Designing Your Performance Management System
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- Suzan McDowell
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1 Designing Your Performance Management System At this point, you should have a good understanding of what performance management is and how it can be used. You should be clear on your goals and have some idea of what approaches might work best in your company. You are aware of the impact of employment equity legislation on performance management procedures and know what you should do to protect yourself and your employer from unnecessary lawsuits. You also know what you can reasonably measure and how. Now you are ready to consider the scope, management, and implementation of the program. A wide variety of forms and management review techniques exist. They range from very simple one page checklists to complex systems involving multiple measurements and extensive narratives. Some companies make the mistake of selecting or adapting a form without first identifying what they are trying to accomplish through performance management. The result is a program that is viewed as just one more piece of paperwork. By using a step-by-step process to identify the needs of all concerned, you can enhance the effectiveness of an existing program or develop an entirely new performance management program that managers and supervisors see as a useful tool, and employees receive as something more than a report card. Designing a performance management program that benefits your company and your employees, or auditing an existing program, involves the following steps: 1. Defining goals and priorities of the program. What are you trying to accomplish for the company, the supervisors and managers, and the employees, through performance management? 2. Establishing the focus of the program. What will you measure? 3. Selecting the techniques. What technique(s) will be used to measure performance? 4. Designing the tools. What forms will be used? 5. Identifying the scope of the program. How extensive will the program be? How will it be integrated with other human resource and business systems? 6. Assigning accountability for the program. Who will administer the program and who will be authorized to conduct evaluations? Who will have access to the results? Before proceeding to answer these questions, it is important to be sure that two essential ingredients are present: support for the program, and good communications. Support, in the form of top management approval, is critical to the success of the program. It means the difference between performance management that meets business objectives and perfunctory paperwork. Open communication channels are necessary at all levels of the company to ensure that the goals and benefits of the program are understood. Negative public relations and misinformation could sabotage the program before it is ever implemented.
2 Defining Your Goals Performance management can serve many useful purposes for the company, for the manager or supervisor, and for employees. Because the scope of the program as well as the design of the forms and procedures relies heavily on the desired results, it is important to begin by identifying the benefits you expect to derive. Use the following checklist to prioritize your company's goals for performance management: For employees it can... For managers and supervisors it can... For the company it can... -Provide recognition -Satisfy their needs to know how they are doing. -Allow them to participate in the process. -Encourage them to take responsibility for their performance -Allow for feedback and two-way communication. -Clarify expectations so they can direct their efforts -Include career development. -Develop/improve rapport with employees -Identify high performers for advancement/rewards. -Identify poor performers for coaching/counseling -Improve individual productivity. -Improve teamwork. -Identify areas for training. -Be used as a basic management tool. -Help them rate themselves. -Provide a basis for raises, promotions and other personnel actions. -Be a source of management information. -Provide documentation for inquiries. -Communicate corporate goals or objectives. -Build stronger working relationships. -Improve overall company productivity. To ensure support and develop commitment, you could encourage participation at this early stage of the design process. Some companies have appointed a task force of representatives from various levels and departments in the company to identify and prioritize the goals of the program. This kind of involvement builds support and keeps the communication channels open. Identifying the Scope of the Program Scope refers to the policy and procedure issues you must address as well as the comprehensiveness of your program. Such factors as the mission, the available support, and the culture of your company all affect the tools you design to implement the program. You have already decided several major policy issues when you established the goals, focus and techniques for measurement. Other policy and procedure issues requiring decisions are:
3 Frequency Deciding when and how often to do performance management is an important procedural issue. While most companies have established the practice of annual evaluation, there are some other options you may want to consider. For example: In the case of new employees, more frequent evaluation may help you decide whether the employee is going to be successful in the job. Interim evaluation at three months, six months, and/or nine months can help you plan the employee's training. More frequent evaluations in the early years may help to accelerate the salary of an entry-level employee. When the program is used as the basis for compensation, the frequency may be related to the employee's position in the salary range. Lower employees may be evaluated more often to accelerate them, and employees near the top of their ranges may be extended several months to slow down their salary increases. Although you make a decision on normal frequency, your system should allow for exceptions when warranted by performance problems or by exceptional, outstanding performance. Interim Performance Management or Progress Reports? Closely related to the timing issues is the consideration of whether to implement a follow up system which requires supervisors and managers to meet with employees on a quarterly or other scheduled basis to evaluate progress. It is felt that such interim meetings head off performance problems and set the stage for a smoother discussion at the end of the review period. One or More Forms? While consistency is an employment equity issue, it is permissible to have several different forms within a company as long as the same form is used consistently for like jobs. The focus of measurement will guide you in this decision. Some companies find that the nature of work among jobs is very different, especially between exempt and non-exempt employees. They have one form for exempt employees that measures results and another for the non-exempt employees that