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Evaluating Performance - Measuring Results and Behaviour

Dr Bhavana Adhikari

Results approach Measuring performance Behavioural approach Measuring performance

Recall from previous lecture

Performance planning Discusses 3 aspects


Results
Key accountabilities Objectives Performance standards

Behaviour Development plans

Measuring Results

Measuring results
Key accountabilities What are the different areas on which the employee is expected to focus (broad areas) Objectives Within each area what are the expected objectives (statements of important and measurable outcomes) Performance standards How do we know how well the results have been achieved (yardstick used to evaluate how well

employees have achieved each objective)

Determining accountabilities
Collect

information about the job Job description (result of job analysis) and organisation goals Job description gives information on tasks performed

Determining accountabilities
Related

tasks grouped together form clusters or accountabilities (broad area for which employee is responsible for producing result) After establishing key accountabilities determine the relative degree of importance

Determining accountabilities

How to determine relative degree of importance?


1. What % of time is spent in performing each accountability 2. If accountabilities were performed inadequately would it affect the orgn/ unit goal significantly 3. Is there a significant consequence of errorCould it contribute to injury or death, serious property damage and loss of time and money

Determining accountabilities

Accountability statement should include


list of accountabilities Consequences of performing them inadequately Consequences of error % of time spent on each accountability

Determining accountabilities
Example: One of the accountabilities for training specialist Team building consultation Assists company leaders in designing and delivering their own team building sessions and other interventions. This is relatively important to the successfulness of teams. Mismanagement of this function will result in teams not meeting their full potential and wasting time and resources on conducting their team sessions (10%of time)

Determining objectives

After determining accountabilities determine specific objectives Statements of an important and measurable outcome that contribute to accountability Help employee guide their effforts

Determining Objectives
Purpose:

to identify

Outcomes
Limited number Highly important

When achieved
dramatic impact on overall organization success

Determining objectives
1. 2. 3. 4. 5.

Objectives must have the following characteristics Specific and clear Challenging ( not impossible) Agreed upon Significant Impact overall success of orgn Prioritised- Prioritised and tackled one by one

Determining objectives
Time bound 7. Achievable- Employees should have the skills trg and resources 8. Fully communicated Not only to manager and employee in question but other orgn members who may be related and effected by the objectives 9. Flexible- Dynamic business environment
6.

Determining objectives
10.

Limited in number Too many objectives difficult toachieve Too few May not make a sufficient impact 5-10 objectives per review period is manageable but can change based on

Determining objectives
Example: Team building consultation Objectives Deliver necessary team training sessions throughout the year within budget with an acceptable satisfaction rating

Determining performance standards


Next step To define performance standards Yardsticks to help determine the extent to which objectives have been achieved Help raters determine the level of performance achieved

Determining performance standards

Following aspects are considered


Quality Quantity Time

Determining performance standards

Quality
How well the objective has been achieved Can include
Usefulness Responsiveness Acceptance rate Error rate Feedback from users and customers

Determining performance standards

Quantity
How much has been produced, how often and at what cost

Determining performance standards

Time
Due date, cycle time, deadlines, adherence to schedules

Determining performance standards

Thus performance standards must include


Action, Desired results Due date Quantity/ Quality indicator

Determining performance standards

Example of performance standard Reduce overtime from 150 hours / month to 50 hours/ month by December 1, 2007 at a cost not to exceed Rs 1,20,000

Determining performance standards


Mostly standards describe fully satisfactory performance But we can create standards to describe

Minimum performance Outstanding performance

Determining performance standards


Example Minimum performance standard Reduce overtime from 150 hours / month to 75 hours/ month by December 1, 2007 at a cost not to exceed Rs 1,20,000 Outstanding performance standard Reduce overtime from 150 hours / month to 40 hours/ month by October 1, 2007 at a cost not to

Determining performance standards


Characteristics which useful performance standards need to have
1.

2.

Related to postion based on jobs key elements and tasks and not individual traits or person to person comparisons Concrete , specific and measurable
Observable and verifiable No dispute over whether and how well they have been met

Determining performance standards


3.

Practical to measure Created taking into account


Cost Accuracy Availability of needed data

3. 4. 5.

Meaningful Measure what is relevant Realistic and achievable Reviewed regularly so that remedial actions can be taken

Determining performance standards


Example Team building consultation Designed and delivered 95% 0f the scheduled team building sessions with a cost not to exceed Rs 30000 for an 85% satisfaction rating by December 2007

Measuring Behaviours

Measuring Behaviors: Overview


Identify

competencies Identify indicators Choose measurement system

Measuring Behaviour
Includes

assessment of competencies Competencies are measurable

Identify Competencies
Competencies are Measurable clusters of KSAs
Knowledges Skills Abilities

That are critical in determining how results will be achieved Example- Written or oral commn, creative thinking

Types of Competencies
Differentiating

Distinguish between superior and average performance


Threshold

Needed to perform to minimum standard

Types of Competencies
For

example for the position of IT Project Manager


a differentiating competency is process mgt ( ability to manage project related activities) A threshold competency is change management

Measuring Behaviour
Indicators

To understand the extent to which an employee possesses a competency we have indicators An indicator is a behaviour which if displayed shows that the competency is present A competency can have several indicators We dont measure the competency directly but we measure indicators

Measuring Behaviour
For

example two competencies that define good leadership


Consideration (degree to which the leader looks after the well being of his followers) Initiation structure (degree to which the leader lays out task responsibilities)

Measuring Behaviour
Five

indicators whose presence would indicate the existence of consideration competency


