It’s Not about the Form!
Performance Alignment & Accountability Process

---

September 10, 2009 - Rick Tate & Julie White Ph.D., Impact Achievement Group, Inc.

One of the acknowledged critical responsibilities of managers and supervisors is the process of managing the performance of both individuals and groups. Within that process, managers are asked to conduct performance reviews (aka. performance appraisal or performance evaluation) on a predetermined basis.

Unfortunately, many performance review or appraisal systems are fraught with difficulties. Among the many unintended consequences of poorly designed performance review systems are:

• Performance driven by forms rather than the job requirements.
• Job descriptions that are too elaborate, too lengthy and vague regarding focus.
• Too many performance elements to keep track of and measure.
• Measuring process behaviors rather than results.
• Ambiguous adjectives, personal characteristics, and traits used to describe and measure performance.
• Standards that are difficult to describe and articulate.
• Overly broad metric scales which make it difficult to evaluate performance fairly.
• Flawed interpretation of the “expectations” issue regarding performance (confusion between manager and employee regarding what “expectations” are based on).
• All employees subjected to one-size-fits-all performance elements and metrics that do little to describe the individual job results or outputs.
• Subjective measurement that is vague and misunderstood between manager and employee.
• No distinguishing differentiation between performance issues and professional conduct issues.
• A cumbersome and time consuming process.

What this all leads to is difficulties in setting performance goals and objectives, difficulties in conducting performance discussions, difficulties in performance review conversations, and difficulties in assigning fair and justified performance marks.

Over the years, most everyone we have interviewed, both managers and employees alike, concur that the performance review process is littered with these problematic concerns.

The challenge for your organization is clear: Why take on any more liability in performance management than is necessary?

The solution is a performance review process that drastically reduces the difficulties and flaws in the traditional review or appraisal process. An effective review process focuses on the unique critical contributions of each job, not a generic review of all jobs. What is needed is a performance review process that is user friendly, focuses on key performance outcomes and standards for each job, contains simplified metrics, and results in more concrete performance discussions between managers and employees.

While objectivity in standards and measurement is continually pushed for, the reality is that with any organization, management subjectivity plays an essential part with any performance management process. The key is to get managers to clearly articulate the meaning of any subjective standards or measurements, first to themselves, and secondly to their direct reports.

Capturing the data from mangers using this method brings to the surface what the manager deems pertinent for success in a job and what he or she would be measuring; no matter what form they were required to use. Using this process puts the manager’s performance objectives and priorities on the table and allows employees to know and understand what they are really being evaluated on. This eliminates the game of attempting to transfer what the manager actually evaluates to a form that has performance
descriptors that are generic and unrelated to what the manager deems important.

THE PROCESS
There are nine critical elements of the Performance Advantage™ review process that
address these identified problems.

Overview:

Job requirements drive the performance review process and the specifics of the review form—not pre-established performance characteristics.

The performance requirements of a specific job should drive both what and how performance is measured. A pre-printed form that all employees are subjected to is never sufficient for fair and accurate performance review and measurement. One-size-fits-all performance review forms are like one-size-fits-all anything…they fit no one well and everyone poorly.

In our discussions with many organization managers, it has become clear that managers evaluate the performance they believe to be pertinent and then use that evaluation to attempt to conform their opinion of employee performance to the pre-designated characteristics on last year’s appraisal form. Managers evaluate what they believe is important and set their own standards of what meets acceptable job requirements. This is what must be captured, documented and communicated to employees. It’s going to be put in play anyway… so the goal is to make it well-thought-out and legitimate.

Step One: Develop job descriptions that are focused on contributions, not job tasks.

Narrowing down job descriptions so each one identifies the key reason the job exists keeps both manager and employee focused on the essential contributions of each job. The critical question to ask to clarify the job description is, “Why do we have this job?”

Step Two: Identify the Key Performance Elements (the 3 to 8 critical outcomes, results, or  contributions) based on the job description.

Setting goals/objectives and measuring too many performance issues can easily take the focus off the critical contributions a job provides. Also, much of the time many of the issues that are measured are inherent in the outcome, result, or contribution required.

