PERFORMANCE MANAGEMENT LECTURES

CHAPTER ONE

STAFF PERFORMANCE

What is employee performance? Put simply, employee performance is how a member of staff
fulfils the duties of their role, completes required tasks and behaves in the workplace.
Measurements of performance include the quality, quantity and efficiency of work.

How to Evaluate an Employee: A Performance Review Checklist

Most businesses conduct employee evaluations regularly, usually at least once a year. The job
performance evaluation typically includes reviewing how employees’ work duties and habits
compare with company expectations. Often, the employee performance evaluation results are a
vital consideration for promotions, bonuses, and raises.

Regular evaluations help workers do assigned tasks more efficiently, understand what’s expected
of them, improve communication between management and employees, and give employees
proper recognition for their work. Learn how to evaluate employee performance and measure
employee performance so your team can function at their best.

Key Takeaways

These topics explain how to conduct an employee performance evaluation and the important
factors of why employee performance evaluations are helpful leadership tools:

 Employee performance reviews are scheduled formal meetings that provide assessments
of work performance, typically held annually, with regular check-ins throughout the year.

 Employers can use these meetings to set clear expectations and measure employee
success in their role.

 The performance review process helps improve employee performance and productivity
while offering support and additional training to those who need it.

 Reviews also allow employers to open a line of communication with their team members
to assess their satisfaction and engagement.

 Utilizing standard metrics (like performance review templates) is helpful for objectivity
during reviews, especially when evaluating their eligibility for promotions, raises, and
layoffs.

What Is a Performance Evaluation?

This is a regular assessment and review of an employee’s performance on the job. Managers
typically conduct a complete performance evaluation annually, with periodic check-ins
throughout the year.
Performance evaluations allow an employer to set clear expectations, evaluate employee
performance and measure the employee’s success. The information gathered in an overall
performance evaluation can help drive decisions about pay raises, promotions, and layoffs.

Often, performance reviews include the manager’s evaluation of the employee’s overall
performance and a self-evaluation conducted by the employee about their own evaluation of their
success. A proper assessment is judged against specific goals using clearly defined metrics.

Factors to Consider During a Performance Evaluation

1. Job knowledge and skills

How well does your employee know their position? Do they demonstrate all necessary skills at a
level that meets your expectations?

2. Quality of work

Check over the work done in a specific period of time and evaluate the overall quality by
checking for mistakes, ensuring it was thoroughly thought through, and considering feedback
from clients and other team members.

3. Quantity of work

Are they keeping up with the expected work pace for their position? You can compare their
workload and production to others in similar roles for their evaluation.

4. Communication skills

Is your employee effective at sharing knowledge, asking questions, and taking direction? Do
they convey their thoughts clearly while speaking and in writing? Do they display a professional
and positive attitude and work well in a team setting?
5. Initiative and problem-solving skills

Does the employee identify and solve issues as they arise, or do they need to be told? How do
they handle problems that occur in their work? Are they comfortable delegating or asking for
help when needed?

6. Attendance and punctuality

Are they on time and ready to work when expected? Do they call out often, and if so, do they
have appropriate reasons for doing so?

7. Performance against goals

Do they meet the goals set out for them by their supervisors or managers? Do they set and meet
their own professional goals?

Suppose you’re unsure where to start with an evaluation. In that case, consider implementing the
usage of the software that tracks time and project management so that you can keep easy tabs on
employee productivity. FreshBooks is a cloud-based accounting software that offers time-
tracking tools, project management services, and more, increasing the efficiency and accuracy of
tracking employee achievements.

Evaluating Employee Performance

Companies need a standard evaluation framework in place to evaluate the performance of an

employee effectively and review each employee against those standard performance metrics.
Here’s a step-by-step guide to effectively evaluating employees:

1. Set Performance Standards

It’s important to set clear performance standards that outline what an employee in a specific role
is expected to accomplish and how the work should be done. The same standards must apply to
an employee’s performance for every employee in the same position. All standards should be
achievable and relate directly to the person’s job description.

