performance management - ftms · 2015. 9. 1. · characteristics of good objectives s =...

PERFORMANCE MANAGEMENT

This resource is part of a range offered free to academics and/or students using Armstrong’s Handbook of Performance Management, 4th edition, as part of their

course. For more academic resources and other FREE material, please visit www.koganpage.com/resources and then click on Academic Resources.

http://www.koganpage.com/products/armstrongs-handbook-of-human-resource-management-practice/HumanResources/H/Human_Resources_Management/H001/1002602/9780749452421/


The basis of performance management





A systematic process for improving

organizational performance by

developing the performance of

individuals and teams.

PERFORMANCE MANAGEMENT





PURPOSE OF PERFORMANCE MANAGEMENT

• Obtain better results from the organization, teams and

individuals by understanding and managing performance within

an agreed framework of planned goals, standards and

competency requirements

• Establish shared understanding on what is to be achieved, and

manage and develop people in a way which ensures that it will

be achieved

• Align individual objectives to organizational objectives and

ensure that individuals uphold corporate core values

• Act as a lever for change





PERFORMANCE MANAGEMENT –

SEVEN QUESTIONS

1. What do we mean by performance?

2. How can we identify good or poor performance?

3. How can we establish the cause of good or poor performance?

4. How can we motivate people to perform well?

5. How do we deal with under-performers?

6. How can we do all this fairly and consistently?

7. How do we achieve line manager buy-in?





Align individual and

organizational objectives

64%

Improve

organizational

performance

63%

Improve

individual

performance

46%

Basis for

personal

development

37%

Develop a

performance

culture

32%

Inform pay

decisions

21%

PERFORMANCE MANAGEMENT OBJECTIVES

e-reward survey 2005





EXAMPLE OF

PERFORMANCE MANAGEMENT OBJECTIVE

e-reward survey of performance management 2005

‘Supporting culture change by creating a performance culture and reinforcing

the values of the organization with an emphasis on the importance of these in

getting a balance between what is being delivered and how it is delivered.’





THE BUSINESS CASE FOR PERFORMANCE MANAGEMENT

• Provide framework for effective people management

• Develop high-performance culture

• Achieve human capital advantage

• Develop required skills, abilities and attitudes

• Promote job engagement

• Uphold core values





Performance management processes used 96%

PM in place for more than 5 years 52%

PM covers all jobs 91%

Objective setting 99%

Performance review 99%

Personal development plans 89%

Performance improvement plans 74%

360-degree 30%

Competence 24%

Web 16%

INCIDENCE AND FEATURES

E-reward survey of performance management 2005



0% 50% 100%



Very significant 32%

36%

10%

22%

Fairly significant

Insignificant

Not known

IMPACT OF PERFORMANCE MANAGEMENT ON

PERFORMANCE

Views of respondents to e-reward 2005 survey





CONCLUSIONS OF CIPD SURVEYS 1997 AND 2003

• Treat the management of performance as a way of life

• Don’t over-engineer

• Gain line management support and ownership

• Vital to communicate, involve and train

• Easy to design, tough to implement





The performance management system





Performance and

development planning –

performance agreement

• role definition

• objectives

• competencies

• performance improvement

• personal development

Act

• carry out role

• implement performance

improvement plan

• implement personal

development plan

Manage performance

throughout the year

• monitor performance

• provide continuous feedback

• provide coaching

• deal with under-performers

Review performance

• dialogue and feedback

• agree strengths and any

areas for improvement

• build on strengths – ‘you are

particularly strong in this area’ –

how can you make

even greater use of them?

PERFORMANCE MANAGEMENT CYCLE





Planning

Measurement

Dialogue

Feedback Performance

management

CHARACTERISTICS OF PERFORMANCE MANAGEMENT





Performance management processes





PERFORMANCE AGREEMENT

The purpose of the performance agreement is to:

• agree objectives and competency level requirements

• agree on methods of measuring performance

• agree on plans for performance improvement and

personal development





TYPES OF OBJECTIVES

• Ongoing (role or work) objectives

• Targets

• Projects

• Behaviour

• Values

• Improvement

• Learning





CHARACTERISTICS OF GOOD OBJECTIVES

S = specific/testing – clear, unambiguous, understandable and

challenging

M = measurable – in terms of quantity, quality, time or money

A = achievable – challenging but within the reach of a competent and

committed person

R = relevant – to organizational objectives so that they and the

individual’s goals are aligned

T = time-framed – to be completed within an agreed timescale





PERFORMANCE REVIEWS: KEY FEATURES

• Forward looking – not a post mortem

• Exchange of views (dialogue)

• Measurement

• Feedback

• Positive reinforcement

• Constructive

• Leads to an agreement

• Assessment





WHAT TO FIND OUT AT A REVIEW MEETING

• What individuals have learned or need to learn

• Where they have got to

• Where they are going

• How they are going to get there

• What they believe they know and can do

• What help or guidance they require





Assessing performance





ASSESSMENT METHODS

• Narrative: eg ‘This employee has worked effectively and

delivered the expected results’

• Visual (Matrix)

• Rating

• 360-degree feedback

• Balanced scorecard





VISUAL (MATRIX) ASSESSMENTS

High level of

achievement, approach

needs to improve

High performing

Not meeting requirements

Positive approach,

low level of achievement

Achievement

measures

Behaviours, attitudes, overall approach to work





RATING – FIVE-POINT POSITIVE/NEGATIVE SCALE

A Outstanding performance in all respects.

B Superior performance, significantly above normal job

requirements.

C Good all-round performance which meets the normal

requirements of the job.

D Performance not fully up to requirements. Clear weaknesses

requiring improvement have been identified.

E Unacceptable. Constant guidance is required and performance

of many aspects of the job is well below a reasonable standard.





EXAMPLE OF POSITIVE FOUR-POINT RATING SCALE

• Very effective: Meets all the objectives of the job. Exceeds

required standards and consistently performs in a thoroughly

proficient manner beyond normal expectations.

• Effective: Achieves required objectives and standards of

performance and meets the normal expectations of the role.

• Developing: A contribution which is stronger in some aspects of

the job than others, where most objectives are met but where

performance improvements should still take place.

• Basic: A contribution which indicates that there is considerable

room for improvement in several definable areas.





• Useful to sum up

judgements about people

• Recognizes that we all

form overall views about

people

• Tells people clearly how

they are doing, and can

be used as a basis for

agreeing what needs to

be done to improve the

rating

• Can inform performance

or contribute to pay

decisions

• Largely subjective

• Difficult to get

consistency

• Over-simplifies complex

judgements

• Overshadows

performance reviews

For Against

ARGUMENTS FOR AND AGAINST RATING





360-DEGREE FEEDBACK MODEL

Individual

Manager

Direct reports

Customers/clients Colleagues





360-DEGREE FEEDBACK METHODOLOGY

360-degree processes rely on questionnaires which ask for an

evaluation such as ‘how well does… do…?’ Typical headings are:

Leadership Team player

People management Self-management

Communication Vision

Organizational skills Decision making

Expertise Drive

Adaptability

Feedback may be provided by a profile as illustrated in the next slide. It

is usually anonymous and may be presented by an external consultant

who is available to give advice and counselling.





Gives useful feedback

Establishes good working relationships

Open to new ideas

Values other’s opinions

Recognizes achievements

Scale 1 2 3 4 5



EXAMPLE OF 360-DEGREE PROFILE



Customer perspective

How do customers see us?

Innovation and learning

(people) perspective

Can we continue to improve

and add value?

Internal perspective

What must we excel at?

Financial perspective

How do we appear to

our shareholders?

THE BALANCED SCORECARD





Reporting on performance management





PERFORMANCE AND DEVELOPMENT: AGREEMENT AND REVIEW

Name: Forename:

Job title: Department:

Reviewer’s name: Job title:

PERFORMANCE AND DEVELOPMENT AGREEMENT

Objectives Performance measures

Competencies Agreed actions

PERSONAL DEVELOPMENT PLAN

Learning need How it will be met Action by whom Completion date

PERFORMANCE MANAGEMENT FORM, PART 1

This resource is part of a range offered free to academics and/or students using Armstrong’s Performance Management, 4th edition, as part of their course. For

more academic resources and other FREE material, please visit www.koganpage.com/resources and then click on Academic Resources.



