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PerformanceManagement:FromModeltoImplementation Acknowledgements ItiscompletelyimpossibleformetoacknowledgeindividuallythehelpIhavereceivedinevolvingmyideaspresentedhere.MyformerprofessionalcolleaguesinSiemensandLG,andsomeclosefriendsworkinginvariousenterpriseshaveencouraged,supportedandinspiredmeduringthepastdays.Ihavereallygainedalotfromthem.MyparticulargratitudegoestoSHIFTandalltheprofessorsthattaughtme.WithoutthelearningenvironmentofSHIFTandtheteachingofthedevotedanddedicatedprofessorsinthepasttwoyears,itwouldbeimpossibleformetocompletethethesisandmyeducation.TheseprofessorsincludebutarenotlimitedtoHuangYuanshen,LuNaisheng,LuoGuoliang,XuYaqin,WuXiaoyuandZhuPeifen,whoselectureshavereallygivenmetremendousinspiration.Finally,mysincereandthemostimportantacknowledgementneedandshouldgotomykindsupervisorProfessorWenJianping,andmybelovedhusbandBobMiao.SincetheverydaywhenIbeganmypostgraduatestudy,ProfessorWenhasneverstoppedofferingmeherpatientcoaching,assistanceandencouragement,whicharereallyappreciated.Ihavebeentremendouslymovedbyhermeticulosityandherdevotiontothecauseofeducation.MyhusbandBob,whoisregardedasanexpertonPMintheHRfield,hasinspiredmeamazinglyduringmywritingjourney,andtriedtosparehisprecioustimeinpolishingmythesis.Wereitnotfortheirpatientsupportandencourage,thisthesiswouldneverhave beencompleted. Abstract PerformanceManagement(PM),currently,isreallyabuzzwordinvariouskindsoforganizations.Inordertoimprovetheperformanceofthewholeteam,theHRDepartmentemploysdifferenttoolsofPM;however,theimplementationprocessandtheresultsarefarfromsatisfactory.Inviewofthis,theauthorfirstlyproposesamodelonPMthatlinksallkeyfactorstogetherinPMexecution.Thisisbasedontheauthor’sknowledgeofvariedPMtheoriesaswellason-the-jobexperienceinLGandSiemens.ThemodelclearlystatestheimportanceofStrategyCommunication,CommunicationandCoaching,andCorporateCulture,whichareoftenignoredbymanagersindailymanagement.Itcouldbesaidthat,withouttheseelements,PMeffortswoulddefinitelyendupwithfailure.Andnext,animplementationprocessofPMisputforwardandelaboratedwithcases.Finally,theauthorpointsoutsixtypesofpossiblefailuresinpracticalimplementation,andmeanwhile,proposessomerecommendationsforimprovement. KeyWords:PerformanceManagement;Performance;Strategy;Communication;CorporateCulture 摘要 业绩管理(又称绩效管理),对当今各类企业及组织来说,是一个让管理者异常头痛的话题。表面上看,几乎所有的企业组织机构都在实施所谓的业绩管理,但结果如何、对业绩的提升到底有何作用,恐怕十之八九的管理者都会摇头叹息。 鉴于此,本文作者在较为深入地学习研究了解管理大师们的业绩管理理论并结合在不同企业人力资源部门实践的基础上,提出了企业正确实施业绩管理的参考模型,把企业常常忽略的战略沟通、沟通教练和企业文化融入模型当中,并置后两者于至关重要的地位。可以说,脱离了它们,业绩管理根本无从谈起。接下来,作者从实践的角度颇具创新地提出了在企业推进业绩管理的过程和步骤,并结合实例进行了详细阐述。最后,作者基于自己对理论的总结和在企业实地的调查,指出了当今企业实施业绩管理失败的六大因素,并针对性地提出了合理的建议及改进的办法。 关键词:业绩管理,业绩,战略,沟通，企业文化 ContentsIntroduction6ChapterITheoriesonPerformanceManagement71.1DefinitionsofPerformanceManagement71.2MethodologiesandToolsinPM81.2.1360DegreeReview91.2.2ManagementbyObjectives91.2.3Benchmarking111.2.4Balancedscorecard121.2.5PerformanceAppraisal131.3PerformanceAppraisal≠PerformanceManagement14ChapterIIModelonPerformanceManagement172.1StrategyCommunication182.2KeyPerformanceIndicatorsandObjectiveSetting202.3ActionPlanning222.4AppraisalandReview222.5PayandDevelopment232.6CommunicationandCoaching252.7CorporateCulture27ChapterIIIProcessfortheImplementationofPM303.1FormaProjectTeam303.2AnalyzeCurrentProblems313.3SetobjectivesandKPI313.3.1CompanyObjectives313.3.2Department/BranchGoals323.3.3IndividualPerformanceGoals333.4ClarifyVisionandStrategyintheOrganization343.5PerformancePlanning383.6LinkPerformancetoRewardsSystem413.7PerformanceAppraisalandReview453.8ContinuousFeedback503.9AnnualSummaryMeeting52ChapterIVConclusion56Bibliography58IntroductionSincethelate1950s,managementgurushaveputforwardtheiruniqueviewsonPerformanceManagement(PM)oneafteranother.Withtheincreasingexpansionofmodernenterprisesandthefiercemarketcompetitionworldwide,theorieson PMseemtohavebeenonthewaytoperfection.Thepracticeinvariousorganizations,however,hasneverbeenassatisfyingasexecutivesexpected.Inrecentyears,PMhasincreasinglybecomeabuzzwordinnumerouscompanies,largeorsmall.AsurveyconductedbyPriceWaterhouseCoopersConsultingin2003toldusanotherstory:87.6%oftheemployeeshavevariouskindsorcomplaintsabouttheirinternalPMsystemwhile83.2%ofthemanagersconfessedthattheirperformancewouldnotbeaffectedatalliftheirPMsystemisabandoned.ThefailureofPMsystemexecutionintoday’scompanies,intheauthor’sviewpoint,liesinvaguecorporatestrategy,unclearcorporateculture,ineffectivecommunicationandcoachingofthemanagers,wrongKeyPerformanceIndicators(KPI)anduntimelyfeedback.Inviewofthis,theauthorproposedhermodelonPerformanceManagement,andelaboratedeachitemtheoretically.Next,theauthor’sprocessfortheimplementationwasputforwardinapracticalway,whichaimstoaddresssomeexistingproblemsoncurrentperformancemanagementsystemsinmostorganizations.Intheend,theauthorpointedouttheprevailingtypesoffailureinPMimplementation,andmeanwhile,proposedrecommendationtoremedythem.Theauthor’sreadingofarticles,papersandbooksonPMandexperiencesandobservationinLGandSiemensaswellhashelpedmakethisthesispossible.Hopefully,thethesiscouldbeofhelptosomeorganizationsandmanagers. ChapterITheoriesonPerformanceManagement1.1DefinitionsofPerformanceManagementPerformanceManagement(PM)hasbecomeahottopicsincethelate1980s;however,itisnotanewtermeitherintheoryorinpractice.Intoday’sbusinessworld,mostorganizationshavebecomeawarethatperformanceneedandshouldbemanaged.PMhasalreadybecomeabuzzword.However,todate,thereisstillnoclearorfixeddefinitionforit,thoughtoquotethemanagementguruPeterF.Drucker(1999:177)"Performancemanagementisthestrategy,methodologies,andprocessesofmanagingtheperformanceoftheorganizationanditsbusinessnetworkbyleveragingassetstoachieveacommonsetofgoalsandobjectives."AccordingtoM.WaltersfromInstituteofPersonnelandDevelopment(1995:89),performancemanagementisusedtodescribethemovementtowardseffectiveness,whichallowsorganizationstobecomemorestrategic,deliberateandaccountableintheiractions,andimproveoperationaleffectivenessbyhelpingcommunicatemission,visionandgoals,setoperationalobjectives,andcontinuallymanageperformanceagainstthoseobjectives.AndM.Armstrong(1994:102)definesPMlikethis:performancemanagementisthebusinessstrategyandmethodicalprocesstomanageexecutionofanorganizationtoacommonsetofgoalsandstakeholderobjectives.Simplyspeaking,performancemanagementusesbothmethodologyandtechnologytohelpmanagetheorganizationbyaligningexecutionwithstrategy.TherearealsoverysimpledefinitionsfromEffectivePerformanceManagement(S.J.Costello,1992:56):PerformanceManagement=measure,monitorandmanageperformanceagainstpre-definedgoalsandobjectives;andanothersimplestatementis,PerformanceManagementmeanscreatingtherightkindofmeasuresandtherightkindofrewards.High-PerformingOrganizations(S,Kerr.1995:42)viewsperformancemanagementinitsbroadestsense:howpeoplearemanaged,motivatedandrewardedforsuperiorperformance,inspiringemployeestomanagetheirownperformance. PMisastrategichumanresourcesprocessthatincorporatesperformanceappraisal,communicationsofcorporatestrategiesandobjectivesdownthroughtheorganization,trainingandemployeedevelopment,andcompensationassessment.Inwesterncultures,PMhasbeendemonstratedtohaveasignificantpositiveimpactonsuchareasasjobsatisfactionandthereforeretentionandturnoverrates.Inrecentyears,PMpresentsmanagersandsupervisorswithaclearmodelthatcanbeusedtoplan,monitor,analyzeandmaintainasatisfyingprocessofperformanceimprovementfortheirstaff.Italsoillustratesstrategiesfordevelopingthecrucialskillsofcoaching,problemsolving,andgivingfeedbackwhileteachingmethodsforlinkingorganizationalandpersonalgoals.PMistheprocessofcreatingaworkenvironmentorsettinginwhichpeopleareenabledtoperformtothebestoftheirabilities.APMsolutioncanhelporganizationsalignorganizationalunits,operationalprocessesandindividualswithpre-definedgoalsandobjectivesbornofacommonstrategy.WiththecontinualloopofinsightprovidedbyPMsolutions,organizationscaneasilymanagetheirongoingeffectivenesstoimproveoverallperformanceagainsttheirgoalsandobjectives.1.2MethodologiesandToolsinPMIndecades,PMhasprovidedvariousmethodologiesandtoolsfordifferentorganizationstodesignandimplementworkablesystems.Amongthem,360DegreeReview,ManagementbyObjectives(MBO),Benchmarking,andBalanceScorecard(BSC)arethemostpopularones.Itisevidentlytruethatmostorganizationsdobenefitagreatdealfromthem.1.2.1360DegreeReview360DegreeReviewisalsoknownasmulti-raterassessment,multi-sourceassessment,simultaneousassessmentor360degreefeedback,whichisaprocessofgatheringevaluationsfromvaryingsourcesandperspectivestoformacompositeassessmentofanindividualwithinanorganizationforthepurposeofperformanceimprovement. 