Principles

A performance appraisal system is designed with three overriding principles in mind:

1. To align and communicate organizational goals

2. To improve organizational, group, and individual performance by holding everyone accountable

3. To serve the customer

The better the system achieves all three goals in an integrated manner, the more effective the organization will be. Let’s look at each principle in greater detail.

Many organizations make the mistake of rarely explaining what their performance goals are. They may include them in a report or in a chart, but that information rarely cascades down to the individual employee.

The most effective way of doing this is to first ensure that there is a clear line of sight from the organization’s goals down to the individual’s performance standards. This is essential because if the performance goals are properly aligned with employee and team performance standards at all levels of the organization, everyone will be working toward achieving the organization’s goals.

Once the standards are aligned, they must be written in a manner that is clear, understandable, fair, measurable, and achievable. Last, the employees need to understand how the standards relate to the organization’s goals, so they recognize how their actions fit into the bigger picture. This should be accomplished using the whole brain method of teaching described earlier in this book.

Several years ago, I worked for a national organization whose productivity had declined. In order to address this situation, national productivity goals were established, and goals were given to every office. Each director had a productivity goal written into his performance standards, as did each division chief, each team, and each employee. Everyone understood the goals, why they were important, and how they fit into the national picture. The net result of this unified approach was that national productivity increased almost immediately, and continued at a high rate.

Improving performance at the organizational, group, and individual levels requires a commitment to using the appraisal system as intended, a willingness to provide employees with the training and tools that they need to do the job, hard work, consistency, a desire to address any problems that may develop, and the ability to hold everyone accountable. By applying the system fairly and firmly at every level, you will make incremental improvements along the way that can easily add up to significant improvements in their totality. The key is to view this approach as a two-way street—that is, while we are expecting employees to achieve the goals we’ve set for them, we must do everything we can to make sure that they succeed.

In the case just cited regarding productivity improvement, the organization did more than simply align its performance goals. First of all, it also established national performance standards for every key position, which meant that it would have the same minimum expectations for each employee at every one of its facilities. This approach helped to reduce the variability in performance across the country. Second, it established a national computer-based training system that was given to both new employees and employees that were experiencing performance problems. Third, it developed an Intranet-based performance management system that tracked the performance of each employee, so that (1) everyone could easily see how he was doing relative to their standards; and (2) upper management could ensure that throughout the country, anyone whose performance was below expectations would be dealt with appropriately.

When applying the first two principles, you need to ensure that they also have an impact on the customer. After all, as government employees, we are here to serve the citizens of our country, state, city, or county. However, if the appraisal system does not address the needs of the customer, the organization can easily become too internally focused and lose sight of the customer. When that happens, you will eventually see a disconnect between the organization’s perception of its service and the perception of that service from the people the organization is serving. Once that happens, trouble usually follows.

The same organization that made major strides in productivity did not have performance standards emphasizing customer satisfaction. As a result, slowly but surely, problems started developing. For example, over time, when people called that organization for assistance, they found employees to be less courteous and less willing to help. Moreover, the rate at which that organization’s decisions were being appealed doubled, because the focus was on increasing productivity, not on making decisions that satisfied its customers. Lastly, the media wrote a number of uncomplimentary articles regarding that organization because they did not believe that it was as customer-focused as it should have been. Had that organization made customer satisfaction a part of its performance appraisal system, many of those problems would have been alleviated, at least to some extent.

Goals

There are three major goals when implementing a performance appraisal system: (1) The system will drive the right behavior; (2) people will be treated fairly and by the numbers; and (3) employees will know where they stand at all times. If you can achieve these three goals, the system will help foster strong performance, the right culture, and the sense that everyone is on a level playing field. Let’s look at each goal in a bit more detail.

A successful performance appraisal system means that employees are trying to perform in a manner that helps the organization achieve its goals and objectives. If everyone is working in that direction, the organization will function both smoothly and effectively. However, if the system is poorly designed or implemented, just the opposite can happen—the employees may be working at odds with the organization’s goals. The clearer the link between the standards and the goals, the better and more focused will be the overall performance.

I once worked for a government organization that said it placed a premium on making quality decisions. However, because that organization had heavy backlogs, management did not feel that it could afford to perform monthly quality reviews of its employees’ work. As a result, for all intents and purposes, there was no quality element in the employees’ performance standards.

The employees quickly recognized that management wanted them to push the work out in order to reduce the backlog. They gave the organization exactly what the performance appraisal system said that management wanted—high productivity at the expense of good quality. In this instance, the performance appraisal system drove the wrong behavior.

Management eventually recognized the error of its ways and understood that high output with low quality translates into low productivity, because of all the rework that is involved. Accordingly, it reinstated the quality reviews and struck the right balance between productivity and quality.

