Performance Management

Do You Want to Know More About:

• Assessing employee performance fairly and accurately?
• Motivating employees and teams to perform at their maximum capacity?
• Providing effective performance feedback and coaching?
• Developing employee performance plans that are aligned with organizational goals?

Performance Management Is the Key

Well-developed performance management programs benefit organizations by:

• Aligning employee performance with the organization's strategic goals.
• Ensuring that employees receive fair, consistent, and accurate performance feedback that clearly outlines expectations.
• Increasing employee motivation and engagement through developmental coaching and feedback discussions.
• Ensuring performance appraisal processes are legally defensible.

How Can I-O Psychologists Help?

1. Develop Performance Appraisal Tools. I-O psychologists can analyze jobs and develop performance appraisal tools that ensure all supervisors are calibrated to have the same understanding of how poor, average, and above average performance is identified.
2. Develop Structured Rating Processes. I-O psychologists can develop performance management systems that facilitate ongoing performance monitoring and incentivize regular feedback to employees.
3. Train Performance Raters. I-O psychologists can train performance raters to identify and avoid common ratings biases so that ratings are as fair and accurate as possible. I-O psychologists can also train performance raters on how to provide coaching and feedback to employees in ways that increase motivation and facilitate performance enhancement.
4. Set Performance Objectives. I-O psychologists can set specific performance objectives and goals for employees based on scientific evidence that map to the organizations’ strategic goals and maximize employee motivation.
5. Develop Compensation Systems. I-O psychologists can create and implement compensation systems that are aligned with the organizations’ strategic goals and are supportive of organizational values and culture (e.g., pay-for-performance systems), as well as identify other types of incentives that are valued by employees.
6. Conduct Legal Audits and Provide Expert Witness Testimony. I-O psychologists are uniquely qualified to audit an organization’s performance management program and identify potential legal risks; they can also serve as expert witnesses in performance management cases.
7. Develop and Administer 360 Surveys. I-O psychologists can develop, implement, and coach to 360-degree feedback surveys that provide participants with detailed feedback regarding how their performance is viewed by supervisors, peers, direct reports, and/or clients and customers.

Performance Management Needs: An Example

The following is an example of an organization facing performance management challenges:

• A large retail chain was faced with low employee engagement in stores and declining sales.
• The existing annual performance review system for supervisors in stores consisted of three items related to overall performance.
• The majority of managers rated their employees as “superior” to maximize the provision of merit pay, which was linked to these ratings.
• Cost saving measures in the organization necessitated a new performance review system that accurately defined and tracked performance and rewarded only the highest performers.

Performance Management Needs: The Solution

I-O psychologists helped this organization by:

• Analyzing the store supervisor position and identifying the critical tasks performed on the job.
• Interviewing key leaders in the organization to determine the organization’s strategic goals and how the store supervisors’ behavior was tied to those goals.
• Developing a performance appraisal process to reward behaviors directly related to the organization’s strategic goals.
• Training managers to use the new performance rating process in a consistent and unbiased manner.
• Aligning the organization’s compensation system to reward performance directly related to meeting strategic objectives.

Performance Management Needs: The Results

This organization benefited by realizing the following results*:

• Sales increased by 30%.
• Store-level employee engagement (as rated in an annual employee survey) increased by 40%. The largest increase was on survey items related to finding meaning in one’s work and having a clear understanding of how one’s work affects the organization as a whole.
• Turnover decreased by 25%.

*The results here are an example of potential outcomes using the solution delineated above.