HRM’s role in the performance management process
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Chapter 8: Performance Management: 8.1b Why Performance Management Systems Sometimes Fail Book Title: Managing Human Resources Printed By: Carmen Banner (carmen.banner@snhu.edu) © 2016 Cengage Learning, Cengage Learning
8.1b Why Performance Management Systems Sometimes Fail
Performance appraisals often fall short of their potential. In an ongoing survey of employee attitudes by the HR consulting firm Watson Wyatt, only 30 percent of employees said they thought their company’s performance management process actually improved employee performance. Only one in five thought it helped poorly performing employees do better.
Many people fault the formal evaluation process. They believe it discourages teamwork by focusing on workers’ individual achievements rather than what their teams or firms accomplish. (Who gets the best rating and the biggest raise? Who does not?) Others contend that evaluations are useful only at the extremes—for highly effective or highly ineffective employees—and are not as useful for the majority of employees in the middle. Other people point out that evaluations often focus on short-term achievements rather than long-term improvement and learning. Still others complain that the only feedback they get is during formal evaluations, or they aren’t done at all. This can especially be a problem in small businesses, as this chapter’s small business feature shows. It’s not uncommon for managers to show new employees to their workstations and leave them on their own or to assign tasks to employees on a routine basis with little or no feedback on the tasks they have already completed. A more complete list of the reasons why formal evaluations fail is shown in Figure 8.3.
Figure 8.3
Let Me Count the Ways … Reasons Why Performance Evaluations Can Fail
Inadequate preparation on the part of the manager.
The employee is not given clear objectives at the beginning of performance period.
The manager may not be able to observe performance or have all the information.
The performance standards may not be clear.
Inconsistent ratings among supervisors or other raters.
Manager rates employee’s personality rather than performance.
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The halo effect, contrast effect, or some other perceptual bias.
Inappropriate time span for evaluation (either too short or too long).
Overemphasis on uncharacteristic performance.
Inflated ratings because managers do not want to deal with “bad news.”
Subjective or vague language in written evaluations.
Organizational politics or personal relationships cloud judgments.
No thorough discussion of causes of performance problems.
Manager may not be trained at evaluation or giving feedback.
No follow up and coaching after the evaluation.
Sources: Patricia Evres, “Problems to Avoid during Performance Evaluations,” Air Conditioning, Heating
& Refrigeration News 216, no. 16 (August 19, 2002): 24–26; Clinton Longnecker and Dennis Gioia, “The
Politics of Executive Appraisals,” Journal of Compensation and Benefits 10, no. 2 (1994): 5–11; “Seven
Deadly Sins of Performance Appraisals,” Supervisory Management 39, no. 1 (1994): 7–8.
Small Business Application
Does a Small Business Need to Formally Evaluate Its Employees?
So now you have your own business. That means you can dispense with those pesky, time-consuming performance reviews everyone dreads, right? You never liked them as an employee. In fact, maybe they helped solidify your desire to work for yourself. Why would you like them any more as a manager, entrepreneur, or small business owner?
Do not be so fast to dump formal performance evaluations. Without them, you might end up “flying blind” when it comes to some important performance metrics. “In a small business in particular, the performance review is like a dashboard—it gives you all kinds of gauges about quality, job knowledge, and customer service,” says Robert Chanin, the director of human resources for the Alcott HR Group, a professional employer organization that provides HR and other services. “If there isn’t any gauge, you don’t know if your business is doing well or not.”
By contrast, put a good performance management system in place and the sky is the limit, says Barrie Gross, a human resources expert and employment law attorney. “They’re one of the tools businesses can use to get employees more involved, increase their motivation, and help them achieve success,” Gross explains. Evaluating your employees also lets them know they are not just human
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cogs in the production process—that you care about them, their involvement in the firm, and their personal goals. This can help a small business retain its top employees rather than losing them to big companies where they are often treated more impersonally. The feedback can be verbal, if the reviews are for development purposes only. However, if the evaluations are used in conjunction with raises and promotions, they should be written. Legal experts counsel employers to maintain written records in order to provide themselves with greater legal protections.
Small businesses with few employees or that are just launching their performance management systems can utilize off-the-shelf systems consisting of either printed forms or software. Popular software brands include Success Factors’ Performance Management system, Evaluation Smart, and Halogen’s eEvaluation product, the latter two of which are web-based. Generally, a manager can customize evaluation forms in software packages by selecting elements from a list of attributes and behaviors that describe on-the-job success for a position.
Keep in mind that performance reviews are not about the forms, though. They are a two-way discussion designed to benefit both parties. In addition to your employees learning about how they can improve their performance, the evaluations can help you learn how to improve yours as well.
Sources: Amy Linn, “Boost Performance with Performance Reviews,” Small Business Review,
http://smallbusinessreview.com; David Javitch, “How to Survive Employee Appraisals,” Entreprenur.com,
http://www.entrepreneur.com.
For reasons such as these, a substantial number of organizations, including Adobe Systems, Kelly Services, and SAS Institute, no longer conduct formal evaluations but use ongoing coaching, individual development plans, or other feedback systems instead. Other organizations, including Xerox, Motorola, and Procter & Gamble, have modified their performance evaluations to try to improve them. At RoundPegg, a hiring startup that develops social applications, all employees have quarterly reviews, or “feedback sessions,” that last just 20 minutes. “Our job is to make sure our employees are being successful, and if they’re not, we’re doing something wrong,” say Brent Daily, RoundPegg’s co-founder and chief operating officer. “My job here isn’t just to make sure everyone is crossing their T’s and dotting their I’s—my job is to remove the obstacles and allow them to do what they do best.”
Because teamwork is so important in organizations today, other companies are starting to use crowdsourcing as part of their performance management systems. In an HR context, crowdsourcing involves continually gathering feedback, compliments, and suggestions from the different people who work with an employee using “social-recognition” applications installed on a company’s computers and mobile devices. Achievers and Globoforce are two such brands. (You can think of the applications as being somewhat analogous to “liking” something someone does on Facebook.) When they are recognized by other workers, employees get points that translate into monetary and other rewards. 3M, the Marriott and
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Starwood hotel chains, and the pharmaceutical company Eli Lilly are using this type of software. Starwood Hotels believes it keeps all of its employees focused on the important drivers of the firm’s performance, builds teamwork, and helps the company identify and reward top performers.
A dashboard in Achievers allows managers to see which employees are being recognized by other people for their contributions.
Achievers.com
Source: http://www.achievers.com/solutions/employee-recognition#/images/4
Chapter 8: Performance Management: 8.1b Why Performance Management Systems Sometimes Fail Book Title: Managing Human Resources Printed By: Carmen Banner (carmen.banner@snhu.edu) © 2016 Cengage Learning, Cengage Learning
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