Strategic Performance Management

Prof. K. B. L. Srivastava
Department of Humanities and Social Sciences
Indian Institute of Technology, Kharagpur

Lecture - 17
Implementing PM System – 2

In this lecture, we will discuss how we can implement an effective performance

management system in an organization. We also discussed the kind of evaluation form
that we want to use. What kind of scale do we want to use? Once we decide the structure
and the type of scale, then we implement the performance management system. We also
talked about the trainer's role in rating the evaluators so that we can make sure that
performance evaluation is accurate and consistent. The rater must be trained on various
aspects. They need training in 2 kinds of assessments. One is related to behavior, and the
other one is related to results.

When it comes to evaluating results, there is not much problem because you have fixed
performance standards that are objective. Then you compare these performance
standards with the achievement of the individual to see whether he has achieved the
desired goal. When it comes to rating the behavioral competencies, the raters have a lot
of problems.

Raters must be trained in the process to ensure that they make correct observations of
employee behavior. The rating decides the number of things like reward, their carrier
growth, including promotions, and the development plan for the next cycle of the
performance.

Since we decide about a lot of issues related to the performance. We record and
document it to ensure that implementation takes place in writing. We will discuss how to
train individuals in observation of the behavior. They must be trained on how to observe
the behavior?
(Refer Slide Time: 03:01)

The idea is to minimize some of the unintentional errors. There are two kinds of errors
made by the individual. One is intentional, and the other one is unintentional. Intentional
means that you try to rate people as average or either you become too strict or too
lenient, and it is known as intentional error. The unintentional error takes place
consciously or unconsciously. It is in the back of the mind of the supervisor, and that is
why sometimes he is not even aware that he is going to commit certain mistakes. They
should be trained at how they are going to observe/rate behavior so that they go for a
proper evaluation of the behavior.

It is important to ensure that they are trained in observation of the behaviors so that they
can rate it, record it, and use this information for evaluating the performance.

What is important here is that you look at the rater's observation of the performance.
(Refer Slide Time: 04:23)

We have to train them for behavior observation. Behavioral observations are defined as
the competencies, and these competencies include punctuality, problem-solving, decision
making, integrity, trust, interpersonal communication, and leadership. These identified
eight competencies are to be observed among the employees. The employees perform
certain behaviors that are related to the process. We need to differentiate within the
process leads to the outcome.

We are not going only to evaluate outcomes but also the process; these processes are
important. So we need to identify the behavioral competencies which contribute to the
performance. When we are going to identify these competencies for the evaluation, we
need to look at whether employees are trained for proper evaluation.

The first important thing is that each competency must be defined properly. What does it
mean when we are talking about a particular competency, say problem-solving, decision
making, or leadership or integrity? It needs to be defined so that it helps the rater to
understand which competency is used. Once you have defined it, the second stage in the
processes is that you need to identify the indicators of these competencies because that is
how we are going to measure these indicators. If we are not able to identify the
indicators, we will not be able to measure these competencies. For example, when you
are saying problem-solving, it means that whatever problem happens at the workplace,
he can solve it with the help of his knowledge, skills, and abilities. It means that he is
arriving at a solution effectively cost-effectively using less time to resolve the problems
related to his duties and responsibilities.

What are the problems solving indicators? You have to see what kind of problems he is
facing and how he solve those problems? You need to indicate at least 3 4 behaviors that
you relate to problem-solving abilities. So, whenever the problem comes, what happens?
What kind of activities does he perform? Indicators are related to activities that are going
to be related to solving that problem. These indicators related to a particular behavior or
competency should be defined. The third thing is that once you know the indicators
related to behavioral competencies or problem-solving, you go for observation. You need
to observe whether these indicators are present in problem-solving. How effective or
ineffective the person in solving the problem.

You also measure the effectiveness of behavior by observation because it helps you to
rate the behavior. There are four steps to be followed in behavioral observation. First,
you need to define all these competencies because you use them. You also need to look
at the indicators of these competencies. They also need to be identified because these are
the activities that the person does to perform the behavior.

Now, as a supervisor, you are supposed to observe them and then to see whether these
behaviors are effective. You rate them using a rating scale that is going to be descriptive,
and labels are defined. Rating scales are used to see that the supervisors measure all the
competencies. You need to be trained, especially because these two steps are pre-
specified before the evaluation takes place. You need to be trained on how to observe
and then record because, after observation, you record it, and then based on the record,
you rate performance.

