In AC 3.2 you need to explain 3 data that can be use during the staff performance appraisal. Please see page 104 to see the data.
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3PRM
Unit Title : Supporting Good Practice in Performance and
Reward Management
Unit Code : 3PRM
Credit Value : 6
3
Purpose and Aim
An introduction to the purpose and processes of Performance and Reward Management and the role of the Human Resources in promoting and supporting good practice.
Develop the trainees’ understanding of how motivational theories and associated tools can be used within the context of Performance and Reward Management
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Purpose and Aim (Cont…)
Provide an overview of the appropriate skills and good practices associated with performance management reviews and follow-up and the data management aspects.
Understand the role of financial and non-financial benefits and important determinates of reward decisions.
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Learning Outcome 1
6
| The learners will: | The learners can: |
| AC1.1 Describe the purpose of performance management and its relationship to business objectives AC1.2 Explain the components of performance management system AC1.3 Explain the relationship between motivation and performance management | LO1 Explain the link between organisational success, performance management and motivation |
Defining Performance
Is it:
Loyalty?
Longevity?
Competence?
Potential?
Results?
Behavior?
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Performance
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Performance Management
According to Armstrong and Baron (2004) Performance Management is “ a process which contributes to the effective management of individuals and team in order to achieve high levels of organizational performance. As such is established shared understanding about what is to be achieved and an approach to leading and developing people which will ensure that it is achieved.”
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The Purpose of Performance Management
To align people with organisational goals – to communicate organisational goals and strategy, to ensure individual/team contribution is linked to the organisational objectives and business plan
To improve the performance of the individual employees – to provide support and guidance of what needs to be achieved, to help the individual understand their strengths and weakness and identify areas for improvement, to motivate
To improve the overall performance of the organisation
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Activity
Discuss: is the context of performance important (such as environment, sector, culture) and in what way.
Please provide practical examples.
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Components of Performance Management (PM)
The components of a Performance Management process may include:
Appraisal
Assessment of competence
Objective-setting and review
Learning and development activities
Performance-related pay
Coaching and mentoring
Succession planning
Personal development planning
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Activity
What are the most important parties / sources that effects employee performance?
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Activity answer
What are the most important parties / sources that effects employee performance?
The employee him self
Direct manager
The organization (Culture/Policy & Procedure)
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Activity
Please discuss: what is the difference between performance management and performance appraisal?
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Performance Appraisal
A performance appraisal is a regular review of an employee's job performance and overall contribution to a company.
Performance appraisal is often conducted by the line manager at specific times of the year. Its purposes are:
To review the performance of the individual against set objectives for the specific role
To discuss career and development desires and how these can be achieved
Reward reviews
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Performance Appraisal Benefits
Please discuss what are the benefits to the individual and to the organisation? Work in groups
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PA - Individual Benefits
Better understanding of strategic aims and own role in organisational success
Increased motivation
Increased job satisfaction
Development of potential
Informed career planning
Ability to meet own objectives as well as broader organisational and team objectives
Opportunity to publicize ambition
Better understanding of the link between effort, performance and reward
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PA – Organisational Benefits
Improved communication on business goals
Improvements in performance
Identification of potential to aid succession planning
Targeted training and development activities
Evaluation of selection practices
More objective distribution of reward
Improved retention
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The Performance Review Cycle
Identifying factors relevant to performance in the job
Collecting information on performance
Organising the information
Discussing or reviewing the information
Agreeing outcomes
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Components of Performance Appraisal Schemes
Who is to be appraised
Who appraises - the HR? The line?
What is being appraised – the criteria – traits vs results vs competencies – and the achievement of objectives
What are the assessment methods – checklist, ratings, gradings, comparison, competencies, critical incidents?
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Steps for Conducting Productive Performance Reviews
Identify what the employee has done well and poorly
Ask for feedback and understand any issues
Discuss the implications of changing behaviors
Explain how skills used in past achievements can help overcome any performance problems
Agree on an action plan
Set a follow-up meeting and agree on behaviors, actions, attitudes to be evaluated
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Performance Appraisal process
Good Practice in Performance Appraisal
Support from top management
Systems that are open and participative
Agreement at all levels about the purpose (S) of the scheme
Clear, specific and well-communicated (SMARTS) objectives that are jointly agreed
Line managers’ recognition of their critical role in this process – i.e. it is not seen as an HR function
Clear links to the disciplinary and/or capability procedure when handling conduct or poor performance issues so that the messages to the employee are the same.
