The Treatment of Individual Performance

1. The Treatment of Individual Performance • Traditionally centred on the assessment of performance and the allocation of reward • Typically viewed as the result of the interaction between individual ability and motivation • Planning and enabling performance have a critical effect on individual performance

2. Appraisal systems • Traditionally provided a formalised process to review employee performance • Typically designed on a central basis, usually by HR function • Typically requires line managers to appraise performance of their staff • Appraisal forms often not living forms but archived in HR areas • Issues of performance are often neglected until next appraisal

3. What is Appraised • Varies between organisations • Can cover – personality, behaviour or job performance

4. Qualitative Appraisal • Can involve writing an unstructured narrative on the general performance of the appraisee • Guidance may be provided on areas to assess • Can leave important areas unappraised

5. What is actually measured • Extent the individual conforms to the organisation (Coates, 1994) • Some traditional appraisal - personality traits • Behaviour and performance on the job • Aspects of the job or major headings on the job description • Measure job objectives

6. Linking Ratings to Behaviour • Behaviour anchored rating scales - BARS • Behavioural Observations Scales - BOS

7. Electronic Surveillance Systems • Activity rates of computer operators can be recorded and analysed • How calls of telephone staff can be analysed

8. Mystery Shoppers Testing the performance of sales staff by sending in assessors acting as customers

9. Level of Appraisal IRS Survey, 2003: 79 of 96 very large employers appraised employees

10. Concerns over Appraisal • Treated as an administrative exercise • Ineffective • Does little to improve performance of employees in the future • Lack clarity of purpose • Expected to deliver in too many areas • Used for both development and pay which conflict

11. Common Reasons for Failure – American Research • Unclear performance criteria • Ineffective rating instrument • Poor working relationship with the boss • Appraiser lacked information on the manager’s actual performance (Longenecker, 1997)

12. Other Problems Indicated • Lack of ongoing performance feedback • Lack of focus on management development / improvement • Problems with the process • Review process lacking substance

13. Who Owns the System? • Designed and imposed by HR – little ownership by line managers • If forms completed and returned to HR – may be seen as paper filling exercise by the line

14. Performance Management Systems • Increasingly seen as a way to manage employee performance • Incorporates appraisal/review process • A framework where performance can be directed, monitored, and links in the cycle audited (Mabey & Salaman, 1995)

15. Advantages of Performance Management Systems • Being tied closely into the objectives of the organisation • Represent a more holistic view of performance • Appraisal or review is integrated with performance planning • Performance is assessed and successful performance rewarded and reinforced (Bevan & Thompson, 1992)

16. Conceptual Foundation of Performance Management • Relies on view that performance is more than ability and motivation • Clarity of goals is key • Goals are seen as motivators – Goal theory

17. Expectancy Theory & Performance Management • Individuals motivated to act provided they expect to achieve the goals set • Belief that achieving goals will lead to rewards • Belief that rewards on offer are valued

18. Development Driven or Reward Driven 85% companies surveyed – linked performance management to pay Armstrong and Baron – found that only 43% of organisations reported such a link 82% had performance related pay IPD Survey 1992

19. Differences Between Performance Management & MBO MBO An off the peg system Generally involves objectives being imposed on managers from above Performance management Tends to be tailor made Produced in house Emphasis on mutual objective setting & ongoing support

20. Characteristics of Performance Management Systems Table 12.1  Characteristics of performance management systems

21. Stages of a Typical Performance Management System Figure 12.1  Stages of a typical performance management system

22. An Objective Setting Cascade Figure 12.2 An objective-setting cascade

23. A Shared View of Expected Performance • Individual objectives derived from team objectives • An agreed job description jointly devised • Objectives are outcome or results oriented • Objectives are tightly defined and include measures to be assessed • Objectives designed to stretch individuals and offer potential for development

24. SMART Objectives • Specific • Measurable • Appropriate • Relevant • Timed

25. Delivering & Monitoring Performance The manager’s role – • Enabling role while staff are working to achieve the performance agreed • Organising resources • Organising off-job training • Being accessible • Providing ongoing coaching • Providing support & guidance

26. Reviews Normally informal Need not be part of formal system Can take place as needed Provide a forum for employee reward in terms of recognition of progress

27. Formal Performance Review & Assessment Need to concentrate on development issues to motivate Extent objectives have been met

28. Reward • Some systems still include link to money • Promotion and development often used as a reward

29. Critique (1 of 2) • Needs to be line driven not HR driven • Training in the introduction and use of system required • System is only as good as the people who operationalise it • Integration of activities important

30. Critique (2 of 2) • Can suffer from same problems as traditional appraisal systems • Managers can be influenced by subjective feelings • Performance ratings can be de-motivating • SMART targets can cause problems if not reviewed and updated regularly

31. 360 Degree Feedback Whole range of feedback sought from a range of people and sources, e.g.: Peers Subordinates More senior managers Internal customers External customers Individuals themselves

32. Summary • Performance management systems include more than appraisals • There is conflict in many appraisal and performance management systems • Current trends include greater employee ownership and involvement • 360 degree feedback is becoming more widely used