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HRM547 Winter 2021

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Performance Management Exam

There was a Performance Management conference for mid-size insurance organizations (1000 to 3000
employees) in the Midwest. This is considered to be a good conference for networking and sharing ideas
because all participants are from similar organizations.

Participants were asked to provide a few bullets about their current performance management system.
Here is what they were told:

Please provide us with some highlights of your Performance Management
System. For example, you might comment on:

 How the system is connected to the organization’s strategy.

 Elements of the system, such as who provides input to appraisals and
development opportunities, your appraisal form, linkages to other
systems, etc.

While you can provide any highlights you like, you must include the following:

 What was a tough decision you had to make?

Representatives from the following three organizations (Yellow, Teal, and Red) provided the following:

Yellow Organization

 Our company is currently developing new strategic goals due to a recent merger. Our Performance
Management System is based on a working draft of these goals.

 Our system is practical and easy to use. We employ a user-friendly software where managers and
employees can enter data to evaluate the employee. We feel that the employee and managers are
best equipped to evaluate the employee. I know some other companies do not even ask for self-
evaluation and use only the manager’s input.

 We developed a quick training session to teach managers to run a meeting where they review the
company’s vision with their employees so that everyone understands it. Managers even have the
option to develop vision statements for their departments.

 We focus on employee motivation by looking at evaluating relatively stable traits. We find this is
more important than simply measuring behavior or results because traits are what an individual
carries from job to job.

 Our accountability analysis is very complete and we empower the manager to set individual
performance standards.

 One tough decision we made was to use a comparative system to measure both behavior and
results. We found using this simple rank order system much easier for managers to use. The other
choice we almost made was to develop BARS (which was tedious to develop and difficult for the
managers to use). Our managers like our comparative systems approach.

 Our appraisal form is easy to understand. Both the manager and employee provide ratings and back
them up with evidence of performance. They do not provide an overall rating, given it is not merely
a simple average of individual ratings, but a weighted average of the different objectives. The
individual ratings are entered into a system and a weighted average is computed and provided to
the manager and employee.

 We are most proud of our ongoing communication plan. Every month there is an email about the
system that addresses such issues as “How does it fit into our strategy?” or “What’s in it for you?”

HRM547 Winter 2021

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Teal Organization

 While we have a mission statement, we are guided by our vision statement, which is future
oriented. It is quite comprehensive and is only three paragraphs long. We kept it that length so we
can make links to many of our processes, such as our HR systems, and, of course, our performance
management system.

 Every manager creates department goals based on those of the organization. We are proud to say
that organization goals are clear to everyone.

 We looked at our organizational strategic plan and developed job descriptions by talking with
incumbents in the position. They were very helpful in discussing what they do and how they do it.

 In essence, we did a work analysis on every job. We found that people could not distinguish
between “frequency” and “criticality;” therefore, we only included “frequency.” This really sped up
the process, allowing us to implement the system quickly.

 Our performance management system allows input from multiple sources. We do get pushback
from some individuals saying that they are providing feedback on many people and it is quite time
consuming. We, however, feel that this multiple ratings’ approach is worth it in order to get a good
reading on every employee.

 The system feeds directly into our talent management system to help identify high potential
employees.

 Our performance review meeting is a collaborative effort, concentrating primarily on what the
employee must do to succeed.

 Employees write a paragraph or two on what they felt contributed to a goal or made its
achievement difficult. This is included as part of the appraisal form.

 We make sure that managers and employees agree on a specific development plan.

 One of the tough decisions we had to make is what academics refer to as “task and contextual
performance.” I say academic because in reality it is quite difficult to include both. We chose task
performance because it is tied to abilities and skills.

 All ratings on our appraisal form are calculated by our online system. It is a complex algorithm that
takes ratings on each dimension from the multiple raters to determine an overall score. This also
safeguards against a manager inserting too much weight on his or her assessment.

 Given we have multiple rater input, we offer an optional online training program for anyone to take
that deals with rater error training.

Red Organization

 We base our performance management system on our mission statement. Employees from a cross
section of the organization were invited to be on a task force to help create it. We felt using the
mission statement for our system was more important than using our vision statement.

 All managers are required to develop mission statements for their units that are in line with that of
the organization.

 Managers meet four times a year with each employee to discuss progress against goals.

 Our system is closely linked to all HR systems. Given this, we found it unnecessary to do a work
analysis for our jobs. It was too time consuming. Instead, managers and employees decide on the
elements to be looked at in the performance management system.

 We found it too difficult to make direct links of employee goals to that of the organization. Some
employees are too low in the organization to see the connection.

HRM547 Winter 2021

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 What we value most is that we have mandatory training for all our managers on the performance
management system. Our managers are trained and provided resources to identify key activities to
put into the employee development plan.

 Regarding an action plan for employees: our managers, who understand the job requirements and
have been taught on various developmental possibilities, outline a plan of action and the employee
has the opportunity to agree or to appeal to HR.

 Our performance management system really helps us identify the causes of poor performance. That
is because we focus the system primarily on how the work is done.

 One of our tough decisions was not to develop competencies. It is a tedious, time consuming
process. We do measure both behaviors and results, but competencies do not exist in our
organization.

 Our appraisal form includes a section for the manager to write in any conditions affecting the
employee’s performance. We used to have a section for the employee to also comment, but felt
that would have been discussed with the manager over the course of the meetings they have
throughout the year and eliminated it; therefore, simplifying the amount of required writing.

 The only numerical rating provided is one of overall performance.

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This exam is worth 32 points. Please answer all four questions below (Please number your responses).
Included next to each question is the point value (because some questions are weighted more than
others).

(1) While none of these organizations has taken an ideal approach to designing and implementing a
performance management system, which organization do you feel needs the most improvement in their
system as they described it? Please be specific in stating why you chose this organization. Cite any of our
readings, etc. to support your opinion. (8 points)

(2) Which organization do you feel has the best performance management system as it has been
described? Please also specifically state:

 The positive aspects you feel make it the best of the three

 What aspects still need to be improved (Feel free to add any questions you would like to ask
to clarify any aspects).

Your response should include citing any of our readings, etc. to support your opinion. (12 points)

(3) Look at the organization you did not choose in the previous two questions and look at the “tough
decision” they made. What feedback would you give them about their decision? Please support your
feedback by citing any of our readings, etc. (6 points)

(4) Choose any one of the three organizations. What advice would the authors of the article,
Performance Management at the Wheel: Driving Employee Engagement in Organizations, give them
with respect to employee engagement? Please provide at least two pieces of advice. (6 points)