Performance Management
BCSLA Conference
September 29 – October 1, 2013
Presented By Rob Westbury, VP Human Resources
inSite Housing, Hospitality & Health Services, Inc.
Copyright © 2006 Accenture All Rights Reserved. Accenture, its logo, and High Performance Delivered are trademarks of Accenture.
Performance Management
Agenda
1. Performance Management – Definition and Framework
2. Building a Performance Management Framework
a. Business Goals
b. Three Assessment Models: Traditional, Leadership
Driven, Employee-Driven
c. Development Plans and Rewards
3. Assessing an Employee: Tips for a Successful Evaluation
4. Performance Management in a Union Environment
2
Performance Management – Definition & Framework
What Is It?
A set of processes and tools to assess the
performance of employees
KEY: Link business performance to employee
performance and behaviours
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Performance Management – Definition & Framework
Where to Start? The Business!
•Performance Management should be tied to business
outcomes
• What are your company’s long and short term goals?
• What are your company’s core values?
•Tying how you assess employees to your business
objectives is the best way to achieve your business
outcomes
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Performance Management – Definition & Framework
Framework
Common themes for effective Performance Management
Frameworks:*
1. Framework includes developmental plans for the future
2. Managers trained on providing effective performance evaluations
3. The quality of performance appraisals is measured
4. Process established to address/resolve poor performance
5. Performance appraisal includes information other than that based on the judgment
of managers
6. The performance review process is consistent across the organization
7. Employees can expect feedback more than once a year
8. 360 degree reviews are used to support the performance evaluation process
9. Includes ongoing goal review and feedback from managers
* From: Institute for Corporate Productivity, “Finding the Keys to Performance Management: A Study of Current Trends
and Future possibilities”
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Performance Management
Agenda
1. Performance Management – Definition and Framework
2. Building a Performance Management Framework
a. Business Goals
b. Three Assessment Models: Traditional, Leadership
Driven, Employee-Driven
c. Development Plans and Rewards
3. Assessing an Employee: Tips for a Successful Evaluation
4. Performance Management in a Union Environment
6
Performance Management – Building a Framework
1. Document Business Goals/Values
You own and operate several Independent Living
residences in British Columbia with 200 employees and 20
managers. Your business goals…
Short term (within 1 year):
 Increase NOI
• Renegotiate supplier contracts
• Decrease food costs
 Increase employee engagement
Long term (within 5 years):
 Expansion: 50% increase in number of owned and operated facilities
 Build community relationships
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Performance Management – Building a Framework
2. Develop Assessment Program
What would you do?
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Performance Management – Building a Framework
2. Develop Assessment Program
Once a framework has been established, assessing employees is
a three step process:
Step 1:
Set Objectives
(what will employees be
measured on?)
Step 2:
Assess Employees
Step 3:
Create
Development Plan
There are many models defining step 1. We will look at three…
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Performance Management – Building a Framework
2. Develop Assessment Program – Model 1
Model 1 (Traditional): Score card / assessment methodology
developed by job description
EXAMPLE: Cook
Knowledge & Ability
Trait
Rating
1. Has knowledge of methods, materials and practices of volume food preparation
2. Creates a positive dining experience
3. Is able to follow kitchen systems and practices
4. Has knowledge of food safety practices in preparation, handling and storage of food
5. Participates in own learning and development
Communications
Trait
Rating
1. Communicates effectively with supervisors, colleagues, clients, families and others
2. Makes appropriate choices to communicate verbally, in writing or electronically
4 = Consistently exceeds requirements; 3 = Meets expected requirements
2 = Acceptable but needs improvement to meet expectations; 1 = Unsatisfactory/Fails to meet minimum requirements
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Performance Management – Building a Framework
2. Develop Assessment Program – Model 2
Model 2 (Leadership Driven): Leadership develops employee
objectives for each job / role based on business objectives
EXAMPLE:
1. General Manager:
Objective: Reduce non-labour costs in FY 2013 through inventory
management, waste reduction and other process improvements
Target: 2% reduction in non-labour costs in FY 2013
2. Marketing Manager:
Objective: Increase occupancy in Northern region of BC through
development of a targeted marketing campaign <DETAILS OF PLAN>
Target: 90% occupancy in Northern region by close of FY 2013
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Performance Management – Building a Framework
2. Develop Assessment Program – Model 3
Model 3 (Employee Driven): Employees develop their objectives,
within a leadership-defined framework and Supervisor approval
EXAMPLE:
BUSINESS ACUMEN
Objective:
a.
b.
c.
d.
e.
f.
