Are Standards Standard ? Integration of Goals &
Performance Management


By

Dr. H.C. Gurnani
Reader
Department of Economics, N.M.S.N Dass (P.G.) College
Budaun
&
Deepa Gupta
Asst. Professor
Department Of Management Studies
IILM - Academy of Higher Learning
Plot No. 17-18, Knowledge Park-II, Greater Noida
&
Mukul Gupta
Asst. Professor
Department Of Management Studies
IILM - Academy of Higher Learning
Plot No. 17-18, Knowledge Park-II, Greater Noida
 


The evolution of the concept of performance management as a new Human Resource Management model reflects a change of emphasis in organisations away from command-and-control toward a facilitation model of leadership. This change has been accompanied by recognition of the importance to the employee and the institution of relating work performance to the strategic or long-term and overarching mission of the organization as a whole. Employees' goals and objectives are derived from their departments, which in turn support the mission and goals of the Organisation.

The performance management process provides an opportunity for the employee and performance manager to discuss development goals and jointly create a plan for achieving those goals. Development plans should contribute to organisational goals and the professional growth of the employee. The planning process must also involve consideration of the emerging organisational environment.  Demographic change, increased pressures, competition, pressures to constrain administrative costs, regulatory and policy pressures, higher transaction volumes and services expectations and greater influence of customers or constituents all have a part in changing the way that we do our work.

Every manager knows you can't improve what you can't measure. That's why managers are always looking for ways to measure performance. They want to measure the performance of products and services to determine which ones generate the most profit. They want to measure the performance of business units and locations to determine where they should invest for growth. They want to measure the performance of customers to pinpoint lucrative demographics. They want to measure the performance of individuals to determine who is contributing to the company's success - and who needs more job enrichment/ job rotation/transfer/ promotion or who has to be fired.

Many managers have had bad experiences with formal performance management systems.  Many systems are poorly designed and do more to de-motivate than motivate employees.  A well-designed system will give them the power to:

  • Retain their best employees,
  • Give these employees a reason to maintain their good performance,
  • Deal with poor performers appropriately, and,
  • Attract the type of employee that they need

Performance measurement, however, is harder in some markets than in others. If you're making candles or breads, for example, it's pretty easy to figure out your unit cost and your profit margin. It also tends to be relatively easy to spot your top salespeople and your most productive assembly lines. For financial services companies, on the other hand, performance measurement is a major challenge. Factors such as risk and the cost of capital must be factored into profitability calculations. Selling costs are often difficult to capture. Plus, the sheer range of offerings that must be tracked and managed - from simple savings accounts to sophisticated wealth management services - can often be overwhelming.

Business performance management takes a holistic approach to the way in which organizations manage themselves and their relationships with customers, partners, suppliers and employees. It empowers every department in a company to set, measure and hit its goals and brings the results together in a way that promotes cross-functional collaboration across the entire enterprise.

When performance standards are in place, both you and your employees will know what the expectations are for the performance of essential functions and related tasks. This common understanding provides the basis for ongoing feedback and performance counseling between appraisals as well as for the formal performance appraisal process.

Developing Standards Collaboratively:

There are a number of approaches to developing written performance standards. One is the directive approach in which the performance manager writes the standards, in consultation with management and the Employee Relations representative for his or her department. Then the standards are shared with the employees affected for their information and to address any questions they may have.

Another is a collaborative approach in which employees work with you to develop the performance standards for their positions. While it is a legitimate option to develop the standards without employee input, the benefits of a collaborative approach are important. Both the performance manager and the employee bring valuable information to the process and the end result is more likely to be supported by everyone involved.

Performance manager, however will make the final decision about the appropriateness of the standards in consultation with management and the Employee Relations consultant of the department. Mutual agreement with the employee about standards is preferable, but not always possible. Mutual understanding and recognition of the standards is necessary.

In the collaborative process of developing standards for a task or function, include all of those employees whose work will be evaluated according to those standards. If the task or function is unique to one position, then include the employee in that position in the development process. If the task or function is performed by more than one employee, involve all employees whose job description includes it. For the sake of fairness and consistency, consider collaborating with other units in a department if employees reporting to different performance managers perform the same tasks or functions.  Before meeting, explain to everyone involved exactly what performance standards are, why they are important, and how they will be used. Confirm that the employees understand the process and solicit their comments and questions. Tell them that you would like to work together to develop standards for their positions and that their recommendations and concerns will be considered seriously. Describe the process you will follow. Also explain that it is your responsibility to make the final determination about the appropriateness of the standards.

Writing the Standards:

Make sure that all participants in the standards writing process have access to the following documents:

    • An up-to-date copy of their job description
    • A copy of the department mission and goals, if available
    • The form for the performance appraisal model used in your Vice Chancellor area.

You may find that it is appropriate to define standards which apply to an entire essential function, though typically standards are developed for related tasks. It is not necessary to write a performance standard for every task in a job. Focus on those which are most important to the position.