Observation and record both are important, and that is where you make an error. This
error is to be minimized. You go for training the supervisors on how to go about the
observation of the behaviors. When supervisors are trained for observational behaviors,
there are certain ways that you can do it. You keep a note or a diary and writing
everything as and when some behavior is observed. You can also take the help of an
audiovisual aid. It helps to find out whether we have observed and captured the processes
using an audiovisual aid to ensure that whether the individual performs those particular
behaviors. What are these indicators, and how do we go about behavioral observation
training which is very important. Using this method, you can see that people are trained,
and they do not make unintentional errors, which could be related to the supervisor’s
traits, characteristics, employment, and personality.

So, observers need to be trained on how they are going to observe, record it, and use this
information to rate the performance. If they are trained in this kind of skill, they will go
for a better record and minimize unintentional errors. You can also use observational
aids, including diaries, notes, and other mediums.

We can use other kinds of audiovisual aids like cameras, but the use of cameras
sometimes disturbs the people as they become conscious. So they should be aware of
whether you go for non-participant observation or participant observation. You can use
some of these audiovisual aids without informing people to ensure that it is not going to
affect the functioning of the individual.

(Refer Slide Time: 13:23)

Moving further, let us see if you have trained supervisors in behavioral training, then
what happens? You already have pre-established behaviors for each performance
dimension dimensions related to integrity, trust decision making, problem-solving, and
communication. These are the dimensions of the performance. For each of these
performance dimensions, you have established several behaviors. What are the behaviors
that you can relate to this? It is already pre-established. Then you see how behavior is
related to this within a given time frame because evaluation is related to a particular time
frame. So, we observe those incidents which are matching with these behaviors. If you
train the supervisor, he would be in a better position to observe those incidents which
could be related to this one. For example, in critical incident technique, we observe those
incidents which lead to either very effective performance or ineffective performance. So,
if you are trained, you will be able to see those critical incidents which lead to either
effective or ineffective performance.

If you use certain aids, then it helps to standardize the observation of behavior. You write
with the help of a diary, or you have some other mechanism to ensure that the processes
get captured in some way. So, you have a standard record of helping you to rate the
appraisee.

It is always good to have a record in the form of a diary or note. You can use electronic
mediums also. Once you record these critical incidents for the period of evaluation, it
helps you to ensure that the rating is more accurate and consistent. You do not make an
error because you do not do it immediately. You fill-up the form after six-month.

When we are going to fill-up the form of the six months, you may not be remembering
everything. Still, you have captured the processes in the form of a note or dairy or critical
incidents. Then it would be advantageous. It would help you to see that you do not make
an unintentional error. So, there are a lot of benefits. Supervisors must be trained so that
they are not biased in their evaluation.

(Refer Slide Time: 16:19)

Moving further, another form of training given in addition to behavioral observation
training is known as self-leadership training. It is related to understanding the individual.
If you train in this process, what are the benefits? The training program is related to the
understanding of the individual about himself. If you better understand your strength,
weaknesses, and biases, it might affect your behavior. You are trained in observations to
help you to evaluate performance. You also manage other's preparedness, and it would
increase your confidence in rating because of your training.

You better understand how the job is performed. It leads to maturity, self-confidence in
the individual, or their subordinates. In the process, when you are talking about self-
leadership, the content of this training includes positive self-talk, mental imagery,
positive beliefs, and thought patterns. Now, let me explain each of these things. When
we are talking about positive self-talk or mental image, what does it or mental imagery?
Positive self-talk means what? Positive self-talk means what?

When we talk about yourself, a lot of things come to in our mind. What am I doing?
Why am I doing it? Whatever I am doing is worth doing it or not? Whether it is good?
What I am doing is it going to benefit others? It could be negative, as well as positive.
The idea is to develop positive self-talk among the individual so that they think
positively not only about themselves but about others.

The second point is mental imagery, what kind of mental framework you have developed
about the people, and yourself? So, if you have developed a mental framework about
other people that they are good, capable and they can perform well. Suppose you have
developed a mental framework about yourself that you are not good, others are not good,
and they will not work unless forced to do it. So, this kind of cognitive framework might
lead to negative thinking processes. The idea is to develop your capability and all the
barriers which might negatively affect your mental framework.

You are going to develop a more positive mental framework and imagine those things
which lead to better results. You can imagine that people are good, driven by themselves,
and would perform well if given all the opportunities and direction. So, this kind of thing
is related to positive mental imaginary.

The third point is a positive belief. It means believing in yourself and also believing in
others. Do you believe in your subordinates, or do you believe in yourself. If you believe
in yourself, then probably you are increasing the confidence level of yourself and also
the confidence level of your subordinates who will perform better. When I say that I can
go or I can win, and you can win. So, give examples, and suggest what a positive relief
about you as well as others. These attributes or characteristics must be developed in the
raters because that would lead to a kind of leadership where people would understand in
a better way about the things that are happening and simulate thought patterns. How do
you think the way you think depends upon what kind of input you have and how you
process that information?

