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600 E Boulevard Ave
Dept 113
Bismarck, ND 58505-0120

Phone · 701.328.3290
Fax · 701.328.1475
Email · hrms@nd.gov

Employment Verification · 701.328.2677

Management: Performance Management

Performance Evaluation

What It Is?

Performance Evaluation is a tool you can use to help enhance the efficiency of the work unit. This tool is a means to help ensure that employees are being utilized effectively. Employees can use it as a clear indication of what is expected of them before you tell them how well they are doing, and then as feedback of how well they did.

Purpose

Performance Evaluation is a multi-purpose tool used to:

The primary purpose of Performance Evaluation is to provide an opportunity for open communication about performance expectations and feedback. Most employees want feedback to understand the expectations of their employer and to improve their own performance for personal satisfaction. They prefer feedback that is timely and given in a manner that is not threatening.

Benefits

Many benefits result from the Performance Evaluation process:

Requirements

North Dakota Administrative Code (NDAC) Chapter 4-07-10 contains requirements for performance management and evaluation:

4-07-10-02: Each agency, department, and institution shall adopt and use a program to provide for the development and management of the performance of each employee in a classified position.

4-07-10-03: Each employee in a classified position must be informed of the responsibilities assigned to the employee's position and of the level of performance needed to successfully perform the work.

4-07-10-04: Each agency, department, and institution shall use the criteria in one or the other of the following performance management program types:

  1. Individual-based performance.
    1. Performance reviews are conducted at least annually.
    2. Performance reviews are based on individual job-related requirements.
    3. A standard form or approach is used.
    4. Performance standards, or goals and objectives are used.
    5. The review includes a review of past performance.
    6. The review includes a discussion of how performance may be improved or how an employee's skills may be developed.
  2. Team-based performance.
    1. Performance reviews are conducted at least annually.
    2. Performance reviews are based on overall team performance and how the employee functions as part of a team.
    3. The emphasis of the program is on improving the quality of a service or product, constantly improving systems and processes, and on preventing problems and eliminating them.
    4. The program provides guidance for the education, training, and self-improvement of the employee.

Employee Involvement

Performance evaluation is most effective when employees are actively involved in open discussion about their own performance expectations and about how they are doing in meeting those expectations.

Involving the employee in the performance evaluation process will make it a meaningful, worthwhile experience for you, the employee, and the organization because employees:

Ultimate benefits realized by the organization will be increased productivity, efficiency, job satisfaction, and morale and decreased turnover.

Performance Expectations – The Basis for Effective Performance Evaluation System

As NDAC 4-07-10-03 states each employee must be informed of the level of performance that is needed to successfully perform his or her work. These are performance expectations describing the conditions that exist when a job is done well. They usually come from an agency’s strategic plan and are communicated down through departmental goals, objectives, and individual position descriptions. Performance expectations should tie in with essential functions and qualifications required for the position as stated in the position description. (See The Position Description.) "Think SMART when developing performance expectations." Expectations should be Specific, Measurable, Achievable, Realistic, and Time-bound.

Specific – The performance expectation should be one that can be witnessed or observed, defined, and concrete.

Measurable – You should be able to assess, evaluate, and distinguish between different performance levels. The end result can be identified in terms of quantity, quality, time lines, acceptable standards, or procedures. Many say the work they do is not measurable. But if it is not measurable, how then do they know if a goal has been met and if their contributions have value? Definitive results can be identified for all work.

Achievable – Each performance expectation should be one that can be achieved by the employee without barriers that hinder its completion. However, it should not be so easily achieved that the employee is not challenged nor so difficult that the employee becomes frustrated. It should be reasonable.

Realistic – Each expectation should be an actual requirement of the employee’s job and within the parameters of the position description.

Time Bound – Each expectation should have a time frame associated with it – daily, weekly, etc.

Some factors for which expectations may be set forth and measured are:

Steps of Effective Performance Evaluation

- Review

Look at the previous evaluation for:

- Analysis

Analyzing Causes of Gaps

Management often assumes that where actual performance falls short of expected performance, employees must try harder. However, it is very important to analyze why a gap exists between expected performance and actual performance to determine if there is a cause other than inadequate employee efforts. Most causes will fall into three categories:

The cause of a performance gap may overlap a couple categories. It is imperative that you and your employee communicate to identify the cause of the gap and arrive at solutions to eliminate or minimize the gap.