2. Set Specific Goals

You should also set specific goals for each employee, unlike performance standards, which can
apply to multiple workers. Goals are particular to the strengths and weaknesses of the individual
employee and can help them improve their skills or learn new ones.

Working to achieve career goals and overcome challenges will help workers to feel more
engaged with their job while providing higher job satisfaction and better productivity. Work with
each employee to set goals that are reasonable and relevant to their position to set them up for
success.

3. Take Notes Throughout the Year

Track the performance of your employees and create a performance file for each worker. Keep
records of notable accomplishments or incidents, whether positive or negative. Remember that
you can give immediate feedback to employees when something stands out as well, you don’t
have to wait until the year-end performance review process to give praise or constructive
criticism.

4. Be Prepared

When it comes time to give an employee evaluation, it’s best to prepare for the meeting
beforehand. Review your documentation for the employee before the meeting and note what you
want to discuss with the employee.

The performance review should be mostly about the positive elements of the employee’s
performance, with helpful advice on future improvement. After all, if the worker’s last
performance review was mostly negative, they probably wouldn’t still be working for you.

5. Be Honest and Specific with Criticism

When you do need to give criticism in an evaluation, be honest and straightforward when giving
feedback. Don’t try to sugarcoat or downplay the situation, which can confuse the employee.
Give clear examples and then provide helpful, specific advice on how the employee can grow
and improve employee performance in the future.

6. Don’t Compare Employees

The purpose of an employee evaluation is to review the performance of each staff member
against a set of standard performance metrics. It’s not helpful to compare one employee’s
performance to another employee’s performance, and doing so can lead to unhealthy competition
and resentment. Always circle back to your evaluation framework to evaluate one employee’s
performance, not the performance of other workers.

Utilizing employee performance evaluations and review templates can keep things on equal
footing, as you will ask the same questions and analyze the same metrics between both
employees.

7. Evaluate the Performance, Not the Personality

Your evaluation should focus on how well the employee performs their job rather than their
personality traits. When you judge the employee’s personality, they can feel attacked, and the
conversation can turn hostile.

For example, rather than providing feedback about an employee being immature or emotional,
it’s more productive to give specific examples of the employee’s actions in the workplace that
demonstrate those characteristics. Don’t take criticism personally; always tie it back to work.

8. Have a Conversation

An employee evaluation shouldn’t be a one-way street where the manager gives constructive
feedback and the employee listens without responding. Instead, a productive employee
evaluation should be a conversation between the two of you. Listen to your employees’ concerns
and how they’d like their careers to grow. Find out how you and the larger team can help
employees meet their career goals.
You may also ask employees to self-evaluate how they think they performed at their job for the
year. A performance review should allow employees to review the workplace, their managers,
and themselves and reflect on their career growth.

9. Ask Specific Questions

To foster productive conversations with employees during the evaluation period, it can help to
enter the room with specific questions you’d like to discuss with the worker. Here are some
questions you can ask workers to spark conversation and receive valuable information:

 What do you hope to achieve within the company this year?

 What resources or support do you need from the department to reach your goals?

 What will your biggest challenges be in meeting your business goals this year?

 How often would you like to receive feedback?

 How can I be a better manager to you?

 What do you enjoy about your work?

 What work or personal goals have you recently achieved?

 Is there an experience or action you are most proud of since our last review?

 What are your long-term career goals, and how can the organization help you achieve
them?

 What new skills would you like to develop this year? Is there training we can provide to
help develop those skills?

 What brings you joy in the work you do?

 What project or goals are you interested in working on in the future?

Asking questions will allow your staff to express their feelings, concerns, and opinions without
fear and make them feel heard.

10. Give Ongoing Feedback

Ideally, employee evaluation is an ongoing process, not a one-time task. Offer constructive
feedback regularly and touch base with a worker to see how they’re working toward their yearly
goals to help improve worker morale and keep employees on track while improving work
quality. Opening up communication between yourself and your team will improve the
company’s culture and make staff more willing to come to you if any issues arise before they
become big problems.

Benefits of Tracking Employee Performance

Benefits of tracking employee performance include:

 Staying up-to-date and on the same page with your team members.

