Category Archives: Performance Management

IMPLEMENTATION OF THE BELL CURVE

The Bell Curve and Forced Ranking are NOT appraisal systems. The Bell Curve is only a tool used by companies to justify their comparison of employees within the company and their budgetary constraints. Once the rating has been decided the appraisal is just a administrative procedure, since the bell curve has become one of the most used tool and an integral part of Appraisal system its generally termed along with the appraisal system.

It is NOT an appraisal tool because it does not have built-in performance standards and metrics to distinguish an Outstanding, Good, Average, or Poor performance.

I think the bell curve appraisal system is better known as the Forced ranking appraisal systems. It require managers to rank their employees from best to worst, apply the rankings to a bell curve and use the results to determine pay as well as who to fire. Actually I know what forced appraisal method is like…like in there are two extremes a good and a bad..and the manager has to rank his employees accordingly…say an honest employee will be ranked in the top 10% and likewise…

Personally I am completely against the implementation of Bell Curve appraisal system. Three major flaws I see in this system are:

  1. This system is implemented department wise instead of the entire employee database and hence there are chances that the worst in some departments are much better than the average in other departments but still they are forced to leave.
  2. When this system is implemented in a department where the performance has been very good and the company cant afford to fire the lower 10% the bonuses and the raise in salary is quite less compared to other departments and hence sooner or later the firm seems the top 20% leave because they are not happy with their respective packages.
  3. This system alongwith improving the top performers in your company would also attract hyper competitive nature among employees and hence resulting into a dysfunctional working environment in the same department.

    Now for the implementation:

    Its generally based on three levels of performances the top 20 is extraordinary the mid 70% is ordinary but the backbone of the company and the rest 10% are the guys who are worthless and cant be trained and hence are fired if the performance doesnt improve for three consecutive years.

    The appraisal system is done department wise and The respective line managers are supposed to rate employees into these three groups.

The candidate who is not able to come out of the lower 10% for two/three years is then fired.
Will have to agree that the bell curve with a few tweaks can be very fruitful.

Before the implementation of the Bell Curve Appraisal System, You have to ensure the following,

a) Use of objective parameters for the performance appraisal system.

b) Determine the reason for poor performance of the employee if there is any.

c) Let the employee take responsibility for improved and only offer your assistance if needed.

d) Document all the performance related discussions with the employee

Now the following came across to me during a discussion with a friend, she used to work for ABB and hence the practice followed by ABB is just awesome a smart solution to the bell curve appraisal system.
The main business strategy of ABB  is customer focus. It aims to achieve it through TQM, time-based management and supply management. ABB has four business segments in Pakistan comprising about 30 independent business areas. Each business area operates like an independent company with its own strategic plans and budgets. Teamwork is central to the achievement of ABB’s strategy. Traditionally, ABB’s performance appraisal system focused on individual performance and results, and its compensation system rewarded high performers. Although eminently logical, this system of appraisal and compensation discouraged teamwork, which was the prime requirement for a customer-focused strategy. ABB has changed its appraisal and compensation system to foster teamwork. There are nine aspects to the current system: –

Change of nomenclature: The present system is called the developmental appraisal, not performance appraisal. This emphasizes the role of appraisal in promoting individual learning and development.

Planning the job for the following year: This provides role clarity and builds a common understanding between the individual and the team leader.

Counseling for development: Counseling is an integral part of the appraisal system emphasizing openness and disclosure.

Team performance: The individual’s contribution to team performance is of major importance.

Process parameters: Process parameters with emphasis on quality, customer focus and systems form the core of the appraisal.

Training: The appraisal system is used to identify the training needs for individuals and teams.

Focus: The appraisal system has a single focus, namely development of individual and teams.

Client-centered: The developmental appraisal system is exclusively client-oriented. There is no complex web of procedures with perforated sheets and flow charts maintained by the human resource department. The forms remain with the team leaders and team members.

Label-free ratings: There is no overall rating with labels such as ‘outstanding’, ‘good’, and ‘average’.

ABB has also developed a system of compensation for its managers that promotes team effort. In ABB, a business area, which is roughly equivalent to a strategic business unit (SBU), is judged on certain performance parameters. Based on the performance of the business area, the team members in that particular business area receive a percentage of the basic pay and allowance as lump-sum payment. All members of the same grade receive exactly the same percentage. Performance parameters include both qualitative and quantitative indicators. Quantitative parameters include orders and profits. Qualitative indicators include factors such as on-time delivery. The company classifies individuals into three categories: –

Group A includes those who perform far below expectations with special counseling being provided to such individuals.