360DegreeReviewisamethodoratoolthatprovideseachemployeewithanopportunitytoreceiveperformancefeedbackfromhisorhersupervisorandfourtoeightpeers,reportingstaffmembers,co-workersandcustomers.Most360DegreeReviewtoolsarealsorespondedtobyeachindividualinaselfassessment.360DegreeReviewallowsindividualtounderstandhisowneffectivenessasanemployee,co-worker,orstaffmember.Themosteffectiveprocessesprovidefeedbackbasedonbehaviorsthatotheremployeescouldsee.Thefeedbackprovidesinsightintotheskillsandbehaviorsdesiredintheorganizationtoaccomplishthemission,visionandgoals,andlivethevalues.Thefeedbackisfirmlyplantedinbehaviorsneededtoexceedcustomerexpectations.Peoplewhoarechosenasraters,usuallychoicessharedbytheorganizationandemployee,generallyinteractroutinelywiththepersonreceivingfeedback.Thepurposeofthefeedbackistoassisteachindividualtounderstandhisorherstrengthsandweaknesses,andtocontributeinsightsintoaspectsofhisorherworkinneedofprofessionaldevelopment.1.2.2ManagementbyObjectivesManagementbyObjectives(MBO)wasfirstoutlinedbyPeterDruckerin1954inhisbookThePracticeofManagement.AccordingtoDrucker,managersshouldavoid'theactivitytrap',gettingsoinvolvedintheirday-to-dayactivitiesthattheyforgettheirmainpurposeorobjective.OneoftheconceptsofMBOwasthatinsteadofjustafewtop-managers,allmanagersofafirmshouldparticipateinthestrategicplanningprocess,inordertoimprovetheimplementabilityoftheplan.AnotherconceptofMBOwasthatmanagersshouldimplementarangeofperformancesystems,designedtohelptheorganizationstayontherighttrack.Clearly,MBOcanthusbeseenasapredecessorofValue-BasedManagement.MBOisasystematicandorganizedapproachthatallowsmanagementtofocusonachievablegoalsandtoattainthebestpossibleresultsfromavailableresources.MBOmanagersfocusontheresultratherthantheactivity.Theydelegatetasksby"negotiatingacontractofgoals"withtheirsubordinateswithoutdictatingadetailedroadmapforimplementation.MBOisaboutsettingobjectivesandthenbreakingthesedownintomorespecificgoalsorkeytarget. TheprinciplebehindMBOistomakesurethateverybodywithintheorganizationhasaclearunderstandingoftheaims,orobjectives,ofthatorganization,aswellasawarenessoftheirownrolesandresponsibilitiesinachievingthoseaims.ThecompleteMBOsystemistomotivatemanagersandempoweredemployeestoimplementtheirplans.InMBOsystems,objectivesarewrittendownforeachleveloftheorganization,andindividualsaregivenspecificaimsandtargets.TherearesixstagesforMBOimplementation:ll Definecorporateobjectivesatboardlevelll Analyzemanagementtasksanddeviseformaljobspecifications,whichallocateresponsibilitiesanddecisionstoindividualmanagersll Setperformancestandardsll Agreeandsetspecificobjectivesll Alignindividualtargetswithcorporateobjectivesll Establishamanagementinformationsystemtomonitorachievementsagainstobjectives1.2.3BenchmarkingDr.MohamedZairiinhisCompetitiveBenchmarking:AnExecutiveGuide(1992:34)definesBenchmarkingasanythingtakenorusedasapointofreferenceorcomparison,somethingthatservesasastandardbywhichothersmaybeserved,andalltodowithanythingorsomethingthatiscomparativelymeasurable.AndCookSarah(1995:105)says:Benchmarkingisarational,disciplinedapproachtocontinuousimprovementwhichhelpsidentify,comparewithandemulatebestpracticewhereveritoccurs.Toputitsimply,Benchmarkingmeansthefollowingsteps:findapointofreferenceformeasurement,studykeyinternalprocesses,comparewithotherorganizations,improvecontinuouslyandthenbecomethebest.Gettingthebenchmarkinghabitisaboutthecarefulanalysisofhowyourinternalorganizationdoeswhatitdoes,howitaddsvaluetorawmaterialsorintellectualresources,howitmatchesmarketneeds,andhowitdeliversthegoodsorservice totheendcustomer.Generally,therearefouracceptedtypesofbenchmarking,eachwithitsownspecificobjectives,namely,internal,competitive,functional,andgeneric.Tobespecific,inturntheymean:benchmarkingtheprocessesthatyourownorganizationundertakes;benchmarkingyourdirectcompetitorwhoseemstobedoingbetterthanyouinthesamemarketplace;benchmarkingthecompaniesthatarenotcompetitorsbutmayemploysimilarprocessestoyourowninoneorseveralpartsoftheirorganization;andbenchmarkingthosecompaniesthathavearecognizedandleadingreputationformanagingaprocessthatyoudo.Whenbenchmarking,allofthemrequireacommitmentofresourcesandexpertisetovaryingdegrees.Therefore,itisbettertodefinethespecifictypeatanearlystage.1.2.4BalancedscorecardBalancedScorecard(BSC)iscurrentlythemostpopularmanagementinstrumentthatcanbeusedtotranslateanorganization'smissionandstrategyintoacomprehensivesetofperformancemeasurestoprovideaframeworkforstrategicmeasuresandmanagement.Thescorecardmeasuresorganizationalperformanceacrossfourperspectives:financial,customer,internalbusinessprocessesaswellaslearningandgrowth.Financialperspectiveincludestraditionalfinancialmeasuressuchasrevenuegrowth,returnsoninvestmentorreturnsonassets,marketshares,andearningspershare.Customerperspectiveincludesmeasuresofimportancetocustomerssuchastimeliness,quality,performance,cost,andservice.Internalbusinessprocessperspectiveincludesmeasuresofthecriticalinternalactivitiesandprocessesthattheorganizationusestomeetitscustomers'expectations.Learningandgrowthperspectivemeasurestheorganization'sabilitytoadaptandinnovateforthefuture;andthiscouldincludetimetomarketfornewproduct development,workforcetraininganddevelopment,andprocessimprovement.Theseperspectivesprovideamulti-dimensionalbalancebetweeninternalandexternalperspectives,leadingversuslaggingindicators,objectiveversussubjectivemeasures,currentversusfutureneeds,etc.Tradeoffsbecomeexplicitbusinessdecisionsbasedonstrategy. Diagram1 1.2.5PerformanceAppraisalIn1993,A.M.MohrmaninhisMakingitHappen:ManagingPerformanceatWork(P.92)statedthat:PerformanceAppraisal(PA)shouldbetheregular(usuallyannual)processinwhichmanagersand/orothersassessanemployee'sperformancefortheyearaspartoftheperformancemanagementapproach.PerformanceAppraisalRevisited(P.Long,1986,P57)viewedinthisway:“PAis aprocessofassessingprogresstowardachievingpredeterminedgoals,includinginformationontheefficiencywithwhichresourcesaretransformedintogoodsandservices(outputs),thequalityofthoseoutputs(howwelltheyaredeliveredtoclientsandtheextenttowhichclientsaresatisfied)andoutcomes(theresultsofaprogramactivitycomparedtoitsintendedpurpose),andtheeffectivenessoftheorganization’soperationsintermsoftheirspecificcontributionstoprogramobjectives.”Virtuallyeverymajorcorporationusesperformanceappraisalsystemsduringthepastyears.Thesystemshavebecomeanintegralpartofsalaryrecommendations,successionplanning,andemployeedevelopmentprograms.EvenmanyacompanyhastakenitforgrantedthatPerformanceAppraisalsystemisPerformanceManagement.Butthekeyquestionis:Dotheywork?Doperformanceappraisalsimproveperformance,oraretheyacolossalwasteoftime?Hasanybodybotheredtofindout,orarewejustassumingthatperformanceappraisalmustbeagoodthingbecauseeverybodyusesit?1.3PerformanceAppraisal≠PerformanceManagementIn1965,theHarvardBusinessReviewreportedtheresultsofalandmarkstudybyHerbertMeyer,EmanuelKay,andJohnFrenchJr.,whichtestedtheeffectivenessoftraditionalperformanceappraisalsystemsatGeneralElectric(GE).Unfortunately,thismeticulousresearch,conducteddecadesago,hashadalmostnoimpactontheprevalenceofperformanceappraisalsystemsatmajorcorporations.Myownresearchsuggeststhatthisarticleisasrelevanttodayasitwaswhenfirstpublished.Notmanypeopleunderstoodthen.WhyTheProcessFailsNaturally,wewouldexpectthatperformanceappraisalefforts,likeanyothermanagementactivity,wouldshowpoorresultsifdonepoorly.Toavoidthisproblem,Meyerandhiscolleagueswerecarefultoselectalocationthatbasedperformanceappraisalsonjobresponsibilities,notonpersonalcharacteristics,andthatprovidedmanagersintensivetraininginthetechniquesforconductingappraisalreviews.Inotherwords,theystudiedperformanceappraisalsystemsat theirbest.Theirconclusionsshouldalarmanymanagerorcompanythatreliesonperformanceappraisals.Theteamfoundthatcomprehensiveannualperformanceappraisalswereofquestionablevalue,andmoreoftenthannot,theseappraisalserodedratherthanimprovedperformance.Let'slookatsomespecifics.Ingeneral,themanagerstheystudiedofferedbothpraiseandcriticismduringtheirevaluations.Onaverage,thenumberofpositivecommentsslightlyexceededthenumberofnegativeremarks.Interestingly,employeestendedtoignorethepositivecommentsandviewedthemlargelyasacushionforthenegativepointsthemanagerbroughtup.Thesenegativecomments,ratherthanservingasanimpetusforimprovingperformance,tendedtomakeemployeesdefensive.Themorecriticismtheyheard,themoretheiractualperformancedeclinedaftertheappraisal.Ifyouareoftheopinionthatpointingoutareasofweaknessimprovessomeone'sperformance,youaredefinitelywrong.Furtherexaminationoftheirresearchshowsthatpraisetendedtobeaboutgeneralcharacteristics,butcriticismstendedtobeaboutspecificincidents.That'ssomethinglikesaying,"You'reagoodemployee,but.