2. Agenda
What the Experts Say About Performance
Appraisals
What Do You Think?
Performance Appraisals Versus Performance
Management… and Other New Practices
Conducting Effective Meetings About
Performance (and Other Difficult Conversations)
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4. Performance Appraisal Definition
A PERFORMANCE APPRAISAL IS:
One of those special human encounters
where the manager gets no sleep the night
before, and the employee gets no sleep the
night after.
—Thomas B. Wilson
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5. Overarching Goal
• To create and promote a workforce that can
achieve the organization’s mission to
provide the most value to its stakeholders
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6. Elements of Traditional Appraisals
• Goal Setting—Supervisors set performance
objectives or standards for individual employees;
• Measures—Tasks or levels of performance are used
to gauge whether person has achieved his/her goals;
• Feedback—Comparison of performance to goals is
usually provided at end of performance period;
• Performance Rating—Supervisor judges overall
performance and gives numeric rating;
• Merit Pay—Pay increase based on performance
rating and market price for position.
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7. Performance Appraisals in Your
Organization
• Are managers in your organization required
to conduct performance appraisals?
1 = Yes 2 = No
• Do you give performance appraisals, do you
receive a performance appraisal, or both?
1 = Give Appraisal 2 = Receive 3 = Both
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8. Appraisal Process Objectives
• Managers: Recognize and reward top performers.
• Employees: Obtain honest, timely feedback,
development and coaching.
• Compensation Managers: Ensure that dollars
allocated according to performance.
• Human Resource Executives: Identify top
performers and plan for their development and
succession.
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9. What’s Wrong With This Picture?
• Managers are usually uncomfortable with
appraisal process.
• Employees are not happy with the assessment
of their performance.
• Most organizations (90%) do not consider
performance appraisals to be effective.
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10. Myths Reality
• Appraisal process can • Often one function
effectively serve several undercuts the other (e.g.,
functions employees focus on pay)
• One-size-fits-all works
well for supervisors and • Different preferences in
employees coaching, receiving
feedback
• Ratings are motivating
• Ratings don’t provide
useful information and can
be demoralizing
• People withhold effort
without incentives • People are intrinsically
motivated to perform well10
when work is meaningful
11. Why Appraisal Processes Often Fail
• Appraisal process only operates for part of the year—
not meaningful if goals are not monitored.
• Ratings are based on managers’ opinions, only
include what managers remember.
• Managers avoid honest feedback to prevent conflict.
• Organizations try to meet too many objectives
(feedback, development, pay raises, etc.).
• Employees believe criteria are vague, subjective; can
be demoralized by ratings, especially when pay is
involved……
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12. Linking Pay to Appraisals—
A Good Idea?
• At least two dozen studies over the last
three decades conclusively documented
that people who expect a reward for
completing a task, or for doing that task
successfully, simply do not perform as well
as those who expect no reward at all.
—Harry Levinson
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13. Rewards or Punishment?
• Pay is not a motivator, but it can be a de-
motivator when it is inequitable
• Rewards can create conflict between
managers and staff, or among staff
members
• Rewards undermine interest because
artificial incentive cannot match intrinsic
motivation
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14. Merit Pay Increases and
Performance Appraisals
• Should merit pay increases be included in the
performance appraisal process?
• If the purpose is to provide feedback, encourage
development, probably not.
• If the purpose is to reward the individual—maybe.
• Merit pay increase should be given when
individual shows new capabilities over a sustained
period, rather than end-of-the-year appraisal.
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15. Remember Myers-Briggs
Anyone who supervises someone else should:
• Look carefully at the assumptions made about
motivation.
• Assess the degree to which carrot-and-stick
assumptions influence own attitudes.
—Harry Levinson
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16. What Do You Think?
• On a scale of 1 to 5, what do you think of the
performance appraisal process?
1 = Performance appraisals always meet these
objectives.
2 = They meet some of these objectives.
3 = They are a necessary evil.
4 = They could/should be improved if we continue
to use them.
5 = Performance appraisals should be eliminated
altogether.
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17. What Do You Think?
• Do appraisals encourage you to work harder?
1 = Yes, I work harder because of the appraisals.
2 = Yes… at least for the the month before
or after my appraisal.
3 = No, my effort would have been the same with
or without an appraisal.
4 = No, I find performance appraisals
discouraging and ineffective, which impacts
my work effort.
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18. So What Do We Do Instead?
Performance Management and
Other New Practices
19. Typical Process Ideal Process
Highly subjective Explicitly defined
Unilateral (only from Mutually understood,
the manager’s with multilateral
perspective) communication
Little focus on future Strong development
capacity focus
Uncertain link to Grounded in business
business success success drivers
drivers
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20. SMART
• Specific—Goals and criteria should be clearly defined;
• Meaningful—Evaluation process should impact
behavior;
• Achievable—Goals should be realistic; process should
provide incentive to perform beyond expectations;
• Reliable—Process should achieve desiredobjectives;
• Timely—Performance reviews and feedback should
occur more frequently than once each year.
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21. Performance Management
• Performance management is the process of
creating a work environment in which
people are enabled to perform to best of
their abilities.