Training for appraisers and appraises, including giving and receiving feedback.
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Trends in Performance Appraisal
From traits to result-based assessment
From effort to result focus
From judgmental to joint problem-solving
From managerial to all jobs
From a top-down to 360 degree feedback
From competencies to achievements
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Assessment of Competencies
Necessary to ensure that staff are both confident and competent in their work. Individuals are considered competent when they are able to consistently apply their knowledge and skills to the standard of performance required in the workplace.
Organisations are increasingly assessing not only what the job holder achieves, but also how it is achieved. This trend has resulted in targeting the behaviours of the employees as these have impact on colleagues and customers.
The competencies based approach is also used in other areas of HR. Please provide examples?
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Objective Setting and Review
Business objectives
Team/ division/ departmental objectives linking with business objectives
Individual objectives linking with the above
As well as:
Individual objectives resulting from development needs
Project objective
Training and development objectives
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Objective Setting and Review (Cont…)
Objectives should be set by using the SMART framework:
Specific
Measurable
Agreed
Realistic
Time-bound
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Smart Goals
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Smart Goals
SMART targets
Specific: should have a focus and not be vague.
Measurable: should include something that can be measured.
Achievable: can be attainable, otherwise it will be de-motivating.
Realistic: could be done with the resources and skills available.
Time-bound: must have a time frame so that success can be measured.
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Activity
Identify if these are SMART goals or not:
To achieve last year profits within nine months of this year.
To learn two new skills within one year.
To achieve an excellent results this semester.
To reduce our cost by 12% at the end of this year.
To raise our product B price 20%.
This year our financial result will be better than last year.
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Learning and development activities
An organisation is responsible for ensuring that its employees have the appropriate skills, knowledge and Attitude to fulfill the organisation's strategic and operational objectives.
This has obvious implications for recruitment, but it also entails a commitment to learning and development by the organisation to ensure that skills and knowledge are maintained and developed to ensure ongoing competitiveness and adaptability.
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Coaching and mentoring
Coaching is a training or development process via which an individual is supported while achieving a specific personal or professional competence result or goal. Mentoring is an ongoing relationship that is developed between a senior and junior employee.
Mentoring provides guidance and clear understanding of how the organization goes to achieve its vision and mission to the junior employee. A mentor is similar to a coach, he is often teaching by example, by demonstration of the skills that the learner can then model.
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Succession planning
Succession planning refers to a group of activities that aim to ensure that at any time an organization has sufficient number of people with the ability, knowledge, personal attributes and experience to step into roles at the next level when they become vacant.
The aim is to develop pools of talent from which replacement can be selected once the vacancy becomes available.
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Job Description and Performance Review
Clearly identify and spell out the responsibilities of a specific job
Provide an opportunity to clearly communicate your company direction and they tell the employee where he or she fits inside of the big picture.
Set clear expectations for what you expect from people.
Helps other employees, who work with the person hired, understand the boundaries of the person's responsibilities
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Activity
Discuss: what is the role of the HR in performance management?
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The Role of HR Practitioners
Identifying the need for a new or revised scheme
Designing the scheme
Implementing and communicating the scheme
Designing and organising training for appraisers and appraisees
Administering the scheme
Monitoring the scheme
Maintaining the scheme (i.e. is it working efficiently?)
Evaluating the scheme (i.e. is it working effectively and does it meet its objectives?).
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HR Practices for High Performance
The high performance work practices is a set of HR practices that are considered to have a positive impact on organisational performance. Although research confirms that there is a clear link between specific HR practices and organisational performance, the causality is difficult to explain.
Please give examples of such practices?
Please discuss the reasons why it is difficult to prove the HR policies have a positive impact on performance
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HR Practices Examples
Teamwork
Performance related pay
Training to perform multiple jobs
Annual appraisal
Mentoring
Workforce diversity
Formal assessment tools for recruitment
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Activity
Discuss: what do you think are the reasons for someone performing poorly? How can these be addressed?
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Motivational Theories and Their Relevance to Performance Management
Maslow’s hierarchy of needs.
ERG Theory
Motivational Hygiene Theory.
MCCLELLAND'S learned needs Theory.