….."Asaresult,employeesdiscountedthepositiveremarksandfocusedinsteadonthenegativecomments.Anothernotableconclusionisrelatedtotiming.Annualperformancereviewswere----andinmanycasesstillare----donearoundthetimeofsalaryadjustments.Presumably,theperformancereviewexplainedanupcomingsalaryaction.Employeesviewedthisconnectionwithahighdegreeofsuspicion.Theybelievedthatnegativecommentswerenotmadewithagenuineinterestinhelpingthemimprovetheirperformance;instead,theyviewedtheappraisalsasanit-pickingexercisedesignedtojustifyameagerraise.Nowonder,arecentresearchfindingfromtheBalancedScorecardCollaborativeinLincoln,Mass.shows,only9%oftheorganizationshavesoundexperiencesintheexecutionofPMtools,andonly11%havesuccessfulstoriesinthisregard,and85.32%assertedthattheirPMsystemdidnotmeettheirpreviousexpectationinspiteofalargeamountofinputindollar,timeandhumanresourcesaswell. Luckily,withtheadvancementofcorporatemanagement,peoplecametorealizethatPAwasjustanindispensablepartinPMsystem;Performanceneedsto,andshouldbemanagedratherthanmerelyappraised.However,togreatlypromoteorganization’soverallperformance,morethingsareworthyofconcern,whichactuallyplaysasignificantroleinanorganization’operation. ChapterIIModelonPerformanceManagementSincePMismuchmorethanaonce-a-yearmeetingtoreviewanemployee’sperformance,itshouldbedealtwithinasystematicwayinanyorganization.Inthischapter,theauthorisproposingaPMmodelthatcanbeusedindifferenttypesofcompanies,andevennon-profitorganizations.Themodelincludesfivekeythemes,whichare:ll Strategycommunicationll Keyperformanceindicatorandobjectivesettingll Actionplanningll Appraisalandreview,andll PayanddevelopmentDiagram2ThesearethemajorthemesofaPMsystem.Inthecenterofthemodelis“communicationandcoaching”,whichisthemostimportantthingformanagerstodoinimplementingaPMsystem.Attheoutersideofthemodelis“corporateculture”,somethingthatisdifficulttodescribe,buthasgreatinfluenceonthewaypeopleworktogetherinanorganization. 2.1StrategyCommunicationTheword“strategy”tendstocreateconfusioninmostorganizations.Inparticular,ittendstoimplythatthereisonlyonelevelofobjectivesandthateverythingelseisatacticoraplan.Thisisnottrue.Mostofthekeytermsinstrategyapplytoaperformancetarget,theyarelabeleddifferentlytodistinguishthelevelatwhichanorganization/individual/manageroperates.Inthemanagementliteratures,therearenumerousdefinitionsofstrategy.Let’sfirststartfromadistinguishedwriteronstrategy,HenryMintzberg.HesaidinhisTheFallandRiseofStrategyPlanning(1991:185):“strategyrepresentstheformalexpressionofdeterminationtoreachthevision.”AndMichaelPorterseesstrategyinhisWhatisStrategy(1995:59)likethis:“strategymeanshowtheorganizationisgoingtoachieveitsobjectives------howresources,systems,peopleandstructureareusedoremployed.”AnothertheorydescribedbyRobertS.KaplanandDavidP.Nortonisawidelyacceptedone.KaplanandNortonintheirTheStrategy-FocusedOrganization(2001:215)maintainthattherearethreedifferenttypesofgenericstrategies:1.Productleadership.“Aproductleadershipcompanypushesitsproductsintotherealmoftheunknown,theuntried,orthehighlydesirable.”SonyCorporationandIntelCorporationepitomizethisstrategy.2.Customerintimacy.“Acustomer-intimatecompanybuildsbondswithitscustomers;itknowsthepeopleitsellstoandtheproductsandservicesitneeds.”TheHomeDepot,Inc.andMobilhavesuccessfullyexecutedthisstrategy.3.Operationalexcellence.“Operationallyexcellentcompaniesdeliveracombinationofquality,priceandeaseofpurchasethatnooneelsecanmatch.”CompaniessuchasCostcoWholesaleCorporation,McDonald’sCorporation,andDellComputerCorporationaremodelsofthisstrategy.Itcouldbesaidthatstrategytoanorganizationisexactlywhattheroottoatree.Therefore,strategyisofcriticalimportanceintoday'sbusinessenvironmentofrapidchangeandunforgivingcompetition.Manyorganizationsdevoteextensiveresourcestodevelopingawinningstrategy.However,recentresearchfindingsfromtheBalancedScorecardCollaborativein Lincoln,Mass.,indicatethatnineoutoftencompaniesfailtoexecutethestrategiestheysetforthemselves;only5percentofemployeesunderstandcompanystrategies;60percentoftoday’scompaniesfailtolinktheirbudgettotheirstrategies;and85percentofcompanies’executiveteamsspendlessthanonehourpermonthdiscussingstrategy.Hereistheheadache.Corporationsholdthewrittenstrategies,butseldomputthemonthetable.------Virtuallythereisnostrategy.Thustimelyandefficientcommunicationthroughoutthewholeorganizationisextremelyimportant.Fromchairman,CEOaswellastopexecutivestoindividualemployees,eachoneshouldhaveaclearknowledgeandunderstandingofthecompany’sstrategy.Howtoexecuteitandwhatitrequiresshouldbeborneinmind,too.Formanagersthismeansdecidingwhatyouneedtodoinresponsetocurrentandanticipatedconditions,decidingwhatskills,resources,systemsandprocessesareneededtoperformwellnow,andknowinghowtochangetheseinordertoperformwellinthefuture-----whenthewholeworldmightbedifferent.Therefore,strategyisbasedonaclearunderstandingoftheenvironmentorconditionsinwhichyouoperate.Fortopexecutives,strategymeanshavingavisionofwhatispossibleundertheseconditions,knowingwhatactionsareneededtotaketoattainthevision,clarifyingissuesconsideredasbeingimportant,thenimplementingtheseactions(oftencalledyourvalues),andbeingabletomeasureperformanceaccuratelyasprogresscanalwaysbemonitored,measuredandevaluated.2.2KeyPerformanceIndicatorsandObjectiveSettingKeyPerformanceindicators(KPI)aredefinedasthefinancialandnon-financialquantitativemeasurementsthatarecollectedbytheorganization,eithercontinuouslyorperiodically,andusedbythemanagementtoevaluatetheextentofprogresstowardsmeetingtheorganization’sdefinedoutcomes.Thereare,however,numeroustypesofindicatorssuchasinput,output,outcomeimpact,relevance,risk,efficacy,efficiencyandeffectivenessindicators. Outcomeindicatorsaredefinedasthoseindicatorsthatmeasurethequantityandqualityoftheresultsachievedthroughtheprovisionofgoodsandservicesandcan,forinstance,includethefollowing:ll Reducedincidenceofdisease(throughvaccinations)orll Reducedmortalityorlowerhealthcosts(throughimprovedfamilyhealthpracticesorimprovednutrition,orcleanerairandwater).Outputindicatorsontheotherhandmeasurethequantity(andsometimesthequality)ofthegoodsandservicescreatedorprovidedthroughtheuseofinputsandcan,forinstance,includethefollowing:ll Numberofclientsvaccinated(byahealthprogram)orll Pollutioncontrolmeasuresinstalledorincentivesorregulationsenforced(apollutioncontrolorairorwaterqualityimprovementprogram).Inorderforperformanceindicatorstowork,amanagementstructureandincentivesthatvalueresultsneedtobeinplace.PerformanceIndicatorsareatoolandontheirowntheycandonothing,butintheproperenvironmenttheycaninspireaction.Consequently,Performancemeasuresmust:ll Befocusedonlong-term,multi-dimensionalperspective,notjustshort-termfinancialperspectivell Belinkedtoperformancell Beguidedbythevisionandprinciplesandsupportedbymanagementll Notbesoldasaself-containedsolution------whichwillnotinthemselvesproducehigherlevelsofeffectiveness,efficiencyandqualityll Followfromexistingsystemsandprocesses,andshouldbeprogressivelyimprovedandenhanced.Itisthuscriticalthatmanagementregardperformancemeasurementasanintegral partoftheorganization’sstrategicplan.Inordertomakethestrategyandplaneffective,monitoringandevaluationmustbeaddressedduringprojectdesign.Oncestrategicguidelinesandoutcomeshavebeendefinedandindicatorshavebeenselected,thenextconsiderationshouldbetherequirementsfordatacollectionandmanagementandtheuseoffeedbackfromdata.Indicatorsshouldbebasedonsuchprinciplesas:ll Theyshouldberelevantandselective(afewandmeaningful);ll Theyshouldbequantitativeandqualitative;ll Theyshouldfocusonoutcomesaswellaseffectiveness,andalsobeabletomeasuretheperformanceoftheorganization;andll Datarequiredmustbeeasilyavailableordatarequirementsshouldbeincludedintheprojectdesigntoenableanalysis.Performanceindicatorsmustbebasedontheuniqueobjectivesofitsunits,functionsandindividualsasanorganizationmarchestoachievethevisionandstrategy.Theseperformanceindicatorswillbebasedonanunderlyingframeworkthatlinksobjectiveswithprogramcomponentsandtheirrespectiveinputs,activities,outputsatdifferentimplementationstages.Theframeworkshouldbeobjective-driven,sinceanyactionisaimedatachievingitsobjectives.2.3ActionPlanningInaneffectiveorganization,workisplannedoutinadvance.ActionPlanningmeanssettingperformanceexpectationsandgoalsforgroupsandindividualstochanneltheireffortstowardachievingorganizationalobjectives(KoganPage,R.Hale,HowtoIntroduceTargetSetting,1993).Gettingemployeesinvolvedintheplanningprocesswillhelpthemunderstandthegoalsoftheorganization,whatneedstobedone,whyitneedstobedone,andhowwellitshouldbedone.Therefore,itisadialoguebetweenasupervisorandanemployeetoestablishclear,specificperformanceexpectationsatthebeginningoftheperformancecycle.ItcouldbesaidthatActionPlanningistheprocessofidentifyingthegoalsand standardsrequiredbyemployeestoachievetopperformance.Theprocessprovidesanopportunitytodefinepositionexpectations,establishperformanceobjectivesrelatedtothecorporatestrategicplan,reviewobjectivesandassessperformancemid-waythroughtheyearandattheendoftheyear,jointlycreateanindividualdevelopmentplanthatprovidesforprofessionalandpersonalgrowth,andcommunicatefeedbackaswell.2.4AppraisalandReviewAppraisalistheprocessthroughwhichmanagersandemployeesevaluateanddiscussperformancemeasuredagainstpreviouslyestablishedgoalsandexpectations.IntheirPerfomanceAppraisal(1997:38),C.LongeneckerandS.GoffpointedoutthatabetterAppraisalsystemshould,first,support360DegreeReviewforbothcompetencyandKPImodels,andsetupappraisalperiod,appraisalitems,weightandinputscale,self-defineappraisalformataccordingtorequirements;second,provideperformanceanalysis,summarizeappraisalofeachemployeeandgeneralresultstoestablishrelevanttrainingplan;andthird,establishawardsanddisciplineaccordingtoappraisalresultsandgenerateperformancecompensationautomatically;andfinally,supportevaluationresultsanalysisfromvariousviewpointsandlinkwithtraining,compensationandpotentialtalentsdatabase.Reviewisasummativetwo-waydiscussionandwrittendocumentationfocusingonemployeeperformance:areasofexcellence,goalsforimprovementanddevelopmentneeds.Performancereview,anextremelyimportantcomponentinperformancemanagementprocess,istheculminatingdiscussionbetweenthesupervisorandstaffmembersregardingwhereperformanceexceeded,met,orfellbelowexpectations,thelearninganddevelopmentneededandreceived,goalsthatweresetandachievedbythestaffmember,andmeanwhilefeedbackfromothersaffectedbythestaffmember’sperformance.Informationfromtheperformancereviewismorecriticalnotjustforperformanceimprovement,butforotherhumanresourcedecisions,includingcompensation.Datafromperformancereviewscanbeusedtohelpdeterminesalaryincreases,if