PERFORMANCE MANAGEMENT & COMPETENCY MAPPING

MODULE 1: INTRODUCTION

Definition: Performance management is a continuous process of identifying, measuring and developing the performance of individuals and teams and aligning performance with the strategic goals of the organization .

Let’s consider each of the definition’s two main components:

1. Continuous process: Performance management is onging process of setting goals and objectives, observing performance & giving & receiving ongoing coaching & feedback.

2. Alignment with strategic goals. Performance management requires that managers ensure that employees’ activities & outputs are congruent with the organization’s goals & consequently, help the organization gain a competitive advantage. PM therefore creates a direct link between employee performance & organizational goals & makes the employees’ contribution to the organization explicit.

The performance management contribution:

There are many advantages associated with the implementation of performance management system. Implementing a well-designed performance management system has many advantages. From the perspective of employees, a good system increases motivation and self-esteem, helps improve performance, clarifies job tasks and duties, provides self-insight and development opportunities, and clarifies supervisors’ expectations. From the perspective of managers, good systems allow them to gain insight about employees, allow for more fair and appropriate personnel actions, help them to communicate organisational goals more clearly, let them differentiate good and poor performers, and help drive organisational change. Finally, from the perspective of the HR function, a good system provides protection from litigation

Dangers of poorly implemented PM systems:

What happens when performance management do not work as intended. Consider the following list:

1. Increased turnover. If the process is not seen fair, employees may become upset &leave the organization. They can leave physically (i.e. quit) or withdraw psychologically (i.e., minimize their effort until they are able to find a job elsewhere).

2. Use of misleading information: If standardized system is not in place, there are multiple opportunities for fabricating information about an employee’s performance.

1

3. Lowered self-esteem: Self-esteem may be lowered if feedback is provided in an inappropriate 7 inaccurate way. This, in turn can create employee resentment.

4. Wasted time money: Performance management systems cost money & quite a bit of time. These resources are wasted when systems are poorly designed & implemented.

5. Damaged relationships: As a consequence of a deficient system, the relationship among the individuals involved may be damaged, often permanently.

6. Decreased motivation to perform: Motivation may be lowered for many reasons including the feeling that superior performance is not translated into meaningful tangable (e.g., pay increase) or intangiable (e.g., personal recognition) rewards

7. Employee burnout & job dissatisfaction: When the performance assessment instrument is not seen as valid & the system is not perceived as fair, employees are likely to feel increased levels of job burnout & job dissatisfaction. As a consequence, employees are likely to become increasingly irritated.

8. Increased risk of litigation: Expensive lawsuits may be filed by individuals who feel they have been appraised unfairly.

9. Varying & unfair standards & ratings: Both standards & individual ratings may vary across & within units & also be unfair

10. Emerging biases: personal values, biases, & relationships are likely to replace organizational standards.

Aims & Roles of PM Systems:

Performance management systems serve multiple purposes.

First, they serve a strategic purpose because they help link employee activities with the organisation’s mission and goals, they identify results and behaviours needed to carry out strategy, and they maximize the extent to which employees exhibit the desired behaviors and produce the desired results.

Second, they serve an administrative purpose in that they produce information used by the reward system and other HR decision-making (e.g., promotions, termination, disciplinary actions).

They serve an information purpose because they are the source of information for employees to learn about their performance vis-à-vis the expectations,

Fourth, they serve a developmental purpose in that performance feedback allows individuals to learn about their strengths and weaknesses, to identify training needs, and to make better decisions regarding job assignments.

Fifth, Organisational maintenance purpose because they provide useful information for workforce planning and for evaluating the effectiveness of other HR systems (e.g., comparing performance before and after an expensive training programme to see whether training made a difference).

Finally, performance management systems also serve a documentation purpose – for example to support HR decisions and help meet legal requirements.

Characteristics of an ideal PM systems:

2

Ideal performance management systems are rare. Such ideal systems are: Many trade-offs take place in the real-world implementation of performance management systems. However, the closer the system is to the ideal characteristics, the greater the return will be for employees, supervisors, and the organisation as a whole. A performance management system is the key factor determining whether an organisation can manage its human resources and talent effectively. Performance management provides information on who should be trained and in what areas, which employees should be rewarded, and what types of skill are lacking at the organisation or unit level. Therefore performance management also provides information on the types of employee who should be hired. When implemented well, performance management systems provide critical information that allows organisations to make sound decisions regarding their people resources. As should be evident by now, implementing an ideal performance management system requires a substantial amount of work. But this does not start when the system is put into place. The process starts much earlier, because unless specific conditions are present before the system is implemented, the system will not achieve its multiple purposes. Module PE02 provides a description of the entire performance management process.

However we should strive to place a check mark next to each of these characteristics: the more features that are checked, the more likely it will be that the system will live up to its promise.

Strategic congruence: The system be congruent with the unit & organisation’s strategy. In other words, individual goals must be aligned with unit & organizational goals.

Thoroughness: The system should be thorough regarding four dimensions. First, all employees should be evaluated (including managers). Second all major job responsibilities should be evaluated (including behaviors & results). Third, the evaluation should include performance spanning the entire review period, not just the few weeks or months before the review. Finally, feedback should be given on positive performance aspects as well as those that are in need of improvement.

Practicality: Systems that are too expensive, time consuming, & convoluted will obviously not be effective. Good, easy-to-use systems (e.g., performance data are entered via user-friendly software) are available for managers to help them make decisions. Finally the benefits of using the system( e.g., increased performance & job satisfaction) must be seen as outweighing the costs(e.g., time, effort, expense).

Specificity: A good system should be specific,it should provide detailed & concrete guidance to employees about what is expected of them & how they can meet these expectations.

Identification of effective & ineffective performance: The performance management system should provide information that allows for the identification of effective & ineffective performance. That is, the system should allow for distinguishing b/w effective & ineffective behaviors & results thereby also allowing for the identification of employees displaying various levels of performance effectiveness. In terms of decision making, a system that classifies or ranks all levels of performance & all employees, similarly is useless.

3

Reliability: A good system should include measures of performance that are consistent & free of error. For example, if two supervisors provided ratings of the same employee & performance dimensions, ratings should be similar.

Performance Management Process:

Performance management is an ongoing process. It never ends. Once established in an organisation, it becomes part of an organisation’s culture. The performance management process includes six closely related components: (a) prerequisites, (b) performance planning, (c) performance execution, (d) performance assessment, (e) performance review, and

4

(f) Performance Renewal & Recontracting.

