Class themes this week were Distinctive Competencies and Livelihood Schemes in SP and Should performance appraisals be used and, if so, how? in SHRM. The SHRM readings for this week are all about performance appraisals and performance management. The week five readings for SP also covered performance management. In that case the readings were focused on the organization level rather than individuals, but there are a couple of similarities.

Table of contents

Strategic Planning

• Bryson, Resource C - Developing a Livelihood Scheme
• Strategy Formulation and Performance, Poister, Edwards, Pasha & Edwards (2013)
• A Sustainable Business Model for Public Service Organizations?, Osborne, Radnor, Vidal and Kinder (2014)

Strategic Human Resources Management

• Douglas McGregor, revisited: Managing the human side of the enterprise, Heil, Bennis, & Stephens (2000)
  • Chapter 5 - Performance Appraisal or Performance Development
  • An Uneasy Look at Performance Appraisal, by Douglas McGregor
• New keys to employee performance and productivity, Luthy (1998)
• Quality results from performance appraisals, Teckchandani & Pichler (2015)
• Square Pegs and Round Holes, Gravina & Siers (2011)
• Optional SHRM readings - week 7
  • Performance Management, Pynes (2004)
  • Putting a value on training, Cermak & McGurk (2010)
  • Seven biggest problems with performance appraisals: and seven development approaches to rectify them, Davis (2011)
  • Stimulating Informal Learning Activities Through Perceptions of Performance Appraisal Quality and Human Resource Management System Strength, Bendall et. al. (2014)

Strategic Planning (SP)

Bryson, Resource C - Developing a Livelihood Scheme

• dynamic organizational capacities for producing public value are necessary to achieve a desirable fit with the environment
• An exploration of these capacities may lead to new goals, performance indicators or criteria for stakeholder satisfaction, efforts to develop new competencies, or creation of new or different resource arrangements.
• The resource-based view is arguably the dominant approach to strategy research and teaching in North America and Europe
• key insights of the resource-based view are that “scarce, valuable, and imperfectly imitable resources are the only factors capable of creating sustained performance differences among competing firms, and that these resources should figure prominently in strategy making”
• Distinctive competencies are one such resource
• Livelihood scheme = government and nonprofit equivalent of a business mode
• a livelihood scheme provides the fundamental logic underlying any effective strategic plan.
• a strategic plan should articulate how the livelihood scheme is to be taken advantage of and deployed
• The livelihood scheme summarizes how an organization is uniquely able to meet its mission
• interconnected key terms:
  • critical success factors (CSFs) - things the organization must do in order to survive and prosper; factors may be explicit or implicit
  • distinctive competency outcomes (DCOs) - what distinctive competencies produce
  • resources - any assets that an organization might draw on to help it achieve its goals or perform well on its CSFs
  • competencies (Cs) - a subset of resources that consist of abilities, sets of actions, or processes that an organization can manage and that ideally help it perform well
  • distinctive competencies (DCs) - competencies that are very difficult for others to replicate and therefore are a source of enduring advantage
  • core competencies (CC) - on that is really crucial to the organization doing well. It is core because of its location in the linkages to competencies and aspirations
  • core distinctive competencies (CDC) - a distinctive competency whose presence is crucial to achieving organizational aspirations because it is hard to emulate and critical to long-term success
  • threshold competencies (TCs) - competencies that must be present in order to be a viable organization in the first place (i.e. accounting, finance management, HR, IT, procurement systems)
  • distinctive assets (DAs) - a particular resource that may be drawn on or exploited by a competency
  • core distinctive asset (CDA) - a distinctive asset that is core to the achievement of the organization’s business aspirations
• The way in which distinctive competencies and distinctive assets are linked to and support the distinctive competency outcomes and aspirations of a public organization constitutes its livelihood scheme.
• Distinctive competencies are crucial to a viable livelihood scheme, which is not the same as a strategic plan but provides the crucial underpinning for one
• The process of developing and using a livelihood scheme involves several steps.
  • Do the necessary preparation work
  • Identify critical success factors (CSFs) and potential distinctive competency outcomes (DCOs)
  • Identify competencies (Cs), distinctive competencies (DCs), threshold competencies (TCs), and distinctive assets (DAs)
  • Identify a tentative aspiration system (including, for example, mission, mandates, goals, and critical success factors)
  • Build a draft livelihood scheme
  • Create a full livelihood scheme
  • Develop a multiyear strategic plan based on the underlying logic of the livelihood scheme
  • Develop a first-year business plan
• Draft livelihood schemes are typically developed in a one-day workshop. Development of a multiyear strategic plan takes longer.
• To identify CSFs or potential DCOs the facilitator should start with the question, “From the key stakeholders’ perspectives, what must we do especially well to succeed—now and in the future?”
• it will probably be hard to tell the difference between a CSF and a potential DCO. The key distinction is that CSFs are what matter to key stakeholders, while a potential DCO (the outcome produced by a DC) may not be important to key stakeholders.
• In order to create a livelihood scheme, the aspiration system—what is desired—must be supported by the competencies, distinctive competencies, and distinctive assets
• final steps involve using the livelihood scheme as a guide to developing a strategic plan and annual business plans. The livelihood scheme provides the basic logic that the plans need to embody.
• final steps involve using the livelihood scheme as a guide to developing a strategic plan and annual business plans. The livelihood scheme provides the basic logic that the plans need to embody.
  • organizations that perform well over long periods of time will draw on distinctive competencies and distinctive assets that consist of linked competencies and assets and self-reinforcing loops of competencies and assets.
  • organizations that develop a valid livelihood scheme and formulate and implement their strategies based on that scheme will achieve a better fit or alignment with the demands and opportunities of their environments
  • successful collaborations involving public and nonprofit organizations must be underpinned by linked competencies and assets across organi­zations in the service of the organizations’ shared aspirations. (i.e. collaborative advantage)
  • success for public organizations is likely to be based on the exploitation, sustenance, and protection of existing distinctive competencies and distinctive assets, as well as the development of new distinctive competencies and distinctive assets.
• the day a public or nonprofit management team spends on developing a livelihood scheme is typically one of the best days they will ever spend sharpening their strategic thinking, acting, and learning abilities.