thereisthecompensationpracticewithintheunit.2.5PayandDevelopmentInmostorganizationstoday,thereisnodirectlinkagebetweenwhatanemployeeispaidandhisorhercontributiontothesuccessfulexecutionoftheorganization’sstrategy.Itiseasytosaythatrewardsorcompensationshouldbeusedinastrategicmannertodriveemployeeperformance;however,itisnotsoeasytodo.Mostcompanieslackthetools,methodologiesandprocessestocloselytietheorganizationobjectivesandindividualactivitiesandgoals,andtightlylinkthevariousinterestsoffinance,salesandHR.Therefore,itisquitenecessarytoestablishPay-for-Performancesystem,whichtiescompensationdirectlytospecificbusinessgoalsandmanagementobjectives.Thesystemtriestoimproveindividualaccountability,alignshareholder,management,andemployeeinterests,andenhanceperformancethroughouttheorganization.Toachievethis,measurableandcontrollableperformancetargetsandrewardsmechanismshouldbematchedtocorporateobjectives.Thiswill,inturn,igniteemployees’enthusiasmandpromotetheorganization’shealthydevelopment.Tobecomeperformance-driven,organizationsneeddothefollowing:First,aligntheobjectivesandresourcesofthedifferentpartsoftheorganization.Anorganizationismadeupofvariousbusinessunits,departmentsanddivisions.Tocreateorganizationalalignmentbetweentheseentities,itisimportanttodefinetheoverallvisionandmission,thekeyperspectives,thecriticalinitiativesandthestrategicobjectivesforeachentityoftheorganization.Second,cascadeobjectivesdownintotheworkforceandmanageworkforceperformance.Itisnotenoughtohavetherightstrategy.Thestrategicobjectivesoftheorganizationneedtobeunderstoodatalllevelsoftheworkforce.Thecascadingprocessgivestheworkforceaclearunderstandingofhowtheirindividualperformancewillbemeasuredandevaluated.Italsocreatesatightlinkagebetweenorganizationalobjectivesandindividualgoalsandactivities.Third,rewardindividualsforperformance.Linkingtheachievementofobjectives, demonstrationofcompetenciesandothermeasuresofperformancetoanindividual’scompensation,whetherbonuses,stockoptions,rewardpoints,orcommissionsdriveseachpersontochangehisorherbehaviorsandalsohelpstheorganizationachieveitsstrategicobjectives.Andforth,understandorganizationalandindividualperformanceusingreal-timeinformation,whichcanhelpmanagementseewhatinitiativesareworking,whatprojectsarehelpingtoachievethestrategicobjectivesandwhatstrategiesareproducingresults.Similarly,providingactionableinformationtoindividualemployeesisthekeytohelpingthemunderstandhowtheyareperforming,howtheycanimproveandhowtheycanhelptheorganizationachieveitsobjectives.Lastbutnottheleast,optimizestrategyexecutionusingmodelsandanalytics.Byusingreal-timefeedbacktofrequentlyoptimizeitsperformance,anorganizationbecomesmorenimble,flexibleanddynamic,creatingtrueandsustainablecompetitiveadvantages.2.6CommunicationandCoachingContinuouscommunicationandcoachingisofcardinalsignificanceinPerformanceManagement.Inmymodelofperformancemanagement,communicationandcoachingareatthecenter.Withoutthem,theabovefivestepscannotbesuccessfullyimplementedandperformancemanagementeffortsusuallyendupinfailure.Therefore,itisnecessaryforthemanagerstoconducteffectivecommunicationwithandcoachingtotheemployees.RichardS.Williams,aprofessorofpsychologyfromLondonUniversityarguesthatcoachingisanongoingprocessofcommunicationbetweenthesupervisorandtheemployeeforimprovingcurrentperformanceandbuildingcapabilitiesforthefuture,whichinvolvesinformalconversationornotesaswellasmoreformalmeetingsandwrittendocumentation.(HarvardBusinessReview,Vo8,P92,2001)Therefore,thekeytoimprovingperformanceisfrequentcommunicationbetweenthemanagerandthesubordinate.Foramanager,itisimportantthatheprovidestimely,specificandconstructivefeedbacktotheemployee,establisheswhythe shortfallinperformanceexists,discussesandagreeswhatsupport,developmentandassistancearerequiredtohelptheemployeeimprovehisorherperformance,andthenencouragestheemployeebyprovidingpositivefeedbackonhisorherperformancewhenitisdue.Eachmanagerhastheresponsibilitytocommunicatewithhisemployeesonanongoingbasis.Theseconversationsshouldprovideclearandhonestroleexpectationsandfeedback,andshouldhelpidentifyimprovement,development,andcareerissues.Eachemployeehastheresponsibilitytoparticipatefullyintheseconversationssothatheunderstandshisroleresponsibilitiesandexpectations,andcommunicatesanyobstaclesortrainingneededinordertoperformhisroleatanoptimumlevel.InhisStrategicManagement(1999:125),J.L.Thompsonviewscoachingasthetwo-waydiscussionthatfocusesonrecognizingemployeeexcellenceandareasforimprovementandlearning,aswellasidentifyingbarrierstoperformance.Itisexpectedthatcoachingwilloccuronaneededbasisthroughouttheyearandmaybeinitiatedbyeitherthesupervisorortheemployee.Supervisorsandemployeesareencouragedtodocumentthesediscussionsasappropriate.Coachingincludesavarietyofactivities,suchasobservingperformance,correctingpoorperformance,providinginstructions,recognizingexcellentperformance,directingemployee’sefforts,listeningtoemployee’sconcernsandideas,providingencouragement,andremovingbarrierstoperformance.ForSupervisors,coachingmeansprovidingongoingperformancefeedbacktoemployeestorecognizeexcellentperformance,solicitingideasandsuggestionsfromtheemployeeforimprovingworkprocesses,andworkingwiththeemployeetoidentifybarrierstosuccessandstrategiesforremovingorminimizingthebarriers.Moreover,italsomeansdiscussingemployee'slearningandprofessionaldevelopmentneedsaswellassolicitingemployee’sfeedbackonsupervisorycoachingeffectiveness.Insomesituations,coachingmaynotresultinimprovedperformance.Whenthat occurs,supervisorsmayneedtouseinformaland/orformalcorrectiveactionprocedurestoaddressperformanceissues.Supervisorshaveresponsibilityforunderstandingandimplementingappropriatecorrectiveaction.Foremployees,thismeansaskingtheirsupervisorsforcoachingwhentheyneedit,listeningandrespondingtofeedbackfromcoaches,andprovidingfeedbacktotheircoachesaboutwhattheyneed.Frequentandeffectivecommunicationandcoachingwillusuallyensurethatperformancedoesnotbecomeanissue,however,persistentshortfallsinperformancemayrequireformaldisciplinaryactionbeinginvoked.2.7CorporateCultureDuringthepastdecadeithasbeenwidelyrecognizedthatcorporateculturehasasignificantimpactonoverallorganizationalperformance.Anincreasingnumberofsuccessfulorganizationshave,atleastinpart,attributedtheirsuccesstoeffectiveculturemanagement.AccordingtoFlaniganandFinger(TheEconomist,Vo8,P59,2001),everyorganizationhasauniqueculture,determinedbytheindividualandgroupbeliefs,values,attitudesandexpectation,whichinteractswithanorganization’speople,structure,andsystemstoproducebehavioralnorms(“thewaythingsaredonearoundhere”)Itcouldbesaidthateverythingthathappensinanorganizationisdrivenbytheorganization’sculture.Itdefineswhattheorganizationconsidersasbeingimportantandwhatitconsidersasbeingunimportant,howpeoplecelebratesuccesses,reacttochallenges,anddealwithdisappointments.Ifstrategydefineswhereanorganizationwantstogo,culturedetermineshow------maybewhether------itgetsthere,becauseitcontrolshowpeoplemakedecisionsandsetpriorities.InhisHumanResourceManagement(1998:595-596)，Robbinsreferstocorporatecultureasasystemofsharedmeaningorasetofkeycharacteristicsthattheorganizationvalues.Theprimarycharacteristicsthatcapturetheessenceofan