Stage 3 - Evaluating Performance (Part 8 of 10 of HRSG’s Guide to Performance Management through Competencies)

The final stage in the performance management cycle involves determining how the employee performed, whether there were things that could have been done differently or better, and whether the employee achieved his/her learning goals for the cycle.

This is the first in a 10 part series that looks at:

1. What is Performance Management?
2. Linking Performance Management to Corporate Strategy
3. How to Design a Performance Management System - Step 1
4. How to Design a Performance Management System - Step 2
5. The Performance Cycle – How Competencies are Incorporated
6. Stage 1 – Planning for Success
7. Stage 2 – Managing & Feedback for Success
8. Stage 3 – Evaluating Performance
9. Multi-source Feedback
10. Performance Management in Summary

While the supervisor is clearly responsible for conducting the final review, the process should be collaborative, with employees coming prepared to review their accomplishments, where they may have exceeded or performed to the standards required, as well as where there were challenges or shortfalls in their performance. If progress review meetings have been conducted on a regular basis, there should be few surprises for the employee and supervisor.

Common Errors in Evaluation
One of the main challenges in Performance Management, especially in situations where high stakes decisions are being made based on Performance Reviews (e.g., salary increase, bonuses, promotions, etc.), is ensuring that to the extent possible ratings of performance are as fair and as accurate as possible.

The following table highlights some of the common errors when rating employee performance as well as ways in which each of these types of errors can be addressed.

Error Type		Description	Ways to Address
Recency:		Giving more weight to events closer to the evaluation time	•  Record performance information throughout the cycle. •  Conduct evaluation based on full performance information available.
Leniency:		Lenient evaluations because: •       like employee •       don’t want to deliver negative information •       Don’t want to penalize employee if other managers are known to be lenient	•  Keep a good record of performance information •  Substantiate evaluation, based on specific performance examples collected throughout the cycle. •  Second level review by manager’s manager. •  Committee reviews to rationalize ratings among employees.
Central Tendency:	The tendency to give an average rating to all or most employees. Could be due to: •       Lack of time •       Laziness •       Uncertainty about employee performance •       Unwilling to differentiate among employees		•   Keep a good record of performance information. •   Substantiate evaluation, based on specific performance examples collected throughout the cycle. •   Second level review by manager’s manager. •   Committee reviews to rationalize ratings among employees.
Severity:	Relatively rare. May be due to wish to: •       Keep employees on their feet, or •       Appear tough.		•   Ensuring that manager substantiates ratings based on specific performance examples. •   Second level review by manager’s manager. •   Committee review to rationalize ratings among employees.
First Impression:	Reliance on first impression of employee. Could be related to infrequent contact with employee.		•   Observing employee’s performance at work. •   Regular meetings to review progress and provided feedback.
Similar-to-me:	Giving more favorable evaluations to employees that seem similar to manager.		•   Keep good records of performance •   Substantiate evaluation, based on specific performance examples collected throughout cycle. •   Second level review by manager’s manager. •   Committee review to rationalize ratings among employees.

Key Decisions
When designing an integrated goals and competency-based performance management system, there are a number of decisions that have to be made with regard to how the ratings will be completed.

Rating Goals:

• Will each goal be rated, or will the manager assign and overall rating for all goals?
• Will there be an arithmetic average of all the goals, or will some goals be seen as more important and given more weighting in the overall rating?

Rating Competencies:

• Will an overall rating be given to each competency?
• Will each indicator be rated and then averaged to achieve a rating for the competency?
• Will some competencies be seen as more important and therefore be given a heavier emphasis or weighting?

 Rating Goals plus Competencies:

• How will the ratings for the goals be considered in combination with the ratings for competencies?
• What weighting will each receive?

All of these questions needed to be considered, especially if significant decisions are being made based on the ratings – e.g., pay-for-performance, bonus or other rewards, promotion, succession, etc.

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In the next in our series of 10 blogs, we will discuss multi-source (360 degree) feedback and the important role competencies play in this form of performance management. Sign up to our blog’s mailing list through the form on the right-hand side to receive the rest of the series in your inbox.

HRSG is a leader in competency-based performance management solutions and training. Contact us today to find out how we can help you.

