Upon completing the performance rating, the supervisor usually conducts an interview with the worker to provide feedback—one of the most important parts of the appraisal process. Many managers dread the performance interview, particularly if they do not have good news to deliver. The HR department or an external group, such as a management association or consulting group, can help managers by offering training in conducting interviews, providing role-play practice, and offering advice on thorny issues. Figure 7.8 summarizes several communication “microskills” that managers need to effectively conduct an appraisal interview.

Performance reviews are sometimes separated into two sessions: one to discuss performance, the other to discuss salary.65 The logic behind this system was based on two assumptions. First, managers cannot simultaneously be both a coach and a judge. Thus, the manager was expected to play the coach role during the performance development meeting and the judge role during the salary meeting. Second, if performance and salary discussions were combined, employees probably would not listen to their performance feedback because their interest would be focused on salary decisions.

However, research has found that discussion of salary in an appraisal session has a positive impact on how employees perceive the appraisal’s usefulness.66 Managers who have to justify a low salary increase will probably take time to carefully support their performance assessments, and this more detailed feedback should make the appraisal session more valuable to the employee. Second, feedback, goal setting, and making action plans can become a hollow and meaningless exercise when salary implications are divorced from the session.

Overall, it appears that the best management practice is to combine development and salary discussion into one performance review. Informal performance management throughout the appraisal period requires a combination of judgment and coaching.

It makes sense that the appraisal interviews focus on gaps in performance and provide suggestions to workers for improvement. However, feedback that focuses only on shortcomings can be demoralizing rather than motivating. It can be useful to focus feedback on what workers do well so that they hear positives as well as any necessary negatives. The Manager’s Notebook, “Accentuate the Positive,” explores a strength-based approach to providing performance feedback.

MANAGER’S NOTEBOOK Accentuate the Positive

Customer-Driven HR

The traditional approach to providing performance feedback focuses on gaps in performance, those areas where an employee’s performance is below expected levels. Those gaps are deficiencies that need to be resolved in order for performance to improve. Taking this traditional approach in a performance review session seems rational: identify the employee’s weaknesses and discuss how to improve. From the employee’s perspective, however, such a review will likely be a negative experience that consists of criticism and lowers motivation. Given this potential response from workers, it may be no surprise to learn that performance feedback, although sometimes effective, can also lead to decreased performance.

A promising approach meant to improve the positive impact of performance feedback is to focus on the strengths that an employee brings to his or her job. Rather than focusing on deficiencies to eliminate weaknesses, the idea is to recognize strengths and to build on how the worker contributes to the organization. The focus on strengths is, of course, better received by workers than negative feedback. Strengths-based feedback has been found to be motivating to workers and to improve productivity.

To the extent that people have natural strengths and weaknesses, the strengths-based approach focuses on building on natural talents rather than on trying to change someone’s weak areas. Trying to change a naturally weak area can be difficult and frustrating for you, as a manager, as well as for the employee. Recognizing someone’s strengths can make performance feedback a more positive and motivating experience.

Sources:Based on Aguinas, H., Gottfredson, R. K., and Joo, H. (2012). Delivering effective performance feedback: The strengths-based approach. Business Horizons, 55, 105–11; Cardy, R. L., and Leonard, B. (2011). Performance management: Concepts, skills, and exercises (2nd ed.). Armonk, NY: M. E. Sharpe, Inc.; De Nisi, A. S., and Kluger, A. N. (2000). Feedback effectiveness: Can 360-degree appraisals be improved? Academy of Management Executive, 14, 129–139.▪▪

Because formal appraisal interviews typically are conducted only once a year,67 they may not always have substantial and lasting impact on worker performance.68 Much more important than the annual interview is informal day-to-day performance management. Supervisors who manage performance effectively generally share three characteristics:

• ▪ Explore the causes of performance problems.

• ▪ Develop an action plan and empower workers to reach a solution.

• ▪ Direct communication at performance and provide effective feedback.69

Each of these characteristics is critical to achieving improved and sustained performance levels.

Identifying the causes of performance problems may sound like an easy task, but it is often quite challenging. Performance can be the result of many factors, some of which are beyond the worker’s control. In most work situations, though, supervisors tend to blame the worker when they observe poor performance, whereas workers tend to blame external factors.70 This tendency is called actor/observer bias. 71 The experience of baseball teams provides an analogy. When a team is losing, the players (workers/actors) point to external causes such as injuries, a tough road schedule, or bad weather. The manager (supervisor/observer) blames the players for sloppy execution in the field. And the team’s owner and the sportswriters (top management/higher observers) hold the manager responsible for the team’s poor performance.

