Employee Development and Performance Management - dummies

Employee Development and Performance Management

By Herman Aguinis

Employee development is a component of an effective performance management system. For employee development to be successful, it has to be a joint activity entered into by both the employee and the manager.

To do so, the first step is to create a personal development plan.

Create employee development plans

To be most useful, personal development needs to answer the following questions:

  • How can I continually learn and grow in the next year?
  • How can I do better in the future?
  • How can I avoid performance problems I faced in the past?
  • Where am I now and where would I like to be in terms of my career path?

Information to be used in designing development plans comes from the performance evaluation form. You can design a development plan based on each of the performance dimensions evaluated. For example, if the performance dimension “communication” is rated as substandard, this area would be included in the development plan.

Implement employee development plans

The direct supervisor has an important role in the creation and completion of the employee’s development plan.

Because of the critical role of the direct supervisor in the employee development process, it is a good idea for the supervisor to have their own development plan as well. This will help the supervisor understand the process from the employee’s perspective, anticipate potential roadblocks and pain points, and create a plan in a collaborative fashion.

If you are a manager, make sure you do the following if you want your employees’ development plans to be implemented effectively:

  • Explain what is required of the employee to reach a required performance level
  • Refer to appropriate development activities
  • Review and make suggestions about development objectives
  • Check on the employee’s progress toward development objective achievement
  • Offer the opportunity for regular check-ins and reinforcing positive behaviors

To be successful in implementing each of the five success factors listed, supervisors themselves need to be motivated to support the employees’ completion of their development objectives. For this to happen, supervisors must be held accountable and rewarded for doing a good job of helping their employees develop.

Define and measure performance

Performance is a combination of two things:

  • Behaviors and actions: what an employee does
  • Results and products: the outcomes of an employee’s behavior

Do you see the arrows creating a circular motion in the figure? This means that behaviors and actions affect results and products, and vice versa. For example, if an employee puts a lot of time in preparing for an important client presentation (behavior), the client will be pleased (result). In turn, if the client is satisfied (result), this will motivate the employee to allocate sufficient time to client presentations in the future (behavior).

performance combines behavior and action
Performance is a combination of behaviors and actions as well as results and products.

Measure performance as behaviors

To measure behaviors, you first cluster them into competencies. These are clusters of knowledge, skills, and abilities (KSAs) that are critical in determining how results will be achieved. Examples of competencies are customer service, written or oral communication, creative thinking, and dependability.

Competencies are not directly observable, so you must rely on key performance indicators (KPIs), which are measurable behaviors telling us the extent to which the competency is present.

An indicator is a behavior that, if displayed, shows that the competency is present.

Take the case of a professor teaching an online course. An important competency is “communication.” This competency is defined as “the set of behaviors that enables a professor to convey information so that students are able to receive it and understand it.” For example, one of the KPIs is whether the professor is conveying information during preassigned times and dates. That is, if the professor is not present at the chat room during the prespecified dates and times, no communication is possible.

Another behavioral indicator of the competency communication is whether the responses provided by the professor address the questions asked by the students or whether the answers are only tangential to the questions asked.

Measure performance as results

To measure results, you first need to answer the following two questions:

  • What are the key accountabilities — different areas in which this individual is expected to focus efforts?
  • Within each accountability, what are the expected performance objectives — goals that should be achieved?

Key accountabilities are broad areas of a job for which the employee is responsible for producing results. Objectives are statements of important and measurable outcomes for each accountability.

If you manage people, you need to become a performance management leader, meaning that you guide employees so their performance is aligned with the mission, vision, objectives, and strategies of your unit and your organization.

To transition from being a manager to becoming a performance management leader, you must learn a few important skills.

Become an effective coach

Coaching is key to staff training and development. It is a collaborative, ongoing process in which the manager interacts with direct reports and takes an active role and interest in their performance.

Good coaches do three things: they direct, motivate, and reward employee behavior.