organization’scultureincludeinnovationandrisktaking,focusonoutcomesratherthantechniquesandprocesses,peopleandteamorientation,competitiveness,anddevelopmentalfocus.J.P.Kotter(1992:33)definescorporatecultureasthesocialforcethatcontrolspatternsoforganizationalbehaviorbyshapingitsmembers’cognitionandperceptionsofmeaningsandrealities,providingeffectiveenergyformobilizationandidentifyingmembershipornon-membership.Factorsaffectingtheformationofacorporatecultureincludetheinfluenceoffoundersandmanagement,itshistory,sizeandtechnologyused,variousfactorsoftheexternalenvironment,goalsandobjectives,andthebeliefs,values,norms,assumptions,attitudesandexpectationsofindividualsandgroups.IvancevichandMatteson(1999:93)arguethatcorporatecultureevolvesoveraperiodoftimeandcanbeinfluencedbypowerfulindividuals,buttypicallyevolveswhenindividualsandgroupsinteractandworktogether.Armstrong(1999:96-97)proposesthatcorporatecultureisexpressedbybehaviorintheareaofmanagementstyle,theorganizationclimate,andcorporatevaluesandnorms.Corporatevaluesornormsusedtosetguidelinesforbehavior.Theorganizationclimateistheworkingatmosphereasperceivedandexperiencedbyitsemployees.Thiswillencompasspeople’sperceptionsofandreactionstothecharacteristicsandqualityofthecorporatecultureanditsvalues.Itisbelievedthattheroleofcorporatecultureistoprovideasenseofidentitytoitsmembers,toenhancecommitmenttotheorganization’smission,andtoreinforcebehavioralstandards.Mostpeopleagreethatthereisacloserelationshipbetweenorganizationalcultureandorganizationalsuccess.Thesuccessofeffectiveandhighperformanceorganizationsareusuallyattributedtoacombinationofbeliefs,values,policies,procedures,andpractices.Thereisalsoarelationshipbetweeneffectivenessandthetranslationofcorebeliefsandvaluesintopoliciesandspecificpracticesregardingthemanagementofhumanresources,managementoftheinternalenvironment,strategyplanning,decision-makingaswellasconflicthandling. ChapterIIIProcessfortheImplementationofPMThesuccessfulimplementationofaPMsystemusuallyrequiresthetopmanagementofanorganizationtoworkcloselywithaninternalprojectteamandveryoften,someexternalconsultants.Aprocessisnecessarytohelpeveryoneinvolvedstayontrackduringthecourse.Generallyspeaking,ittakesninestepsforanorganizationtodesignandimplementaPMsystem.Diagram3 13542 SetObjectives&KPIAnalyzeCurrentProblemsFormaProjectTeamClarifyVision&StrategyPerfor-mancePlanningAnnualSummaryMeetingContinuousFeedbackPerformanceAppraisal&ReviewLinkPerfor-mancetoRewardsSystem6789 3.1FormaProjectTeamFirstandforemost,aprojectteamshouldbeformedbeforeperformancemanagementiscarriedout.Thefollowingseveralpointsneedtobepaidcarefulattention:ll TheinitiativetoexecuteaPMsystemmustbefullysupportedbythetopexecutiveinanorganization.Withoutthesupportfromtopexecutives,noPMsystemcansucceed. ll Theprojectteammustconsistofthetopexecutive,HRdirector,directorsofeachdivisionandothersupervisorsconcerned.ll InviteanexpertonPMtotakepart,ifpossible.3.2AnalyzeCurrentProblemsTosomeorganizationswithPMsystem,whattheprojectteamneeddoistofindoutandanalyzethereasonswhythecurrentPMsystemturnsoutunsatisfactoryresults.ThenproposeexpectationsfordesiredPMsystemandmeanwhile,listthepitfallsthatshouldbeavoided.TosomewithoutaPMsystem,thefirstthingistoanalyzetheexistingproblems.Withproblemsinmind,establishexpectationsandintroducePMsystem.3.3SetobjectivesandKPILet'stakealookatABCElectricalSupplyCo.toseehowcompanyobjectivesandperformancegoalsareset.(BasedonsomematerialsfromHRDepartmentinABCElectricalSupplyCo.)3.3.1CompanyObjectivesCompanyobjectivesin2001wereasfollows:ll Builda“customerforlife”witheachtransaction.ll Achieveacompetitiveadvantage.ll Developacompetitiveadvantagewithorderfillrates,orderaccuracyandon-timedelivery.ll Growprofitability.Companyobjectivesrelatetooutcomes,butwhere“therubbermeetstheroad”meanstranslatingtheseobjectivesintoSpecific,Measurable,Achievable,Result-orientedandTime-bound(SMART)performancegoals.ForABCElectricalSupply,thefollowingcompanyperformancegoalswere quantified:ll Achieveaveragecustomersatisfactionindex(CSI)ratingof80percentbaseduponallcriteriameasuredbya2001customersatisfactionstudyadministeredonDec.1,2001.ll Achievetotalknowledgeandskillsemployeesatisfactionindex(ESI)ratingof80percentmeasuredbya2001employeesatisfactionstudyadministeredonDec.1,2001.ll Achievecontinuousorder-fillrates(OFR's)of94.6percent,order-accuracyrates(OAR's)of99.7percent,andon-timedeliveryrates(OTDR's)of98.4percentmeasuredbyABC'sserviceperfectioninformationsystem.ll Improvenetincomebeforetaxes(NIBT)from3.2percentFYEDec.31,2000to4.2percentFYEDec.31,2001measuredbyABC'syear-endfinancialstatements.ABC'sperformancegoalsweren'tdifficulttocreate.AcustomersatisfactionmailsurveywasadministeredtoABC'sactivecustomers.Thecustomersatisfactionindex(CSI)ratingof80percentisaJ.D.PowersandAssociatesbenchmarkforhighcustomersatisfaction.AsimilarbenchmarkwasappliedtotheemployeesatisfactionquestionnaireadministeredtoeveryABCemployee.Benchmarksonorder-fillrate,order-accuracyrateandon-timedeliveryratewerederivedfromTheLogisticsInstituteatGeorgiaTechsurveys.Usingthecomputersystem,ABCwasabletoprovidecontinuousorder-fillrates,order-accuracyratesandon-timedeliveryrates.TheNIBTmeasureswerebasedonABC'spastperformancecomparingittoNAED'sPerformanceAnalysisReport(PAR)forbenchmarking.3.3.2Department/BranchGoalsAftercompanygoalsarefinalized,everydepartmentandbranchdevelopstheirownperformancegoalsthatresultintheaccomplishmentofallthecompanygoals.ThefollowingisABCElectricalSupply'sAustinbranchperformancegoals: ll Achieveaveragebranchcustomersatisfactionindex(CSI)ratingof80percentbaseduponallbranchcriteriameasuredbyquarterlycustomersatisfactionreportcards.ll Achievetotalbranchpersonnel“KnowledgeandSkills”employeesatisfactionindex(ESI)ratingof80percentmeasuredbyquarterlyemployeesatisfactionreportcards.ll Achievecontinuousbranchorder-fillrates(OFR's)of94.6percent,order-accuracyrates(OAR's)of99.70percent,andon-timedeliveryrates(OTDR's)of98.4percentmeasuredbyABC'sserviceperfectioninformationsystem.ll Improvebranchnetincomebeforetaxes(NIBT)from2.8percentFYEDecember31,2000to4percentmeasuredbyABC'squarterlyfinancialstatements.3.3.3IndividualPerformanceGoalsUponthecompletionofbranchgoals,individualperformancegoalsaredevelopedthatwillaidinaccomplishingallthebranchperformancegoals.CarlWidgetworksattheAustinbranchasacountersalesperson.Let’sseehisindividualperformancegoals.Onegoalmightbetoachievebranchcountersalespersoncustomersatisfactionindex(CSI)ratingsof80percentforbeingfriendly,responsive,knowledgeableandthankful,measuredbyquarterlycustomersatisfactionreportcards.Itcanbeseenfromtheexamplethattherightperformancemanagementsystemisbuiltonquantifiablemeasuresthatlinkindividualgoalswithdepartmentorbranchandcompanygoals.To“raisethebar”insuchareasasemployeesatisfaction,customersatisfaction,serviceperformanceindicesandfinancialresults,anelectricaldistributormustdevelopagoal-settingandfeedbackprocesstoensurethatindividual,departmentandbranchperformancegoalsallfocusonaspectsofworkthatarecontrollable andmeasurable.Withoutthisprocessinplaceacrosstheentirecompany,itisverydifficult,ifnotimpossible,tolinkperformancetorewards.Theendresultisthateveryemployeewillhaveaclearunderstandingofhowtheirbehavioraffectsthecompany.Everyemployeewillknowcompanygoals,howtheirdepartmentorbranchgoalsaffecttheoverallcompanygoals,andhowtheirindividualperformancegoalsaffecttheirdepartmentorbranchaswellasoverallcompanygoals.Employeescorecardsshouldbedevelopedtoclearlystategoalsforthecompanyasawhole,aswellasgoalsspecifictotheemployee'sdepartmentorbranch.Allperformancegoalsneedtobebalancedtoreflectemployeesatisfaction,internalservicequality,customersatisfactionandfinancialfitnessmeasuresaswell.3.4ClarifyVisionandStrategyintheOrganizationAttheverybeginningofthispart,whatvisionandstrategyismustbeinreaders’concern.Inthepreviouschapterstrategyhasalreadybeendiscussed,andthenpriorityshouldbegiventothevisionofanorganization.J.Thompsonpointedoutthatthestatementofcorporatevisionshoulddefineinafewwordsacompany'sambition-------theroleitwillplay,thegeographicandmarketsectorsinwhichitwillcompete,andthesustainablecompetitiveadvantageithasorcanachieve(1999:105).Avisionactuallyprovidesanidentitythatenablesvalues,strategies,systems,policiesandaccountabilities---thecomponentsofculture---tobealigned.Asaresultabusinesscanbemanageddynamicallyandpositionedtotakeadvantageofopportunitiesinanuncertainworld.P.Brownin1992definedvisionlikethis:Visionprovidesanaimingpointforstrategydevelopmentandguidanceforthepursuitofradicaloptions.Anothermanagementmasterdefineditinanevensimplerway:vision=perceptionofthekindoffuturetowhichweaspire. Anentrepreneurviewedvisionastheoveralltarget-----itrepresentstheideainaperfectfuture.Avisionthatisspecificenoughtomotivateallemployees,yetflexibleenoughtoallowriskstobetakenandopportunitiestobeexploited,isabasisforcommunication,bothinternallyandexternally.Visionhelpsdemonstratetoinvestorsthedistinctivenessofthecompanyinwhichtheyareinvesting,providesarationaleforacquisitionandresourcedecisions,andafocusforbuildingrelevantskills.Meanwhile,thevisioncreatesapictureofthedestination.Thestrategydefinesthelogicofhowthisvisionwillbeachieved.Visionandstrategyareessentialcomplements.Thevisionisappealingbutlackscredibilityuntilastrategyisdevelopedtoshowhowthisvisionwillbeaccomplished.Sofar,everyoneknowswhatvisionandstrategymeantoanorganization.However,howtoclarifythemorhowtomakethemwellunderstoodthroughoutthewholeorganizationremainsachallenge.Atthelaunchofthenewstrategy,executiveshadbetterusecommunicationprocessesthataresimilartothoseemployedfornewproductintroductions.Theprocessesstartwitheducation(creatingstrategyawareness)andarefollowedbytestingwhetheremployeesunderstoodthemessage(strategymindshare),checkingthatemployeesbelievethestrategyisbeingfollowed(strategyloyalty),and,finally,determininghowmanyareteachingothersaboutit(becomingastrategymissionary).Eachofthesestatesofmindandcommitmentcanbemeasured,justascompaniesdowiththeircustomers.Andcompaniesshouldauthorizespendingbudgetstocommunicateandeducatetheiremployees,justastheycommittoadvertisingandpromotionexpenditurestocommunicatetoconsumersaboutnewproductintroductions.Clearly,communicationisamajorleverfororganizationalsuccess.Yetpoorcommunicationisprevalent.Ifemployeesdon’tunderstandthevision,theyareevenlesslikelytounderstandthestrategyintendedtorealizethatvision.Without understandingvisionandstrategy,employeescannotadapttheirworktocontributingtoeffectivestrategyimplementation.Theleadershipteamshoulduseeverypossiblechanneltocommunicatethevisionandstrategyoftheorganization,andtoreinforcethemateachopportunity.GerryIsomofCIGNAusedaverylivelymetaphortoemphasizetheimportanceheplacedoncontinualcommunicationandclarification:“Whenyouareintroducingsomethingnewintoacompany,it’sarealparadigmshift.It’samajorculturaladjustment.It’slikedrivinganailintogranite;youhavetokeephittingthenail.”