Job analysis can be conducted using interviews, observation, or off-the-shelf questionnaires. Once a list of tasks has been compiled, all incumbents should have an opportunity to review the information and rate each task in terms of frequency and criticality. Each of the six components of the performance management process plays an important role. If any of these components is implemented poorly, then the entire performance management system suffers. For example, lack of knowledge of the organisation’s mission and the job in question (i.e., prerequisites) will not allow performance planning (i.e., performance roadmap) to be aligned with organisational goals. This in turn will lead to poor performance execution. In short, a performance management system is only as good as its weakest component. The links between the various components need to be established clearly. For example, performance planning needs to be closely related to performance execution. Performance planning is a futile exercise if execution does not follow from planning.

The First Component Of The Performance Management Process Involves Two Prerequisites . First, there is a need to have good knowledge of the organisation’s mission. This knowledge, combined with knowledge regarding the mission of one’s unit, allows employees to make contributions with a positive impact on their unit and on the organisation as a whole. Second, there is a need to have good knowledge of the job in question. A job analysis allows for the determination of the key components of a particular job: what tasks need to be done, how and what KSAs are needed. If we have good information regarding a job, then it is easier to establish criteria for job success.

The Second Component Of The Performance Management Process Involves Performance Planning: Performance planning includes the consideration of results and behaviour, as well as a development plan. A discussion of results needs to include key accountabilities (i.e., broad areas for which an employee is responsible), specific objectives for each key accountability (i.e., goals to be reached), and performance standards (i.e., what are acceptable and unacceptable levels of performance). A discussion of behaviours needs to include competencies (i.e., clusters of KSAs). Finally, the developmental plan includes a description of areas that need improving and goals to be achieved in each area.

The Third Component Involves Performance Execution: Both the employee and the manager are responsible for performance execution. For example, the employee needs to be committed to goal achievement, and should take a proactive role in seeking feedback from his or her supervisor. The burden is on the employee to communicate openly and regularly with the supervisor. Also, the employee has a responsibility to be prepared for the performance review by conducting regular and realistic self-appraisals. On the other hand, the supervisor also has important responsibilities. These include observing and documenting performance, updating

5

the employee on any changes in the goals of the organisation, and providing resources and reinforcement so that the employee can succeed and continues to be motivated.

The Fourth Component Involves Performance Assessment: Both the employee and the supervisor must evaluate employee performance. Involvement of the employee in the process increases his or her ownership and commitment to the system. In addition, it provides important information to be discussed during the performance review. In the absence of self-appraisals, it is often not clear to supervisors whether employees have a real understanding of what is expected of them.

The Fifth Component Involves Performance Review: This is when the employee and manager meet to discuss employee performance; this meeting is usually called the appraisal meeting. This meeting usually emphasizes the past: what the employee has done and how. However, an effective appraisal meeting also focuses on the present and the future. The present involves the changes in compensation that may be a product of the results obtained. The future involves a discussion of goals and development plans the employee will be expected to achieve during the next review period.

The Final Component Involves Performance Renewal & Recontracting: Essentially this component is identical to the performance planning stage. However, performance renewal and recontracting uses information gathered during the review period to make adjustments as needed. For example, some new key accountabilities and competencies may be included, or some goals may have to be adjusted either upwards or downwards.

Performance Management & Strategic Planning:

Strategic Planning: Strategic planning is a process that involves describing the organization’s destination, assessing barriers that stand in the way of destination, & selecting approaches for moving forward. The main goal of strategic planning is to allocate resources in a way that provides organizations with a competitive advantage. Overall, a strategic plan serves as a blueprint that defines how the organizations will allocate its resources in pursuit of its goals.

Strategic planning involves defining the organisation’s present and future identity. The overall purpose of a strategic plan is to serve as a blueprint allowing organisations to allocate resources in a way that provides the organisation with a competitive advantage. Strategic planning serves several purposes, including defining an organisation’s identity, preparing for the future, analysing the environment, providing focus, creating a culture of cooperation, generating new options, and serving as a guide for the daily activities of all organisational members. Performance management systems must rely on the strategic plan to be useful. The behaviours, results and development plans of all employees must be aligned with the vision, mission, goals and strategies of the organisation and unit. The process of creating a strategic plan begins with an environmental analysis, which considers both internal (e.g., organisational structure, processes, etc.) and external (e.g., economic, technological, etc.) trends. Internal trends can be classified as either strengths or weaknesses, and external trends can be classified

6

as either opportunities or threats. A gap analysis consists of pairing strengths/weaknesses with opportunities/threats and determining whether the situation is advantageous (i.e., leverage), disadvantageous (i.e., problem), or somewhere in between (i.e., constraint and vulnerability). The second step in creating a strategic plan is to write a mission statement based on the results of the gap analysis. A mission statement defines why the organisation exists, the scope of its activities, the customers served, and the products and services offered. Mission statements also include information such as what technology is used in production or delivery, and the unique benefits or advantages of the organisation’s products and services. Finally, a mission statement can include a statement of values and beliefs, such as the organisation’s managerial philosophy. The third component of a strategic plan is the vision statement, which includes a description of future aspirations. Whereas the mission statement emphasises the present, the vision statement emphasises the future. However, in many cases the mission and vision statements are combined into one. For vision statements to be most useful they must be: (a) brief, (b) verifiable, (c) bound by a timeline, (d) current, (e) focused, (f) understandable, (g) inspiring, and (f) a stretch. Once the mission and vision statements are created, the next step in the strategic planning process is to generate specific goals to help fulfil the mission and vision. Goals provide more specific information regarding how the mission and vision will be implemented. Typically, goals span a 5-year period. The final step in the strategic planning process is to identify strategies that will help achieve the stated goals. These strategies are game plans, and usually address issues around growth, survival, turnaround, stability, innovation and leadership. The HR function plays an important role in identifying strategies because they have knowledge of the organisation’s mission and vision as well as the organisation’s internal capabilities, or what is called an organisation’s human capital. The organisation’s strategic plan, including the mission, vision, goals and strategies, cascades down to all organisational levels. Thus each division/unit also creates its own strategic plan, which should be consistent with the organisation’s plan. The tasks and KSAs included in individual job descriptions must be congruent with the Organisation’s and unit’s strategic plans. In other words, job descriptions should include activities that, if executed well, will help fulfill the mission and vision. Job descriptions detached from strategic priorities will lead to performance evaluations focused on behaviours and results that are not central to an organisation’s success. The various choices in designing the performance management system are directly affected by an organisation’s strategic plan. Different missions and visions lead to different types of system, for example emphasising behaviours (i.e., processes) as opposed to results (i.e., outcomes). Top management must be aware that the performance management system is a primary tool to execute an organisation’s strategic plan. This awareness will lead to top management supporting the system. In addition, all organisational members need to be able to answer the ‘what’s in it for me’ question regarding the system. Implementing the performance management system will require considerable effort on the part of all those involved. For this reason, those doing the evaluation and those being evaluated should know how the system will benefit them directly.

