Traditional performance management focuses on setting individual objectives and assessing achievement. While intended to increase control, identify problems early, align goals, motivate employees, and provide clear standards, in reality managers are reluctant to give honest feedback and employees do not believe managers are qualified to evaluate them. Only 30% of workers feel performance management helps improve performance. Automated performance management aims to implement best practices more easily and improve feedback quality. A study of Pakistani industries found positive relationships between effective management by objectives practices, organizational productivity, and employee performance. The balanced scorecard measures performance across financial, customer, internal process, and learning/growth perspectives. 360 degree feedback involves confidential, anonymous feedback from subordinates, peers, and supervisors to provide development insights.

1. GENS9005:Psychology of WorkMANAGING PERFORMANCEGroup 40:NingZhangWendy Chen Lola OyetunjiBrodie FinlaysonBrian TranWilson Huynh

2. Traditional Performance ManagementTraditional performance management is generally described within the context of Management by Objectives (MBO). This concerns the management of individual performance in the workplace by first setting individual objectives and then assessing whether these objectives have been achieved. What should it accomplish?Increased management control over work tasks and resultsIncreased management ability to identify problems at an early stageAlignment of employee objectives and organisation objectivesEmployee motivation through self-set objectives and performance standardsEnhanced communication between managers and employees in terms of understanding expectationsClear standards so that breach of standards can be objectively identified and disciplinary action can be takenA system of objective feedback from managers to employees without any subjective influencesMeasurable objective criteria upon which management can determine rewards such as promotionCentralised record of performance for each employee

3. Traditional Performance ManagementMost managers agree with the concepts of performance management, however few actually implement themIn reality,Managers: reluctant to give honest and objective feedback due to the fear of damaging relationships with employees, upon whom they rely on to complete tasksEmployees: believe that managers are not qualified enough to discuss their performance and coach them to improve their skillsA survey conducted by Watson Wyatt showed that only 3 out of 10 workers agree that their company’s performance management system helps improve performance. Less than 40 percent of employees said their systems established clear performance goals, generated honest feedback or used technology to streamline the process.(E.D. Pulakos, 2004, Performance Management, p.1)

4. Performance Management Process

5. Automated Performance ManagementTheory: Traditional performance management systems are insufficient to support and sustain the advanced levels of shared thinking required for high performing organizations. Benefits of Performance Management AutomationImplement performance management best practices more easilyIncrease goal visibility and boost shared accountabilityGain powerful insights by using collected data more effectivelyEnsure complianceEliminate paperwork hasslesImprove feedback quality and strengthen management skillsSave timeGather feedback that’s more honest, objective and openImprove your bottom line

6. Automated Performance ManagementSuccessFactors Professional EditionDesigned specifically for small and medium-sized businessesThis solution claims to provide higher employee engagement, better HR and executive oversight, and more efficient business practicesKey featuresOnline Performance ReviewsAnonymous 360 ReviewsStreamlined Goal PlanningStronger Compensation PlanningRobust Reporting and Analytics "This solution has enabled me and my senior management to make sound decisions about how to grow the business efficiently, with greater transparency and accountability."Jim Hooker, Chief Executive Officer and President - Televerde

7. Management By Objectives (MBO) Case Study: Pakistani IndustriesAim: Identify the relationships between effective Management By Objective practices, organisational productivity and employee performance of organisationsOnly companies listed for more than 3 years were selected36 responses were collectedOrganizations operating in the twin cities (Rawalpindi and Islamabad) were personally visited and the questionnaires were distributed to the HR Managers/Executives of the organizationsTelephone interviewing and email methods were used (24 responses were collected)

8. Management By Objectives (MBO) Case Study: Pakistani IndustriesHuman Resource Management professionals of the targeted organizations were requested to reply to all the questions About the MBO practices implemented in their organizations and employee’s performance of their organizationsControl variables: Age of the organization and number of employeesIndependent variables: MBO practices, including Coaching and Mentoring, Performance Based Reward, Employee Participation and Job Description.