If a performance appraisal system is not perceived as being fair, it will eventually implode. In my experience, the one issue that upsets government unions more than anything else is disparate treatment of bargaining unit members. If employees know that their careers are subject to the whims of their current supervisor, they are likely to become angry and/or cynical or simply leave the organization, any one of which is bad for the government.

Employees expect and deserve fair treatment. The best way to do this is by consistently applying the numbers to everyone, regardless of whether or not you like a particular employee.

I once took over an organization that was perceived to have many difficulties with its local union. When I discussed this matter with the union representatives, they complained that managers tended to go after employees they did not like, and protected poor performers who were their favorites. When I looked into this, I reluctantly concluded that they were right.

In order to address the situation, I instructed each division chief to rank the performance of employees by position, from top to bottom, and to share this information with all supervisors who had a need to know. I wanted to ensure that we were dealing with the bottom performers fairly, and that we also identified the top performers. Once this happened, the supervisors realized that their actions could be easily scrutinized, so they began taking a closer look at the way they treated each employee. This resulted in the employees being treated in a much fairer and more even-handed manner.

The third goal of a good appraisal system is that employees know where they stand at all times. In this way, they will know when problems arise and will diligently try to address them. The more information that employees receive about the context of their individual performance, the better they will perform.

In this organization that started ranking its employees, we later added two additional pieces that further enhanced the application of the appraisal system. First of all, we gave the employees monthly feedback that let them know exactly what their monthly and year-to-date performance was relative to the standards. We also let them know how they were doing relative to their peers so they had a sense of context with respect to their performance. By demystifying the appraisal system, we let them see things a bit more from management’s perspective, which served to further motivate most of the employees.

Involvement

The best way to develop and implement a performance appraisal system is to include all of the key players: line management, HR staff, the affected employees, and the union. All of these players have a stake in the standards, so it is much better to involve them early on in the process and get their perspective. Otherwise, complaints may arise throughout the development and implementation of the standards that will slow down the process and, quite possibly, preclude management from taking timely action.

At the very outset, line management should consult with human resources regarding all technical aspects of the standards. At a minimum, management wants to ensure that the standards will be in compliance with all legal requirements as well as the agency’s rules, regulations, policies, and procedures regarding performance management. Once this is clear, management should get copies of standards written by other organizations for similar positions. After all, there is no need to reinvent the wheel.

As soon as that is done, management has two choices: (1) it can write the standards and then float them by the union, which will most likely canvass the employees for their thoughts; or (2) it can include the employees and the union in the actual development of the standards. I prefer the second approach. Although it is up to management to actually set performance standards, including the employees and the union at that stage gives them a greater stake in the standards, and a sense of inclusion. Potential problems are identified early on, and they are easier to iron out before positions harden. Lastly, it becomes much more difficult for an employee and/or the union to challenge the standards at a later date if they have been involved in the process from the beginning.

Union Relations. If management simply develops the standards and then sends them to the union for comment, the union’s usual reaction will be resistance. From its perspective, the new standards seem to come out of left field, so it tends to view them with suspicion, thinking that management is out to get the employees. Inevitably, the union will try to delay the process and do everything it can to put up barriers along the way.

Of course, sometimes the relationship between the parties can be poor, and in that case, a less-inclusive approach may be better. However, management should ask itself, which came first, the chicken or the egg? In other words, have management’s actions caused the relationship to sour, or is it simply dealing with a difficult and unreliable union?

Performance Appraisal

What Is It?

A performance appraisal is a written method for assessing how well an employee is performing, usually on an annual basis. It is the primary means by which a government organization holds its employees accountable for achieving desired outcomes.

How Does It Work?

Each year, employees are given a written set of measurable performance expectations (standards) that are directly linked to the achievement of the organization’s goals and objectives. During the year, management provides them with feedback as to how they are doing relative to the standards. If an employee fails to meet any of the standards, management is expected to intervene early in an effort to help the employee improve his performance. If the employee continues to perform below par, management should take further action.

At the end of the appraisal period, each employee receives a formal written appraisal that assesses his performance against each one of the standards and assigns him an overall rating.

There are two primary types of appraisal systems in government. The first one is called a pass/fail system. Under this approach, at the end of the year, employees receive one of two possible ratings: pass or fail. The goal of this type of system is to simply weed out poor performers. Some supervisors prefer this kind of system because it is simpler to use and does not require the supervisor to make meaningful distinctions between employees, which can be both painful and difficult and can often trigger hard feelings, grievances, and EEO complaints. The other side of the coin is that the system has limited relevance beyond performance appraisal.

I worked under this pass/fail system for several years. It was relatively easy to use and trouble free. However, because meaningful distinctions were not made between the employees, there was no real linkage between the appraisal system and the other management systems. Moreover, the top employees resented the system because it did not give them the credit they felt they deserved, and it did not distinguish between the better employees and the marginal employees who were barely making their standards.