7

MODULE 2: PERFORMANCE APPRAISAL SYSTEM IMPLEMENTATION

Defining Performance: Performance is about behaviours or what employees do, and not about what employees produce or the outcomes of their work. However, performance management systems typically include the measurement both of behaviours (how the work is done) and of results (the outcomes of one’s work). Performance is evaluative (i.e., we judge it based on whether it helps advance or hinder organisational goals) and multidimensional (i.e., many behaviours are needed to describe an employee’s performance).

Determinants of Performance:

What factors cause an employee to perform at a certain level? Why do certain individuals perform better than others? A combination of three factors allow some people to perform at higher levels than others: Performance is determined by a combination of

a) Declarative knowledge (i.e., information)b) Procedural knowledge (i.e., know-how) &c) Motivation (willingness to perform).

Thus,Performance = Declarative knowledge × Procedural knowledge × Motivation If any of the determinants has a value of 0, then performance also has a value of 0

Factors Determining performance:

Declarative knowledge Procedural knowledge MotivationFacts Cognitive Skill Choice to performPrincipals Psychomotor Skill Level of effortGoals Physical Skill Persistence of effort

Interpersonal Skill

Deliberate practice involves the following five steps:

1. Approach performance with the goal of getting better & better.2. As you are performing, focus on what is happening &why you are doing things the way

you do.3. Once your task is finished, seek performance feedback from expert sources, & the more

sources the better.4. Build mental modals of your job, your situation, & your organization.

8

5. Repeat steps 1-4 continually & on an ongoing basis.

Performance Dimensions:

As noted earlier, performance is multidimensional, meaning that we need to consider many different types of behaviors to understand performance. Although we can identify many specific behaviours, two types of behaviours or performance facets stand out: Task performance & contextual performance.

Contextual & task performance must be considered separately because they do not necessarily occur in tandem. An employee can be highly proficient at higher task, but be an underperformer regarding contextual performance.

Task performance: Activities that transform raw materials into the goods & services that are produced by the organisation. Activities that help with the transformation process by replenishing the supply of raw materials, distributing its finished products, or providing important planning, coordination, supervising, or staff functions that enables the organisation to function effectively & efficiently.

Contextual Performance: It is defined as those behaviors that contribute to the organisation’s effectiveness by providing a good environment in which task performance can occur. Contextual Performance includes behaviors such as the following:

Persisting with enthusiasm & exerting extra effort as necessary to complete one’s own task activities successfully (e.g., being punctual 7 rarely absent, expending extra effort on the job)

Volunteering to carry out task activities that are not formally part of the job (e.g., suggesting organisational improvements, making constructive suggestions)

Helping & cooperating with others (e.g., assisting & helping coworkers & customers) Following organisational rules & procedures(e.g., following orders & regulations,

showing respect for authority, complying with organisational values & policies) Endorsing, supporting rules & defending organisational objectives (e.g., organisational

loyalty, representing the organisational favorably to outsiders)

Ethical Performance: It focuses on doing the right thing. This sounds simple, but the fact is that nearly everyone faces dilemmas at work. The most frequent acts were cutting corners on quality control, covering up some incidents, abusing or lying about sick days, deceiving customers, & putting inappropriate pressure on other employees at work.

9

Approaches to Measuring Performance:

Trait Approach:

The trait approach emphasizes the individual performer & ignores the specific situation, behaviours, & results. If one adopts the trait approach, raters evaluate relatively stable trait. These can include abilities, such as cognitive abilities (which are not easily trainable) or personality (which is not likely to change over time). For example performance measurement may consist of assessing an employee’s intelligence & conscientiousness at the end of each review period.

Job Performance In Context:

What are some of the challenges of implementing a system that emphasizes the measurement of traits only? First, traits are not under the control of individuals. In most cases, they are fairly stable over one’s life span. They are not likely to change even If an individual is willing to exert substantial effort to do so. Consequently, employees may feel that a system based on traits is not fair because the development of these traits is usually beyond their control. Second the fact that an individual possesses a certain trait (e.g., intelligence) does not mean that trait will necessarily lead to desired results & behaviors. As noted in above flow chart individuals are embedded in specific situations. If the equipment is faulty & coworkers are uncooperative, even a very intelligent & conscientious employee is not likely to engage in behaviors conducive to supporting the organisation’s goals.

Behavior Approach:

The behavior approach emphasizes what employee do on the job & does not consider employees traits or the outcomes resulting from their behaviours. This is basically a process-oriented approach that emphasizes how an employee does the job.

The behavior approach is most appropriate under the following circumstances:

10

A PerformerIn A Given

Work Situation

Engages In Certain

Behaviors

That Produce Various Results

The link between behaviors & results is not obvious: Sometimes the relationship b/w behaviors & desired outcomes is not clear. In some cases, the desired result may not be achieved in spite of the fact that the right behaviors are in place.

Outcomes Occur In The Distant Future: When the desired results will not be seen for months, or even years, the measurement of behaviors in beneficial.

Poor Results Are Due To Causes Beyond The Performer’s Control: When the results of an employee’s performance are beyond the employee’s control, then it makes sense to emphasize the measurement of behaviors.

Result Approach:

Workers are skilled in the needed behaviors: An emphasis on results is appropriate when workers have the necessary knowledge & skills to do the work. In such situations, workers know what specific behaviors are needed to achieve the desired results & they are also sufficiently skilled to know what to do to correct any process related problems when the desired results are not obtained.

Behaviors & results are obviously related: In some situations certain results are obtained only if a worker engages in a certain specific behaviors. This is the case of job involving reparative task such as assembly-line work or newspaper delivery.

Results show consistent improvement over time: When results improve consistently over time. It is an indication that workers are aware of behaviors needed to complete the job successfully. In these situations it is appropriate to adopt a result approach to assessing performance.

There are many ways to do the job right: When there are different ways in which one can do the tasks required for a job, a results approach is appropriate. An emphasis on results can be beneficial because it could encourage employees to achieve the desired outcomes in creative & innovative ways.

Diagnosing the causes of poor performance:

As a manager one has to deal with the poor performance. To do that one needs to essentially identify the problem & the causes which created the problem, decide on a solution & make the solution work.