(AndyNeely,2002,P109)Companiesmustviewthecommunicationandclarificationasastrategiccampaign,ascriticalasanycommunicationprogramdoneforitsexternalconstituentsofcustomers,investorsandsuppliers.Thecreativeandprofessionalskillsofitsinternalandexternalcommunicationgroupshouldbemobilizedforthecampaign.Thecommunicationprogramshouldhavethefollowingobjectives:1.1. Developanunderstandingofthestrategythroughouttheorganization.2.2. Developbuy-intosupporttheorganization’sstrategy.3.3. Educatetheorganizationaboutmanagementsystemforimplementingthestrategy.4.4. Providefeedbackaboutthestrategy.EdRobertson,managerofemployeecommunicationsatFederalExpressCorporation,emphasizedthattheperformanceofthecommunicationprocessmustbeevaluatedbyresults,notactivities.Countingthe“numberofmessagessent”and“numberofviewers”measurestheactivitiesofacommunicationprocessbutnotitsoutput.GeorgeBernardShawsaid:“Thegreatestproblemwithcommunicationistheillusionthatithasbeenaccomplished.”Itdoesn’tmeanthatamessageshouldhavebeenreceivedjustbecauseithasbeensent;therefore,theoutputmeasuresforthecommunicationsprocessshouldbesharedamong employees.Severalcompanies,toverifythatthemessagewasindeed“out”,asked,aspartoftheirannualemployeesurvey,whethertheemployeeknewaboutandunderstoodthestrategy.Mostcompaniesfeelthatthedeeppenetrationofthemessageisagreatassetfortheorganization.Manymediaareavailabletoclarifythecorporatestrategytotheemployees,someofwhichinclude:ll Quarterlymeetings.Initially,theexecutivesusethemeetingsofthiskindtointroducethePMconcept.Astheconceptbecomesestablished,theyusequarterlymeetingstobrieftheorganizationonrecentperformanceandengageinQ&Adiscussionsaboutthefuture.ll Monthlynewsletters.Thenewslettersdefineanddescribethestrategy,andprovideperiodicreportsandstoriesaboutemployeeinitiativesleadingtoimprovedperformance.ll Brochures.Aone-pagedocumentdescribesstrategicobjectivesandhowthesewillbemeasured.ll Educationprograms.ByincorporatingthePMsysteminalleducationandtrainingprograms,themessageofPMasanewwayofdoingbusinessisreinforced.ll Companyintranet.TheconceptofPMispostedontheIntranet,withvoiceandvideosegmentsofexecutivesdescribingtheoverallstrategyandexplanationsforindividualobjectives,measures,targets,andinitiatives.Fewcompaniesuseonlyasinglemedium.Mostuseacomprehensivemixofmediainaprogramofcontinualcommunications.Eventually,thevisionandstrategyoftheorganizationbecomespervasiveandroutine,deeplyembeddedinongoingmanagementprocesses. 3.5PerformancePlanningPerformanceplanningpresentsanopportunityforthesupervisorandemployeetodiscusshowtheywillcommunicateaboutperformance,whichissurelyguidedbythecompany’sstrategy.Thesupervisorandemployeecandiscusshowtheemployeelikestoberecognizedforgoodperformanceandhowtheyprefertoreceivefeedbackwhenthereisaperformanceproblem,andalsotheycandiscusshowthesupervisorpreferstoreceivefeedbackfromtheemployee.Theregulatoryrequirementsforplanningemployees'performanceincludeestablishingtheelementsandstandardsoftheirperformanceappraisalplans.Performanceelementsandstandardsshouldbemeasurable,understandable,verifiable,equitable,andachievable.Throughcriticalelements,employeesareheldaccountableasindividualsforworkassignmentsorresponsibilities.Employeeperformanceplansshouldbeflexiblesothattheycanbeadjustedforchangingprogramobjectivesandworkrequirements.Whenusedeffectively,theseplanscanbebeneficialworkingdocumentsthatarediscussedoften,andnotmerelypaperworkthatisfiledinadrawerandseenonlywhenratingsofrecordarerequired.InPerformancePlanning,therefore,itisthedutyofthesupervisorto:ll Haveathoroughunderstandingoftheworkinvolved-----thecriticalfunctionsandkeytasks;ll Reviewthejobdescriptiontoensurethatinformationisaccurateandup-to--date;ll Knowwhatconstitutes“successfulperformance”inthecorecompetenciesandeffectivelycommunicatethis;ll Identifypriorityareas,ifappropriate,amongthecoreandspecificcompetenciesthatwillbeemphasizedintheevaluation;ll Communicatehowtheresultsoftheemployee’sworkcontributetotheunit’sgoals;and ll Asktheemployeewhatinformation,resources,tools,trainingandsupervisionisneeded.Meanwhile,itisthedutyoftheemployeeto:ll Haveathoroughunderstandingoftheworkinvolved–thecriticalfunctions,keytasks;ll Reviewthejobdescriptiontoensurethatinformationisaccurateandup-to-date;ll Understandwhatconstitutes“successfulperformance”ofthecorecompetencies;ll Understandhowtheresultsofthispositioncontributetotheunit’sgoals;ll Communicatewhatinformation,resources,tools,trainingandsupervisionisneeded;andll Askquestionstoclarifyinformation.PerformanceplanningestablishesexpectationsforperformanceandisthefoundationuponwhichtherestofPerformanceManagementlies.Theperformanceplanningprocessmayvary,dependingonthelengthofthetimetheemployeeandthesupervisorhaveworkedtogether,thedegreeofexperienceofbothindividuals,thequalityofpastperformance,etc.Belowisasampleagendathatincludesseveralimportantissuestoaddressduringaperformanceplanningsession.SampleAgendaforaPlanningMeetingIntroductionTheintroductionsetsthetoneofthediscussionandpresentsthefocusofperformanceplanning:ll Establishingandagreeinguponperformanceexpectations; ll Clarifyingwhattheemployeewillbeevaluatedon;andll Settingthestageforongoingfeedbackandcoachingthroughouttheyear.ReviewpositiondescriptionThePerformancePlanningMeetingisagoodopportunitytoreviewthejobdescriptionanddetermineifitisstillaccurate.Reviewingthejobdescription:ll clarifiesdutiesandresponsibilitiesthatareuncleartotheemployee;ll helpsthesupervisorknowwhattheemployeedoesonadailybasis;andll highlightsareasofthejobthatneedspecialattention.DiscusscompetenciesThesupervisorandtheemployeeshoulddiscusseachofthecorecompetencies(includingsupervisorycompetencies,iftheemployeealsohaspeoplereportingtohim).Insomecases,thecorecompetenciesmaynotadequatelycovertheemployee’sresponsibilities.Itmaybeusefultoaddanewcompetencytotargetakeyareaofresponsibilityforanemployee.Ifacompetencyisadded,theemployeeandthesupervisorneedtodiscussandcometoanunderstandingoftheadditionalcompetencyandtheexpectationsassociatedwithit.EstablishperformancestandardsSupervisorsandemployeesshouldworktogethertocreatestandardsrelatedtoeachcompetency.Standardstakeexpectationstothebehaviorallevel.Tocreatestandards,readthespecificdescriptorsundereachcompetency.Identifythosepointsthatarekeyissuesforyourunitandthinkaboutthestandardsthatareassociatedwitheach.Performanceplanningisdesignedtoenableallemployeestoachievetheirmaximumpotential,tofacilitatecommunicationandfeedback,andtorecognizethecontributionofeachemployeetotheorganization. 3.6LinkPerformancetoRewardsSystemInaneffectiveorganization,rewardsareusedtohelpachievetheorganizationalgoals.Rewardingmeansrecognizingemployees,individuallyandasmembersofgroups,fortheirperformanceandacknowledgingtheircontributionstotheorganization'smission.Let'sfirstlookathowCarlWidget'sgoals(acaseinPart3.3ofChapter3)weretranslatedintoarewardsysteminhiscompensationplan.Itsetsaside$2,400quarterly($9,600annually)inincentivepayandlinksthatpaytoa“balanced”individualperformance,coincidingwithhisbusinessunit'sgoalsaswellascompanygoals.Inaddition,histhreeindividualperformancegoalincentivesareallwithinhis“lineofsight,”orinotherwords,hedirectlycontrolstheiroutcomes.Gain-sharingprogramslikethisgiveemployeesaregularshorter-termmonetaryrewardformeetingspecificperformancegoalsforwhichtheyaredirectlyresponsible.InthecaseofABCElectricalSupplyCo.,everyonereceivesaquarterlymonetaryincentiveforaccomplishingcontrollableandachievablegoals.Carlreceiveshisemployeescorecardatthebeginningoftheyear,listingcompanyperformancegoals,department/branchperformancegoals,andhisindividualperformancegoals.Healsoreceivesandsignsoffonhiscompensationplan.Employeebuy-inandownershipisthusachieved.Thisshared-destinyrewardsystemmotivatesemployeestomeetindividual,departmentorbranchandcompanyperformancegoals.Managementdeliversquarterlyreportstoemployeesonhowwellthecompanyisperformingagainstitscompany,departmentandbranchtargets.Next,Carl'smanagerholdsaformalquarterlyperformancegoalreviewtoreporthowwellheachievedhisindividualperformancegoalsagainsthistargets.HismanagerthencalculatesCarl'sincentivecompensationrewardpayment.Inadditiontothesequarterlymeetings,Carl'smanagerholdsmonthlycoachingsessionstoevaluateCarl'sprogressonhisindividualperformancegoalsandtocommunicatecriticalbusinessinformationwithhim.Oncecompany-widerewardsystemsareinplacewithquarterlyincentivepayouts forallemployees,andemployeesarereapingincentivepayoutsforperformance,employeesatisfactionandmotivationskyrockets.Employeeslearntothinkmorelikeownersofthecompany.Afteroneortwoyearsofvariable-basedcompensationsuccess,theemployercanbegintoreducebasepaythroughouttheorganization,forgreaterpotentialincentiverewards.Thisbecomeswellreceivedbybothemployersandemployeesbecauseemployersarestrugglingwithattracting,motivating,andretainingemployeeswithoutgreatlyincreasingfixedcosts,andmostemployeeswantanopportunitytoearnmoremoney.Aslongastheyhaveexperiencedincentiveplansuccess,mostareverywillingtosacrificesomefixeddollarsformoreincentiveearnings.Let’sseehowtoestablishthelinkagebetweenperformanceandrewardsintheplanningsession.