PERFORMANCE AND DEVELOPMENT REVIEW

Objectives Achievements

Competencies Actions taken

Development needs Actions taken

Comments by reviewer:

Comments by reviewee:

PERFORMANCE MANAGEMENT FORM, PART 2





Performance management skills





DEVELOPING PERFORMANCE MANAGEMENT SKILLS

• Communication

• Briefing

• Self-development

• Training

• Coaching

• Mentoring





DEVELOPING PERFORMANCE MANAGEMENT SKILLS AT

STANDARD CHARTERED BANK

Management

development

curriculum

E-learning module

for key pillars

of performance

Performance

coaching

guides

Studying our best

managers and

migrating

their practices

• objective setting

• interim and first review

• informal discussions

• performance coaching

• managing poor

performance

Improve the way managers manage





CONDUCTING A REVIEW MEETING

• Encourage the individual to do most of the talking

• Listen actively

• Allow scope for reflection and analysis

• Analyse performance not personality

• Keep the whole period under review

• No surprises

• Recognize achievement and reinforce strengths

• End meeting positively with agreed action plan





GIVING FEEDBACK

• Build feedback into the job

• Provide feedback on actual events

• Describe, do not judge

• Refer to specific instances

• Ask questions rather than making statements

• Get people to work things out for themselves

• Select key issues – focus on improvable areas

• Show understanding





COACHING AS A PROCESS OF MANAGEMENT

• Making people aware of how well they are performing by, for example, asking them questions to establish the extent to which they have thought through what they are doing.

• Controlled delegation – ensuring that individuals not only know what is expected of them but also understand what they need to know and be able to do to complete the task satisfactorily. This gives managers an opportunity to provide guidance at the outset; guidance at a later stage may be seen as interference.

• Using whatever situations may arise as opportunities to promote learning.

• Encouraging people to look at higher-level problems and how they would tackle them.



Coaching as part of the normal process of management consists

of:



THE ‘GROW’ MODEL OF COACHING

• ‘G’ is for the goal of coaching, which needs to be expressed in

specific, measurable terms that represent a meaningful step

towards future development.

• ‘R’ is for the reality check – the process of gaining as full a

description of what the person being coached needs to learn as

possible.

• ‘O’ is for option generation – the identification of as many

solutions and actions as possible.

• ‘W’ is for wrapping up – when the coach ensures that the

individual being coached is committed to action.





Managing performance





IMPROVING INDIVIDUAL PERFORMANCE: SEVEN STEPS

1. Select the goal – establish priority areas for action.

2. Define expectations – targets and standards.

3. Define performance measures – the basis upon which

progress to achieving the goal can be monitored.

4. Plan – the improvement programme.

5. Act – implement the improvement programme.

6. Monitor – review progress and analyse feedback to ensure the

target or standard is achieved.

7. Extend the process – continue the development programme

as required.





DEALING WITH UNDER-PERFORMERS

1. Identify and agree the problem.

2. Establish the reason(s) for the shortfall, eg where the individual:

– did not receive adequate support or guidance from his/her manager;

– did not fully understand what he/she was expected to do;

– could not do it – ability;

– did not know how to do it – skill;

– would not do it – attitude.

3. Decide and agree on the action required.

4. Resource the action.

5. Monitor and provide feedback.





–40% 0% +40%

Positive performance drivers Negative performance driver

Fair and accurate feedback 39%

Employee understanding of

performance standards 36%

Focus on strengths in review 36%

Culture of internal

communication 34%

Focus on weaknesses in

review -26%

PERFORMANCE DRIVERS – PERCENTAGE IMPACT ON

PERFORMANCE

Source: Corporate Leadership Council Performance Management Survey 2002 (sample size 19,000)





Performance management issues





Line managers do

not have required

skills

88%

Line managers do

not discriminate

sufficiently in

making assessments

84%

Line managers not

committed to

performance

management

75%

Line managers

reluctant to

conduct reviews

74%

100%

0%

THE FOUR MOST FREQUENTLY MENTIONED ISSUES

E-reward survey of performance management 2005





‘Shift in culture among long-term employees

that performance management is just

something they have to go through but they

will be in the job anyway, to a more

businesslike approach to performance

management, with accountability and

competency.’

