Defining Performance & its

Measurement
PMS includes measuring both the behavior as well as results,
whereas performance is only about the behavior of an employee.
Behavior is characterized as being performance when it is-
1. Evaluative
2. Multidimensional
 Factors that limit performance

 ORGANIZATIONAL FACTORS  INDIVIDUAL FACTORS

- Failure to communicate -Lack of KSAs
performance expectations - Lack of effort or attention
- Unrealistic expectations - Poor judgment
- Lack of performance feedback - Personal problems
-Lack of resources
- Failure to train and instruct
- Failure to counsel and
accommodate
- Hostile environment
- Harassment
 Performance Facilitation
 The process of working toward performance expectations, by
• Providing necessary support systems to perform
• Analyzing performance on an ongoing basis
• Reinforcing good effort
• Counseling for mid-course correction as required
 Objectives
• Actualizing the performance plans
• Manage performance as a relationship – keep employees focused
continually
• Creating a challenging and satisfying environment
• Institutionalize high performance
 Steps in the process
 Analyzing performance on an ongoing basis
 Keeping track of the progress toward a task / KPA
 Noting the facilitating and inhibiting factors
 Obtain periodic comments from the employee for review purposes
 Reinforcing efforts in the right direction
 Encourage and provide support systems
 Bring about ownership and commitment in the employee
 Removing performance deficiencies
 Counsel periodically, if mid course correction is required
 Review conditions and reset goals if required
 STAR PERFORMERS
 Heroes : Drive themselves and their subordinates too hard
 Meritocrats: Believe that good ideas prevail solely on their merit
 Bulldozers: Ride roughshod over others, while getting a lot of
work done
 Pessimists: Emphasize only the downside
 Rebels: Automatically fight convention and authority
 Home-run hitters: Try to do and get too much done too soon

(Waldroop and Butler, 2000)

The Boss asked me for the performance appraisal of Bob Smith:
* Bob Smith, my assistant programmer, can always be found
* hard at work in his cubicle. Bob works independently, without
* wasting company time talking to colleagues. Bob never
* thinks twice about assisting fellow employees, and he always
* finishes given assignments on time. Often Bob takes extended
* measures to complete his work, sometimes skipping coffee
* breaks. Bob is a dedicated individual who has absolutely no
* vanity in spite of his high accomplishments and profound
* knowledge in his field. I firmly believe that Bob can be
* classed as a high-caliber employee, the type which cannot be
* dispensed with. Consequently, I duly recommend that Bob be
* promoted to executive management, and a proposal will be
executed as soon as possible.

A memo was soon sent following the letter:

