Performance Management

managing employee performance for

sustainable organisational growth

Learning Objectives
Learning what performance
management
Learn how to set goals, objectives
and put development plans together
with your staff.
Learn how to review performance
and how to manage underperformers.
Learn how to deal with difficult
people in an effective manner.

Ground Rules
Please put all mobile phones and
devices on SILENT mode
Feel free to ask questions
Active participation- Cold calls
Two breaks: Tea and Lunch

Performance Management
allows successful companies to
appraise employees performance
identify performers and marginal
performers
motivates performance-based
remuneration
help identify competence gaps
build a culture of performance and
alignment
creates communication channel for

Performance Management
Is a continuous process of setting
goals, effectively communicating
them, monitoring and evaluating the
results against agreed set criteria
and objectives of a firm in order to
identify, support, retain and develop
employees to drive strategic growth
and development of the firm.

Drivers of Organisational
Performance

Key Aspects of Performance

Mgt

Funnelling

Goal-Setting
Usually done annually
Based on set targets and objectives
from the companys management
Aligned to companys strategic
direction and goals
Should be done with necessary input
from employee
Finalised by each Manager or Unit
Supervisor

How To Set Goals

Specific: must clear, precise goals,
standards, objectives, evaluation criteria
Measureable: must be quantified, can be
revised and documented
Attainable: must be achievable with
reasonable effort and resources
Relevant: must be in line with the goals of
the unit/department and company
Time-bound: must be performed within a
clearly defined specific time frame

Communication

Informal and formal means

Based on set goals and objectives
Clear and collaborative
Documented for easy reference
Multi-layered
Constructive
Right mind-set

Monitoring

Through employee feedback

Informal meetings
Results/Figures
Feedback from colleagues and
subordinates
Customer feedback
Team performance

Some Evaluation Methods

Individual performance review
meetings
360 degree feedback
Pair Ranking
Management by Objectives
Use of objective, systematic and
defensible measurements

Employee Development
Plan
Is a roadmap to improve employees
work performance with a view to
address current areas of deficiency
and prepare him/her to meet future
challenges

How to Create a
Development Plan
List all needed short and long term skills,
competence/knowledge to meet current and
future job requirements
Compare employees performance to the list
Identify areas of performance and deficiency
Let employee perform self-assessment based
on company needs
Meet and compare assessments, highlight
areas of disagreement

How to Create Developmental Plan

(2)
Manager decides on final area of focus
Devise an improvement plan with emphasis
on employees areas of deficiency and
companys areas of focus
List required actions, trainings, coaching to
drive current job and future career
improvement
Give employee a copy of the signed
document
Provide support during the course of the year

Difficult Employees

Non Team Players

Marginal Performers
Lazy Employees
Non-ethical

Impact on Organisations

Reduced efficiency
Higher operating costs
Low team morale
Poor work place culture
Acrimony and dispute
Poor corporate image
Threatens competitiveness and
future growth

Difficult employees
Verbally confront issues directly and
document subsequent meetings
Proffer multiple solutions and ask
employee to come up with a
corrective action plan
Offer support and coaching if
required
Bring in a third party (e.g. HR) if
additional help is needed
Be consistent, calm and professional

Reasons For Poor

Performance
Lack of skills

Perf

Poor Perf

Excellent

PERFORMANCE
OPPORTUNITIES

No/Low Knowledge

High Knowledge

Key Performance
Management Questions
1.
2.
3.
4.
5.
6.

Why assess performance

What performance to asses
How to assess performance
Who assess performance
When to assess performance
How to communicate performance
assessment

The WHY of
Performance
Management Systems

-Administer Salary & Wages

-Correct Performance/Behavior
-Plan for Future (promotion, transfer, career dev)
-Facilitate Decision-Making (counseling, terminations)
-Facilitate Human Resource Planning
-Create Culture
-Building Good Relationships
-Increase Organizational Loyalty
-Determine Effectiveness of Selection and
Placement Methods

WHAT to Assess
Skills/Abilities/Needs/Traits of Individuals
That Interact with the Organization to Produce
Behaviors Which
Result in Outcomes

HOW to Assess
Performance
Traditional
Management-by-Objective
Assessment Center
Peer Review Panel
Critical Events
Upward Feedback
360 Degree

Some Techniques of
Performance Management
Essay (open-ended)
Management by Objective
Ranking
Paired Comparisons
Forced Choice
Forced Distribution
Ratings:
-Checklist
-Scales

Essay Technique

escribe in detail the quantity and quality of th

mployees performance during the past twelve
months.
escribe the employees strength and weaknes
How do you describe the employees potential
within the company?
What leadership skills does the employee bring
o the job?
What future development activities do you
ecommend for the employee?

Morgan Stanleys Essay

System
Consider objectives identified in prior years Summary as well
as this years objectives.
Evaluation:
Strengths
1.
2.
3.

Comments

Development Areas
1.
2.
3.

Comments

Management-byObjective
Examples
Employee will contribute to organizational
profit margin by lower costs in department
by 3.5percent.
To implement new recruitment system, the
employee will evaluate the effectiveness of
the advertisements placed during the year.

Ranking Example
Manager ranks all employees from best to worst:
Overall performance
On specific criteria (communication,
customer relations skills, etc.)

Paired Comparisons
Example

Rank each employee grouping overall or

on a characteristic:
Employee A and Employee B
Employee B and Employee C
Employee A and Employee C
Employee C and Employee D
Employee D and Employee A
Employee D and Employee B
etc.