 You have the opportunity to identify future leaders and reward good work.

 You will gain important information that allows you to set reasonable targets, which can
improve morale and reduce turnover.

 You will find out about processes that may hinder your business’s productivity.

 You may find opportunities to provide further training and support to team members.

 Knowing they are tracked may help employees stay focused, improving their efficiency.

 Employee reviews let you speak one-on-one with each team member to receive feedback
on their role and expectations.

 Reviews allow you to ensure each employee understands your expectations of them.

 Effective reviews can foster a collaborative work environment.

What’s the Purpose of Employee Evaluation?

When you evaluate your employee’s performance, you receive valuable insight into the
company’s culture while helping your staff better understand what is expected of them. It can
provide helpful advice and constructive criticism to team members, providing guidance and
support to improve their performance in the future.
It will also help you assess each employee’s strengths and motivations while helping you plan
for their future at your company. Utilizing standard metrics is useful for objectivity during
performance reviews, especially when evaluating their eligibility for promotions, raises, and
bonuses.

Conclusion

The evaluation process is based on specific criteria, like their job description. A manager will
review employees’ work, productivity, accomplishments, and skills and determine whether they
meet expectations. High performers should receive acknowledgment or rewards, while those
failing to meet expectations should be re-trained or supported to do their job.

Although it can be an uncomfortable meeting, evaluating your employee’s performance is

important as it keeps you updated on everything in your company while identifying top
performers and those that need improvement. It can improve worker productivity and create a
better company culture by opening up new lines of communication for a more collaborative
workplace. Tracking performance also creates a mutual understanding. Everyone involved will
be up to date on company and employee goals, which will motivate employees, improve the
business’s overall productivity, and ensure all projects get finished on time.

FAQs on Employee Job Performance Evaluations

What is the best evaluation model?

The 360-degree model is the best job evaluation model. Constructive feedback about the
employee is gathered by the people who interact with them in various capacities, including
managers, subordinates, peers, and clients, usually taken by a questionnaire. The worker is also
invited to provide their view of their role for a well-rounded overview self-evaluation of the
employee.

What are examples of performance criteria?

Some performance criteria examples include quality of work, execution and organization,
progress and growth, resiliency, communication, job knowledge, teamwork, and problem-
solving. For the best results, try to avoid negative feedback while instead focusing on their future
potential.

Why is it important to track employee performance?

This type of tracking is crucial to keeping workers engaged, productive, and on track. It also
gives managers essential insights into each employee’s potential, successes, and the places they
may need additional support. Employees will respond to fair assessments and will feel supported
and listened to.

How do you tell an employee they need to improve?

Schedule an informal private chat and ask them what they think they could improve upon or
where they may need help, and then explain what metrics they are missing while staying
positive, focusing on their potential for growth. Offer support through retraining, and schedule a
follow-up to keep them accountable and motivated.

What are the 5 areas of improvement?

The top five areas for improvement in job performance are:

 Time management – using time effectively and productively

 Delegation – knowing how to prioritize tasks and how to distribute work appropriately

 Organization – the ability to keep things on track without missing or forgetting anything

 Communication – being able to define goals, express concerns, and give instructions
clearly

 Engagement – enthusiasm and involvement in work projects

CONCEPT OF PERFORMANCE

What is the concept of performance in HRM?

Performance management is about setting clear and measurable objectives for work, and is an
important managerial and human resource tool. A well-run performance management system
will provide staff with clear objectives for their job, and plenty of opportunities for feedback and
discussion with their supervisor.

What is Performance?

Performance could be defined simply in terms of the achievement of quantified objectives. But
performance is not only a matter of what people achieve but also how they are achieving it. A high
performance result comes from appropriate behavior and the effective use of required knowledge,
skills and competencies.

Performance management must examine how results are attained because this provides the
information necessary to consider what needs to be done to improve those results. The concept of
performance has been expressed by Brumbrach (1988) as follows: ‘Performance means both
behaviors and results. Behavior emanates from the performer and transforms performance from
abstraction to action.