That idiot was reading over my shoulder while I wrote the
report sent to you earlier today. Kindly read only the odd
numbered lines (1, 3, 5, etc...) for my true assessment of
him.
 Performance management & human capital
management (HCM)
 HCM is concerned with obtaining, analyzing & reporting on data that
inform direction of people management, strategic, investment &
operational decisions at corporate level and at front line management.
 Performance management data can be used to:
- Demonstrate organizational ability to raise competency levels
- Assess how long it takes for a new employee to give optimum performance
- Provide feedback on development programs including induction, coaching
& mentoring in terms of increased performance
- Demonstrate success of internal recruitment programs
- Tracks skill levels and movement in any skill gap in the organization
- Match actual behavior against desired
- Assess commitment to values and mission
- Assess understanding of strategy & contribution
 * Performance management & talent management
* Developing a High performance culture (HPC)
 HPC is in which achievement of high levels of performance is a way of life.
Characteristics include:
- Management defines what it requires as performance
- Alternative work practices in use are job redesign, autonomous work teams,
flexible working etc.
- People know organizational expectations- understand their goals &
accountabilities
- Strong fit between job & people’s capabilities
- People are empowered to maximize their contributions
- Promoting positive attitudes that result in an engaged & committed workforce
- Performance management processes are aligned to business goals to ensure
that people are engaged in achieving agreed objectives and standards
- A pool of talent ensures a continuous supply of high performers in key roles
- People are valued and rewarded according to their contribution
- People are involved in developing high performance practices
High performance work systems (HPWS)
 High performance cultures can be developed through a HPWS which is “an
internally consistent & coherent HRM system that is focused on solving
operational problems & implementing the firm’s competitive strategy”,
because of the following features:
1) links the firm’s selection and promotion decisions to validated
competency models
2) It is the basis for developing strategies that provide timely & effective
support for the skills demanded to implement the firm’s strategies.
3) Enacts compensation & performance management policies that attract,
retain and motivate high performance employees.
Performance management contributes to the development of a high
performance culture through a HPWS by defining what performance is &
how managers and their teams should achieve it. How performance can
be measured and steps taken to monitor results in comparison with
expectations. Means of getting high performance are also provided.
 Measuring Performance
 By the means of measures or metrics
 Choice of measures can be categorized as key performance
indicators (KPIs), scorecards or the balance scorecard and
communicated by means of dashboards.
 4 principles governing the use of performance measures or
metrics (Quinn, 2003):
1. Measure the right things- one’s directly contributing to an
organization’s performance
2. Clearly communicate what will be measured
3. Consistently apply the measures- to all departments/units
4. Act on the measures- constructively.
 Types of measures
 Financial measures cannot evaluate factors like innovation,
employee engagement, employee relations and level of employee
and customer satisfaction. These factors are sometimes referred as
the leading indicators as they inform management of the
progress made on initiatives undertaken to improve performance.

 To identify lead measures it is necessary to establish key factors

that drive performance- the KPIs that form the basis of
performance monitoring and measurement systems

 Jack Welch, quoted by Kramer (2004)- 3 most important things

one needs to measure in business are customer satisfaction,
employee satisfaction and cash flow.
Measures
 KPIs- are the results that are crucial to achieve high performance & provide
basis for setting objectives & measuring performance.
- It is a special kind of metric, measures strategically important things
for the organization such as sales per square meter, added value per
employee, rate of stock turnover cost per unit of output etc. Range
of KPI is between 6 and 12.
 Score cards- record performance related to a set of KPIs. Balanced
score card helps to align employees’ individual performance with the
overall strategy.
 Dashboards- is a graphical display, designed to convey key
performance measures on an organization’s intranet system to a wide
audience so that they can be assimilated and acted upon easily &
swiftly. They use dials, “traffic light” displays and graphs to make
performance information available and when required.
Teams & Performance
 Factors affecting team performance-
 Clarity of team goals in terms of expectations & priorities
 How work is allocated to teams
 How team is working (processes) in terms of cohesion, ability to
handle internal conflict and pressure
 Extent to which the team is capable of managing itself, setting goals
& priorities, monitoring performance
 Quality of leadership-even self managed teams need a sense of
direction that they cannot necessarily generate by themselves;
 Level of skill possessed by individual team members;
 Systems & resources support available to the team.
PERFORMANCE MEASURES FOR TEAMS WILL BE RELATED TO
PURPOSE OF THE TEAM & ITS PARTICULAR OBJECTIVES
AND STANDARDS OF PERFORMANCE.
Team performance management processes
 Agree objectives
 Formulate plans to achieve objectives
 Implement plans
 Monitor progress
 Review and assess achievement
 Redefine objectives and plans in the light of the review
TEAM PERFORMANCE REVIEWS
1. Generate feedback reviews- progress of team as a whole
2. Work reviews- of the team & members contribution
3. Group problem solving
4. Update objectives- review of new requirements, opportunities or
threats; amendment & updating of objectives and project plans.
Determinants of performance

Performance =
Declarative Knowledge
X
Procedural Knowledge
X
Motivation
 Implications for Addressing
Performance Problems

 Managers need information to accurately identify

source(s) of performance problems
 Performance management systems must
 Measure performance
AND
 Provide information on SOURCE(s) of problems
 Factors Influencing
Determinants of Performance

