Chapter 7 Implementing a Performance Management System Copyright 2013 Pearson Education, Inc. publishing as Prentice Hall 7-1 7-1 Overview Preparation Communication Plan Appeals Process Rater Training Programs Pilot Testing Ongoing Monitoring and Evaluation Online Implementation Copyright 2013 Pearson Education, Inc. publishing as Prentice Hall 7-2 7-2 Preparation Need to gain system buy-in through : Communication plan regarding performance management system Including appeals process Training programs for raters Pilot testing system Ongoing monitoring and evaluation to show benefits Copyright 2013 Pearson Education, Inc. publishing as Prentice Hall 7-3 7-3 Communication Plan Answers: What is Performance Management (PM)? How does PM fit into our strategy? What's in it for me? How does it work? What are our roles and responsibilities? How does PM relate to other initiatives? Copyright 2013 Pearson Education, Inc. publishing as Prentice Hall 7-4 7-4 Cognitive Biases That Affect Communications Effectiveness Selective exposure Selective perception Selective retention Copyright 2013 Pearson Education, Inc. publishing as Prentice Hall 7-5 7-5 To Minimize Effects of Cognitive Biases: A. Consider employees Involve employees in system design Show how employee needs are met Copyright 2013 Pearson Education, Inc. publishing as Prentice Hall 7-6 7-6 To Minimize Effects of Cognitive Biases (Continued): B. Emphasize the positive Use credible communicators Strike firstcreate positive attitude Provide facts and consequences Copyright 2013 Pearson Education, Inc. publishing as Prentice Hall 7-7 7-7 To Minimize Effects of Cognitive Biases (Continued): C. Repeat, document, be consistent Put it in writing Use multiple channels of communication Say it, and then say it again Copyright 2013 Pearson Education, Inc. publishing as Prentice Hall 7-8 7-8 Appeals Process Promote employee buy-in to PM system Amicable/Nonretaliatory Resolution of disagreements Increases perception of the system's fairness Copyright 2013 Pearson Education, Inc. publishing as Prentice Hall 7-9 7-9 Appeals Process (continued) Employees can question two types of issues: Judgmental Validity of evaluation Administrative Whether policies and procedures were followed Copyright 2013 Pearson Education, Inc. publishing as Prentice Hall 7-10 7-10 Recommended Appeals Process Level 1 HR reviews facts, policies, and procedures HR reports to supervisor/employee HR attempts to negotiate a settlement Level 2 Arbitrator (panel of peers and managers) or High-level managerfinal decision Copyright 2013 Pearson Education, Inc. publishing as Prentice Hall 7-11 7-11 Rater Training Programs Content Areas to Include: Information Identifying, observing, recording, and evaluating How to interact with employees Choices of Training Programs to Implement Rater Error Training Frame of Reference Training Behavioral Observation Self-Leadership Training Copyright 2013 Pearson Education, Inc. publishing as Prentice Hall 7-12 7-12 Content A. Informationhow the system works Reasons for implementing the performance management system Information The appraisal form System mechanics Copyright 2013 Pearson Education, Inc. publishing as Prentice Hall 7-13 7-13 Content (continued) B. Identifying, observing, recording, and evaluating performance How to identify and rank job activities How to observe, record, and measure performance How to minimize rating errors Copyright 2013 Pearson Education, Inc. publishing as Prentice Hall 7-14 7-14 Content (continued) C. How to interact with employees when they receive performance information How to conduct an appraisal interview How to train, counsel, and coach Copyright 2013 Pearson Education, Inc. publishing as Prentice Hall 7-15 7-15 Choices of Training Programs Rater Error Training (RET) Frame of Reference Training (FOR) Behavioral Observation Training (BO) Self-Leadership Training (SL) Copyright 2013 Pearson Education, Inc. publishing as Prentice Hall 7-16 7-16 Rater Error Training (RET) Goals of RET Make raters aware of types of rating errors they are likely to make Help raters minimize errors Increase rating accuracy Copyright 2013 Pearson Education, Inc. publishing as Prentice Hall 7-17 7-17 Intentional Rating Errors Leniency (inflation) Severity (deflation) Central tendency Copyright 2013 Pearson Education, Inc. publishing as Prentice Hall 7-18 7-18 Unintentional Rating Errors Similar to Me Stereotype Halo