Coaching happens every day. It is about helping to correct and improve any performance that doesn’t meet expectations. But it is also about long-term performance and involves ensuring that each employee’s development plan is being achieved.

Being a coach is similar to serving as a consultant, and for coaching to be successful, you must establish a helping relationship.

Do you want to be an effective coach? Then follow these success factors:

  • Establish a good coaching relationship. For coaching to work, the relationship between the coach and the employee must be trusting and collaborative. You need to listen to understand. You need to try to walk in the employee’s shoes and view the job and organization from his or her perspective. You need to coach with empathy and compassion. Such compassionate coaching will help develop a good relationship with the employee.
  • Make sure the employee is the source and director of change. You must understand that the employee is the source of change and self-growth. Accordingly, you need to facilitate the employee’s setting the agenda, goals, and direction.

The purpose of coaching is to change employee behavior and set a direction for what the employee will do better in the future. This type of change will not happen if the employee isn’t in the driver’s seat.

  • Make sure you understand that the employee is whole and unique. You must understand that each employee is a unique individual with several job-related and job-unrelated identities (for example, computer network specialist, father, skier) and a unique personal history. You must try to create a picture of your employees that is complete and rich so that they bring their whole selves to work. It will be beneficial if you have knowledge of the employee’s life and can help the employee connect his life and work experiences in meaningful ways.
  • Facilitate employee growth. Your main role is one of facilitation. You must direct the process and help with the content of a developmental plan but not take control of these issues. You need to maintain an attitude of exploration: Help expand the employee’s awareness of strengths, resources, and challenges. And you need to facilitate goal setting.

You need to understand that coaching isn’t something done to the employee, but done with the employee.

Give effective feedback

Giving feedback to an employee regarding their progress toward achieving their goals is a key component of the coaching process. Effective feedback is not limited to an annual employee performance review.

Feedback includes information about both positive and negative aspects of job performance and lets employees know how well they are doing.

Positive feedback

Although most people are a lot more comfortable giving feedback on good performance than they are on poor performance, you need to follow best practices when you give praise.

Here are some best practices you should implement:

  • Positive feedback should be sincere and given only when it is deserved. If you give praise repeatedly and when it isn’t deserved, employees are not able to see when a change in direction is needed.
  • Positive feedback should be about specific behaviors or results. You should give feedback within context so that employees know what they need to repeat in the future.
  • In giving positive feedback, you should take your time and act pleased. Don’t rush through the information.
  • Don’t give positive feedback by referring to the absence of the negative. For example, avoid saying “not bad” or “better than last time.” Instead, praise should emphasize the positives and be phrased, for example, as “I like the way you did that” or “I admire how you did that.”

Constructive feedback

Constructive feedback includes information that performance has fallen short of expectations. This type of feedback is sometimes referred to as “negative feedback,” but I prefer to use “constructive feedback” because this label has a more positive and future-oriented connotation.

The goal of providing constructive feedback is to help employees improve their performance in the future; it isn’t to punish, embarrass, or chastise them.

It is not easy to give constructive feedback. Why? Managers fear negative reactions such as employees becoming defensive and even angry. Friendships at work can be damaged.

Constructive feedback is most useful when early coaching has been instrumental in identifying warning signs and the performance problem is still manageable. Constructive feedback is most likely to be accepted when it is given by a source who uses straight talk and not subtle pressure and when it is supported by hard data.

Conduct effective review meetings

Discussions to review various aspects of an employee’s performance evaluation serve three important purposes:

  • These discussions allow employees to improve their performance by identifying performance problems and solutions for overcoming them.
  • They help build a good relationship between the supervisor and the employee because the supervisor shows that they care about the employee’s ongoing growth and development and that they are willing to invest resources, including time, in helping the employee improve.
  • Performance management leaders use review discussions as stay interviews. Stay interviews focus on finding out what makes employees stay in the organization and help managers create strategies to enhance employee engagement and retain star performers.