‘Structured programme of

training for managers plus

ongoing coaching.’

‘Generating leadership from

the top to support/encourage

line managers to tackle poor

performance head on in a

fair and positive manner.’

‘Nagging, nagging,

nagging, motivating,

threatening, etc.’

‘Senior management insistence.’

‘Providing full line

management briefing,

training, guidelines and

policies.’

ADDRESSING THE ISSUES





Developing performance management





BASIC DESIGN PRINCIPLES – CIVIL SERVICE

PERFORMANCE MANAGEMENT REPORT

• Stretching objectives agreed at the beginning of the year.

• Individuals know the competencies and behaviours they are

expected to demonstrate.

• Regular discussions during year between individuals and their

managers to discuss progress.

• Formal meeting at the end of the year to record whether

objectives have been achieved and levels of competence

demonstrated.

• Line managers make a narrative assessment but do not

translate this into a box mark.







• Consult and involve

• Provide training (formal and

coaching)

• Communicate

• Get support from senior

management

• Get buy-in from line managers

• Align to organizational and

stakeholder needs

• Keep it simple

• Ensure clear purpose and

processes

• Monitor and evaluate

• Don’t make it too complicated

• Don’t make it a form-filling

exercise

• Don’t underestimate the time

it takes to introduce

• Don’t keep changing the system

• Don’t assume that managers

have the skills required

• Don’t link to pay

• Don’t blindly follow others

• Don’t neglect communication,

consultation and training

• Don’t assume everyone wants it

Dos Don’ts

INTRODUCING PERFORMANCE MANAGEMENT

Advice from the respondents to the e-reward 2005 survey



1. Define purpose

2. Enlist support

3. Communicate

and involve

4. Develop

process

5. Train

6. Pilot test

and re-train

INTRODUCING PERFORMANCE MANAGEMENT





Please indicate how you felt about performance management by recording your reactions to the following

statements. Indicate: A If you fully agree B If you partly agree C If you disagree

1. I am quite satisfied that the objectives I agreed were fair.

2. I felt that the meeting to agree objectives and standards of performance helped me to focus on what I

should be aiming to achieve.

3. I received good feedback from my manager on how I was doing.

4. My manager was always prepared to provide guidance when I ran into problems at work.

5. The performance review meeting was conducted by my manager in a friendly and helpful way.

6. My manager fully recognized my achievements during the year.

7. If any criticisms were made during the review meeting, they were acceptable because they were based

on fact, not opinion.

8. I was given plenty of opportunity by my manager to discuss the reasons for any of my work problems.

9. I felt generally that the comments made by my manager at the meeting were fair.

10. The meeting ended with a clear plan of action for the future with which I agreed.

11. I felt motivated after the meeting.

12. I felt that the time spent in the meeting was well worth while.

EVALUATING PERFORMANCE MANAGEMENT –

OPINION SURVEY





ANALYSING THE PERFORMANCE MANAGEMENT GAP What are the current and desired performance management characteristics in your organization?

Performance management fully

supported by top management

Top management pays lip

service to performance

management

1 2 3 4 5 6 7

Line managers fully committed

to performance management

Line managers see

performance management

as a pointless chore

Line managers are fully skilled in


There are serious

deficiencies in the skill levels

displayed by line managers

Line managers conscientiously

follow performance management

guidelines

There is hard evidence that

performance management is

improving business performance

There is no evidence that



Performance management

deals effectively with

under-performers

Little or no action is

generally taken to deal

with under-performers

Employees believe that


is fair

Employees do not trust their

managers to review their

performance fairly

Mark on the scale: X for current, O for desired This resource is part of a range offered free to academics and/or students using Armstrong’s Handbook of Performance Management, 4th edition, as part of their


Line managers go their own

way, if they do anything



ANALYSING THE PERFORMANCE MANAGEMENT GAP What are the current and desired performance management characteristics in your organization?

