CHAPTER 6

Five Program Requirements

An Effective Performance Review Program

Up to this point, this book has focused on the specifics of a performance review program. Significant job segments and standards of performance were emphasized and described in order to clarify what is expected of an employee. The appraisal of performance was then discussed with a suggestion that a self-appraisal be included. Specific suggestions were then given on how to prepare and how to conduct an appraisal interview. The preparation of a performance improvement plan was described in detail. Chapter 5 dealt with the characteristics and techniques of an effective coach. Throughout the book, emphasis has been placed on manager and employee working together to accomplish improved performance on the part of the employee.

This chapter takes a broader view and describes the five requirements for an effective performance review program.

The Program Fits the Organization

Some programs are quite complicated and require considerable paperwork. Other programs use simple forms and procedures and keep paperwork to a minimum. Some programs require appraisals and interiews on a quarterly or semiannual basis, while others require them only annually. In choosing a program, every organization must be sure that its program can be properly implemented.

For example, a program that requires frequent appraisals and much paperwork will fail if there is a minimum of time available for those who must do the appraisals and complete the forms. It will probably also fail unless the person responsible for administering the overall program has enough time to do an effective job. Another important requirement is support from top management. Therefore, care should be taken to select a program that fits the needs, personnel, and priorities of the organization.

The Program Is Communicated

The word “communicate” means to create understanding. This means that everyone involved in the program must understand the what, why, when, where, and how. In most cases, it requires meetings to explain and discuss the program, as well as a manual that describes the forms and procedures.

I attended a recent meeting in which a manager said that his organization was using the Hay System of performance appraisal. He went on to say that those involved in the program called it the “haze system” because everyone was confused.

When introducing a new performance review program I had developed for a large corporation, the general manager of the Carlsbad plant scheduled a dinner meeting of all employees who were included in the program. Secretaries, engineers, and foremen were included, for example, even though they were not going to conduct appraisals and interviews with other employees. The general manager and I wanted to be sure they understood the program because they were going to be appraised and interviewed. In order to accomplish this communication, we prepared slides and a small booklet that supplemented the oral presentation I made. A question-and-answer session followed the presentation. By using this approach, we were confident that there would be much better understanding of the program than if we left it up to the managers to communicate the program to their employees.

The Program Is Sold

Understanding isn’t enough. Those who implement the plan must be convinced that their time and effort are going to be rewarded. Initially, this can probably be done through persuasion. As time goes on, though, the benefits must be real.

When I introduced the performance review program at Carlsbad, the process of selling included the following steps:

1.Explanation of the program to the general manager, industrial relations manager, and management development supervisor. We discussed it and made some minor changes.

2.Explanation of the program to the eight department heads. We discussed it and made some changes on the basis of their recommendations.

3.Communication of the program at the dinner meeting. Benefits to the individual employees as well as to the company were stressed.

4.Individual discussion with those who weren’t sold on the program.

5.Clarification by the general manager that it was their program and not a program that had been imposed by the corporate office. He emphasized that I had been invited to help them implement the program.

The program must be sold not just initially, but continuously. Managers constantly battle with priorities. The more they are sold on the program, the more likely they are to give time and energy to it and do it effectively.

The Reviewers Are Trained

It’s not enough to create understanding and sell the managers on the program. They must have the necessary skills to implement the program. To get them to understand the forms and procedures is relatively easy, but to get them to develop the required skills is difficult. And a well-written manual isn’t going to do it.

With our program, the necessary skills were:

Identifying significant job segments

Developing standards of performance

Appraising performance

Conducting the appraisal interview

Developing a performance improvement plan

Coaching

All these skills required practice. So we established a training program as follows:

FIRST MEETING (2 hours)
Objectives	1.Understand the performance review program.
	2.Learn how to identify significant job segments.
Agenda	1.Overview of the program.
	2.Description of significant job segments.
	3.Examples of significant job segments.
	4.Each person lists significant job segments for his or her own job.
Assignment	Get together with one of your employees and jointly develop significant job segments for her job.
SECOND MEETING (3 hours)
Objectives	1.Review significant job segments.
	2.Learn how to write standards of performance.
Agenda	1.Discussion of significant job segments that were developed as an assignment.
	2.Meaning of standards of performance.
	3.Characteristics of standards of performance.
	4.Examples of standards of performance.
	5.Each person writes one standard of performance.
Assignment	Jointly develop with the employee standards of performance for one of the significant job segments from the previous assignment.
THIRD MEETING (2 hours)
Objectives	1.Review standards of performance.
	2.Understand appraisal by the supervisor.
	3.Understand self-appraisal.
	4.Learn how to complete appraisal form.
Agenda	1.Discussion of standards of performance that had been developed as an assignment.
	2.Explanation of the appraisal process.
	3.Explanation of the appraisal form.
	4.Samples of completed appraisal forms.
	5.Each person completes a sample appraisal form.
Assignment	1.Complete an appraisal form on the employee.
	2.Get the employee to complete the self-appraisal form.
FOURTH MEETING (3 hours)
Objectives	1.Review the appraisal process and forms.
	2.Understand guidelines for an effective appraisal interview.
	3.Learn how to conduct an appraisal interview.
Agenda	1.Discussion of completed appraisal forms from the assignment.
	2.Explanation of guidelines for an effective appraisal interview.
	3.Demonstration of a poor appraisal interview.
	4.Demonstration of a good appraisal interview.
	5.In groups of three, each person in turn takes the role of interviewer, interviewee, and observer. The observer leads the critique after each practice interview.
Assignment	Conduct an appraisal interview with the employee.
FIFTH MEETING (2 hours)
Objectives	1.Review the appraisal interview.
	2.Understand a performance improvement plan.
	3.Learn to prepare a performance improvement plan.
Agenda	1.Discussion of the appraisal interview completed as an assignment.
	2.Explanation of a performance improvement plan.
	3.Examples of a performance improvement plan.
	4.Each person writes a performance improvement plan.
Assignment	Jointly develop with employee a performance improvement plan for one aspect of the job.
SIXTH MEETING (2 hours)
Objectives	1.Review the performance improvement plan.
	2.Understand on-the-job coaching.
	3.Review the entire performance review program.
Agenda	1.Discussion of the performance improvement plan that was developed as an assignment.
	2.Explanation of characteristics of an effective coach.
	3.Explanation of coaching techniques.
	4.Review of the entire program.

The length of the six training meetings (two or three hours each) was established to accomplish the objective. The amount of time between sessions was determined by the group at the end of each session by discussing how long it would take to do the assignment. When agreement was reached, the next session was scheduled accordingly.

Each assignment was done by the managers with the same employee. When the training program was completed, each manager had completed the following steps of the performance review program with one employee:

Jointly developing significant job segments.

Jointly developing standards of performance for one significant job segment.

Completing an appraisal form.

Having the employee complete a self-appraisal form.

Conducting an appraisal interview.

Jointly developing a performance improvement plan.

After the training program was completed, the managers were scheduled to conduct performance reviews with all employees. The management development supervisor at Carlsbad was available as a resource for anyone who needed help.

According to William Simpson, management training manager at Kemper Insurance, that company’s performance review training was done on a more concentrated basis. For example, a two-day workshop was conducted with Kemper managers on how to write performance standards. Here is a brief outline of the approach, adapted with permission from Education Exchange, a publication of the Insurance Company Education Directors Society.

FIRST DAY
Morning	1.Welcome
	2.Objectives of workshop
	3.Introductions
	4.Background of performance standards within Kemper Insurance
	5.Principal (explains what, who, how, and when) Film (29 minutes) Quiz Discussion
	6.Need for performance standards (explains why) Filmed case study (4 minutes) Discussion questions Other
	7.Procedures and techniques (explains how) Booklet, “Guidelines” Handout material Other
Lunch
Afternoon	1.Workshop: practice in writing performance standards Consultation with discussion leader as needed
	2.Periodic summaries by participants
SECOND DAY
Morning	1.Continuing workshops in writing performance standards Periodic evaluation of progress by participants Continued consultation with discussion leader as needed
	2.Assignment changes as necessary or desirable
	3.Periodic summaries by participants of progress, problems, and so on
	4.Informal session with guest speaker Presentation Questions and answers
Lunch
Afternoon	1.Continuing workshops Include periodic evaluation, periodic summaries, assignment changes, and so on
	2.Summary
	3.Close

This concentrated workshop was designed to develop and sharpen skills through extensive practice and critique.

Appropriate Controls Are Established

There are two philosophies of management. One says that people will do what the manager expects. The other says that people will do what the manager inspects. The first philosophy applies in many situations, but in performance appraisals, the second seems to predominate.

Even if managers are sold on the performance review program and higher management expects them to do it, there is a good chance that the reviews will be considered a should-do instead of a must-do. In most cases, the managers have so many must-do’s that many of the should-do’s don’t get done. And if the manager discovers that nothing serious happens if the performance reviews aren’t completed on schedule, the program becomes “voluntary” even though it began as a compulsory part of the job.

At one plant of a large company, the general manager was most enthusiastic when the new performance review program started. He conducted reviews with his employees as scheduled, and he expected them to do the same. The human resources department sent him a monthly report of schedules and completions. If any reviews were not completed on time, he talked with the manager about it. So all reviews were completed, most of them on time.