The Evaluation Meeting

Before the performance evaluation meeting:

During the meeting:

Strategies and Techniques

Not all performance evaluation methods work equally well in every organization – one size does not fit all! It is important to consider the categories of employees to be appraised (i.e. managers vs non-managers), the types of jobs performed, the nature of the relationship between employees and managers, the purpose(s) which the evaluation is intended to serve. Other factors are the availability of in-house expertise, developmental costs, and how easy is it to use.

At the core of all successful evaluation formats are clearly defined and explicitly communicated standards or expectations of employee performance. Employees must understand what is expected of them.

Descriptions of the various performance evaluation methods can be found in the Appendix of this section.

You, as a supervisor, should visit with your human resources office or a representative from Human Resource Management Services regarding implementing a strategy or using a technique that will best serve your needs.

Common Evaluation Errors

There are many errors that supervisors unconsciously make during performance evaluation. A few of the most common are:

Frequency

NDAC 4-07-10 requires that performance evaluation be done at least annually. But annual feedback alone may not be appropriate for every situation. As stated earlier, employees want feedback in a timely manner. They don’t want to hear in June about how well they did last August. They want to know now while it’s fresh in their mind and they can revel in their success.

Annual feedback fails to correct inadequate performance or unacceptable work behavior at the most effective time – when it occurs. It is not effective for employees to hear in June about inappropriate behavior that occurred last August. And it’s not fair – the employee didn’t have the opportunity to learn from what was wrong and improve during the time from the occurrence to the evaluation. Immediate feedback is the most effective method of managing performance. Day-to-day feedback is critical to obtaining immediate behavior improvement.

A continuous feedback process addresses the basic needs of the employer to provide frequent feedback to employees. Desired performance is identified and reinforced. Undesirable performance is identified and dealt with promptly - at a time when change can be made more easily. The process also addresses the basic needs of the employees to know how they are doing.

More formal performance feedback should be conducted at least annually, although semi-annually or quarterly would be better. When feedback is provided on a more frequent basis, the feedback discussions can focus more on the present and the future – not the past as in traditional annual discussions.

Conflicting Purposes of the Evaluation Process

As you saw at the beginning of this Chapter, there are many purposes for performance evaluation. Because time may be scarce and performance evaluation is seen as time consuming, the same management tool may be used for many purposes. Sometimes those purposes conflict. For example, if the employee has inadequate performance and is not eligible for a salary increase, it will be difficult to get the employee interested in discussing training and development opportunities. The employee is concentrating on how s/he can get the supervisor to increase their salary. A technique to emphasize the performance-related aspects of the evaluation process is to conduct performance evaluations at a time that does not coincide with annual salary adjustments in July. Alternatives to conducting performance evaluations in June or July are the employee’s employment anniversary date, a calendar year schedule, or another notable date.

Another conflict in the evaluation process is when an employee is rewarded with a promotion based only on good performance, without focusing on the requirements of the new job versus the employee’s qualifications. If you are using performance evaluation as an indicator of future performance, ensure that the factors that were evaluated in previous positions are reflective of what is required in the new position.

Legal Considerations

Many of the same laws listed in the Employee Selection section, apply during any phase of the employment process or relationship – including performance evaluation. To minimize the risk of violating legal requirements:

Giving Constructive Performance Feedback

It is very difficult for a supervisor to address a performance issue with an employee without arousing some defensiveness. How then can you call attention to a performance deficiency in a way that is constructive?

Supervisory Management Development Program

The Supervisory Management Development Program is a three-part program covering communicating effectively, managing conflict, and developing people and performance management. The program was developed by Sterling Institute and Human Resource Management Services specifically for supervisors in state government and is conducted by Human Resource Management Services staff. To find out more about this program, please call Human Resource Management Services at 328-3290.

APPENDIX

Methods of Performance Evaluation

Each of the performance evaluation methods listed below may be used to varying degrees. We recommend that agencies analyze their specific needs and choose any combination of the following that best meets those needs. Human Resource Management Services will, upon request, assist agencies in their analysis.