Reduces and/or minimize costs
Improves productivity
Meets employee scheduling requirements
Manages risk to the business
Meets or exceeds regulatory service requirement
Other
Description:
Target:
I will reduce food costs by implementing the following programs:
1. New inventory management process and tools
2. Create kitchen waste management monitoring program
3. Meet with staff weekly to monitor progress and track food costs
2% reduction in food costs in FY
2013 compare with FY 2012
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Performance Management – Building a Framework
2. Develop Assessment Program – Pros & Cons
MODEL 1
MODEL 2
MODEL 3
PROS:
• Easy to understand and administer
for manager and employee
• Consistent year-to-year
PROS:
• Fast: when progress needs to occur
quickly
• Specific: mangers know exactly what
needs to be done
• Flexible: can be changed by
management based on changing
business goals/needs
PROS:
• Allows employees more input which
can increase employee engagement
• Can help foster innovation: more
creative ideas
• Specific – allows supervisors /
employees to agree on goals and
targets
• Flexible: can be adjusted by
supervisor / employee regularly to
meet changing business goals
CONS:
• Inflexible – key performance
indicators usually picked once but
rarely change
• Score methods can be
misinterpreted / over-emphasized
(“why did I get a 3 not 4?”)
• Passive – limits involvement of
manager and employee
CONS:
• Perceived as “dictatorial”
• Can damage employee engagement
(increases stress/pressure)
• Can restrict creative ideas
CONS:
• Labour-intensive to administer
• Needs coordination to share
objectives across team
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Performance Management – Building a Framework
2. Develop Assessment Program – FAQs for Models 2 & 3
Question: Why not assess employees on the tasks they are
expected to perform with my company (i.e. Model #1)?
Answer:
•
•
•
•
Employees should be assessed on how they perform work
BUT
Employees are hired with the expectation they are to perform all required job duties
in a way that meets expectations. To do less suggests that the employee should not
have been hired in the first place
Assessing only performance of day-to-day activities simply measures the success of
the recruitment process
Objective setting models build a culture of high performance and commitment to the
company. It is more than just “doing your job”, it means commitment to the
company’s core values, business goals, growth and future
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Performance Management – Building a Framework
2. Develop Assessment Program - FAQs for Models 2 & 3
Question: What if, due to unforeseen circumstances or through no
fault of my own, I do not achieve my objective(s)? Does that mean I
get a poor rating?
Answer:
•
•
•
•
Not necessarily. Employees should still receive a good rating even if an objective is
not achieved if the objective was not achieved due to circumstances beyond the
employee’s control
It is a supervisor’s responsibility to determine this.
Objectives should never be adjusted, especially targets, simply because the
employee no longer believes they can achieve them
Objectives must be achievable such that success is within the control of the
employee
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Performance Management – Building a Framework
3. Development Plans and Rewards
Whether for a high or low performer, all feedback should be tied
to an action or development plan…
Poor performers:
•
Feedback should outline what is expected of the employee and where they have not met
expectations: always provide specific examples of behaviour
•
Development plans need to be equally specific
•
List behaviours that need to change and the outcomes that need to be demonstrated to
“prove” change has occurred
•
Work with employee to create a plan to achieve new outcomes: e.g. employee to take
training, to shadow another employee to improve performance, etc.
•
Provide an expected date of completion…expectations need to be stated, not assumed.
Good performers:
•
As with poor performers, feedback should be specific and outline examples of when employee
has met or exceeded expectations
•
Development plans should be equally specific, but geared towards career development
•
Where does the employee want to go? Make sure they know they are valued and that the
company is committed to their growth
•
Identify the career path: promotion, additional responsibilities, etc. and start a plan to get
there (internal/external training, job shadowing, additional responsibilities/step-ups, etc.)
