Effective Performance Management: Principles and Guidelines

Effective Performance Management 

Effective Performance Management

Content Index: 

Definition of Performance Management

The purpose of Performance Management

Basic Principles

Who Should Appraise

Performance Ratings Scale

Performance Management Cycle Common Errors in Performance Appraisal

Definition of Performance Management: Performance management is an ongoing process of communication between a supervisor and an employee that occurs throughout the year, in support of accomplishing the strategic objectives of the organization. Performance Management involves giving employees timely, relevant, and effective feedback to promote job satisfaction, increase competence, and develop employees in their chosen profession. 

The purpose of a performance appraisal: The purpose of a performance appraisal is to helps the organization to determine the value and productivity that employees contribute, and it also helps employees to develop in their own roles.

Basic Principles: The underlying principles of an effective performance management system include: • An effective performance management system helps organizations, managers, and employees succeed. Performance management is a tool for success.

• Performance management is a shared commitment to high performance. 

• Performance management balances autonomy and accountability at the individual and organizational levels.

• Effective performance and continuous learning should be encouraged and supported.

• Effective performance management should be in alignment with organizational values throughout the division.

• Performance management should be based on clearly identified key result areas and core competencies for support employees and supervisors/managers. 

Who Should Appraise:

• Usually, an employee will be appraised by immediate reporting manager/supervisor, reviewed by department head or functional head and final decision to be taken by “Performance Review Committee” formed by the Executive Director 

• For staff who has dual supervisory lines will also be assessed by direct reporting line supervisor, but the respective supervisor obtains feedback and review comments on overall performance from the technical reporting line supervisors. 

Performance Ratings Scale: In the Performance Appraisal Form, performance will be rated on a 5-point scale: Performance ratings Definition Rating 

Performance ratings	Definition	Rating
Needs improvement	Consistently fails to meet expectations and employee demonstrate less confidence & morale to improve in performance	1
Satisfactory	Meet expectations in most of the cases but occasionally fails to meet expectations. Employee needs substantial & micro-supervision to perform.	2
Good	Employee consistently meets expectations and perform in his/her performance areas.	3
Very Good	Employee meets expectations in all his/her areas of performance. Employee performs above his/her expectations occasionally.	4
Excellent	Employee performs far exceeds expectation. The employee is ready to take over bigger responsibility.	5

Performance Management Cycle 

Performance Management is a continuous process that is divided into four phases. Following are details of each phase in the Performance Management Cycle:

11.1. Performance Planning:

Performance planning involves two issues- Setting Key Result Indicators and Identifying Core Competencies. These issues can be explained as follows:

A. Setting Key Result Indicators (KRIs)

The employee and the line manager sit together to agree on Key Result Indicators at the beginning of the year and set them (maximum eight) in the Appraisal Form. At this point, managers need to ensure that the KRIs are a good representation of the full range of duties carried out by the employee, especially those everyday tasks that can take time but are often overlooked as significant accomplishments.

However, often the most difficult part of the planning phase is finding appropriate and clear language to describe the KRIs. Therefore, every effort should be made to set S.M.A.R.T. objectives regarding KRIs. 

The SMART method for setting KRIs will be like as follows:

S	Specific	What will be accomplished? What actions will you take?
M	Measurable	What data will measure the goal? (How much? How many? How well?)
A	Achievable	Is the goal achievable? Do you have the necessary skills and resources?
R	Relevant	How does the goal align with broader goals?
T	Time-Based	What is the time frame for accomplishing the goal?

Identifying Key Competencies for Success

In addition to Key Result Indicators (which focus on end results), key competencies that employees can use to perform the job is often as important to success as end results. Thus, employee performance is assessed on how well key competencies are demonstrated in reaching the key result indicators.

Key competencies will differ according to the nature of job and managerial hierarchy and will be printed in advance in the appraisal form. The Line manager, in the planning meeting, should discuss the core competencies required of the employee according to his/her grade.

Both the employee and manager need to sign off on the agreed performance plan. A copy of the signed plan should be submitted to HR department while both the supervisor and supervisee keep a copy along with a soft version of the performance agreement document.

Mid-Term Review

To evaluate employees’ performance in the first six months of the assessment year (in the month of December). The purpose of the Mid-Year Review is to:

1. Assess performance on progress against annual objectives set at the start of the year and provide formal feedback to the employee

2. Review the development plan and amend/update the plan where appropriate

3. Recognize achievements and identify achievements that were not part of the original objectives

4. Note barriers to performance and through a process of coaching and interaction develop action plans to resolve the barriers to performance.

