Evaluating performance
Organisations are continually asking people to perform better. This theme examines ways to set and agree individual goals and provide objective feedback on performance. It also explores how to review team performance in a way that leads to performance improvements.
Is development working? There is more pressure today than ever before to produce results from staff development programmes and initiatives. If development is not shown to add value, it may be difficult to justify the expense. This theme looks at how monitoring, measurement and evaluation of development can be used as a management tool to determine what is and is not working as well as anticipated.
In this theme you will:
Explore the processes used to review individual and team performance
Plan to meet the performance review needs of individuals
Identify ways of evaluating development
Consider ways of increasing the effectiveness of development.
Performance reviews
A performance review or appraisal is where you provide feedback to your team and individual members of the team on their performance and set goals for the future. You should regard this as one of your most important responsibilities. The purpose of a performance review is to:
improve the individual's – and therefore, an organization's performance. To do so, the appraisal has to be responsive to individual needs and be available to individuals throughout the organization.
Source: Crainer (1998)
Developing the performance review process
In developing a performance review process, an organisation must take into consideration:
the organisation's goals and their link to individual needs
the performance the organisation requires from the individual and the link to individual needs.
A framework for considering the performance review process is shown in Figure 5.1.
Figure 5.1 Goal alignment for performance
For performance reviews to have any value, organisations have to ensure that work is being organised efficiently and that the key processes are all aligned to ensure the production of goods or services that meet customers’ needs.
Part of your responsibilities as a manager when organising work is to agree team and individual objectives. A review or appraisal is then conducted to match actual against targeted performance.
At an organisational level, the criteria for evaluating performance will range from shareholder value and stock market valuation, to profit margins at business and unit levels. There will of course be many other criteria applied, each of which will be used to ensure that the organisation is performing effectively.
At management level, the criteria include organisational performance measures, and performance measures for the individual and the team. The focus should be on the actual performance measure and also on how the performance was achieved. This gives an opportunity to link performance to development. Some features of the review would include:
identifying factors that enhanced or hindered achievement
any development that enhanced achievement
personal commitment and contribution to the performance of the team
approach taken to problem solving.
Why organisations undertake performance reviews
At a broad, strategic level, performance reviews indicate how well an organisation's workforce is performing against goals. If jobs are designed correctly and people are trained to undertake these jobs, then staff performance should fall within a normal distribution curve – see Figure 5.2.
Figure 5.2 Distribution of staff performance
This normal distribution can be used at all levels in an organisation. Even in a department which contains many high fliers, the distribution should still be apparent, albeit that overall performance should be better than in others. Performance reviews assessed against the normal distribution curve help in spotting areas of underperformance. They also help in determining whether a manager is being too lenient or hard in assessing performance.
Mullins (1999) suggests several key benefits of a performance review process. It can:
identify an individual's strengths and weaknesses, and indicate how strengths can be built upon and weaknesses overcome
help to reveal problems that may be restricting progress and causing inefficiencies
develop a greater degree of consistency through regular feedback on performance and discussions about potential
provide information for staff planning, assist succession planning and determine suitability for promotion and particular types of employment
improve communications by providing a forum for staff to talk about their ideas and expectations and how we11 they are progressing.
Types of review
There are two types of performance review:
formal – which usually takes place at least once a year
informal – ongoing, as and when appropriate.
We will look at each of these in turn.
Formal reviews
Most organisations undertake annual performance reviews, although some may undertake interim formal reviews at the six-month period and, under certain circumstances, more frequent formal reviews may take place, for example, for graduate trainees, high potential staff being considered for promotion, special appointments or for underperforming staff.
The performance review process
A typical performance review process may involve the following steps:
Line manager receives forms from HR department:
Line manager distributes these to staff and asks them to review their own performance
Staff complete forms and return them to manager
Manager reviews individual performance and makes recommendations
Manager conducts performance review interviews with individual members of staff
Summary of meeting is recorded on the form which is signed by both parties and forwarded to senior manager or senior specialist for comment
Senior manager may also record comments
Form is returned to HR department, checked and, based on content, appropriate further actions are taken.
Organisations use a range of tools for assessing staff, and assessment may be against a number of criteria, such as achievement of objectives or achievement of competencies.
Annual performance reviews often carry an overall rating of performance and this rating may be used by organisations when determining an individual's pay rise or annual bonus. Organisations will already have the overall value of the pay rise or the size of the bonus pool in mind, and these may have been calculated against a normal distribution curve.
One side effect of directly linking performance reviews to pay is that the staff member involved in the review may tend to be less than frank about their own shortcomings if they fear a financial penalty is likely. A more objective outcome is likely if the performance review is divorced from the annual pay review.