• Begins when a job is defined and ends
when the employee leaves your
organization.
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22. Performance Management
at the Organization Level
• Clearly define and communicate the
organization’s mission, strategies, and
performance goals.
• Provide appropriate training for managers on
giving feedback.
• Ensure employees receive ongoing feedback and
appropriate training.
• Align job descriptions with organizational goals.
• Conduct exit interviews to understand why valued
employees leave the organization.
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23. Performance Management
at the Manager Level
• Involve employees in goal-setting process; goals
should be flexible enough to reflect changing
workplace conditions.
• Clearly articulate performance metrics used to
measure employee’s success in meeting agreed-
upon goals.
• Provide training to employees to strengthen
performance and advance career.
• Provide ongoing “on the job” feedback.
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24. Performance Management
at the Employee Level
• Develop performance goals with his/her manager.
• View manager as a coach or mentor rather than
someone who passes judgment.
• Be receptive to feedback.
• Don’t rely on manager to provide all the feedback
—employee is also responsible for providing
information on his/her performance.
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25. Other New Approaches
• Evaluations in new systems are not
conducted for raises, promotions, or
bonuses—instead for development and
communication.
• Most important aspect in all is multilateral
communication between employee,
managers, and others, rather than one-way
communication.
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26. Examples
• Pass/fail systems or no ratings at all
• Peer reviews
• Self-reviews
• Upward assessments
• 360-degree feedback
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27. Owning the Solution
If people do not participate in and “own” the
solution to the problems or agree to the
decision, implementation will be
halfhearted at best, probably
misunderstood, and more likely than not
fail.
—Michael Doyle in forward to Kaner, Sam Facilitator’s
Guide to Participatory Decision Making New Society
Publishers, Gabriola Island, BC 1996
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28. Recapping the Key Points
Expectations should be linked to business
objectives;
Performance goals should be established;
People should be coached, mentored—
employees should be motivated; and
Assessments relying solely on supervisor’s
perspective will have limited value.
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29. Are You Using Any New
Techniques?
1 = Yes, and it’s more effective than the traditional
appraisal process.
2 = Yes, we’re still evaluating the effectiveness.
3 = Not yet, but we’re thinking about it…
4 = No, we’ll probably always use the traditional
appraisal process.
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31. Four Stages of Difficult
Conversations
1) Prepare
2) Initiate conversation
3) Explore their story, then yours
4) Collaborate on resolution
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32. Stage 1: Prepare
• Consider your objectives and approach
• Conduct research—if you’re the manager, review
the employee’s file, outline some topics and
talking points, do a mental walk-through.
• Employee should consider their performance as
well and prepare notes or jot down concerns and
questions.
• Be open to multiple perspectives
• Adopt a positive mindset (see next slide)
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33. Choose a Positive Context
• When a conflict is framed in a negative
context, the focus is on power, and will
likely result in a winner and a loser.
• Focusing on improvements instead of
mistakes can defuse the tension.
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34. Stage 2: Initiate Conversation
• Invite conversation and share your purpose
• Key practice: describe the issue/problem as
a difference in perspective
• Avoid problem solving during initial stage
of conversation
• Acknowledge feelings, which are frequently
core issues, before attempting to solve
stated problems
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35. Stage 3: Get Their Story--
Then Tell Them Yours
• Start with their story
• Don’t assume that you know their story
• Don’t push back—Listening does not imply
agreement
• Express your views and feelings after their
story is finished
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36. Your Story
• Start with the most important points
• State what you mean clearly to avoid
assumptions
• Share how you formed conclusions
• Avoid words like “never” or “always” or
“fault”
• Present your story as “your truth” not “the
truth”
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37. Stage 4: Collaborate on
Resolution
• Invite the other person to help identify solutions
• Invite the other person to come back if attempted
resolution is not successful
• Remain hopeful that mutually acceptable solution
is possible
• Recap major points, be sure to end on encouraging
note
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38. Key Sources
Wilson, Thomas B. Innovative Reward
Systems For the Changing Workplace,
McGraw-Hill, New York 1994.
Flannery, Thomas P., et. al., People,
Performance, and Pay, The Free Press, New
York 1996.
Various articles published on human
resource websites
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Hinweis der Redaktion
Today, obviously, I’m going to talk about performance appraisals. We’re getting to the end of the year, which is when many companies and organizations start their performance appraisal process, so I hope that this presentation is timely, if nothing else. In my presentation, I’m going to summarize what human resource experts say about performance appraisals—I’ll touch on what managers think, how employees react, and the overall effectiveness of the performance appraisal process. Throughout the presentation, I’ll be asking you some questions using these voting devices, which I”ll explain in a bit. I’ll also talk about some new practices that human resource experts are advocating, and if we have time, I’ll conclude with a few slides that focus on how to deal with difficult conversations—they’re soft skills that most everyone has probably heard, but they’re always worth hearing again.
Performance appraisals are very common—performance appraisals are given in approximately 80% of workplaces. I personally do not give performance appraisals at this point—I supervised two work study interns, who I had to evaluate annually, but most of my experience comes from the employee side.
