Guide to Performance Management

Performance management is the foundation for employee performance and engagement. Performance management is larger than the annual performance review. The process includes setting clear and specific expectations, and providing specific and ongoing feedback both informal and formal. When elements of Performance Management are completed in a thoughtful and coherent manner, with active engagement of both manager and staff member, the results for all parties (including the University as a whole) are very positive.

This critical dialogue between managers and their staff members sets the platform for ongoing coaching, and ultimately the final performance appraisal, at the end of the fiscal year.

What’s in it for you to work at being a better performance manager?

• You are able to consistently ensure that your team is working toward the University’s and your school or department’s strategies and goals.
• You are confident that you are being fair and consistent with your staff members.
• You have solid data and observations to use as the basis for recognition and reward decisions.
• You have created an environment in which people can grow and develop their skills – enhancing their own capabilities and their contribution and commitment to the University.

Step 1: Planning Performance

Establish Performance Focus

It is important to focus the performance plan on those elements or actions that you want the staff member to spend his or her time on. There are usually two distinct components to the performance focus:

Job Role: The day-to-day functional responsibilities of the staff members job. Start with the job description if you have one. If not, work with the staff member to identify the five to seven key things that comprise the staff member's job. concentrate on what the person does generally, for example "develops..., maintains..., manages...", etc. If your list is long, combine the elements that produce the same output. Select as may areas of focus as you think are manageable.

Special Projects or Assignments: Often staff members will be assigned large projects that are part of their annual performance goals. These projects are usually related to the staff member's job role, but focus on initiatives larger than completion of day-to-day tasks. Special projects could include things like documentation of new procedures, finding ways to improve a process, or implementing new systems.

Articulate Performance Goals

Your role as the Supervisor of others is to identify and communicate your department's overall objectives to your staff, and translate them into individual objectives.

Discussing and reaching agreement on objectives at the beginning of the cycle, in addition to providing periodic feedback and modifications as needed, will lead to a successful end of the cycle appraisal discussion with minimal anxiety and no suprises.

The number of goals (typically 3-5 for each individual) should reasonably reflect the most important accomplishments required for success. Consider the work to be done, and the desired result. Describing the goals using the three elements below will increase the probability of you and your staff member having the same understanding of the goal.

Outcome: An outcome describes what needs to be achieved. Outcomes will vary in scope. Some performance goals may be single tasks. Other performance goals may be large scale projects. For example: To improve the resopnse time required for student inquiries.

Measurement: the measurement describes how both you and your staff member will describe the work to be done and assess whether the goal has been successfully completed. For example: Reduce the response time required for student inquiries from the current 10.5 hours to 7.5 hours.

Timeframe: The timeframe establishes a specific target date for the results to be achieved. Establishing a clear timeline enables the staff member to set appropriate priorities when completing multiple tasks. It also avoids differing assumptions between staff members and managers about the priority of the task. For example: Reduce the response time required for student inquiries from the current 10.5 hours to 7.5 hours by the end of the fall semester.

Questions to ask yourself when writing goals:

• How does this goal support school or department goals?
• What do you expect to be accomplished by the end?
• Why is this important?
• Who does this benefit?
• Who is involved?
• Due date?
• How? (action steps)
• How will you know when the objective is achieved? (measures/observations/completion/accuracy)
• Is there any room for misinterpretation on the part of the staff member?

Align Performance Goals with the School/Department Goals

As a manager it is your responsibility to communicate clearly to your staff the relevance and alignment of the performance goals you just articulated with the higher level goals of the school or department (or your own performance goals). The main questions to ask yourself are:

• Do the goals that I've just articulated for my staff member link to the overall goals of the school/department in a clear way?
• Will my staff see how their work contributes to the goals of the school or department?

Build and Confirm the Plan

The extent to which you detail the specific actions you expect your staff member to take will depend on the requirements of your school or department performance management process, and your assessment of the staff members' current performance on tasks similar in nature to the defined goals.

For staff members with lower current performance levels, you will want to have a direct role in specifying the actions required to meet the performance goals. Staff members with higher levels of performance will be able to develop their plans more independently.

The probability of goals being achieved increases significantly with detailed planning. Consider who should own building the action plan. Whether you, the staff member, or both of you build the plan, it is the manager's responsibility to ensure that a viable plan is established.