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Performance Management – Building a Framework
3. Development Plans and Rewards
I got a great review….so what???
•
•
High performance needs to be rewarded
It is a best practice to develop reward programs for the highest performers to retain talent and
create succession plans for future leadership
Key points to successful rewards programs:
1. Must be fair and applied consistently to truly encourage high performance:
o Develop a transparent process to assess performance and to determine who receives
rewards for top performance
o Train, train, train: managers involved in assessing for the purpose of providing rewards
need training to ensure fairness and consistency
2. Understand your employees:
o Use surveys, focus groups or other methods (market surveys/data) to establish what
programs employees want and find meaningful: promotion vs. raise; benefits vs. salary;
training programs/conferences/sabbaticals vs. bonus; time off/PTO vs. bonus
o Don’t underestimate the power of public recognition for a job well done (feature employees
in newsletter, speak publicly of good behaviour/outcomes)
3. If a monetary reward program is used to incent high performance, establish a model to create a
consistent approach to rewards (salary bands, formula to establish bonuses that employees
understand, etc.)
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Performance Management
Agenda
1. Performance Management – Definition and Framework
2. Building a Performance Management Framework
a. Business Goals
b. Three Assessment Models: Traditional, LeadershipDriven, Employee-Driven
c. Development Plans and Rewards
3. Assessing an Employee: Tips for a Successful Evaluation
4. Performance Management in a Union Environment
18
Performance Management – Assessing Employees
Tips for a successful evaluation
1. Be specific: provide examples of behaviour you have observed when
providing feedback, both negative or positive
EXAMPLE: “Jane Doe demonstrates exceptional business acumen. In January of this
year she revised kitchen inventory procedures, created a new excel spreadhseet tool
to be used by the Hospitality Services Manager for inventory and trained staff on her
new procedures and tool. These improvements led to a significant <USE DATA>
reduction in inventory errors”
2. A performance review should never be a surprise
• Course correct bad behaviour when observed, don’t wait for a formal annual review
• Revise objectives if required
• Provide feedback in real time
3. Allow employees to self-assess
• Provides an opportunity for direct report to tell supervisor work they have
performed supervisor may not be aware of / may have missed
• Effective way to understand and deal with discrepancies between supervisor’s and
employee’s understanding of how they are performing
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Performance Management – Assessing Employees
Know your limits – 3 Biases Every Assessor Should Know!!
Human biases you should know about to provide
effective feedback
•
•
•
•
How we make decisions relies on how we take in and
process information
People take in incredible amounts of information every
second of every day: informational, physical, emotional
We use (or often don’t use) this information to make
decisions and provide feedback
How we process information to provide feedback can be
subject to biases
Source for materials: Fiske & Taylor (1991). Social Cognition
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Performance Management – Assessing Employees
Know your limits – 3 Biases Every Assessor Should Know!!
Exercise
You are working on a project with a co-worker. You have
scheduled a regular update meeting every Wednesday at
9:00AM. For three weeks in a row, your coworker has come
to the meeting late, most recently over 20 minutes late.
You are frustrated…
How would you assess your co-worker?
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Performance Management – Assessing Employees
Know your limits – 3 Biases Every Assessor Should Know!!
1. The Actor-Observer Effect
What is it?
• In general, people explain others’ behavior as caused by internal factors and
their own behavior as driven by situational or external factors
EXAMPLE: “The dog ate my homework…”
Why it Matters
• By fully considering all of the situational factors that may have caused
someone’s behaviour, we can make better decisions and form stronger
relationships
Exercise Revisited:
Is your coworker disorganized or disrespectful? Take note of the situation and be
observant…what might be causing your co-worker to be late? Are their other
examples of behaviour you can draw from?
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Performance Management – Assessing Employees
Know your limits – 3 Biases Every Assessor Should Know!!
Exercise # 2
John is a hospitality worker and has been a very good performer
throughout the year. He consistently has met or exceeded his ability to
complete his rounds of cleaning on time, every shift and the quality of
his work is good.
Recently, you received a complaint from a tenant’s family member
about the cleanliness of their mother’s room. The family member
indicated that her mother’s floor was not swept and counters not wiped
on two occasions. On the last visit, this family member also found John
to be rude.