Any amendment/update made to a performance contract or mid-term review must: ·  Be mutually agreed upon between the relevant line manager and employee. ·  Be signed and dated by the employee and the line manager; and · Come into full effect from a date mutually agreed upon between the line manager and the employee.

 Year-End Review

At the end of the performance review period (in the month of June), the line manager will meet the employee to conduct the annual performance review. During the Year-End Review:

·   Firstly, the appraisee (employee) will judge himself or herself before the assessment by the supervisor, and

·   Secondly, the appraiser (line manager) will evaluate the KRIs, and core competencies displayed by the employee during the year of evaluation based on what has been specified in the annual performance plan at the beginning of the year and the progress established in the mid-term review.

If SMART goals have been set and ongoing coaching/feedback has been taken place, the overall outcome of the year-end review should come as no surprise to the employee.

After the completion and signature of the document by the employee and the line manager, a copy will be sent to the Human Resource Department through the head of the concerned department and a copy will be kept for reference when needed. If an employee disagrees with any part of the performance assessment, provide him/her the opportunity to include his/her comments in performance appraisal form.

 

Guidelines for Appraisal Interview

Guidelines for Appraiser

The appraiser needs to be well prepared for the appraisal interview. S/he should:
1.     Review standards, documentation, and job description as well as the appraisal form and various ratings.
2.    Prepare the employee in advance. Make an appointment for the interview well in advance and tell the person the purpose of the interview. Get them thinking about performance - perhaps provide a list of questions to use as a basis for discussion. Examples of such questions might include:
·          What do you think you've done best during the appraisal period?
·          What could you have done better?
·          What overall rating would you give yourself?
·          What rating do you think I will give you?
·          Any suggestions for the department?
·          What can I do to help make you more effective?

3.     Arrange to hold the interview in a physical setting that will enhance the interviewing process. The basic requirement is a private room where the conversation cannot be overheard.
4.  Allow adequate time so the interview will not have to be terminated in the middle of an important discussion.
5.   Establish a friendly, helpful, and purposeful tone at the outset of the discussion. Recognize that it is not unusual for you and your employee to be nervous about the discussion and use suitable techniques to put you both more at ease. Also, prepare to enter difficult conversation.
6.  Make sure that the session is truly a discussion. Encourage employees to talk about how they feel they are doing on the job, how they might improve, and what developmental activities they might undertake. Often an employee’s viewpoints on these matters will be quite close to your own.  
To facilitate an open discussion of the issues that have been raised, you might consider the following:
·          Listen actively
·          Use the reflective summary
·          Use silence
·          Be honest in your answers
·          Minimize criticism
7.      List disagreements. If possible, disagreements should be resolved before the end of the interview.
8.      Make certain that your employees fully understand your appraisal of their performance.
9.    Discuss the future as well as the past.   Plan with the employee specific changes in performance or specific developmental activities that will allow fuller use of potential.
10.  End the discussion on a positive, future-improvement-oriented note. You and your employee are a team, working toward the development of everyone involved.
Guidelines for Appraisee

• Confirm the meeting with your supervisor. 

• Gather any documentation regarding your performance that you have collected throughout the year.

• Consider submitting quarterly progress reports on achievements.

• Complete your self-evaluation; make a copy and give it to your supervisor in advance of the   meeting.

• Review your objectives and standards of performance set during the performance planning meeting.

• Write down questions that you want to ask your supervisor.

• Be prepared to talk about your performance – what you do well, how you could improve,              what you would like to learn.

During the performance review:

• Listening to feedback from the supervisor and ask questions to clarify information.
• Share information from self-evaluation.
• Offer suggestions and ideas for improving performance, if needed.
• Identify areas for learning and development.
• Identify obstacles to performance and suggested solutions.
• Sign performance review form, attaching comments if desired.

Common Errors in Performance Appraisal

• Halo error: appraiser giving favorable ratings in all areas based on impressive performance in just one area.
• Horns error: Downgrading an employee across all performance dimensions exclusively because of poor performance in one dimension.
• First impression error: Developing a negative or positive opinion of an employee early in the review cycle and allowing that to negatively or positively influence all later perceptions of performance.
• Recency error: Allowing performance, either good or bad, at the end of the review cycle to play too large a role in determining an employee’s overall performance evaluation.
• Leniency error: Consistently rating an employee higher that is deserved.
• Severity error: Rating an employee consistently lower than is deserved.
• Central tendency error: Avoiding extremes in rating across all performance dimensions.
• Clone error: Giving better ratings to an employee who is like the rater in behavior and/or personality.
• Spillover error: Continuing to downgrade an employee for performance errors in prior review periods.