Article on Performance Management

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Meritocracy, the system we all espouse, in order to succeed requires not only well designed appraisal formats to assess the performance of employees, but more importantly a well planned and conducted appraisal process. Appraisal process must be conducted with great objectivity, sincerity and commitment giving the importance it deserves.

Generally there are two things which determine how successful a performance appraisal system is in place in an organization. 1) The contents/design of the performance appraisal form and 2) the manner in which Performance Appraisal is conducted. While organizations lay great emphasis on the contents/design part, spending much of time, money and energy on designing most suitable, objective, comprehensive…. formats, it comes to a naught if the appraising process is not conducted properly. Effectiveness of the performance appraisal system depends on how seriously it is perceived, importance given to it by both the subordinate and reporting officer, and the impact it is going to have on possible rewards and punishments.

Organizations use performance appraisal records for a variety of things. But the best way of utilizing them is to develop people and improve their performance through a clear understanding of their work goals, so that they realize and reach what Maslow calls "Self actualization" (i.e. fully realizing their potential and thereby achieving their own professional and also organizational goals). In organizations where performance appraisal is used for reward and punishment, great care must be taken so that it forms objective, honest and accurate record of formal evaluation of on the job performance of the employee and supports or corroborates the kind of rewards and punishments proposed.

The achievement of the stated objective is the mutual responsibility of both the reporting officer and the subordinate by making the appraisal process as objective as possible. It should be a joint participative, sensitive and positive exercise rather than being one sided, evaluative and judgmental.

Generally the performance appraisal formats have the following components:

Mutually (Reporting Officer and the subordinate) agreed Key Result Activities (KRAs)/Goals/Tasks that must be attained or accomplished by the appraisee (one who is to be appraised).
Identification of Training and Development needs of the appraisee and other support systems he needs to accomplish/attain the mutually agreed KRAs.
Self-appraisal by the employee on his performance vis-à-vis the KRAs.
Analysis and recording of the employees’ performance parameters, after mutual discussion between the appraiser (one who does the appraisal who is usually the reporting officer) and the employee.
Ratings on personal attributes of the employee.
Communication in terms of feedback to the employee by the reporting officer for his development and increasing his effectiveness and feedback to the top management on the kind of rewards and punishments that may be bestowed on the employee, if performance appraisal is used for such purpose.

Emphasis should be on setting of Key Result Tasks/Individual Goals, which cascade from Groups’ Key Result Activities/Group goals, which in turn are derived from organizations’ vision, mission and objectives. Appraisal should record performance vis-à-vis expectations/goals set and be assessed not merely by quantified measurement but also by qualitative performance indicators as also place emphasis on how results are achieved. For example in attaining the individual goals, the macro environment and other factors which are outside the control of an individual or the organization may at times be so favorable that realizing targets becomes so easy and excellent performance may be attained with out corresponding effort which normally should have gone to obtain it. Similarly when macro environment is not conducive, inspite of the best efforts of the employee there may not be significant results. Often an employee might resort to pressure tactics and may have scant regard for humane approach in obtaining work from the subordinates, or he be so obsessed with achieving of quantified targets deviating from the accepted or desired mode of process of attaing such goals like for e.g. deviating from organisation values, ethics, or destroying the spirit of teamwork in the process of attaining the goals, etc. The appraisal system should be participatory and not a top down one in analyzing these things. Infact it should be a culmination and reflection of yearlong learning on mutual interactions, rather than merely filling up the contents of goals achieved and tickmarking the relevant ratings of individual attributes.

