More Praise for . . . The Performance Appraisal Question and Answer Book: ‘‘Anenlightening,practical,andvaluabletool.Dickhastakenthesometime confusing and frightening problem of performance appraisal and provided effectiveapproachesandanswersthatcanbeadaptedtoanyorganization. ItisaMUSTforthehumanresourcesprofessional’slibrary.’’ —WilliamK.Hill HumanResourcesDirector CityofWinston-Salem(NC) ‘‘DickGroteclearlyandeloquentlypresentsaverypracticalguidefornavi- gating the often-murky waters of the performance appraisal process. The PerformanceAppraisalQuestionandAnswerBookisamust-readforallwho are captivated with the notion that the development, administration, and oversightofaneffectiveperformancemanagementsystemisnotonlypossi- ble,butindispensabletotheorganizationallifeofanybusiness.’’ —MichaelS.Sorrells DeputyCommissionerforHumanResources GeorgiaDepartmentofJuvenileJustice ‘‘Muchhasbeenwrittenanddebatedaboutthevalueofperformanceman- agement systems. However, the fact remains that top-performing compa- nies have rigorous performance management systems. The Performance Appraisal Question and Answer Book is a must-have handbook for every manager’smostcomplexissue:performance.’’ —DonLangewisch PerformanceSystemsManager ChevronTexacoCorporation The PERFORMANCE APPRAISAL QUESTION and ANSWER BOOK A SURVIVAL GUIDE FOR MANAGERS Dick Grote American Management Association NewYork•Atlanta•Brussels•BuenosAires•Chicago•London•MexicoCity SanFrancisco•Shanghai•Tokyo•Toronto•Washington,D.C. SpecialdiscountsonbulkquantitiesofAMACOMbooksare availabletocorporations,professionalassociations,andother organizations.Fordetails,contactSpecialSalesDepartment, AMACOM,adivisionofAmericanManagementAssociation, 1601Broadway,NewYork,NY10019. Tel.:212-903-8316.Fax:212-903-8083. Website:www.amacombooks.org Thispublicationisdesignedtoprovideaccurateandauthoritative informationinregardtothesubjectmattercovered.Itissoldwiththe understandingthatthepublisherisnotengagedinrenderinglegal, accounting,orotherprofessionalservice.Iflegaladviceorotherexpert assistanceisrequired,theservicesofacompetentprofessionalperson shouldbesought. LibraryofCongressCataloging-in-PublicationData Grote,RichardC. Theperformanceappraisalquestionandanswerbook:survivalguide formanagers/DickGrote. p. cm. Includesindex. ISBN0-8144-0747-1(hardcover) ISBN0-8144-7151-X(paperback) 1. Employees—Ratingof. 2. Performancestandards. I. Title. HF5549.5.R3 G642 2002 658.3(cid:1)125—dc21 2002002171 (cid:2)2002DickGrote. Allrightsreserved. PrintedintheUnitedStatesofAmerica. Thispublicationmaynotbereproduced, storedinaretrievalsystem, ortransmittedinwholeorinpart, inanyformorbyanymeans,electronic, mechanical,photocopying,recording,orotherwise, withoutthepriorwrittenpermissionofAMACOM, adivisionofAmericanManagementAssociation, 1601Broadway,NewYork,NY10019. Printingnumber 10 9 8 7 6 5 4 3 2 1 Contents Introduction ....................................... xv 1. The Importance of Performance Appraisal ........ 1 1.1 Whatis‘‘performanceappraisal’’? ....................... 1 1.2 Wheredidperformanceappraisalscomefrom? .............. 2 1.3 Whatisthepurposeofperformanceappraisal? .............. 4 1.4 Theperformancemanagementprocessinourorganizationhas conflictingpurposes.Weuseittodeterminemeritincreasesand performancefeedbackforworkdoneduringtheprevioustwelve months,todeterminetrainingneeds,andasakeytoolinsuccession planning.Canoneprocedurereallyserveallthosefunctionswell? 7 1.5 HowmanymeetingsshouldIhavewithanemployeetotalkabout performance? ...................................... 8 1.6 Allthesemeetingstaketoomuchtime.WhyshouldIspendallthis timedoingperformanceappraisalwhenI’vegotmuchbetterthings todo? . .......................................... 8 1.7 Ifperformanceappraisalistrulyimportant,whyisitthebuttofso manyjokesandthetargetofDilbertcartoons?. .............. 