9. Management By Objectives (MBO)Case Study: Pakistani IndustriesCorrelation of Employee Participation and Coaching & Mentoring (0.55) a mentoring system caused better employee participationCorrelation between Job description and Coaching & Mentoring system (0.6)showing mentoring effectBetween Performance Based Reward and Job Description, correlation is highest (0.59) whenever a highly scientific and rigorous performance based reward is delivered to employees, they act on job description in a proper manner, so their performance increased significantly

10. Management By Objectives (MBO)Case Study: Pakistani IndustriesCorrelation between Employee Participation and Job Description (0.59) employee’s increased participation in MBO practices automatically describes his/her job area and goalCoefficient of correlation between ‘Organizational Productivity’ and ‘Employees Performance’ is (0.46)usage of transparent coaching and mentoring, performance based reward, employee participation and job description lead to higher organizational productivity and employee performanceSignificant association between Job Description, Organizational Productivity and the employee’s performance of organization (0.46)psyche of the Pakistani organizations i.e. the performance of the employee is measured on the basis of quantifiable results.

11. Management By Objectives (MBO)Case Study: Pakistani IndustriesImpact of Coaching and Mentoring on the employee’s performance of the organizations is showing a positive relationship up to (0.24) among individual MBO practices, Coaching and Mentoring in routine decision-making as well as in strategic decision-making, is a very important factor which is likely to increase the organizations' market shareemployees in the organizations are allowed to make decisions related to cost and quality matters, they are asked by their supervisors to participate in operations related decisions and suggest improvements in the way things are being doneHighest mean of Performance Based Reward (3.75) majority of the managers in the corporate sector are thinking that Performance Based Reward is the most important factor in organizational productivity but Job Description is showing the lowest mean (3.57)Positive correlation amongst several MBO practices

12. Management By Objectives (MBO)Case Study: Pakistani IndustriesConclusion: Positive relationship amongst effective MBO practices, organizational productivity and employee performance. Job Description system has a positive and significant impact and is one of the main indicators of the high organizational performance Employee participation/empowerment is another Effective MBO practice that has a significant impact on the employee performance and proving that an employee’s participation in decision-making leads an organization to perform much better than its competitors in the industryInvesting in Coaching and Mentoring tends to have a high employee productivity level that ultimately contributes towards high organizational productivity MBO practices have positively affected the Pakistani corporate sector, and is acting like a catalyst towards the growth in organizational productivity and better employee performance

13. Balanced Scorecard

14. Balanced ScorecardIntroduced by Kaplan and Norton ‘A balanced scorecard is a performance measurement system that identifies and reports on performance measures for each key strategic area of the business’ (Langfield-Smith et al. 2006)It measures organisational performance across four different but linked perspectives that are derived from the organisation’svision, strategy, and objectives

15. Financial PerspectiveQuestion to answer: How should we appear to our shareholders?

16. Customer PerspectiveHow should we appear to our customers?The unique mix of product, service, relationship and image that a company offers to its target customers; for example:Lowest total cost Product innovation and leadershipComplete customer solution

17. Internal Business Process PerspectiveWhat business processes must we excel?Need to consider a number of processes:Operating processes Customer management processes Innovation processes Regulatory and social processes

18. Learning and Growth PerspectiveHow will we change and grow?Identify initiatives to continuously improve our capabilities in order to support our processes and customers Consider:Human resources (employee competencies)Information technology Organisational culture and alignment

19. Limitations of BSCDifficulty in evaluating the relative importance of measures (i.e. are all measures equally important?) Large number of measures dilute overall impact Requires quantification of qualitative data Time and expense involved Requires a highly-developed information system Linkages between measures can seem too linear/simplistic Linkages to reward systems: how do we weigh different measures in the reward system?

20. 360 Degree FeedbackOverview360 Degree Feedback is a system in which employees receive confidential, anonymous feedback from fellow workers.Feedback comes from subordinates, peers and supervisors. It also includes a self assessment component from the employee.Results from 360-degree feedback are typically used for training and development purposes.