Lessons We Don’t Learn, Donahue and Tuohy (2006)

• Case study of a February 2006 White House report on lessons learned from Hurricane Katrina.
• Lessons called out in briefing concerned planning, resource management, evacuation, situational awareness, communications, and coordination
• No one in the emergency response community was surprised, because we identify the same lessons again and again, incident after incident
• we repeatedly confront command and control issues in large incidents, but somehow we fail to learn
• The central concerns of this paper are why that is so and how we can improve, targeting six research questions:
  1. Is it true that lessons recur?
  2. What lessons are persistently identified?
  3. Why do these lessons continue to be identified as important?
  4. Why are these lessons so hard to learn? (That is, why do agencies have difficulty devising and implementing corrective actions once lessons are identified?)
  5. How do lessons-learned processes work?
  6. How can they be improved?
• by explicitly identifying persistent challenges, responders may be better attuned to challenges and more able to address them in their processes
• by better understanding why challenges remain unresolved, responders may be able to adapt
• Various mechanisms for sharing experience have emerged. Most processes involve some version of three core components:
  1. Evaluating an incident
  2. Identifying lessons
  3. Learning
• while review of incidents and the identification of lessons are more readily accomplished, true learning is much more difficult
• Despite the disparity of the reports we reviewed, we found a striking consistency in major categories of lessons identified. Five main areas:
  1. command
  2. communications
  3. planning
  4. resource management
  5. public relations
• By using the term “command and control,” we do not mean to suggest that structures are unitary, rigid, or static. Successful management requires collaboration, flexibility, and adaptability across multiple diverse actors.
• What accounts for command problems? Agencies lack the commitment to coordinate. At best, they’re unaware of what others are doing. At worst, they’re unwilling to cooperate.
• Primary mechanism for resolving resource-allocation struggles, the Emergency Operations Center (EOC), is often ineffective. Delegates sent to EOCs are usually liaisons who lack decision-making authority. Turf battles rage.
• Incident Command Systems (ICS) are in common use but not understood and implemented in a consistet manner. “Everyone agrees we need ICS, but we don’t share one system.”
• communications isn’t entirely (or even fundamentally) a technology problem
• technology is only an enabler; communicating requires that people are willing to share information with each other. “We dump millions into hardware, but don’t think about systems.”
• The most fundamental problem to plague planning processes is a lack of commitment to plans across agencies and jurisdictions.
• Plans are often developed by mid-level managers. Senior managers and political officials may have the plan on their shelves, but get no formal training on what is in it or how to use it. Similarly, plans are not disseminated to supervisors or training academies.
• Resources must be obtained rapidly when a disaster occur. Normal resource acquisition systems are too slow and are not designed to obtain large amounts of supplies rapidly.
• well-meaning volunteers add a significant management burden to already over-taxed incident managers
• public relations challenge - when agencies fail to use a common message, do not control the message carefully, the pressure to get information out quickly undermines accuracy
• It should be possible to solve at least some of these problems once and for all. Challenges to this proposition in five general areas:
  • Motivation for Change
    • Organizational change is notoriously difficult, but particular challenges attend change in the emergency response arena.
    • Even following a major event, it is hard to sustain a commitment to change long enough to accomplish it.
    • Another impediment is the episodic nature of events. Happens infrequently in any given location, but consistently in the nation as a whole. To improve response overall emergency response community has to be willing to learn from each other. Calls for organizations to think of their experiences collectively.
    • Pressure for change from within the discipline does not have the same force as external scrutiny
    • Thinking about learning and change in a single agency or discipline faces substantial barriers. Doing this work collectively is even harder
  • Review and Reporting Process
    • Assuming that an agency is open to learning and change, the learning process can be thought of as beginning with the identification of lessons
    • After Action Reports (AARs) typically focus on what went wrong, but chiefs want to know what they can do that is right
    • Value of reports is often undermined because they’re not distributed effectively. As a result, adoption of new practices is haphazard
  • Learning and Teaching
    • Failure to learn is due, in part, to a lack of systems to identify and disseminate lessons.
    • Simplistically, the lesson learning and change process iterates through the following steps:
      • Identify the lesson
      • recognize the causal process
      • devise a new operational process
      • practice the new process
      • embed/institutionalize and sustain the new process
    • agencies tend to consider individual incidents and particular lessons in isolation, rather than as systems or broad patterns of behavior.
    • practice is required to inculcate new behavior.
    • feedback after implementing new practices is typically informal and passive; it comes from simply noticing improvement, rather than actively testing for it.
  • Exercising
    • Perhaps the key mechanism for testing, practicing, refining, and inculcating new lessons-derived behaviors is exercising.
    • One design problem is striking the right balance between the known and the unknown.
    • Another design problem is a lack of realism
    • A major impediment is fear of failure
      • “People don’t come to exercises because they’re afraid they’ll be tested, that they’ll make mistakes, and that they’ll be embarrassed”
      • “We don’t train people how to operate first and then test them afterwards. Instead, we throw them in blind, and then tear them apart afterwards.”
    • important imbalances in exercise goals and the content of exercise scenarios
    • uneven participation means that agencies miss the opportunity to build strong, trusting relationship
  • Resource Constraints
    • Commitment to learning is wasted if resources are not available to support the process.
    • investments in basic capacity are not as marketable – as “sexy” – as equipment for combating terrorism.
• Fundamental challenge is that it takes long-term resource commitment and organizational discipline to solve recurring problems.
• Recommendations:
  • need to radically improve the way we train and exercise
    • exercises must be recast as learning activities targeted at improving performance
    • exercise planning should follow the military-style crawl - walk - run structure
    • We must find a way to introduce the chaos and common failures likely in a real event into state, regional, and local exercises
    • To support lessons-focused planning, agencies must establish and follow a requirement to document events and lessons learned immediately post-operation. Adopting a standard format for this process would make it easier
  • need a comprehensive, nationwide capability to gather and validate the information we learn
    • Learning lessons depends on the development of a robust analytical capability
    • Tools such as databases with smart search engines, electronic update bulletins, and web-based training, should be employed so that responders could easily find information relevant to their missions, disciplines, service responsibilities, and hazard environments
      • Note: parallels here to Intellipedia
    • A crucial concern when developing an effective lessons analysis institute is liability. Integrity requires that those who report be protected from retribution
  • need incentives to institutionalize lessons-learning processes
    • To achieve broad consistency, important to promote a regional commitment to identifying problems and adopting best practices
• ability to capitalize on experience and improve capacity is ever more important
• Enduring change needs to address the structure, system, and culture of an organization
• As a practical matter, the main problem with lesson learning can be seen as a lack of will and commitment, rather than a lack of ability.
• most big lessons are inter-agency lessons, requiring learning within and across agencies
• Prevention is an important (and oft-ignored) goal. Suggests two things:
  1. those who prepare reports often forego the opportunity to comment on how to avoid problems altogether
  2. further research is warranted to understand learning in the context of prevention
• helping organizations navigate the complexities of lessons learning should be informed by the substantial academic literature that has developed around this issue.