Group B consists of ideal performers with performance exceeding the expectations of the organization. They are given non-financial rewards in addition to flat equal increments.

Group C comprises individuals who perform strictly according to expectations. All of them receive exactly the same amount of bonus and increments.

To summarize Bell curve by itself is strict no according to my opinion but a few tweaks and this should be the best solution.

I hope the above clears all doubts on drawbacks and implementation of bell curve appraisal system.

 

 

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HR Manager’s Role In Organization Performance Management And Employee

I have heard about  a lot ofHR Managers desire to change the Performance Management system in the organization as their first HR assignment. It is no doubt one of the better portfolios and immensely challenging one. The challenge of the performance management system not only lies in the design of it but in its execution. This is an area where HR Managers can add immense value. One needs to carefully determine the role that one needs to play in the process for maximum effectiveness. One can earn a lot of credibility as the HR Manager is this critical exercise is done well. Performance management is a critical organization development intervention. This is an area where HR Managers can add immense value. One needs to carefully determine the role that one needs to play in the process for maximum effectiveness. One can earn a lot of credibility as the HR Manager is this critical exercise is done well. Performance management exercise is much more than only an evaluation process for employees. It is often a career defining exercise for a lot of ambitious employees and HR has a significant role to play in evaluation and assessment of employee performance.

Play the “perfect role” in Performance Management System: (more…)

A Study to Explore 360 Degree Appraisal System

360 degree Appraisal system is useful to help people be more effective in their current roles, and also to help them understand what areas they should focus on if they want to move into a management role.

 

The relationship of 360 Degree Appraisal System with other Human Resource Systems is positive in terms of its utility. It is used for training, team building, career development, succession planning, performance assessment and for monitoring the effects of change training programmes.

360 degree Appraisal system makes better performance of the organization because

  • Enhances performance quality
  • Provides specific performance feedback
  • Targets developmental areas
  • Provides strong motivation
  • Facilitates performance improvement
  • Allows measurement of training effectiveness
  • Enhances self-knowledge
  • Supports continuous learning
  • Improves the reliability and validity of performance information.

 

There are few inherent difficulties are not unique and common with any appraisal & feedback systems like

  • Managers may focus on pleasing subordinates in an effort to get higher appraisal
  • The authority of manager could be undermined by the pressure of upward appraisals and the implications of low evaluations for a manager’s status within the organization.
  • 360 degree Appraisal System is not focused on basic technical or job-specific skills
  • 360 degree appraisal system should not be used to measure strictly objective things such as attendance, sales quotas, etc.
  • Managers may also be confused about how to interpret subordinate appraisal relative to ratings from other sources, such as their bosses

In order to reap maximum benefits from the system, the system should have

Senior-Level Support – Senior Managers should participate in the 360 degree feedbackappraisal process and actively pursue their own developmental plans.

Communicating the purpose of the system to all the employees

Proper Planning for the implementation of 360 degree appraisal system

Delivery of Feedback – If feedback is not provided in an appropriate manner, your program could backfire. We recommend using professional, neutral coaches to deliver feedback.

Developmental Plan – Every person who receives feedback needs to create some developmental goals based on the feedback he or she received – and remember – those goals need to be both measurable and achievable.

Accountability – Developmental goals are meaningless unless people are held accountable for achieving them. Make sure your employees and their managers understand how to create S.M.A.R.T. goals – Specific, Measurable, Attainable, Realistic and Timely.

Follow-Up – Plan to solicit additional feedback six to twelve months after the initial data are collected.

Conclusion:

360 degree appraisal system as discussed above has its advantages and disadvantages. However, this has lesser limitations as a performance Management system in comparison to the traditional top-down performance methods. In order to reap the full benefits, organizations need to nurture a value system wherein openness, trust and objectivity are given more emphasis.

 

How to Use Performance Appraisals to Build Staff Success and Company Results

The Annual Performance Appraisal is an opportunity to enhance employee performance and create greater success for the company and the individual. My intent is to explore how coaching skills can be used in creating a good performance appraisal experience for both the employee and the supervisor and how to keep good performance going throughout the year.

Performance appraisals are often dreaded by both the employee and the supervisor. Often the manager talks about issues that the employee didn’t expect. With the manager as a coach and partner committed to the employee’s success the environment can shift. The goal is to reframe the experience, creating a positive, goal oriented environment that thrives on success.

In using coaching type questions you have the opportunity to create powerful positive energy, find out what the gaps are and what the resources needed are.