During the second year of the program, the general manager didn’t complete his reviews as scheduled. In spite of reminders from the human resources department, he fell further and further behind. Because he hadn’t completed his, he didn’t say anything to his employees who hadn’t completed theirs. Managers soon discovered that the program was now “voluntary.” Some did it and some didn’t.

During the second year, this general manager transferred to the corporate office and was replaced by a general manager from a different plant. When the new general manager learned of the performance review situation, he called the department heads together and said, “I understand you have the same performance review program here that we have at the other plant. I believe in the program. I will do it on schedule with each of my employees. I expect you to do it on schedule with your employees. I’ve asked the human resources manager to send me a monthly report of performance reviews scheduled and those completed. If the reviews are not completed as scheduled, I will not approve any salary increases for you or anyone else in your department until they are completed. In other words, I’m going to require that you do it, because I believe that it is beneficial to every employee as well as to the company. Any questions?”

Naturally, there weren’t any questions. The managers knew that the program had just returned from “voluntary” to compulsory. Controls like this are sometimes needed to put performance review in the must-do category.

Summary

Performance of employees can be improved through performance appraisal and coaching. This won’t happen, however, unless a program is carefully planned and effectively implemented. It won’t be perfect at the beginning. Therefore, it is probably wise to start slowly, perhaps by means of a pilot program in a department where the manager is eager to try it. If the program is effective, other managers will hear about it and request that it be implemented in their departments. Eventually it may become company policy for all departments.

The five requirements described in this chapter are essential to the success of a performance review program. If any one of them is missing, there is a good chance that the program will fail. Every organization, therefore, should be sure that:

The program fits the organization.

The program is understood.

The program is sold.

The reviewers are trained.

Appropriate controls are established.

An effective performance review program can be highly beneficial, not only in terms of financial savings but also in terms of the morale of manager and employee alike.

Posttest

Write “yes” in front of each statement if you agree and “no” if you disagree.

____	1.Every employee has responsibility for his own development.
____	2.Every manager has responsibility for the growth and development of all employees.
____	3.Every organization has responsibility for the growth and development of all employees.
____	4.Most people want to know how they are doing their job as the manager sees it.
____	5.Most employees would like to improve their performance.
____	6.Less than maximum performance of an employee is often due to factors over which the employee has no control.
____	7.The same performance review program (forms, procedures, interview) should be used both for improved performance and for salary administration.
____	8.Performance appraisals and reviews should be voluntary on the part of managers.
____	9.The more writing required of the manager on the appraisal form, the more effective the program.
____	10.The less paperwork required in a performance appraisal program, the more effective the program.
____	11.Appraisal forms should include about a 50-50 balance between items dealing with performance and those dealing with personality.
____	12.Agreement on significant job segments and standards of performance is an important prerequisite to the appraisal of job performance.
____	13.The word “appraisal” connotes both judgment and communication.
____	14.A group appraisal of a person’s performance is better than having an appraisal just by the manager.
____	15.A self-appraisal by the employee is a good idea.
____	16.The main objective of the appraisal interview is for the manager to explain and sell her prepared appraisal to the employee.
____	17.In the interview discussing the performance of the employee, there should be no surprises.
____	18.In an appraisal interview, it’s a good idea to have at least three people present (for example, the manager, the employee, and a neutral party, such as a representative of the human resources department).
____	19.Appraisal interviews should be a pleasant experience for both manager and employee.
____	20.In the appraisal interview, the manager should not show his completed form to the employee.
_____	21.An organization can be assured that an effective appraisal interview has been conducted if the employee is required to sign the form.
____	22.In an appraisal interview, the manager should always give her appraisal of the employee and then ask the employee for reactions and comments.
____	23.It’s a good idea to divide the appraisal interview into two or three separate interviews.
____	24.An appraisal interview should always end on a positive note.
____	25.A specific written performance improvement plan is an important part of a performance review program.
____	26.A performance improvement plan should include what should be done, by whom, and when.
____	27.It’s a good idea for employees to work toward performance improvement in several areas at once.
____	28.Coaching means the same as counseling.
____	29.Coaching a group of employees is similar to coaching a team of athletes.
____	30.On-the-job coaching is necessary to be sure that the performance improvement plan is implemented.
____	31.Coaching on the job should include praise for good work, as well as constructive criticism and help to improve poor work.
____	32.Improvement in performance should be immediately rewarded by the manager.
____	33.Rewards should be based on performance, rather than seniority.
____	34.Both the manager and the employee should have a copy of all completed forms.
____	35.A copy of the completed appraisal forms should be put in the personnel file of the employee.
____	36.A standard of performance should be:
____	a.Established for a job.
____	b.Established for an individual.
____	c.An “acceptable” level of performance.
____	d.A “well done” level of performance.
____	e.Challenging (requires stretch but can be reached).
____	f.Unattainable (requires stretch and can’t be reached).
____	g.Agreed on between manager and employee.
____	h.Determined solely by the manager.
____	i.Determined solely by the employee.
____	j.Jointly determined by manager and employee.
____	k.Clear to manager and employee.
____	l.Written.
____	m.Time oriented.
____	n.Specific (numbers, percentages, dollars, wherever possible).
____	o.The basis for performance appraisal.
____	p.Subject to change.
____	37.The same appraisal forms and procedures can be effectively used by any kind of organization.
____	38.The people who supervise a performance appraisal program must do more than simply oversee paperwork. They must communicate the program and sell it to those involved.
____	39.It takes no real training to conduct performance reviews effectively.
____	40.Administrative controls must be established for performance review programs.

