FEEDBACK

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Performance Management & Feedback

Organizations need broader performance measures to insure
Performance deficiencies addressed in timely manner through employee development programs Employee behaviors channeled in appropriate direction toward performance of specific objectives Employees provided with appropriate & specific feedback to assist with career development

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Strategic Choices in Performance Management

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Reciprocal Relationship Between T&D & Performance Management

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Who Evaluates?
Problems with immediate supervisors conducting performance evaluations
Lacking appropriate information to provide informed feedback on employee performance Insufficient observation of employees day-to-day work to validly assess performance Lack of knowledge about technical dimensions of subordinates work Lack of training or appreciation for evaluation process Perceptual errors by supervisors that create bias or lack of subjectivity in evaluations
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Perceptual Errors of Raters

Halo effect
Rater allows single trait, outcome or consideration to influence other measures of performance

Stereotyping
Rater makes performance judgments based on employees personal characteristics rather than employees actual performance

Recency error
Recent events & behaviors of employee bias raters evaluation of employees overall performance

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Perceptual Errors of Raters

Central tendency error
Evaluator avoids higher & lower ends of rating in favor of placing all employees at or near middle of scales

Leniency or strictness errors

Evaluators tendency to rate all employees above (leniency) or below (strictness) actual performance level

Personal biases & organizational politics

Have significant impact on ratings employees receive from supervisors

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Purposes of Performance Management Systems

Facilitate employee development
Determine specific training & development needs Assess individual & team strengths & weaknesses

Determine appropriate rewards & compensation

Salary, promotion, retention, & bonus decisions Employees must understand & accept performance feedback system

Enhance employee motivation

Employee acknowledgment & praise reinforces desirable behaviors & outcomes
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Purposes of Performance Management Systems

Facilitate legal compliance

Documentation is strong defense against charges of unlawful bias

Facilitate HR planning process

Alert organization to deficiencies in overall level & focus of employee skills

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Other Performance Feedback Systems

Peers
Only effective when political considerations & consequences are minimized, & employees have sense of trust

Subordinates
Insights into interpersonal & managerial styles Excellent measures of individual leadership capabilities Same political problems as peer evaluations

Customers
Feedback most free from bias

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Other Performance Feedback Systems

Self-evaluations
Allow employees to participate in critical employment decisions More holistic assessment of performance

Multi-rater systems or 360-degree feedback systems

Can be very time-consuming More performance data collected, greater overall facilitation of assessment & development of employee Costly to collect & process Consistent view of effective performance relative to strategy
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What to Evaluate?

Traits measures
Assessment of how employee fits with organizations culture, not what s/he actually does

Behavior-based measures
Focus on what employee does correctly & what employee should do differently

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What to Evaluate?
Results-based measures Focus on accomplishments or outcomes that can be measured objectively Problems occur when results measures are difficult to obtain, outside employee control, or ignore means by which results were obtained Limitations
Difficult to obtain results for certain job responsibilities Results sometimes beyond employees control Ignores means or processes Fails to tap some critical performance areas

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Job Performance Competencies

Closely tied to organizations strategic objectives Can take tremendous amount of time to establish Must be communicated clearly to employees Must be tied in with organizations reward structure
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Multilevel Corporate Competency Model

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Capital One Success Factors & Competencies

Builds relationships
Communicates clearly & openly Treats others with respect Collaborates with others

Leads in learning environment

Recruits talent Motivates & develops Builds & leads teams Influences others Promotes culture

Applies integrative thinking

Analyzes information Generates & pursues ideas Develops & shapes strategies Identifies & solves problems Applies integrated decision making Focuses on strategic priorities Organizes & manages multiple tasks Directs & coordinates work Gets job done

Takes personal ownership

Takes responsibility Learns continuously Embraces change Initiates opportunities for improvement Shows integrity Maintains perspective
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Drives toward results

How to Evaluate?
Absolute measurement
Measured strictly by absolute performance requirements or standards of jobs

Relative assessment
Measured against other employees & ranked on distance from next higher to next lower performing employee Ranking allows for comparison of employees but does not shed light on distribution of performance
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Forced Ranking/Distribution
Arguments in favor of forced ranking
Best way to identify highest-performing employees Data-driven bases for compensation decisions Forces managers to make & justify tough decisions

Arguments critical of forced ranking

Can be arbitrary, unfair, & expose organization to lawsuits Inherent subjectivity