When meeting with a staff member:

o Be totally present

o Tune into them and tune out everything else

o See their greatness

Use Coaching Questions:

o What’s going right?

o What makes it right?

o How can we build on this success?

o What is it that would be ideal

o What are the challenges you are dealing with?

o What resources do you need?

You, the supervisor become the coach–coaching for success. In creating a plan focused on success for the employee, the manager begins to shift the paradigm to one of employee and coach/partner. As supervisors, our role is build successful teams and we have to have successful team members in order to do that. If we focus on creating success we are more likely to create it. Focus on the positive, the solutions. What’s going right, how do we create more of it? In working with teams I have found that when I focus on what they are doing well and how we do more of it we build on our success.

When we create goals that are measurable, we can measure them, and track their progress. If goals are soft, not measurable it becomes difficult to progress the plan or give any feedback. So, how do we make them measurable? Measurable is countable, how many, when, who?

Goals tie into the company vision and the employee’s vision.

Goals Point to an exciting future.

SMART Goals are positive, specific, measurable, attainable, relevant and time bounded

Annual goals are typically big. It’s important to break them down into smaller steps. Make them doable and not overwhelming.

Building in accountability in your annual success plans is vital. How many performance appraisals have you had or have you done, that didn’t get looked at until the next year?

Meet with staff regularly, reviewing the goals and creating new plans for the upcoming month. It’s unfair to come at a staff person at the end of the year and say you didn’t accomplish what we outlined in your plan. If it is never mentioned it gives staff the impression that it wasn’t that important and they don’t need to work on the goals outlined. Remember the goals outlined are focused on creating better results for the company. You want that. Focus on the plan.

At the monthly meeting spend time to:

Review the vision

Review the accomplishments (What’s going right?)

Review the goals and score them: 60%; 85%

When a goal is falling short use coaching skills to help figure out what the problem is and how to change it.

Yes, you can accomplish some things just by writing down the goal, but the level of accomplishment is usually lower than what we want in our companies.

The monthly review of the PLAN gives you the opportunity to really check-in with staff and support them in developing success. It prevents the annual performance review dread. Staffs know you are invested in their success as well as that of the company. This is powerful. It develops you as a leader and partner of the staff member and lets you know where the focus needs to be. You have created a regular stream of communication-both ways that can only improve results.

Coach them to succeed

 

A Fool-proof Plan for Promotion


Getting a promotion is easy but maintaining a new position is not a piece of cake. An oft-quoted line from  Spiderman
 comes to mind whenever I get a promotion: with great power comes great responsibility.

But how do you get that great power?  Follow a few easy tips and get an instant promotions in you organization.

Show your company the love

Any organization you join, you join for a reason. Whatever the reason, the company has given you opportunities in terms of salary and career. In the current economical scenario, when the unemployment rate is 15 per cent, getting a job is difficult. In these conditions if an organization has given you an opportunity, be thankful and show your employer that you appreciate their choosing you from among many other applicants. Show your love for the organization with your attitude and behavior.

Work with passion

It is always your choice to join a company. Companies never force you to join them. They always have alternatives, but when they offer you a job, it’s your choice to accept or reject the offer. After joining the company, you agree to work in the field of your choice. Therefore, you need to be passionate and immerse yourself in work. Learn new things every day related to your field and try to implement them to the current job process. This will make the employer happy that you are more interested in bringing out your own potential and are not just taking home a monthly salary.

Take initiative and go the extra mile

An employee that takes initiative and goes the extra mile can help an organization to grow – and that always pleases employers. But before taking any initiatives, calculate the risk associated with it. Do some research, discuss the issues with your peers in other companies, discuss it with your immediate supervisor (if he is supportive) and then present the idea in-front of your employer.

Taking initiative is always appreciated if the idea is in favor of a company’s growth and profitability. It can build your trust and make the employer feel that you are interested in the growth of the company.  Eventually, growth of a company comes back to you.

Many of you may be thinking that these tasks are not easy. Remember, if you have deep interest in your field of choice, motivation to perform will come automatically. Focus on career development rather than only your salary and perks. If you find a company that can make your career, forget everything and start focusing on your work. Once you become successful in winning the heart of your employer; promotion, handsome salary and all the benefits are waiting for you.

3 Steps to Performance Management

A Performance Management System (PMS) is a systematic process through which an organization can gauge its employees’ performance.

Common Elements of an effective performance management system are:

1-      Plan: Individual and team objectives should be communicated to employees in a clear and concise manner. These objectives should be based on “SMART” (Specific, Measurable, Attainable, Relevant, Time bound) criteria, and should be developed by both managers and their team members. Objectives must reflect the company’s mission, vision and values, keeping in mind organizational goals, the methods to be utilized to achieve   them and corresponding deadlines.

