200503cover
Things are only impossible until they’re not.
– Jean-Luc Picard
THE
BULLETIN
Volume 73 | Issue 2
March 2005

Performance management without the anxiety

Lori Berger

Everyone has skills and weaknesses. The challenge in managing others is to recognize and be willing to address your own limitations and to help those you supervise recognize and address theirs. A formal and prevalent method of doing so is through performance management. Unfortunately, this process is often considered synonymous with performance appraisals, giving it a negative perception. Many—if not most—people could tell you a story about having been on the receiving end of a bad performance review session. However, with a more rounded approach and understanding of the purpose of performance management, it can be a worthwhile experience for supervisors and employees alike.

History

Managing the performance of staff has evolved over time, and as the complexity of work has changed, the methods of managing staff performance have changed as well. With the Industrial Revolution, managers began formally measuring and evaluating employees’ work. Positive or negative action could be taken based on the worker’s contribution to the organization’s success (Rausch, 1985). The earliest industrial performance appraisal programs were simple. People were evaluated and paid based on the work they turned out or the number of items produced. In many jobs, quality also was a critical factor, and evaluation systems were expanded to address those issues. As work moved to more complex activity, more elaborate measurements were needed (Rausch, 1985). Character and personality traits came into the picture in addition to the quantity and quality of work performed. Subjectivity became a factor, and supervisors were given great latitude in interpreting how employees were rated or appraised.

Following the Industrial Revolution, behavioral systems were based on descriptions of what the employee did or failed to do with respect to key elements of the job (Rausch, 1985). These systems did not satisfy the need for factual and thorough appraisals. In fact, in many organizations, even though formal performance management procedures existed, personnel decisions about promotion and termination often ignored or even opposed the performance evaluation results (Rausch, 1985).

In the 1950s the “management by objective” concept became prevalent (Rausch, 1985). Goals and results were the focus of evaluation. However, because goals and objectives were handed down without much employee involvement, there was not much ownership of the organization’s strategic direction.

Since that time much has been learned to show that the more organizations involve people at all levels in setting their goals, the more ownership people will have of the system (Rogers, Miller, & Worklan, 1993). Systems that include a combination of goal achievement, character traits, and key elements of accountability are the most effective (Rogers, Miller, & Worklan, 1993). Successful systems involve the employee in task review and the development of appropriate, realistic goals for performance improvement; “Systems that are considered successful provide extensive involvement by the employee being rated. People will support something they help shape” (Rausch, 1985, p. xvii).

Expectations

Effective performance management focuses on results, aligns activities to the goals of the organization, and produces meaningful measurements. “No matter what business you’re in, everyone in the organization needs to know why,” says Frances Hesselbein (in Nelson, 1994, p. 32).

Almost all employees want to do a good job. Bill Hewlett, cofounder of Hewlett-Packard, says: “Men and women want to do a good job, a creative job, and if they are provided the proper environment, they will do so” (in Nelson, 1994, p. 21). Most employees who fail do so as a result of unclear expectations and a lack of effective performance management during the course of their employment.

According to Williams (2004), it is the supervisors’ responsibility to ensure employees understand their specific role in the organization and that expectations are attainable; “Supervisors must clearly articulate realistic expectations in writing. Setting unrealistic expectations leads to a waste and misuse of time and valuable resources” (A6 2).

On a basic level, the performance management system you implement helps people manage their actions in support of the organization’s mission and goals. This begins at the point of hire. During employees’ orientation, they should be given written job responsibilities and performance guidelines. They also should be made aware of how their performance will be monitored and appraised. Rausch (1985) says, “The most important part of employee orientation is to make them aware that the performance management program has significant benefits for them” (p. 87). The supervisor can use this time to give a copy of the performance evaluation instrument to the new employee and explain how the evaluation may be used for various personnel decisions, compensation, professional development fund allocation, etc. “Employees should have an understanding that the performance management system will help them gain greater satisfaction from their work and maximum tangible outcome, which leads to better organizational results”(Rausch, 1985, p. 88).

Beyond the basic expectations of the day-to-day, employees also should understand the organization’s goals so they can improve within this framework. The people involved in achieving the goals should help set them to increase their commitment to achievement and better ensuring success. Rogers (in DDI, 2003) says: “Linking individual performance goals to strategic organizational goals connects employees to the strategic direction of the company. By doing this, you provide more meaningful work and motivate employees to feel a greater sense of ownership of the organization’s success” (A6 3).