Forced rankings tend to be more effective in organizations with high-pressure, results-driven culture
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Measures of Evaluation
Graphic rating scales Weighted checklists Behaviorally anchored rating scales (BARS) Behavioral observation scales (BOS) Critical incident method Management by objectives (MBO)

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Graphic Rating Scales

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Weighted Checklist

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Behaviorally Anchored Rating Scale (BARS)

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Behavioral Observation Scale (BOS)

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Objectives-Based Performance Measurement

Enhanced employee motivation Employees can far more committed to reaching performance objectives they have agreed to When employee participates, his/her trust & dependability placed on line

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Objectives-Based Performance Measurement Three common oversights

Setting vague objectives Setting unrealistically difficult objectives Not clarifying how performance will be measured

Objectives selected must be valid

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Other Considerations
Ensure link between performance management, training & development, & compensation Assignments & responsibilities Traditional performance evaluation may need redesign due to changes in contemporary organizations Degree of standardization or flexibility of performance management system Standardization important to prevent job bias Flexibility important differing levels of responsibility & accountability
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Reasons Managers Resist or Ignore Performance Management

Process is too complicated No impact on job performance Possible legal challenges Lack of control over process No connection with rewards Complexity & length of forms

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Strategies for Improving Performance Management System

Involve managers in design of system Hold managers accountable for performance & development of subordinates Set clear expectations for performance Set specific objectives for system Tie performance measures to rewards Gain commitment from senior managers
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Has 360 Degree Feedback Gone Amok?

Purposes of 360 Degree feedback systems

Furthering management & leadership development Facilitating organizational change & improvement initiatives that allow organization to become more open & participative Expand formal appraisal system by making feedback evaluative & linking more with formal performance appraisal

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Has 360 Degree Feedback Gone Amok?

Recommendations for increasing likelihood that 360 feedback will benefit organization
Assign internal consultant or champion to oversee process & hold him/her accountable for results Initial implementation should be on limited basis to allow for evaluation of process using pre-post test control group test design Create focus group to identify effectiveness criteria that organization values & will be used in measurement process Train all raters to avoid systematic rater errors

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Super-Measure (SM)
Single measure with great relevance up, down, & across organization & customer base Used to align behaviors & actions of various parts of firm with value proposition Transcends other measures by unifying actions of disparate organizational functions & levels
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Super-Measure (SM)

Clearest examples from firms within service sector

Service encounters often require various elements of supply system to have direct customer interface Most powerful service guarantees are those that guarantee satisfaction with no exclusions

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Reasons for Adopting SM Management

Crises may provide pressure to resolve conflict & to arrive at consensus Continuous improvement Achieve better alignment with strategy Market-share-grabbing strategy Achieve rapid growth Maintain culture Decentralize management

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Selecting & Implementing SM

SMs tie directly to firms market & follow strategy SMs are simple & common
Need not be comprehensive or balanced

Nave horizontal & vertical relevance

Relevant from executives to employees, across functional departments & are linked to market

Both monetary & behavioral rewards tied to SM All employees must understand how they affect SM Dynamic reward system
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Strategic Performance Appraisal in Team Organizations

Effective performance-appraisal systems require careful consideration of team contingencies

Team membership configuration Team task complexity Nature of interdependencies among team & external groups

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Work or Service Teams

Well-developed social system Quality of interpersonal relationships important Individual& team performance appraisals recommended Outcome-based performance appraisal recommended for team, but not for individual members Members typically responsible for monitoring & documenting own performance on individual tasks

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Project Teams
Assembled for specific purpose & expect to disband once task is complete Focused more on tasks than on team members Metrics developed that relate to various stages of project
Teams can self-correct before things go too far off course

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Project Teams
Multisource performance appraisal particularly useful Project leader & peer ratings good sources of behavioral ratings Members rated on both individual performance & team contribution

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Network Teams
Virtual
Potential membership not constrained by time or space

Work extremely nonroutine Rapid-response units charged with strategically responding to market challenges Performance of whole team often not assessed formally Appraisal focused on
Developing individual capacity to initiate, participate, & lead improvisational action, rather than on past outcomes
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Network Teams
Competency-based appraisal systems optimal Employees assessed on extent to which they
Apply learning to current activities Set developmental goals Seek out feedback

Behavior-based appraisal used to assess extent to which members engage in collaborative communication & teamwork

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