21. 360 Degree FeedbackDevelopment tool to recognise strengths and weaknesses360 is a highly effective development tool. This type of feedback process gives people an opportunity to provide anonymous feedback to a fellow worker, that they might otherwise feel uncomfortable giving. Feedback recipients gain insight into how others perceive them and have an opportunity to adjust behaviours and develop skills that will enable them to excel at their jobs. Performance Appraisal tool to measure employee performanceUsing a 360 degree feedback system for Performance Appraisal is a common practice, but not always a good idea. It is difficult to properly structure a 360 feedback process that creates an atmosphere of trust when you use 360 evaluations to measure performance. Moreover, 360 feedback focuses on behaviours and competencies more than on basic skills, job requirements, and performance objectives. These things are most appropriately addressed by an employee and his/her manager as part of an annual review and performance appraisal process. It is certainly possible and can be beneficial to incorporate 360 feedback into a larger performance management process, but only with clear communication on how the 360 feedback will be used.

22. 360 Degree FeedbackWhat it measures360 feedback measures behaviours and competencies 360 assessments provide feedback on how others perceive an employee 360 feedback addresses skills such as listening, planning, and goal-setting A 360 evaluation focuses on subjective areas such as teamwork, character, and leadership effectiveness http://www.custominsight.com/360-degree-feedback/what-is-360-degree-feedback.asp

23. 360 Degree FeedbackWhat it doesn’t measure360 feedback is not a way to measure employee performance objectives (MBOs) 360 feedback is not a way to determine whether an employee is meeting basic job requirements 360 feedback is not focused on basic technical or job-specific skills 360 feedback should not be used to measure strictly objective things such as attendance, sales quotas, etc. http://www.custominsight.com/360-degree-feedback/what-is-360-degree-feedback.asp

24. Westpac Banking CorporationBackgroundWestpac is Australia’s second largest bankGroup has a handful of other business units (Rams, St. George, BT Financial)As a large group, a solid performance management structure is required for their staffWestpac transitioned to become more decentralised, with a lot of staffing issues (hiring, performance reviews) done at the branch levelInterviewed the manager and other employees to get both views of the performance management systems in the bank

25. Westpac Banking CorporationPeople InterviewedEmployees in different roles were asked on what they thought of the current performance management systemsFrank Speranza (Bank Manager) provided information on Westpac’s Performance Management Systems How were they asked?Questions emailed to managerApproached the manager after work and asked the following questionsHow the club managed performance? (traditional or automated)

26. Type of performance management methods used by the club

27. Do the performance management systems put in place work?

28. Are managers basing appraisals on hard facts or opinions?

29. What does the company define as ‘best practice’ in performance management?Via email, I asked randomly selected employees to rate the system

30. Westpac Banking CorporationFindingsWestpac uses a combination of both traditional and automated performance management systemsThe performance management system uses methods including appraisals and 360 degree feedbackWBC makes career plans through communication with individualShort and long term goals are set during half yearly appraisalsWBC has an appraisal every 6 months starting from the financial yearBoth the Bank Manager and Assistant Bank Manager conduct the half yearly appraisalAwards and bonuses are provided if the employee meets certain Key Performance IndicatorsWeekly results are logged on the intra-net and ranked nationally to others in the same rolePerformance goals are followed up closely by managers

31. Westpac Banking CorporationDiscussion of resultsPerformance is based mainly on sales revenue figures, however attitude to work is also a factor in the employees overall performance.Each employee has his or her own unique career plan set by the acting managersStaff at the Burwood branch have given strong feedback in the branch’s performance management systemHowever, staff felt they were not provided with enough options to learn new skillsBurwood branch is currently ranked 20th nation-wide in terms of revenue generated and customer service feedback

32. Canterbury Leagues ClubBackgroundResearch by group member into Canterbury Leagues Club to help relate the link of theory and practice behind managing performanceCanterbury Leagues Club is one of the biggest clubs in NSW, thus efficient performance management is requiredSeparated into two sections Food and beverage and Gaming.Interviews were conducted by group member aimed at human resources, management and fellow work colleagues to get a overall view of performance management in the club.

