Performance Management

MHR 3200 Dr. Larry Inks Department of Management and Human Resources Fisher College of Business The Ohio State University

Overview
Performance Management Overview
The Importance of Accountabilities Performance Evaluation Development Planning and Career Discussions Summary Thoughts

Linkage to Earlier Class Topics

Performance Management Provides a framework for aligning people resources against strategic and tactical objectives Provides a system for rewarding (hopefully in an equitable way!) varying levels of performance to motivate and retain high performers Is a fundamental means of helping each organizational member maximize his/her current effectiveness and future potential Serves as the starting point for career discussions and movement Provides valuable information and feedback for use in developmental discussions, action planning and training Requires good leadership skills (both personal and group) to be done most successfully
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Performance Management Basics

Definition of Performance Management The means through which managers ensure that employees activities and outputs are congruent with the organizations goals. or The use of organizational systems, tools, procedures, etc. to help ensure a given organizational member is performing to his/her highest potential and level of effectiveness.

The Performance Management Cycle

Rewards (Merit increase, etc.) Training and development (ongoing) Informal feedback (ongoing)

Setting Accountabilities

Performance Review

Developmental Review
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Benefits of Performance Management

Allows employees to: - Identify their strengths and recognize areas to improve - Work with their manager to identify contributions to the team - Establish a plan to develop skills Allows managers to - Build stronger working relationships with employees - Show employees their commitment to helping them meet job standards - Encourage employees to improve job skills - Identify and solve job performance issues Provides a framework for making good hiring, development and compensation decisions Allows the organization to improve and be successful

Performance Management Terms/Concepts

Performance Management Cycle

Accountabilities
Developmental Review Performance Review Rewards Systems (merit increases, etc.) Rating Errors

Performance Improvement Plan: bad

Career Discussion
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Setting Accountabilities

The Importance of Specific Accountabilities

Specific performance/job accountabilities are important for a number of reasons: They are each persons roadmap for success in the given fiscal year, and are the basis for update discussions to review progress. They provide a clear line of sight and linkage between what each individual does in his/her job and the organizations overall business objectives. By helping prioritize work, they guide decision making throughout the year. Considered at the team level, they help ensure the team is functioning efficiently, working together effectively, and focused on critical objectives. They are included in performance management assessments (e.g., performance review) at the end of the fiscal year.

Developing Your Accountabilities

You should consider the following as you develop your accountabilities:

The strategic objectives of the organization itself.

The strategic objectives for your business, function, group, etc. The strategic goals and objectives established by your Manager and his/her team, including his/her own accountabilities. The important and/or critical tactical objectives you have for the year. Any other key initiatives or actions you need to take to help drive the success of the organization.

Accountabilities should have strong alignment within the organization

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Characteristics of Good Accountabilities

Grounded in, and clearly aligned with, the strategic agenda and objectives for each business and/or function as much as possible Stretch but achievable Limited in number (e.g., no more than 8-10), including a focus on selfdevelopment Aligned with those of your Manager and other members of his/her team Developed using tools and templates for enterprise-wide consistency SMART (Specific, Measurable, Attainable, Relevant, Time-Based) Reviewed on a quarterly basis at all levels of the organization

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Accountability/Priority Alignment Matrix

Strategic Priorities Team Member 1 Team Member 2 Team Member 3 Team Member 4 Team Member 5 Team Member 6

(Priority 1)

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(Priority 2)

(Priority 3)

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(Priority 5)

(Priority 6)

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Performance Evaluation

Approaches to Performance Evaluation

Ranking

Forced distribution
Graphic rating scales Critical incidents Behaviorally anchored rating scales (BARS) Management By Objectives (MBO): most common Generic Results approaches: most common

MBO/Results approaches are probably by far the most common

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Managers Role in Performance Evaluation

Provide feedback frequently (informally and formally) during the year

Think about the atmosphere/context for the actual review discussion

Potentially ask the individual to do a self-assessment Encourage the individual to actively participate and tell you what he/she thinksallow candid, frank but professional conversation Provide the right balance of positive vs. constructive feedback Recognize mistakes but try to make it a learning experiencefocus on solving the problems in the future Focus feedback on behaviors, NOT personal characteristics! Agree on goals, next steps, and dates for follow up Above all else, accurately rate performance, potential, etc.!!
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Self-Assessment
Allows employees to: - Describe results (both successes and disappointments) for the year - Rate themselves against competencies or other key assessment traits - Summarize their performance - Give themselves an overall performance rating for the year Provides employees a say in their performance review Helps provide a more realistic perspective on performance May provide the Manager with information he/she wasnt aware of Generally leads to a more effective performance discussion

Self-assessment adds a bit of complexity but the benefits are worth it

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Making Performance Management Work Well

Get ongoing, visible support from senior leadership
Establish the right number of challenging accountabilities Ensure managers/supervisors are trained in the system and tools Clearly communicate the total rewards system and components Ensure managers provide regular and/or informal feedback Set clear expectations for employee performance and development Regularly (e.g., quarterly) review progress at multiple levels Use performance management tools to differentiate across levels of performance and send the right message to different people Not rocket science; just needs focus/discipline to be effective
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Developmental Review-- Objectives

A developmental review/development discussion should have as its objectives candid, informative and realistic discussion of the following: Strengths, relative weaknesses, and development needs and objectives Career interests and work-related areas for which the employee is passionate Career goals, both short-term and longer-term Discussion of potential career planning options (e.g., paths that the employee could take within the organization)

Discussion of potential next roles

The discussion should increase individual levels of engagement

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Developmental ReviewSample Questions

- What do you see as your primary strengths? Your primary areas of weakness? - What do you see as your biggest development needs? - What kinds of things are you most interested in?

- What do you like about your current job? What do you not like about it?
- What are your shorter-term (i.e., 1-2 years out) career objectives? - What are your longer-term (i.e., 3-5 years out) career objectives? - What is/are your ultimate career objectives?

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Discussion Skills
Setting the Climate: A positive, non-threatening tone that describes the meetings purpose
Asking Questions: Keep them simple and to the point, and focused on the topic at hand Listening: Showing youre listening by paraphrasing and reflective listening Seeking Clarification: Asking questions that provide you necessary additional information Providing Your Opinion: Discuss where you and the individual agree vs. disagree (e.g., with regard to strengths and weaknesses, potential next moves, etc.) Discussing Career Actions: These can be developmental actions, and/or potential next movesbut avoid making explicit commitments.
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Discussion Dos and Donts

DO Be Direct DONT Interrogate

Listen and Take Notes

Seek Clarification Be Specific Be Realistic Pinpoint Sources of Disagreement Provide concrete, behavioral examples to support your points Provide a reality check when expectations are unrealistic

Hide Your Thoughts

Dominate Be Arbitrary Patronize Discourage Unnecessarily Become too emotional during any disagreements

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Summary Thoughts--Performance Management

Ongoing feedback throughout the year is very importanthelps eliminate any surprises Regular (e.g., quarterly) follow-up, review and potential revision is also very important Remember that performance management tools, systems, etc. (e.g., performance review, resulting merit increases, etc.) are there to help shape behavior and drive performance Try to differentiate and keep separate developmental discussions and formal performance evaluations (coaching vs. judging) Logistical issues can be problematic (e.g., getting all reviews done on time when on a common review date system) Making the tough calls and having the tough discussions can be very difficult and requires courage, strength and leadership
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Review
Performance Management Overview
The Importance of Accountabilities Performance Evaluation Development Planning and Career Discussions Summary Thoughts

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What Questions Do You Have?