Human Resources and Talent ManagementPerformance Management
Introduction
John Shields’ book “Managing Employee Performance & Reward” delves into various aspects of performance management and reward systems within organizations. The text provides frameworks, theoretical perspectives, and practical examples to help managers effectively implement performance and reward strategies in their organizations. This summary will cover the key points of the book, providing concrete examples and actionable steps for each major point.
1. Understanding Performance Management
Key Points
- Definition and Importance: Shields defines performance management as an ongoing process aimed at improving organizational performance by enhancing the performance of individuals and teams.
- Performance Management Cycle: The cycle includes planning, monitoring, reviewing, and rewarding performance.
- Integration with Organizational Objectives: Performance management should align with the overall strategic goals of the organization.
Examples
- Shields describes a retail company that integrates performance targets with its goal to increase market share in urban areas.
- A case study of a tech firm adopting continuous monitoring and feedback mechanisms to ensure alignment with rapidly changing industry standards.
Actionable Steps
- Action: Align individual and team objectives with organizational goals during the planning phase.
- Implementation: During quarterly meetings, ensure each employee’s objectives contribute to broader company goals.
- Action: Implement continuous performance monitoring tools.
- Implementation: Introduce software that tracks progress against metrics and provides real-time feedback.
2. Performance Measurement
Key Points
- Types of Performance Measurement: Quantitative and qualitative measures.
- Balanced Scorecard: A strategy performance management tool that includes financial, customer, business process, and learning & growth perspectives.
- Critical Incident Technique: Documenting specific instances of effective or ineffective behavior related to job performance.
Examples
- A financial services organization using a balanced scorecard approach to measure performance from multiple dimensions.
- A healthcare provider employing the critical incident technique to capture detailed accounts of exceptional patient care or lapses in service.
Actionable Steps
- Action: Develop a balanced scorecard tailored to your organization’s strategic priorities.
- Implementation: Identify key performance indicators in the financial, customer, process, and learning domains specific to your industry.
- Action: Implement the critical incident technique in performance reviews.
- Implementation: Train managers to document and discuss specific incidents during appraisal meetings.
3. Performance Improvement Plans (PIPs)
Key Points
- Objectives of PIPs: Address performance deficiencies and provide structured guidance for improvement.
- Components of Effective PIPs: Clear expectations, timelines, resources, and consequences for non-compliance.
Examples
- Shields showcases a manufacturing company that successfully turned around the performance of a lagging department through a structured PIP.
- An employee in a sales team who missed targets gets a PIP detailing specific training sessions and weekly check-ins.
Actionable Steps
- Action: Design personalized PIPs for underperforming employees.
- Implementation: Outline specific, measurable goals and provide access to necessary resources such as training programs.
- Action: Regularly review the progress of PIPs.
- Implementation: Schedule bi-weekly check-ins to discuss progress and make adjustments as needed.
4. Reward Systems
Key Points
- Types of Rewards: Intrinsic (e.g., job satisfaction) and extrinsic (e.g., salary, bonuses).
- Designing Effective Reward Systems: They should be fair, transparent, and aligned with performance.
- Equity Theory and Reward Distribution: Employees compare their reward-to-effort ratio with others.
Examples
- A tech company that rewards innovation through a combination of intrinsic and extrinsic rewards, including public recognition and monetary bonuses.
- A sales organization using tiered commission structures to incentivize higher levels of performance.
Actionable Steps
- Action: Create a balanced reward system that includes both intrinsic and extrinsic rewards.
- Implementation: Develop a program where high-performing employees receive both recognition in team meetings and financial bonuses.
- Action: Ensure equity and transparency in your reward system.
- Implementation: Clearly communicate the criteria for rewards and make sure they are consistent across similar roles.
5. Performance Appraisal Systems
Key Points
- Appraisal Methods: Traditional appraisals (e.g., annual reviews), 360-degree feedback, and self-assessments.
- Strengths and Weaknesses: While traditional appraisals can be outdated, 360-degree feedback provides a holistic view but can be time-consuming.
Examples
- A company moving from annual reviews to continuous feedback using an app that allows peer-to-peer and manager-to-employee evaluations.
- An organization that integrates self-assessment into its appraisal process to encourage employee reflection and ownership of development.
Actionable Steps
- Action: Implement a 360-degree feedback system.
- Implementation: Use online platforms to collect feedback from peers, subordinates, and supervisors for a comprehensive view of employee performance.
- Action: Incorporate self-assessments into the performance review process.
- Implementation: Provide employees with templates to reflect on their performance and identify areas for improvement before formal appraisals.
6. Managing Underperformance
Key Points
- Identifying Causes: Underperformance can stem from lack of skills, motivation, or poor job fit.
- Intervention Strategies: Training, coaching, mentoring, and performance improvement plans.
Examples
- A logistic firm identifying underperformance in its delivery staff due to lack of training, then implementing targeted skill-building programs.
- An employee struggling with motivation is assigned a mentor for guidance and support.
Actionable Steps
- Action: Diagnose the root causes of underperformance.
- Implementation: Conduct interviews and assessments to determine whether issues are skill-related or motivation-based.
- Action: Develop tailored intervention strategies.
- Implementation: Create specialized training and mentoring programs to address identified deficiencies.
7. Legal and Ethical Issues
Key Points
- Compliance with Labor Laws: Ensuring fair treatment and avoiding discrimination.
- Ethical Considerations: Transparency, fairness, and respect in managing and assessing performance.
Examples
- Shields provides an example of a company facing legal scrutiny for discriminatory appraisal practices and how it rectified the issue through training and policy changes.
- Ethical dilemmas in performance reviews where managers must balance fairness with organizational demands.
Actionable Steps
- Action: Ensure compliance with labor laws in your performance management system.
- Implementation: Regularly review and update policies in consultation with legal experts to maintain compliance.
- Action: Promote ethical practices in performance management.
- Implementation: Train managers on ethical appraisal methods and ensure transparent communication of performance criteria and processes.
Conclusion
John Shields’ “Managing Employee Performance & Reward” is an invaluable resource for understanding the complexities of performance management and reward systems. By aligning performance goals with organizational objectives, employing effective measurement and improvement strategies, and ensuring fair and transparent reward and appraisal systems, managers can significantly enhance both individual and organizational performance. The practical examples and actionable steps provided in this summary offer a roadmap for implementing best practices in performance management and reward in any organization.