LHR305:

Lesson Overview

There will be many new employees who “test out” of the onboarding and training processes quite well. At the same time, all of this preparatory work focuses on preparing someone to succeed. The question becomes at some point, how well does a person perform in the position. This lesson focuses on the concept of performance management, not simply as a yearly appraisal process but as an ongoing set of interactions that constantly help employees become as productive as possible.

Lesson Objectives

Upon successful completion of this lesson, you should be able to

• define the term, “performance management”;
• identify the purposes of a performance management system;
• compare and contrast at least three types of performance appraisal systems; and
• explain the way in which a performance appraisal system interacts with other performance management tools.

Lesson Readings & Activities

By the end of this lesson, make sure you have completed the readings and activities found in the Lesson 8 Course Schedule.

Performance Management

The phrase “performance management” is a big tent term. The textbook tends to focus on the formal appraisal systems companies use to systematically rate employees’ performance at regular intervals, commonly once per year. Appraisals of this sort are used for a variety of purposes, one of which can be to calculate merit pay increases.

The Bigger Tent

If the use of the phrase in the text is a more narrow understanding of performance management, we should dwell a bit on the larger understanding of its meaning. Certainly formal appraisal systems represent a common approach, and most large organizations employ such devices, but not exclusively. There are a variety of other performance management tools that seek to achieve the same objective:  To connect employee performance to organizational objectives.

On its face, the formal appraisal system tends to focus on 12 month cycles. If no more were communicated than what would be part of this yearly process, we would have a number of important concerns.

• An individual performance problem affecting organizational productivity might be unaddressed in some cases for months before it was “discovered”;
• A pattern or trend in performance issues suggesting a work process flaw might be undetected, resulting in lost productivity;
• An employee’s dwindling performance might be undetected and therefore affect his or her ability to improve career development opportunities (e.g., chances for promotion; opportunities for training); and
• That same employee might, without earlier conversations, find his or her position in the organization to be in jeopardy before discovering his manager’s dissatisfaction with the apparent performance problems.

As a consequence, organizations almost always require that managers engage in much more frequent communication concerning individual and group performance beyond the formal appraisal responsibility that might also exist. In fact, a rule of thumb that many follow is that if a strength or weakness appears as part of the appraisal process (i.e., at the end of the year), that same notation should have been communicated to the employee at the time it first became apparent. In this case the appraisal form is a summation of the communications that would have occurred throughout the year, not the beginning of that conversation.

Examples

Sometimes a manager will observe excellent performance. How would you respond to the following situation?

Mary works with an insurance agency as a registered agent. Her contract with the agency requires that she interact effectively with the public. Part of that responsibility includes warmly welcoming any person who enters the office if Mary happens to be in that location at that time. One day you (Mary’s supervisor) notice that Mary greets an older man entering the office using a walker. Mary immediately engages the person with a greeting, offers to help in locating a seat and offers him a cup of coffee. She then sits with him and chats for a couple of minutes as he waits to meet with another agent in the office.

The likelihood is that at least a significant plurality of managers and supervisors would provide immediate and positive reinforcement to this particular employee with respect to her involvement with the customer. Many don’t. In some cases the argument is that “we pay them to perform well”. In other words, the fact that the employee receives a paycheck is reward enough; a manager is not obligated to say more. Providing some type of recognition at the time of this occurrence, however, helps to reinforce Mary’s choice to take time to interact at a personal level with the customer and represents a “reward” for excellent performance. If not mentioned contemporaneously with the event itself, it is rare that a supervisor will remember it months later at an appraisal meeting. In addition, even though Mary might not be looking for recognition, there are few employees who don’t appreciate that their efforts to excel are noticed.

Of course, there are opportunities to interact with direct reports concerning apparent performance problems. Consider the following example.

Fred had been working as an HR specialist for four years. One of his primary duties is to produce training reports for the more than 25 classes HR teaches every month. The reports include feedback data for each class, but results of assessment tools designed to measure both learning and performance improvements based on the training. For the past two months Fred’s reports have become increasingly less complete. You had returned both with margin notes for additional information. This month you received a report that was even less complete and in some parts almost unintelligible.

In this situation it is quite useful to expect a supervisor to schedule a meeting to discuss the apparent performance problem with the employee, identify its causes and help the employee determine alternative ways to correct the problem. These types of conversations sometimes – sometimes called “counseling sessions” or “performance meetings” – can help establish the reasons for the performance problem. It also allows the employee the opportunity to make corrections before it can continue to negatively influence the organization’s bottom line as well as the employee’s tenure with the organization.

Significance

Therefore, there are a number of reasons why more comprehensive performance management practices are important.

• It is simply unfair to create a formal, yearly appraisal process that holds staff accountable for behaviors which were not addressed at the time they first become apparent, allowing the employee an opportunity to improve.
• Relying on the “once-a-year” process renders praise a less powerful source of reinforcement of excellent performance than coupling that final opportunity with more timely expressions of gratitude and approval.
• Research indicates that an employee’s trust of the appraisal process, and by implication of that person’s supervisor, is enhanced when feedback occurs coincidentally with the behaviors that justify feedback.