Negativity Primacy Recency First Impression Spillover Attribution Contrast Copyright 2013 Pearson Education, Inc. publishing as Prentice Hall 7-19 7-19 Possible Solutions for Types of Rating Errors Intentional Focus on motivation Demonstrate benefits of providing accurate ratings Unintentional Alert raters to different errors and their causes Copyright 2013 Pearson Education, Inc. publishing as Prentice Hall 7-20 7-20 Frame of Reference Training (FOR) Goal of FOR* Raters develop common frame of reference Observing performance Evaluating performance Expected results of FOR Raters provide consistent, more accurate ratings Raters help employees design effective development plans *Most appropriate when PM appraisal system focuses on behaviors Copyright 2013 Pearson Education, Inc. publishing as Prentice Hall 7-21 7-21 Behavioral Observation Training (BO) Goals of BO Minimize unintentional rating errors Improve rater skills by focusing on how raters: Observe performance Store information about performance Recall information about performance Use information about performance Copyright 2013 Pearson Education, Inc. publishing as Prentice Hall 7-22 7-22 Self-Leadership Training (SL) Goals of SL Improve rater's confidence in ability to manage performance Enhance mental processes Increase self-efficacy Copyright 2013 Pearson Education, Inc. publishing as Prentice Hall 7-23 7-23 Pilot Testing Pilot testing is done before the system is implemented. Provides ability to: Discover potential problems Fix them Copyright 2013 Pearson Education, Inc. publishing as Prentice Hall 7-24 7-24 Pilot TestingBenefits Gain information from potential participants Learn about difficulties/obstacles Collect recommendations on how to improve system Understand personal reactions Get early buy-in from some participants Get higher rate of acceptance Copyright 2013 Pearson Education, Inc. publishing as Prentice Hall 7-25 7-25 Implementing a Pilot Test Roll out test version with sample group Staff and jobs generalizable to the organization Fully implement planned system All participants keep records of issues encountered Do not record appraisal scores Collect input from all participants Copyright 2013 Pearson Education, Inc. publishing as Prentice Hall 7-26 7-26 Ongoing Monitoring and Evaluation When system is implemented, decide: How to evaluate system effectiveness How to measure implementation How to measure results Evaluation data to collect: Reactions to the system Assessments of operational and technical requirements Effectiveness of performance ratings Copyright 2013 Pearson Education, Inc. publishing as Prentice Hall 7-27 7-27 Indicators to Consider Number of individuals evaluated Distribution of performance ratings Quality of information Quality of follow-up actions Quality of performance discussion meetings System satisfaction Cost-benefit ratio or return on investment (ROI) Unit-level and organization-level performance Copyright 2013 Pearson Education, Inc. publishing as Prentice Hall 7-28 7-28 Online Implementation Online tools to facilitate implementation E-mails Electronic newsletters Web sites Appeal filing Training programs Pop-up reminders Copyright 2013 Pearson Education, Inc. publishing as Prentice Hall 7-29 7-29 Online ImplementationAdvantages Automation Speed up processes Lower cost Gather and disseminate information faster and more effectively System can be linked to other HR functions Easier to monitor unit-level and organizational-level trends over time Copyright 2013 Pearson Education, Inc. publishing as Prentice Hall 7-30 7-30 Online ImplementationLimitations PM systems that are not implemented following best practices will not necessarily improve from the use of online components. In fact, online implementation may create a more complicated system that is a big waste of time and resources for all involved. Copyright 2013 Pearson Education, Inc. publishing as Prentice Hall 7-31 7-31 Quick Review Preparation Communication Plan Appeals Process Training Programs Pilot Testing Ongoing Monitoring and Evaluation Online Implementation Copyright 2013 Pearson Education, Inc. publishing as Prentice Hall 7-32 7-32 All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior written permission of the publisher. Printed in the United States of America. Copyright 2013 Pearson Education, Inc. publishing as Prentice Hall Copyright 2013 Pearson Education, Inc. publishing as Prentice Hall 7-33 7-33