The second type of system is known as a multitiered appraisal system. Under this approach, employees can receive a number of different ratings, depending on how they perform relative to their standards. The advantage of this system is that you can make meaningful distinctions between employees and can use those distinctions when making other management decisions. The disadvantage of this approach is that it requires more work and more documentation, and forces supervisors to make some decisions that they would prefer to avoid.

Having worked under a multitiered performance appraisal system for most of my career, I have learned that supervisors are generally uncomfortable with such a system when the standards are unclear or when they have a difficult time measuring the performance of their employees. They feel that way because they know when it comes time to issue their end-of-year appraisals, the overall ratings will be difficult to justify. As a result, they often have to rely on their gut, which frequently triggers dissatisfaction among the employees and a perception that the system is not fair.

However, when the standards are clear and the employees’ performance is easy to measure, such problems are less evident. Under these circumstances, you can make meaningful distinctions between employees based on solid data, and this gives the system credibility. Moreover, it becomes possible to clearly and fairly apply the results of the system to other management decisions (rewards, promotion decisions, etc.).

Most government appraisal systems use a multitier approach. The remainder of this chapter will, for the most part, address performance appraisal under a multitier system.

What Is It Used For?

An appraisal system is used to improve the performance of the organization and its employees and to provide assistance to people whose performance is unacceptable. It is also used to help reward organization, team, and individual performance and to make determinations with respect to within-grade or step increases. Lastly, it can be used for making retention determinations, to assess training needs, and to make selection decisions.

Linking Performance Appraisals. Many performance appraisal plans in government are directly linked to the rewards and recognition system. In those cases, people who receive high performance ratings can expect to be rewarded.

In the federal government, employees who receive outstanding ratings get extra credit in the event that there is a reduction in force. In this way, high performers are more likely to be retained in the event that cutbacks occur.

Many high-performing organizations track the errors that its employees make during their performance reviews in order to identify gaps in their training. In this way, they can customize the training and address those errors accordingly.

Many government promotion plans take into account an individual’s appraisal, particularly during the rating and ranking phase. Using this approach, when candidates are assessed against each other, people with high appraisals will have a better chance of being referred to the selecting official for further consideration.

What Is in a Performance Plan?

Performance plans are usually composed of elements and standards. The elements reflect the components of a job that are sufficient to require appraisal. Elements may include, but are not limited to, productivity, accuracy, timeliness, customer satisfaction, and manner of performance. Elements may have one or more performance standards.

There can be two different types of elements. The first one is commonly referred to as a critical element. This involves a job responsibility of such importance that failure to achieve the performance standards of the element would result in a decision that an employee’s overall performance is unsatisfactory.

The second type of element is often called a noncritical element. This pertains to a job responsibility that is important enough to appraise, but not important enough that failure would trigger an overall unsatisfactory rating.

Government organizations that use a pass/fail system have only critical elements in their performance standards. That is because the only determination they wish to make is whether an employee should be retained. Organizations that use a multitiered approach to appraisal also use noncritical elements. In this way, they have more levels at which to appraise their employees.

Using Noncritical Elements. One way to use a noncritical element is to require that employees who fail such an element (but no critical elements) will be appraised at the minimally satisfactory level. At this level, such employees do not get removed from their position. However, they would not receive a within-grade or step increase, either.

The performance standards describe the minimum performance requirement(s) that must be achieved in order to be appraised at a certain level of performance.

A multitiered appraisal system features several overall levels at which an employee can be appraised. Some possible levels would be outstanding, highly satisfactory, fully satisfactory, minimally satisfactory, or unsatisfactory. The number of levels and the criteria for appraisal at each level should be described in the organization’s plan and/or its negotiated agreement.

Setting Rating Criteria. A plan usually specifies that to receive an outstanding rating, an employee must far exceed every critical element. It may indicate that a highly satisfactory rating requires the employee to far exceed all critical elements and to fully meet all noncritical elements.

It may indicate that you need to far exceed all performance standards in an element in order to far exceed the element, or it may be silent in this area and allow the rater to make that judgment. Similarly, it may indicate that you need to fail one or all of an element’s standards in order to fail that particular standard, or it may stay silent on that point.

As you can see, there are many ways to develop an appraisal system and all of its components. The key is that it be in writing, be shared with everyone, and be applied fairly and reliably.

Most performance plans require annual appraisals and at least one mid-year progress review. In addition, a minimum period of time is usually established for an employee to occupy a position and be under the performance plan before he can receive a performance rating.

How Do You Write Performance Standards?

Performance standards should be challenging, yet realistic and sufficient to permit accurate assessment of the employee’s performance. They should be written in terms that are clear and understandable.

Standards should not explain what an employee is supposed to do; that is the role of a position description. Rather, they should describe how an employee is to perform those duties. Ideally, numbers should be incorporated into the standards, because they make it easy to measure an individual’s performance.

