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Friday, February 25, 2011

Setting Objective Performance Targets

If you search the web for how to evaluate performance, what you'll see most frequently are performance measures that are prone to subjectiveness. Employees are also at the mercy  of their superiors' high or low standards. Add these to the usual dysfunctions of many performance management systems like poor compliance, prejudice and lack of discussion. What you'll get is a recipe for a complete waste of time.

When evaluations are based on the manager's perception of poor, needs improvement, met expectation, etc., and not on actual, quantifiable and verifiable results, you run the risk of rewarding people for perceptions of performance that do not reflect the organization's real performance.

What should we do then? Among other things, managers must set clear performance expectations that will be used as basis for getting performance scores. What I mean is state your targets so that the employees know in quantifiable terms what kind of results will give them an excellent rating as well as a poor rating.
Here's an example:

By consistently tracking the key performance indicators and using actual data as basis for determining performance score, real performance is reflected in the employee's performance evaluation sheet.

Why is it important to do this?  First because this is much easier to communicate and secondly it frees the managers from the discomfort of rating employees low without a solid basis. In fact, many managers give their employees' an average or above average rating simply because they do not have the guts to explain a low rating.

So, is a manager's perception unimportant? It is important.  Subjective evaluation should have its place in the performance management system. It is the managers' way of saying "you achieved this result because of what I believe you did. And that if you improve the way you do things, I believe that you will also be able to show better results."

How do you do this? Let the manager evaluate behaviors while letting results speak for the employees' performance. Now, where you put more weight between the two (results or behavior) will speak of what you value more as an organization) Personally, I am for putting so much weights on the results, that a biased evaluation wil have less effect on the overall score. If the manager is able to discuss her evaluation of the employee's behavior, and it resulted in having an individual development plan, then the subjective evaluation would have achieved its real objective.

Now here's the usual grumble I get when I talk about these things. Some people say that what they do is impossible to measure. I have two responses to that. One, I agree that some results are difficult to quantify but they are not impossible to measure. Second if you are trying to measure what you are doing, you are not measuring results, you are measuring efforts. Efforts, no matter how well intended don't always lead to results. Efforts seldom earn the company money to reward employees with.

Measuring and rewarding results require creativity in devising ways for monitoring. Technology helps but it is the manager's in dilligence tracking and providing constructive feedback that really seals the deal.

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