Performance management fully

supported by top management

Top management pays lip

service to performance

management

7 6 5 4 3 2 1

Line managers fully committed

to performance management

Line managers see


as a pointless chore

Line managers are fully

skilled in performance

management

There are serious

deficiencies in the skill levels

displayed by line managers

Line managers conscientiously

follow performance management

guidelines

There is hard evidence that



There is no evidence that



Performance management

deals effectively with

under-performers

Little or no action is

generally taken to deal

with under-performers

Employees believe that


is fair

Employees do not trust their

managers to review their

performance fairly

Mark on the scale: X for current, O for desired

O X

O X

O X

O X

O X

O X

O X



Line managers go their own

way, if they do anything



Performance management case studies





PERFORMANCE MANAGEMENT AT ASTRA ZENECA (1)

Definition of Performance Management:

A continuous cycle of discussions between the

employee and the manager to plan and review

work and development.






Stage 1

Business roles

Plan

Stage 2

Performance

planning

Evaluate Stage 4 Stage 3

Performance Performance

measurement development

Do






Stages

1. Business role clarification – clear statement of agreed role and

objectives.

2. Performance planning – agreement of targets to achieve the

‘plan–do–evaluate’ elements of managing performance.

3. Performance development – agree skills required and prepare

individual development plan.

4. Performance measurement – provide ongoing feedback and

an annual summary of an employee’s performance (no overall

ratings).





APPROACH TO PERFORMANCE MANAGEMENT AT

CENTRICA

• Built on existing best practice

• Standardization across the organization

• Calibration of performance against objectives across

comparable populations

• Processes focused on individual performance

• Balanced scorecard

• Focus on behaviours helping managers achieve their targets

• Development of technical skills





PERFORMANCE MANAGEMENT PROCESS AT CENTRICA

Centrica strategy and

management agendas

• Business and

individual performance

contract

• Financial • Customer

• Operational

• People

• Creates a compelling

future

• Inspires others to

achieve

• Demonstrates a

passion for customers

• Delivers great

business performance

• Learns and shares

knowledge

What How

• Performance rating

• Potential rating

• Development plan





Performance planning

Development

Performance review

Total compensation

Ongoing

coaching and

feedback

Guidance: ‘Have a dialogue and document it’

PERFORMANCE MANAGEMENT AT PFIZER INC





Set goals Track performance

Evaluate and reward

PERFORMANCE MANAGEMENT AT RAYTHEON INC (1)

Performance

dialogue





PERFORMANCE MANAGEMENT AT RAYTHEON INC (2)



• Performance dialogue – frequent and open interaction between employees and their leaders that begins with mutual goal setting and continues with the recognition of accomplishment, the reinforcement of desired behaviours.

• Setting goals – corporate goals set for customer satisfaction, people growth and productivity. These are cascaded to individuals.

• Tracking performance – performance feedback provided throughout the year; individuals also track their own performance.

• Evaluating and rewarding performance – evaluation of performance takes place every day but individual performance is summarized at least annually in the performance review. The leader assesses strengths and areas for improvement and agrees training and development plans. Rewards are linked to performance at company, programme, team and individual levels.



PERFORMANCE MANAGEMENT AT THE SCOTTISH

PARLIAMENT (1)

Purpose

To support the Scottish Parliament in fulfilling its constitutional

role as a representative and legislative body by providing

professional advice and services of the highest standards.

Aim

To be an organization in which we all behave corporately and

are properly trained, informed, involved, motivated and

rewarded, and to which we are proud to belong.





PERFORMANCE MANAGEMENT AT THE SCOTTISH

PARLIAMENT (2)

Achieving purpose and aim:

• Be simple to operate

• Establish a clear link between business and individual objectives

• Ensure commitment to our values and culture

• Ensure that skills and knowledge and behaviour (competencies) are reviewed

• Generate a thorough and continuing review of training and development needs

• Enable us to continue to improve the organization’s performance

• Ensure we can identify and reward exceptional performance and contribution

• Identify good and bad performance clearly





MANAGING PERFORMANCE AT STANDARD CHARTERED

BANK (2)

The process

• Global for all employees

• Accelerate a high performing organization

Objective setting (January)

• Financial/business objectives

• Two core management objectives

• Values objectives for all

Final review (Nov/Dec)

• 1–5 business rating scale

• A–D values rating scale

• Additional feedback form

• Cascaded ‘level down’ rating

reviews

Interim review (July)