Measurable Performance Goals. A good, clear, and defensible standard might contain language requiring an employee to make five decisions a day, with 90 percent accuracy. It might even require that employees make 85 percent of their decisions within 21 days. Another standard might require that people make three field visits per day and that they issue reports within 30 days of the visit, containing no substantive errors 90 percent of the time. All of these standards are easily measurable and can clearly be understood by the affected employees.

Unfortunately, some positions do not lend themselves to measurement as easily as others. For those positions, a bit more creativity may be required.

Abstract Performance Goals. Every level of government seems to have analyst-type positions. These positions rarely require the incumbents to produce the same amount of work on a daily basis, because the nature and type of work varies so frequently. However, with a little bit of effort, these positions can also be measured.

One way to do this would be to use a logbook or spreadsheet to track each assignment and due date given to that individual. Every time the person completes an assignment, the completion date would be recorded so management and the employee would know whether she met the deadline. In this way, the employee could have a measurable standard that requires her to complete 85 percent of assignments on time.

We could take the same approach with respect to her quality. Every report that is submitted to the supervisor could be graded either on a scale of 1 to 10 or on a pass/fail basis. In this way, we could assign a minimum performance standard for quality of either an average of 8.5 per report or that 85 percent of the reports have to be acceptable.

For a job that is primarily advisory in nature (e.g., an attorney, an HRM specialist, etc.) you could build a customer survey into the standards. For instance, a minimum standard might require that 85 percent of the employee’s customers must rate the employee’s advice as being helpful or very helpful.

Dealing with Problem Employees

Identify Them Early and Let Them Know There Is a Problem

Once you develop and distribute performance standards, the next step is to track each employee’s performance relative to those standards. In most cases, you already know who the problem employees are, and the performance appraisal system should merely confirm that. As soon as you have enough data to identify who the problem employees are, you should begin a dialogue with them. This has four purposes:

1. It puts problem employees on notice that there is a performance problem.

2. Supervisor and employee mutually identify the root cause(s) behind the problem.

3. Strategies for resolving the problem are identified.

4. Problems can be nipped in the bud in order to prevent further management action down the road.

Remember, the initial goal is never to fire employees; after all, you’ve already made an enormous investment in them. The goal at first is always to try and get their performance up to an acceptable level.

Having an open and honest dialogue at the very beginning will often pay big dividends. At the early stage, positions have not yet hardened and people are generally more open to suggestions. As a rule of thumb, the sooner you address a performance problem, the sooner you will know what you are dealing with and the easier it will be to fix the problem. Moreover, if you can fix the problem up front, you can avoid all the time, energy, and costs of litigation that may come later.

In one notable case, we identified an employee who was struggling to meet her performance standards. Her supervisor met with her and her union representative and learned that she was having a difficult time working with her assigned mentor. From the employee’s perspective, the mentor was gruff and unresponsive and was unwilling to help her in the areas where she was weak. The supervisor asked her to give him a list of acceptable mentors, which she provided. The supervisor then assigned her a mentor from that list. The two hit it off right away, they were able to iron out her performance difficulties, and she became a productive employee.

Trying to resolve a performance problem up front is always a good thing because: (1) in many cases, you will solve the problem and wind up with a good employee; and (2) in the event that you are unable to improve the performance, you will be able to document the fact that you tried to help the employee.

Always Make a Good-Faith Effort to Help Your Employees

There is a big difference between going through the motions and truly attempting to help an employee in trouble. Some supervisors simply go through the motions of assisting employees because it is required by some rule, regulation, or labor agreement. In reality, they do not really care because they believe that it is the employees’ problem and responsibility to fix their own performance.

Although this approach will probably work on some occasions, the more the supervisor truly attempts to help employees, the better for everybody. First of all, some employee performance problems can be resolved only with the intervention of management, such as the case just described where the employee simply needed a different mentor. Second, other employees and the union watch management to see if it will attempt to assist employees in trouble. When people see that supervisors will go out of their way to help an employee in trouble, they will reciprocate in kind.

There are two other reasons why you want to make a good-faith effort to help a struggling employee. The first reason is that it is the right thing to do. If you were in the shoes of the struggling employee, you would want your boss to try to help you improve. The second reason is that it is good business. If you wind up having to take a performance action against the employee, it could potentially take hundreds of hours of your and others’ time, and could cost the government thousands of dollars to defend your actions. It is always better to try to get the employee to perform successfully, especially at the beginning of the process, when minimal effort is required by management.

One of our employees kept getting involved in automobile accidents. He was a very nervous individual who simply couldn’t drive very well. He was also very knowledgeable about the technical aspects of his job, but it was clear that he could not continue to drive.