Supports subordinates projects Asks about the well being of employees lives outside work Encourage subordinates to reach goals Gets to know employees personally Shows respect for employees work and home lives

Necessary Components for Describing Competencies


Definition Description of specific behaviors


When competency demonstrated When competency not demonstrated

Suggestions for developing the competency


Specific behaviours that are likely to occur when someone does not demonstrate a competency effectively List of suggestions for developing the said competency

Choose Measurement System


Comparative

system

Compares employees with each other


Absolute

system

Compares employees with pre-specified performance standard

Comparative system
Base

measurement on comparing employees with one another


Simple rank order Alternation rank order Paired comparison Forced distribution

Comparative system
Simple

rank order

Employees are simply ranked from best performer to worst performer

Comparative system
Alternation

rank order

Supervisor initially lists all employees Supervisor selects the best employee (#1), then the worst performer (#n), then the second best (#2) then the second worst (#n-1)

Comparative system

Paired comparison
Comparisons are made between pairs of employees to be evaluated Performance of each employee is compared with every other employee No of comparisons n(n-2)/ 2 where n is the number of employees to be evaluated The better of the two is chosen Ranked based on number of times he or she was rated better

Comparative system

Forced comparison
Employees are distributed according to an approximate normal distribution
20% above expectation 70% meeting expectation 10% below expectation

GE follows this approach Enables managers to concentrate on low performers Asked to improve or leave

Comparative system
Forced

comparison

Drawbacks
Assumes that performance is normally distributed, may not be true Discourages employees from engaging in contextual performance behaviour Important to consider orgn culture before implementing it- unhealthy competitivenessmay cut into the bone of the orgn

Advantages of Comparative Systems


Easy

to explain Straightforward Better control for biases and errors found in absolute systems
Leniency ( giving high scores to most employees) Severity ( giving low scores to most employees) Central tendency (not giving any above expectations or below expectation ratings)

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

Absolute Systems
Essays Behavior

checklists Critical incidents Graphic rating scales

Essays

Supervisors write essays describing each employees strength and weaknesses and making suggestions for improvement 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

Consist of a number of behaviour statements which are indicators of various competencies Supervisor checks the appropriate statement Supervisors are mere reporters than evaluators of employee behaviour Because each behaviour is present to some extent a scale is also provided
Each response is weighted Overall score is computed

Behavior checklists
The employee shows respect for rules and regulations
1 Never 2 Sometimes 3 Often 4 Fairly often 5 Always

Behavior checklists

There is an assumption that distance between anchors is the same Widespread popularity 7 point, 5 point, 3 point scale 5 point scale generally most suitable, less complex than 7 point scale, more motivating than 3 point scale because employees believe it is more doable to move one step on a 5 point scale rather than a 3 point scale Careful while choosing anchors Anchors of frequency Anchors of amount Anchors of evaluation Anchors of agreement

Behavior checklists
Advantage:

Easy to use and understand


Disadvantage:

Scale points used are often arbitrary Difficult to get detailed and useful feedback

Critical Incidents method


Critical

behaviour account for the difference between doing a job effectively and ineffectively Gathering of information about different situations (specially those when employees were effective or ineffective in accomplishing jobs)

Critical Incidents method


Limitations

Collecting critical incidents Very time consuming Not possible to quantify

Critical Incidents method


Different variations of critical incidents method Summarising critical incidents and giving them to supervisors in the form of scales

During m/c breakdown was able to keep up production level Strongly agree Agree Undecided Disagree Strongly disagree

Graphic rating scales


Clear

meaning for each response category Consistent interpretation by outside readers Supervisor and employee should have same understanding of rating

Graphic rating scales: BARS improvement

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

Graphic rating scales: BARS improvement

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

Characteristics which useful performance standards need to have


1.

1.

2.

3.

Practical to measure-Should take into account cost, accuracy and avalability of data Meaningful- Relevant to the purpose of the job, to the achievement of orgn objectives and mission Realistic and achievable Employees should be able to reach the stds within the specified time frame Reviewed regularly Regular information

Summary

Measuring Results
Identify accountabilities Set objectives Determine standards of performance

Measuring Behaviors
Identify competencies Identify indicators Choose measurement system

Activity Creating BARS- based graphic rating scales for evaluating business students performance in team projects

Solution

1. Competencies: Team work: Ability to work in a team to finish all project deliverables on time and according to instructions. Assists others as necessary and constantly seeks to further relationships with team members. Failure to develop team work will result in reduced team effectiveness due to lack of communication and cooperation between team members. Business knowledge: Aware of current business trends and applies relevant business research skills to projects at hand. Always learning new skills, staying current on business news and talking with business professionals. Failure to develop business knowledge will result in a decrease in the quality of work produced by the team. Communication: Ability to articulate verbally or through written communication ideas on project deliverables. Use of correct grammar, professional presentation, and clear and concise messages characterize good communication. Failure to communicate well will result in the decreased performance of the team, because team members will no longer understand ideas put forth

2. Behavioral Indicators: Team work o Friendly environment exists o Team members input is accepted o Offers to help other team members when necessary Business knowledge o Student offers input when group is discussing business problems o Actively researches solutions presented o Reads business news sources on a daily basis to stay upto-date on business trends Communication o Clearly articulates points in meetings o Uses correct grammar and word usage in written communications o Professionally presents ideas and findings in project presentations

Summary

Measuring Results
Identify accountabilities Set objectives Determine standards of performance

Measuring Behaviors
Identify competencies Identify indicators Choose measurement system