33. Canterbury Leagues ClubPeople InterviewedSeveral employees were interviewed in the workplace to gather information on what they thought about performance management.Scott Ballesty (Human Resources) was interviewed in depth How were they asked?Some Key questions that were asked were: - How the club managed performance? (traditional or automated) - Type of performance management methods used by the club - Do the performance management systems put in place work? - Are managers basing appraisals on hard facts or opinions? - What does the company define as ‘best practice’ in performance management?Food and Beverage attendants and gaming attendants were given rating survey and ask to rate the performance management that the club was providing.

34. Canterbury Leagues ClubResults of studyClub uses traditional and automated elements in performance management and uses short term goals yearly in defining it’s performance management criteria to employees.Methods used for performance management are NTF’s (note to files), appraisals, 360 degree feedback and pager analysis.Club will assess career goals of certain individuals piror to start of employment and regularly set short or long term goals with employee during appraisals.Appraisals are performed in intervals of 6 week, 3 month, 6 month and yearly depending on length of time employee has been employed.Only supervisors and managers conduct appraisals and discuss with human resourcesEmployee of the month and year awards, are rewards measure for improved performance in employees.Appraisals are performed on regular basis and logged on spreadsheet database for human resources to manage.Performance criteria goals regularly discussed and made clear in staff meetings and self-assessment appraisal.

35. Canterbury Leagues ClubDiscussion of resultsManagers and supervisors base appraisals on hard facts rather than opinions and this is done by assessing note to files, as well as self observation.360 degree feedback is then used by supervisors and managers to back up the factsClub understands the different needs and goals of certain employees and manages their performance accordingly.From rating surveys given out to employees, most employees rated the club’s performance management system to be efficient and effective and meeting their requirements.Process can be streamlined a bit better (more automated) but for the size of the business is not critical

36. Canterbury Leagues ClubFrom evidence given though club provides employee improvement such as further training and courses to take, club will not enforce this on employeesThe club 30 years ago had no performance management put in place and was on the verge of bankruptcy. New management then put in long term goals.Club is now the biggest revenue making club in NSW, now basing performance criteria on short term goals.When asked if the current system for evaluating employee performance obtains the desired results? Interesting answer given back by Scott Ballesty was," In cases where the employees goal is to improve.”

37. Comparison between Westpac and Canterbury LeaguesSimilaritiesInterview style performance appraisals360 degree feedbackRewards based on performance (bonuses, end of year holidays, employee of the month, half yearly awards)Use of both traditional and automated theories of performance management

38. Comparison between Westpac and Canterbury LeaguesDifferencesWestpac performance management more results based, compared to Canterbury which is more traits and orientated based.Canterbury assess employees with use of self assessments, whilst Westpac will use more of a results based approach to performance appraisalsEmployees in Westpac are compared and ranked accordingly internally and nationally whilst Canterbury assess employees more individually.

39. Reference List2011, Performance Management & Appraisal Help Center, reference library, Bacala and Associates, viewed 8 April 2011, < http://performance-appraisals.org/appraisal-library/>;Elaine D. Pulakos, 2004, Performance Management, effective practice guidelines, SHRM Foundation, viewed 8 April 2011, <http://www.shrm.org/about/foundation/research/Documents/1104Pulakos.pdf>;SuccessFactors, Inc, 2007, 9 critical reasons to automate performance management, The CBS Interactive Business Network, viewed 8 April 2011, http://jobfunctions.bnet.com/abstract.aspx?kw=9+critical+reasons+to+automate+performance+management&;docid=253343&tag=bn-leftQureshi, M, Khan, A, Khan, B, 2008, 'Management by objectives, an effective tool for organisational performance: a case study of Pakistani industries' American Society of Business and Behavioral Sciences, vol 15, no.1, February, pp. 22-33