A number of myths lead organizations to continue using the appraisal process…
When goals aren’t monitored year-round, the whole appraisal process is not taken seriously. Managers often lack sufficient information to judge performance accurately, so they have to rely on their opinions. Managers avoid giving honest critiques because they don’t want any conflict. Often times managers dread the appraisal process as much as employees do, so they procrastinate and don’t prepare adequately. Employees can be demoralized by ratings—a study I read cited a statistic that said that 80% of people see themselves in the top 25% of all performers. So 55% will be really demoralized by honest feedback about where they stand.
Managers are creating a workplace in which people feel controlled, not an environment conducive to exploration, learning, and progress.
Should merit pay be included in the performance appraisal? It depends on what you want the performance appraisal process to do…
Managers should be aware of what motivates their people—there are many kinds of ways to “reward” someone. In additional monetary rewards, managers can use verbal/social reinforcements (praise at a staff meeting, or in a one-on-one conversation), symbolic or tangible rewards (a plaque, or even a gift certificate to a restaurant or movie theater), work-related rewards (such as a promotion, special training opportunities).
Pass/fail systems rather than individual performance ratings, or no ratings at all, to emphasize feedback and future improvement—ratings, as mentioned before, can be demoralizing, so assessments that focus on qualitative feedback are becoming more popular. Peer review systems rather than manager-driven systems—peer reviews often have a high level of worker acceptance and involvement; they tend to be task-relevant and accurate. By helping peers to understand each others’ work and airing grievances in a non-threatening manner, peer reviews may also help people to get along better. This means better performance overall for the organization. These work best if all parties know that the reviews will not be used for setting pay or making decisions about promotions or disciplinary actions. Self-assessments are based on the idea that employees are the most familiar with their work. These self-reviews change the manager’s role to a counselor rather than a judge; this type of process can increase an employee’s commitment to improving performance. In organizations where managers are supervising large groups, upward assessments can be a useful tool. Upward assessments show areas where managers can improve performance—and this can increase their credibility with employees and improve communications. Managers (like employees) must be helped to accept and deal with the results of the assessment. 360s are the most comprehensive and costly type of appraisal—it includes self-ratings, peer review, and upward assessments. Feedback is sought from everyone, including customers or clients. Although it’s costly, this type of evaluation generally has high employee involvement and credibility and may have the most impact on an employee’s behavior or performance.
Difficult conversations are often a precursor to collaboration: they are a way to build trust. One way to make difficult conversations less difficult is to think about them in five stages. The first two stages should occur even before the conversation takes place. These are to, first, prepare for the conversation, and second, to imagine a resolution. Third, you want to invite the other person to have a dialogue, in which you’ll listen to their perspective and then explain yours. Finally, you should use this conversation to begin to collaborate on achieving a mutual resolution.
Don’t initiate a difficult conversation without doing sufficient preparation. Planning ahead of time allows you to imagine and practice for the “worst case scenario” Be open to the possibility that there are usually multiple realities: be curious about the other person’s version. They might know something that you don’t. Conflict can result when there are differences in 1) information; 2) observation; 3) interpretation; or 4) conclusions Choose a positive mindset- you have a choice about your mindset. Employee should prepare to
It is important to have a positive mindset so that the other participant does not feel like they are on the losing end of a power struggle. Focusing on potential improvements or what can be achieved will help defuse the tension during the conversation. It is important to remember that one objective of the conversation is to help improve the relationship, cooperation, and overall performance. Remaining open to the other person’s suggestions will go a long way toward achieving this objective.
When you initiate a difficult conversation, you want to explain your purpose and make sure that the other person feels comfortable enough to have a dialogue. Frame your points as things you’ve noticed from your perspective and acknowledge the other person’s feelings or observations before trying to resolve any issues. Example of different stories: I notice that we have different timelines for doing the dishes or I notice that our meetings are starting consistently 10 minutes late.
The biggest impediment to problem solving is blame; too much focus on figuring out who to blame can result in the problem being ignored Whenever you hear someone say something like “You’re lying!” You should automatically be curious and ask questions. Curiosity about the other person’s story will help you understand the situation more fully, and asking questions will show them that you’re trying to understand their perspective. Questions you should ask yourself include: I wonder what part of this is most important to them? What could bring us together on this issue?
Start with the points that you most want to get across and be clear about how you formed your conclusions; avoid extreme words like always or never; and remember to communicate to the other person that you are open-minded to their side of the story. Remember to be prepared for negative reactions. If you’re the manager, when you talk about poor performance, the employee may get upset—they could be angry and hostile, or they could cry or have some other kind of emotional outburst. If the appraisal session deteriorates, terminate it and reschedule the meeting. I think that as an employee, if you can tell you’re about to have a breakdown, it might be a good idea to say that you need some time to digest what the manager has said so that you can respond most effectively.
Be aware that the employee may lob a few negative comments at this point. Make sure that you’ve acknowledged their concerns and invite them to help identify improvements. Let them know that you are open to meet again if an attempted resolution does not work. Or if you cannot work through an issue successfully during the first conversation, convey that you are open to meeting again until you are able to achieve a mutually acceptable resolution. You might say, “I’m really hopeful that we can talk through this issue.”