Following factors can lead to poor performance:

Faulty ManagementUnsupportive OrganizationInadequate work-systems & processesIndividuals In capabilities

11

Main differences b/w Task & Contextual Performance:

Task Performance Contextual PerformanceVaries across jobs Fairly similar across jobs

Likely to be prescribed Not likely to be role prescribedAntecedents: abilities & skills Antecedent: personality

Task performance relates to transforming raw materials into the goods and services which are specific to the job, the core technical skill. Contextual performance concerns aspects of an individual’s performance which maintains and enhances an organisation’s social network and the psychological climate that supports technical tasks. Borman and Motowidlo, (1997) contend that it is the contextual dimensions of job performance, rather than the technical components, that can be predicted from personality constructs and Borman, Penner, Allen and Motowidlo (2001) conclude that personality (Conscientiousness and Dependability) correlates more highly with organisational citizenship behaviours than with task performance. It appears that, conversely, cognitive abilities are more relevant for the prediction of task performance (Arvey & Murphy, 1998). Other research asserts that when the personality variables used in the prediction of performance are derived through job analysis, they predict task-related performance, as well as contextual job performance (Cue, 2002; Jenkins & Griffith, 2004). Jenkins and Griffith (2004) go on to state that in order to predict narrow aspects of performance, narrow traits (more specific, primary or facet level) should be used rather than broad global traits such as the FFM’s Openness to Experience, Conscientiousness, Extraversion, Agreeableness and Neuroticism.

Choosing performance measurement approach:

Trait Approach: What are some of the challenges of implementing a system that emphasizes the measurement of traits only? First, traits are not under the control of individuals. In cases, they are fairly stable over one's life span. They are not likely to change even individual is willing to exert substantial effort to do so. Consequently, employees feel that a system based on traits is not fair because the development of these traits is usually beyond their control.19 Second, the fact that an individual possesses a certain trait (e.g., intelligence) does not mean that this trait will necessarily lead to desired results and behaviors. As individuals are embedded in situations. If the equipment is faulty and coworkers are uncooperative, even a very recent and conscientious employee is not likely to engage in behaviors conducive supporting the organization's goals. In spite of these challenges, there are situations in which a trait -oriented approaches fruitful. For example, as part of its business strategy, an organization may anticipate drastic structural changes that will result in the reorganization of most functions

12

the resulting reallocation of employees. In such a circumstance, it may be useful to the traits possessed by the various individuals so that fair and appropriate decisions are made regarding the allocation of HR resources across the newly created organization.Behavior Approach: Sometimes the relationship between behaviors and the desired outcomes is not clear. In some cases, the desired result may not be achieved in spite of the fact that the right behaviors are in place. For example, a salesperson may not be able to close a deal because downturn in the economy. In other cases, results may be achieved in spite the absence of the correct behaviors. For example, a pilot may not check all items in the preflight checklist but the flight may nevertheless be successful take off and land safely and on time). When the link between behaviors and results is not always obvious, it is beneficial to focus on behaviors as opposed to outcomes.Result Approach: The results approach emphasizes the outcomes and results produced by the employees. It does not consider the traits that employees may possess or how employees do the job. This is basically a bottom-line approach that is not concerned about employee behaviors and processes but, instead, focuses on what is produced (e.g., sales, number of accounts acquired, time spent with clients on the telephone, number of errors). Defining and measuring results usually takes less time than defining and measuring behaviors needed to Thieve these results. Also, the results approach is usually seen as more cost-effective because results can be less expensive to track than behaviors. Overall, data resulting from results approach seem to be objective and are intuitively very appealing. The results approach is most appropriate under the following circumstances: Workers are skilled in the needed behaviors. An emphasis on results is appropriate when workers have the necessary knowledge and skills to do the work. In such situations, workers know what specific behaviors are needed to achieve the desired results and they are also sufficiently skilled to know what to do to correct any process related problems when the desired results are not obtained. Consider the example of a professional basketball player. A free throw is an unhindered shot made from the foul line which is given to one team to penalize the other team for committing a foul. Free throw shooting can make the difference between winning and losing in a close basketball game. Professional players know that there is really no secret to becoming a great free throw shooter: just hours and hours of dedicated practice besides actual basketball play. In assessing the performance of professional basketball players, the free throw shooting percentage is a key results-oriented performance indicator because most players have the skills to do it well. It's just a matter of assessing whether they do it or not. Behaviors & results are obviously related.Results show consistent improvement over time. There are many ways to do the job right.

Measuring results and behaviours:

As a reminder, key accountabilities are broad areas of a job for which the employee is responsible for producing results. A discussion of results also includes specific objectives that the employee will achieve as part of each accountability. Objectives are statements of important and measurable outcomes. Finally, discussing results also means discussing performance standards. A performance standard is a yardstick used to evaluate how well employees have achieved each objective. Performance standards provide information on acceptable and unacceptable performance, for example, regarding quality, quantity, cost, and

13

time. Organizations that implement a management by objectives (MBO) philosophy are likely to implement performance management systems, including objectives and standards. For example, the contract for the chief of police of the city of Flevoland in the Netherlands includes a direct link between objectives of the police department and his personal income.2 Similarly, the police department of the city of Utrecht (also in the Netherlands) has specific performance objectives including that 150 suspects of public violence and 1,050 minors suspected of any crime should be brought before the public prosecutor annually. Similar objectives have been set by police departments in England and Wales. Setting these objectives has not always led to the intended results because, in many cases, police officers resort to gaming strategies to achieve the objectives, often at the expense of providing a high-level quality of service to their local communities.3 Nevertheless, overall, an emphasis on objectives and standards is likely toallow employees to translate organizational goals into individual goals, which is a keygoal of MBO philosophies.

Determining Accountabilities: The first step in determining accountabilities is to collect information about the job. The primary source is, of course, the job description that has resulted from the job analysis and a consideration of unit- and organization-level strategic priorities. The job description provides information on the tasks performed. Tasks included in the job description can be grouped into clusters of tasks based on their degree of relatedness. Each of these clusters or accountabilities is a broad area of the job for which the employee is responsible for producing results.

Determining Objectives: After the accountabilities have been identified, the next step in measuring results is to determine specific objectives. Objectives are statements of an important and measurable outcome that, when accomplished, will help ensure success for the accountability. The purpose of establishing objectives is to identify a limited number of highly import that, when achieved, will have a dramatic impact on the overall success of organization. After objectives are set, employees should receive feedback on their progress toward attaining the objective. Rewards should be allocated to those employees who have reached their objectives.

