Performance Management

Managing People in a Global Environment

Wayne F. Cascio
October 10, 2008
Challenges of Performance Review

 In forced ranking, all employees are ranked against each

other and grades are distributed along a bell-shaped curve

 Do you support the use of forced rankings?

 If the criteria used to determine an employee’s rank are

more qualitative than quantitative, does this undermine the
forced-ranking system?

 Suppose all the members of a given team are superstars.

Can forced ranking deal with that situation?
Facts About Performance Appraisals

 Employees are often less certain where they

stand after the appraisal interview than before it

 Employees tend to evaluate their supervisors

less favorably after the interview than before it

 Employees feel that the authoritarian, “tell-and-

sell” approach to appraisal is out of sync with
today’s democratic business structure
What is Performance Management?

 A willingness and a commitment to

focus on improving performance at the
level of the individual or team every
day
Key Elements of a P. M. System

 Sr. Management involvement in the

process
 Employee involvement in the process
 Common performance measures
 An emphasis on coaching and feedback
Why Do P. M. Systems Fail?

 Focusing on the wrong things

 Ignoring sr. managers, operating managers, and
employees
 Poor communication about the process and
changes in it
 Making the process difficult
 Implementing “flavor-of-the-month” programs
Hewitt Assoc. Study of 437 Firms

 Firms with successful P. M. systems

outperformed those without them on every
financial and productivity measure used in
the study:
 Profits
 Cash flow
 Stock market performance
Firms with Successful P. M. Systems

 Measure what really

matters
 Foster open
communication among
employees about what
really counts
 Performance Appraisal

Systematic description of job-relevant strengths

and weaknesses of an individual or group
How Often?

 Once or twice a year is not enough

 Difficult to remember specifics over a 6- or 12-
month period
 Many organizations require more frequent,
informal “progress” reviews
 90-day plans
Effective Appraisal Systems Are

 Relevant
 Acceptable
 Sensitive
 Reliable
 Practical
Acceptability

 Do raters use standardized procedures?

 Do employees believe results are fair & accurate?
 Does the form accommodate special or unique
circumstances?
 Do you get feedback
Acceptability

 Does the rater suggest how you could

improve?
 Do you get resources to improve?
 Does management care about how
appraisals are done?
Legal Issues in Appraisal

 ID essential functions using job analysis

 Base all ratings on essential job functions
 Train supervisors
 Have formal appeal mechanisms + higher-level
review
 Document appraisals + any reasons for
termination
 Provide counseling for poor performers
Strategic Dimension of Appraisal

 What kind of behavior do you want to encourage?

 Short-term: bottom-line results for current quarter

 Long-term: customer satisfaction, market share

 Remember: Managers get the kind of

performance they reward!
Alternative Methods

 Essay  Critical incidents

 Ranking/paired  Graphic rating scales
comparisons  Behaviorally-anchored
 Forced distribution rating scales
 Management by
 Behavioral checklist
objectives
Which Method Is Best?

 None is an unqualified
success when used for
merit pay or promotion
Who Should Evaluate?

 Immediate supervisor
 Peers
 Subordinates
 Self-appraisal
 Customers
 Computers
To Improve 360-Degree Feedback

 Be clear about the purpose of the appraisal –

employee development

 Train raters to understand the overall process, show

them how to complete forms, and to avoid common
rating errors

 Seek a variety of types of information about

performance
 Make all raters accountable to upper-level review
To Improve 360-Degree Feedback

 Help employees interpret and react to the ratings,

and include goal setting.

 Implement 360-degree reviews regularly, so

employees can track their progress over time

 Take the time to evaluate the overall system

Managers Who Excel in This Area
Do the Following

 Listen well
 Relinquish control, encourage employee
participation + open communication
 Approach “negative” information slowly
and with caution
Managers Who Excel in This Area
Do the Following

 Focus on observable behavior & give

specific examples
 Avoid arguments; allow the employee to
save face
 Focus on problems and solutions, not on the
employee’s personality
Things to Do Before Appraisal

 Communicate frequently with subordinates about

their performance
 Get training in appraisal interviewing
 Use a problem-solving approach, not “tell and
sell”
 Encourage subordinates to prepare for review
sessions
Things to Do During Appraisal

 Encourage participation
 Judge performance, not personality and
mannerisms
 Be specific
 Be an active listener
 Set goals for future improvements
 Avoid destructive criticism
Things to Do After Appraisal

 Communicate frequently with subordinates

about their performance
 Periodically assess progress toward goals
 Tie rewards to performance
How to Give Feedback

 Develop an agenda
 Take the time to listen; no interruptions
 Communicate that you genuinely want to help
 Be accepting and non-judgmental
 Watch for verbal and non-verbal cues
How to Give Feedback

 Focus on the future

 Summarize what was said
 Record responses immediately
 Never betray a confidence
Basic Rules of Performance
Counseling

 Be prepared
 Be factual
 Support the employee’s good performance
 Help the employee improve performance
 Plan for the future
How to Document Performance-
Related Incidents

 Describe what led up to the incident - the problem

& the setting

 What actually happened that was so effective or

ineffective? (Names, dates, times, facts)

 Describe the consequences of the effective or

ineffective behavior
Managing Your Boss

 Recognize that your boss needs you in order to do

his or her job well
 Understand his or her goals + how you can help
the boss reach them
 Appreciate the pressures & problems the boss
faces
 Tell the boss your aspirations & goals
Managing Your Boss

 Learn how the boss likes to receive information

 Keep the boss informed about your successes &
problems
 Making working with you efficient & enjoyable
for the boss
 Make it easy for the boss to discuss problems &
conflicts
Managing Your Boss

 Assess yourself + your needs:

 Your strengths & weaknesses
 Your personal style
 Are you a dependent or an independent person?
Managing Your Boss

 Develop & maintain a relationship that:

 Fits both your needs & styles
 Includes mutual expectations
 Keeps your boss informed
 Is based on dependability & honesty
 Uses your boss’s time & resources selectively
Do Not Assume That:

 The boss knows your aspirations, problems, &

needs
 You can talk to your boss only when he/she asks
 The boss will start a discussion when there are
problems
 The boss gets paid so well that he/she doesn’t
have to be thanked