9 1.8 W.EdwardsDeming,thequalityguru,saidthatperformance appraisalswereanorganizationalevilthatshouldbeabolished.Was hewrong? ........................................ 10 1.9 Eveniftheytrytobeobjective,managerscan’thelpbut discriminateonthebasisofrace,sex,age,andotherillegal considerations.Isn’tperformanceappraisalactuallyaverybiased process? .......................................... 11 1.10 Whatarethelegalrequirementsforaperformanceappraisal system? . ......................................... 13 1.11 HowdoImakesurethatourperformanceappraisalsystemislegally defensible? ........................................ 13 v vi Contents 1.12 Isperformanceappraisalreallynecessary?Can’tthebenefitsthat thesystemprovidestoorganizationsandthepeopleinthembe obtainedanyotherway? .............................. 19 2. Performance Planning ......................... 21 2.1 Whatis‘‘performanceplanning’’? . ...................... 21 2.2 Whatarethemanager’sresponsibilitiesintheperformance- planningphaseoftheprocess? .......................... 22 2.3 Whataretheemployee’sresponsibilitiesforperformanceplanning? 24 2.4 Whenisthebesttimetosetandreviewexpectations? . ... ... .. 26 2.5 Ihaveneverheldaperformance-planningmeeting.HowdoIget theplanningmeetingofftoagoodstart? ................... 26 2.6 Whatisthedifferencebetween‘‘results’’and‘‘behaviors’’? ... .. 27 2.7 Howdoyoudeterminesomeone’skeyjobresponsibilities? ... .. 29 2.8 Somebigrocksmaybebiggerthanothers;somekeyjob responsibilitiesaremorecriticalthanothers.Howdoyoudetermine themostimportantitems? ............................. 32 2.9 Howdoyoudetermineamethodforevaluatingsomeone’s performanceinmeetingtheirkeyresponsibilities? .. ... ... ... . 32 2.10 Descriptivemeasuresseemsubjective.Don’twehavetobe objectivewhenweevaluatesomeone’sperformance? ......... 34 2.11 Wheredoesgoalsettingfitintotheperformance-planningprocess? 36 2.12 HowdoIpicktherightgoals?Whereshouldanindividuallookto findgoalsandobjectives? ............................. 37 2.13 Howshouldagoalstatementbewritten? . ................. 39 2.14 WhatareSMARTobjectives? ........................... 41 2.15 HowhighshouldIsetmyperformanceexpectations? . ... ... .. 42 2.16 WhatdoIdoiftheindividualdisagreeswiththegoalsIwantset,or saysthatmystandardsareunreasonableorthatoneofthekeyjob responsibilitiesI’veidentifiedisnotreallypartofthejob? ... ... . 44 2.17 HowdoIwrapupaperformance-planningmeeting? .......... 44 3. Performance Execution ......................... 46 3.1 Whatis‘‘performanceexecution’’?....................... 46 3.2 Whatarethemanager’sresponsibilitiesintheperformance executionphase? ................................... 46 3.3 Whataretheemployee’sresponsibilitiesintheperformance executionphase? ................................... 48 Contents vii 3.4 HowshouldIkeeptrackofemployees’performance?ShouldIkeep ajournal?AndshouldIrecordday-to-dayperformanceorjustnote theexceptionalpositiveandnegativeevents? ............... 50 3.5 Shouldemployeeshaveaccesstomyperformancelog? ........ 51 3.6 HowdoImotivatepeopletodelivergoodperformanceandto correctperformanceproblems? ......................... 52 3.7 Whataboutpay?Isn’tmoneytheonlythingthatreallymotivates? 55 3.8 Whatcanamanagerdotocreatetheconditionsthatmotivate? .. 57 3.9 Whataboutrecognition?Isn’trecognizinganemployeewho’sdone goodworkaneffectivemotivationaltool? .................. 64 3.10 We’reconsideringstartinganemployee-of-the-monthprogram.Is thisagoodrecognitiontool? ........................... 65 3.11 Dopeopleneedpraiseeverytimetheydoagoodjob? .. ... ... 67 3.12 Idon’thaveabudgetforawardstorecognizepeople.HowcanI recognizetheirgoodperformanceifIcan’tdemonstratefinancially thatweappreciategoodwork? ......................... 68 3.13 Isrecognitionjustamatterofheapingonthepraise? ... ... ... . 69 3.14 HowdoIactuallyuserecognition?Istheremoretoitthanjust saying,‘‘Thanks...nicejob’’? .......................... 