Key Points to Remember

• Effective performance planning considers both the day-to-day job focus as well as project-oriented goals.
• Performance goals should be stated clearly and succinctly. Both the staff member and manager should have a clear picture of the expected outcome, how success will be measured, and the timeframe in which the work will be done.
• Managers should be able to describe to staff members how their individual work contributes to the goals of the school or department.
• The probability of performance goals being achieved increases with detailed planning.

 

Step 2: Coaching Performance

Determine Coaching Requirements

Coaching is providing ongoing feedback to your staff members and can be either positive or constructive in nature. As a manager you have a responsibility to provide ongoing coaching to your staff members based on their needs in either formalized meetings and/or on an ad hoc basis.

Coaching requirements are not the same for all staff members.

In fact, coaching requirements are not even consistent for one staff member as he or she works on different tasks. Staff members have differing levels of skill for all the tasks they perform. As an effective coach, you need to be aware of the areas where your staff member requires support.

Staff members who have lower levels of performance may require greater coaching support. Staff members who have higher levels of performance may require less coaching support.

Coaching takes place throughout the year. How frequently you meet to discuss progress will depend on two things: the expectations of your school/department, and the performance levels you have identified for each of the tasks required to achieve the performance goals.

Confirm with your staff how frequently you will meet to assess progress. Be explicit about whether you or the staff member is responsible for establishing your meetings. Continue to discuss development needs and keep ongoing documentation of both accomplishments and development needs.

Tips for both informal and formal coaching opportunities with your staff:

• Focus on the most important priorities.
• Describe specific situations and behavior.
• Focus on the work, not the individual; relate feedback to goals and expectations.
• Balance positive and constructive statements.
• Try to see things from their perspective; share your own experiences, if relevant.
• Present corrective feedback in a positive, action-oriented way.
• Ensure that the individual understands by asking him or her to summarize.
• Follow up to monitor improvements and set follow-up dates.

Provide Ongoing Coaching Against the Performance Plan

People need reinforcement, especially when developing new skills and abilities or addressing new challenges. A key responsibility of a good coach is to find the situations where staff members are doing well, and provide detailed, positive feedback. Similarly when coaches observe ineffective work or behavior, they have a responsibility to provide feedback which highlights what is not going well, and how it can be addressed.

Clear the Path: Providing What They Need

As part of the coaching process, managers must ensure that the staff member has the time, resources and information required to execute the requested assignments. There are two aspects to clearing the path for your staff members:

1. Resolving any barriers that are impeding progress
2. Leveraging enablers that will accelerate achievement of results

As manager work to resolve barriers and leverage enablers, they create a supportive environment for their staff members.

Key Points to Remember

• Managers should determine how much coaching staff members need for each of the tasks or goals assigned. A staff member may need significant coaching on one task and be able to complete others quite independently.
• Coaching is an ongoing process which takes place in formal meetings, as well as in ad hoc conversations.
• Managers have the responsibility to clear the path for staff members -- removing barriers and leveraging enables of success.

 

Step 3: Reviewing Performance

About Reviewing Performance

Throughout each step of the Performance Management Process, you have provided direction, feedback and support to your staff members as they progressed through their assigned work.

• At least once a year you will be expected to formally review the performance of your staff, and provide written feedback.
• Reviewing Performance, the final step in Performance Management, is heavily dependent on the previous two steps. In order to be able to provide accurate and balanced performance reviews, it is essential that managers take the time to do a quality job in establishing performance goals and coaching.
• The notes you created about initial goals and progress throughout the reporting period will enable you to approach the final performance review with clarity and confidence. The final feedback should contain no surprises for either the manager or the staff member.
• Each element of Reviewing Performance should be completed by both manager and staff member, with the manager having responsibility for documenting the final performance appraisal.

Review Actual Results

There’s nothing like facts to focus a performance review meeting.

Both the staff member and manager should compare what the staff member achieved against the stated performance goal (Outcome/Measurement/ Timeframe).

Additionally, you should review how the staff member achieved those results. Consider your school or department's stated or generally understood values.

• Are there particular behaviors your school or department promotes – integrity, collaboration, valuing diversity, continuous learning, etc.?
• What actions did the staff member take to achieve the results?
• How did the staff member behave with others to achieve results?
• Were there special circumstances that made the goal particularly challenging?

This assessment of results allows you to provide feedback about:

• What was achieved
• Strengths that can be recognized and leveraged, and
• Challenges that require further coaching and improvement

Provide Feedback on Results

The feedback you provide to your staff member will include two categories of work: performance in an ongoing job role and accomplishments on assigned goals or projects.

