Performance management is a process by which managers and employees work together to plan, monitor and review an employee’s work objectives and overall contribution to the organization. More than just an annual performance review, performance management is the continuous process of setting objectives, assessing progress and providing on-going coaching and feedback to ensure that employees are meeting their objectives and career goals. Show In this Section:An introduction to performance managementThe fundamental goal of performance management is to promote and improve employee effectiveness. It is a continuous process where managers and employees work together to plan, monitor and review an employee's work objectives or goals and his or her overall contribution to the organization.
Before you embark on the development of an effective performance management system, you should take a moment to consider whether or not your organization has HR management practices in place to support the performance management process. These include:
An effective performance management system will:
The establishment of an effective performance management system requires time and resources and therefore, the support of the board, the executive director and other senior managers. When developing a new performance management process, an organization can strike a committee made up of employees, managers and board members to increase buy-in, understanding and support for the process. Management support to act upon the outcomes of the performance management process is also necessary to ensure that good performance is recognized, inadequate performance results in the necessary support and/or training to improve performance, and consistently poor performance results in a change of responsibilities or termination, as appropriate. Whether you are introducing a new performance management system or modifying an existing process, it is critical that you communicate the purpose and the steps in the performance management process to employees before it is implemented. Also, remember to review your new performance management system after the first year and make adjustments as necessary.
The performance management cycleThere is much more to performance management than the annual performance review meeting. As mentioned in the introduction, performance management is a continuous process of planning, monitoring and reviewing employee performance. Phase 1 — PlanThe planning phase is a collaborative effort involving both managers and employees during which they will:
Both the employee and manager need to sign off on the proposed work assessment plan. A copy of the plan should be given to the employee and another should be kept in her or his confidential personnel folder. Setting objectives and measurementsOften the most difficult part of the planning phase is finding appropriate and clear language to describe the performance objectives and measures or indicators of success. Managers need to ensure that the objectives 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. What is a valid measure of good client service?If the measure used only considers the number of clients served (i.e., what was done), then the quality of service or how well it was done is not captured. Assessing both "what" and "how" would be a more valid measure for good customer service. For example, in addition to the number of clients served, the quality of the information provided and a complaint rate of 1% or less could represent good client service. To assess quality of information provided, the supervisor could do spot checks to listen to or look at the information that the employee provides to clients. The supervisor would then assess accuracy and completeness of the information. Objectives and indicators need to be SMARTSpecific Measurable Attainable Realistic Time-bound Writing SMART objectives:Action verb + Object of the action verb + Measures
Phase 2 — MonitorFor a performance management system to be effective, employee progress and performance must be continuously monitored. Monitoring day-to-day performance does not mean watching over every aspect of how employees carry out assigned activities and tasks. Managers should not micro-manage employees, but rather focus their attention on results achieved, as well as individual behaviours and team dynamics affecting the work environment. During this phase, the employee and manager should meet regularly to:
Continuous coachingPerformance management includes coaching employees to address concerns and issues related to performance so that there is a positive contribution to the organization. Coaching means providing direction, guidance and support as required on assigned activities and tasks. As a coach, managers need to recognize the strengths and weaknesses of employees and work with them to identify opportunities and methods to maximize strengths and improve weak areas. The role of the coach is to demonstrate skills and to give the employee feedback, and reassurance while she or he practises new skills. Good listening skills on the part of the coach, together with the ability to deliver honest feedback, are crucial. In a coaching role, you are not expected to have all the answers. The strategic power of any coaching dialogue lies primarily in the coach's ability to ask the right questions. Providing feedbackPositive feedback involves telling someone about good performance. Make this feedback timely, specific and frequent. Recognition for effective performance is a powerful motivator. Constructive feedback alerts an employee about an area in which performance could improve. The feedback is descriptive and should always be directed to the action, not the person. The main purpose of constructive feedback is to help people understand where they stand in relation to expected and/or productive job and workplace behaviour. Often, it is positive and supportive feedback that is most readily and easily shared. Finding the right way to provide constructive feedback to address a particular performance issue can be more daunting. If an employee is not meeting performance expectations, managers need to provide constructive and honest feedback. It's important to do this when an issue first arises – before it escalates into a significant problem. Here are a few points to consider when giving constructive feedback: Prepare