Again in whatsoever design we incorporate the above, the process of filling in those blank spaces is crucial. For e.g. the mutually agreed KRAs/Goals comprises of 1) Routine Job/Position responsibilities and 2) new initiatives to be taken up. The new initiatives can be, improved or creative work processes, leading to efficiency and effectiveness and leaving a lasting positive effect that will henceforth become the standard work procedure. When the appraiser rates an employee, mere execution of the routine position responsibilities should not be given excellent / outstanding ratings. Reporting officers should therefore clarify their expectations of the employee at the time of setting goals and there should not be any miscommunication between them. It must also be made clear that the modus operand of attaining such goals should fall in line with accepted norms of work culture. Sometimes it can so happen that in the organization due to changing focus, priorities, and exigencies, there may arise a need to alter the KRAs set for an employee at the time goal setting, or an employee may be transferred to a different functional area, or region, there by his job becomes different or altered. Similar circumstances may arise when the reporting officer is replaced by a new one who may have a different perspective of focus and priorities. Sometimes the reporting officers get displaced shortly before the appraisal process commences. In those events again conducting the appraisal becomes far more important and the process should take into account the background of events.

Identification of Training needs in the appraisal format should be to cover the gap between the existing competencies and the desired competencies to achieve the set goals/KRAs. Such training needs should be catered immediately by the Reporting officer so that it facilitates the individual employee to attain the goals set for him. It should not become an opportunity to the employee to let loose his fanciful ideas to get trained in skills not necessarily required for accomplishing his tasks nor should provide an opportunity to the reporting officer to please his subordinate by providing him paid holiday of sorts to distant places in the name of providing training. Having identified the training needs of the employee, it becomes the responsibility of the Reporting Officer to ensure that such training needs are taken care of on a timely basis. If not provided, next years’ appraisal report should highlight it and the employee should be given due weightage on his performance.

Self appraisal is an important feature of the appraisal format for it provides a perspective from employees’ point of view. It communicates his contributions, accomplishments and reflections on various facilitating and inhibiting factors which played a role on attaining or otherwise of the goals he set for himself. His failures, and the capabilities he could discover within himself in the process or the capabilities he felt he lacked and the support or otherwise he obtained from his reporting officers and other colleagues and his views on how plans to overcome them. It provides a viewpoint or a perspective to the reporting officer to objectively form his opinion on the performance of employee and expected future levels of performance from him.

Analysis of performance of the employee through mutual discussion is a very crucial aspect where the design of the performance appraisal format is of less importance than the process of conducting it. Reporting officer should not let their own biases creep in, put the subordinate at ease, set a constructive tone, listen to subordinates’ self appraisal, present his own evaluation of subordinates’ on the job performance, discuss areas of difference of opinion and arrive at mutually agreed workable solutions for realizing future goals and for the fulfillment of professional goals of the subordinate and the organizational goals.

While rating on the personal attributes it is important for the reporting officer to go through the definitions of each attributes to maintain uniformity in understanding among all the reporting officers in the organization. While rating on attributes the appraiser must cite specific instances of behaviors exhibited by the appraisee and record rationale for inferences made.

Some organizations use a perforated sheet in the appraisal format, which contains the recommendations for rewards and punishments to be given based on the appraisal conducted. This is normally done by the appraisee confidentially and is directly communicated to the top management. Normally a widespread behavior is observed, where the reporting officer does the appraisal to please the subordinate but when it comes to filling this portion, he contradicts what is done in the appraisal sheet earlier. For e.g. While he may rate an employee well in all aspects, he may state that the employee is not fit to take up superior responsibilities etc. One suggestion is to make such potential appraisals also open to appraisee.

All reporting officers in a organization must be well versed in conducting the appraisal process, as it brings consistency in evaluation across the organization not benefiting a few because of the functional area they are in or to a particular reporting officer they are attached to. Organizations should invest more time and energy in educating the reporting officers on how to conduct the appraisal rather than using their energies in endless redesigning of appraisal formats.

Top management should exhibit its commitment towards a fair and objective performance appraisal process and actions taken on appraisal records should be timely, objective and specific. Line managers should be impressed on conducting appraisal and utilizing it properly for organisations’ benefit and conducting appraisal should get integrated with counseling, mentoring and proper implementation of training policy.

An appropriately conducted appraisal process will result in better placement of employees, brings role clarity and leads to job satisfaction which is great motivating factor for an employee.