Gathering Performance Information:

Appraisal Forms: At the core of any performance management system is the assessment of performance. Information on performance is collected by using forms, which can be filled out on paper or electronically. One advantage of filling out forms electronically is that the information is stored and it can easily be shared, for example, between the manager filling out the form and the human resources (HR) department. Also, having the data available in electronic form can help in subsequent analyses, for example, in making comparisons of the relative average performance levels of various units within the organization. Finally, using electronic forms is beneficial because, as changes take place in the organization or job in question, forms need to be revised and updated and electronic forms are usually easier to modify than paper forms. Regardless of whether they are electronic or paper, appraisal forms usually include a combination of the following components:

14

Basic employee information:. This section of the form includes basic employee information such as job title, division, department and other work group information, employee number, and pay grade or salary classification. In addition, forms usually include the dates of the evaluation period, the number of months and years the rater has supervised or worked with the employee, an employee's starting date with the company and starting date in the current job, the reason for appraisal, current salary and position in range, and the date of the next scheduled evaluation.Accountabilities, objectives, and standards. If the organization adopts a results approach, this section of the form would include the name and description of each accountability, objectives agreed upon by manager and employee, and the extent to which the objectives have been achieved. In many instances, the objectives are weighted in terms of importance, which facilitates the calculation of an overall performance score. Finally, this section can also include a subsection describing conditions under which performance was achieved, which may help explain why performance achieved the (high or low) level described. For example, a supervisor may have the opportunity to describe specific circumstances surrounding performance during the review period, including a tough economy, the introduction of, a new line of products, and so forth.Competencies and indicators: If the organization adopts a behavior approach, this section of the form includes a definition of the various competencies to be assessed, together with their behavioral indicators.Major achievements and contributions. Some forms include a section in which a rater is asked to list the two or three major accomplishments of the individual being rated during the review period. These could refer to results, behaviors, or both.Developmental achievements. This section of the form includes information about the extent to which the developmental goals set for the review period have been achieved. This can include a summary of activities, such as workshops attended and courses taken, as well as results, such as new skills learned. Evidence of having learned new skills can be documented, for example, by obtaining a professional certification. Developmental needs, plans, and goals. This section of the form is future oriented and includes information about specific goals and timetables in terms of employee development. As noted before, some organizations choose to create a separate development form and do not include this information as part of the performance appraisal form. Stakeholder input. Some forms include sections to be filled out by other stake holders, such as customers with whom the employee interacts. Overall, stakeholders are defined as people who have firsthand knowledge of and are affected by the employee's performance. In most cases, input from other stakeholders is collected from them by using forms separate from the main appraisal because not all sources of performance information are in the position to rate the same performance dimensions. For example, an employee may be rated on the competency "teamwork" by peers and on the competency "reliability" by a customer. A more detailed discussion of the use of various sources of performance information is offered later in this chapter.Employee comments. This section includes reactions and comments provided by the employee being rated. In addition to allowing formal employee input, which improves the perceived

15

fairness of the system, the inclusion of this section helps with legal issues because it documents that the employee has had an opportunity to participate in the evaluation process.Signatures. The final section of most forms includes a section in which the employee being rated, the rater, and the rater's supervisor provide their signatures to show they have seen and discussed the content of the form. The HR department may also provide approval of the content of the form.

Characteristics Of Appraisal Forms:

We should be aware that there is no such thing as a universally correct appraisal form. In some cases, a form may emphasize competencies and ignore results. This would be the case if the system adopted a behavior as opposed to results approach to measuring performance. In others, the form may emphasize developmental issues and minimize, or even completely ignore, both behaviors and results. In such cases, the form would be used for developmental purposes only and not for administrative purposes. One size does not fit all, and different components are appropriate based on the purposes of the appraisal. In spite of the large variability in terms of format and components, there are certain desirable features that make appraisal forms particularly effective:Simplicity. Forms must be easy to understand, easy to administer, quick to complete,clear, and concise. If forms are too long, convoluted, and complicated, it is likely that the performance assessment process will not be effective.Relevancy. Good forms include information related directly to the tasks and responsibilities of the job; otherwise, they will be regarded as an administrative burden and not as a tool for performance improvement.Descriptiveness. Good forms require that the raters provide evidence of performance regardless of the performance level. The form should be sufficiently descriptive that an outside party (e.g., supervisor's supervisor or HR department) has a clear understanding of the performance information conveyed.Adaptability. Good forms allow managers in different functions and departments to adapt them to their particular needs and situations. This feature encourages widespread use of the form.

Who Should Provide Performance Information?So far, we have assumed that the supervisor is the primary source for performance information. This is the case in most organizations because the supervisor observe employees directly and has good knowledge about performance standards. However: there are also alternative sources of performance information. Let's consider the use of the direct supervisor as a source of performance information, followed by the use of other sources including peers,subordinates, self, and customers SUPERVISORS: An advantage of using supervisors as a source of performance information is that are usually th the best position to evaluate performance in relation to strategic orgar_- zational goals. Also, supervisors are often those making decisions about rewards associated with performance evaluation. In addition, supervisors are able to differentiate among various

16

performance dimensions (e.g., adaptability, coaching, and development) regardless of the level of experience of the employee being rated.13 In shot_ supervisors are often the mostimportant source of performance information becaust they are knowledgeable about strategic issues, understand performance.

Peers: Many organizations use performance evaluations provided by peers. Take, for example, the system implemented at a large international financial services bank.15 Through acquisitions, the bank has been growing rapidly and has as its strategic goal the consolidation of its offices. Change management is extremely important to the successful implementation of this consolidation. The company is therefore revising how it assesses the competency "teamwork" at the senior and middle management levels, with the belief that successful teamwork is crucial to change management initiatives. Specifically, one-third of the score for this competency is determined by ratings provided by peers. As an additional example, the Australian National University Medical School recently introduced a system in which students rate their peers in terms of personal and professional performance. Students begin to provide anonymous ratings on-line at the end of their first year in medical school. The system allows students to share their assessment of their peers and provides faculty with early-warning signs to assist students who may not be performing up to personal or professional standards.

Subordinates: Subordinates are a good source of information regarding the performance of their managers.18 For example, subordinates are in a good position to evaluate leadership competencies, including delegation, organization, and communication. In addition subordinates may be asked to rate their manager's ability to (1) remove barriers that employees face,shield employees from politics, and (3) raise employees' competence. With this type of system, subordinates may hesitate to provide upward feedback if put on the spot: however, if managers take the time to involve employees in the process by soliciting their input, employees are more likely to give honest feedback.

Customers: Customers, and other key stakeholders in general, provide yet another source of performance information. Collecting information from customers can be a costly and time consuming process; however, performance information provided by customers is particularly useful for jobs that require a high degree of interaction with the public or with particular job-related individuals (e.g., purchasing managers, suppliers, sales representatives). Also, performance information can be collected from internal customers.