If you have a clear job description communicated, accountabilities are defined well,
objectives are known to you, performance standards are known to you. It would bring
more clarity in your thinking, but if it is not, then you do not know how you rate. So,
make sure that your thought patterns are obvious because these are the inputs that are
going to be processed by you when you go for the rating.

Thought patterns are related to the thinking mechanism of how you process the
information given to you. What kind of information related to the behavior or results of
the employees? Once you know the behavior and results of the employees, you process
the information like how you take up those things. It depends upon the way you process
the information and your capability. If you have a positive belief, if you have developed
a positive framework, then it would lead to better understanding, and you will provide
better direction.

You will be motivated to do this job. Training is important so that you are motivated
enough, and you direct yourself in these kinds of activities, and you have confidence in
doing this. So, self-direction, self-motivation, and confidence are very important, and
that can be developed through self-leadership training. I have given you certain
examples, and with the help of these examples, you can understand how leadership
training helps the individual to understand themselves better, like cognitive ability, their
framework, the belief systems. How they process the information? If they are clear about
it, probably they would be in a better position to do the rating job, and they would be
more accurate in the process. The idea is that you are focusing on certain intrinsic factors
because these things have intrinsic value, not external but related to the individual itself.
It is related to the characteristics of the people needing training. So, in behavioral
observation training, you train them on how to observe, record, and rate behaviors. Our
characteristics might influence, which might lead to certain unintentional rating errors.

To remove those unintentional rating errors, you must be trained to understand yourself
in a better way so that it increases your self-confidence and also motivation to do a better
job, and you do not make many mistakes.

(Refer Slide Time: 23:58)

Moving further, when you design this kind of training, you look at your belief systems,
your assumptions, self-talks, and mental imagery. What is your current stage? What
kind of belief systems you have? What type of confidence level you have? Whether you
have positive self-talk or negative self-talk? What are your assumptions about yourself
and your subordinates? What kind of mental framework you have? First of all, you talk
about that thing; then you see whether they are good or not. You analyze the
functionality.

You can uncover the pattern related to your characteristics and behaviors by analyzing
these things and know that you can move them from being deconstructive to make it
more constructive. Make sure that you are moving towards a more constructive approach
by defining your belief systems, assumptions, self-talk, and mental framework, and move
from a negative framework to a more positive framework. Make sure that you move it
positively. If it is not done, then again, you go for analyzing this, and so you again do or
go for step one again. So, once you can identify and develop more functional or
constructive beliefs about yourself and others, then you have more positive self-talk,
better mental image, a framework about yourself. Make sure that you are led by more
functional characteristics than a dysfunctional one like negative self-talk or low self-
confidence or low self-esteem or going to be dysfunctional.

If you are not motivated enough and you do not have confidence in rating, you will
make more errors. So, it is important to see that these kinds of things are minimum and
you can do it. You continue monitoring and maintaining your attitude and behavior in
such a way so that it leads to a more positive framework, and you understand yourself
better. It would lead to a better understanding of yourself.

(Refer Slide Time: 26:23)

Self-leadership learning is another kind of training that could be given to individuals to

minimize these unintentional errors, and it is known as self-efficacy. What is self-
efficacy? Self-efficacy is your belief about yourself, belief in your capabilities, and belief
in your strength.

If these things are high, you will probably be in a better position. We are talking about
self-efficacy training, especially for the raters, to do a good job of evaluation. The idea is
that if persons are trained in the area of self-efficacy to understand their worth, belief,
confidence, and self-esteem. Whatever they are doing that is worthwhile, and it
contributes to the goals and objectives of the organization. They have the confidence that
they will do a good job of rating.
These kinds of belief systems are important because when we do a job of rating, you rate
others, and it requires some sort of demands on the part of you to rate. Make sure that
this interpersonal demand does not bring any kind of discomfort to you. If this brings
discomfort, then you become biased either intentionally or unintentionally.
Unintentionally or unconsciously, you do not think about these kinds of biases like Halo
effect or horn effect, primacy effect, or recency effect. You do not consider these kinds
of things while making unintentional errors.

You need the training to do a good job and to understand the behavior for observation.
You need to understand yourself and develop a belief that you can rate accurately, and
that would increase your effectiveness.