Chapter By R Nelson

Tuesday, March 7, 2000 at 04:22:59

Most of the time performance appraisals for determining compensation increases, training need identification and for promotions. The performance appraisal has delinked itself from being an instrument of evaluating performance and bringing about better performance in the organisation. Application of performance management practises that enable organisations to improve their performance and bring in a performance driven culture is the need of the hour rather than performance apppraisals only

Chapter By Ashok Kumar

Thursday, June 15, 2000 at 02:08:25

No doubt without the Commitment of the Top Management it would just be very very difficult to bring this sort of Change. This in fact calls for a cultural change wherein emphasis is not only given to the Outcome or the end result but also on the Process & Effort made to achieve the result. While discussing of the Process & Effort we need to focus on the Leadership style , his approach of consulting others, his ability to learn, his approach as a team member, his effort in planning his days and week,and his overall orientation for Subordinate development. All this really calls for a different ball game wherein the concerned Supervisors is able to Empathise with his sub-ordinate and is really able to understand his emotional world. In an era where every individual is competing with each other and where very tight schedules are drawn without much scope for slippages , there is every probability that conflicts are going to become a common affair. As such it has become all the more important that a supervisor makes all out effort to understand emotional world of the subordinate in terms of his hindering and facilitating factors in terms of achieving his goals, what help the person requires to achieve them,where is he / she vis-a-vis his own persoanl growth and his own ambition in the next 3-4 years, what is happening on his family front. All this shall only happen if the subordinate is able to see value and a genuine concern in all this. For this what can be done is that once in a month an effort can be made by the supervisor to sit with his subordinate and have a face to face interaction in a non threatening atmosphere. What I have personally observed that it charges the motivation level of an Individual considerably and in fact the employee makes all out effort to achieve the Organisational goals.