Implementing Performance Management System:

Communication Plan: In general, having more and better knowledge of the performance management system leads to greater employee acceptance and satisfaction.1 Organizations often design a communication plan to ensure that information regarding the performance management system is widely disseminated in the organization. A good communication plan answers the following questions

17

What is performance management? Answering this question involves providing general information about performance management, how performance management systems are implemented in other organizations, and the general goals of performance management systems.How does performance management fit into our strategy? To answer this question, we should provide information on the relationship between performance management and strategic planning. Specifically, information is provided on how the performance management system will help accomplish strategic goals.What's in it for me? A good communication plan describes the benefits of implementing performance management for all those involved. How does it work? Answering this question entails giving a detailed description of the performance management process and time line: for example, when meetings will take place, what the purposes of each meeting are, and when decisionsabout rewards will be made.What are my responsibilities? The communication plan should include information on the role and responsibilities of each person involved at each stage of the process. For example, it includes a description of the employees' and supervisors'main responsibilities in the performance management process.How is performance management related to other initiatives? The communication plan should include information on the relationship between performance management and other initiatives and systems, such as training, promotion, and succession planning.

APPEALS PROCESS:The inclusion of an appeals process is important in gaining employee acceptance for the performance management system because it allows employees to understand that, if there is a disagreement regarding performance ratings or any resulting decisions, then such disagreements can be resolved in an amicable and non retaliatory way. In addition, the inclusion of an appeals process increases perceptions of the system as fair.

When an appeals process is in place, employees have the ability to question two types of issues: judgmental and administrative.? Judgmental issues center on the validity of the performance evaluation. For example, an employee may believe that a manager's performance ratings for that employee do not reflect his actual performance. Administrative issues involve whether the policies and procedures were followed.

For example, an employee may argue that her supervisor did not meet with her as frequently as he had with her coworkers and that the feedback she is receiving about her performance is not as thorough as that received by her coworkers. Typically, when an appeal is first filed, the HR department serves as a mediator between the employee and the supervisor. An appeal sent to the HR department is usually called a Level 1 or Level A appeal. The HR department is in a good position to judge whether policies and procedures have been implemented correctly and also has good information about the various jobs, levels of performance expected, and levels of performance of other employees within the unit and organization. The HR department gathers the necessary facts and brings them to the attention of either the rater to encourage

18

reconsideration of the decision that cause d the appeal or to the complainant to explain why there have been no biases or violations. In other words, the HR department either suggests corrective action to the supervisor or informs the employee that the decision or procedures were correct. If the supervisor does not believe corrective action should be taken or if the employee does not accept the HR decision, and the appeal continues, then an outside and unbiased arbitrator makes a final and binding resolution.

This is usually called a Level 2 or Level B appeal. This arbitrator can consist of a panel of peers and managers. The panel reviews the case, asks questions, interviews witnesses, researches precedents, and reviews policy. Then, they simply take a vote to make the decision. In some cases, the vote represents the final decision. In other cases, the vote is forwarded to a highlevel manager (vice president or higher level) who takes the panel's vote into consideration in making the final decision.

The box "Selected Excerpts from the University of North Carolina Performance Management Appeals Process" shows some of the key sections of the performance management appeals process for employees at the University of North Carolina. The appeals process is intended to air concerns and to resolve disagreements. The purpose of this specific policy is to provide employees and management with a means for resolving disagreements involving performance evaluations and performance pay issues.

TRAINING PROGRAMS FOR THE ACQUISITION OF REQUIRED SKILLS:Training the raters is another step necessary in preparing for the launching of the performance management system. Training not only provides participants in the performance management system with needed skills and tools to do a good job implementing it but also helps increase satisfaction with the system.

RATER ERROR TRAINING

Many performance management systems are plagued with rater errors. For example. long as about 1,700 years ago, the Wei dynasty in China implemented a performance management system for its household members. The philosopher Sin Yu has bee: quoted as saying that "an Imperial Rater of Nine Grades seldom rates men according to their merits, but always according to his likes and dislikes."10 Accordingly, the goal of rater error training (RET) is to make raters aware of what rating errors they are like% to make and to help them develop strategies to minimize those errors. The goal of RET is to increase rating accuracy by making raters aware of the unintentional errors the are likely to make.RET programs typically include definitions of the most typical errors and a description of possible causes for those errors. Such programs also allow trainees to view examples of common errors and to review suggestions on how to avoid making errors. TIN can he done by showing videotaped vignettes designed to elicit rating errors and ask trainees to fill out appraisal forms regarding the situations that they observed on videotapes. Finally, a comparison is made between the ratings provided by the trainee and the correct ratings. The

19

trainer then explains why the errors took place, which specific errors were made, and ways to overcome the errors in the future. RET does not guarantee increased accuracy. Raters do become aware of the possible errors they can make but, because many of the errors are unintentional, simple awareness of the errors does not mean that errors will not be made. Nevertheless. may be useful to expose raters to the range of possible errors. These errors include following:Similar to me error. Similarity leads to attraction, so we tend to favor those who are similar to us. Consequently, in some cases, supervisors are more likely to give higher performance ratings to those employees who are perceived to be more similar to them in terms of attitudes, preferences, personality, and demographic variables including race and gender. Contrast error. Contrast error occurs when, even if an absolute measurement system is in place, supervisors compare individuals with one another instead of against predetermined standards. For example, when a supervisor rates an individual of only average performance, the rating may actually be higher than deserved if the other individuals rated by the same supervisor display substandard performance levels: the age performer may seem to be better in comparison to the others. This error is most likely to occur when supervisors complete multiple appraisal forms at the same time because, in such situations, it is difficult to ignore the ratings given to other employeesLeniency error Leniency error occurs when raters assign high (lenient) ratings u most or all employees. In other words, leniency involves artificial rating inflation.

Pilot Testing:Before the performance management system is implemented formally, it is a good idea to test a version of the entire system so that adjustments and revisions can be made a needed. In pilot test of the system, evaluations are not recorded in employee files: however, the system is implemented in its entirety from beginning to end, including all the steps that would be included if the system had actually been implemented. In other words, meetings take place between supervisor and employee, performance data are gathered, developmental plans are designed, and feedback is provided. The most important aspect of the pilot test is that all participants maintain records noting any difficulties they encountered, ranging from problems with the appraisal form and how performance is measured to the feedback received. The pilot test allows for the identification and early correction of any flaws before the system is implemented throughout the organization.