The feedback should:

• Reflect the time available for each type of work. If an individual is expected to spend 90% of their time on daily job responsibilitiesand 10% of their time on projects, then the feedback should reflect that ratio.
• Be balanced, with input from both staff member and manager, and with acknowledgment of both positive and negative experiences through the review period.
• Include reflection by both manager and staff member. The purpose is to assess what has happened, but also to identify ways in which the staff member, the manager, or the school or department could have created even better results.
• Be based on your direct observations or on validated input from reliable sources.

Determine Performance Ratings

Managers must assign the ratings in a consistent fashion for all staff members. in order to do this, you must first clearly understand the University's rating system. Explaining the rating method to staff members prior to discussing individual scores will allow them to understand their results in an appropriate context.

The Columbia University rating system in the recommended Performance Appraisal form is below. You must understand, and be able to explain, how you determined the overall rating for the work you are reviewing.

Exceeds Expectations: Performance was clearly superior, consistently exceeded the expectations and the requirements of the position.

Meets Expectations: Performance met the expectations and the requirements of the position. Meets the high performance standards of the School or Department.

Needs Improvement: Performance was inconsistent with regard to the expectations and the requirements of the position. Steps must be taken to further develop targeted areas which will improve overall performance.

Does Not Meet Expectations: Performance was below standard with regard to the expectations and the requirements of the position. Steps must be taken to improve overall performance.

It is helpful to allow the staff member to assess their own performance, including their view of the rating score because:

Encouraging discussion about why they selected the rating can lead to productive insights.

It allows the staff member to articulate the things they did well, that support a positive rating. It allows the staff member to examine ideas about the tangible differences that would have allowed a higher score.

These insights can be used in the final element of Reviewing Performance, as you both consider opportunities for this staff member's ongoing development.

Build Plans for Further Development

Building plans for further development is a logical and positive final step of the review process. The staff member's perception of this activity is derived from the manager's approach throughout the whole Performance Management process because:

• If the manager has consistently used the Performance Management Process to guide and enrich the capability of the staff member, this step will be viewed with enthusiasm and interest.
• If the process has been judgmental and not supportive, then this step will be viewed as an administrative requirement which will not receive attention and action.

The areas that are selected for development should be clearly defined, in much the same manner as the original performance goals that were established using the Outcome, Measurement, Timeframe format.

The staff member should be able to see how the new skills or knowledge will be acquired, and how they are expected to be applied - to the current job role, and as preparation for future job roles. Specifically:

• If the planned development is a requirement to achieve satisfactory performance in the current job role, then the specifications for achieving the development must be very precise, with tightly controlled timelines.
• If the development efforts are focused on longer-term staff member development, for a job role that may not yet be determined, the timeliness may be more relaxed.

Key Points to Remember

• Involving staff members in each element of reviewing performance will allow greater engagement and acceptance of the final performance review.
• Reviewing results at the end of the performance cycle should be focused on facts.
• Consideration should be given to how results were achieved, as well as what was achieved.
• Managers must be able to explain the overall performance rating they assign. They must have a clear understanding of what would have made the performance scores higher or lower.
• Plans for future development may include addressing specific requirements for current job performance or longer term development for future roles.

Sales Assessment

Here is a somewhat complicated but very comprehensive model to assess the sales function of a company or business unit.

I can see this coming in very handy in a diagnostic phase of a project, allowing you to test various elements that affect sales performance: From the very broad knowledge and understanding of the market and overall sales targets, to very specific factors affecting the function itself (systems, people, processes, structures, competencies, product offering, instruments, etc.).

Note that a similar pictorial could probably also be used for various other functions, whether it’s finance, marketing, or supply chain.

People performance and potential model

a simple group-profiling matrix tool for teams and organizations

This elegant and simple model has been around in various forms for many years. Its precise originsare not clear. The model appears in different formats, with different terminology - and no doubt different titles of the model itself - although by implication the basic structure is constant, relying on a four-part 2 x 2 matrix, which is a common method of classification in management and beyond.

See also the pdf diagram, based on an interpretation kindly provided by John Addy, 2004.

The purpose of the model is to enable a simple assessment and representation of the mixture of types (according to potential and performance) within any work group or team, but it is a relatively blunt instrument and is neither designed nor recommended for detailed individual staff assessment.