For example, let’s take a common performance characteristic: Initiative. It certainly is a personal characteristic that is desired from most any employer. However, the real question is, “Why is this characteristic desired?” The ultimate answer, “Because it leads to outcomes, results, and contributions that are desired.” If outcomes, results or contributions could be achieved without Initiative then we wouldn’t desire it.

So, why waste time measuring this characteristic and attempting to clarify to the employee the manager’s interpretation of this characteristic?

Identify the standard of performance and then measure the performance to standard. Initiative will be present if the standard is met.

Step Three: Create performance standards for each Key Performance Element.

A standard of performance should reflect the acceptable level of performance required to hold the job. By clearly articulating an acceptable performance standard for each performance element a pass/fail measurement is automatically created.

Performance below the standard does not meet the performance requirements for the job and performance at or above the standard is deemed acceptable. An effort should be made to make performance standards output or result oriented as much as possible. While some performance elements do not lend themselves to clear result or outcome standards and cannot be measured as objectively as others, performance review is more effective when standards are outcome and/or result based.

Example: the standard for a file clerk is not an amount of files filed within specific time limits, it is the accurate and timely retrieval of information. This pushes the performance management in the direction of an outcome (retrieval) not a process (filing). Note; accuracy and timeliness will require en efficient filing process.

Step Four: Performance standards should reflect acceptable outcomes for a particular job, not for the individual filling the job at the moment.

To avoid punishing high performers in a performance review process, performance standards should address the level of performance that “meets acceptable job requirements” (the level of performance that entitles a person to retain the job).

Performance standards should not reflect “meets expectations.” When this descriptor is applied inequities in the review process become frequent. When managers have high expectations of an individual because of past performance then many times that high performer receives an ‘average’ performance mark when they meet the manager’s very high expectations. Having high expectations regarding the performance of an employee should not result in that employee being punished for meeting the high expectations with exceptional performance.

Example: If I have an IT specialist that has demonstrated remarkable expertise in fixing system problems in an incredibly short time period I might develop very high expectations for this individual. If this employee continues to meet these high expectations (they continue to pull off miracles), does this employee really deserve a performance mark indicating average performance… which is performance that meets the acceptable level for holding the job?

Different perceptions and practices around the term ‘expectations’ creates unfair performance evaluations and influences high performers to look for greener pastures.

Step Five: Create a valid, reliable metric scale for each Key Performance

Element
Depending on the standard created for a performance element, the rating scale should reflect a maximum of four performance levels. Each deviation on the scale must contain a description of performance that would earn that particular rating.

• There is no need to have two deviations on the scale below the “meets” performance level (2). An employee’s performance is either below what is minimally accepted for a performance element or it isn’t. Performance that tracks continually below the “meets” level shouldn’t be tolerated or paid for.
• Depending on the type of performance element, one or two deviations from the “meets” performance level (2) might be called for. This is determined by the manager and the characteristics of the performance element. It is not necessary to have every performance element have the same numerical rating scale… some may be suited for a 1 to 3 rating scale while others may need a 1 to 4 scale.
• Usually the more objective and quantifiable the standard and measure the more a manager can utilize a 1 to 4 scale.
• The more subjective the standard and the measure the more a 1 to 3 scale is appropriate (the 4 box is considered N/A in these cases).

Step Six: Clarify subjective standards and measurements with the employee.

In a perfect world, all performance elements would lend themselves to objective, quantifiable measurements. However, in the area of human performance where people are called upon to plan, think, and act many performance elements remain subjective relative to what differentiates poor performance from good performance and good performance from excellent performance. This managerial discretion in performance review is necessary and practical. However, what makes subjective performance standards effective is the manager’s ability to clearly articulate to the employee:

• What makes up the subjective performance standard.
• Performance facts and specific situations that provide feedback to the employee regarding performance that doesn’t meet, meets, or exceeds the standard.

Example: One of the performance elements of an accounting job might be to maintain the general ledger. In balancing the ledger, it would be difficult to put a quantifiable standard on this element as the person in the job is not in control of many of the numbers that get entered into the ledger and imbalances will occur.
The “meets” standard might read something like, “assures the timely and accurate balance of the ledger with infrequent management intervention.”

The manager must decide what is acceptable regarding “timely balance” and “infrequent management intervention”. This must then be described to the employee in clear terms at the beginning of the performance period. The employee’s performance must then be discussed at routine intervals during the
performance period and examples used to support any performance feedback. In doing so, performance management can be applied effectively to areas where there is no clear objective performance standard.