Ongoing Monitoring And Evaluation:When the testing period is over and the performance management system has been implemented organization -wide, it is important to use clear measurements to monitor and evaluate the system.27 In a nutshell, a decision needs to be made about how to evaluate the system's effectiveness, how to evaluate the extent to which the system is being implemented as planned, and how to evaluate the extent to which it is producing the intended results. The United States federal government takes the evaluation of performance management systems very seriously. Since the early 1990s, several laws have been passed that mandate federal agencies to develop a strategic plan, a performance plan, and a performance report.

20

Conducting Staff Appraisals:

Introduction: Performance appraisal is a method of evaluating the behavior of employees in the workspot, normally including both the quantitative and qualitative aspects of job performance. Performance here refers to the degree of accomplishment of the tasks that make up an individual's job. It indicates how well an individual is fulfilling the job demands. Often the term is confused with effort, which means energy expended, and used in a wrong sense. Performance is always measured in terms of results. A student, for example, may exert a greatdeal of effort while preparing for the examination but may manage to get a poor grade. In this case the effort expended is high but performance is low.

Need: 1) Providing Feedback: Providing feedback is the most common justification for an organization to have a performance appraisal system. Through its performance appraisal process the individual learns exactly how well he did during the previous twelve months and can then use that information to improve her performance in the future. In this regard,performance appraisal serves another important purpose by making sure that the boss's expectations are clearly communicated.2) Facilitating Promotion Decisions: Almost everyone in an organization wants to get ahead. How should the company decide who gets the brass rings? Performance appraisal makes it easier for the organization to make good decisions about making sure that the most important positions are filled by the most capable individuals.3) Facilitating Lay-off or Downsizing Decisions: If promotions are what everybody wants, lay-offs are what everybody wishes to avoid. But when economic realities force an organization to downsize, performance appraisal helps make sure that the most talented individuals are retained and that only the organization's marginal performers are cut loose.

Skills Required: Both the appraiser and the appraisee should have a range of skills in order tomake the best of the appraisal. An appraisal should not involve going round in circles without getting anywhere.

Job Description:

Meaning & Definition of Job DescriptionJob description (JD) implies objective listing of the job title, tasks, duties and responsibilities involved in a job. Job description provides the criteria for evaluating the performance of the job holder. It is a written statement of what the job holder does, how it is done, under what conditions it is done and why it is done. It describes what the job is all about, throwing light on job content, environment and conditions of employment. It is descriptive in nature and defines the purpose and scope of a job. The main purpose of writing a job description is to differentiate the job from other jobs and state its outer limits.

21

Contents of Job DescriptionJob description contains the following:1) Job Identification: Job identification or organizational position includes the job title, alternative title, department, division, plant and code number of the job. The job the Identifies and designates the job properly. The department, division etc. Indicate the name of the department where it is situated. The location gives the name of the place.2) Job Summary: Job summary serves two important purposes. Firstly, it provides a short definition which is useful as additional identification information. Secondly, it serves as the summary to orient the readers towards understanding detailed information which follows. It gives the reader a "quick capsule explanation" of the content of a job usually in one or two sentence. 3) Job Duties and Responsibilities: Job description clearly states the duties and responsibilities to be performed on the job with proper classification as primary, secondary and other duties. It is regarded as the heart of a job. It also describes time to be taken in performing the job and sub-job.4) Relation to other job: This helps to locate the job in the organization by indicating the job immediately below or above it in the job hierarchy. It also gives an idea of the vertical relationship of work and procedures.

Guidelines for Writing Job DescriptionsAccording to Ernest Dale, the following guidelines should be kept in mind while writing job descriptions:I) Job description should indicate the nature and scope of the job, including all important relationships.2) It should be brief, factual and precise; use active verbs such as collect mail, sort out mail, distribute mail, etc. Avoid statements of opinion. Give a clear picture of the job; explain all the duties and responsibilities of the job in greater detail.3) More specific words he chosen to show4) The kind of work,5) The degree of complexity,6) The degree of skill required,7) The extent to which problems are standardized and8) The degree and type of accountability.9) The extent of supervision available should also be clearly stated.10) The reporting relationships must also be clearly indicated (e.g., whoreports to whom, frequency, etc.).

Uses of Job DescriptionFollowing are the uses of job description:I) Helps to Develop Job Specifications: It aids in the development of job specifications which are useful in planning, recruitment, training and hiringpeople with required skills.2) Used for Group Discussion: Preliminary drafts can be used as a basis for productive group discussion, particularly of the process starts at the executive level.

22

3) Orient New-Employees: It can be used to orient new-employees towards basic responsibilities and duties.4) Used to Develop Performance Standards: It is basic documents used in developing performance standards.5) Used for Job Evaluation: It can be used for job evaluation, a wage and salary administration techniques.6) Helps a Manager during Interview: A job description enables the manager to frame suitable questions to be asked during an interview.7) Vehicle for Organizational Changes: A job description becomes a vehicle for organizational changes and improvement. It helps top executives in fixing responsibilities.

Job Specification

Meaning & Definition of Job SpecificationJob specification or job requirements describe the personal qualities, traits, skills, knowledge and background necessary for getting the job done. According to Dale Yoder, "Job specification as a summary is a specialized job description, emphasizing personnel requirements and designed specially to facilitate selection and placements".

Meaning & Definition of Job SpecificationJob specification or job requirements describe the personal qualities, traits, skills, knowledge and background necessary for getting the job done. According to Dale Yoder, "Job specification as a summary is a specialized job description, emphasizing personnel requirements and designed specially to facilitate selection and placements".

Nature of Job Specifications1) Job specification tells what kind of person to recruit and for what qualities that person should be tested.2) Job specification translates the job description into terms of the human qualifications which are required for a successful performance of a job. They guide in hiring and job evaluation.3) Job specifications are developed with the cooperation of the personnel department and various supervisors in the whole organization. The personnel department coordinates the writing of job description and job specification and secures agreement on the qualifications required.

Writing Job SpecificationsThe major steps in writing job description are as follows: 1) Specifications for Trained versus Untrained Pesunnel: Writing job specifications for trained employees is relatively straig:tiforward. For example, suppose one want to fill a position for an accountant (or counselor or programmer). In cases like these, job specifications might focus mostly on traits like length of previous service, quality of relevant training, and previous job performance. Thus, it is usually not too difficult to determine the human requirements for placing already trained people on a job. "Me problems are more complex when filling jobs with untrained people (with the intention of training them on the job). One specify qualities

23

such as physical traits, personality, interests, or skills that imply some potential for performing or for being trained to do the job. 2) Specifications Based on Judgment: Most job specifications come from the educated guesses of reoplc like supervisors and human resource managers.