 Individual characteristics
Procedural knowledge
Declarative knowledge
Motivation
 HR practices
 Work environment
 Performance Dimensions:
Types of multi-dimensional behaviors

 Task performance
 Contextual performance
Pro-social behaviors
Organizational citizenship
Task performance

Activities that
 transform raw materials
 help with the transformation process
 Replenishing
 Distributing
 Supporting
Contextual performance
Behaviors that
 contribute to organization’s effectiveness
and
 provide a good environment in which task
performance can occur
 Differences Between
Task and Contextual Performance
 Task Performance  Contextual
 Varies across jobs Performance
 Fairly similar across jobs
 Likely to be role
prescribed  Not likely to be role
prescribed
 Influenced by
 Abilities  Influenced by
 Skills  Personality
 Why Include Task & Contextual Performance
Dimensions in PM system?

1. Globalcompetition
2. Teamwork
3. Customer service
4. Supervisor views
Job Performance in Context
A performer That
Engages in
(individual or In a given produces
certain
team) with situation various
certain traits behaviors
results

TRAIT BEHAVIOUR RESULTS

Approaches to Measuring Performance

 Trait Approach
- Emphasizes individual traits of employees
 Behavior Approach
- Emphasizes how employees do the job
 Results Approach
-Emphasizes what employees produce
 Trait Approach
 Emphasis on individual
 • Evaluate stable traits
Cognitive abilities
Personality
 Based on relationship between traits & performance
Trait Approach (continued)
 Disadvantages
 Improvement not under individual’s control
 Trait may not lead to
 Desired behaviors or
 Desired results
 Behavior Approach
 Appropriate if
Employees take a long time to achieve desired
outcomes
Link between behaviors and results is not obvious
Outcomes occur in the distant future
Poor results are due to causes beyond the
performer’s control
 Results Approach
 Advantages:
• Less time
• Lower cost
• Data appear objective
 Most appropriate when:
• Workers skilled in necessary behaviors
• Behaviors and results obviously related
• Consistent improvement in results over time
• Many ways to do the job right
 Choose Behavioral Measurement
System

 Comparative system
 Compares employees with each other
 Absolute system
Compares employees with pre-specified
performance standard
Comparative system

 Simple rank order

 Alternation rank order
 Paired comparisons
 Forced distribution
 Advantages of Comparative Systems

 Straightforward – can check relative position of each

employee
 Better control for biases and errors found in absolute
systems
Leniency
Severity
Central tendency
Disadvantages of Comparative Systems
 Rankings may not be specific enough for
 Useful feedback
 Protection from legal challenge
 No information on relative distance between employees
 Specific issues with forced distribution method
Assumes normally distributed population
 Discourages contextual performance
During times of downturn this could de-motivate
marginal performers
Absolute Systems

 Essays
 Behavior checklists
 Critical incidents
 Graphic rating scales
 Essays
 Advantage:
Potential to provide detailed feedback
 Disadvantages:
 Unstructured and may lack detail
 Depends on supervisor writing skill
 Lack of quantitative information; difficult to use in
personnel decisions
Behavior checklists
 Advantage:
Easy to use and understand
 Disadvantage:
Scale points used are often arbitrary
Difficult to get detailed and useful feedback
 Performance Measurement
 Absolute systems
• Critical Incidents – Report of specific employee
behavior (effective and / or ineffective)
• Allows focus on specific and actual behavior rather than
traits
• Time consuming and difficult to attach quantitative value
• Need to continually write down the behaviors
• Adjective rating scale - list of factors at the workplace
(e.g, quality of work, knowledge, initiative etc.), employee
rated on a continuum (e.g., unsatisfactory to satisfactory)
• Allow for quantitative analysis
• Less time consuming
• Issues of ambiguity in administering, consistency in
interpretation by both parties
 Graphic rating scales: BARS

 Behaviorally Anchored Rating Scales (BARS)

Use critical incidents as anchors
Involves multiple groups of employees in
development
Identify important job elements
Describe critical incidents at various levels of
performance
Check for inter-rater reliability