We sat down with him and explored other avenues. We realized that he was a long-term employee who had skills that were needed by our organization. Accordingly, we reassigned him to a job where we could leverage his technical skills, but did not require him to travel by car. By making a good-faith effort to address his situation, we were able to retain a valuable employee and demonstrate to the other employees that we were a compassionate employer.

Don’t Wait Too Long to Take Action

You’ve made a good-faith effort to assist the employee and have given him a reasonable amount of time to improve. If you do not see any improvement, then it is time to take further action. At this point, your informal efforts have not paid off, so it is time to move on to the next step.

A common mistake that supervisors make at this juncture is to do nothing, because they hope that the problem will simply go away. Unfortunately, it almost never does. If early intervention does not succeed, that is generally an indication that the performance problem is far more serious and needs to be addressed immediately. If you made a good-faith effort to sit down with the employee and identify what the problem was, the employee made a good-faith effort to try and improve, and the performance remains unchanged, then the performance problem is serious and needs to be addressed immediately. This means placing the employee on a performance improvement plan.

A performance improvement plan is a written document that advises employees regarding four specific aspects:

1. How their performance is unacceptable

2. What specific assistance will be provided to assist them in improving their performance

3. What they need to do to bring their performance up to the acceptable level

4. How long they have to bring their performance up to that level

This is the formal phase of the process, and the place where the rubber meets the road. In other words, once employees are placed on an improvement plan, they either meet their performance standards or action is taken to remove them from their job (by reassignment, demotion, or separation). This is the time when management finally brings the problem to a head, because earlier informal efforts have failed. The sooner we bring the problem to a head, the sooner it will go away.

I can cite the case of an elderly employee who was failing in both her quantity and her quality standards. Because of her advanced age, her supervisor was uncomfortable dealing with the situation, and she let the problem linger. Finally her division chief insisted that appropriate action be taken. Despite management’s informal attempts to help the employee, she was unable to come close to meeting her standards, so she was placed on a performance improvement plan. During the performance improvement period, the employee failed miserably, in part because she was unwilling to take virtually any direction from her supervisors. Accordingly, management proposed her removal and I eventually terminated her.

At first, the local union grieved the removal and accused us of terminating her because of age discrimination. However, her family eventually intervened, realized that it was time for the employee to retire, and convinced her to withdraw the grievance. By using the appraisal system in the proper matter, we were able to bring this matter to a satisfactory resolution.

Another example: Looking to boost our organization’s productivity, we raised our individual production standards by 17 percent. Although it was a bit of a stretch for many people, we felt that almost all of the employees were capable of reaching that standard. At the beginning, almost half fell short of the new standard. The supervisor sat down with each employee who was failing and tried to provide assistance. Over time, many of these folks achieved the new standard and no further action was taken. However, a few could not make the grade, so they were placed on formal performance improvement plans.

Once they recognized that management was serious about the standards, was willing to continue to help them, but was prepared to take further action if necessary, almost all of the remaining people came around. Overall productivity increased, and the few employees who couldn’t make the grade were demoted to lower-graded positions.

Document Your Actions

I’ve made this point before, but need to reiterate it because the documentation requirements for performance-based actions are a bit different. For actions involving misconduct, you primarily need to document what, where, when, and how an employee did something wrong. You also need to show why the conduct was wrong; to establish a connection between the employee’s job and the misbehavior; and to demonstrate that the action taken by management was reasonable.

For performance-based actions, you have to show that the employee was aware of the performance standards and was placed on notice that the standards were not being met, that the employee was given the opportunity to improve, that management made a good-faith effort to provide assistance, and that, despite this, the standards still were not met during the performance improvement opportunity period. Furthermore, you also have to demonstrate that whatever action you wind up taking (reassignment, demotion, or separation) was reasonable under the circumstances. In my experience, the two areas that generally come under attack when a performance-based action is taken are the standards themselves and whether management truly made a good-faith effort to assist the employee.

In most cases, if management simply keeps good records, there should be no dispute that the employee was aware of the standards (the employee should have signed her appraisal form at the beginning of the year indicating that she received her standards). In addition, there is rarely disagreement as to whether the employee made her performance standards. Either she made the standards or she didn’t. If the standards are based on numbers, then the performance should not be in dispute, especially if she is receiving periodic reports regarding her performance.

Unions invariably attack the standards, claiming they either are too difficult or are unclear. The best way to counter this claim is to be prepared to demonstrate (1) the connection between the organization’s goals and the standards; (2) that the union and the employees were involved in the development of the standards; and (3) that most of the employees were able to achieve the standards.

The area where management is generally the most vulnerable is in its obligation to assist the employee. Most government labor agreements contain detailed procedures outlining what management is to do when an employee has performance problems. It is vital that all supervisors familiarize themselves with these requirements so that they can both comply with them and document their compliance. Otherwise, they can easily expose themselves to charges that the employee was not truly given the chance to improve as agreed to in the labor contract.