In establishing the goals, employees and supervisors can work together to ensure they are based on specific results and aligned with the organization’s goals. Goals will help to provide a clear direction and common frame of reference for future communication between the employee and supervisor. Use the common “SMART” acronym as a guide in setting goals: Specific, Measurable, Action-oriented, Realistic, and Time- and resource-constrained. Goal achievement requires you to implement a plan, monitor progress, and then revise objectives and action plans as needed (Rouillard, 1999).

Leading by example

In addition to having goals in place, employees must be motivated. Lawson (1996) says managers can only create an environment that encourages and promotes the employee’s self motivation; “To be successful as a manager, you first need to understand that you cannot motivate anyone” (p. 1). As the adage goes, this means getting people to do what you want them to do because they want to do it. The challenge is to give them a reason to want to do it; doing it to satisfy a need they have. Supervisors have to tune into employees’ needs, not their own. One big step is to practice what you preach.

Supervisors need to fully understand their role as leaders and mentors. Fuhrman (2004) says: “Leadership is influencing others by example. True leaders don’t tell anyone what to do. They would rather invest their time teaching what they know and showing how it is done—so others can get where they want to go.” (p. 11).

Additionally, supervisors must be knowledgeable and have the skills necessary to manage and lead others. Because these change as organizational needs evolve, supervisors can attend training to sharpen their skills and focus on competencies that will aid their effectiveness. Application is certainly a great teacher, and if supervisors begin to understand the entire picture of performance management, and understand the competencies they need to have to be confident in fulfilling a supervisory role, then the idea of helping others succeed becomes easier. To be an effective leader and good performance manager, Furman (2004) says:

  • Learn to build unity
  • Be a servant – Take your eyes off of yourself and look for what you can do for your staff
  • Be uplifting – Look for good qualities in all and praise and encourage
  • Lead, don’t manage
  • Relate to people as human beings, not just employees
  • Treat everyone fairly and consistently
  • Be effective in communicating
  • Be kind
  • Be visible
  • Be steady, persistent, optimistic, and hopeful
  • Be forward-thinking – Keep sight of the big picture and communicate that to others

It is important to remember that leadership is more than reaching a goal; it is spurring others to greatness. This is the essence of performance management.

Conversational appraisals

As supervisors monitor their own self-improvement, they also must show employees what they need to do to improve. This is the primary goal of most performance appraisal strategies. There are as many methods of appraising employee performance as there are organizations. This is because it is important to choose elements of performance appraisals that fit an individual organization’s needs. One organization might consider speed of work completion to be its highest priority, whereas another requires a focus on customer service. Additionally, different levels of responsibility might require unique evaluation procedures that others could do without. It is helpful to identify common areas across job levels so as to make comparisons across departments if determining fund allocation and promotion.

Perhaps the easiest and most widely used appraisal method is simple, verbal feedback. As a supervisor who is unhappy with an employee’s performance or approach to a task, it makes the most sense to correct the behavior as it is happening, either casually or by meeting with the person, rather than waiting for an annual performance evaluation. Supervisors should be sure feedback is clear, that they emphasize the positive, are specific, focus on behavior rather than the person, refer to behavior that can be changed, and are descriptive rather than evaluative. Supervisors need to own the feedback they give by using “I” statements, avoiding generalizations, and being careful with advice as it is better that the staff member identify actions to address the issue more effectively (McGill & Beatty, 1995).

It is human nature to not want to address areas where people are not meeting expectations. However, not addressing the concern will only make it more challenging to correct as time passes. The unfortunate aspect of not managing a performance problem is that the individual who is exhibiting the poor performance is typically the last to know. Co-workers are affected by their peers who are not performing and supervisors are looked upon as being ineffective.

Research done by Development Dimensions International and the Society for Human Resources Management (Rogers, Miller, & Worklan, 1993) found these “Top 10 Performance Management Frustrations” regarding appraisals (p. 25):

  • Performance management is a once-a-year event; periodic reviews don’t occur.
  • A lack of opportunity exists for employee involvement.
  • Performance is not rewarded appropriately.
  • Raters are biased or inconsistent.
  • Appraisals aren’t done on time.
  • The focus is on the negative and petty.
  • A full rating scale is not used; the system relies on forced rankings.
  • There’s no follow-up on what is discussed in appraisals.
  • Upper management lacks commitment.
  • It takes a lot of time.