Strategy Formulation and Performance, Poister, Edwards, Pasha & Edwards (2013)

• this article analyzes the effect of strategic planning and logical incrementalism
• results suggest that strategic planning exerts a positive influence on effectiveness and system productivity measures, but does not influence efficiency or cost-effectiveness measures
• Logical incrementalism by itself appears to have a negative effect
• strategic planning efforts within a larger framework of logical incremental decision-making positively affects both the effectiveness and the system productivity measure
• emphasis on performance in government has risen in response to two sustained trends:
  1. demands for accountability
  2. “managing for results”
• Strategy provides direction and guidance for how an agency will move into the future, and addresses the most fundamental issues facing an organization
• some organizations “muddle through”
• most engage in some form of purposeful strategy development
• two dominant models - rational planning and logical incrementalism
• rational planning, as embodied in formal strategic planning, is designed as a rational approach to strategy development that employs a comprehensive and systematic process
• logical incrementalist approach strategizes and negotiates decisions along the way as changes occur
• Agencies may blend the two approaches, developing formal strategic plans within an ongoing context of logical incremental decision-making
• Strategic Planning
  • Strategic planning is a “big picture” approach that addresses the most fundamental issues facing an organization’s long-term vitality and effectiveness
  • proponents of strategic planning emphasize the need for flexibility in tailoring the process
  • strategic planning in the public sector often incorporates the following common elements:
    • clarifying mission and mandates
    • identifying core values
    • developing a vision of the future
    • assessing internal strengths and weaknesses
    • conducting an environmental scan and a situational analysis of how the agency relates to its environment
    • identifying strategic issues facing the organization
    • establishing strategic goals and objectives
    • developing and assessing the feasibility of strategies for achieving those goals and objectives
    • creating and implementing action plans to move the strategies forward
    • monitoring and evaluating progress
    • updating strategies as might be needed
  • goals of strategic planning, in brief:
    • forces officials to clarify goals and objectives
    • formalizes communication
    • reduces reactionary responses to external shocks
    • helps complex organizations plan for the long term
    • forces organizations to gather analyses for better decision-making
    • unifies the activities of complex organizations
  • in government, purpose of strategy is focused on improving performance and providing better services
  • the most direct linkage between strategic planning and performance is provided by goal-setting theory
  • Formal strategic planning embodies a rational approach that emphasizes logical decision-making in pursuing goals
  • Since the goals identified by strategic planning efforts often focus on improving performance, therefore, strategic planning should be expected to lead to improved performance.
  • Strategic planning often focuses on identifying and resolving the most fundamental strategic issues facing an organization
• Logical Incrementalism
  • Proponents of logical incrementalism point out that organizations rarely make decisions in the formal, rational manner
  • planning is rarely strategic, and strategy formulation occurs as a result of strategic thinking.
  • According to Quinn (1978), effective strategies tend to emerge from a series of “strategic subsystems”
  • managers must necessarily make decisions incrementally because the lessons they have learned from the past do not always enable them to know what will work in the future
  • excellent managers have a clear idea of their objectives, and usually some idea about how to achieve them based on theory, experience, or hunches
  • “grope along” pragmatically
  • Logical incrementalism is based on a political rather than an analytical approach
  • appreciation of the importance of group processes, power relationships, politics, personal values, and organizational culture, and a recognition that interactions among key individuals and groups will exert strong influence on strategy
  • given its lack of sustained and disciplined focus, and perhaps the absence of stable goals, we do not expect that logical incrementalism alone will have a positive impact on performance
• Blending Approaches
  • It is important to be opportunistic as well as deliberate
  • Formal strategic-planning efforts play an important role encouraging strategic thinking and forward thinking.
  • Need to be encompassed by a much broader, ongoing, flexible, and interactive process of formulating strategy that is responsive to ever changing pressures
• existing research has yielded somewhat mixed results regarding the impact of strategy development on performance
• analyses demonstrate that strategic planning and logical incrementalism do affect performance in the transit industry, but that their effects depend upon the dimension of performance being studied
• Formal strategic planning did not affect the efficiency or cost-effectiveness measures. however, it did have a positive effect on the number of passenger trips per capita and passenger trips per vehicle mile operated.
• Our findings demonstrate that in terms of transit system utilization and system productivity, strategic planning is associated with superior organizational performance
• logical incrementalism did not affect either the efficiency measures or the cost-effectiveness measures. Did have a statistically significant negative effect on passenger trips per capita as well as on passenger trips per vehicle miles operated. Is associated with lower performance
• strategic planning on its own is associated with better performance, and logical incrementalism on its own is associated with lower performance, the employment of both approaches together leads to stronger overall performance
• Strategic planning that produces a sufficiently flexible strategic framework can enable incremental decision-making that allows for taking risks and learning from mistakes
• there is clearly sufficient theory and plausible rationale for a causal explanation here, but the jury is still out
• most important lesson is that strategy formulation is not a zero-sum game—formal strategic planning vs. logical incrementalism—because blending the two in practice, one way or another, is likely to generate maximum benefit

A Sustainable Business Model for Public Service Organizations?, Osborne, Radnor, Vidal and Kinder (2014)