We demoted an employee for poor quantity and low quality. From our perspective, this was a no-brainer, since (1) he was historically our poorest employee in his particular occupation; and (2) there was little dispute that his performance was unacceptable. However, the union argued that the labor agreement required management to identify the root cause of an employee’s performance problems and to take appropriate action to address that root cause. Since his supervisor was not aware of that provision and did not document her efforts to identify the root cause of the employee’s problems in the case file, an arbitrator overturned the employee’s demotion, finding that we had not complied with the contract.

In another instance, we took a performance-based action against an employee who occupied a position that required a high degree of concentration. This was a more complex case than the one just described because he had difficulty sleeping at night due to a medically documented condition. His defense was that he was always tired at work through no fault of his own, so he should not be penalized for health reasons that were beyond his control.

In this situation, management fairly and methodically dealt with the employee’s concerns, so that by the time he was demoted, management had a strong and well-documented case. His supervisor first asked for medical information that would document the employee’s sleeping problem, as well as a list of reasonable accommodation(s). Although the employee ultimately did not request any accommodations, his supervisor did allow him to get up from his desk and walk around briefly whenever the employee became drowsy. He also allowed the employee to change his work schedule so he could come to work later in the morning.

As his performance problems developed, the supervisor followed the contract requirements with respect to performance-based actions, and documented his actions accordingly. Once management proposed to take action against the employee, the union knew that management had a strong case and requested that the employee be demoted to a position that did not require so much concentration. The employee did much better in his new position, which created a “win-win” situation for everyone.

Keep Your Focus

If you have to formally place an employee on a performance improvement plan, do not allow the employee’s complaints to cause you to lose focus. Many times, employees will try to turn the process around and place the onus on management. If that happens, you will wind up in a reactive mode and will be constantly responding to the employee’s issues. Once that happens, you tend to veer away from the performance improvement process, and that’s when things get out of control.

Always stay focused on the process, because if you do that, you will be much more likely to treat everyone in the same way. The more you allow allegedly unique circumstances to intervene in the process, the more you will be open to charges of disparate treatment.

That is why I am a strong advocate of early intervention. It allows you to identify issues early on in the process and then respond to them accordingly. By the time you have to proceed formally, you should have addressed the employee’s main complaints, which will then allow the process to proceed unimpeded.

Clarifying Expectations. A supervisor notes that an employee has a problem meeting timeliness standards. The supervisor counsels the employee that his timeliness is unacceptable and needs to be improved. He also asks the employee if there is anything wrong, and the employee responds that he has been having a lot of personal problems lately. Wanting to be fair, the supervisor refers the employee to an employee assistance program and offers to approve leave if it will help the employee take care of the problems. At the same time, in a follow-up letter of counseling, he again makes it clear to the employee that he expects performance standards to be met.

In this situation, the supervisor has treated the employee in the same manner as any other employee who was failing his standards, and has made a good-faith effort to help the employee. By dealing with the situation firmly but fairly, he is in a good position to take further action if the employee’s performance doesn’t improve. In essence, he has (1) attempted to help the employee; (2) documented his actions in the event he has to take further action; and (3) stayed on course with the performance improvement process.

Training Is a Tool to Improve Performance. A large number of employees are failing their quality standards. A review of the reasons why so many people are failing suggests that many of them are making multiple errors on the same procedure. In this situation, the appropriate thing to do would be to give additional training to everyone on that procedure, monitor how people were doing, and then take further action against the people who are still experiencing problems (presumably, a lot fewer people).

Although this approach delays the process a bit, it is the right thing to do. First of all, you want to take action only against people who truly have performance problems. Second, if you proceed against a large percentage of the people, all of whom are experiencing the same problems, for the same reasons, the process will eventually get sidetracked, and at some point you will wind up back at square one. Better to fix the problem early on and then move forward in a manner that is sure to stay on track.

Best Practices

Examine the Performance Trends

In reviewing the performance of your employees, it is important to look at which direction they are trending. If the performance of most of your employees is relatively consistent, that tells you that you have stability in your process. If it is getting better, that is obviously a good thing, but you need to know why. Perhaps many of them are becoming more experienced, or maybe some recent training helped to clarify a few issues. If things are trending poorly, you also need to know why. Maybe a process has changed, or possibly morale has dropped for some reason. Whatever the cause for the sudden change, you need to know the reason so you can address it if necessary.

The same principle holds true for individual performance. You need to look at each employee’s performance with the same pair of eyes, since the direction they are trending should influence the action you take.

Picking Your Battles. An employee with performance problems who is trending better every month should probably be treated a bit differently from someone who is getting worse each month. That’s not to say that they shouldn’t both be treated fairly. However, I think it is fair to delay issuing a performance improvement plan to someone who is trending well and will soon be meeting his standards. At the same time, it is also fair to issue the plan to someone who is not meeting his standards and getting worse each month.