James (1995) suggests that people work better when they are given:
feedback on how they are performing
clear attainable goals
involvement in setting tasks and goals.
Informal reviews
People should not have to wait until an annual formal review to be told how they are doing. Feedback on performance should be regular and ongoing. Informal reviews include simple feedback, such as saying, ‘That's great, well done…’, that shows you are happy with the individual's overall performance. However, informal reviews also include occasional one-to-one meetings, where the manager and individual staff member consider any areas that are of concern.
Informal reviews are particularly useful in the following circumstances:
when a person has done something praiseworthy
when a person is new to the role or to the team
when the role changes
after the individual has attended a development event
when the manager or team leader changes
when objectives or targets are changed
for the manager to make routine, regular checks on progress and to clarify any areas of concern
for the manager to discuss performance before a coaching session
to help determine the causes of good or poor performance.
Each of the above opportunities enables the manager to talk with an individual to explore areas of mutual interest and agree what is needed to help improve performance. It is an opportunity for both parties to voice any concerns, ask questions and clarify matters, explore options and agree how to proceed. Whenever appropriate, the manager should always reassure, praise and encourage the member of staff.
Informal performance reviews are often undertaken because an individual is underperforming. Rather than chastise the individual for poor performance, the manager should first use the review as an opportunity to identify the cause or causes. Often people do not perform well because of factors which may be unrelated to work, or because of factors which are outside their control. There may be family matters which are affecting an individual's concentration and performance, materials or information may arrive late, or equipment may be faulty. A quiet, friendly chat will reveal a lot more information than telling someone off before knowing all of the issues.
Conducting performance reviews
The way you conduct a formal review and an informal review meeting are broadly similar; it is the content of the review which differs. Your organisation may have some guidelines on how best to run reviews; you may find there are similarities with the following guidelines.
Guidelines for conducting reviews
Arrange a venue in which you know you will not be disturbed and agree the time and duration with the individual. It is important that you do not spring the meeting on a person – give prior notice. In some circumstances you may wish to reassure individuals that there is nothing for them to worry about – many people do worry about performance reviews, especially informal reviews unless they are a common feature.
During the meeting:
State the reason for the meeting and the agenda what – you want both parties to get out of it – and the time you have set aside for the meeting.
Open the review by asking the individual how they believe they are performing or how they are getting on. A good starting point is to ask them to talk you through their self-assessment form, if they have completed one. Ask questions to clarify and widen your knowledge and understanding of the topics under review.
Respond with the facts and your observations and views, but do not get involved in a debate. Debates may get heated and are not conducive to a constructive dialogue. The very nature of performance reviews is that they should be a mixture of fact and opinion. As the manager, you have a duty to ensure that your opinion is well informed, and based on first-hand and accurate observations and evidence. The facts should speak for themselves. If people do not initially accept your views and try to engage you in a debate, ask them to reflect on the matters under discussion and perhaps offer them the opportunity for a further meeting.
Start with an overview of the goals which were agreed or set and then undertake a structured review of each, mentioning any specific factors which may have hindered or enhanced performance. It is important that you discuss the issues and not the personality behind the issues.
Be specific, especially if you are discussing areas of underperformance. You should be able to state clearly what did or did not occur and when, and the impact it had on performance. You may wish to refer to standards, measurements, statistics and specific occurrences that support your views. Examine causes, what went well, why and how. Consider a few important issues in order to keep the review manageable and to avoid overwhelming an individual with too much detailed feedback.
Ask the individual how they plan to improve. Agree how changes or improvements can be implemented, and what other help, coaching and assistance may be given. Initiate a dialogue on future actions and goals, and how they will be achieved.
Confirm how you will monitor progress and the ongoing feedback you wish to gain from the individual on their work.
Review the agenda to ensure you have covered all issues.
Try to end on a positive, encouraging note, close on time and make a written record of the discussion and actions agreed.
After the meeting, monitor performance and find opportunities to continue to provide feedback of a few important issues.
Kathy Gagne (2001) suggests the following four key points when reviewing staff performance:
Give honest feedback – don't try to protect underperforming staff because of fear of confrontation.
Ask questions – encourage people to reflect on their own performance and their understanding of their job and reponsibilities.
Focus on the future – establish the objectives for the next period, and the development and support needed to meet them.
Communicate organisationl goals – use the review to keep people informed of shifts in the organisation's priorities
Keeping notes on performance
It is good practice for team leaders and managers to make informal, ongoing notes about people and their performance. This is a very useful process because it is impossible to remember every aspect of an individual's performance throughout the period under review.