Expectancy Theory
Equity Theory
Goal-setting Theory
Reinforcement Theory
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Maslow’s hierarchy of needs
The needs of individuals can be ranked into a hierarchy.
The lowest ranking needs are the most basic, such as the need for food, water and shelter, whilst the highest ranking needs involve very complex issues relating to “self-actualization” where the individual becomes all that they can possibly be.
All employees have a range of needs that need to be satisfied. Any unsatisfied lower level needs will mean that employees cannot be motivated.
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Maslow’s hierarchy of needs
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ERG Theory
Studies had shown that the middle levels of Maslow's hierarchy overlap. Alderfer addressed this issue by reducing the number of levels to three. The letters ERG represent these three levels of needs:
Existence refers to our concern with basic material existence motivators.
Relatedness refers to the motivation we have for maintaining interpersonal relationships.
Growth refers to an intrinsic desire for personal development.
Like Maslow's model, the ERG motivation is hierarchical, and creates a pyramid or triangle appearance. Existence needs motivate at a more fundamental level than relatedness needs, which, in turn supersedes growth needs.
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ERG Theory
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ERG Theory
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McClelland Theory
There are three main types of motivational need:
The need for achievement
The need for authority and power
The need for affiliation
Each employee and manager has differencing levels of these needs, and this influence their style and behavior as managers or employees
McClelland (need for achievement)
People who are achievement-motivated typically prefer to master a task or situation. They prefer working on tasks of moderate difficulty, prefer work in which the results are based on their effort rather than on luck, and prefer to receive feedback on their work.
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McClelland Theory
This is the best type for managers, they want to do well and will therefore use results and people to achieve this.
McClelland (need for affiliation)
People who have a need for affiliation prefer to spend time creating and maintaining social relationships, enjoy being a part of groups, and have a desire to feel loved and accepted. People in this group do not typically make effective managers because they worry too much about how others will feel about them.
A manager who has strong affiliation motivation will want to be liked and they may find it difficult to make unpopular decisions.
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McClelland Theory
McClelland (need for authority and power)
This motivational need comes from a person's desire to influence, teach, or encourage others. People in this category enjoy work. and place a high value on discipline.
A manager from this type will take control and want to lead the organization, but may not be good with people.
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McClelland Theory
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Motivational Hygiene Theory (Herzberg)
Like Maslow, believed that pay was not the only motivator and came up with his theory which had two elements to it hygiene factors and motivators.
For an employee to be motivated, all the hygiene factors need to be met first and then the motivators could be used to make them work harder.
Herzberg’s theory works in a similar way to Maslow’s in that even if recognition and advancement are offered, if the working conditions are unsafe an employee will remain de-motivate.
A culture that rewards safe working and pays well is likely to have staff who are ready to be motivated.
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Motivational Hygiene Theory (Herzberg)
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Reinforcement Theory
Reinforcement theory is the process of shaping behavior by controlling the consequences of the behavior.
In reinforcement theory a combination of rewards and/or punishments is used to reinforce desired behavior or extinguish unwanted behavior.
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Reinforcement Theory
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Reinforcement Theory
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Expectancy Theory
M = E × I × V
Expectancy is the belief that increased effort will lead to increased performance.
Instrumentality is the belief that if you perform well that a valued outcome will be received.
Valence is the importance that the individual places upon the expected outcome.
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Expectancy Theory
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Equity Theory
Equity theory, most popularly known as equity theory of motivation, was first developed by John Adams, a workplace and behavioral psychologist, in 1963.
John Adams proposed that an employee’s motivation is affected by whether the employee believes that their employment benefits/rewards are at least equal to the amount of the effort that they put into their work.
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Equity Theory
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Activity
What are the most common mistakes that the supervisor do with regards to the employee's appraisal?