State the facts
Listen
Although we may sympathize with an employee’s unique personal circumstances and reasons she or he is not performing, it is important to remain focused on the performance issue. If you alter what is required of one employee (i.e., “bend the rules”) you will have to be prepared to do so for all employees. As a performance manager, try to avoid putting yourself in the position to have to judge which circumstances warrant “special treatment” and those that do not. Agree on an action plan
Follow up
Phase 3 — ReviewThe performance assessment or appraisal meeting is an opportunity to review, summarize and highlight the employee’s performance over the course of the review period. Self-assessment is a standard part of most performance appraisals. By using the performance plan and assessment form as a guide, employees can assess their performance in preparation for the appraisal meeting. This process can identify gaps between the employee’s self-perceptions and the views of the manager, and can allow for more in-depth discussion of these performance points during the meeting. Managers should review their performance management notes and documentation generated throughout the year in order to more effectively assess the employee’s performance. Only issues that have already been discussed with the employee should be part of the assessment documentation and meeting. This will ensure that managers deal with performance problems when they arise and that there are no surprises during the performance assessment meeting. In the performance assessment meeting, employees and managers will:
The employee and the supervisor should sign off on the form. This acknowledges involvement in the process, but not necessarily agreement by the employee with the content of the evaluation. If an employee disagrees with any part of the performance assessment, provide tthe opportunity for her or him to attach comments and file them with the performance assessment form. Managers must ensure that the employee receives a copy of the assessment form and the signed document is put in the employee's file. Important: An appeals processEven with a well-designed and -implemented performance management process, there may be situations when an employee has a serious difference of opinion with the manager about her or his performance assessment. A procedure for the employee to discuss disagreement with the process should be established. Some options for dealing with disagreements about performance appraisals are: Step review system Peer review system Ombudsman Avoid rater bias or assessment errorsOur judgements about many things are affected by our perception. When a person evaluates someone else, the evaluation reflects both the person being assessed and the evaluator's built-in biases. Managers should be aware of their possible evaluation biases, so they can try to eliminate them from the assessment process. Some common biases include:Halo Horns Central tendency Leniency bias / Strictness bias Same-as-me
Developing a performance assessment formA performance assessment form is a tool that helps guide and document a discussion between a manager and an employee about the employee's performance over the past year. A poorly designed assessment form can undermine a good performance management system. Below are some guidelines on what to include in a performance assessment form. General informationTypically, the first section of a performance assessment form includes standard information about the employee, the manager and the organization. This includes the:
Assessment form instructionsInclude some brief instructions on how to complete the assessment form, the type of information to include on the form and the reason that the information should be included. "The performance assessment form is designed to guide the manager and employee in documenting the employee's results in comparison to the agreed-upon objectives. Please follow the instructions for each section...” Performance objectives and measuresDocument the performance objectives identified in the employee’s work plan and the measures to be used to assess achievement. List the objectives in their order of importance, with the most important listed first.
Competency profileIf your organization has a performance assessment process that is based on a competency framework, be sure to include the list of relevant competencies on the assessment form. Examples of competencies include teamwork, effective communication and problem-solving.
Clear rating scalesPerformance assessment forms often include rating scales to help guide and simplify the assessment process. Poorly constructed rating scales can be a source of confusion, subjectivity, ambiguity and conflict – all of which undermine the performance assessment process. A reliable assessment has consistent ratings for the same performance over time and with different raters. To increase the reliability of rating scales:
For key work objectives, a rating scale like this is simple and can guide the discussion between the manager and the employee:
For key competencies or other behavioural measures, consider a frequency scale like this one:
Employee training and development planAs part of the performance assessment process, the manager and employee may have identified areas for further training and/or development, as well as the types of activities the employee could undertake. Document the expectations for training and development in the performance assessment form. At the end of the year, document the results of the learning activities. Example – Program Coordinator
Example – Office Manager
Sign-off sectionEnd your form with an area for the manager and employees signatures. The signatures should come after a statement that indicates 'by signing, both parties are acknowledging that they have read and discussed the contents of the performance assessment form.' This allows the performance management cycle for one year to come to a close and the cycle for the next year to begin. Make sure the employee understands that, by signing, he or she does not have to agree with all the comments made in the assessment. If an employee disagrees with any part of the performance assessment, provide them with the opportunity to attach their comments.