Not just the instruments for results, behavior is also an outcome in its own right – the product of
mental and physical effort applied to tasks – and can be judged apart from results. This definition
of performance leads to the conclusion that when managing performance both behavior and results
need to be considered.

It is not a question of simply considering the achievement of targets as used to happen

in management-by-objectives scheme. Competence factors need to be included in the process.
This is the so-called ‘mixed model’ of performance management, which covers the achievement
of expected levels of competence as well as objective setting and review.

Significance of Performance
Performance is all about the core values of the organization. This is an aspect of behavior but it
focuses on what people do to realize core values such as concern for quality, concern for people,
concern for equal opportunity and operating ethically. It means converting espoused values
into values in use: ensuring that the rhetoric becomes re

Meaning of Alignment

One of the most important purposes of performance management is to assign individual and
organizational objectives. This means what people do at work leads to the achievement of
organizational goals.

The real concept of performance is associated with an approach to creating a particular vision of
purpose and aims of the organization, which will be helping each employee to understand and
recognize their part of responsibilities by the help of which they will manage and enhance the
performance of both individuals and the organization.

In an organization, alignment is a flow of objectives from the top to bottom and at each level,
team or individual objectives are defined in comparison with higher-level goals. But it also should
be a transparent process where individuals and teams are being given the opportunity to set their
own goals within the framework defined by the purpose, strategy and values of the organization.

Objectives should be agreed, not set, and this agreement should be reached through the open
dialogues that take place between managers and individuals throughout the year. In other words,
this needs to be seen as a partnership in which responsibility is shared and mutual expectations are
defined.

Managing Expectations

Performance management is essentially about the management of expectations. It creates a shared

understanding of what is required to improve performance and how this will be achieved by
clarifying and agreeing what people are expected to do and how they are expected to behave and
uses these agreements as the basis for measurement, review and the preparation of plans for
performance improvement and development.

The Significance of Discretionary Behavior

Performance management is concerned with the encouragement of productive discretionary
behavior. Discretionary behavior refers to the choices that people make about how they carry out
their work and the amount of effort, care, innovation and productive behavior they display.

It is the difference between people just doing a job and people doing a great job.

Guiding Principles of Performance Management

It is necessary to identify any causes that are external to the job and outside the control of either
the manager or the individual. Any factors that are within the control of the individual and the
manager can then be considered.

First, the entire performance management process – coaching, counselling, feedback, tracking,
recognition, and so forth – should encourage development. Ideally, team members grow and
develop through these interactions. Second, when managers and team members ask what they need
— to be able to do to do bigger and better things — they move to strategic development.

The researchers also got the following additional views from practitioners about performance
management −

 A management tool which helps managers to manage.

 Driven by corporate purpose and values.
 To obtain solutions that work.
 Only interested in things you can do something about and get a visible improvement.
 Focus on changing behavior rather than paperwork.
 It’s about how we manage people – it’s not a system.
 Performance management is what managers do: a natural process of management.
 Based on accepted principles but operates flexibly.
 Success depends on what the organization is and needs to be in its performance culture.

Differences between performance management and performance Appraisal

It is sometimes assumed that performance appraisal is the same thing as performance management.
But there are significant differences.
  Performance appraisal can be defined as the formal assessment and rating of individuals by
their managers at, usually, an annual review meeting.
 In contrast, performance management is a continuous and much wider, more
comprehensive and more natural process of management that clarifies mutual expectations,
emphasizes the support role of managers who are expected to act as coaches rather than
judges and focuses on the future.

Performance appraisal has been discredited because too often, it has been operated as a top-down
and largely bureaucratic system owned by the HR department rather than by line managers. It was
often backward looking, concentrating on what had gone wrong, rather than looking forward to
future development needs.

Performance appraisal schemes existed in isolation. There was little or no link between them and
the needs of the business. Line managers have frequently rejected performance appraisal schemes
as being time consuming and irrelevant. Employees have resented the superficial nature with
which appraisals have been conducted by managers who lack the skills required.