• Global economic recession presented significant challenges to public service organizations (PSOs), resulting in a growing need to establish the basis for a sustainable business model for PSOs
• New Public Management (NPM) flawed in theory and failed in practice
• NPM has undermined PSO sustainability by encouraging a short-term, transactional approach to the delivery of public services
• We offer an alternative to this, based within the New Public Governance and the public service-dominant logic (PSDL) for public service delivery
• essential for PSOs to move beyond the failed transactional approach of the NPM and take a relational and public service-dominant approach that emphasizes three elements:
  1. building relationships across the public service delivery system
  2. understanding that sustainability derives from the transformation of user knowledge and professional understanding of the public service delivery process
  3. being predicated upon the inalienable co-production of public services with service users
• Critique of NPM, two points:
  1. NPM is a fatally flawed paradigm because its logic emphasizes ownership of concrete goods rather than the relational process of service delivery. Basis of NPM is a preoccupation with management of manufacturing processes. Public services are invariably intangible processes where production and consumption occur simultaneously, do not involve transfer of ownership, and are co-produced between service professionals and service users.
  2. NPM has failed in practice to produce sustainable PSOs. Has encouraged development of PSOs preoccupied with internal measures of efficiency and with satisfying internal customers, that are highly efficient but also permanently failing in terms of external effectiveness. Internal efficiency has “crowded out” achieving public value
• The NPM belief that internal cost cutting an efficiency will produce sustainable PSOs has failed. The underlying question therefore is what is the nature of sustainable business practice for PSOs? Challenges this question leads to:
  • to understand public services as the result of complex public service delivery systems
  • to embrace public service delivery as being relational and process-based
  • to realize that the business logic of public services is, like for all services, different from that of manufactured goods
  • to develop reform strategies for public services that understand that reform requires a cultural change
  • to acknowledge co-production as central to the realization of effective public services
  • to accept that digital technology is transforming the relationship between PSOs and public service users
• Sustainable business practice in commercial markets has traditionally been equated with a healthy ‘bottom line’ profitability. However more recently there has been a growth of alternative models of sustainable practice. Includes the triple bottom line, social audit and social accounting based practices.
• For PSOs there has been a strong critical accounting strand over the past 20 years arguing for their role in contributing to higher-level goals
• we would argue that sustainability for PSOs must be assessed across four dimensions:
  1. the sustainability of individual PSOs
  2. the sustainability of public service delivery systems and their governance mechanisms
  3. the sustainability of local communities
  4. environmental sustainability
• we argue here for seven propositions to form the basis of a sustainable business model:
  1. public services are systems
  2. individual PSOs need to be sustainable in their own right in the short term
  3. internal efficiency is necessary for individual PSOs but will not produce sustainable public service system
  4. the key resource and route to effectiveness for PSOs is knowledge, and the key tools for its transformation are relational rather than transactional. Transformation is currently emphasized and supported by advances in information technology
  5. sustainable PSOs are dependent upon building long-term relationships
  6. co-production is at the heart of public service delivery
  7. public service systems need to embrace environmental sustainability
• three cross-cutting issues require further attention:
  1. role of Information and Communications Technology
  2. cross-sectoral and inter-industry differences in the nature of sustainability for public services
  3. appropriate application of existing soft technologies

Strategic Human Resources Management (SHRM)

Douglas McGregor, revisited: Managing the human side of the enterprise, Heil, Bennis, & Stephens (2000)

Chapter 5 - Performance Appraisal or Performance Development

• performance appraisal is the process that McGregor took the most exception to
• McGregor suggests new ways managers can approach the process, qualities what we now categorize as mentoring
• the single most compelling question raised about performance appraisal systems is whether their primary purpose is evaluative or developmental; that is, are they a grading tool or a learning tool?
• When learning and evaluation are combined into one system, a single overarching problem inevitably arises: the problem of the boss as both evaluator and coach.
• To really learn and develop, people must be able to share weaknesses as well as strengths and must view information about their present performance as hopeful and nonthreatening.
• performance evaluations are meant to motivate employees to perform better in the hope of getting a better evaluation (or for fear of getting a negative one)
• erroneous assumption is made that the performance of an individual can be isolated from the overall performance of the department and organization.
• competition is inherent in performance evaluation systems, and appraisals that weigh individuals against each other and force them to compete can result in many of the same problems that arise from competition:
  • A scarcity mentality that inhibits cooperation and teamwork.
  • Stifled creativity and innovation.
  • Reduced efficiencies and compromised product and service quality.
  • Inhibited dialogue.
  • Demoralized “losers” and destroyed self-esteem resulting in compromised promised relationships.
• Performance appraisal can shift the focus of the employee from the customer to the boss.
• Performance appraisal can encourage mediocrity. woe be to us if we negotiate for true stretch goals and succeed.
• Performance appraisal can reduce and pervert information flow.
• Performance appraisal can create a short-term focus.
• Performance appraisals can undermine organizational vision and values. Too often, evaluations are based on what is easy to measure or has been traditionally measured
• Performance appraisal can destroy trust.
• Ideally, performance appraisal as a developmental tool provides feedback and the opportunity to discuss present performance. It identifies problems and provides a forum for resolving them, and serves as a basis for the creation of a plan that lets people grow and systematically take on greater responsibility.
• feedback is fundamental to rapid improvement and organizational learning
• when feedback to the employee is delayed, filtered, or otherwise perverted, improvement slows and learning suffers.
• more often than not, the supervisor is also the worker’s evaluator, interjecting an element of fear into what should be a learning process.
• instead of basing performance appraisal primarily on past performance data, wouldn’t it make more sense to base the appraisal on what the individual does with that performance information?
• In such a system, a person’s ability to use information wisely becomes more important than short-term performance data.
• Here are 10 guidelines for creating a better performance management system:
  1. Determine whether you intend the system to be evaluative or developmental.
  2. Reduce any perceived threats in the system.
  3. Develop self-control-get feedback to the person who will use it first.
  4. Ensure that everyone can win.
  5. Eliminate explicit or implicit forced distribution.
  6. Avoid unnecessary or meaningless distinctions.
  7. Evaluate people on their willingness and demonstrated ability to learn.
  8. Give each person the responsibility for demonstrating the value that they create for the organization.
  9. Every system should require a complete analysis of learnings and areas for improvement.
  10. Get rid of any job descriptions that are not redesigned frequently.
• The, attitudes of the company toward employee development, encouraging employees to use their full talents in the workplace enhance commitment of employees to the company. As employees develop, their human capital increases and their self-worth and economic productivity increases.