70 3.15 Won’tsomepeople—thebetterperformers—endupgettingmore recognitionthanotherswhodon’tperformaswell?Isn’tthat discriminatory? . .................................... 72 3.16 Won’tpeoplecomplainwhenIdeliberatelytreatsomepeople betterthanothers?Won’tIbeaccusedoffavoritism? .. ... ... .. 73 4. Performance Assessment ....................... 74 4.1 Whatis‘‘performanceassessment’’? ...................... 74 4.2 Whatarethemanager’sresponsibilitiesforperformance assessment? ....................................... 75 4.3 Whataretheemployee’sresponsibilitiesintheperformance assessmentphase?................................... 77 4.4 Whataremyboss’sresponsibilitiesintheperformanceassessment phase?Doesshehavetoreviewandapprovemyappraisalsbefore Ideliverthemtomystaff? . ............................ 78 4.5 ShouldIasktheindividualwhoseperformanceappraisalIam preparingtomakeupalistofaccomplishments? . ............ 80 4.6 ShouldIasktheindividualtocompleteaself-appraisalusingthe company’sperformanceappraisalform? ................... 82 4.7 Ihavetowriteaperformanceappraisal.WheredoIstart? . ... .. 83 viii Contents 4.8 WhatinformationdoIneedtowriteavalidperformanceappraisal? 85 4.9 Whataboutcollectingdatafromotherpeopletouseonthe performanceappraisalform?Woulditbeagoodideatoaskfor informationfromasalesman’scustomers,oraskamanager’s subordinatesaboutherperformanceasasupervisor? .......... 87 4.10 I’veaskedtheemployeetowriteaself-appraisal.ShouldIusewhat theemployeehaswrittenintheself-appraisalaspartoftheofficial appraisalI’mwriting? ................................ 88 4.11 ShouldIputmoreemphasisontheresultstheindividualachieved oronthewaythepersonwentaboutdoingthejob? . ... ... ... 89 4.12 OneofmysubordinatesworksinadifferentcityandIdon’tseeher verymuch.HowcanIappraiseherperformanceaccurately? .. .. 90 4.13 ShouldIincludetheemployee’ssuccessesandfailuresin completingthedevelopmentplanaspartofhisformalperformance appraisal? ......................................... 91 4.14 Whatare‘‘ratingerrors’’? ............................. 91 4.15 ShouldIgoovertheemployee’sappraisalwithmymanagerbefore Ireviewitwiththeindividual? .......................... 92 4.16 HowdoIgoaboutconvincingmyboss(assumingherapprovalis needed)thatoneofmypeopledeservesaparticularlypositiveor negativereview? .................................... 97 4.17 Iftheappraiser’sbossapprovestheappraisalbeforetheemployee seesit,hasn’tthedoorbeenclosedonthepossibilityofany changes? ......................................... 98 4.18 Theindividualfailedtoachieveanimportantobjective,butthere wereextenuatingcircumstances.HowshouldIrateher performance? ...................................... 99 4.19 Inwritingtheindividual’sperformanceappraisal,shouldIconsider howwellheperformscomparedwithotherpeopleinthe departmentwhoaredoingthesamejob? .................. 100 4.20 Ourperformanceappraisalformhasaratingscalethataskswhether theperformancefailedtomeetexpectations/metsome expectations/metallexpectations/exceededexpectations/far exceededexpectations.IfIhaven’tdiscussedmyexpectationswith theemployee,howdoIrateperformance? . ................ 101 4.21 Ourratingscaleisnumerical:one,two,three,four,andfive,with fivebeingthehighestonthescale.Sallybasicallydidagoodjob thisyear.ShouldIrateherathree,afour,orafive?........... 103 4.22 Shouldemployeesinnewrolesbemeasuredandevaluatedthe sameasemployeeswhohavebeeninaroleforalengthoftime? 104 Contents ix 4.23 Howcanwetakethe‘‘personal’’outofareviewandstillgivean accuratepictureoftheemployee?Forexample,Joe’sgoingthrough adivorce.Hisperformancehassuffered,butIempathizeandwant togivehimapassingreview. ........................... 105 4.24 Oneofmysubordinatesdoesaverygoodjob...notbreathtakingly outstanding,butsolidandstrongandbetterthanaverage.ShouldI rateherinourmiddlecategoryoffullysuccessfulorpushher evaluationoverthelineandintothesuperiorcategory?HowdoI figureouttherightcategory? ........................... 