Chapter By Sachin Rastogi

Friday, July 21, 2000 at 05:25:51

Performance Reviews: Bridging the Gap Between Criticism and Constructive Feedback For most employers, performance reviews are intended to measure the extent to which an employee's performance meets the requirements of that individual's employment position. Employers also use performance reviews to help to establish goals for the future, open channels of communication, and strengthen the relationship between employer and employee. Some employees, however, perceive that performance reviews are sessions in which every mistake made by that employee in the past review period is dissected and analyzed ad nauseam, that unrealistic goals will be set, and that meaningless threats and/or promises will be made regarding future performance. Employers and employees often have conflicting opinions about the purpose of performance reviews, which can mean that performance reviews present a significant legal and administrative challenge to supervisors and HR departments. In order to approach the lofty expectations of employers for performance reviews, and bridge the gap between those expectations and employees' more negative interpretations, the reviews must include three key elements: 1.Clear identification of job standards; 2.Consistent, objective measurement of the extent to which those standards are being met; and 3.Provision of opportunities for clarification and/or feedback. If any of the three factors are eliminated, the performance review process is a meaningless exercise and might, in fact, cause more harm than good. Clear Identification of Job Standards Employers can fairly determine whether an employee possesses the knowledge and technical competencies to perform his or her job responsibilities, those responsibilities must be clearly defined and effectively communicated to the employee. A written job description is helpful, but cannot be the basis of a full and fair performance evaluation unless the employee is aware of the description and of the expectations that flow from it. Job descriptions should set forth the basic responsibilities of the employment position, should be written in a clear and understandable language, and should specifically list any skills or areas of expertise that the employer deems to be essential to the job. Failure to include such information could be the basis of an employee's argument that he or she did not fully understand the scope of the job responsibilities, and was therefore unfairly evaluated. This description should be provided to an employee at the start of employment, and when any substantive revisions are made to the job description for any reason. In addition to providing a job description to an employee at the beginning of his or her tenure, and providing appropriate updates, an employer should make every effort to use the job description as a reference point during the performance review. Such use adds an element of objectivity to the review process and provides a relevant basis from which to approach a fair evaluation of performance. Smaller companies, or companies for which written job descriptions are impractical (i.e., "start up" companies in which job descriptions are still in a developmental stage) can include a written list of basic employment responsibilities, if appropriate, such as "compliance with company policies and procedures," "regular attendance," and knowledge of basic operating systems," and should state clearly to employees that these factors will be part of their performance reviews. Again, clearly identifying certain standards by which an employee's performance will be measured establishes an objective basis for the performance review. Measurements Used in Documenting Performance Although many employee evaluations systems are based on a numerical ranking system, employers should avoid numerical rankings, if possible. Generally, such systems cause immediate disagreement; it is human nature to feel that one deserves a higher "score" than is received. Using objective descriptive rankings ("Exemplary," "Above Average," "Competent," "Marginal," and "Unacceptable," for example) allows employers to support determinations with factual documentation, and avoids the resentment which is sometimes generated by a numerical "grading" system. The most obvious, but most frequently disregarded, advice to individuals conducting performance reviews is to set aside friendship, sympathy, and personal animus and evaluate the employee on a factually objective basis. Just as an unfairly critical review can serve to demoralize an overly sensitive employee, an unwarranted positive review can undermine a company's future argument regarding a less-than-stellar performer who is terminated for performance problems. The Supreme Court's recent decision in Reeves v. Sanderson Plumbing Products (decided June 12, 2000) makes this issue even more critical. In that case, the Court held that an employee's prima facie case of discrimination, coupled with sufficient evidence for a reasonable fact finder to reject the employer's nondiscriminatory explanation for its decision to terminate the employee, may be adequate to sustain a finding of liability for intentional discrimination on the part of the employer. An employer who argues that it terminated an individual for performance problems may weaken its explanation of nondiscriminatory conduct if the documented reviews for the employee indicate only positive comments prior to the termination. Individuals who conduct performance reviews must be non-judgmental in their approach, avoiding subjective comments and over-generalizations. Written reviews should not include gratuitous editorializing, and should be factual and as accurate as possible regarding specific examples of performance or conduct. Opportunities for Clarification or Feedback An employer cannot assume that its employee has fully understood a performance review without allowing an opportunity for discussion of that review. Performance reviews should take place with as much privacy as possible, to allow the employee to voice concerns comfortably, and with sufficient time to fully cover both the employee's achievements and any incidents of marginal or unsatisfactory performance. The review should allow time for questions, but should not be used as a "gripe" session by either the reviewer or the employee. Any written evaluation form used in the review process should include sufficient space for employee comments. Employee comments should be followed up promptly, especially if they raise issues that may have an impact on future employee performance or company morale. While the employee may not agree with each element in the assessment, he or she should be able to sign off on the performance review believing that the process was productive, and done even-handedly and objectively, with full opportunity to voice his or her concerns and questions. What NOT to Do in Performance Reviews: The performance review session should not be used for the following purposes: 1.To discuss general business strategy; 2.To analyze past decisions concerning the employee; 3.To criticize or praise other employees or 4.To reprimand the employee. Conclusion Performance reviews are fundamental to a productive workplace. The evaluation process, when properly and fairly conducted, can (BLEEP)ist in strengthening employer-employee relationships, can increase an employee's sense of empowerment and personal investment in the company, and lead to a more compe(BLEEP)ive and satisfied workforce. When done improperly, performance reviews can work against employers and may actually support a claim for wrongful termination. Guidelines for preparing for and conducting a performance management session. Issue: As HR manager, you have a staff of highly motivated and skilled employees to successfully accomplish the varied and complex goals of your department. However, a yearly performance review may not be enough to elicit this high level of performance from employees. What can be used throughout the year to train and motivate your employees? Answer: Performance management sessions held throughout the year with each employee can help accomplish this goal. Performance management is an ongoing process that involves regular goal-setting, communication, evaluation and allocation of rewards or consequences. A good performance-management program has a number of advantages. A good program can help you get the best from your employees, because when employees know that attention is being paid to their performance, they are generally motivated to work better. Performance management helps redirect employee efforts. An employee may be working hard, but working on the wrong things. Sessions throughout the year will enable a manager to keep tabs on what employees are working on, in order to direct efforts to better fulfill company goals. Periodic performance management gives managers a measuring tool by tracking whether employees are achieving specific goals set for them and with them. When it comes time to award promotions and raises, performance management can aid a manager by allowing a review of documentation that has been kept over the year on employees. The following is an approach for preparing and conducting a performance-management session: Preparing a performance management session: 1.Gather information. 2.Set up a time and notify the employee. 3.Finish preparing the employee's evaluation. 4.Forward copy of review ahead of time to employee (if you choose to let the employee read the review). Conducting a performance-management session: 1.Start with light conversation. This sends the message that the meeting is not adversarial. 2.Present the employee with a copy of the evaluation. Allow time for him/her employee to read it over. 3.Go over each section of the evaluation and discuss examples. Allow employees to ask questions or offer feedback. 4.Together, set new goals and make plans for achieving those goals. Goals should be aggressive, yet attainable. Document the new goals. 5.Secure acknowledgement from the employee. Evaluation forms should have a space for employees to acknowledge that they have had an opportunity to review the evaluation, even if the employee disagrees with certain aspects contained in it.