- Multi-source Assessment (360-Degree Feedback, Full-circle Appraisal)

This method differs significantly from the traditional supervisor/subordinate performance evaluation. Multi-source assessment involves gathering information from a number of customers who actually deal with the employee providing feedback – both internal and external. Internal customers include the immediate supervisor, other managers, co-workers, and subordinates. External customers may include clients, applicants, consultants, staff from other agencies, legislators, etc. The basis of this method is to provide a broader assessment of how an employee is doing on the job. This method is viewed as an optimal tool for identifying areas for improvement, guiding behavioral change, and generally enhancing performance management capabilities because it is not dependent on a single individual’s perceptions. It makes the employee much more accountable to the various customers because they now have input into the employee’s performance rating.

- Self-Appraisal

Provides the opportunity for employees to evaluate their own performance and express how they think they’ve performed without being influenced by their supervisor’s judgements. Supervisors also evaluate performance on the same factors and use that as a basis to compare responses. This can reveal areas of agreement or highlight differences of opinion. The advantage of this method is that it provides more interaction between supervisors and subordinates, greater agreement on performance expectations, and greater accountability for performance through increased employee participation in the review process. Supervisors still have the responsibility to write reviews and provide the employee with honest communication about performance. They must also be able to provide explanations for differences of opinion about performance so employees can understand what they are doing wrong and how they can do things better.

- Subordinate Appraisal of Managers (Upward appraisal)

Supervisors are reviewed by those they supervise. This method serves to provide feedback on the qualitative aspects of management performance – how well they communicate, provide direction, delegate responsibility, etc. Employees’ fear of reprisal may inhibit them from honestly providing feedback on their supervisor’s performance. However, providing anonymity and working with supervisors to handle constructive criticism may guard against that.

- Peer

This method involves coworkers evaluating an employee. It is based on the premise that individuals can relate to an employee as their equal and are in the best position to judge the employee’s performance because they understand the nature of the job and are familiar with the activities of the employee. This method is particularly useful in organizations having self-directed work teams, but could be used in other settings as well. An advantage is that peer appraisal relates more to results than efforts. Disadvantages perceived are that peers are too lenient and tend to give high ratings to friends and low ratings to those they dislike.

- Management by Objectives (MBO)

MBO is a form of results-oriented appraisal. It is commonly used for supervisors, but may be used for other employees as well. It requires that both the supervisor and the subordinate agree upon specific objectives in the form of measurable results. The objectives are the standards of performance. MBO is intended to motivate stronger performance on the part of managers and employees. It is assumed that if employees meet their goals, supervisors will meet their goals, and organizations will then meet their goals. MBO has the following components: (1) major objectives to be accomplished within specified dates, (2) action plans and milestones for accomplishing the objectives, (3) periodic meetings with the manager and employee to review progress and make corrections if necessary, and (4) an assessment of employee performance at the end of the MBO cycle. An advantage of MBO is that it is a participative approach in which employees have input in setting their own objectives, as well as being involved in decisions that affect the objectives of the organization. MBO has been criticized as being based on numerical quotas rather than continuous improvement process, and that it focuses on the performance of individuals at the expense of teamwork. It is also very time consuming, requiring a considerable amount of administrative work.

- Continuous Improvement Review

Concentrates on current day-to-day results that can be linked directly to organization-wide improvements in quality and productivity. However, the formal evaluation must accurately reflect the entire review period, i.e. probationary, annual, etc.

- Behaviorally-anchored Rating Scale

This is a method where standards are described in the form of behavior expected of an employee. The descriptions are based on critical incidents determined to be characteristic of the various levels of performance. The descriptions help to provide objectivity in rating. This tends to focus on activity rather than results.

- Trait Format

This format describes traits of an individual. Some examples are initiative, dependability, cooperation. Be aware that while those traits may be factors affecting an individual’s performance, to evaluate traits alone becomes subjective and is, therefore, difficult to defend.

- Critical Incident Method

This involves observing and recording information about unusually good or unusually poor behavior. It is usually used in conjunction with another rating technique to support the evaluation and provides specific examples to discuss with the employee. Documentation should be factual, objective, and job-related.

- Essay or Narrative Format

This format is a simple approach that requires evaluators to write or answer questions about past performance, strengths and weaknesses, training and development needs, etc.. This format is very suitable to jobs in which there are few quantifiable results, and it provides opportunity for considerable detail about performance issues. The format, however, is difficult to use for comparing performance with other employees.

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