• Formal step-back

• ‘Tracking’ rather than

‘rating’

Performance coaching

throughout the year

Regular open discussion:

• integrates performance, learning

and development, reward and

individual engagement

• addresses performance issues

• under-performance not tolerated






BANK (3)

Top management impetus

Common top team

agenda cascaded

Senior

leadership

on performance

issues

Top 300 leaders

monthly calls –

emphasize key

performance

management

behaviours

Communications

style – integrated

messages

CEO’s ‘big call’ –

2,000 managers

Chair and CEO

personally write to

top performers

CEO performance

bonus levelling

of top 1,000

managers






BANK (4)

‘Living the values’

Responsive Trustworthy Creative International Courageous

Behavioural indicators

Discussion – agree relevant behaviours

Assess against behaviours: rating A–D





To know how well

we are doing

To know what we

need to do and

learn to improve

and progress

To know what is

expected of us


BANK (3)

Employees’ rights





THAMES VALLEY POLICE PERFORMANCE AND

DEVELOPMENT REVIEW PROCESS

• Key to the performance management

strategy

• Establishes strong employment relationships

• Provides a route to individual, team and

organizational performance planning

• Secures future training and development

provision

• Creates more visibility for career paths,

competencies and behaviours across ranks

and roles

This resource is part of a range offered free to academics and/or students using Armstrong’s Handbook of Performance Management, 4th edition, as part of their course. For more

academic resources and other FREE material, please visit www.koganpage.com/resources and then click on Academic Resources.



UNILEVER (1)

PERFORMANCE DIFFERENTIATION TOOLKIT

Objectives

1. Continuously ‘raise the bar’.

2. Audit our collective strength.

3. Focus on the ‘current reality’ to gain agreement on our view of staff with:

– high potential;

– high performance – are we stretching and rewarding these people appropriately?

– standard performance – how to further motivate?

– development needs – how can we maximize performance?

– performance concerns – what can we do about poor performers; do we turn them around or move them from role?





UNILEVER (2)

Assessment areas

Skills

Experiences

Competencies

and

living values

Performance





UNILEVER (3)

Assessment and action

Possible actions:

• reward

• set milestones

• provide feedback

• training

• coach to improve delivery

Possible actions:

• recognize and reward

• challenge/stretch

• expose

• coach

Possible actions:

• set milestones


• coach/monitor/track

• decision to continue or

end employment

Possible actions:

• recognize and reward


• mentor/coach to improve

• acknowledge contribution

HOW

WHAT

Inconsistent in

meeting

expectations

Consistently

meeting

expectations

Inconsistent in

meeting agreed

individual

business targets

Consistently

meets individual

business targets





UNILEVER (4)

Process flow

Line manager:

Discusses with employee at performance and development meeting:

• delivery against targets

• behaviour against competency framework and values

Leadership team:

• compares evidence

• calibrates judgements

• discusses what else makes individual managers successful or unsuccessful



Consequence management:

• communicate feedback and consequence to individual

• agree development plan with individual

• manage under-performers



UNILEVER

The leader’s mindset

• I have to communicate my performance expectations with my employees.

• Fairness and honesty impacts behaviour and performance.

• Focus on utilizing strengths to the maximum and closing gaps.

• The employee needs to take ownership for his/her development with my support.

• It is my role to support by coaching, mentoring, leading and managing conversations.

• I have to differentiate among people in my assessment and coaching.





PERFORMANCE MANAGEMENT AT THE VICTORIA &

ALBERT MUSEUM Job description

(updated)

Evidence

(departmental) Evidence

(individual)

Corporate

plan Departmental

objectives Individual

objectives

Performance

standards

Attributes

Assessment

Countersigning officer review

Personal

development

plan

Ratings –

pay

decisions





Conclusion





Performance management – key considerations

• Performance management is about running

the business; it is what managers do – a

natural process of management.

• Success depends on what the organization is

and needs to be in its performance culture.

• It is the process that is important not the

system.

• Focus on development, not pay.

• Base on accepted principles but operate

flexibly.

• Effective communication, involvement and

training are essential.





performance management - ftms · 2015. 9. 1. · characteristics of good objectives s =...

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