An Uneasy Look at Performance Appraisal, by Douglas McGregor, originally published in the May-June 1957 issue of HBR

• The more the method is used, the more uneasy I grow over the unstated assumptions which lie behind it. This article has two purposes:
  1. To examine the conventional performance appraisal plan
  2. To describe an alternative
• Formal performance appraisal plans are designed to met three needs, one for the organization and two for the individual:
  1. They provide systematic judgments to back up personnel actions
  2. They are a means of telling a subordinate how he is doing
  3. They also are being increasingly used as a basis for the coaching and counseling
• appraisal programs tend to run into resistance from the managers who are expected to administer them.
• boss’s resistance is usually attributed to the following causes:
  • A normal dislike of criticizing
  • Lack of skill needed to handle the interviews
  • Dislike of a new procedure with its accompanying changes
  • Mistrust of the validity of the appraisal
• Training programs designed to teach the skills of appraising and interviewing do help, but they seldom eliminate managerial resistance entirely
• The conventional approach, unless handled with consummate skill and delicacy, constitutes something dangerously close to a violation of the integrity of the personality.
• The respect we hold for the inherent value of the individual leaves us distressed when we must take responsibility for judging the personal worth of a fellow man.
• The modern emphasis upon the manager as a leader who strives to help his subordinates achieve both their own and the company’s objectives is hardly consistent with the judicial role demanded by most appraisal plans.
• Most subordinates tend to underestimate both their potentialities and their achievements. Moreover, subordinates normally have an understandable wish to satisfy their boss, and are quite willing to adjust their targets or appraisals if the superior feels they are unrealistic.
• Effective development of managers does not include coercing them (no matter how benevolently) into acceptance of the goals of the enterprise, nor does it mean manipulating their behavior to suit organizational needs. Rather, it calls for creating a relationship within which a man can take responsibility for developing his own potentialities, plan for himself, and learn from putting his plans into action.
• One of the main differences of this approach is that it rests on the assumption that the individual knows-or can learn-more than anyone else about his own capabilities, needs, strengths and weaknesses, and goals.
• The proper role for the superior, then, is the one that falls naturally to him under the suggested plan: helping the subordinate relate his career planning to the needs and realities of the organization.
• the knowledge and active participation of both superior and subordinate are necessary components of this approach.
• Another significant difference is that the emphasis is on the future rather than the past. Appraisal thus becomes a means to a constructive end
• The accent is on performance, on actions relative to goals
• There is little chance that a man who is involved in a process like this will be in the dark about where he stands, or that he will forget he is the principal participant in his own development and responsible for it.
• As a consequence of these differences we may expect the growth of a different attitude toward appraisal
• The particular mechanics are of secondary importance. The machinery of the program can be adjusted to the situation.
• if this approach is accepted, the traditional ingenuity of management will lead to the invention of a variety of methods for its implementation.
• Of course, managerial skill is required. No method will eliminate that.
• There is one unavoidable cost: the manager must spend considerably more time in implementing a program of this kind.

New keys to employee performance and productivity, Luthy (1998)

• Public management must discard the longevity-based compensation system and develop an employee performance-based compensation system. Performance development planning should cover criteria for accurate evaluation, career management, peer and client reviews, and employee-to-supervisor feedback.
• Almost 20 years have passed since public managers began recognizing that traditional performance measurement and employee evaluation systems were inadequate, however more than 80 percent of surveyed government organizations still use outdated performance evaluation processes
• money alone does not motivate employee performance nor reinforce loyalty. It is a “satisfier” that enables an employee to meet needs, and to some degree reflect their status.
• public organizations have floundered among simplistic approaches to employee performance evaluation and correspondingly weak attempts to link performance with pay
• Longevity continues to drive far too many compensation decisions, encouraging almost an implosive survivalist mentality rather than collaboration
• individual contributions must be based on clear direction. Without such clarity, employees have no such expectations to meet
• Only when time is taken to develop a job model for each employee, with detailed assignments and an opportunity for peer review, will evaluation be worthwhile and provide a sensible basis for personal and professional development
• Formal and informal research consistently reveals that employees desperately want to be judged on their accomplishments and to seek new opportunities
• want to be recognized and rewarded for their unique contributions
• How, then, can a manager thoughtfully guide an operation in a manner that encourages high productivity, accurately depicts who is actually performing, and establishes a nonintrusive system that monitors and documents true employee contribution?
• In an evolved system, supervisors and employees work together to create an employee contribution and development plan that is specific to the employee and his or her position.
• Developed and used properly, this plan will determine progress toward annual objectives, the achievement of important professional development goals, and the successful implementation of agreed-upon actions
• Quarterly or semiannual progress updates, plus an annual review, also provide excellent opportunities to promote ongoing communication between employees and supervisors.
• Perhaps most important here is a new process that removes much of the subjectivity from performance evaluation and replaces it with objective criteria derived directly from established job responsibilities
• A key success factor, of course, is cooperation between employees and supervisors, requiring supervisors to actually teach, mentor, and plan with employees
• Seven types of input, or “dimensions,” critical to fostering continuous improvement:
  1. Core/Job-Specific Attributes
  2. Technical Knowledge and Skills
  3. Interpersonal Characteristics and Skills
  4. Job-Related Goals, Key Objectives, and Assignments
  5. Career Management, Personal and Professional Growth and Development
  6. Peer/Customer Review
  7. Employee-to-Supervisor Feedback
• With the growing popularity of “360-degree reviews,” dimensions 6 and 7 provide a means of review that will become quite common over the next three to five years
• The process has been developed to set clear boundaries regarding what the organization expects, what the job requires, what outcomes need to be achieved, and what areas of growth and development will prove beneficial.
• This type of “performance contracting” has been around for many years and has been successful when properly implemented.
• implementation must be thoughtful and well planned.
• The process positively changes the work environment and alleviates the ordinate/subordinate relationships that destroy teamwork and initiative.
• Because a primary emphasis has been placed on strategic planning for public agencies, it has become increasingly apparent that, to have meaning, performance planning and evaluation must be tied to strategic plans
• Written properly, plan actions and strategies will identify accountable parties who can be evaluated on whether and how well the agency’s goals, objectives, and/or recommended actions have been accomplished
• By clarifying expectations, goals, and assignments, plus describing the knowledge and skills required for success, an organization can build an enduring foundation for employee performance measurement and for consistent process improvement.