In the DDI and SHRM study, the respondents were asked to rate the effectiveness of their system as a tool to help them do their jobs well and their impression of how much the appraisals they received during the past three years helped them be more effective in the jobs. Out of a five-point Likert scale, the ratings were 2.95 and 2.93 respectively (Rogers, Miller, & Worklan, 1993). While a performance management system is not a magic answer to correct all performance problems, a well-administered program can go a long way in helping employees meet performance goals. Obviously, based on this study, it appears there is some work ahead of organizations to improve their systems.

In looking to improve its system, Bates College undertook a new form of performance appraisal. Called the “Conversations Document,” it offers a starting place for discussion about how an employee’s performance and progress is aligned with the organization’s goals (Lee, 2003). It seeks not to focus on shortcomings but rather to document what an individual employee must do to ensure future organizational successes. While some might consider this a euphemistic take on the common goal of most performance management systems, its procedures call for frequent dialogue and forward-thinking instead of documenting past failures or even past successes. Additionally, the employee and supervisor play equal roles in the process, taking some of the pressure or negative perception away from a performance management process (Lee, 2003). And employees can even initiate a “conversation” at any time if they feel an adjustment should be made (Bates College, n.d.).

According to DDI (2003), “Organizations are having reviews more frequently, allowing employees to measure their progress more often. In 1997, 78 percent of all organizations conducted performance reviews yearly. In 2003, while 50 percent continue to conduct yearly reviews, 40 percent conduct them at least twice a year” (A6 5). Rausch (1985) suggests conducting quarterly performance progress discussions as a time to informally review an employee’s action plan. For each progress review, Rausch (1985) suggests following these steps (pp. 48–49):

During the progress reviews, the following questions should be raised.

  • Is the umbrella standard being met?
  • Are the established standards likely to be met?
  • Are there knowledge/skill deficiencies and what should be done about them?
  • How is progress with respect to the improvement plan (if one has been developed at the last performance review)?
  • Is additional support from you, the supervisor, required?
  • What performance standards are still appropriate in light of the changing situation and which should be changed or added?

Take the steps necessary to satisfy the conclusions from the discussion of [these] questions.

  • Make the necessary notes for the employee’s performance management file.
  • Set the date for the next progress review.

This will help when you complete the annual review. You will simply be pulling together material from your previous quarterly reviews and adding the fourth quarter items. This frequency relieves some of the uneasiness that employees and supervisors feel. People appreciate having a sense of whether they are on track.

Formal evaluations

Most organizations use a combination of performance management techniques, among which is often a formal evaluation. Typically done annually, much of the time this involves a standard form sometimes including a rating system.

The 1993 study conducted by DDI and SHRM discovered that while many organizations used numerical scales to rate performance, respondents envisioned more descriptive evaluations of performance in the future. Instead of treating people based on a numerical scale, appraisers would use phrases such as “exceeded objective,” “met expectations,” or “goal not achieved.” The idea was that this would help avoid the confusion about what, exactly, each number in a numerical scale means.

However, since then, “The economic difficulties facing some organizations has caused the increased use of forced ranking with the need to decrease their workforces. Thirty-four percent of organizations surveyed make frequent use of forced ranking, which is an increase from 13 percent in 1997” (DDI, 2003, A6 5). Using forced ranking can lead to negative side effects such as lawsuits, lower morale, decreased teamwork, and internal competition (DDI, 2003). As G.M.J. De Koning (2004) says, “When managers control their employee’s ratings—and thus, their year-end raises—employees will focus on currying favor with their managers rather than trying to engage their customers or increase their productivity” (A6 11).

For this reason, employees should prepare a self-evaluation (Rausch, 1985). This helps the supervisor in understanding the differences in perception. It might also help lessen the characterization of the formal evaluation as “one-way communication in which the supervisor describes how well the individual met or failed to meet performance standards. C9 The employee usually is not encouraged to respond meaningfully or candidly to the manager’s judgments. When the feedback is negative, the individual’s response can be perceived as defensive. In fact, in many systems, the employee’s response is called a ‘rebuttal’” (Lee, 2003, p. 5).