Forced Distribution
Example
Place each of the employees in your unit in the
following categories based upon overall or
specific category performance:
Top 10 percent:
50 89 percent:

10-49 percent:
Bottom 10 percent:

Outstanding:
Average:
Good:
Below Average:
Unacceptable:

General Electrics
Distribution
The Vitality Curve
High
Top Performers
10%
Highly Valued
70%
Least Effective
20%

Promotability
Medium

Limited

Ratings Example:
Scales

Rate the employees behavior on the scale provided.

Excellent Good Fair Poor N/A
4
3
2
1 ___
Reasoning ability
4
3
Decisiveness in Decision-making
Imagination & originality
4
Ability to plan and control
4
Cooperation with peers
4
Cooperation with management 4
Professionalism
4
3
Interpersonal skills
4

3
3
3

2
2
2

3
2

2
1

___
2
1 ___
1 ___
1 ___
1 ___
1 ___
___
1 ___

Citibanks Performance
Scorecard
Measurements

Standards

Managers assessment

Leadership,
Ethics/Integrity
Customer Interaction
Community Involvement
Contribution to Overall Business
People

Managers assessment

Performance
Teamwork
Training & Development
Employee Satisfaction
Control

Auditors standards

Below
Par

Par

Abov
e Par

Citibanks Performance
Scorecard..
Measurements
Customer Satisfaction

External company survey

Goal of 80%

Strategy Implementation

Objective standards

Households
Cross-sell, splits, mergers
Retail asset balances
Market share
Financial
Revenue
Expense
Margin

Objective stadards

Below
Par

Par

Abov
e Par

Citibanks Link to
Compensation
Ratings
Above Par
Par
Below Par

Bonus
30%
15%
0%

Opportunity
Reinforce/Reward Behavior
Change Behavior
Model Behavior
Establish Culture

Focus
Time
orientation

Judgmental
Past
performance

Development
al

Preparation for
future
performance
Method
Improving
Improving
performance by
performance by
changing
self- learning &
behavior through personal growth
rewards
Supervisors Judge who
Counselor who
Role
appraises
listens, helps,
encourages &
guides
Subordinate Listener, reactor Actively
s
to, defender of
involved in

Criteria for Performance

Measures
Relevant
Reliable
Discriminating
Practical

WHO Should Assess

Performance
Superior Only
Subordinate(s)
Peers/Coworkers
Self
Customers
Others

WHEN to Assess
Performance
Probation Period
Annually (anniversary date, assigned date, set
date for all)
Semi-annually
For Cause
On-going
As needed

How to Communicate
PM Info
Orally
In Writing
Formally
Informally
Public
Private
Moderated

Handling Performance
Issues
What to do
Where to start
How to do it

Why PM Is Difficult
Job/Outcomes not quantified
Personal relationships with employees
Unable to give criticism
Personality biases
Poor communication
Conflicting Goals
Playing God

Errors in Performance
Measurement
Strictness or Leniency
Central Tendency
Halo Error
Recency Error
Supervisor Bias
Overall Ratings

Correcting PM Errors
Isolate Job Areas
Observe Regularly
Minimize Number of Ratings Completed
Train Raters
Define Dimensions Better
Give Feedback
Use Continual Feedback
Include Other Sources
Decrease Generalities, Include Specifics

Effective PM Systems
System acceptable to employees
Managers use system regularly & correctly
Perception of being treated fairly by system
Useful feedback provided
Focus on problem solving, not blame
Serve to increase productivity & satisfaction
System used by organization

Training for PM
Interviews
Have documentation
Be objective
judge job, not individual
Use specific examples
Share control
Make it a year-round process

Training.continued

Solicit & give feedback

-Clear -Constructive
-Descriptive, not judgmental

Avoid arguments
Strive for consistency
Get it down in black and white
By-the-book
Listen

PRIOR TO PM
INTERVIEW
Decide on best time
Decide on best place
Prepare facilities
Gather info and materials
Prepare employee
Plan the opening
Plan the approach
Plan the conclusion

After PM Interview
Meet deadlines
Solicit input
Reinforce, reward, punish
(follow through)
Review regularly

How to Destroy PM
System
Do not follow policies

Be inconsistent in application
Treat it as unimportant
Do not follow-up
Reprimand in public; Reward in private
Conduct when angry
Be late

The WHY of
Performance
Management Systems

-Administer Salary & Wages

-Correct Performance/Behavior
-Plan for Future (promotion, transfer, career dev)
-Facilitate Decision-Making (counseling, terminations)
-Facilitate Human Resource Planning
-Create Culture
-Building Good Relationships
-Increase Organizational Loyalty
-Determine Effectiveness of Selection and
Placement Methods

Performance
Management
Trends
Shift from viewing financial figures as
main criteria to one of multiple indicators
More weight on indicators of efficiency
and effectiveness
Change to viewing PM as on-going,
evolving process

Skills/Abilitie
s/
Needs/Traits

Behaviors

Results

Job Knowledge
Strength

Perform Tasks
Obey
Instructions
Report
Problems
Maintain
Equipment
Follow Rules

Sales
Production
Levels
Production
Quality
Scrap/Waste

Submit
Suggestions
Follow-up

Equipment
Repairs
Customers

Coordination
Business
Knowledge
Desire to
Achieve
Dependability
Creativity

Accidents

Measures Focus
Consistent indicators across industry or
similar organizations
Comparison of indicators over time in
organization
Comparisons with pre-determined standard

Approaches to PM

Comparative
Attribute
Behavioral