Stage 2 - Management & Feedback for Success (Part 7 of 10 of HRSG’s Guide to Performance Management through Competencies)

The next step in the Performance Management Cycle is to review progress.

This is the first in a 10 part series that looks at:

1. What is Performance Management?
2. Linking Performance Management to Corporate Strategy
3. How to Design a Performance Management System - Step 1
4. How to Design a Performance Management System - Step 2
5. The Performance Cycle – How Competencies are Incorporated
6. Stage 1 – Planning for Success
7. Stage 2 – Managing & Feedback for Success
8. Stage 3 – Evaluating Performance
9. Multi-source Feedback
10. Performance Management in Summary

Reviewing the employee’s performance throughout the performance cycle is dynamic and vital to the employee’s success. Both the employee and superior should be continually assessing progress achieving in the employee’s goals and monitoring where improvements can be made.

Part way through a performance cycle things can change. Budgets can be cut, priorities can change or unforeseen challenges beyond the employee’s control can arise, which will necessitate a change in the employee’s goals and plan. Similarly, it is possible that gaps in the employee’s skills/competencies can be discussed, which will in turn give rise to a change in the learning and development goals for the employee.

Competencies as the Foundation for Feedback

Clearly establishing the competencies and the actions required for successful performance is an excellent way to support feedback. Firstly, it is important at the beginning of the performance cycle for the supervisor and employee to review expected actions for the employee. Having done this, it then becomes possible to review and discuss throughout the cycle how the employee is doing at displaying the selected level needed for the job. An example of a scaled competency from HRSG’s competency dictionary is shown below. One could argue that Client Focus is needed for most jobs; but for certain jobs - such as Help Desk Agent, Retail Sales, etc. – this competency is particularly important. For the supervisor, having clearly defined the competency level needed in the job takes the guess work out of giving feedback to employees. Competencies also give employees a much clearer picture of the kinds of actions or behaviors the supervisor is expecting from them in their jobs.

Let’s take an example of a Travel Agent. I travel all over the world in my role as President of HRSG. I rely on good Travel Agents to get me to my destination in the most time and cost-effective way possible. I expect them to display Level 3 Client Focus behaviors / actions – in other words, I want them to “provide added value” in their service. If I tell them I want to get to a certain destination halfway around the world by a certain date, I need them to provide options. I want an agent that “looks for ways to add value beyond my immediate request”.

I recall one situation in which I had asked for flights to a destination on a certain date. The agent came back with options for that date, but failed to tell me that if I travelled the day before, I would have had fewer connecting flights, taking far less time at less cost. Clearly, the agent did not provide added value by looking for ways to address by needs beyond my immediate request; in other words, the agent did not perform to the standard required (Client Focus, Level 3). In a performance discussion, I could use this as a specific example of how the performance expectation was not met, as well as the basis for discussing alternative actions the employee could have taken to meet my needs and to improve performance in the future.

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In the next in our series of 10 blogs, we will discuss evaluating performance and how competencies support this process. Sign up to our blog’s mailing list through the form on the right-hand side to receive the rest of the series in your inbox.

HRSG is a leader in competency-based performance management solutions and training. Contact us today to find out how we can help you.

Measuring ROI of Competency-based Talent Management

We all know how difficult it is to effectively manage something you cannot measure. Like many other management constructs, measuring outcomes of Competency-based Talent Management (CbTM) can be challenging.

As a competency consultant, I often see HR or line managers not even consider results measurement, or get half way through their CbTM project before they even think of measuring results. And unfortunately, it can sometimes be too late if you are too far along in the project, as you need a baseline for comparison.

Measurement of results should really start the moment you identify a business need for a CbTM application, at which point you should identify the desired results and changes you are trying to achieve. It does not have to be complicated, and often can be as simple as qualitative feedback. On the more complex side, you can look at organizational performance measures, and how they tie to the CbTM initiative.

Measuring the results of competency-based HR applications is the only way to be able to prove success to top management. This requires measurement of current performance at the time the project is started, followed by a second or multiple measurements after the application is implemented and has had time to affect the workplace. By building measurements into the project from the start, the application can be designed to facilitate the collection of performance data, and you can more easily demonstrate real value to your management team.