Chapter By Deepa Kulkarni

Thursday, June 3, 2004 at 05:26:48

Hi Mr. Prasad. I am Deepa, an MBA from Osmania University, Hyderabad working for a HR and General Management consulting organization. I went through ur article on Performance Management. I am really impressed with the clarity of the article and it was a learning for me. thanks

Chapter By Nadeem Ahmed Khan

Thursday, July 22, 2004 at 15:36:23

Mr. Prasad I m student of Ph D (Human Resource Development) and my reserach title is "IMPROVE PERFORMANCE MANAGEMENT THROUGH HRD INTERVENTION". I read your article and really got some thing very relevant to my requirement. I congratulate you for such a knowledge sharing article. I need some articles or relevant books (names) on PERFORMANCE MANAGEMENT HISTORY please share with me i shall be thankful. Nadeem

Chapter By Lourenço Barbosa

Tuesday, August 3, 2004 at 06:07:46

I have created a firm that the core Business is implementing in Portugal Employee Performance management projects. We are facing some difficulties because, no doubt, without the Commitment of the Top Management it very very difficult to bring this sort of Change to those firms. We have to show to top Management that the project will improve the performance of all the firm and that the costs of new benefits are not as great as the benefits achieved by the firm. Do you know where can I find real cases or case studies to help top Management accepting this kind of projects? I think that the performance appraisal has delinked itself from being an instrument of evaluating performance and now is about better performance in the organisation. Your article is excellent

Chapter By Akbar Saitkulov

Thursday, September 23, 2004 at 04:01:31

I have recently investigated the performance of management in company and found out that performance management appears only at the initial stage of the employment, without further investigation, co the scheme is simple, first they take employee and monitor if he does well , company employes him, if not lays off. In my opinion this is a wrong strategy to follow, cause it can fuel the agency cost in company.

Chapter By Mary Juliana Malini

Thursday, May 26, 2005 at 00:01:33

Sir, Could you please clarify me on the following: how to measure Punctuality / Reliability / Organizing / Cheerful, Friendly and Pleasant how to measure Team Spirit / Initiative and Commitment / Innovation Regards, Mary

Chapter By shivani upadhyay

Tuesday, June 14, 2005 at 04:21:55

Dear Mr Prasad I think your article gives a clear cut picture of what exactly PMS is all about . I have read a lot about it as i am doing my reasearch over the subject and have taken selected the banking sector as sample area. You being a very senior and knowledgeable professional ,may i request you to guide me how to start writing my theis.The topic is Performance Management System in Banks: A critical Evaluation. Awaiting a reply from your end, Rgds, Shivani

Chapter By bhakti

Wednesday, July 6, 2005 at 07:19:44

Personel Appraisal in companies

Chapter By moses mwandenga

Wednesday, February 8, 2006 at 09:34:47

Please could you send /advice by example in power generation plant . How i can conduct a performance management review to 50 technicians, all are reporting to me as supervisors regards