The model provides a quick view or perspective of a group profile that often is elusive in complex human resources audits, and can assist in making investment decisions, although this apparently early purpose of the model should be approached with care given the more sophisticated expectations and considerations of modern organizational management.

It is therefore ideal for presentations and for reflecting a complex situation using a simple graphic. The model is not for individual counselling and development, other than for reference and interest alongside more accurate and objective individual assessment tools and processes.

The 'people potential performance model' (or whatever else it might be called) is especially useful in illustrating clearly and broadly the mix or profile of quite large groups of people within a human resources or organizational planning context. It's also helpful in understanding, determining, and explaining the different treatment that is appropriate for different categories of people with a group, according to local definitions and implications.

The model can also be used to show an ideal mix, and an actual mix, and thereby highlight the gapor difference, from an overall strategic viewpoint.

It can be a useful supplementary tool or reference point alongside more detailed and complexappraisals and training needs analysis processes.

The model also has a good training and educational value, which is why it's featured here. It can help managers and leaders to understand that people are different, have different needs, and can be helped in different ways and directions, appropriate to their situation.

people potential performance model

Bear in mind that the descriptive terminology can be adapted to suit the situation and it is likely that the terms below have been adapted from those used when the model was first defined. The notes in each quadrant are just a few examples of the sort of different responses and actions appropriate for each type.

	low potential	high potential
high performance	backbone >  high performance low potential Acknowledge effort and contribution. Utilize as coaches and mentors. Look for each person's hidden high potential, undiscovered passions, etc., and offer new challenges and responsibilities as appropriate, so these people too can be stars, to any extent they are comfortable.	stars  high performance high potential Agree challenging stretching work, projects, career development, responsibilities, or these people are likely to leave. Give appropriately stretching coaching, mentoring, training. Explore and encourage leadership and role-model opportunities, to set and raise standards of other staff.
low performance	icebergs ^ or >  low performance low potential Counsel, build trust, understand issues. Identify hidden potential. Facilitate more fitting roles, direction, purpose, opportunities, etc., linked with and perhaps dependent on performance improvement. Failing this, assist or enable move out of organization if best for all concerned.	problem children ^  low performance high potential Confirm and acknowledge potential. Counsel, build trust, understand issues. Explore and agree ways to utilize and develop identified potential via fitting tasks and responsibilities, linked with and perhaps dependent on performance improvement. Explore attachment to backbone or star mentors and coaches.

See the origins notes below about referencing the 'people performance potential model' (or whatever else it might be called). Precise origins are not certain. If you have information or evidence for the origins of this model please let me know.

using the 'people performance potential' model

The model can be used both to visualize or represent the ideal or required staffing profile of a group or organization, and separately, the actual staffing profile, according to the categories in the model, and thereby to see graphically and quickly the difference or gap between the two, i.e., in terms of staff mix, 'what mix do we need' versus 'what mix do we have'?

As such it is a powerful tool for reflecting, seeing a complex picture simply and quickly, and therefore for presentation too.

Since the model enables very quick easy illustration or demonstration of a complex set of people-related factors that are highly significant for organizational performance and development, the tool is very useful for executives and executive discussions, presentations, reports and planning documents, etc.

While the model provides a quick simple easily-understood snapshot, remember it is not in itself a sophisticated or precise instrument for individual assessment.

Scoring questionnaries can be developed and used (see the example questionnaire/templete for the performance/potential matrix below), or data may be used from performance appraisals and other assessment tools, however the model will always be a broad indicator and is not recommended ever to be used in isolation to make important decisions about people'd development and future careers.

As such, care must be taken when matching people to the categories. Ensure this is done consistently, and also ensure that appropriate supporting assessment methods are utilized for detailed action planning and to support discussions with individuals.

As with any assessment indicator, people have a right to see how they have been graded, and to be involved in the process at all stages. Accordingly great sensitivity is required when explaining the system, and efforts shopuld be made to temper potential disappointments with encouragements and opportunities to improve, with support as appropriate.

When using the model it is important to state any the assumptions, and the necessary criteria and measurement methods used in populating the categories.

You can adapt the model to suit your own situation, notably the terminology for the two axes and each quadrant, and also the criteria and definitions applicable to each quadrant.

