With the rapid penetration of the Internet into the workplace, organizations can take advantage of a growing selection of online tools that promise significant increases in the effectiveness of HR systems. Performance management is a prime example of a system that can significantly benefit from the power of the Web.
The potential derives from several factors including the rapid transmission of information among multiple reviewers, efficient database storage, analysis and retrieval, and a user interface that can transform performance feedback from a static paper exercise into a dynamic interactive process that can be readily integrated with day-to-day management.
When new technology is superimposed on an existing human resource management system, it is critical to ensure that the original purpose of the system is preserved and enhanced. As HR practitioners consider new online performance management products, they should take the opportunity to re-examine what makes an effective performance management system and evaluate the products according to these criteria.
Fit with management philosophy
Performance management takes place within the context of an organization’s management philosophy and approach. Management philosophy is undergoing continuous significant change due to a number of factors, most notably:
•the need for high productivity in the global economy;
•the increasing emphasis on information technology and on the service sector;
•the increased diversity in the workplace; and
•the growing desire among employees for a challenging and rewarding work life.
Performance management takes place within the context of an organization’s management philosophy and approach. Management philosophy is undergoing continuous significant change due to a number of factors, most notably:
•the need for high productivity in the global economy;
•the increasing emphasis on information technology and on the service sector;
•the increased diversity in the workplace; and
•the growing desire among employees for a challenging and rewarding work life.
In response to these factors, management philosophy has evolved from a top-down, centralized approach towards a greater focus on participative management and bottom-up decision-making.
An online performance management product needs to be congruent with the management philosophy and approach of the organization. The best choice for an online product is one that is versatile and can facilitate performance management for a variety of approaches, such as:
•traditional performance management with the direct supervisor as the sole reviewer;
•decentralized, participative performance management with multiple reviewers; and
•self evaluation performance management for autonomous work teams.
•traditional performance management with the direct supervisor as the sole reviewer;
•decentralized, participative performance management with multiple reviewers; and
•self evaluation performance management for autonomous work teams.
A versatile online product allows an organization to adapt and evolve its performance management approach in response to changing environmental and organizational conditions.
All performance management systems need to incorporate a model of effective performance. A valid model is one that captures all critical elements of performance, that is, the “right” things are being measured to ensure individual and organizational effectiveness. Leading edge organizations use performance models that include three essential dimensions of job performance:
•productivity — objectively observable achievements resulting from job activities;
•competencies — knowledge, skills and abilities that underlie high productivity; and
•work values — attitudes towards work and the organization that underlie high productivity.
•productivity — objectively observable achievements resulting from job activities;
•competencies — knowledge, skills and abilities that underlie high productivity; and
•work values — attitudes towards work and the organization that underlie high productivity.
Selecting an online product that includes these critical elements of performance will maximize the validity and effectiveness of an organization’s performance management.
It is important to determine whether an online product does in fact contain a performance model. Online products that allow the organization to design its own performance feedback instrument are not based on a performance model, and do not ensure the validity of the feedback information collected. There may be overlapping measures and key performance areas that are omitted — both of which compromise a performance management system’s validity and, therefore, its effectiveness and accuracy in capturing and measuring the critical dimensions of performance.
Comprehensiveness of system
A comprehensive system incorporates a number of related performance management components to provide optimal performance feedback information for individual employees and the organization. The best choice in an online performance management product would include the following key components.
A comprehensive system incorporates a number of related performance management components to provide optimal performance feedback information for individual employees and the organization. The best choice in an online performance management product would include the following key components.
Goal Setting — Setting meaningful performance goals and measuring success in terms of goal attainment are critical for increasing individual, work group and organizational productivity and motivating employees to develop and grow. Goal setting is particularly important for long-term employees in moderate to highly complex jobs where there is a degree of latitude in how the job is executed, and/or where job output can vary significantly as a function of effort (i.e.: sales positions).
Setting goals and assessing goal attainment follow a repetitive process, occurring at the appropriate points in a systematic performance review cycle. An online performance management product should facilitate goal setting at the end of the review cycle for the upcoming review cycle. This process ensures goals have been established and communicated to the employee before the current review cycle begins, and that the employee and reviewers understand the performance expectations for the current review period.
An online product should review goal attainment as part of performance assessment at the end of the review cycle. This process provides the employee with specific feedback on goal related success, and provides reviewers with valuable input to their numeric ratings of performance.
Performance Ratings — Performance ratings numerically evaluate the employee’s “level of achievement” and provide quantitative feedback on areas of strengths and weaknesses for specific measures of performance. As part of a comprehensive performance management system, numeric ratings provide a quantitative assessment of performance that allows for a variety of analyses at the individual, department and organizational level. An online performance management product should provide measurement scales that have been psychometrically designed to be easy to use and to minimize ratings errors and maximize accuracy. Scales should always include an “N/A” (Not Applicable) option so that the reviewer can choose to not provide feedback on a particular measure.
Behavioural Feedback — Behavioural feedback is an essential element of effective performance management, providing concrete instances of successful and unsuccessful job behaviours. Behavioural feedback documents the critical incidents of behaviour and supporting comments that substantiate the numeric “level of achievement” ratings. This is particularly important when performance ratings are either very high or very low.
Critical incidents of behaviour are salient examples of performance, often very good or very poor, that occur throughout the review period. Critical incidents of behaviour provide employees with “how to” feedback (i.e.: specific examples of job behaviours to avoid or to do in order to improve performance for a particular measure). Supporting comments document additional information that can clarify and support numeric ratings for a particular measure (i.e.: special circumstances that may have impacted performance; suggestions on how to improve a low rating or maintain a high rating; or effects that the work group, department or organization may have had on a rating).