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Don't prepare for the appraisal meeting
Don’t listen enough to the employee
Don’t clarify the criteria/standards in advance
Evaluating the employee in the appraisal period only, and Not given the him/her any feedback during the year
Evaluating the employee on his/her last month's performance and not the whole year
Maximizing mistakes and minimizing achievements
Evaluating the personality of the employee and not his/her performance
Not doing their correct role as a direct mangers (unclear instructions/not providing training opportunities/not providing suitable working environment or enough resources)
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To Summarise
The purpose of performance management and its relationship with business objectives
Features of performance management
Difference between PM and PA
The role of the HR
The link between motivation and performance management (Motivational Theories)
Dos and Don’ts in the performance appraisal
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Learning Outcome 1 Review
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| The learners will: | The learners can: |
| AC1.1 Describe the purpose of performance management and its relationship to business objectives AC1.2 Explain the components of performance management system AC1.3 Explain the relationship between motivation and performance management | LO1 Explain the link between organisational success, performance management and motivation |
Learning Outcome 2
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| The learners will: | The learners can: |
| AC2.1 Explain the purpose of reward within the performance management system AC2.2 Identify and explain the components of an effective total reward system | LO2 Contribute to effective performance and reward management in the workplace |
Reward
According to Armstrong (2002:4) reward consists of:
“Financial rewards (fixed and variable pay) and employee benefits, which together comprise total remuneration. The system also incorporates non-financial rewards (recognition, praise, achievement, responsibility and personal growth) and in many cases, performance management process. The combination of financial rewards, employee benefits and non-financial compensation comprises the total reward system”
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Activity
Discuss: why do organisations reward employees?
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Purpose of Reward
Required by the law
To attract talent
To motivate employees
To retain talent
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Total Reward System Components
Basic pay and contingent pay – financial reward (bonuses, commission, share options, company share plan)
Non-pay (fringe) benefits – pension plan, training and development, annual leave, on-site car parking, childcare and food vouchers
Wider non-financial rewards – the work environment, corporate culture, job security, employee recognition practices, opportunities for personal development and growth, interesting work, making a positive difference
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Connection Between Reward and Resourcing
Recruitment – organisations choose to position themselves as an employer based on the reward they can offer: pay vs culture; employer of choice - the ultimate positioning where both financial reward and culture are taken into consideration.
Please discuss why is it important for employers to be seen as employers of a choice?
Retention – reward (both financial and non-financial) may be used as a powerful tool to retain talent
Please give examples of how reward helps employee retention.
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Connection Between Reward and Motivation
Armstrong and Murlis (1992:282) argue that for reward systems to act as real incentives they must satisfy three basic requirements:
The reward should bear a direct relation to the effort
The payment should follow immediately or soon after the effort
The method of calculation should be simple and easily understood
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Connection Between Reward and Motivation (Cont…)
To be taken into consideration that different people are motivated by different incentives (e.g. money, influence, career growth, job security, work-life balance)
Not every organisation can afford all the components of the Total Reward System
Some of the non-financial benefits may be invisible to employee upon the beginning of the employment relationship or may not be considered as such
Most visible parts remain the financial reward and benefits
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Pay Systems
There are two main categories of pay system: basic rate schemes and variable or incentive schemes.
The systems in use in some organisations include a combination of the two.
Basic Rate Systems
- Here an employee will have fixed rate of basic pay set in reference to a particular time period – for example, per hour, per week or per year. There may be other payments in addition to basic pay, such as overtime or additional pay for working shifts or nights, for example, but the basic pay rate will not vary according to individual contribution or performance.
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Variable or Incentive Pay Systems
Here an employee’s pay – or more usually, part of their pay – will vary dependent on their individual performance, the performance of the team they are in or the whole company’s performance.
The most common types of scheme relate to individual performance and apply only to part of the employee’s wage or salary.
Examples of variable or incentive pay systems include sales commission, appraisal/performance-related pay, payment by results.
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Pay Structures
Purpose:
To create a framework for pay that is transparent and easy to understand
To make sure that payment reflects what the organisation is trying to achieve
To help ensure fairness and lawfulness
Types of pay structures – graded structures, broad banding, individual pay rates, job families, pay spines
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Linking Pay with Performance
Armstrong ( 2002:261) states that PRP:
- Provides individuals with financial rewards in the form of increases to basic pay or cash bonuses which are linked to an assessment of performance, usually in relation to agreed objectives.
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Non - Financial Rewards
Non-financial rewards unusually refers to those items that are not pay or benefits but still have a role to play in recruiting, retaining and motivating employees and generating loyalty and commitment.
- achievement
- recognition
- responsibility/autonomy
- influence
- personal growth
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Reward Systems
Rewards is the tool of the org that are used to make staff work harder, some of them are:
Pay
Performance-related pay
Pension schemes
Profit sharing
Employee share options
Mortgage subsidies
Bonuses
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Reward Systems
Loans/advances
Childcare
School fees
Staff discounts
Flexible working
Leave
Health care
Extended parental leave
Cafeteria incentive schemes
Salary sacrifice schemes
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Reward Systems
Pay
Pay for many employees is the reason they go to work.