If using a scoring system, the total scores for Performance and Potential equate to one of the four quadrant positions in the People-Performance-Potential Matrix. Scoring may also enable more detailed 'mapping' of positions of people within quadrants according to actual scores. Beware however of trying to make the model and assessment of people be overly sophisticated and detailed. It is a simple tool. Try to keep its usage simple and understandable too.

questionnaire for positioning people in the performance/potential matrix model

Here is a simple quick example of a questionnaire which can be used to match people to categories in the 'People-Performance-Potential Matrix', described above. It's an example. You can adapt it, simplify or expand it, according to your own situation.

It is very important that:

• assessments and scoring of people's performance and potential is conducted in a consistent and fair way, and
• explanations and transparency of the process are managed sensitively and positively - everyone can be developed.

'people performance potential matrix model' questionnaire - template/example Agree a score for each of these factors with each employee (using evidence and/or discussion as appropriate). Where factors are irrelevant remove them and adjust high/low total interpretation accordingly:
Scoring scale: 1 - 4. Scoring key: 1= needs improving, 2 = satisfactory, 3 = good, 4 = excellent. (Interpretation for model positioning: 1-2 = low, 3-4 = high.)	Score  (1-4)
1. Performance (factors relating to current job role - assess in detail as required, or import from appraisal/other assessment system)
1.1 Job skills
1.2 Job/product/technical knowledge
1.3 Attitude and behaviour (US-English: behavior)
1.4 Commitment and flexibility
1.5 Effectiveness and results (mindful of obstacles, mitigation, situation)
1.6 Working relationships
Performance total (up to and including 12 = low; 13 and over = high)
2. Potential (is there clear evidence of existing or developing [factors stated below] required beyond current role? N.B. scoring refers to evidenced potential, not to current level.)
2.1 Capabilities
2.2 Knowledge
2.3 Attitude/behaviour
2.4 Commitment and flexibility
2.5 Strategic awareness and effectiveness
2.6 Working relationships
Potential total (up to and including 12 = low; 13 and over = high)
The total scores for Performance and Potential equate to one of the four quadrant positions in the People-Performance-Potential Matrix. Conversion of scores to a matrix quadrant may simply be to a quandrant according to high or low classification, or may instead enable more detailed 'mapping' of positions within quadrants according to actual scores.
© Alan Chapman, Businessballs.com, 2013 - see model and explanation at www.businessballs.com/people_performance_potential_model.htm

N.B. The scoring rationale used in the questionnaire template above assumes that a grading of 'satisfactory' does not represent 'high' performance or potential. If your own organizational situation considers 'satisfactory' as a 'high' level of performance or potential then amend the scoring terminology accordingly.

origins of the people performance potential model

In terms of referencing the best I can suggest is that it is: Variously attributed to/claimed/adapted by Boston Consulting Group, George Odiome, Jack Welch, Doug Stewart, and Nicholas Barnes, c.1970-1996. The pdf diagram is based on an interpretation by John Addy, 2004.

If you have information or evidence of origins, or observations about the application of this model, please send them.

Since publishing the model as a pdf diagram on the website in 2004 (based on an interpretation initially provided to me by John Addy, who was also unsure of its origins) I have received the following suggestions:

Lori M Beevers suggested (Sept 2005) that the model appeared in a book by George Odiome in the 1970's and was credited to the Boston Consulting Group. The terminology was as above, except for these differences, which she suggested might have been updated to be less insulting, which seems a very reasonable observation: 'icebergs' = 'deadwood'; 'backbone' = 'workhorses'; and 'problem children' = 'question marks'. In other respects the model and its basic meanings were as above.

Chris Page informed me (Jan 2007) that he had seen a simplified version of the model attributed to Jack Welch (General Electric Company, business writer/guru). The names of the four quadrants were not featured, and in what would arguably be typical Welch no-nonsense fashion, the recommended action associated with the 'low potential - low performance' category was to question why these people remain on the payroll. Apparently in this version of the model, 'potential' was extended to 'potential to do a bigger job', which is (in my view) a far narrower meaning and by implication ignores utterly one of the main points of the model: that many people thought to have no potential actually have tremendous potential that has neither been uncovered or utilized, which is why they are not performing well.

Tony Thacker informed me (Feb 2007): "Re. people performance model... Doug Stewart, in The Power of People Skills, p185, John Wiley, ISBN 0-471-01187-8, uses a somewhat similar quadrant model, but using skill and motivation as the two axes rather than performance and potential..."

