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Performance Management

Four Questions for Employee Performance Appraisals

July 22, 2007 By Nagesh Belludi Leave a Comment

Peter Drucker is widely regarded as the “Father of Modern Management,” and one of the most influential management philosophers of the modern era. In “The Effective Executive,” Peter Drucker advocates that a manager focus on an employee’s strengths when appraising his/her performance.

Four Questions for Performance Appraisals

Effective executives usually work out their own unique form of performance appraisal. It starts out with a statement of the major contributions expected from a person in his past and present positions and a record of his performance against these goals. Then it asks four questions:

  1. What has he [or she] done well?
  2. What, therefore, is he likely to be able to do well?
  3. What does he have to learn or to acquire to be able to get the full benefit from his strength?
  4. If I had a son or daughter, would I be willing to have him or her work under this person? If yes, why? If no, why?

Call for Action

Strong performance motivates outstanding performers. Therefore, managers must make it a priority to understand each employee’s motivation and strengths and provide objective, fair and consistent appreciation to keep him/her fully engaged.

Managers, however, often fail to realize the prospect of enhancing employee performance by targeting their efforts on each employee’s strengths. They often resort to deliberating over an employee’s shortcomings, and, thus attempt to develop abilities not inline with the employee’s strengths.

Address the above four questions when preparing the performance appraisal of an employee. These questions enable you, the manager, to reinforce the strengths of the employee and guide a career that focusses on his/her strengths.

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Filed Under: Managing People Tagged With: Motivation, Performance Management, Peter Drucker

Keeping a Diary on Employee Performance

December 8, 2006 By Nagesh Belludi 1 Comment

Blog reader Sasawat from Bangkok (Thailand) asks:

“I recently joined a multinational chemicals company that uses a performance appraisal system. I supervise seven engineers. To help me do their performance evaluations at the end of the year, should I maintain a diary to record their projects and actions?”

Most managers rely on employee performance in the period immediately preceding the performance evaluation deadline. Unfortunately, they do not weigh performance from throughout the year (or quarter, if their organizations use a quarterly review system.) Some employees exploit this behavior by slacking-off during most of the year and by shaping-up in the weeks before a performance evaluation is due.

Keeping a Diary on Employee PerformanceA log or a diary will help managers record employee projects and behaviors in one location. Clearly, recording significant and relevant examples of employee performance helps managers write objective performance summaries.

Recording events in a dairy every week, however, becomes overwhelming when you have seven employees. Instead, ask each employee to keep a diary of his/her achievements. Review this information with your employee once every week. Give regular, specific feedback, both affirmative and corrective. This ensures that you keep yourself informed of your employee’s work and demonstrates that you care about his/her current work and achievements.

When a performance evaluation is due, study the employee’s diary along with your notes, if any from your weekly meetings. You should not have to dig through your files or seek reports from various sources. You will have accumulated all the data you will need, in one place, to help you prepare for an effective performance evaluation statement and discussion.

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Filed Under: Managing People Tagged With: Great Manager, Performance Management

Performance Management: What is Forced Ranking?

September 27, 2006 By Nagesh Belludi 4 Comments

Reader Sriram from Chennai (India) asks,

A multinational recently acquired our 35-employee software testing company. Our personnel department sent an email on how this purchase affects us. The email mentioned a new forced ranking system for performance evaluation. Can you describe this system?

Every organization needs a formal approach to track individual contributions and performance against organizational goals and to identify individual strengths and opportunities for improvement. Typically, this system involves placing employees along a performance curve or classifying employees into categories of percentiles for performance.

Bell curve for forced ranking / performance management

Jack Welch, General Electric’s former CEO, is often associated with a 20-70-10 distribution: the top 20 percent is rewarded for best performance, the middle 70 percent is rated ‘average’ and the bottom 10 percent is coached for improvement. The ‘rank-and-yank’ system, also associated with Jack Welch, automatically terminates employees in the bottom category, allowing organizations to purge the worst performers.

Although an individual’s supervisor conducts the formal performance review discussion, management higher-ups assign the individual’s ranking following debates on performances of comparable individuals from across the organization. Often, these higher-ups are not knowledgeable enough of an individual’s performance. An individual’s ranking then depends on the supervisor’s willingness to fight on behalf of the individual. The ranking is ‘forced’ because an individual may be ranked in a lower category regardless of whether the direct supervisor (and hence the most knowledgeable reviewer) would have rated the individual that way on his/her own.

In intent, the forced ranking system is an excellent method for rewarding top performers and setting specific deadlines for improvement for poor performers. Despite its appeal, the system has several drawbacks. For instance, the system promotes individual performance over teamwork and often leads to dissatisfaction among ‘average’ and poor performers. In my opinion, most of this dissatisfaction stems from poor administration of the system at the ground level. I will cover this in another blog article.

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Filed Under: Managing People Tagged With: Performance Management

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About: Nagesh Belludi [hire] is a St. Petersburg, Florida-based freethinker, investor, and leadership coach. He specializes in helping executives and companies ensure that the overall quality of their decision-making benefits isn’t compromised by a lack of a big-picture understanding.

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