Behavioural feedback is most effective when critical incidents of behaviour and supporting comments are gathered throughout the entire review period. The best choice for an online performance management product is one that provides reviewers with a diary for collecting and documenting behavioural feedback as it occurs throughout the performance review cycle.
Career Planning — Many factors contribute to individual career planning such as employee interests and aptitudes, and organizational career paths and opportunities. Performance feedback constitutes one important element of a career plan by identifying an employee’s strengths and areas needing improvement in relation to career goals. Performance feedback should link to the career planning process so that the career plan is based on valid and constructive feedback and specific developmental activities and goals.
The best choice for an online performance management product is one that would allow reviewers to set career goals, to identify major areas of strengths and areas needing improvement in relation to career goals, and to specify the developmental and training activities required to achieve these goals.
Customization of system
One of the great advantages of the Internet is that HR managers now have ease of access to specialized knowledge and experience through the Web-based products being offered by human resource experts. For online performance management products, this can translate into a performance model that has been tested through years of consulting experience to ensure the validity, comprehensiveness and effectiveness of performance dimensions and measures. These performance measures can be customized to reflect organization specific performance examples and other job-related information, providing an organization with the best of both worlds — an expert based performance management system tailored to the organization.
One of the great advantages of the Internet is that HR managers now have ease of access to specialized knowledge and experience through the Web-based products being offered by human resource experts. For online performance management products, this can translate into a performance model that has been tested through years of consulting experience to ensure the validity, comprehensiveness and effectiveness of performance dimensions and measures. These performance measures can be customized to reflect organization specific performance examples and other job-related information, providing an organization with the best of both worlds — an expert based performance management system tailored to the organization.
The topic of customization points to an important distinction that HR practitioners should be aware of when evaluating online systems: 360-degree feedback vs. 360-degree performance management. While conceptually and operationally similar, they are not interchangeable systems and have different goals and outcomes. The 360-degree feedback system provides relatively open-ended feedback with the aim of diagnosing deficiencies and identifying strategies for organizational development. This system typically allows respondents to create a customized feedback questionnaire from a large set of feedback items. Lacking a uniform measurement model and format, it is not intended to be used to evaluate individual employee performance in a performance management context. On the other hand, a 360-degree performance management system allows multiple reviewers to provide individual employee job performance feedback of an evaluative and developmental nature.
Efficient administration
Web-based technology has much to offer performance management in terms of increased efficiency and sophistication in collecting, analyzing and reporting 360-degree performance information. What was once a cumbersome paper- and people-intensive process can be simplified to a Web-facilitated process through which multiple reviewers input comprehensive performance information via e-forms. This information is stored in a server-side database, and retrieved and analyzed through standard report formats at the click of a button. When reviewing online performance management products consider the following features.
Web-based technology has much to offer performance management in terms of increased efficiency and sophistication in collecting, analyzing and reporting 360-degree performance information. What was once a cumbersome paper- and people-intensive process can be simplified to a Web-facilitated process through which multiple reviewers input comprehensive performance information via e-forms. This information is stored in a server-side database, and retrieved and analyzed through standard report formats at the click of a button. When reviewing online performance management products consider the following features.
Security — Because of the sensitive nature of performance data, an online product transmitting data over the Internet must provide the same level of security expected for financial transactions. Database access needs to be username and password protected. Different categories of system users need to be specified in terms of level of database access. For example, access should be controlled to ensure that reviewers can only enter and edit feedback for employees they are authorized to review. A final security feature would be the archiving of a performance review so that it cannot be modified once the review is officially complete.
Ease of Implementation — Simplicity, ease of use, speed and efficiency are important features of an online performance management system for initial set up and customization, reviewer data entry and editing, performance data analysis and generating reports.
Reports — Standardized report formats make the analysis and reporting of performance information instantaneous once multiple reviewers have submitted their input for a review. The best choice in an online performance management product would offer essential reports that support human resource decision-making including performance summary and diagnostic analysis at individual, department and organization levels.
Support and Training — The best choice in an online performance management product is one that requires minimal on-going support, training and add-on consulting fees. System administrator support and training for initial set up and customization would typically be included as part of the price of a product. On-going support and training needs should be met through clear, easy to follow online instructions and comprehensive e-tutorial training for system users. In addition, telephone and e-mail support should be available for more complex issues.
E-tutorial training is especially important for reviewers who may not have prior training and experience in the critical elements of performance management such as setting goals, career planning, rating performance, documenting critical behavioural incidents and conducting performance feedback interviews. This training can be delivered efficiently through well-designed e-tutorial modules that provide the necessary knowledge and skills for effective performance feedback.
Role of the HR Specialist — An often-mentioned benefit of an online human resource system such as performance management, is that organizations are effectively outsourcing the HR function to the experts who developed and maintain the product. While this is certainly an advantage, particularly for a smaller organization that may have little or no HR expertise, in mid- to large-size organizations the HR specialist still has a key role to play in customizing the system, authorizing reviewers, monitoring system use for timeliness and quality, and training. In selecting an online performance management product, it is important to ensure that the administrator can maintain the required level of control over the system to ensure that it meets its strategic HR objectives.
Excellent performance management can be enhanced when joined with the power of the Internet. The requirements of effective performance management supply the criteria for selecting an online product: fit with management philosophy, validity of performance model, comprehensiveness of system, customization of system and efficient administration.
Larry Shetzer is a partner at HR Matrix Consultants Ltd., and developer of FeedbackMatrix.com, an Internet-based performance management system. He can be reached at (250) 653-9951 or [email protected].