(BasedontheEmployeeScorecardofABCElectricalSupplyCo.)ABCEMPLOYEESCORECARDName:CarlWidgetDate:January2,2001Department/Branch:AustinbranchItisimportantformetounderstandcompanygoalsandmydepartmentorbranchgoalsbecausemyindividualworkcontributestotheaccomplishmentofthesegoals.Therefore,Imustclearlyunderstandtheexpectationsandpriorities.Ialsounderstandthatmygoalsandexpectationsmaychangethroughouttheyear,asthegoalsofthecompanyandmydepartmentorbranchchangeinordertomeetevolvingbusinessneeds.CompanyPerformanceGoals:AchieveaverageCSIof80percent Achievetotal“Knowledge&Skills”ESIof80percentAchievecontinuousOFRof94.6percent,OARof99.7percent,andOTDRof98.4percentAchieveNIBTof4.2percentDepartment/BranchPerformanceGoals:AchieveaveragebranchCSIof80percentAchievetotal“Knowledge&Skills”ESIof80percentAchievecontinuousbranchOFRof94.6percent,OARof99.7percent,andOTDRof98.4percentAchievebranchNIBTof4percentIndividualPerformanceGoals:AchievebranchCounterSalespersonCSIof80percentAchievedailysales-orderwriteraverageof35ordersand140linesAchievebranchNIBTof4percentABCELECTRICALSUPPLYCO.2001REWARDSPLANName:CarlWidgetTitle:CounterSalespersonEffectiveweekendingJanuary6,2001Hourlywageof$14Quarterlyincentivebaseduponachievementof:BranchcountersalespersonCSIratingsof80percentforbeingfriendly,responsive,knowledgeableandthankfulmeasuredbyquarterlycustomersatisfactionreportscards.Pays$800. Dailysales-orderwriteraverageof35ordersand140linesmeasuredbycomputersystem.Pays$800.BranchNIBTis4percentofbranchnetsalesmeasuredbyquarterlyfinancialstatements.Pays$800.Thefollowingslidingscaleswillreflectthepercentageofquarterlyincentivepayouts:95percentofgoalpays95percentofincentivecompensation90percentofgoalpays90percentofincentivecompensation85percentofgoalpays85percentofincentivecompensation80percentofgoalpays80percentofincentivecompensationBelow80percentpaysnoincentivecompensationQuarterlyincentivesarepaidbythefifteenthdayaftereachquarter.Terminationofemploymentwillresultinforfeitureoffuturequarterlyincentives.ThiscompensationplanwillsupercedeanypreviouscompensationplansandwillbesubjecttoreviewandrevisioninDecember2001Excellentperformanceshouldnotberecognizedonlyfromtheformalawardsperspective.Recognitionandmotivationisanongoing,naturalpartofday-to-dayexperience.Alotoftheactionsthatrewardgoodperformance-------likesaying"Thankyou"-------don'trequireaspecificregulatoryauthority.Nonetheless,awardsregulationsprovideabroadrangeofformsthatmoreformalrewardscantake,suchascash,timeoff,andmanynon-monetaryitems.Theregulationsshouldalsocoveravarietyofcontributionsthatcanberewarded,fromsuggestionstogroupaccomplishments.Thatistosay,therearenon-monetarywaystorecognizeandmotivatetheemployees,suchas,thankingemployeesforajobwelldone,providingmeaningfulfeedback,offeringopportunitiesforhighvisibility,gettingemployeesinvolved,empoweringemployees,celebrating employees’successes,providingopportunitiesfortraining,etc.3.7PerformanceAppraisalandReviewPerformanceappraisalandreviewprovidesthemanagerandtheemployeewithasummaryofthelevelofsuccessthathasbeenachievedwithrespecttothekeyresultsandcompetenciesidentifiedintheperformanceplanning.Thisinformationisusedtoidentifytrendsinperformance,strengths,andareasrequiringfurtherdevelopment,andanylearninganddevelopmentthatmayberequired.Meanwhile,itistheformaldocumentationthatacknowledgesanemployee’scontributionsaswellaschallengesandprovidesguidanceaswellasdirectionwherenecessary.Appraisalsystemshouldalsouseobjectiveandtransparentmeasuresofassessmentandshouldreducebiasandfavoritism.Everyemployeemustfullyunderstandthesystem,criteriausedandhowmarksaregiven.Trainingontheappraisalsystemonregularintervalsisalsoneededtoimprovetheattitudeandtoheightenthemoraleofemployees.T.J.PetersandR.H.WatermanintheirinSearchofExcellence(1982:56)putit,“Appraisalshouldbedoneobjectively;theperformanceappraisalshouldbebasedonyearlytargets;thecriteriashouldbemeasurable;theremustbecontinuousdiscussionorconsultingsessionsbetweentheappraiserandappraised;performanceappraisalshouldnotbeusedasayardsticktodeterminesalarymovement,ratheritshouldbeusedasatoolforthedevelopmentofemployee.”Beforetheperformancereview,thesupervisorisexpectedtoscheduleampletimeandarrangeaprivateplaceforthediscussion,andmeanwhileremindtheemployeetobringappropriatematerials(files,self-evaluation,copiesofletters,etc.).Theemployee’sjobdescription,theexpectationssetduringtheperformanceplanningdiscussion,thecompletedself-evaluation,thedocumentationcollectedthroughouttheyear(letters,files,etc.)shouldbecarefullyexamined,whichshouldbeconductedduringregularbusinesshours,notduringbreak,lunchoraftertheworkdayisover.Forthesupervisor,planfortwo-waycommunicationduringthereviewmeetingandthinkingofquestionsthatcouldbeusedtohelpyouremployee“open-up”isalsoveryimportant.Whattheemployeeshoulddo beforethereviewistoconfirmthemeetingwiththesupervisor,gatheranydocumentationregardingtheperformancethathasbeencollectedthroughouttheyear(letters,notes,etc.),completehisorherself-evaluation,reviewhisorherjobdescriptionandexpectationsthatweresetduringtheperformanceplanningdiscussion,andwritedownquestionsthatheorshewantstoaskthesupervisor.Makingacarefulpreparationwillbealwayshelpful.Andduringtheperformancereview,thesupervisorissupposedtooffertheemployeeanopportunitytosharehisorherself-evaluation,settargetsforimprovement,discusswithhisorherthelearninganddevelopmentneeds,andprovidespecificfeedbackontheemployee'sperformance,includingpriorityareastargetedduringPerformancePlanningandperformancethatexceeded,metorfellbelowexpectations.Intheend,donotforgettoanswertheemployeequestionsregardingtheperformancereview,andsignthePerformanceReviewFormandfinallyobtaintheemployee'ssignature.Fortheemployee,Sharinginformationfromtheself-evaluation,offeringsuggestionsandideasforimprovingperformance,identifyingareasforlearninganddevelopment,andlisteningtofeedbackfromthesupervisor,andaskingquestionstoclarifyinformationaswellarereallynecessary.Atlast,doremembertosignthePerformanceReviewForm,andattachcommentsifdesired.Andthen,aftertheperformancereview,whatthesupervisorshoulddoistomakeacopyofthereviewfortheemployeeandhimself,andreturntheoriginalonetotheappropriateindividualintheunitforsignature(s)andfiling.Fortheemployee,keepacopyofthePerformanceReviewforfuturereference,andusetheinformationgainedintheperformancereviewtobuildonstrengthsandimproveareasforgrowth.Surely,thereexistsomepitfallsinPerformanceReview,namely,Haloerror,Hornserror,Firstimpressionerror,Recencyerror,Leniencyerror,Severityerror,Cloneerror,Centraltendencyerror,andspillovererror.Tobespecific,Haloerror–Appraisergivingfavorableratingstoalljobdutiesbasedonimpressiveperformanceinjustonejobfunction. Hornserror–(Oppositeofhaloerror)DowngradinganemployeeacrossallperformancedimensionsexclusivelybecauseofpoorperformanceononedimensionFirstimpressionerror–Developinganegativeorpositiveopinionofanemployeeearlyinthereviewperiodandallowingthattonegativelyorpositivelyinfluencealllaterperceptionsofperformance.Recencyerror–(Theoppositeoffirstimpressionerror)Allowingperformance,eithergoodorbad,attheendofthereviewperiodtoplaytoolargearoleindetermininganemployee’sratingsfortheentireperiod.Leniencyerror–Consistentlyratingsomeonehigherthanisdeserved.Severityerror–(Oppositeofleniencyerror)Ratingsomeoneconsistentlylowerthanisdeserved.Cloneerror–Givingbetterratingstoindividualswhoareliketheraterinbehaviorand/orpersonality.Centraltendencyerror–Avoidingextremesinratingsacrossemployees.Spillovererror–Continuingtodowngradeanemployeeforperformanceerrorsinpriorratingperiods.Toavoidtheseerrors,specialattentionshouldbepaidtothefollowingpoints:First,keepdocumentation(notes,e-mail,etc.)throughouttheyear,onaccomplishmentsandneedsforimprovementaswell.Andasktheemployeetokeepdocumentation,too.Second,allowenoughtimebeforethereviewmeetingtothinkandreflectontheeventsofthepastyear.Third,askothersfamiliarwiththeperson’sworktoaddinput(makingsurethattheemployeeknowsaboutthisbeforehand),andmeanwhile,asktheemployeetoreviewhisorherownperformanceasadditionalinputtothediscussion. GuidelinesforConductingaPerformanceReview1.Makeit“prioritytime.”Createanagendaforthemeeting·Minimizeinterruptions2.Setatoneofcollaboration.StartthediscussiononapositivenoteEncouragetheemployee’sparticipation3.Beclearaboutthepurpose.Reinforcethatthediscussionwilladdressstrengthsandareasforimprovement4.Reviewperformanceexpectations.Discussthejobdescription,positionobjectives,goals,andcriticaljobtasksBeclearaboutperformancestandardswithintheunit5.Discussperformancethatisbelow,meets,andexceedsexpectations.Uselanguagethatisclearandspecific;useexamplesDescribeperformance,notpersonality6.Asktheemployeewhatheorshethinks.ActivelylistentotheemployeeAllowtheemployeetospeakfreelybeforerespondingtohisorhercommentsClarifytheemployee’sconcerns,thenaddressthem7.Setgoalsto:Buildonstrengths