measures effort. Other companies have combined these into one form that measures both effort and results. In a decentralized company where performance management is administered within work units, it is common to find a variety of forms that meet the objectives of each unit's program. In a highly centralized company, however, where the performance management program is coordinated by a personnel administrator, a myriad of forms may make it impossible to achieve the goals of the program. Will Employees Be Invited to Participate In the Process and to What Extent? If employee involvement and participation is an important goal of your performance management program, there are several ways input of the employees can be considered. One way is by allowing self-evaluation in addition to supervisory evaluation. Self-evaluation can be accomplished by encouraging employees to evaluate their own progress in addition to the supervisory evaluation. The same form, or a different form, can be used for this purpose. In addition to the advantage of participation, this technique encourages advanced thought and preparation, often making the discussion more fruitful for both the employee and the supervisor. A strong disadvantage to self-evaluation is that it intimidates many supervisors and the end result is a negotiation of ratings rather than a productive discussion of performance. One way to minimize this
4 disadvantage and still enjoy the advantages is to have the employee complete a different form, one which does not involve ratings, but focuses on strengths and weaknesses or perceptions of progress. If you decide to have the employee and the appraiser use the same form, you can choose among three approaches: 7. The employee can complete the form on his own and then discuss his self-management with the supervisor. Though somewhat better than having only the appraiser complete the form, it still forces the supervisor to play judge in this case, judging the way the subordinate has judged him/herself. 8. The subordinate and the supervisor can both complete the form on their own and then bring it with them to the interview to resolve their differences. This is better, but it lends itself to argument and defensiveness, since both parties will feel obligated to defend what they have written. 9. The supervisor and the subordinate can both review a blank copy of the performance management form independently, making no marks on it, and then use the interview to complete an management of the subordinate. This approach is the best of all, because it encourages a joint discussion of the items on the form without the liability of any written preconceptions. Both parties have the opportunity to state their views and compromise without losing face. Of course, the interview should be more than just a joint filling out of the form. In fact, some companies hold two meetings between superior and subordinate: one to complete the form and another to discuss its implications for the future (this being the real interview). This approach has the advantage of a de-emphasizing the role of the form even further by allowing some time to elapse between filling it out and actually discussing performance problems and future goals. A casual tone in any instructions that accompany the employee's copy of the form can help defuse any unnecessary anxiety. For example: Here is a copy of the company performance management form. Management requires that one be completed yearly and a copy put on your personnel file. Take time to look it over carefully, and I will do the same. Let's get together next afternoon to fill one out together. By getting this paperwork out of the way now, we'll be able to spend our time during the performance management interview concentrating on the really important things about your job performance and your future with the company, and we won't have to worry about filling out any forms at that time. Supervisor's signature Supervisors should also be provided with written instructions: Here is your copy of the company performance management form. Look it over carefully before setting up an appointment with your subordinate to fill the form out jointly. Make it clear that you are complying with company policy. Take the items on the form one at a time, and ask the employee what he thinks before you offer
5 your own opinion of his rating on each item. Most employees tend to understate their ratings, and this will put you in the favorable position of being able to upgrade their ratings. It will also help compensate for those items on which you feel the rating should be lower. Make certain the employee knows you are only creating a record, not trying to get at the heart of the matter. The session will be successful if the record you create is acceptable to you, to the employee, and to the company. Personnel officer's signature Who Else Will Be Invited to Participate In the Performance Management Process? In some instances, an employee's performance is more obvious to others besides the supervisor. Caseworkers in the field, employees temporarily assigned to other units, evening shift workers, etc. If this is prevalent in your company, you may want to consider a procedure for accepting performance documentation from others, either as input to an evaluation or as the basis for it. A different form, or the same form, could be used to collect performance data from others who regularly observe the employee in action. Some companies have also invited peer input when teamwork and company productivity are strong goals of the program. Will the Performance Management Program Be Integrated with Other Existing Systems? Although it can stand on its own as a discrete system in the company, the administration and the results of performance management are often improved when integrated with other human resource and business systems to achieve the goals of the program. The most obvious relationship is with the payroll system. If the performance management program is used as the basis for merit increases or bonuses, procedures must be designed that allow for the recommendation and approval of salary increases and transmission of that information to the payroll system. The performance management system can also be effectively coordinated with an existing management or personnel information system. Working in concert, procedures can be developed for notification that performance management is due, recording of ratings, updating of job descriptions, and updating of personnel information in cases of promotions, terminations, transfers, etc. A results-focused performance management system can be integrated with a company planning system to assure that individual or team goals correspond to the general business plan. Information about the accomplishment of goals can be fed back to the business system for use in future planning and goal setting. An information exchange may also be planned with an Employment Equity/Affirmative Action Program to ensure that development activities for women and minorities are planned and carried out.
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