2. Slide 2
Agenda
3 Introduction
4-5 Definitions
6-9 Benefits of performance reviews
8-9 Determining base pay and total earnings
10-11 Strategies around performance reviews
12-14 Creating a more effective pay-for-performance system for the public sector
15-17 Avoiding discrimination
18-20 Creating a valid and legally defensible pay-for-performance plan
21-22 Defining job performance and the creation of a performance review instrument
23-24 Areas to consider when setting objectives
25-27 Improving the level of employee buy-in
28-30 Factors which support alignment of objectives
31-32 Rating errors
33-34 Forced distribution
35-36 Graphic rating scale for work quantity
37-39 Ratings and reviews
40-41 Where HR goes wrong with performance reviews
42-44 Criticisms of annual performance reviews
45-50 Replacing the annual performance review
51 Summary and questions
3. Introduction to Toronto
Training and Human
Resources Inc.
Toronto Training & HR Inc. is a specialist
training and human resources consultancy
headed by Timothy Holden
10 years in banking
15 years in training and human
resources
Freelance practitioner since 2006
The core services provided by Toronto
Training & HR are:
Training event design
Training event delivery
HR support with an emphasis on
reducing costs, saving time plus
improving employee engagement
and morale
Assistance for job seekers
Slide 3
7. Slide 7
Benefits of performance
reviews 1 of 3
Employee participation is an
effective tool for enhancing job-related
autonomy, a necessary
precondition for employee growth
Performance review participation
provides employees with a voice
into the performance review
process-if employees are
confident in the fairness of the
performance review process, they
are more likely to accept
performance ratings, even
adverse ones
8. Slide 8
Benefits of performance
reviews 2 of 3
Employees possess valid, unique,
and relevant performance
information that is unavailable or
unobservable by the rater,
therefore the quality, quantity,
accuracy and validity of
performance review information
increases
Employee ownership in the
process provides a personal stake
in the success of the system,
enhancing employee acceptance
9. Slide 9
Benefits of performance
reviews 3 of 3
Employee participation generates
an atmosphere of co-operation
and employee support
11. Strategies around
performance reviews
Slide 11
High performance,
low attitude
High performance,
high attitude
Low performance,
low attitude
Low performance,
high attitude
12. CREATING A MORE EFFECTIVE
PAY-FOR-PERFOMANCE SYSTEM FOR
THE PUBLIC SECTOR
Slide 12
13. Creating a more
effective pay-for-performance
Slide 13
system for
the public sector 1 of 2
Identify a systematic procedure
for creating performance review
instruments
Describe the appropriate training
for those conducting a
performance review interview
14. Creating a more
effective pay-for-performance
Slide 14
system for
the public sector 2 of 2
Implement performance reviews
using the developed instruments
and performance interview/review
training
Evaluate employee attitudes
towards the newly developed
system
16. Slide 16
Avoiding
discrimination 1 of 2
Questions to ask
Do members of a protected
group receive
disproportionately lower
ratings than others?
Do members of a protected
group receive
disproportionately more low
ratings than others? Or
fewer high ratings?
17. Slide 17
Avoiding discrimination
2 of 2
Questions to ask (continued)
Does membership in a
protected group predict one’s
performance ratings?
Do performance ratings
explain race, gender or age
disparities in pay or
promotions?
Is the performance
management system
effective?
18. CREATING A VALID AND LEGALLY
DEFENSIBLE PAY-FOR-PERFORMANCE
PLAN
Slide 18
19. Creating a valid and
legally defensible
pay-for-performance
plan 1 of 2
Slide 19
A definition of job specific
performance that leads to the
creation of a performance
review document that clearly
outlines low to high
performance measures
A well-conducted performance
review interview process
20. Creating a valid and
legally defensible
pay-for-performance
plan 2 of 2
Slide 20
Equitable decisions regarding
the amount of merit increases
that will be given for different
levels of performance
22. Defining job
performance and the
creation of a
performance review
instrument
Slide 22
Job analysis
Rating of tasks
Creation of the performance
review
Identifying raters
Rater training
Performance review interview
26. Improving the level of
employee buy-in 1 of 2
What can employees gain?
SMART objectives
Documenting evidence
Strengths
Areas for improvement
Active listening
When disagreement occurs
When needs are not being met
Coaching managers
Slide 26
27. Improving the level of
employee buy-in 2 of 2
Slide 27
Obstacles and how to overcome
them
Symmetry
29. Factors which support
alignment of objectives
1 of 2
What does the alignment of
objectives involve ?
Climate fit
Communication
Leadership support
Management guidance
Strategic plan characteristics
Strategic plan level
Slide 29
30. Factors which support
alignment of objectives
2 of 2
Plan alignment
Employee alignment
Slide 30
40. WHERE HR GOES WRONG WITH
PERFORMANCE REVIEWS
Slide 40
41. Slide 41
Where HR goes wrong
with performance
reviews
No-one comes out of them any
wiser
Too much focus on the what
and not the how
Employees feel disengaged as
there is too much them and us
Objectives aren’t clearly defined
There’s never any praise
43. Criticisms of annual
performance reviews
1 of 2
Slide 43
Employees need and want
regular feedback (daily, weekly),
so a once-a-year review is not
only too late but often a
surprise
Managers can’t judge an entire
year of work from an individual,
so the annual review is awkward
We usually have many peers
and managers, so one person
can’t adequately rate you
without peer input
44. Criticisms of annual
performance reviews
2 of 2
Slide 44
Issues with people who are a poor
fit and perform poorly should be
addressed immediately
People are inspired and motivated
by constructive feedback—and the
performance review process works
against this
The development part of a
performance review conversation—
what can be done to improve
performance and engagement—is
often ignored or depreciated
46. Replacing the annual
performance review
1 of 5
Develop a feedback-rich culture and
tools (online, formal and informal) that
encourage all employees to give each
other feedback
Separate discussions about
performance from discussions about
potential, pay raises, and future career
plans
Assume that employees know about
their strengths, weaknesses, and
performance, and ask them to self-assess
and share it with you
Slide 46
47. Replacing the annual
performance review
2 of 5
Slide 47
Enable managers to assess
performance and give their people
feedback regularly-as you do this, it
gets easier and employees
appreciate it
Focus managers on hiring the best
and building a team of high
performers-rather than assume that
20% of your people will perform
poorly, spend more time on
assessment, culture, and fit to
ensure low performers aren’t hired
in the first place
48. Replacing the annual
performance review
3 of 5
Slide 48
Assume everyone wants to succeed, so
if they aren’t performing well it’s not
necessarily their fault—you should help
them find a better fit so set and
evaluate objectives frequently
Beware of pay for performance plans
(these tend to create perverse
behaviour, as people focus on their
objectives at the expense of the
organization); in sales, pay for
performance can work well; but in other
roles it can cause problems
49. Replacing the annual
performance review
4 of 5
Slide 49
Give your managers a strong
cultural framework and set of
values to hire and manage from-this
makes selection easier and enables
you to evaluate and coach people
more effectively
Invest in leadership development-most
managers struggle with
selection, hiring, training, coaching,
and evaluation
50. Replacing the annual
performance review
5 of 5
Slide 50
Provide managers with time and
tools to learn, a framework for
feedback, and continuous
development so they become better
Reward talent production not talent
hoarding-if you pay managers to
produce output, they’ll focus on
talent performance and evaluation
Use talent production metrics to
evaluate leaders, forcing reviews to
move toward coaching/development