Regular note taking of both facts and opinions is an excellent counter against staff who make a determined effort to perform better in the period immediately prior to formal reviews in the belief that their managers have short memories.
If you make regular notes, remember to keep them in a safe place and don't commit anything to print that you are not prepared to discuss openly. Bear in mind that the Data Protection Act 1998 affords people the right to access records about themselves.
The Data Protection Act 1998, which covers both the public and the private sector throughout the United Kingdom, gives individuals a right to find out what information, including personnel information, is held about them on computer and in some manual records.* This is known as the right of subject access. There is also a right to have inaccurate data corrected, blocked, erased or destroyed, and to seek compensation through the courts for damage and distress caused by such inaccuracy or by any other contravention of the Act.
* The Act applies to records held in manual filing systems if these are structured by reference to individuals or by criteria relating to individuals, and allow easy access to the personal data they contain.
Source: Data Protection Act 1998
Performance review in your organisation
Objective
This activity asks you to identify your organisation's current approach, to performance reviews, and to compare this with a suggested generic process for performance review.
Task
1 Compare your organisation's performance review process with the process outlined here. How does it differ? Make comments alongside your ticks or crosses.
Generic performance review process |
What happens in your organisation |
Line manager receives forms from HR with notes for guidance on completing |
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Distributes forms and notes to staff, asks them to review their own performance |
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Staff complete forms and return to manager |
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Manager agrees a time and date, books a room and conducts individual performance review discussions |
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Summary of each discussion is recorded on forms and both parties sign |
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Forms are forwarded to senior manager or senior specialist (second reports) who may just sign as agreeing original comments or may add further comments |
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If the second reports show significantly different comments, forms are returned to manager and individuals are notified. Forms may be re-signed by individuals |
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Forms contain overall performance scores against a known scale |
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Overall performance score may be used to help identify: |
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2 From your comments, how effective is your organisation's performance review process? You may feel that your organisation's established process works extremely well.
Comment on your organisation's performance review process: |
3 What improvements, if any, would you recommend to your organisation's process? Can you suggest improvements to make it better for your staff?
Ideas for improvement: |
Feedback
An effective performance review process ensures that effort is aligned with strategy. You have a key role to play in ensuring this link is made and enhanced, but the link should be made in conjunction with each member of your team. You should also bear in mind the problems often associated with linking performance review with assessment for reward, as concerns about reward can undermine efforts to focus on performance. For people to be fully committed to work, they should contribute to and agree their objectives or goals – thereby ensuring their buy-in.
Carrying out informal performance reviews
Objective
Use this activity to reflect on your informal performance review feedback process, and to plan to get to know the review needs of your team members.
Task
1 Reflect on how you give informal reviews by answering the following questions. You may like to write on a separate sheet of paper.
2 How aware are you of what your team members require from you in terms of informal reviews?
Plan to speak to each member of your team to ascertain the nature and level of feedback each of them would like to receive from you.
Feedback
Demonstrating your sensitivity and flexibility in meeting people's different needs will enhance your individual and team relationships. however, you should remember that all feedback needs to be accurate, clear and appropriate and, in some cases, timely. On the subject of time, you will need to ensure that you give sufficient time to meet people's informal performance review needs.
Monitoring and evaluating development
Some organisations pay great attention to the monitoring, measurement and evaluation of staff development. Some organisations state that they intuitively know whether development is working, without the need to implement time-consuming monitoring, measuring and evaluation processes. In some respects, development becomes an act of faith.
A major international bank sends high-flying middle managers to one of the world's top business schools for a three-week strategic banking programme. The overall cost of this programme, including lost opportunity, airfares and accommodation, is very expensive. The programme and its outputs are not monitored, measured or evaluated, but the business unit heads have high regard for the programme and so continue to make provision for it in their business development budgets.
One of the main reasons that organisations do not always evaluate the return on their development investment is that they contend that it is difficult or impossible to separate out the development event from other factors involved in changes in performance or outputs. If it isn't measurable, it isn't seen as a priority. The counter view is that, although difficult, the effects of development can be measured through appropriate evaluation techniques.
Establishing a focus on outputs
For many years, line and development managers have asked the question: ‘What are the objectives for this development programme or event?’ It is only relatively recently that more widespread questions have been asked about outputs. Now managers are asking: ‘What are the work-based outputs I wish to achieve?’ or ‘What needs to happen in the workplace and what development will make or help it happen?’ If managers are clear about the outputs they want to achieve, it is possible to ensure a close fit with the development process that is needed.
Linking development and evaluation
Figure 5.3 shows how a development process should look if all components are in place.
Figure 5.3 Development and evaluation
We will look at each of these in turn.