Dr Nicholas Barnes informed me (also Feb 2007): "Re. people performance model... I can make a claim to have invented it with my boss at the time (Brian Lewis) when we were working in HR for a Danish (by registration) company called Borealis sometime around 1996. We used it once a year when we did succession and experience planning and was used based on peoples performance reviews. As it was used all over Europe (at least 9 countries) by our HROD staff it would certainly have leaked out into the wider world via local consultants as we found it very useful and presumably so would they..."

Tony Perryman provided the following helpful information, which supports the view that the original terminology was Deadwood, Workhorses, Problem Children and Rising Stars, (July 2007): "You will find a full explanation of this model in the Havard Business Review - around the mid to late eighties. The authors developed a more sophisticated view than in your explanation. They suggest that as a businessman the choice of where to invest is determined on where the best return is to be found, which should be so with people. So Rising Stars are where to invest. Workhorses: maintenance investment or for motivation purposes; Problem Children: improve technical capability or knowledge; and Deadwood: no investment unless to be moved into a more appropriate role. I have been using this model since the early nineties, however because line managers become jittery about terms like deadwood, I just use A, B, C and D as a classification and sometimes D is the rising star!

B - Workhorses Individuals who produce effectively, however they have reached their level of competency.	A - Rising Stars  Individuals who have real potential for the future and are high performers.	hi  p  e  r  f  o  r  m  a  n  c  e  lo
D - Deadwood Individuals who have no potential and perform poorly. They are in the wrong role.	C - Problem Children Individuals who have potential but are not performing in their role. This may be because they are newly promoted.
low          potential          high

This simple method helps dictate where scare development resources should be spent:

• A - Rising Stars - Most investment. This is where the business is going to get the best return on there investment. Invest sufficient to keep engaged and grow for the future.
• B - Workhorses - Minimal investment. Invest only to keep motivated or to upgrade skills.
• C - Problem Children - Targeted investment. Action plan which includes giving them technical skills to perform at the required level. Any investment will only occur after full analyses of an individual’s motivation to move from where they are currently. If they do not respond move to another role or exit business.
• D - Deadwood - No investment. Action plan to either find a more appropriate role or exit business. "

(With thanks to Tony Perryman, July 2007)

Michael Burgess wrote (July 2007): "My understanding of the Productivity Potential model origins has always been that it was from The Boston Consulting Group (Boston Matrix) used to evaluate products in terms of their market share and their potential for market growth. It's self-explanatory how this applies to products and might go some way to explaining the rather harsh terminology when it was adapted by George Odiorne to describe employee performance."

Cash Cow  'milk' - maintain	Star  'shine' - develop	hi  m  a  r  k  e  t  s  h  a  r  e  lo
Dog  'shoot' - exit/divest	Problem Child  fix or divest
low         market growth or potential         high

(Thanks Michael Burgess, July 2007. See the detailed explanation of the 'Boston Matrix' in the business planning section.)

Jeffrey Cole wrote (February 2008): "... In 1987 I saw this [people-performance matrix model] in a USMC leadership training manual from, I believe 1967, which is probably still in the library either at Camp Kinser, Okinawa Japan, or at the Combat Service Support Detachment at Takegahara Garrison (Gotemba prefecture), Japan. Given that this was in a Government training manual I believe that would indicate that the diagram is probably older than the 1970s. The labels on that diagram did not have cutesy names, it was simply 'capability to learn' and 'willingness to perform' and the quadrants reflected low/high for each attribute. The mentoring recommendations based on the diagram were essentially (for the axes - willingness to perform / capability to learn):

high/high : coach 
high/low: teach 
low/high: father (discipline) 
low/low: remove as quickly as possible.

teach  this person	coach  this person	high     willingness  to  perform  low
remove  this person	'father' (discipline)  this person
low          capability to learn          high

(Diagram interpretation based on the above description provided by J Cole.)

If you have details, evidence or observations about the origins and application of the People-Performance model please send them.

authorship/referencing

This model has uncertain origins, being variously claimed by and/or attributed to the Boston Consulting Group, George Odiome, Jack Welch, Doug Stewart, and Nicholas Barnes, among others. The pdf diagram is based on an interpretation by John Addy, 2004. Clarification and evidence relating to authorship, ownership and origins are welcome.