Psychological Contract with Performance Management

The concept of psychological contract is a system of beliefs that encompass the actions employees
believe are expected of them and what response they expect in return from their employer. It is
concerned with assumptions, expectations, promises and mutual obligations. Psychological
contracts are ‘promissory and reciprocal, offering a commitment to some behavior on the part of
the employee, in return for some action on the part of the employer.

A positive psychological contract is one in which both parties – the employee and the employer,
the individual and the manager – agree on mutual expectations and pursue courses of action that
provide for those expectations to be realized.

A positive psychological contract is worth taking seriously because it is strongly linked to higher
commitment to the organization, higher employee satisfaction and better employment relations.
Performance management has an important part to play in developing a positive psychological
contract.
Performance management processes can help to clarify the psychological contract and make it
more positive by −

 Providing a basis for the joint agreement and definition of roles.

 Communicating expectations in the form of targets, standards of performance, behavioral
requirements (competencies) and upholding core values.
 Obtaining agreement on the contribution both parties have to make to get the results
expected.
 Defining the level of support to be exercised by managers.
 Providing rewards that reinforce the messages about expectations.
 Giving employees opportunities at performance review discussions to clarify points about
their work.

Performance Management - Process

. Performance management is a process management which consists of the following activities −

  Plan − decide what to do and how to do it.
 Act − carry out the work needed to implement the plan.
 Monitor − carry out continuous checks on what is being done and measure outcomes in
order to assess progress in implementing the plan.
 Review − consider what has been achieved and, in the light of this, establish what more
needs to be done and any corrective action required if performance is not in line with the
plan.

This sequence of activities can be expressed as a continuous cycle as shown in the following figure
−

Performance Management Cycle

Performance management can be described as a continuous process cycle as shown in the

following figure, which follows the plan–act–monitor–review sequence as described above.

Performance Management Sequence

The sequence of processes carried out in this cycle and the likely outcomes are illustrated in the
following figure −
Performance Management Activities

Let us now discuss the activities that take place in performance management. The main activities
are −

 Role definition, in which the key result areas and competence requirements are agreed.
 The performance agreement, which defines expectations − what individuals have to
achieve in the form of objectives, how performance will be measured and the competences
needed to deliver the required results.
 The performance improvement plan, which specifies what individuals should do to
improve their performance when necessary.
 The personal development plan, which sets out the actions people should take to develop
their knowledge and skills and increase their levels of competence.
 Managing performance throughout the year, when action is taken to implement the
performance agreement and performance improvement and personal development plans as
individuals carry on with their day-to-day work and their planned learning activities. It
includes a continuous process of providing feedback on performance, conducting informal
progress reviews, updated objectives and, where necessary, dealing with performance
problems.
  Performance review is an evaluation stage, where a review of performance over a period
takes place covering the aspects like achievements, progress and problems as the basis for
the next part of the continuous cycle – a revised performance agreement and performance
improvement and personal development plans. It can also lead to performance ratings.

Performance Management in Action

Performance management should not be like a system based on periodical formal appraisals and
detailed documentation. The activities should be logical in the sense of contributing to an overall
approach in which all aspects of the performance management process are designed.

Thus, in every organization there is a need to declare why performance management is important,
how it works and how people will be affected by it. The declaration should have the visible and
continuous support of top management and should emphasize to develop a high-performance
culture and integrate organizational and individual goals.

Performance management recognizes the fact that we all create the view of the people who work
for the organization and it also makes sense to express that view explicitly against a framework of
reference.

Planning & Agreements

Performance management helps people to get into action so that they achieve planned and agreed
results. It focuses on what has to be done, how it should be done and what is to be achieved. But
it is equally concerned with developing people – helping them to learn – and providing them with
the support they need to do well, now and in the future.

Performance Agreement
The framework for performance management is provided by the performance agreement, which is
the outcome of performance and development planning. The agreement provides the basis for
managing performance throughout the year and for guiding improvement and development
activities.

The performance agreement is used as a reference point when reviewing performance and the
achievement of improvement and development plans. Performance and development planning is
carried out jointly by the manager and the individual. These discussions should lead to an
agreement on what needs to be done by both parties.