Identify the need. Development needs are identified either from top down or bottom up and should be aligned with the organisation's goals. In some cases, this may be more of an act of faith, because certain aspects of personal and management development are often less tangible than technical or job-related development. The judgement of the manager is important in determining or confirming specific needs.
Outcomes. These are the results that the department or unit wishes to achieve in the workplace from its investment in the development event. Good questions to ask are: ‘What is it that needs to happen in the workplace?’ or ‘What added value will accrue to the department if people undertake this development?’
Aim. This is a broad description of the learning event. It can be simply a sentence or short paragraph. For example, ‘The aim of this programme is to introduce managers to a range of motivational theories and techniques, which they may apply in conjunction with their team leadership responsibilities’.
Objectives. These cover the scope of learning in the development event. They may also cover the learning methodology. In some cases, objectives may include both primary and secondary considerations. For example, a programme may be designed primarily to ‘improve problem solving and decision making’, but secondary objectives may be ‘to enhance communication skills, teamworking and networking’.
Planning. There are two separate aspects of planning:
The event has to be planned, which involves design, resources, facilities, venue, budget
The manager has to organise the people involved in the development, which includes planning for their absences from work.
Pre-event discussion. This is an opportunity for the manager to reaffirm the rationale for the individual who is undertaking the development. Managers often state their expectations and provide pointers towards specific aspects of the event, linking it to the individual's development and the business need.
Undertaking development. There are many forms of development, suffice to say that the success of a development event, whether it is attending a residential course, reading a book or secondment to another department, is reliant upon the commitment of the individual.
Post-event discussion. This is, arguably, the most important discussion a manager will have with staff attending a development event. It is important to know if they enjoyed the event. If a person has enjoyed a learning experience, they will remember more of it for a longer period of time and be more disposed to apply the learning in the workplace.
Implement learning. The manager has an important role in providing opportunities for staff to apply what they have learned in the workplace. The manager may act as a coach in this or may simply provide informal, ad-hoc support.
Monitor and measure. The form of monitoring that a manager employs following staff development varies widely according to the situation. However, monitoring normally comprises a mixture of first-hand observations and feedback from other team members and the individual's suppliers and customers. Monitoring may also require the individual to make regular reports to the manager.
Measurement and monitoring are often interlinked. Some managers may say that intangible development is difficult or impossible to measure, for example we cannot measure morale. However, we can measure the factors which impact on good or poor morale. Measurement criteria should be agreed at the post-event discussion and regular checks or reports should be made to ensure work is on track.
Evaluation. Common reasons for evaluating development include:
to validate development as a business tool aimed at profitability
to justify the costs incurred
to help improve the design of events
to help in selecting development methods.
The Kirkpatrick model of evaluation
There are several well-known and commonly used models for measuring the effectiveness of development. One way of undertaking a structured review process is to apply the Kirkpatrick model which examines development at four levels, as shown in Table 5.1. This model was first published in 1983 and is widely used throughout the UK.
1 Reaction |
Were participants pleased with the programme or learning event? Did the event deliver what was promised? This is normally undertaken by a survey at the end of, or immediately following a programme. It is of limited value, but an individual's overall and immediate feelings about an event can have a bearing on their willingness to implement the learning in the workplace. One of the best uses of a reactive survey is to determine participants’ view on:
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2 Learning |
What did participants learn? Can they apply the knowledge or skills acquired? This can be assessed by tests during or after the development event. Some tests confirm short-term recall only, others confirm aptitude and skills capability. The imposition of tests usually means that some people will concentrate harder than otherwise – meaning they should learn more. |
3 Behaviour |
What the learning transferred back to the workplace. Did behaviours change based on what was learned? This is assessed by monitoring in the workplace. Changes in behaviours are very dependent on the syllabus and individual reactions to the learning. To monitor changes in behaviours, managers must first have a good understanding of previous behaviour and of the new standards they expect. |
4 Results |
Did the changes in behaviour or the skills learned positively affect the organisation? What was the impact on the bottom line? This is assessed by monitoring in the workplace and measuring results against goals or objectives. Agreeing objectives using the SMART criteria plays an important part in measuring added value results. |
Table 5.1 The Kirkpatrick evaluation model
Source: Adapted from Kirkpatrick (1983)
The difficulty with evaluating the effectiveness of development is that it takes time and it may not be the only factor which has contributed to changes in performance. Like many other processes within an organisation, if the right criteria are included at the input stage, it is easier to measure and evaluate the outputs later on.
Evaluating development in your organisation
Objective
Use this final activity to compare your organisation's evaluation of development with the Kirkpatrick model.