It is called self-efficacy means. It is important that once you have this kind of belief, you
will rule out any kind of discomfort that you will have with the rating, which would
increase your rating in the interpersonal context. Some kind of training program can be
arranged for the raters like you watch a videotape that how successfully confident people
believe who believe in themselves, do a good job of a rating. It could act as a role model
for them, and then you can discuss the specific behaviors that you have observed in the
role in the picture. Then how you invite them. So, it could also be done through role-
plays when you are going to do certain things, and then you are given feedback on how
you have deserved rating. That would increase your confidence, believe in yourself, and
then you will be able to do a better job of rating. So, a self-efficacy rating is also
important.
(Refer Slide Time: 29:44)

Then from self-efficacy rating we move to pilot testing and in pilot testing you have
ensured a good implementation of a performance management system. You have trained
the raters, you have decided about the kind of system that you want to introduce. You are
ready with the appraisal form but you are not going to start it for the whole organization.
Before moving for finally implementing the system you are going to test it on a set of
sample maybe one department and see that what is happening, what kind of feedback
you are getting.

Based on the feedback that you get you try to make some adjustments. See the problems
that you are facing, what kind of problem related to their scaling appraisal form
difficulties in recording that performance data. You will be able to identify these issues
and if you need to make any corrections before it is finally implemented otherwise, if
you do not go for pilot testing, you will be not able to correct any thing which could be a
problem related to the scaling techniques, related to the measurement of the behaviour
are even the kind of appraisal form that you are using because the system if you look at
from the systems users perspective those are going to make use of this system especially
the managers and how they are going to react to this system. So, get their reactions, use
that feedback and get better acceptance and once it is accepted in one part of the
organization you can move on and implement that in the organization.
(Refer Slide Time: 31:27)

First of all we will rule out a test version with a small group in one department see what
happens and then we move to fully implement in a planned way for the entire
organizations so that you are not able to create any problem. When you want to fully
implement a PMS in the organisation, make sure that all the participants who are going
to do the job have a record of issues encountered. They are not going to record appraisal
scores they are going to identify. What kind of issues are coming up and once all the
input is received from the pilot test, then that is incorporated or embedded in the final
version.

(Refer Slide Time: 32:11)

Now you have a full-fledged PMS system for introducing in the entire organization and
that would have a visor acceptance. Once PMS is implemented organisation make sure
that you are able to monitor and evaluate how the PM system is working? What you are
going to evaluate? Whether the performance management system is working effectively?
You are not going to encounter any problem related to form scaling measurement
recording of the data and whether you are able to implement as per your plan in the
entire organization or not and whether this performance management system that you
have produced is really giving good results or not because if it is not giving good results
or it is giving intended results that you want the system to come out that is accurate
assessment of the performance of the employee then this PM system is not going to be
effective.

(Refer Slide Time: 33:14)

Make sure that it gives accurate results. How we are going to see the evaluations? What
are the reactions to the system? What kind of feedback is given by the managers about
the performance management systems? What kinds of problems are coming especially
related to operation and the technology that you are using and how the ratings are?
Whether ratings are without any biases or without any errors? Are they are having
certain biases? So, what actually is important here that when you are going to use these
kinds of systems while you are using technology. Most of organizations have gone for
automated performance management systems and that gives you an edge over the
manual performance system because in an automated performance system. Suppose, you
are using software so everything is regarded in this is kept there throughout the year. It
gives you a better assessment of performance ratings and the kind of data that you have
is going to be more accurate.

(Refer Slide Time: 34:12)

What are the measures that you are going to use for monitoring and evaluation these are
the metrics that could be used. How many people have been evaluated? How the
performance rating is distributed across the set of sample? What kind of information you
have? How much follow up has been done? Whether you going for this performance?
Discuss meeting after this or not? Are people satisfied with the performance
management system or not? What is the return on investment of this particular system
and what is the performance ultimately you are going to measure. The people are able or
individuals are able to perform as per the expectation as there is standards or not. Now,
we are going for online implementations using electronic websites. Even appeal filing
and all kind of things are done in an electronic mode so that it gives more accuracy and
assessment of the result.
(Refer Slide Time: 34:52)

It is very important to use emails, electronic newsletters; websites where appeal filing
can be done electronically and the training programs are also done electronically where
you can implement online so that people understand what are the kinds of errors they are
making and how to avoid it.

(Refer Slide Time: 35:23)

It has certain advantage because you are going for automation also accuracy and speed is
maintained, cost is less and you get information more effectively and you can also link it
with other HR function. Suppose he is performing very well. You see that he gets less
(Refer Time: 34:50) promotion or he gets higher rewards and these kind of things and if
you have an automated performance management system probably it would be easy to
monitor performance at the individual organizational and unit level but it has certain
limitations.

(Refer Slide Time: 35:56)

Because you may not be following the best practices and if you want to improve then
again you have to go for it because it is very difficult to improve the online version
because again you have to write code, go for a program and it is more complicated and if
you are not going to use it properly then probably it is going to be waste of time and
resources. So, make sure that if are going for online system you are going to use and
make sure that it is giving the desired results.

Thank you very much.