Set up and separate review meetings

Because performance management leaders play these paradoxical roles, it’s usually helpful to separate the various meetings related to performance. Separating the meetings also minimizes the possibility of negative surprises. Also, when meetings are separated, it’s easier to separate the discussion of rewards from the discussion about future career development, which allows employees to give their full attention to each issue, one at a time.

Effective employee development is not reliant upon one annual performance appraisal; performance management systems can involve as many as six formal meetings. Each of these sessions should be seen as a work meeting with specific goals, including the following:

  • System inauguration: A discussion of how the system works and the identification of the requirements and responsibilities resting on the employee and supervisor. This discussion includes the role of self-appraisal and the dates when the employee and supervisor will meet formally to discuss performance issues.

This meeting is particularly important for new employees, who should be introduced to the performance management system as soon as they become members of the organization.

  • Self-appraisal: This meeting involves the employee’s assessment of themselves. This meeting is informational in nature, and at this point, the supervisor doesn’t pass judgment on how the employee regards their own performance. This meeting provides an opportunity for the employee to describe how they see their own performance during the review period. It is helpful if they are given the same employee evaluation form to be filled out later by the supervisor so that they can provide self-ratings using the same dimensions that will be used by the supervisor.
  • Classical performance review: During this meeting, you discuss employee performance, including both the perspective of the supervisor and the employee. Most performance management systems include only this type of meeting. No other formal meetings to discuss performance are usually scheduled. This meeting is mainly past-oriented and typically doesn’t focus on what performance should look like in the future.
  • Merit/salary review: During this meeting, you discuss what, if any, compensation changes will result as a consequence of the period’s performance. It is useful to separate the discussion of rewards from the discussion of performance so that the employee can focus on performance first, and then, on rewards. Although these meetings are separate, supervisors should explain clearly the link between the employee’s performance, discussed in detail in a previous meeting, and the rewards given.

Rewards are not likely to carry their true weight if they are not linked directly to performance.

  • Developmental plan: In this meeting, you discuss the employee’s developmental needs and what steps will be taken so that performance will be improved during the following period. This meeting also includes information about what types of resources will be provided to the employee to facilitate the development of any required new skills.
  • Objective setting: This meeting includes setting developmental goals for employees, both behavioral and results-oriented, regarding the following review period. At this point, the employee has received very clear feedback about their performance during the past review period, knows what rewards will be allocated (if any), understands developmental needs and goals, and knows about resources available to help in the process of acquiring any required skills.

Although six types of meetings are possible, not all six take place as separate meetings. For example, the self-appraisal, classical performance review, merit/salary review, development plan, and objective setting meetings may all take place during one umbrella meeting, labeled a “performance review meeting.”

Optimal sequence for review meetings

Regardless of the specific type of meeting, performance management leaders should take several steps before the meeting takes place:

  1. Give at least a two-week advance notice to the employee to inform them of the purpose of the meeting and enable her to prepare for it.
  2. Block out sufficient time for the meeting and arrange to meet in a private location without interruptions.

Taking these two steps sends a clear message that the meeting is important and that, consequently, performance management is important.

If several meetings are merged into one labeled “performance review meeting,” the optimal sequence of events for such a meeting is the following:

  1. Explain the purpose of the meeting.
  2. Conduct self-appraisal.
  3. Share performance data and explain rationale.
    1. Discuss development.
    2. Ask employee to summarize.
    3. Discuss rewards.
    4. Hold follow-up meeting.
    5. Discuss approval and appeals process.
    6. Conduct final recap.

If you are dealing with a top performer, use the final recap meeting as a stay interview by asking these types of questions:

  • Have you ever thought about leaving our team?
  • How can I best support you?
  • What do you want to learn here?
  • What can you learn here that will make you feel good when you go home every day?

Although stay interviews will not ensure that a star employee will never move, they can be very useful in identifying the factors that matter most to a team’s most impactful contributors.

See also How to Follow Up After a Job Performance Appraisal Session.