Chapter 7

Implementing a
Performance
Management System
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 Overview
 Preparation
 Communication Plan
 Appeals Process
 Rater Training Programs
 Pilot Testing
 Ongoing Monitoring and Evaluation
 Online Implementation

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 Preparation
 Need to gain system buy-in through:
• Communication plan regarding
performance management system
 Including appeals process

• Training programs for raters

• Pilot testing system

 Ongoing monitoring and evaluation

to show benefits
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Communication Plan Answers:
 What is Performance Management
(PM)?
 How does PM fit into our strategy?
 What’s in it for me?
 How does it work?
 What are our roles and
responsibilities?
 How does PM relate to other
initiatives?
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 Cognitive Biases That Affect
Communications Effectiveness
 Selective exposure
 Selective perception
 Selective retention

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To Minimize Effects of Cognitive
Biases:

A. Consider employees
 Involve employees in system design

 Show how employee needs are met

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To Minimize Effects of Cognitive
Biases (Continued):
B. Emphasize the positive
 Use credible communicators

 Strike first—create positive attitude

 Provide facts and consequences

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To Minimize Effects of Cognitive
Biases (Continued):

C. Repeat, document, be consistent

 Put it in writing
 Use multiple channels of communication
 Say it, and then say it again

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 Appeals Process
 Promote employee buy-in to PM
system
• Amicable/Nonretaliatory

• Resolution of disagreements

 Increases perception of the

system’s fairness

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 Appeals Process
(continued)
 Employees can question two types of
issues:
• Judgmental
 Validity of evaluation

• Administrative
 Whether policies and procedures were
followed

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Recommended Appeals Process
 Level 1
• HR reviews facts, policies, and
procedures
• HR reports to supervisor/employee
• HR attempts to negotiate a settlement
 Level 2
• Arbitrator (panel of peers and
managers) or
• High-level manager—final decision
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 Rater Training Programs
 Content Areas to Include:
• Information
• Identifying, observing, recording, and evaluating
• How to interact with employees

 Choices of Training Programs to Implement

• Rater Error Training
• Frame of Reference Training
• Behavioral Observation
• Self-Leadership Training
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 Content
A. Information—how the system
works
• Reasons for implementing the
performance management system

• Information
 The appraisal form

 System mechanics

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 Content
(continued)

B. Identifying, observing, recording,

and evaluating performance
• How to identify and rank job activities

• How to observe, record, and measure

performance

• How to minimize rating errors

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 Content
(continued)

C. How to interact with employees

when they receive performance
information
• How to conduct an appraisal
interview

• How to train, counsel, and coach

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Choices of Training Programs
 Rater Error Training (RET)

 Frame of Reference Training

(FOR)

 Behavioral Observation Training

(BO)
 Self-Leadership Training (SL)

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 Rater Error Training (RET)
 Goals of RET
• Make raters aware of types of rating
errors they are likely to make

• Help raters minimize errors

• Increase rating accuracy

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 Intentional Rating Errors

 Leniency (inflation)
 Severity (deflation)
 Central tendency

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 Unintentional Rating Errors
 Similar to Me  Stereotype
 Halo  Negativity
 Primacy  Recency
 First  Spillover
Impression
 Attribution
 Contrast

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 Possible Solutions for
Types of Rating Errors
 Intentional
• Focus on motivation
• Demonstrate benefits of providing
accurate ratings

 Unintentional
• Alert raters to different errors and
their causes
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 Frame of Reference Training
(FOR)
 Goal of FOR*
• Raters develop common frame of reference
 Observing performance

 Evaluating performance

 Expected results of FOR

• Raters provide consistent, more accurate ratings
• Raters help employees design effective
development plans

*Most appropriate when PM appraisal system focuses on behaviors

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Behavioral Observation Training (BO)
 Goals of BO
• Minimize unintentional rating errors

• Improve rater skills by focusing on how

raters:
 Observe performance

 Store information about performance

 Recall information about performance

 Use information about performance

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 Self-Leadership Training (SL)
 Goals of SL
• Improve rater’s confidence in ability to
manage performance

• Enhance mental processes

• Increase self-efficacy

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 Pilot Testing
 Pilot testing is done before the
system is implemented.
• Provides ability to:
 Discover potential problems

 Fix them

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 Pilot Testing—Benefits
 Gain information from potential participants

 Learn about difficulties/obstacles

 Collect recommendations on how to improve

system

 Understand personal reactions

 Get early buy-in from some participants

 Get higher rate of acceptance

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 Implementing a Pilot Test
 Roll out test version with sample group
• Staff and jobs generalizable to the
organization

 Fully implement planned system

• All participants keep records of issues
encountered
• Do not record appraisal scores
• Collect input from all participants
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Ongoing Monitoring and Evaluation
 When system is implemented, decide:
• How to evaluate system effectiveness
• How to measure implementation
• How to measure results

 Evaluation data to collect:

• Reactions to the system
• Assessments of operational and technical
requirements
• Effectiveness of performance ratings
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 Indicators to Consider
 Number of individuals evaluated
 Distribution of performance ratings
 Quality of information
 Quality of follow-up actions
 Quality of performance discussion meetings
 System satisfaction
 Cost-benefit ratio or return on investment (ROI)
 Unit-level and organization-level performance
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 Online Implementation
 Online tools to facilitate implementation
• E-mails
• Electronic newsletters
• Web sites
• Appeal filing
• Training programs
• Pop-up reminders

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Online Implementation—Advantages
 Automation
 Speed up processes
 Lower cost
 Gather and disseminate information faster
and more effectively
 System can be linked to other HR functions
 Easier to monitor unit-level and
organizational-level trends over time

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Online Implementation—Limitations
 PM systems that are not implemented
following best practices will not
necessarily improve from the use of
online components.
 In fact, online implementation may create
a more complicated system that is a big
waste of time and resources for all
involved.

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 Quick Review
 Preparation
 Communication Plan
 Appeals Process
 Training Programs
 Pilot Testing
 Ongoing Monitoring and Evaluation
 Online Implementation
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publishing as Prentice Hall
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