Discuss and describe those behaviors and results which would constitute the minimum acceptable performance for the task or function. Performance which satisfies those standards will receive the rating of solid performance. You may also describe the behaviors and results that would demonstrate performance which would exceed expectations, and/or would fall below expectations. The same principles apply to the development of standards, regardless of the rating.

Standards should be written in clear language, describing the specific behaviors and actions required for work performance to meet, exceed or fail to meet expectations.

Use specific terms describing measurable or verifiable features of the performance

1. Describe performance expectations in terms of timeliness (deadlines, dates), cost (budget constraints, limits), quality (subjective and objective measures of satisfaction), quantity (how many), customer satisfaction, independent initiative demonstrated and any other relevant verifiable measure.

2. Specify the acceptable margin for error. It is very rare for perfection to be an appropriate standard, even for outstanding performance.

3. Refer to any specific conditions under which the performance is expected to be accomplished or performance assessed. Statements like the following refer to the conditions under which the task or function is done: 1) with training from Frank , 2) using job aids provided by Ly, 3) assuming all required information is received on time from department, 4) assuming [this task] is performed 50% of the work day.

Written performance standards may also be developed for the general categories to be evaluated, found under Significant Performance Dimensions of Performance Appraisal Model Three: initiative/innovation, teamwork/collaboration, leadership, decision-making, etc. and, when appropriate, optional dimensions such as cost control. Develop standards for these categories with the particular position as well as the needs of the organization in mind.

If you supervise a supervisor, collaborate to develop performance standards for the supervisory categories of leadership, delegation, development of subordinates, performance counseling, and affirmative action.

Performance standards may be written to different levels of complexity. The more general the applicability, the harder it is to be specific.

Guidelines for Performance Standards

Keep in mind the following guidelines when writing your performance standards:

  • Performance standards should be related to the employee's assigned work and job requirements.
  • Your reporting systems should be adequate to measure and report any quantitative data you list.
  • Quantifiable measures may not apply to all functions. Describe in clear and specific terms the characteristics of performance quality that are verifiable and that would meet or exceed expectations.
  • Accomplishment of organizational objectives should be included where appropriate, such as cost-control, improved efficiency, productivity, project completion, process redesign, or public service.

Checking Your Standards

After you have written your performance standards, check them against the questions in the following list:

1. Are the standards realistic? Standards should be attainable and consistent with what is necessary to get the job done. Standards for performance which meets expectations represent the minimum acceptable level of performance for all employees in that position.

2. Are the standards specific? Standards should tell an employee exactly which specific actions and results he or she is expected to accomplish.

3. Are the standards based on measurable data, observation, or verifiable information? Performance can be measured in terms of timeliness, cost, quality and quantity.

4. Are the standards consistent with organizational goals? Standards link individual (and team) performance to organizational goals and should be consistent with these goals. The success of the organisation's and department's missions depends on this strategic connection.

5. Are the standards challenging? Standards may describe performance that exceeds expectations. Recognizing performance that is above expectations or outstanding is crucial to motivating employees.

6. Are the standards clear and understandable? The employees whose work is to be evaluated on the basis of the standards should understand them. Standards should use the language of the job.

7. Are the standards dynamic? As organizational goals, technologies, operations or experiences change, standards should evolve.

By first using the peer assessments as a developmental tool more than as a measurement device, the employees will be given an opportunity to familiarize themselves with the concepts and skills needed to complete the surveys. However, they will not have the added pressure that can be felt when the evaluations are being used as the basis of setting performance standards and reward distribution. As the employees become more confident in working with the reviews, the assessments can start to evolve into sources of information for feedback. Then eventually be used as a means of setting performance criteria and developing compensation plans. In addition, a definite procedure can be developed for administering the assessments.

This includes establishing direction for the desired behaviors; clarifying the needs of stakeholders; setting challenging but attainable goals and objectives; establishing a metric system; and developing a system for maintaining the desired performance with positive reinforcement. When performance is defined correctly in an organization, it can not only lead to increased productivity, but it can also help identify problems so that new standards can be established. The defining of performance is an ongoing cycle that is constantly changing as the needs of the organization change, and as performance assessments identify areas that can be improved. Properly defining performance in an organization can be the most crucial part of the performance management system, and should be done by all the levels of the organization that are involved.

Objectively measure performance. If it is not objective, it will not operate as a system but be continually challenged by employees or managers. Objectivity can be achieved by setting competency standards or goals for various levels of performance, explaining how each will be measured and committing to rewards or discipline for each standard during Performance Planning. Appraisal then becomes a simple and unemotional process based on objective criteria.
 


Dr. H.C. Gurnani
Reader
Department of Economics, N.M.S.N Dass (P.G.) College
Budaun
&
Deepa Gupta
Asst. Professor
Department Of Management Studies
IILM - Academy of Higher Learning
Plot No. 17-18, Knowledge Park-II, Greater Noida
&
Mukul Gupta
Asst. Professor
Department of Management Studies
IILM - Academy Of Higher Learning
Plot No. 17-18, Knowledge Park-II, Greater Noida
 

Source: E-mail May 16, 2006

     

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