It is important that managers determine the causes of performance deficiencies accurately for three reasons. First, determination of causes can influence how performance is evaluated. For example, a manager is likely to evaluate an episode of poor performance very differently if he thinks it was due to low effort than if he thinks it was due to poor materials. Second, causal determination can be an unspoken and underlying source of conflict between supervisors and their workers. Supervisors often act on what they believe are the causes of performance problems. This is only rational. But when the supervisor’s perception significantly differs from the worker’s, the difference can cause tension. Third, the cause affects the type of remedy selected; what is thought to be the cause of a performance problem determines what is done about it.

How can the process of determining the causes of performance problems be improved? A starting point is to consider the possible causes consciously and systematically. Traditionally, researchers believed that two primary factors, ability and motivation, determined performance.72 A major problem with this view is that situational factors external to the worker, such as clarity of the task, quality of materials, and degree of management support, also affect worker performance.73

A more inclusive version of the causes of performance embraces three factors: ability, motivation, and situational factors. The ability factor reflects the worker’s talents and skills, including characteristics such as intelligence, interpersonal skills, and job knowledge. Motivation can be affected by a number of external factors (such as rewards and punishments), but is ultimately an internal decision: It is up to the worker to determine how much effort to exert on any given task. Situational factors (or system factors) include a wide array of organizational characteristics that can positively or negatively influence performance. System constraints include poor quality of materials, poor supervision, and other factors listed in Figure 7.9.74

Performance depends on all three factors. The presence of just one cause is not sufficient for high performance to occur; however, the absence or low value of one factor can result in poor performance. For example, making a strong effort will not result in high performance if the worker has neither the necessary job skills nor adequate support in the workplace. But if the worker doesn’t put forth any effort, low performance is inevitable, no matter how good that worker’s skills and how much support is provided.

In determining the causes of performance problems, managers should carefully consider situational factors. The factors in Figure 7.9 are only a starting point; they are too generic for use in some situations. Involving workers in generating examples of situational constraints can send a signal that managers are serious about considering workers’ input. The supervisor and worker (or work team) can go over the list together to isolate the causes of any performance difficulties.

After the supervisor and the worker have discussed and agreed on the causes of performance problems, the next step is to take action to control them. Depending on whether the cause of performance problems is related to ability, effort, or situational characteristics, very different tactics are called for, as Figure 7.10 makes clear. Leaping to a remedy like training (a common reaction) will not fix a problem that is caused by poor effort and will be a waste of the organization’s resources.75

Effective performance management requires empowering workers to improve their performance. As in a sports team, the supervisor-as-coach assists workers in interpreting and reacting to the work situation. The role is not necessarily one of mentor, friend, or counselor. Rather, it is that of enabler. The supervisor-as-coach works to ensure that the necessary resources are available to workers and helps employees identify an action plan to solve performance problems. For example, the supervisor may suggest ways for the worker to eliminate, avoid, or get around situational obstacles to performance. In addition to creating a supportive, empowered work environment, coach/supervisors clarify performance expectations; provide immediate feedback; and strive to eliminate unnecessary rules, procedures, and other constraints.76

Communication between supervisor and worker is critical to effective performance management. Exactly what is communicated and how it is communicated can determine whether performance improves or declines. Although there is merit to providing positive feedback regarding a worker’s strengths (see the Manager’s Notebook, “Accentuate the Positive”), performance problems can’t be ignored.

Performance discussions can be difficult for managers, and a worker may disagree that there is a performance issue and become emotional. For example, say that a manager tells an employee that her late arrivals and long lunches are affecting the performance of the office. Instead of understanding and promising to improve, the employee denies that there is a problem, claims that the manager is unfairly focusing on her small errors, and begins yelling at the manager. Handling this type of situation professionally is a key competency to being an effective manager. Unfortunately, these types of situations will occur during your management career.

A key question is how you will handle these situations. Following some simple steps can help keep the communication effective and focused on performance.77 First, define the performance problem. If performance is to improve, understanding the performance issue is a necessary starting point. Second, make it a discussion. Performance improvement will be more likely to occur if there is a dialogue, rather than a one-sided lecture. Third, be plain and direct in communicating the performance issue. Although it might make you more comfortable to be vague and dance around the issue, focusing on the performance issue will move the discussion toward a clear plan of action. Last, and most important, maintain your composure. If you become emotional and say things out of anger or frustration, you will likely regret them later.

It is important that communication regarding performance be directed at the performance itself and not at the person. While it might be tempting to summarize a worker’s behavior and tell the employee that she or he is, for example, unreliable or adversarial, these conclusions about person characteristics are not likely to be helpful. Even if these conclusions about a worker are correct, they have to do with personal characteristics and are not likely to be helpful in improving performance. The conclusions can be seen as personal attacks and can cause an employee to become defensive. Further, conclusions about personal characteristics may address aspects of someone’s nature that can be difficult to change. For instance, it may be difficult for someone to become a more reliable person. However, it may be more doable for that person to hear feedback about the importance of arriving on time and meeting delivery targets and to control these work-related behaviors. Communication focused on performance, rather than the person, can be the more effective route to improving performance.