Step Seven: Identify Critical Elements and Weight Factors.

In some jobs, there are performance elements that are of critical importance to the success of the organization. While all performance elements in all jobs are necessary and important, some do stand out as “below the waterline” performance.

That is performance where poor performance causes significant harm and superior performance makes a substantial contribution to the organization as a whole. The use of these critical performance elements should be recommended by the manager and decided upon by the executive team. Depending on the element, a weight factor is given to that standard which would give the employee a higher mark when their performance is at the level 2 or higher. This allows the organization to recognize performance is critical contribution areas while using the same performance rating scale.

No weight factor should ever be given to performance that is below the acceptable job requirements.

Step Eight: Create a Key Performance Element that reflects the Business Principles or Core Values of the organization.

A performance review system should support any established business principles or core values. The professional conduct of all employees plays a critical role in the attraction and retention of talented people as well as the company’s reputation in the marketplace. Ensuring the performance review process addresses professional conduct lets everyone know those behaviors are important.

In most cases the scale that works effectively for professional conduct is a 2 level scale, with the rating point value being a 0 or a 2.

Regarding professional behavior, employees either behave accordingly or they don’t. Issues like “respectful treatment of others” don’t lend themselves to deviations above the 2 level. Very respectful? Outlandish respect? Deviations above a 2 scale only create unnecessary conflicts at review time.

Managers behave in accordance with the professional behavior standards and hold others accountable or they don’t. The behavior and tolerance regarding professional conduct is best suited to be evaluated on a two point scale… Pass/Fail.

When anyone doesn’t meet acceptable standards for professional behavior no review points should be earned. This is the reason for the 0 to 2 scale. Anyone who fails to behave in accordance with the code of conduct does not deserve a point towards their overall performance. Done this way, the Business Principles or Core Values take on significance.

Step Nine: Create a Performance Index for overall performance measurement of each employee and effective use for compensation and promotion decisions.

To create an equitable overall performance rating for all employees the prescribed approach allows for the creation of a Performance Index for each position. This is accomplished by adding up the total number of rating points earned by the employee and dividing that number by the total number of rating points that were possible in that position. This process makes it unnecessary to have everyone rated
on the same number of performance characteristics using the exact same rating scale for each characteristic.

For example: An employee may hold a position that has 6 Key Performance Elements:

• Two of the KPE’s are rated on a 1 through 4 scale (8 rating points available).
• Three of the KPE’s are rated on a 1 through 3 scale (9 rating points available).
• One KPE, the professional conduct element, is a 2 point scale (2 points available).
• The total performance points available for this position are 19.
• If this employee earns 15 points then his or her Total Performance Index for the rating period would be 80.

Note: When any Key Performance Element contains a critical weight factor the performance points available don’t change. This allows the employee to earn more performance points in critical job areas and improve their Total Performance Index as a reward for good performance in a critical area.

Summary:
This approach requires managers to identify the important aspects of a position, designate what acceptable performance looks like, designate what exceptional performance looks like, communicate clearly to the employee what performance is expected and how performance will be rated, provide performance feedback and performance discussions during the rating period, and evaluate performance based on the agreed upon performance targets.

These managerial steps, when carried out, will make performance management at your organization effective, consistent, and fair.

---

Impact Achievement Group is an assessment, leadership development, and performance management training and consulting company, focused on retention and employee engagement. Through assessments, story-based interactive workshops, simulations, and coaching, we provide managers / supervisors with the skills and tools they need to diagnose, coach, and inspire performance for results. Impact Achievement Group offers organizations of all sizes, a unique opportunity to assess how well managers create an engaging work environment, effectively set expectations, hold employees accountable, and conduct actionable workplace communications. Impact Achievement Group provides front line supervisor training in leader-led or eLearning formats for transitioning, new or tenured supervisors in their popular series “Supervisory Basics”. This series of 12 modules covers the best practices to accelerate development and establish participants as true leaders, gaining engagement and commitment rather than compliance. For more information: Call: 888/248-5553 Email: info@impactachievement.com

© 2009. Impact Achievement Group, Inc., White, & Tate. All Rights Reserved. 888/248-5553 · www.impactachievement.com