ImproveperformanceintargetedareasDeveloptheemployee’sknowledge,skills,andabilitiesAligntheemployee’sworkwiththeneedsoftheunit8.Agreetofollowup.Scheduleatleastoneinterimcheck-inonperformanceduringtheyearAskhowtheemployeepreferstoreceivefeedback(written,verbal)Discusshowtheemployeelikestoberecognizedforgoodwork9.Closewithencouragement.OfferhelpandsupportEndonapositivenotebysummarizingemployeestrengthsandcontributions3.8ContinuousFeedbackFeedbackisobjectiveandsupportableinformationprovidedtotheemployeetoeithermaintainorbuildondesirableperformance,orredirectfocuswhenthingsarenotontrack.Monitoringperformanceandprovidingfeedbackonaregularbasisisessentialifperformanceistobeeffectivelymanaged.Itistheprocessofprovidingon-goingsupportandadvicetoemployeestoassisttheminachievingtheirtargets,andre-focusingtheireffortsifrequired.Generally,feedbackisusedtoencourageprogress,reinforcepositiveactions,helpanemployeecorrectalapseinperformanceorbehavior,recognizetheemployee’svalueandcontributiontotheorganization,andre-focusanemployeewhenthereisinsufficientprogresstowardsaspecificgoal.Providingfeedbacktoanemployeeonaregularbasismaysignificantlyinfluenceperformanceinapositiveway.Whetherintendingtosupportandsustaindesirableperformance,orre-focusefforts,feedbackwillhavemuchgreaterimpactifsharedinatimelymanneraseventsoccur.Thisiswhenperformancerelatedcomments andguidancearemostmeaningful.Effectivefeedbackistwo-way(givingandreceiving),regularandon-going,specificaswellastimely.Therefore,whenfeedbackiseffective,itreinforcespositiveactions,promotescontinuedalignmentwithexpectations,helpstheemployeetorecognizedesiredoutcomesand/orbehaviors,encouragestheemployeetodevelopdesirableworkpractices,andassiststheemployeetoachievetheirowntargetsandthegoalsoftheorganization.Positivefeedbackisusedtoreinforceajobwelldone.Tobeeffectiveitmustincludespecificinformationaboutwhatthepersondidwellandwhyitwaseffective.Non-specificfeedbacksuchas“Nicework”canfeelgoodbutdoesn’tprovideusefulinformationtoreinforcethebehavior.AneasymemoryaidforprovidingeffectivefeedbackisthewordSTAR:ST=SituationorTask-----remindsyoutodescribethesituationortaskthepersonfaced(i.e.what’stheissue?)A=Action-----remindsyoutodescribetheactiontaken(i.e.whatthepersondid)R=Result-----remindsyoutodescribetheimpactoftheperson’saction(i.e.howtheiractionshelped).FortheeffectiveFeedback,thefollowingtipsmaybeuseful:ll MultipleSourcesofFeedback:aprocesswhichprovidesemployeeswithperformanceinformationtosupplementsupervisoryfeedback;thismayincludefeedbacksourcessuchasself,peers,constituentsordirectreports.ll Feedbackinvolvestreatingeachotherwithrespect.ll Constructivefeedbacktriestoreinforcethepositiveandchangethenegativebyidentifyingwhatwasdonewellorpoorly,describingwhatactionorbehaviorisdesired,andexplainingtheeffectsoftheobservedanddesiredactsofbehavior.ll Goodfeedbackistimely.Givethefeedbackasquicklyaspossibleaftertheevent. ll Feedbackinvolvesbothpartieslisteningcarefully.Checkforclaritytoensurethatthereceiverfullyunderstandswhatisbeingsaid.ll Goodfeedbackshouldbespecific.Generalizedfeedbackdoesnotexplainwhatbehavioristorepeatoravoid.Describeexactlywhatwasdonewelland/orwhatcouldbeimproved.Forexample,“Thisreportiswellorganizedandthesummaryclearlystatesyourconclusionsandproposedactions”ratherthan“Goodreport.”ll Keepfeedbackobjective.Usefactualrecordsandinformationwheneverpossible.Includedetailsthatfocusonspecificactionsandresultsratherthancharacteristicsoftheemployee.Forexample,say“thishappened”ratherthan“youare”“Youhungupthephonewithoutsayinggood-bye.”ratherthan“youarerude.”ll Feedbackaboutperformanceissuesisbestdeliveredinperson.Theemployeewillhaveachancetorespondtoanyissuesraised.Especiallyavoiddeliveringnegativefeedbackviae-mailmessages.3.9AnnualSummaryMeetingPerformanceManagementisaboutongoingtwo-waycommunicationbetweentheemployeesandtheirsupervisors.Theannualperformancemanagementreviewshouldbeasummaryofvariousmeetingsthroughouttheyear(interimgoalreviewsorupdates).Duringtheannualsummarymeeting,theemployeeisexpectedtodothefollowing:ll Bepreparedtogivefeedbacktothemanager.ll Reviewthecurrentroledocument:Doesitreflectyourcurrentroleinthedepartment?Ifnot,discusswiththesupervisoraboutrevisingyourroledocument.ll Reviewyourgoalsfortheyear:Havetheybeenmet?Reviewyourachievements.Thinkaboutobstaclesorroadblocksyouencounteredandhowyoudealtwiththem. ll Reviewthecompetenciesrequiredforadministrativestaffpositions:Identifyspecificareasofexpertiseorskillsthatyouwouldliketodeveloporimprove.Identifyyourstrengths.Inwhatareashaveyouimproved?Canyouidentifyanydevelopmentalgoalsforthecomingyear?ll Thinkaboutobstaclesorroadblocksthatyoufaceinperformingyourresponsibilitiesandwhathelpisneededfromyoursupervisortoovercomethem.Whatideasdoyouhaveforchangesthatwouldhelpyouperformyourrolebetterand/orimprovetheoperationofthedepartment?Ifyoumanageothers,whathaveyoudonetodevelopandstrengthenyourstaff’sperformanceandskills?Andwhatthesupervisorshoulddoisto:ll Beresponsibleforpreparingthesummarydocumentation.ll Reviewtheemployee’sroledocument.Doesitreflecttheircurrentroleinthedepartment?ll Reviewtheprimarypositionresponsibilities.Hastheemployeeeffectivelyperformedthese?Whatisyouroverallassessmentofhowtheseresponsibilitieswereperformed?ll Reviewtheemployee’sgoalsfromlastyear.Weregoalsmodifiedorchangedduringthereviewperiod?Havethegoalsbeenmet?Haveyoubeenabletoprovidetheemployeewiththetoolsandsupporttogetthejobdone?ll Reviewlastyear’sappraisal.Howdoesthisyearcomparetolastyear?Havetherebeenimprovements?ll Considerwhetheryouneedtospeakwithanyoneelseinordertohaveamorecompleteandaccuratepictureofyouremployee’sperformance.ll Reviewthecompetenciesrequiredforadministrativestaffroles.Assesstheemployee’sstrengths,weaknessesandareasofgreatestimprovement.Isthereaspecificareawhereyouwouldliketoestablishadevelopmentalgoal?ll Providesuggestionsfortheemployeethatwillhelpimprovetheirperformanceintheirrolesortheoveralloperationsofthedepartment. ll Iftheemployeesupervisesothers,discusswhatheorshehasdonetostrengthentheirownstaff.Askaboutregularcommunicationofinformation,jobexpectations,andfeedback.ll ContacttheHumanResourcesOfficeforassistanceifsubstantialperformanceissuesexist.FinalizingthePerformanceManagementDocumentThesupervisorisresponsibleforcompletingthefinaldraftofthePerformanceManagementDocumentandforwardingthecompleteddocumenttoHumanResourcestobecomepartoftheemployee’spersonnelfile.Sendahardcopysothatsignaturesareincluded.ThesupervisorshouldprovideacopyofthefinalPerformanceManagementDocumenttotheemployee.TheemployeeshouldsignthePerformanceManagementDocument.SigningthePerformanceManagementDocumentindicatesthattheemployeehasmettheirsupervisortoprovideinputtothedocument,thattheyhavereviewedthedocument,andthattheyhavemetthesupervisorfordiscussion.Theemployeehastherighttorespondtotheevaluationinwriting. ChapterIVConclusionAsurveybyTalentShanghaiindicatesthat78%oftheorganizationsregardedtheirPerformanceManagementsystemofthepreviousyearasanunsuccessfulexperience.Thatistosay,theirconsiderableeffortsandresourcesdolittlehelptotheirperformanceimprovement.NowonderthesedaysthereareplentyofcomplaintsonPMinvariousmedia.Asamanagementtool,however,thePMsystemitselfdoesnotbringanyfailure;instead,itisthePMsystemimplementationprocessthatmakesthedifference.IhaveobservedatleastsixdifferenttypesofprocessfailuresinPMimplementation:1.Lackofseniormanagementcommitment2.Lackofstrategycommunication3.TreatingPMasonetimeevent4.Hiringinexperiencedconsultants5.Toofewindividualsinvolved6.IntroducingPMonlyforcompensation/rewardsImplementationfailuresdooccur,butsomecompaniesarealreadyenjoyingbenefitsfromtheirPMsystems.Tosomeorganizationswithfailurestories,Iherebywouldliketoproposethefollowingrecommendations:ØØ EstablishmentofPMsystemthatallowsgoalsetting.ØØ Establishmentofstrategicplanningprocesswithinorganizationalframework,whichidentifiestheorganizationalobjectivesandlinksthePMsystem.ØØ Developmentofmerit-and-competency-basedrecruitmentsystem.ØØ Reforminhumanresourceandpersonnelmanagementtofocusonthedevelopmentofeffectiveperformancesystems.Incomparisonwiththetraditionalpractices,whichfocusonpermanence,neutralityandanonymity,nowthegeneralfocusshouldbeonresults,flexibilityandincentives. 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