106 4.25 Ihaveaconcernaboutoneofmypeople’sperformance,butI haven’tpreviouslydiscusseditwithhim.Isitokaytobringitupfor thefirsttimeontheperformanceappraisal? ................ 107 5. Performance Review ........................... 110 5.1 Whatis‘‘performancereview’’? ......................... 110 5.2 Whatarethemanager’sresponsibilitiesintheperformancereview phaseoftheprocess? ................................ 110 5.3 Whataretheemployee’sresponsibilitiesintheperformancereview phase? ........................................... 112 5.4 WhatshouldIdobeforethemeeting? .................... 114 5.5 BeforeIsitdowntoconductanappraisaldiscussionwithan individual,isitappropriatetotalkwithotherstogetsomeinsights intowhatImightexpect? . ............................ 118 5.6 HowshouldIopenthediscussion? ....................... 119 5.7 HowdoIstarttheappraisaldiscussionwithanindividualwhohas agreatdealofexperienceandhasworkedforthecompanymuch longerthanIhave? .................................. 121 5.8 It’seasytodiscusstheperformanceappraisalwhentheindividual andIareinagreement.ButwhatdoIdowhenwedisagreeabout somethingimportant? ................................ 122 5.9 HowdoIfigureoutwhattheemployeeisfeeling? ... ... ... ... 125 5.10 HowcanIgetsomeonetoagreewithanhonestandaccurate performanceappraisalrating?........................... 127 5.11 TheemployeeI’mabouttoreviewisanunsatisfactoryperformer andtheappraisaltellsitlikeitis.HowshouldIstartthemeeting? 127 5.12 WhatdoIdowhenanemployeedisagreeswithsomethingIhave writtenontheperformanceappraisal? . ................... 128 5.13 HowdoIhandlethoseawkwardmomentsthatalwaysseemtoarise inperformanceappraisaldiscussions?Forexample,theemployee x Contents whoissilent,ormakesexcuses,orturnstheconversationaround sothatwearecaughtupinirrelevancies? . ................. 129 5.14 HowdoIhandledefensivereactions? ..................... 131 5.15 HowshouldIreactwhenanemployeestartscryingduringthe appraisaldiscussion...orgetsmadatme? ................. 133 5.16 WhenshouldItalkaboutthepayincrease?. ................ 134 5.17 HowdoIbringtheperformanceappraisaldiscussiontoasuccessful close? ........................................... 135 5.18 What’sthebestwaytodealwithanemployeewhorefusestosign theperformanceappraisaldocumentandrefusestoprovidehis owncomments? .................................... 137 6. The Performance Appraisal Form ................ 139 Y 6.1 Isthereanidealperformanceappraisalform? ............... 139 L 6.2 Howdoesacompanydeterminewhichcompetenciesaretrulycore competencies? ....................F................. 141 6.3 WhyisitbettertowritethenarrativethMatexplainswhatismeant byacompetencyasadescriptionofmaster-levelperformance? Wouldn’tadictionarydefinitionwAorkjustaswell? ............ 145 6.4 What’sthedifferencebetweenorganizationalcorecompetencies E andjobfamilycompetencies? .......................... 147 6.5 HowdoIdeterminetheTkeyjobresponsibilitiesofaposition? .. . 149 6.6 Aren’tgoalsandprojectspartofaperson’sjobresponsibilities?Why doesanidealappraisalformhaveaseparatesectionforgoalsand projects? . ........................................ 150 6.7 Thelastpartoftherecommendedperformanceappraisalform coverstheindividual’smajoraccomplishmentsoverthecourseof theappraisalperiod.Shouldn’ttheindividual’sachievementsbe describedthroughouttheappraisalform? . ................. 151 6.8 Arethereanyotherelementsthatcouldbeincludedona performanceappraisalform? ........................... 152 6.9 Howmanydifferentformsshouldtherebe? . ... ... ... ... ... 155 6.10 Howmanyratinglevelsshouldtherebeontheform? . ... ... .. 156 6.11 Whatshouldwecallthedifferentlevels?Doesitmakeany differencewhetherweusewordsornumbers? .............. 157 6.12 Shouldweusedifferentratingscalesforassessingdifferentareas withintheform? .................................... 161 6.13 Shouldtheformprovideforputtingdifferentweightsonthevarious sections? . ........................................ 162 Team-Fly®