Performance management for executive directorsIn many organizations, it is the executive director who is responsible for implementing the performance management system, but the executive director also needs feedback on her or his performance and to demonstrate how she or he is meeting work objectives – so it is integral that board members are involved in performance management. The board of directors is responsible for hiring an executive director to ensure there is a skilled manager at the helm to lead the organization's work. Once hired, the board also has a responsibility to monitor the executive director’s performance because the effectiveness of the organization is closely tied to the executive director's performance. A sound executive director performance management process ensures that:
An executive committee, HR Committee, or a specifically created ad hoc board committee will generally oversee the design and implementation of the performance management process for the executive director. If the organization only has a small number of board members, the board as a whole may be involved in the performance management process – rather than leaving the responsibility to a single board member. Performance assessments shouldn't occur because there is a performance issue. Every organization should have a clear performance management process in place and communicate the plan to the executive director when hired. An executive director's performance needs to be measured in relation to her or his job description, annual work plans and organizational strategic plans. Consider who will provide input. As board members often do not have the opportunity to be in the workplace on a regular basis, it is sometimes appropriate to seek assessment input from other sources than board members, including employees, partners, stakeholders and clients. Ensure the executive director knows if people outside of the board will be asked to participate in the performance assessment process. Often, the executive director can suggest who can provide useful input into the assessment process. Determine how the information generated through the performance management process will be reported back to the executive director and to the entire board of. If a sub-committee of the board (instead of the full board) is responsible for the process, decide if they have authority to offer salary or benefit increases or if the whole board must be involved. Fully document and keep information in the executive director's personnel file. Have the executive director sign any reports along with board members involved in the performance management process. Review the performance management plan periodically and ask the executive director for input so that the process is supportive and useful for the board and the executive director.
360-degree (multi-rater) assessment process360-degree feedback, also known as 'multi-rater feedback', is employee development feedback that comes from colleagues, peers and managers in the organization, as well as self-assessment, and sometimes sources such as clients, volunteers or other stakeholders. Senior managers (including executive directors) are responsible for assessing the performance of other employees but often do not receive adequate feedback themselves. 360-degree feedback allows the individual to understand how his or her effectiveness as an employee, manager, or coworker is viewed by others.
What an effective 360-degree feedback process can achieve:
Why organizations may choose not to adopt the 360-degree approach:
The 360-degree feedback process overviewA 360-degree feedback or other multi-rater process should follow effective change management guidelines. A cross-section of the people who will have to live with and utilize the process should explore and develop the process for your organization. If you are planning to implement a 360-degree feedback process, there are several important questions to ask and answer regarding the process:
Participants may have concerns about confidentiality of reviews, how the completed reviews will be used in the organization and what sort of follow up they can expect. All participants in a 360-degree process need to be trained in the goals of the process, methods used in administering the process, what the organization will do with the data collected, and expectations of the employees involved in the process. Many organizations choose to employ an anonymously filled out 360-degree feedback document, comprised of questions based on the organization’s competency framework. Assessment forms that allow for examples and comments about each question are preferable, since they will allow the person who is the subject of the feedback to better understand the ratings. The employee who is receiving feedback and her or his manager should always fill out the 360-degree assessment as well. The individual’s rating of her/his own performance is important for comparison with the rater group’s feedback. As well, the manager’s feedback is important since, in most assessments, the feedback of the direct supervisor is not averaged with the rest of the feedback from other raters. The collected data is analyzed in a confidential manner and results are shared with the person who is being assessed. Those administering the process and facilitating the debrief/feedback meeting need to assist people to understand their feedback and to support action planning and development based on the feedback. It is critical that those involved in debriefing participants fully understand what the assessment tool and analysis means and its potential impact on the emotions and career of the participant. The debriefing process is critical because it helps the participant facilitate change by:
Final checklist for your performance management systemAs stated previously, performance management has a variety of purposes, one of which is documentation should there be a legal challenge related to performance. To ensure that your performance management process is defensible:
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