It is important to pick and choose your battles. On the one hand, in this case, the second battle is worth fighting, and the first battle probably need not be fought, since the employee seems to be doing a good job of raising his performance. On the other hand, if the employee trends positively but is still unable to meet his standards, then a performance improvement plan would probably be warranted.

Look for Common Causes of Performance Problems

When analyzing performance, you need to determine if there are common causes of the performance problems. If most employees are making the same mistake, that tells you the problem may not be an employee problem but a system problem (training, process, etc.). First try to solve that system problem before treating it as a series of employee performance problems.

Faulty Training. Our organization hired several classes of trainees during a six-month period. The training that the first class received was not nearly as good as the classes that followed (e.g., a national computer-based training program was not available to the first class). As time went by, the first class started experiencing performance problems that the second and third classes did not. Instead of simply taking action against the members of the first class, we analyzed the reasons for their performance problems and determined that their initial training was the root cause of their problems. As a result, we gave them all the opportunity to go through the computer-based training and supplemented the training with mentors, and that resolved most of the performance problems.

You may also discover that one person has actually caused what appear to be multiple employee performance problems. That person may have done a poor job of training, given out misinformation, or otherwise hurt the performance of many people. If that is the case, first address it with the employee before going down the performance improvement route with a large number of employees. You do not want to devote all of the time and energy that is required to fix a problem that does not really exist.

We seemed to have a smooth quality review system, which was designed to assess each employee’s accuracy. Our organization had competitive quality, and we successfully dealt with the occasional employee whose performance was below par.

Eventually we changed the individual who conducted the quality reviews, and all of a sudden, the number of errors that were called began to skyrocket. The employees were up in arms, since far more errors were being called on them than in the past, even though the quality of their work had not changed.

Fortunately, instead of overreacting to the situation and issuing a bunch of performance improvement plans, we first rechecked the errors that were called by the new quality reviewer. We found that he was being overly strict, so we reversed a number of the errors that he called. Ultimately, we replaced him with a reviewer who was universally recognized as being fair.

Use Spreadsheets to Track Employee Performance

You should keep performance spreadsheets by position, with each employee ranked from top to bottom. This will accomplish a number of things:

• Employees can be compared to their own performance standards and to each other.

• You will clearly know who are your top employees, your middle group, and your low performers.

• You will be able to ensure that people are being treated fairly, by the numbers, and with no favoritism.

• Supervisors will understand that they are accountable for their personnel decisions, because their actions can be easily compared with the spreadsheet.

• You will be in a much better position to justify your personnel decisions.

• Spreadsheets can be used for trend analysis, training determinations, and rewards and recognition decisions.

The best type of spreadsheet is one that is electronically linked with the employees’ work so that their performance is automatically recorded by the appraisal system. If that is not possible, manual input is the next best thing, but you need to have a process in place to validate the accuracy of the employees’ input.

Using Tracking Software. Government organizations that answer large numbers of phone calls normally record the performance of each employee in the system’s computer. Some of the information they capture includes number of calls answered per day, number of calls answered per hour, average length of each call, and so on. This information can be easily uploaded into a performance spreadsheet, and then supplemented with a manual input by management that records each employee’s quality. The spreadsheet could then be manipulated to rank employees by their output, their quality, their timeliness, and so on.

Post Performance Data

Spreadsheets can also help to both motivate the employees and improve their performance, especially if they are posted. In my experience, the more the employees know how they are doing relative to the standards and their peers, the better they will perform. Posting performance spreadsheets is a great way to accomplish this objective.

I also believe in posting attendance data along with the performance information because attendance is tied to performance. Even if you are a highly productive employee when you are present, if you do not come to work, the job simply doesn’t get done.

When you post performance/attendance spreadsheets, several things will happen:

• The employees will suddenly have access to much of the same information that management has.

• Employees will be better informed as to where they stand within their peer group.

• If their performance is good, employees will feel proud to see their recognition up on the wall.

• Poor performers will realize that they cannot hide anymore and will be motivated to improve.

• Peer pressure will develop and force the bottom 10 percent to either improve or leave the team.

The initial reaction of most people to this idea is that you can’t do this in a government organization. Some of the objections are that (1) it violates the employees’ privacy; (2) the employees will not like it; and (3) the unions will oppose it. Let’s examine all three objections more closely.

I’m not aware of any law, rule, or regulation that prohibits management from posting this type of information. However, regardless of whether one exists or not, my preference would be to post the information anonymously, that is, Employee A, Employee B, Employee C, and so on. In this way, no one gets formally embarrassed, and to some extent, each employee gets to retain privacy. That being said, everyone would know which letter represents him or her, because they would know their own individual statistics. Moreover, since employees invariably talk to each other, over time, everyone will eventually know who each letter represents.