Quality results from performance appraisals, Teckchandani & Pichler (2015)

• Managers who take time outside of the formal performance appraisal process to seek common ground, practice reciprocity, understand their employees and provide informal feedback will develop trust and support that will enhance workforce productivity.
• almost every organization uses performance appraisals, yet only 6 percent perceive appraisals as being effective
• employee performance actually decreases after a performance review about 60 percent of the time.
• A significant amount of work has been dedicated to how to improve performance appraisals, generally focused on how to prevent rating errors
• there is little evidence connecting some so-called best practices with employee performance
• A focus on the way employees react to appraisals is part of what is known as a “qualitative approach” to performance appraisal.
• employee participation in the performance appraisal review and getting favorable ratings help improve how employees react
• neither of these factors was as important as the quality of the relationship between manager and employee
• relationship quality was almost twice as important as the employee’s performance rating
• When you use an approach that involves building high quality relationships, characterized by trust and support, with all of your employees, they will react more favorably to the performance appraisal review.
• managers tend to form high-quality relationships with employees they like more and low-quality relationships with employees they like less.
• liking is based more on interpersonal similarity than on employee performance
• this tendency undermines the effectiveness of performance appraisals
• every employee needs to feel at least a basic level of support and trust from their manager
• Trust is the willingness to be vulnerable to another part
• Academics have found that trust is associated with enhanced job performance and enhanced citizenship behaviors
• three tips to help you be seen as more trustworthy by your employees:
  1. Emphasize common ground
  2. Lead with small acts of reciprocity
  3. Understand your employees
• Trust and support go hand in hand
• Supportiveness can reduce stress and improve employee productivity
• two main types of supportiveness: emotional and instrumental
  • Emotional = valued and accepted
  • Instrumental = providing employees with the tools and resources that they need to be effective
• tips to help you be seen as being more supportive by your employees:
  • Make yourself accessible to your employee
  • truly care about their well-being
  • Treating each employee uniquely is a sophisticated form of emotional support that goes a long way
  • give effective informal feedback
• building relationships characterized by trust and support with your employees will lead to more positive reactions to the performance appraisal process, which will lead to outcomes such as improved job attitudes and performance

Square Pegs and Round Holes, Gravina & Siers (2011)

• The Organizational Behavior Management discipline focuses almost exclusively on the developmental component, while the Industrial and Organizational Psychology discipline is focused on use of performance appraisals
• performance data should be an output of a Performance Management process, not as an input or starting-point for developmental activities
• An optimal performance management system that serves both the developmental and administrative functions can be created by carefully combining the approaches of both disciplines.
• appraisals are ubiquitous because they help organizations accomplish two important administrative functions: documenting performance and making comparisons between employees
• evaluative component associated with performance appraisal and the developmental aspects of associated with performance management should be intertwined
• performance management should serve six functions:
  1. linking work behaviors to the organization’s strategic purposes
  2. serving as a basis for administrative decisions
  3. communicating performance standards and performance feedback to employees
  4. establishing developmental objectives for training and coaching activities
  5. providing data for organization-wide maintenance and interventions
  6. documenting performance records for organizational and legal purposes
• performance appraisal is focused on the measurement of work performance. goal is to take a “snapshot.” typically involves a combination of subjective ratings and “objective” indices
• traditionally conducted too infrequently and too vague to improve and sustain performance
• Ratee perceptions of the process are often poor as well
• Objective criteria has well-documented drawbacks. Can be differentially deficient or contaminated depending on the situation and job in question
• Direct observations are conceptually problematic as well. Requires observers to make judgments based on operational definitions, which may introduce subjectivity. Also very time intensive
• Performance management is defined as a “continuous process of identifying, measuring, and developing the performance of individuals and teams and aligning performance with the strategic goals of the organization”
• Regular feedback about performance is essential, developmental “coaching is inherent in the process,” widens the focus of traditional performance appraisal to include a greater emphasis on employee development
• a good performance management system should not limit employee development in order to accomplish other goals
• OBM and I-O research has identified other important factors for developing and improving employee performance, namely regular feedback and consequences.
• the best performance management process incorporates components that embody the positive elements of both approaches
• A key consideration in process design must be how to identify the elements of performance that should be evaluated. I-O psychologists recommend use of a systematic process of job analysis. Also a legal requirement that many HR functions be based on job data
• effective performance improvement solutions focus on a few of the most important objectively measureable behaviors and results
• Many organizations now use competency modeling instead of job analysis as a basis for the creation of performance appraisal
• the legality of competency modeling has not yet been well-defined by the courts as a substitute for a thorough job analysis
• a simple process of “mapping” job tasks onto a competency model would highlight job tasks most related to those organization-level objectives
• a performance appraisal should not be an input to a performance management system, but rather an output or summary of behavioral and performance data collected as part of a performance management process.
  • If performance appraisal is an input, then the appraisal serves as the primary source of data and other activities occur separately to improve performance. Here the appraisal acts as a benchmark used to assess change in performance and compare to other employees
  • If performance appraisal is an output, then data is gathered continually throughout the year. Objective data, direct observation data, critical incidents, and subjective rating data can be routinely added to a database. The appraisal “instrument” is then essentially a summary of the data, facilitating developmental efforts throughout the year. Examples include balanced scorecards and performance dashboards. Emphasis shifts from assessment to development.
• Technology could greatly aid this becoming a reality in organizations. Easy to imagine performance data being input into websites and “performance dashboards” dynamically generating performance indices.
• An effective process will go a long way to improve the poor reactions often associated with performance management and focus managers on management
• Performance appraisal is best conceptualized and implemented as an output and not an input of the performance management process
• our clients deserve the state of the art, not dogma related to our discipline

SHRM optional readings - week 7

Performance Management, Pynes (2004)