Test Answers and Reasons for Them

1.Yes, but it must be supplemented by items 2 and 3.

2.Yes, but it must be supplemented by items 1 and 3.

3.Yes, but it must be supplemented by items 1 and 2 to show a complete picture of the responsibilities.

4.Yes, because it relieves feelings of insecurity.

5.Yes, because it can bring rewards such as self-satisfaction, promotion, and merit salary increases.

6.Yes. Other reasons for less than maximum performance include problems inherent in the manager, poor working conditions, defective equipment or materials, and personal problems the employee cannot directly control.

7.No. There is much emotion involved in discussing salary, and usually the objective of improved performance is hard to accomplish simultaneously.

8.No. Appraisals and reviews should be compulsory to be sure they are done.

9.No, not necessarily.

10.No, not necessarily. Effectiveness may have nothing to do with the amount of paperwork.

11.No. All or nearly all of the items on an appraisal form should deal directly with performance.

12.Yes, because these two factors clarify what’s expected and provide a sound basis for the appraisal.

13.No, “appraisal” connotes judgment but not communication.

14.No. Although group appraisals can help avoid bias and increase objectivity, they are very time-consuming and dilute the role of the manager in the performance review process.

15.Yes, because it generates employee involvement and also helps show the manager how the employee feels about his own performance.

16.No. The main purpose is to get understanding and agreement. The best approach is to discuss the appraisal that each of them has completed.

17.Yes, because the joint development of significant job standards and standards of performance will clarify what is expected of the employee. If expectations are clear to both manager and employee, the manager’s opinion will not be a surprise. Also, the day-to-day communication and coaching should keep the employee informed of how she is doing.

18.No, only the manager and the employee should be at the appraisal interview. A third party should be added only for a specific purpose, such as to help prepare a performance improvement plan.

19.Yes, both should feel good about the interview when it is over.

20.No. The manager should not hide anything from the employee, including the appraisal form.

21.No. The only thing that a signature ensures is that the person signed the form.

22.No, this is only one possible approach. Another is to have the subordinate give his self-appraisal first.

23.Yes. This is advisable because the interview must accomplish several objectives: to agree on the appraisal, to develop a performance improvement plan, and to clarify significant job segments and standards of performance for the next appraisal period.

24.Yes. This gives both manager and employee a constructive attitude toward improving the employee’s performance.

25.Yes, because it helps clarify future action for both manager and subordinate.

26.Yes. It is important for the plan to be specific.

27.No. In most cases, it is best to concentrate on only one area at a time to be sure that improvement occurs. Sometimes a second area can also be worked on.

28.No. Coaching is always job oriented and is initiated by the manager. Emphasis is placed on telling. Counseling is usually initiated by the employee and may deal with personal rather than job-related problems. Emphasis is on listening by the manager.

29.Yes. In both situations, the “coach” is trying to get maximum individual as well as team performance.

30.Yes. After the performance improvement plan is jointly developed by manager and employee, on-the-job coaching both reminds and helps the employee to implement the plan.

31.Yes, coaches should praise good work as well as correct poor work.

32.Yes. Immediate positive reinforcement by praise or other means is the best way to encourage and stimulate continued improvement in performance.

33.Yes, in order to encourage maximum effort and the best possible performance.

34.Yes. Each should have a copy for regular referral to ensure understanding and good working relationships.

35.Yes, these forms should be used in considerations for salary increases, promotions, and other personnel decisions.

36.Items a, c, g, j, k, l, m, n. o, and p should be marked “yes.”

37.No, forms and procedures must fit the requirements of the specific organization. Some organizations are better equipped to handle detailed paperwork than others, for example.

38.Yes. No matter how good a program looks on paper, the people who use it must understand it and believe in it before it can really work.

39.No, training is very important. Conducting performance reviews requires skills that must be learned.

40.Yes. Unless higher management establishes requirements and controls, managers will tend to regard it as a should-do rather than a must-do.