The starting point for the performance and development plans is provided by the role profile, which
defines the results, knowledge and skills and behaviors required. This provides the basis for
agreeing objectives and performance measures. Performance and personal development plans are
derived from an analysis of role requirements and performance in meeting them.

Role Profiles
The basis of the performance and development agreement is a role profile, which defines the role
in terms of the key results expected, what role holders are expected to know and be able to do, and
how they are expected to behave in terms of behavioral competencies and upholding the
organization’s core values. Role profiles need to be updated every time a formal performance
agreement is developed.

Developing Role Profiles

To develop a role profile, it is necessary for the line manager and the individual to get together and
agree on the key result areas, define what the role holder needs to know and be able to do and
ensure that there is mutual understanding of the behavioral competencies required and the core
values the role holder is expected to uphold.

Defining Key Result Areas

When introducing performance management, it is probably best to figure out what is to be done
rather than focusing on what has to be achieved.

To define key result areas, individuals should be asked the following questions by their managers
−

 What do you think are the most important things you have to do?
 What do you believe you are expected to achieve in each of these areas?
 How will you – or anyone else – know whether or not you have achieved them?

The answers to these questions may need to be sorted out – they can often result in a mass of
jumbled information that has to be analyzed so that the various activities can be distinguished and
refined to seven or eight key areas.

This process requires some skill, which needs to be developed by training followed by practice. It
is an area in which HR specialists can usefully coach and follow up on a oneto-one basis after an
initial training session.

Defining Technical Competencies

To define technical competencies, i.e., what people need to know and be able to do; three questions
need to be answered −
  To perform this role effectively, what is it that the role holder should be able to do with
regard to each of the key result areas?
 What knowledge and skills in terms of qualifications, technical and procedural knowledge,
problem-solving, planning and communication skills etc. do role holders need to carry out
the role effectively?
 How will anyone know when the role has been carried out well?
Defining Behavioral Competencies

The usual approach to including behavioral competencies in the performance agreement is to use
a competency framework developed for the organization. The manager and the individual can then
discuss the implications of the framework at the planning stage. The following is an example of a
competence framework −

 Personal drive − demonstrate the drive to achieve, acting confidently with decisiveness
and resilience.
 Business awareness − identifies and explores business opportunities, understand the
business concerns and priorities of the organization and constantly seek methods of
ensuring that the organization becomes more businesslike.
 Teamwork − work cooperatively and flexibly with other members of the team with a full
understanding of the role to be played as a team member.
 Communication − communicate clearly and persuasively, orally or in writing.
 Customer focus − exercise unceasing care in looking after the interests of external and
internal customers to ensure that their wants, needs and expectations are met or exceeded.
 Developing others − foster the development of members of his or her team, providing
feedback, support, encouragement and coaching.
 Flexibility − adapt to and work effectively in different situations and carry out a variety of
tasks.
 Leadership − guide, encourage and motivate individuals and teams to achieve a desired
result.
 Planning − decide on courses of action, ensuring that the resources required to implement
the action will be available and scheduling the programme of work required achieving a
defined end-result.
  Problem solving − analysis situations, diagnose problems, identify the key issues, establish
and evaluate alternative courses of action and produce a logical, practical and acceptable
solution.

Core Values

Increasingly, performance management is being used by organizations to encourage people ‘to

live the values’. These values can include such concerns as quality, continuous improvement,
customer service, innovation, care and consideration for people, environmental issues and equal
opportunity. Discussions held when the performance agreement is being reached can define what
these values mean as far as individual behavior is concerned.

Assessing how well people uphold core values is an integral part of performance management,
stating that −

Our success depends on all of us sharing the common values set out in the management plan, i.e.
−

 Integrity − We demonstrate high standards of honesty and reliability.

 Impartiality − We are fair and even-handed in dealing with members of the public and
each other.
 Professionalism − We provide high quality professional advice and support services.
 Client focus − We are responsive to the needs of members, the public and one another.
 Efficiency − We use resources responsibly and cost-effectively.
 Mutual respect − We treat everyone with respect and courtesy and take full account of
equal opportunities issues at all times.