• Performance evaluations are an important components of evaluating KSAOCs among an organization’s workforce, and are used to support job analysis and recruitment efforts
• Performance evaluation systems are indispensable for planning and research
• There should be a positive relationship between the methods and criteria used to screen employees and successful performance
• Performance appraisal is one of the most researched and written-about topics in HRM literature
• The process is universally disliked by raters and ratees
• The integrity of a performance appraisal system depends on the raters’ and ratees’ understanding of its objective
• Ratees who receive training and understand the evaluation system tend to be more committed to its goals
• Common rating errors
  • Halo effect - excellence in one quality influences a higher-than-deserved rating on other qualities
  • Central tendency - rating of average or around the midpoint for all qualities, an easily rationalized escape from making a valid appraisal
  • Strict rating - Rating consistently lower than normal or average
  • Lenient rating - Rating consistently higher than normal or average
  • Latest behavior - Rating influenced by the most recent behavior
  • Initial impression - Rating based on first impressions
  • Spillover effect - Past performance ratings, good or bad, result in a similar rating for the current period
  • Same as me - Rating higher than deserved because the person has qualities or characteristics similar to those of the rater
  • Different from me - Rating lower than deserved because the person has qualities or characteristics dissimilar to those of the rater
• The National Center for Nonprofit Boards recognizes that there is no one best technique that can be used to evaluate chief executive-as-leader
• Four general methods for evaluating chief execs
  • Intermittent or continuous observation by board members, especially the chairperson
  • Periodic assessment of the chief executive by the board’s chairperson or other board members
  • Annual board committee review designed to assess the state of the agency and the chief executive’s performance
  • Full-dress public assessment of the chief executive, including formal hearings and survey data from an extensive variety of interested parties
• Regardless of the type of assessment used, chief executives must have advance notice of the board’s expectations and of the criteria used for the evaluation
• Strategic purpose of the chief executive’s evaluation is to strengthen the agency by improving its management
• Boards should also support and encourage executives’ participation in professional development activities
• One way of documenting performance through the evaluation period is by maintaining employee performance logs. By documenting performance throughout the evaluation cycle, raters are able to provide specific feedback and to minimize their susceptibility to common rating errors.
• For many employees, positive reinforcement is a powerful motivator
• For employees whose performance must be improved, supervisors should recommend some potential strategies for employee development
• The evaluation process should open up communication between supervisors and employees
• Deliberate distortion of performance evaluations can be discouraged by the organization by not only requiring documentation to substantiate ratings but also by holding supervisors accountable for their ratings
• There are three general approaches to performance appraisals:
  1. Absolute methods evaluate the employee against their own standards, without referring directly to other employees
  2. Comparative methods evaluate the employees in one unit relative to everyone else in the group
  3. Goal setting evaluates whether the ratee attained predetermined goals
• Differences in the types of data collected - objective data or subjective measures
• The types of data and performance standards used should be based on a current job analysis
• Common types of evaluation instruments:
  1. Trait rating - Raters are provided with a list of personality characteristics, then assign a rating number to an adjective. Tends to be subjective
  2. Behavioral-anchored rating scales (BARS) - Raters evaluate employees using a set of behavioral descriptions. BARS rely on employee behaviors - what employees actually do and ewhat is under their direct control. Disadvantage to BARS is that development is time-consuming and complex
  3. Essay - The rater writes a narrative essay describing the employee’s performance
  4. Productivity data or work standards - Raters evaluate employees on expected levels of output and quality of output
  5. Management by objectives - Raters and employees together determine goals or objectives and a plan of action for achieving them
  6. Critical incidents - Raters record actual incidents of successful or unsuccessful performance or work actions
  7. Personnel data - Raters tabulate information such as the number of absences or the number of times employees report to work late
• Each evaluation instrument has advantages and disadvantages. It’s important that a chosen appraisal instrument be congruent with the objective for the evaluation and suitable for the positions being evaluated
• Because the responsibilities of different jobs vary, different instruments or even different evaluation procedures might be needed
• Alternative performance management techniques
  • Total Quality Management (TQM) - name given to a variety of management systems designed to improve organizational quality. Founded by Denning, who believed the following steps are necessary:
    1. Create consistency of purpose for the continuous improvement
    2. Break down barriers between departments to build teamwork
    3. Drive fear out of the workplace
    4. Eliminate quotas on the shop floor
    5. Create conditions that allow employees to have pride in their workmanship, including abolishing annual performance reviews and merit ratings
    6. Institute programs of education and self-improvement
  • TQM promotes the continuous improvement of procedures from the top to the bottom. Unlike traditional management techniques that emphasize control, in TQM quality is achieved by improving the process, not by blaming employees
  • Gainsharing - a group incentive plan that distributes gains from improved performance to employees
  • Goalsharing - Also pays bonuses when performance is above standard, difference is that goalsharing plans seek to leverage an organization’s operational strategy by measuring performance on key strategic objectives. Typically used when the external environment is rapidly changing and the org wants to target a particular kind of performance improvement
• Quality improvement processes are not antithetical to the performance evaluation process. If done correctly, quality improvement processes require the development of performance standards and of measures. Key to success of any of these are the personnel policies and rules that support the total-quality environment of the org.
• Performance evaluations should be objective, job-related, and consistent with the org’s mission. They should enhance the org’s effectiveness.
• Performance evals are used to support many HRM functions, but because the appraisal process and instruments cannot serve all purposes simultaneously, the organization must first develop the appropriate instruments and performance management system

Putting a value on training, Cermak & McGurk (2010)

• Using a capability model that appraised nearly 50 aspects of leadership, BGCA to correlate each aspect of leadership with local organizational performance
• Four out of the 50 aspects contributed disproportionately to performance:
  • the leader’s ability to build an effective board
  • find and pursue effective revenue-development strategies
  • use an investor’s mindset toward programs and resource development
  • lead with personal tenacity and persistence
• built its training program around those four subject
• Because the program was designed to improve specific organizational-performance outcomes, the process of assessing its impact was straightforward.
• On average, locations where the leaders had been trained bested the control group on every performance outcome measure
• Picking the right metrics is the key to creating real value from training.
• companies must continually review and revise the links between skills, performance, and training programs
• By tying the curricula of training more closely to key performance metrics and then measuring its impact on them, organizations can generate greater value from training programs and find useful insights to improve programs constantly

Seven biggest problems with performance appraisals: and seven development approaches to rectify them, Davis (2011)