Many organizations uses pay to reward thier employees.
They do that by given thier staff one-off bonus or a pay rise each year (pay scale) to reward them for loyalty or service .
Pay usual is linked to the qualifications and experiences.
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Reward Systems
Performance-related pay
A way of giving workers extra money depending on their performance in the previous period.
Its very common in manufacturing and sales jobs where the more products employees make or sell, the more they are paid.
The performance targets being used to work out the pay reward must be easily measurable and accessible to all employees.
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Reward Systems
Pension schemes
Some org. offer pension schemes as rewards to staff.
Pension: a payment that is given to a person when they retire, it could be self, company or state pension.
A contributory pension scheme is one that both the employee and employer put money into.
A non-contributory pension scheme is one that only the employer puts money into.
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Reward Systems
Profit sharing
Profit sharing is when a business gives its employees a share of the profits besed on how the business is doing .
The share of the profit is distributed between staff depending on some factors such as the performance or/and service years in the company.
Advantages are it allows staff to share in the business success and benefit directly from thier own contribution.
The disadvantage is that profits may be linked to other factors, such as world events or disasters over which employees have no control.
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Reward Systems
Share options
Like profit sharing, a way to reward employees based on company performance.
Depending on the its performance, the company options may be given to employees as free shares that they can sell after a set period of time or as an option to buy shares at a fixed rate, which is often lower than the current share value.
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Reward Systems
Mortgage subsidies
Payments that are given to employees towards their mortgages.
This sort of reward system is more commonly used in areas where housing is expensive.
Some firms such as banks offer mortgage subsidies as part of their employee benefit packages.
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Reward Systems
Bonuses
Giving employees extra money at the end of the year but not necessary every year.
A good way for the org to reward employees without making it part of a payment that has to be given every year.
Linked to the level of performance or as one-off bonus for the completion of a project.
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Reward Systems
Loans/advances
Some companies might give their employees part of their wages in advance to pay some of their personal lives expenses.
Other employers may offer loans with low interest low.
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Reward Systems
Childcare
Some employers offer childcare within their building
Other employers pay the fees of the nurseries or clubs fees for older children
Some employers also offer childcare vouchers
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Reward Systems
School fees
Some employers contribute towards school fees as a reward for staff, particularly if the staff works for the school that the child attends.
If an org. has a number of staff sending their children to a particular school they may be able to gain discounts.
Staff discount
Many businesses offer staff discounts across their product ranges or even have negotiated discounts on products offered by other businesses they work with.
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Reward Systems
Flexible working
Provide employees with special arrangements to help them in balancing between their work and home life.
Work-life balance can be very important to some employees, especially if they have children or relatives to look after.
Flexi-hours that allow the employee to choose the hours of working.
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Reward Systems
Leave
By law every staff in entitled to have a minimum leave every year, if employers decide to offer more generous amounts of paid leave they can use this as a staff reward system.
Extended parental leave
Extended leave that employees can take to look after their children.
Usually this leave is unpaid but the employer will keep the employees' job open for them to return to.
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Reward Systems
Healthcare
Employers offer free or subsidized healthcare for their employees and their families
Healthcare can be received in the organization premises or outside clinic
This will motivate the employees and may reduce the sick leaves
Salary sacrifice scheme
Employees will give up part of their gross salary to receive some kind of benefits instead such as pension scheme.
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Reward Systems
Cafeteria incentive scheme
Employees are offered a selection of different rewards and benefits, and they choose which one that they want such as holidays, company car, loans…
This will benefit the employees and the employers also
Employees will be happier and more motivated
The organization will avoid spending on rewards that are not wanted
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The Legal Aspects of Paying Employees
National Minimum Wage
Maternity and Paternity, Statutory Sick and Redundancy Pay
A Week’s Pay
The right to be paid
Lay-offs
Unlawful Deductions
The Equality Act 2010
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The Role of HR Practitioner
An Advisory Role – you may need to provide both managers and employees with advice about the reward package in your organisation – how its works, what it includes, how decisions are made.
A Research Role – This covers finding out about pay rates and reward packages in competitor organisations and the labor market you are operating in.