John was given a rating of “requires improvement” from his supervisor
for that year.
Thoughts?
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Performance Management – Assessing Employees
Know your limits – 3 Biases Every Assessor Should Know!!
2. Availability Short Cut
What is it?
• People use shortcuts to make decisions and judgments about uncertain events. Availability: to
evaluate the frequency or likelihood of an event based on how quickly instances or associations
come to mind. The ease with which one can imagine particular events can bias how frequently we
think they occur
EXAMPLE: In the late 1960s, the airline industry was concerned about how surveys showed the average
individual considered travel by commercial airliner to be far less safe than it actually was. Why?
Why it Matters
• We can provide better feedback by making sure we are not unduly biased into believing certain
events or behaviours occur more often than is actually the case
What Can I Do??
• When providing feedback, take care to evaluate the facts carefully:
• Write a list of contributions each of your direct reports makes throughout the year. Ensure
you list both positive and negative behaviours.
• When making rating recommendations, review your list to ensure you are not being biased by
only salient information
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Performance Management – Assessing Employees
Know your limits – 3 Biases Every Assessor Should Know!!
Exercise 3
Last year, Julie had an exceptional year as chef of a retirement residence. She
reduced food costs by 4% and improved tenant food quality satisfaction scores
by 5%. As a result, Karen, her manager, gave her the top performance rating for
her work: 4 out of 4.
This year, Julie has maintained food costs, however tenant food quality
satisfaction scores have decreased to their levels of two years ago. Karen did
receive several compliments about the quality of food from family members for
two theme night dinners in which families and friends were invited to the
residence. In the last few months Karen has received some complaints from
kitchen staff about Julie’s management style being abrupt and even aggressive.
Karen gives Julie the top performance rating again: 4 out of 4.
Thoughts?
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Performance Management – Assessing Employees
Know your limits – 3 Biases Every Assessor Should Know!!
3. Theory Perseverance
What is it?
• People have a tendency to cling to their conclusions (theories) even after being
presented with evidence that discredits their conclusion
EXAMPLE: Conspiracy theorists
Why it Matters
• To be effective decision makers, we need to be willing to take in and evaluate new
information and potentially adopt it even if contrary to our previous beliefs.
What Can I Do??
• If you look for evidence to confirm your theory, that is all you will find! This
confirmation bias can be overcome by looking for evidence to both confirm AND negate
your beliefs
• Availability: it’s easier to recall instances or evidence that confirms our beliefs…be sure
to take note (write down?) all perspectives
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Performance Management
Agenda
1. Performance Management – Definition and Framework
2. Building a Performance Management Framework
a. Business Goals
b. Three Assessment Models: Traditional, Leadership
Driven, Employee-Driven
c. Development Plans and Rewards
3. Assessing an Employee: Tips for a Successful Evaluation
4. Performance Management in a Union Environment
27
Performance Management – Union Environment
Key Considerations
Collective Agreements (CA):
• They are “the law”: performance management frameworks must operate within the
confines of your collective agreement
• Consider making your performance evaluation framework part of your CA:
o If negotiating your CA, outlining and negotiating the terms and conditions of your
performance management process may avoid grievances down the road, especially
outlining process for poor performance
o Model 1 (Traditional) assessment method widely used/accepted
Poor Performance
• No one has an issue with a good review but what about a bad review?
o Most CAs have language relating to “culpable” behaviour and discipline
o Key to success is consistency: process needs to apply to all in the same way
o Performance reviews will have an expiration. Find one the business can work with to
meet it’s performance objectives
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Performance Management – Union Environment
Key Considerations
Rewards Program
Programs that reward some but not all employees are rare. Some options:
1. Voluntary programs/contests:
• Programs that are voluntary with participation optional are rarely
contested
• Consider contests or employee-nominated programs. Example:
- Best business idea wins cash prize
- Nominated “employee of the year”
- Site with highest tenant satisfaction score receives prize
2. Differential Rewards Program:
• Administers a bonus to all non-excluded employees but in varying
amounts based on performance (i.e. largest bonus received by
best performer, lowest performer receives smallest bonus)
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QUESTIONS?
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