© Alan Chapman 2007-2013

How Employee Performance Reviews Affect Customer Service and Satisfaction

Melissa Thompson 

70% of employees say their employer should understand them to the same degree they are expected to understand customers. (Towers Watson)

Once a year employees across the working spectrum all become subjected to the dreaded performance review. The performance review is a long established tool that is used by management as a way to justify an employee’s position, determine if they are deserving of a raise or bonus and, essentially, separate the wheat from the chaff. As many advocates as there are in support of the performance review, there are as many detractors calling for the demise of this measurement of employee value and worth.

Despite the calls for the end to the performance review, you should understand its value and why it is important. Here is a history of the performance review and the role that it plays as a measuring tool. Additionally, you should understand how you should approach the review process to provide for greater input from outside influencers (i.e. customers) and allow for some flexibility and agility when judging the performance of your employees.

What We Don’t Know About Performance Reviews

Performance reviews have been a tool that has been with us as long as two millennia. The process for evaluating the work performed by workers is believed to have originated in China at around the third century AD. The advent of the Industrial Revolution in the United States during the 18th century saw a correlation between employee performance reviews and productivity. Systems used to appraise the performance of an employee were prevalent in more than 60% of businesses in America in the 1960s.

The Importance of the Performance Review Process

An effective performance review is comprised of the following five elements: agreement, measurement, feedback, positive reinforcement and dialogue. The reason for conducting the review process utilizing these elements is because it aids in creating a positive interaction between you the employer and your employees. Implementation of an employee review goal-setting process that also employs what is known as the SMART system (specific, measurable, achievable, relevant and time framed) helps you track employee progress, but also gives the employee targets in which to shoot for and ultimately achieve.

Making Performance Reviews Work for Your Customer Service Team

Despite what the naysayers may think about the performance review process, they are important for assessing how employees are doing relative to meeting their goals and providing excellent customer service. There are many discernible benefits that come from the performance review process. These include better results from those vested in the review process as goals are communicated clearly. Employee retention, and thus satisfaction, is decreased by 2x. Stated another way, employees who see performance reviews as inaccurate are 2x more likely to look for another job.

Employees should come to realize that the performance review process is an essential tool in improving their productivity, value and worth to your company. The trick however is to use the performance review process as an opportunity to praise good works and find ways to challenge your employees to stretch beyond their capabilities. If your employees come to dread the performance review process or view it as a draconian method used to judge and diminish their value, it may be time for you to redefine the process and make it meaningful to your business.

Five Compensation Trends Impacting Your Business

While compensation planning has traditionally been approached as an annual process within companies, large, midsized, and small, there has become a heightened focus on approaching compensation planning on a more frequent basis and with greater strategic emphasis. This is in response to an increasingly competitive business landscape and competitive labor market where companies are competing to recruit and retain top quality talent.

With these increasingly competitive dynamics at play, business owners, human resources professionals and organizational leaders alike are staying abreast of business, economic and labor market trends, as well as changes impacting recruitment and retention of top quality employees.

A viable compensation plan requires year round planning and should complement your organization’s goals and objectives towards achieving long term sustainable growth. When conducting compensation planning for your business, consider the following five key components. 

1.      Industry & Company Growth:

Growing businesses within growing industries are becoming hard pressed to sustain continued growth through the recruitment and retention of top quality talent, and a competitive compensation plan in place aims to address this. Accordingly, industry growth and business growth will continue to play an important driver in compensation planning efforts.

2.      Total Compensation:

In response to cost increases in fringe benefits and related costs, proper positioning and communication of these non-cash components of compensation is paramount in broadening employee perspective on their individual total compensation package. Total compensation includes not just the cash portion of pay, but also the non-cash component, which is commonly the employer’s portion of health insurance costs voluntarily paid for by the company.

3.      Alignment:

Connecting compensation programs with business goals is key to driving optimal employee performance levels. As an example, for sales driven positions are generally compensated with a stronger emphasis on variable compensation in the form of commission, incentive, bonus, rather than solely on base salary. As sales increase, so does one’s commission, incentive, or bonus earnings potential.

4.      Market Comparison:

Measuring your company’s compensation program against local, regional and national market compensation trends offers insight into how your company’s compensation program compares with other companies in same or similar industries, and for same or similar job functions.

 

5.      Performance & Results:

For businesses to successfully compete for talent and for profits, tying pay to performance results is pivotal in compensation planning. As such, companies are adopting compensation programs that reward employee performance on the basis of employee, team and company results.

Kandor Group, Inc.