An Administrative Role - There will be different aspects of the reward system in your organisations’ chosen pay system, some involvement in paying wages and salaries, and administering other aspects of the total reward package, such as holidays or gymnasium memberships.
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The Role of HR Practitioner
A Monitoring Role – There will be different aspects of the reward system in your organisation that need monitoring.
A Training Role - You may be called upon from time to time to train others (HR colleagues, line managers, trade union representatives) in how various aspects of the reward system work.
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To Summarise
The connection between reward, resourcing and performance
The rationale behind the different reward systems
Role of reward in being an employer of a choice
Components of the total reward system and their role
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Activity
Discuss: is transparency important? In what way?
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Learning Outcome 2 Review
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| The learners will: | The learners can: |
| AC2.1 Explain the purpose of reward within the performance management system AC2.2 Identify and explain the components of an effective total reward system | LO2 Contribute to effective performance and reward management in the workplace |
Learning Outcome 3
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| The learners will: | The learners can: |
| AC3.1 Identify the factors that need to be considered when managing performance AC3.2 Describe the data required by individuals in performance and reward management process | LO3 Be able to contribute to effective performance and reward management in the workplace |
Activity
Work in 2 groups, discuss and then present on a flip-chart:
Group one: what factors can impact on individual performance?
Group two: what factors can impact on team performance?
How would you manage good and bad performers?
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Factors Affecting Individual Performance
Internal/individual factors:
Capability to perform the job
Motivation
Clear understanding of what is required from them
Finding meaning and purpose of their role
External factors:
Have they received appropriate training or guidance
Are they provided with sufficient support
Is the working environment conducive to performance – can be affected by colleagues/ customers/ physical environment
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Factors Affecting Team Performance
Internal factors:
Management style and skill
Team dynamics
Number of members – is the team short – staffed?
Diversity
External factors:
Objectives set
Broader support from the organisation
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Factors Affecting Organisational Performance
Internal factors:
Management style
Corporate culture
Individual and team performance
HR policies and practices
Diversity
External factors:
Economic, political, legislative environment
Competitors
Nature of products and services
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Performance Management Data
Information from the formal Performance Appraisal
Learning records
Employee feedback
Job description
Record on additional achievements/ special projects participation
Objectives/targets information
Previous performance reviews information both formal and informal
Personal development plan
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A Strategic Approach to Reward
Reward is one of the key levers available to an organisation to influence the behavior, motivation and the commitment of its staff. In fact the overall approach to reward sends strong messages to all employees about what is important to the business.
There is no one “best practice” in terms of reward, only a best practice for the specific organisation given the variables impacting on it. Some of these variables are specific to the organisation, others relative to the industry while others are national and even international initiatives
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Critical Elements/Variables to Be Considered Before Developing a Reward Strategy
Understanding the organisation, its position in its life cycle, strategy, critical success factors and culture.
Understanding the workforce and its demographics.
Knowing the perceptions and values of stakeholders relative to remuneration.
Understanding the market in which you compete for skills, the areas of shortage and demand for scarce talent.
Understanding the environment in which the company operates.
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Reward Strategy
An effective reward strategy, balances strategic and operational goals, ensuring short term actions don’t negate long term opportunities and that the organisation can attract, retain and motivate the quality of people it needs – people with the necessary skills, experience (and/or potential to develop these skills) to achieve its goals.
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Components of a Reward Strategy Includes:
Paying for Performance
Guaranteed pay
Short term incentives
Long term incentives
Performance Management
Personal Development
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Three Main Ways of Reward Strategy
There are three main ways in which employer choice in reward strategy is constrained:
1) By legal regulation of remuneration terms and conditions.
2) By voluntary agreements to jointly regulate the relationship via the process of consultation and negotiation with the trade unions known as ‘ collective bargaining”.
3) By the reality of the external labour market.
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Activity
Discuss: how do you make decisions on reward? What information would you use?
110
Activity
Discuss: where would you find information and guidance on performance standards in the organisation?
