Performance Management
Dan Robbins
Overview
• Define performance
management
• Describe the process of
developing a performance
management system
• Discuss benefits and concerns
• Participate in a simulation
• Q&A
What Is Performance?
• Performance is the behaviors
employees engage in while at
work that contribute to the goals
of the organization
(J.Campbell,1990)
What Is Performance Management?
• “Performance management is the
organized method of monitoring
results of work activities, collecting
and evaluating performance to
determine achievement of goals, and
using performance information to
make decisions, allocate resources
and communicate whether objectives
are met”
(www.shrm.org)
Performance Management Is An Integrated Process
• Outlining goals
• Establishing means to measure
progress
• Setting standards for assessing
results
• Tracking progress towards results
• Exchanging feedback about progress
• Developing reinforcement activities or
interventions for results
(www.managementhelp.org)
Three Stages of Performance Management
• Performance Plan
• Performance Appraisal
• Development Plan
Performance Plan: Step 1
• Identify the domain
– The domain is employee, group or
department that will be the focus of
the performance management
process
(www.managementhelp.org)
Performance Plan: Step 2
• Review organizational goals to
associate preferred organizational
results in terms of units of
performance, that is, quantity, quality,
cost or timeliness
– Performance Management translates
goals into results
– Results are primary products or services
desired from the performance process
(www.managementhelp.org)
Performance Plan: Step 3
• Specify desired results to the
domain
– Results should be SMART
– This step is also called “goalsetting”
(www.managementhelp.org)
Performance Plan: Step 4
• Ensure that the domain’s desired
results directly contribute to the
organization’s results
– Example: Factory worker- does the
employee’s goal of completing a
new training program contribute to
the organization’s goal of
increasing productivity 15%?
(www.managementhelp.org)
Performance Plan: Step 5
• Weight or prioritize the domain’s
desired result
– Using percentages or rankings
– Example: Factory worker- 80% of
employee’s time should be spent
running the machine, 10% in
training, 10% in maintenance
(www.managementhelp.org)
Performance Plan: Step 6
• Identify measures to assess if
and how well the domain’s
desired results were achieved
– Generally specified in terms of
quality, quantity, cost or timeliness
– Identifying measures is typically
the hardest part of the
performance management process
(www.managementhelp.org)
Performance Plan: Step 7
• Identify standards for evaluating how
well the domain’s results were
achieved
– Standards are measures of how well the
goal was met
– Example of a standard- if the goal was to
produce 500 units in a month, then 500
would be “meets expectations”. 600
would be “exceeds expectations.”
(www.managementhelp.org)
Performance Plan: Step 8
• Document the plan including
desired results, measures and
standards
– The “performance plan” gives the
domain the desired results,
weighting of the results, how the
results will be measure, and what
standards those used to evaluate
them
(www.managementhelp.org)
Performance Appraisal: Step 9
• Conduct on-going observations
and measurements to track
performance
– Supervisors should monitor how
the goals are being achieved and
keep in contact with both the
employee and upper management
– Documentation is important so that
formal appraisals are accurate
(www.managementhelp.org)
Performance Appraisal: Step 10
• Exchange ongoing feedback about
performance
– Good feedback is timely, feasible and
understood
– Ideal feedback addresses key activities
to improve or reinforce performance
– Generally, the more sources of
feedback, the more accurate and helpful
the information will be (i.e. 360°
feedback)
(www.managementhelp.org)
Performance Appraisal: Step 11
• Conduct a performance appraisal
– Includes documentation of results,
standards of performance, progress
towards achieving results, how well they
were achieved, examples indicating
achievement, suggestions to improve
performance, and how those
suggestions can be followed
– The appraisals should be carried out at
regular intervals as performance tracking
is underway
(www.managementhelp.org)
Performance Appraisal: Step 12
• If the performance meets the
desired standards then reward it
– This can be in the form of
recognition or compensation or
other benefits
(www.managementhelp.org
Development Plan: Step 13
• If performance does not meet the desired
performance standards, develop or update a
performance development plan to address the
performance gap
– This plan clearly conveys:
• how the conclusion was made that there was inadequate
performance
• what actions are to be taken and by whom and when
• when performance will be reviewed again and how
– An intervention should be provided to assist in
reaching the desired level
(www.managementhelp.org)
Development Plan: Step 13 Considerations
• It is important to note that inadequate
performance is not always the fault of the
domain
– Performance standards may be unrealistic or
the domain may have insufficient resources
– Similarly the overall strategies or the
organization, or its means to achieving its top
level goals, may be unrealistic or have
insufficient resources
(www.managementhelp.org
Development Plan Utility
• Development plans can be used in a variety of situations
– When performance appraisal indicates improvement is
needed
– To “benchmark” the status of improvement so far in a
development effort
– As part of a professional development for an employee
or group of employees, in which case there is not a
performance gap as much as a “growth gap”
– As part of succession planning to help an employee be
eligible for a planned change in role in the organization,
in which case there is also not a performance gap as
much as an “opportunity gap”
– To “pilot”, or test, the operation of a new performance
management system
(www.managementhelp.org)
Step 14
• Repeat steps 9-13 until
performance is acceptable,
standards are changed, the
domain is replaced,
management decides to do
nothing, etc.
(www.managementhelp.org)
Key Benefits of Performance Management
• Focuses on results rather than behaviors and activities
– For example an employee may look very busy and committed but
they’re work has little utility to the company
• Aligns organizational activities and processes to the goals
of the organization
– Performance management identifies goals, results needed to
achieve those goals, measures of effectiveness and efficiency, and
means to achieve them
• Cultivates a system-wide, long-term view of the
organization
– Provides means for long term development that will ultimately make
employees more committed and productive
• Produces meaningful measurements
– Can be useful for benchmarking, or setting standards for
comparison of best practices. They provide consistency for
comparison during internal change. They indicate results during
improvement efforts. They help ensure fair treatment.
(www.managementhelp.org)
Major Concerns of Performance Management
• The most general concern of performance
management is that it seems
extraordinarily difficult and often unreliable
to measure something as complex as
performance
– It is the role of the OD practitioner to ease
these concerns through sound methods and
ethical practices
(www.managementhelp.org)
Simulation
• I am the CEO of a multi-national trillion dollar company
• My company specializes in the molecular
reconfiguration of materials
• Recently, we’ve seen a drop in profits
• I have hired your OD firm to come in and design a new
performance management system for me that will get
me back on track
• Warning: the information will not come easy!
– You have to ask specific questions to get specific answers
• Good Luck
Questions?