Here are a few examples of measurement approaches an organization can use:

• Project Execution: A simple measure would be to review the project plan. Regardless of effectiveness, did the CbTM project team do what it said it would do? This establishes what, how well and how much was done.
• Qualitative Data Sampling: Conducting interviews with different functional groups of employees and managers on a specific HR application (training, career development, etc.). Their anecdotal feedback on its use (competency model, process, tools, etc.) can be summarized and reported back to the CbTM project team and top management. 
• Performance: Showing performance improvements by comparing it to a baseline data is more objective - for example, the performance impact of selecting employees for their competencies versus using traditional methods by looking at things like: output per person or per group; reduction in employee turnover within an organization; reduction in errors or client complaints.
• Business Results: Ultimately, a CbTM application needs to support business goals such as profitability, competitiveness, market share growth, efficiency, quick turnaround times, and increasing customer satisfaction among others. Business metrics that can, and should be included are things like: reduction in turnover that results in lower costs and higher profitability; reduction in production errors, increasing efficiency and speeding up time to market, etc.

So, when starting your competency initiative, think hard about what you are trying to accomplish and why, confirm this with top management, establish the measurement process, set up your baseline measures and then report regularly to determine whether the initiative is having the desired impact.

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HRSG is a leader in competency-based talent management solutions. Contact us today to find out how we can help you.

Stage 1 – Planning for Success (Part 6 of 10 of HRSG’s Guide to Performance Management through Competencies)

This is the first in a series of three that examines the Performance Planning cycle in depth starting with the Planning stage.

This is the first in a 10 part series that looks at:

1. What is Performance Management?
2. Linking Performance Management to Corporate Strategy
3. How to Design a Performance Management System - Step 1
4. How to Design a Performance Management System - Step 2
5. The Performance Cycle – How Competencies are Incorporated
6. Stage 1 – Planning for Success
7. Stage 2 – Managing & Feedback for Success
8. Stage 3 – Evaluating Performance
9. Multi-source Feedback
10. Performance Management in Summary

At the beginning of the cycle the employee and manager should meet to discuss and agree on:

• Measurable goals and targets – “what” the employee must accomplish
• Specific competencies employee needs to accomplish the job and work goals for the performance cycle, as well as
• the learning and development activities the employee needs to undertake to be successful in the job

When setting performance goals, they much meet the SMART criteria:

Specific: Manager and employee share exactly the same understanding of what is to be achieved and to what standards

Measurable: Extent to which they can be objectively observed and measured

Achievable: Should be attainable and yet, provide a stimulating challenge to the employee

Realistic / Relevant: Within control (authority & resources) of the employee and related to the employee’s job

Time Bound: Set within reasonable time frames

Key Indicators are the measures that are used to assess whether the end results have been achieved. They are observable or quantifiable measurements of performance defined in four ways:

For any one objective, one or more of these four types of performance indicators may apply.

Work Plans

A performance plan clearly lays out the goals, criteria, and often the competencies necessary to achieve the goals. However, for complex goals involving several actors and steps, a work plan may be required describing what will be done to achieve the performance objectives to the standards required. For each performance objective there should be a step-by-step plan, which identifies:

• HOW the employee plans to achieve the performance objective
• WHO is responsible for the activities (if more than one employee)
• WHEN these activities will be carried out, and
• WHERE these activities will be carried out (if appropriate).

Competencies to be measured

Competencies are included in the performance management process because they provide a description of how the employee is expected to behave in performing their work. But, different types of competencies can be incorporated in the system depending what the organization wishes to reinforce. For example, competencies that are core to the success of the organization are typically are included to focus everyone on the strategic goals of the organization and to reinforce the required behaviour change needed to achieve the vision. The table below provides a description of different types of competencies that can be included and rationale for doing so.

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In the next in our series of 10 blogs, we will discuss managing performance and providing feedback based on competencies. Sign up to our blog’s mailing list through the form on the right-hand side to receive the rest of the series in your inbox.

HRSG is a leader in competency-based performance management solutions and training. Contact us today to find out how we can help you.