111
To Summarise
Performance and reward policies in the organization
Factors affecting performance
Good practice on managing both good and poor performance
Information sources
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Learning Outcome 3 Review
113
| The learners will: | The learners can: |
| AC3.1 Identify the factors that need to be considered when managing performance AC3.2 Describe the data required by individuals in performance and reward management process | LO3 Be able to contribute to effective performance and reward management in the workplace |
Learning Outcome 4
114
| The learners will: | The learners can: |
| AC4.1 - Conduct a performance review meeting AC4.2 - Reflect on the outcomes of the performance review. | LO4 Be able to conduct and reflect upon a performance review |
Performance Management Purpose
Performance Evaluation is a multi-purpose tool used to:
- Measure actual performance against expected performance - Provide an opportunity for the employee and the supervisor to exchange ideas and feelings about job performance
- Identify employee training and development needs, and plan for career growth
- Identify skills and abilities for purposes of promotion, transfer, and reduction in force
- Support alignment of organisation and employee goals
- Provide the basis for determining eligibility for compensation adjustments based on merit
- Provide legal protection against lawsuits for wrongful termination
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Performance Management Purposes (Cont…)
The primary purpose of Performance Evaluation is to provide an opportunity for open communication about performance expectations and feedback.
Most employees want feedback to understand the expectations of their employer and to improve their own performance for personal satisfaction.
They prefer feedback that is timely and given in a manner that is not threatening.
116
Activity
Work in groups and discuss: Dos and Don’ts for the performance appraisal period. Flip-chart presentation
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Dos and Don’ts for the performance appraisal
Do give concrete examples such as: “Your files are very disorganized. Last week when you were sick, I could not find the information I needed to respond to an urgent question from a client. This reflected poorly on our company”.
Do allow the employee time to express him or herself and provide an explanation if needed.
Do document any comments that are given, including any explanation received from the employee and the corrective action to be taken.
Do it at the right time and place.
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Dos and Don’ts for the performance appraisal
Do explain what specific steps or actions the employee must take to improve their performance, for example: “I expect all client calls be responded to within 4 hours.”
Don’t sugarcoat negative feedback. The employee may not get the message and the issue will seem less important. Get to the point, be frank and honest.
Don’t use vague statements such as “your performance is poor” or “great job!”
Don’t wait! Whether the feedback is positive or negative, giving feedback on a timely basis increases its impact, and everyone’s memory is still fresh on the details.
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Performance Management Process
Performance Management Process
- An overall performance management process ensures that performance feedback, accountability, performance results, corrective action, and performance planning occur.
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Skills for Performance Appraisal
Paraphrasing
Summarizing
Responding to non-verbal cues
Body language
Giving and receiving feedback
Range of effective questions
Difficult conversations
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Potential Issues in Performance Review
The HALO effect
The HORN effect
Can be exacerbated by the ‘RECENCY’ effect
The CRONY effect
The ‘Veblen’ effect
The DOPPELGANGER effect
The IMPRESSION effect
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Activity
List the 3 things supervisors most often do that have a detrimental impact on subordinate performance
What is the best thing that supervisors do and has a positive effect on the employee performance
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360 Degree Feedback
Pioneered in the US Army in the 1970s . Now used by three quarters of the Fortune 500 companies and by 40% of large UK organisations.
Uses anonymous questionnaires focusing on competencies (for example, leadership skills, teamwork ability).
Composite feedback is sought from: a) lower level staffs (90 degree appraisal); b) bosses (180 degree appraisal) and; c) colleagues and customers (full 360 degree appraisal)
Mixed evidence of effectiveness of 360 degree appraisal. Possible management hostility to change.
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360 Degree Feedback
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The Balanced Scorecard
Mapped across four quadrants: The financial perspective; the customer perspective; the internal/business perspective; the innovation and learning perspective
Provides a unique ‘theory of business’ for the organisation
Feeds down into department and individual targets
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The Balanced Scorecard
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Key Tensions Associated with Performance Review
Can create mistrust in management due to increased monitoring
For reward or for development?
Overly bureaucratic
Challenges of measurability…
What is meaningful may not be measureable
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How should pay be determined?
Pay for time or pay for performance?
Pay by inputs or pay by output?
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To Summarise
The purpose and process of PM
Key skills required by the appraiser
Good practice in conducting performance review
Possible issues
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Learning Outcome 4 Review
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| The learners will: | The learners can: |
| AC4.1 - Conduct a performance review meeting AC4.2 - Reflect on the outcomes of the performance review. | LO4 Be able to conduct and reflect upon a performance review |
Q/A
Questions, Comments, and Feedback are welcome.
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