2-      Do: Monitor results regularly and consistently by keeping a close eye on employee productivity. Various tools such as    critical incident logs can be used to collate accurate information. Make necessary adjustments in performance and behavior to achieve the results you want. If you are not getting the desired results, ‘coach’ your employees by asking them probing questions, listening to their issues and motivating and guiding them. Additionally, provide constructive feedback regularly; this will effect their growth and productivity positively.

3-      Appraise Performance: At the end of the year, conduct performance appraisals, which fulfill two major goals. Firstly they help identify possible adjustments in subsequent strategies and SMART objectives. Secondly, performance appraisals help develop individual development plans for employees in regard to their future salaries, positions and career paths.

Remember, performance appraisals cannot be accurate unless the first two steps (“Plan and Do”) are executed meticulously and methodically. If they are done in an in inefficient manner, the performance appraisal will end up being an exercise in futility, resulting in employees feeling resentful instead of motivated.

Ultimately, recognizing an employee’s achievements through financial or non-financial rewards is critical to the success of the PMS process. However , having an effective PMS in place requires a top-down commitment from the organization, as well as an allocation of necessary resources.

12 Steps to Outstanding Staff Performance Reviews

 1. Establish Key Priorities. My clients all understand the power of this. However, if you haven’t determined the 3 key priorities for each staff member, make this task an immediate priority. Key priorities are the most important things you want your staff member to concentrate on achieving over the next six month review period. It is critical both you and your team understand and focus on these.

 2. Review Key Priorities. Assuming that your staff have been given their key priorities, the purpose of the performance appraisal is to review individual’s performance and remuneration against these key priorities. This review is a two-way open discussion with input from both parties. You should reach a consensus on your assessment – if not, discuss further. If a staff member comprehensively delivers on their 3 key priorities, their performance must be acknowledged and remuneration reviewed.

 3. Set Key Priorities for Next Six Months. After reviewing key priorities in Step2, some or all of the existing key priorities may have been completed in the prior period. Discuss this with your staff member and introduce new key priorities where appropriate. Remember to limit these to three although fast track senior staff may have as many as five.

 4. What Barriers, Obstacles and Hurdles need to be overcome? Workshop with your staff member any barriers that either of you see may block them from succeeding with their key priorities. Be honest and spend time here.

 5. Discuss Their Opportunities for Personal & Professional Development and Ask Where Are They Stuck? Sensitively discuss together where there are gaps in their performance. Both provide feedback on areas to focus on development. Ask them to tell you where they are stuck and what successes and opportunities would be achieved if they got “unstuck”.

 6. Analyse What You Can Do. What can you do now and over the next six months to help the individual break through the barriers, obstacles and hurdles ahead of them? Be open, committed and genuine.

 7. Assess Them. Are there any successful performance and resulting outcomes achieved by the staff member that need to be acknowledged now? Remember that acknowledgement of performance can come in many guises – verbal, promotion, bonus, benefit or pay increase (now or at next review).

 8. Assess Yourself. Ask them to tell you what you are doing as a Manager that’s working for them and what you’re doing that isn’t working. You must be open and not resist the feedback. Use this time to develop your listening skills. Discuss this together and agree on another way to work together on this in the future. The ability to facilitate this step well is incredibly powerful and empowering.

 9. Regular Scheduled One-On-Ones. Do you ensure that every staff member has a periodical 1-1 meeting with their Team Leader? If not, implement now. The regularity of these 1-1 sessions can be as often as daily (if circumstances require) but certainly monthly at a minimum. This is where you discuss their progress on their key priorities and help staff achieve them. This is real management.

10. Summarise Your Agreement. You’ve almost reached the end of the staff performance appraisal, however this step is critical. You need to summarise with the staff member exactly what you’ve just agreed upon for the next six months. Agree verbally and then write it down. Forward it to the staff member. Agree on how you will monitor and measure it. Make it clear that future performance appraisals will be determined against these key priorities and measures.

 11. Diarise Management Action. I recommend you ensure that all follow up action to the performance appraisal is attended to or diarised within 48 hours. This includes any remuneration adjustments and promised assistance in removing immediate hurdles or obstacles. It also includes sending staff a summary of agreed priorities and booking periodic 1-1 sessions. If you don’t do this promptly it gets forgotten. If you fail doing this step, your staff will not believe in your leadership and management so forget about true engagement and accountability from them in the future. They will see you as uncommitted.

