Performance Review

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Agenda

In this video, we discuss the following topics:

• Understanding underperformance

• Definition and concept of performance review

• Different aspects of employee development through performance review

• Different types of performance review

• Concept of performance review meeting

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Performance Review

Introduction
• A critical part of performance management is the effective management of the employee whose performance is
not meeting the required standard.

• There is a basic fundamental question that needs to be addressed, i.e. whether underperformance is because of
incompetence or poor attitude?

• Organizations need to understand and bridge this gap between expected and actual performance.

• A systematic approach to identification of the underlying cause of underperformance is required if appropriate

managerial action is to be taken and a positive outcome achieved.

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Possible reasons for Underperformance

• There could be communication problem, where the employee may not know what the manager wants them to
achieve. So the task of the manager is to clarify the tasks and performance standards required for optimal
performance.

• The employee may be aware of what he/she is expected to do but may not have the competence, skills or the
knowledge to do the task. This is a learning issue and necessary training to be provided to be able to do that skill.

• The employee knows what is required but do not have the resources required to do the task, thus falling below
the required standard of performance.

• The employee knows what is required to be done and know how to do it, but does not want to do it as they may
not understand the importance of the task. This may also have to be addressed at the attitudinal level.

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Performance Review

• Organizations use informal reviews all the time and use this to manage performance.

• Performance review is an ongoing process and there is a constant evaluation of what has happened and what
should have happened.

• A formal performance review meeting is done to evaluate the performance more systematically and includes the
overview of performance from last time, comparing them and agreeing on future expectation and plans.

• The success of the organization depends on employees’ performance and how they develop over the period of
their tenure with the organization.

• In the process, performance review develops organizational capabilities to compete, making available the best-
talented people for work.

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Performance Review Defined

• Performance review is defined as an ongoing process used by organizations to document expected results,
standards of performance, and evaluation of performance.

• It also tracks the progress towards achieving the results, assesses how well the performance results are achieved,
provides suggestions, and so also gives the guidelines to follow the suggestions to improve future performances,
etc.

• Every employee’s performance curve goes up and down; hence it cannot be assessed unless it is continuous.

• A performance review discussion involves a formal discussion about the employee’s development.

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Performance Review (Cont.,.)

• Formal reviews needs to document the decisions and actions that occur on a regular basis. There is no surprise
element in the review process.

• A formal discussion should review and document what both parties (appraiser and appraisee) have informally
agreed upon.

• Therefore, performance review is an analysis of an employee’s work habits undertaken at a fixed point of time to
determine the degree to which stated objectives and expectations have been reached.

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Types of Performance Review

Probationary review
• It is the general trend to hire employees on probationary terms, may be for a period from, 6 months to 1 year, on
satisfactory completion of which they are confirmed.

• It is intended to ensure that employees are the right-fit with the organization in terms of performance; also it
facilitates recruitment validation.

• If the employees are unable to perform up to the expected standards, organizations can persuade them to leave.
This process has legal mandates.

• Probationary review, therefore, assesses employees’ performance during their period of probation, based on
which they are either confirmed or released from the organizations.

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Types of Performance Review (Cont.,.)

Rehiring review

• Often employees may voluntarily leave the job, or organizations to right size, or on poor performance count, may
ask them to leave.

• Even after such employment cessation, employees may be rehired.

• At this time, organizations make use of the rehiring review.

• The process in this case is more or less like probationary review, as in this case also rehired employees’
performances are reviewed for subsequent confirmation of their employment or termination.

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Types of Performance Review (Cont.,.)

Self review
• Self-review requires employees to review their own performance.

• The process involves answering certain questionnaire items that is followed by a performance interview.

• Often a self-review system is integrated with the organizational performance review process, so as to get the right
feel about the employees’ own performance.

• In a multi-rating process, this is one of the important areas of review.

• It helps managers to correctly track the employees’ performance and effectively discuss the performance aspects
with the employees.

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Types of Performance Review (Cont.,.)

Peer review

• Often peer-review, like the self-review, forms a major part of the normal review process.

• Employees’ self-assessment may not often provide us the right performance picture.

• This can be better validated by peer-review, i.e., review of their performance by their colleagues.

• The purpose and sanctity of the performance review process may often get defeated by peer-review, as
employees may practice mutual appreciation and make it an issue of bargain.

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Process of Performance Review

The process of performance review consists of the following:

• Has clear aims and measurable criteria for success

• Designed and implemented with employees involvement
• Allow employees a clear ‘line of sight’ between performance goals and those of the organization
• Focus on clarity and performance improvement
• Supported by clear training and development infrastructure
• Links to reward and recognition
• Be regularly and openly reviewed against its success criteria

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Issues in Performance Review

• Why have them at all?

• Does it fulfill the objectives performance review

• Identification of organizational issues

• Who and what should be the focus of the review?

• Criteria to be used for reviewing performance?

• Criteria used for evaluating the effectiveness of the review

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Issues in Performance Review (Cont.,.)

• Role of management on the review process

• Skills required to conduct the review and how to train reviewers

• Should past performance be used as guide to gauge future potential.

• Time line for the review process

• Problems encountered in conducting reviews and what measures to taken to overcome those

• Evaluating the effectiveness of the review

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Some unanswered questions in Performance Review

1. How do people attend to, encode and recall behavior?

2. How do they translate the behavior they recall into rating’s of someone’s performance?
3. Why do supervisors and employees complain so much about performance appraisals?
4. Why do people say that appraisals are unfair or political?
5. Is it possible to design a performance appraisal process that actually motivates (rather than demotivates)
employees to behave in ways that benefit the organization?
6. How can appraisals work in team-based or quality-oriented work cultures?
7. How should appraisals be connected to training and compensation decisions?

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Possible suggestions and solutions

• Appraisals and feedback should focus on performance (not merely traits).

• Performance dimensions and standards should be specific and communicate to employees what is expected of
them.

• Where feasible, assessments of performance should be combined with customer data.

• Contextual performance should be explicitly assessed.

• An organization-specific competency model needs to be developed.

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Summary

Here is a quick recap of what we have learned in this video:

• Mechanisms for managing underperformance include training and development, redeployment, counselling and
disciplinary action.

• There is a continuing change and flux within organizations in terms of performance management practice.

• Real efforts are being made to hold people accountable and address poor performance.

• Linked to attempts to deal with poor performance, energy is being invested in revised ratings, improved, more
flexible approaches to forced distribution of ratings and differentially rewarding employees based on their
contribution.

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