Task
1 The chart gives a series of questions for each of the four levels in Kirkpatrick's model of evaluation to identify current evaluation practices in your organisation.
Kirkpatrick's model |
Questions to ask of your organisation |
Reaction |
Do you meet with all participants to gain their first-hand comments? |
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Did participants complete a questionnaire at the end of the event? |
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Who designed the questionnaire – you, development staff or the supplier of the development event? |
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Whose needs does the questionnaire meet? |
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Do you see copies of these questionnaires, or do they go to the training and development department? |
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What do these questionnaires actually tell you? |
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How do you rate your organisation's processes in this area? |
Can you make clear connections between the programme objectives, the learning gained and the desired outcomes? |
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What processes does your organisation typically employ to measure learning gained? |
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Who determines/designs/monitors/evaluates these measurement processes, and for what purposes are they used? |
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How do you rate your organisation's processes in this area? |
Behaviour |
What processes are currently adopted by your organisation to measure behavioural changes following development events? |
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How do you currently measure behavioural changes in individuals following development events? |
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How do you rate the effectiveness of these processes? |
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How do you rate your organisation's processes in this area? |
Results |
What processes does your organisation currently operate to determine the results of development investment? |
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Do you undertake post-event discussions with your staff? |
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Do you agree new/changed goals/targets/objectives which include measurable (SMART) criteria? |
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Do you monitor performance or observe behaviours which impact on outputs? |
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Do you compare actual outputs achieved against desired outputs (those outputs which were first agreed and which led to the development event)? |
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Do you evaluate the hard and soft data gathered? |
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Can you clearly state whether each development event attended by your staff has made a difference, the nature of the difference and the impact on organisational performance? |
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What data do you have to substantiate your views? |
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Do you currently provide feedback to individuals on the nature of their improved (or otherwise) performance following participation in a development event? |
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How do you rate your organisation's processes in this area? |
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Feedback
You may wish to discuss current evaluation practices in your organisation with colleagues, your manager or training and development staff. What improvements do you think could be made? if your organisation fails to measure the effectiveness of development, do you think there is a danger that the organisation will fail to value development?
Recap
This theme explores the processes used to evaluate performance.
Explore the processes used to review individual and team performance
There are two types of performance review – formal and informal. The formal review is likely to include feedback on how individuals and teams are performing, setting clear, attainable goals and a dialogue to agree goals and tasks.
Informal reviews are likely to be more ad hoc and based on good or poor performance, changes in leadership, targets or objectives or for regular monitoring of performance.
The key points in reviewing staff performance are:
– Give honest feedback
– Ask questions
– Focus on the future
– Communicate organisational goals.
Plan to meet the performance review needs of individuals
To meet the performance review needs of individuals you need to review the processes you use to carry out formal performance reviews
Use informal performance reviews to keep up to date with individual development. By demonstrating your flexibility and sensitivity to the needs of others you will enhance team relationships.
Identify ways of evaluating development
Asking questions such as, ‘What are the work-based outputs we wish to achieve?’ and ‘What development will make it happen?’ will enable managers to ensure a close fit with the development process.
The Kirkpatrick model is a structured evaluation tool for considering the effectiveness of development. It is based on four levels of review: reaction, learning, behaviour and results.
Consider ways of increasing the effectiveness of development
The activity on evaluating development in your organisation provides some useful guidance on ways to increase the effectiveness of development interventions.
Setting clear goals and objectives for development will help you to measure its success and effectiveness. By making clear connections with workplace practice and organisational objectives you will increase the effectiveness and value of the development activities.
More @
Phillips, J. J. (1997) Handbook of Training Evaluation and Measurement Methods, Gulf Publishing
This book illustrates how to design, implement and assess the effectiveness of human resource development (HRD) programmes, and how to measure their return on investment (ROI).
Thomson, R. (2002) 3rd edition, Managing People, Elsevier Butterworth-Heinemann
Managing People addresses the perspective of the individual manager whose role includes the management of people, as well as issues concerning the organisation as a whole. See Chapter 8 ‘Managing performance’ and in particular the sections ‘Training and developing your staff‘, ‘Methods of development’ and ‘Staff development outside the organisation’.
Torrington, D. and Hall, L. (1998) 4th edition, Human Resource Management, Prentice Hall Europe
This book is written from a practical management perspective. It explores various methods of evaluating training.
Tyson, S. and York, A. (2000) 4th edition, Essentials of HRM, Elsevier Butterworth-Heinemann
Essentials of HRM combines an overview of organisational behaviour with a detailed explanation of human resources management policies and techniques. It also acts as an introduction to the study of industrial relations. See Part 4 on training and development and assessing performance.