Regardless, discipline should be separate from the evaluation, but improvement or specific concerns can be discussed; “Performance appraisals should not remind your employees of being called into the principal’s office in high school” (IOMA, 2003, A6 12). All discipline or corrections should occur immediately following the poor behavior, although the evaluation offers an opportunity to document performance consistently below expectations. Also on the taboo list, “Compensation is not usually discussed during performance reviews. Sixty-eight percent of organizations discussed compensation at a time other than the performance review meeting” (DDI, 2003, A6 5).

The steps for the performance evaluation/appraisal are similar to those professionals take for any delicate interview. They include (Rausch, 1985):

  • Set an appropriate climate by selecting a time and place which will ensure a calm, unhurried, uninterrupted environment.
  • Explain the evaluation and the ratings.
  • Provide the employee an opportunity to thoroughly explain his or her viewpoint.
  • Achieve agreement, as much as possible, on the validity of the ratings.
  • Discuss the implications of the ratings on compensation and future performance. (This would be an appropriate time to discuss a performance improvement plan.)
  • Ask the employee to sign the form, to attest that the evaluation has been discussed and encourage them to enter notes if there is dissatisfaction with the evaluation or ratings.

Supervisors should be sure to point out things the employee is doing well. Remember, “Good thoughts not delivered mean squat” (Blanchard, 1994, p. 24).

Improvement plan

A criticism of formal evaluations is that they “are not designed to encourage a dialogue about the employee’s past, present, or future performance” (Lee, 2003, p. 5). This is a fundamental problem with most performance management systems. “Another problem with most systems is that they are unnecessarily past-orientated,” says Lee (2003). “They serve to give employees a report card on prior performance and behavior. A great sense of anxiety almost always exists with such systems because rewards, recognition, and pay are normally tied to the outcome of an individual’s ‘report card’” (p. 5).

To combat these issues, the supervisor and employee can work together to create an improvement plan. As Rausch (1985) states:

An effective performance management system places primary emphasis on the improvement plan—on developing it and on monitoring its progress. A supervisor who understands and accepts this emphasis as a way of life will find it far less difficult to discuss differences of opinion about ratings with the employee. With emphasis on the improvement plan, it is the positive approach of: How can we do it better in the future? How can we avoid the problems we have faced in the past? on which the discussion can be centered. (pp. 62–63)

The following steps would help to ensure the creation of a successful performance improvement plan (Rausch, 1985, pp. 64–65):

  • Emphasize the objective and benefits of the improvement plan.
  • Encourage the employee to suggest what the plan should contain and what steps and self-development should be part of the plan.
  • Suggest additional behavior changes, learning, or skill practice that might be useful.
  • Determine the priorities that should be set for the steps in the plan, and agreement should be reached on the priorities.
  • Set a timetable with dates for review of accomplishment. As much as possible the employee should be allowed to decide by when he or she will complete the various steps.

Primarily, performance management should be looked at as an opportunity for supervisors and employees to work together to improve their weaknesses and set achievable goals that can then be monitored. Working with a supervisor who models appropriate behavior, receiving immediate feedback—positive and negative, and looking to the formal evaluation as a forward-looking planning time, can make any employee look favorably on a performance management system. By helping employees to be aware of and manage their strengths and weaknesses, the process can be a much more positive and thus a much more effective one improving the organization overall.

References

Bates College. (n.d.). 229 conversations document. Employment Handbook in HTML. Retrieved February 8, 2005, from http://www.bates.edu/employee-handbook-229.xml.
De Koning, G.M.J. (2004, November 11). Evaluating employee performance (Part 1). Gallup Management Journal. Retrieved November 23, 2004, from LexisNexis.
Development Dimensions International. (2003, June 6). DDI study shows parallels between performance management quality and organizational performance. Business Wire. Retrieved November 23, 2004, from LexisNexis.
Fuhrman, J. (2004). Leading leaders to leadership. Hummelstown, PA: Possibility Press.
Institute of Management and Administration. (2003, March). To improve your staff evaluations: Cover the four P’s. Pay for Performance Report. Retrieved February 8, 2004, from LexisNexis.