 12. Diarise Next Six Month Review. Everyone’s busy, we’re out of control and you simply don’t have time. Not good enough. Diarise your next six month review and make these one of the non-negotiable, non-cancelable and non rescheduled activities for the year. Make this a rule for the entire business and never weaken on this. Your business and staff deserve it. Be a leader.

Ten Stupid Things Managers Do To Screw Up Performance Appraisal

 Performance appraisals aren’t fun. But a lot of the time they are agonizing because managers do really dumb things, ending up destroying a process that is important to everyone (or should be).

 Thing #1: Spending more time on performanceappraisal than performance PLANNING, or ongoing performance communication.

Performance appraisal is the end of a process that goes on all the time – a process that is based on good communication between manager and employee. So, more time should be spent preventing performance problems than evaluating at the end of the year. When managers do good things during the year, the appraisal is easy to do and comfortable, because there won’t be any surprises.

 Thing #2: Comparing employees with each other.

Want to create bad feelings, damage morale, get staff to compete so badly they will not work as a team? Then rank staff or compare staff. A guaranteed technique. And heck, not only can a manager create friction among staff, but the manager can become a great target for that hostility too. A bonus!

 Thing #3: Forgetting appraisal is about improvement,not blame.

We do appraisal to improve performance, not find a donkey to pin a tail on or blame. Managers who forget this end up developing staff who don’t trust them, or even can’t stand them. That’s because the blaming process if pointless, and doesn’t help anyone. If there is to be a point to performance appraisal it should be getting manager and employee working together to have everyone get better.

 Thing #4: Thinking a rating form is an objective,impartial tool.

Many companies use rating forms to evaluate employees (you know, the 1-5 ratings?). They do that because it’s faster than doing it right. The problem comes when managers believe that those ratings are in some way “real”, or anything but subjective, often vague judgments that are bound to be subjective and inaccurate. By the way, if you have two people rate the same employee, the chances of them agreeing are very small. THAT’S subjective. Say it to yourself over and over. Ratings are subjective. Rating forms are subjective. Rating forms are not behavioral.

 Thing #5: Stopping performance appraisal when a person’s salary is no longer tied to the appraisals.

Lots of managers do this. They conduct appraisals so long as they have to do so to justify or withhold a pay increase. When staff hit their salary ceiling, or pay is not connected to appraisal and performance, managers don’t bother. Dumb. Performance appraisal is FOR improving performance. It isn’t just about pay (although some think it is ONLY about pay). If nothing else, everyone needs feedback on their jobs, whether there is money involved or not.

 Thing #6: Believing they are in position to accurately assess staff.

Managers delude themselves into believing they can assess staff performance, even if theyhardly ever see their staff actually doing their jobs, or the results of their jobs). Not possible. Most managers aren’t in a position to monitor staff consistently enough to be able to assess well. And, besides what manager wants to do that or has the time. And, what employee wants their manager perched, watching their every mood. That’s why appraisal is a partnership between employee and manager.

 Thing #7: Cancelling or postponing appraisal meetings.

Happens a whole lot. I guess because nobody likes to do them, so managers will postpone them at the drop of a hat. Why is this bad? It says to employees that the process is unimportant or phony. If managers aren’t willing to commit to the process, then they shouldn’t do it at all. Employees are too smart not to notice the low priority placed on appraisals.

 Thing #8: Measuring or appraising the trivial.

Fact of life: The easiest things to measure or evaluate are the least important things with respect to doing a job. Managers are quick to define customer service as “answering the phone within three rings”, or some such thing. That’s easy to measure if you want to. What’s NOT easy to measure is the overall quality of service that will get and keep customers. Measuring overall customer service is hard, so many managers don’t do it. But they will measure the trivial.

 Thing #9: Surprising employees during appraisal.

Want to really waste your time and create bad performance? This is a guaranteed technique. Don’t talk to staff during the year. When they mess up, don’t deal with it at the time but SAVE it up. Then, at the appraisal meeting, truck out everything saved up in the bank and dump it in the employee’s lap. That’ll show ’em who is boss!

 Thing #10: Thinking all employees and all jobs should be assessed in exactly the same way using the same procedures.

Do all employees need the same things to improve their performance? Of course not. Some need specific feedback. Some don’t. Some need more communication than others. And of course jobs are all different Do you think we can evaluate the CEO of Ford using the same approach as we use for the person who cleans the factory floor? Of course not. So, why do managers insist on evaluating the receptionist using the same tools and criteria as the civil engineers in the office? It’s dumb. One size does not fit all. Actually why do managers do this? Mostly because the personnel or human resource office leans on them to do so. It’s almost understandable, but that doesn’t make it any less dumb.

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