I’ve learned that the only employees who don’t want information posted are the poor performers. If I were in their shoes, I would not want that information posted, either. However, most other employees do want to see that information because they want to see the organization succeed, they want to know where they stand, and they want the top performers rewarded and the bottom performers held accountable.

From the union’s perspective, this is also a good thing. Posting the information ensures that people will be treated fairly, since management’s actions will be more easily transparent. It makes the union’s job easier, because instead of going out and trying to dig for information, the information is suddenly out in the open for all to see.

I was working for a government organization that serviced delinquent home loans. In essence, the mission of that organization was to help certain citizens avoid foreclosure. There were three ways to accomplish this: (1) the citizen would make a repayment agreement with the lender and would eventually become current on the payments; (2) the government would assume the loan from the lender and become the loan holder; or (3) the citizen would convey the deed to the property to the lender in lieu of foreclosure. Whenever an employee servicing the loan could achieve one of these three actions, it was known as a successful intervention. The higher the number of successful interventions relative to the number of foreclosures, the higher our foreclosure avoidance through servicing (FATS) ratio became.

Although our goal was to have at least a 45 percent FATS ratio, our actual ratio was closer to 20 percent. Accordingly, I asked the division chief to begin posting on a weekly basis the number of successful interventions for each loan servicer. During the first week alone, the disparity in the employees’ performance was remarkable. Our best employees had nine successful interventions, while our poorest employees had none. The employees were flabbergasted. How could several of the employees have no successful interventions?

Immediately, peer pressure began to build, and the lowest performers started cleaning up their act. The number of successful interventions began to steadily increase, and by the end of the quarter, our FATS ratio increased to 48 percent!

Team Performance Spreadsheets. Look at Figure 5-1 for an example of a team performance spreadsheet that might be posted. For this particular job, the minimum standards are as follows: productivity—at least 5 decisions per day; quality—15 percent error rate or lower; and timeliness—85 percent or better.

For productivity, Employee D is right on the borderline, while Employee E is well below. The supervisor will need to work closely with these two, especially Employee D. However, note that while Employee F has the highest average productivity, his overall output is by far the lowest because he rarely comes to work. This should be handled as a leave issue, and is something that the other employees are certainly aware of.

Everyone is achieving the accuracy standard. However, Employee E is right on the borderline. Given the fact that he is also failing the productivity standard, he will require a good deal of supervisory attention.

Concerning timeliness, more than half the employees are failing this standard, although several are close (excluding Employee F). In this situation, the supervisor might want look at the process to see if there is something that is causing so many employees to fail. The supervisor should also discuss this matter with the employees, to see if there is anything else that could be done to ensure that both the organization and the employees succeed.

Issue Monthly Report Cards

Another technique that works extremely well is the use of monthly report cards. Under this approach, employees are given short, monthly reports that tell them exactly how they are doing relative to their performance standards and, in some cases, against their peers.

The report can be as long or as short as you would like, but the key is that it contains information that is clear and directly relates to the employee’s standards. At a minimum, you should include information related to the employee’s performance under both the elements and standards. You may also wish to include other pertinent information showing the average performance for all employees for each element/standard, and information related to attendance. All of this information will provide the employee with a sense of context and will force the employee to see things from management’s perspective.

Monthly Report Cards. Figure 5-2 shows one kind of monthly report card that could be used. It shows employees exactly how they are doing relative to the performance standards and their peers, on both a monthly and a fiscal year-to-date (FYTD) basis. It also provides detailed information regarding their attendance, the time they are spending on direct labor activities, their leave balances, and how that compares to the team averages.

The employee whose performance is documented in the report card in Figure 5-2 appears to be a slightly above-average employee. His output is about average, while his accuracy and timeliness are slightly better than average. He also comes to work on a regular basis, which is a definite plus.

The challenge with this employee is to help raise his performance to the exceptional level. While meeting the minimum standards is a good thing, we all want our employees to do better than that. One way to accomplish this would be to list the higher-level goals on the report card. In this way, the employee will be on notice as to what she needs to do to excel and will have something to shoot for.

Another advantage of a monthly report card is that it allows far more communication with the employee (and documentation) than the usual twice a year meetings. If the employee is doing well, it’s always good to put a note on the employee’s report card thanking her for her good work.

By doing this, management can recognize the employee far more frequently than normal. By the same token, if the employee is not doing well, you should also note that on the report card. This will allow you to build a strong case that you have kept the employee informed of her performance problems. As a result, if you have to later take action against her, it will prevent her from arguing that she did not see it coming.

Key Points to Remember

• Align and communicate your organization’s goals.

• Identify, address, and try to resolve performance problems as quickly as possible.

• Always make a good-faith effort to help struggling employees.

• Let people know that you are serious about dealing with problem performers.

• Post performance statistics and issue report cards.