to performance
appraisal whereby each employee is
rated according to a scale of individual
characteristics.

RZ/FBM 35
 4. Graphic rating scales

• Clear meaning for each response

category
• Consistent interpretation by outside
readers
• Supervisor and employee should have
same understanding of rating

RZ/FBM 36
Sample Performance Appraisal
Form

RZ/FBM 37
RZ/FBM 38
 Graphic
Rating Scale

RZ/FBM 39
Behaviorally Anchored Rating
Scales (BARS)
– Consists of a series of vertical scales,
one for each dimension of job
performance; typically developed by
a committee that includes both
subordinates and managers.

RZ/FBM 40
 Behaviorally Anchored Rating
Scales (BARS)
Developing a BARS
1. Write critical incidents
2. Develop performance
dimensions
3. Reallocate incidents
4. Scale the incidents
5. Develop a final
instrument
Advantages of BARS
1. A more accurate gauge
2. Clearer standards
3. Feedback
4. Independent dimensions
5. Consistency

Copyright © 2011 Pearson 9–41

Education, Inc. publishing
BARS Example

RZ/FBM 42
 BARS improvement
• Behaviorally Anchored Rating Scales
(BARS)
– Use critical incidents as anchors
– Involves multiple groups of
employees in development
• Identify important job elements
• Describe critical incidents at
various levels of performance
• Check for inter-rater reliability
RZ/FBM 43
Measuring Performance

RZ/FBM 44
 Criteria For Performance Measures

1. Related to strategic goals and measures

that drives business performance
2. Relevant to the objectives and KRAs of
individual, team, department
3. Focus on measurable outputs and
accomplishment
4. Indicate data or evidence that will be
available
RZ/FBM 45
 Criteria For Performance Measures

5. Be verifiable- confirming that the

expectation has been met
6. Be as precise as possible
7. Provide a sound basis for feedback and
action
8. Comprehensive covering all aspects of
performance
RZ/FBM 46
 Organizational Measures
• Balanced Scorecard
• European Foundation for Quality
Management
• Economic Value Added
• Malcolm Baldridge Criteria
• Financial ratios

RZ/FBM 47
 Balanced Scorecard
1. Develop by Kaplan and Norton (1992)
2. A set of measure that gives top managers a
fast but comprehensive view of their
business
3. It is a management system that enables
organizations to clarify their vision and
strategy and translate them into action
4. Requires managers to answer four basic
question (business related perspective):
RZ/FBM 48
 Balanced Scorecard
a) *How do customers see us? (customer
perspective)
b) *What must we excel at? (internal
perspective)
c) *Can we continue to improve and create
value? (innovation and learning perspective)
d) *How do we look to shareholders? (financial
perspective)
RZ/FBM 49
 Balanced Scorecard
5. As a tool to help organization monitor the
implementation of organizational strategy
6. Gives managers a comprehensive view of
performance of a business
7. Scorecard users generally engage in three
activities:
* Communicating and educating
* Setting goals
* Linking rewards to performance measure
RZ/FBM 50
 Individual Performance
Measures
1. Measures related to results and
observable behaviors
2. Results should be within control and
agreed upon
3. Behavioral requirements defined and
agreed
4. Measures objective and fair
5. Data available for measurement
RZ/FBM 51