• Poorly developed and administered appraisals result in diminished levels of employee satisfaction
• seven common and persistent failures of performance appraisals that undermine their value and reliability:
  1. Direct bias - biases often influence the supposedly objective ratings a manager
  2. Indirect bias - organizations have their own social, cultural and political environments, these factors influence how managers perceive performance
  3. Competency - Only some organizations train managers on how to conduct a performance appraisal, and very few train non-managers on how to effectively participate in one. This leads to inconsistencies
  4. Devolution - Appraisal processes are often designed by HR and then rolled out. Line managers have no say, and claim a lack of support from HR when they have difficulties. This causes confusion, resentment and a lack of “buy-in”
  5. Authoritarianism * Appraisal meetings are often manager-centric. There is a power imbalance. Many employees feel threatened, worried and defensive at a time when they should feel empowered and confident
  6. Informal, incidental and ongoing appraising - Many organizations view performance review and assessment as an event; are not formally trained or supported to give ongoing, informal or incidental performance feedback
  7. Information collection - the 360 degree tool may be misused and exploited. It adds more subjectivity to a process and allows for poor quality information to be provided
• Training can be an effective and inexpensive solution to the problems inherent in performance appraisal systems:
  • Managers should be made aware of the biases that can come into play
  • Small groups can look at different environmental factors that impact on appraisals and devise strategies to counter these.
  • All employees should be trained on how to participate in a performance evaluation session
  • Line managers need support to ensure there is consistency across the organization on how to conduct appraisals
  • Managers should receive training on strategies to maximize the involvement of the employee during evaluation
  • Coaching could be provided to managers on ways to give incidental, ongoing and informal performance feedback to team members
  • Training should be provided to all employees on how to provide and collect anonymous feedback that is balanced, relevant and constructive

Stimulating Informal Learning Activities Through Perceptions of Performance Appraisal Quality and Human Resource Management System Strength, Bendall et. al. (2014)

• Although employees’ knowledge and expertise are often accrued through formal training programs, informal learning activities—such as reflection on daily activities, knowledge sharing with colleagues, and innovative behavior—also make an important contribution
• Performance appraisal creates an explicit link between individual performance and the organization’s strategic goals, helps employees identify learning needs and provides a framework for setting development goals
• In contrast to formal learning, informal learning occurs outside a classroom or training program; it is typically not institutionally sponsored or highly structured, and it is usually directed by the learners themselves
• Informal learning has the advantages of being timely, context-specific, relevant to employees’ individual learning needs, by being social, and divisible into small-time chunks
• understanding the factors that encourage participation in such activities is crucial for the employee and organizational performance
• Three prominent informal learning activities:
  1. Reflection includes activities such as assessing progress toward goals, identifying strengths and weaknesses, and devising approaches to overcome perceived obstacles
  2. Knowledge sharing includes activities such as exchanging ideas with colleagues, discussing problems, and seeking advice
  3. Innovative behavior includes generating (or adapting) novel solutions to problems, convincing colleagues to adopt new approaches, and ultimately implementing them within the organization
• while we assume that levels of participation in each informal learning activity will generally remain stable over time, we expect that any changes will be related to the organizational context
• Employees choosing to participate in informal learning activities tend to have high confidence in their ability to perform their jobs successfully, a learning goal or orientation, personal goals aligned with their employer’s goals and values, high levels of job satisfaction, and intentions to remain within their current career in the long term
• Employees are also more likely to participate in informal learning activities if they work in organizations with strong transformational leadership, a culture of participative decision making, and effective knowledge management systems
• With regard to management policies, employees are more likely to participate if they receive their manager’s support, and if sufficient time is allocated to these informal learning activities
• performance is likely to be enhanced by feedback that provides correct information about current and desired levels of performance
• feedback should encourage open dialogue
• Employees also tend to receive feedback more favorably when procedures for determining performance ratings are explained
• feedback is thought to encourage the setting of meaningful learning goals to build on strengths and redress weaknesses
• Employees who can make sense of HRM and understand what is expected from them tend to report higher levels of job satisfaction, organizational commitment, and participation in organizational citizenship behaviors
• Ultimately, positive attributions about HRM have been found to lead to greater performance of employees
• Employees may be more inclined to participate in learning activities if HR practices are seen as consistent in supporting the development of employees’ knowledge and expertise
• Our findings here suggest that both the content (performance appraisal quality) and the process of HRM (HRM system strength) influence the willingness of employees to participate in informal learning activities.
• High-quality performance appraisal appears to promote increases in reflection, knowledge sharing, and innovative behavior over time
• Informative feedback could produce more effective self-regulation of learning and ultimately enhance performance
• By receiving accurate information about their performance, employees may feel more confident in making informed choices about suitable informal learning activities, and therefore, may feel encouraged to increase their participation
• supervisors who give effective feedback may provide accompanying development goals, mentoring, or suggestions for learning activities, which may prompt greater participation
• the combination of high-quality performance appraisal and a strong HRM system may signal to employees that ongoing improvement is highly valued by the organization, and that participation in informal learning activities will be regarded positively
• a strong HRM system may lead to organizational resistance to change if the content of the system did not include practices focused on innovation and flexibility
• Voluntary participation in informal learning activities may enhance individual performance through knowledge acquisition and practice, ultimately leading to increased organizational performance
• In low power distance cultures with potentially more informative feedback and greater managerial support, employees may feel empowered to participate more frequently in informal learning activities
• In individualistic cultures, employees may be expected to be more autonomous and feedback is more likely to be focused on performance of individual employees as opposed to teams. Employees in individualistic cultures may focus more on self-improvement in response to performance appraisal, as opposed to working collaboratively to enhance the performance of their teams.
• implications:
  1. organizations can promote informal learning activities by supporting its supervisors to deliver high-quality performance operations
  2. organizations could empower supervisors to facilitate employee participation in informal learning through complementary HR practices
• In conclusion, our study revealed that performance appraisal quality encourages informal learning activities over time, and that this positive effect is augmented when employees have an unambiguous interpretation of what is expected from them
• Organizations would benefit substantially by assisting managers in delivering high-quality performance appraisals, using observable HR practices to promote a strong learning culture, and having an integrated set of practices designed to support the continuing development of employees