Uses of Job Specification1) Find-Out Prospective Candidate: Job specification plays an important role in finding-out prospective employees to a particular job. The specifications help to evaluate curriculum vitae more speedily and ruthlessly, as well as providing a list of pertinent questions for interview.2) Importance of Job Specification also Reflect in Attracting Candidate: A job specification will be the first introduction to candidate. [t is therefore crucial that it is professional and portrays the right image. So writing a dynamic and accurate job specification will be attracting the appropriate candidate

Appraisal Methods:

There are two methods of performance appraisal:1) Traditional Methods/Past-Oriented Methods.2) Modern Methods/Future-Oriented Methods.

Traditional Methods/ Past-Oriented MethodsTraditional methods of performance appraisal include the following:1) Graphic Rating Scale (GRS)2) Straight Ranking Method3) Paired Comparison Method4) Critical Incident Method5) Confidential Reports6) Group AppraisalGraphic Rating ScalesA Graphic Rating Scale (GRS) also known as linear or simple rating scale presents appraisers with a list of traits assumed to be necessary to successful job performance (e.g., cooperativeness, adaptability, maturity, motivation). A five- or seven-point rating scale accompanies each trait. Numbers and/or descriptive words or phrases that indicate the level of performance define the points along the scale. The midpoint of the scale is usually anchored by such words as "average", "adequate", "satisfactory", or "meets standards".

Paired Comparison MethodThis method probably evolved in succession to the straight ranking method in order to provide a systematic procedure for determining the relative ranks of the people. This may be called 'man- to-man assessment'. It is an appreciable system wherein the persons to be assessed are compared with each other in pairs, one at a time for different rating. The number of times the

24

person is compared with that of another has to be tallied on paper. The appraiser is required to fix some criteria for making his assessment.

Straight Ranking MethodThis is the simplest and the oldest method of self-appraisal. With the straight ranking approach, all employee ,are ranked from 'best' to 'worst' on the basis of comparative overall performance. The primary attraction of straight ranking is its simplicity. It requires a minimum of bureaucracy and may be an acceptable solution for small enterprises with just a few employees. Since it involves rank ordering, it necessarily combats intentional assessment errtift particularly central tendency and leniency errors.

Critical Incident MethodThe critical incident method of performance appraisal involved identifying and describing specific events (or incidents) where the employee did something really well or something that needs improvement. It is a technique based on the description of the event, and does not rely on the assignment of ratings or rankings, although it is occasionally coupled with a ratings type system.

Group AppraisalIt is gener ally observed that some evaluator s evaluate their employees according to very high standards though as per the usual practice, this may not be needed. This happens when the performance of the evaluator himself is outstanding, which is why he expects the same from his group. In order to overcome this difficulty, the group appraisal method is based on evaluation of performance by a group of people having knowledge of the job and performance standards. The evaluator gives the necessary briefing about his employees to the group members. The group then discusses the standards of performance for the job and the actual performance by the employees.

Confidential ReportsAssessing the employees' performance confidentially is a traditional method of performance appraisal. Under this method, superior appraises the performance of his subordinates based on his observation, judgments, and intuitions. The superior keeps his judgment and report confidentially. In other words, the superior does not allow the employee to kn ow the report and his performance. Superior writes the report about his subordinate's strengths, weaknesses,intelligence, attitude of work, sincerity, commitment, punctuality, attendance, conduct, character friendliness, etc_ Though confidential report is a traditional method, most of the public sector organizations still follow this method in appraising employee's performance.

Modern/Future-Oriented Methods of AppraisalFuture-oriented methods include the following:1) Behaviorally Anchored Rating Scales (BARS)2) Assessment Centers3) Management by Objectives

25

4) Psychological Appraisals5) 360' Performance Appraisal6) Human Resource Accounting

Behaviorally Anchored Rating Scales (BARS)BARS sometimes called behavioral expectation scales are rating scales whose scales points are determined by statements of effective and ineffective behaviors. They are said to be behaviorally anchored in that the scales represent a range of descriptive statements of behavior varying from the least to the most effective. A rater must indicate which behavior on each scale best describes an employee's performance.

Assessment CentersMainly used for executive hiring, assessment centers are now being used for evaluating executive or supervisory potential. An assessment centre is a central location where managers may come together to have their participation in job. related exercises evaluated by trained observers. The principal idea is to evaluate managers over a period of time, say one to three days, by observing (and later evaluating) their behavior across a series of selected exercises orwork samples. Assesses are requested to participate in in-basket exercises, work groups (without leaders), computer simulations, role playing, and other similar activities which require the same attributes for successful performance, as in the actual job. After recording their observations of rate behaviors, the raters meet to discuss these observations. The decision regarding the performance of each assessee is based upon this discussion of observations.

Management by Objectives (MBO)It was Peter F. Drucker who first gave the concept of MBO to the world way back in 1954 when his The Practice of Management was first published. The MBO concept, as was conceived by Drunker, reflects a management philosophy which values and utilized employee contributions. Application of MBO in the field of performance appraisal is a recent thinking.

Psychological AppraisalsLarge organizations employ full- time industrial psychologists. When psychologists are used for evaluations, they assess an individual's future potential and not past performance. The appraisal normally consists of in-depth interviews, psychological tests, discussions with supervisors and a review of other evaluations. The psychologist then writes an evaluation of the employee's intellectual, emotional, motivational and other work-related characteristics thatsuggest individual potential and may predict future performance.

360-Degree Performance AppraisalThe 360-degree performance appraisal is an appraisal system that encompasses views of employee's superior, co-workers/peers, and customers. Through 360- degree performance appraisal, the employee has the chance to review the manager, which is not practiced with traditional performance appraisals. The 360-degree appraisal gathers information from more

26

than one source. This appraisal system collects information from peers, subordinates, superiors, and customer (internal and external) so that the employee can get a well-rounded, or 360- degree, view of his performance.

Human Resource Accounting MethodHuman resources are a valuable asset of any organization. This asset can be valued in terms of money. When competent and well -trained employees leave an organization, the human asset is decreased and vice versa. Human resource accounting deals with cost of and contribution of human resources to the organization. Cost of the employee includes cost of manpower planning, recruitment, selection, induction, placement, training, development, wages andbenefits etc. Employee contribution is the money value of employee service which can be measured by labor productivity or value added by human resources. Difference between cost and contribution will reflect the performance of employees.

Rater ErrorsA rater error is an error in performance appraisal that reflects consistent biases on the part of the rater. Some of the most common rate errors are: 1) Halo Effect: Halo effect occurs when a rater attaches too much significance to a single factor of performance and gives similar ratings on other performance elements. Thus, overall evaluation is significantly influenced by a single factor. Such a perception undermines the importance of other elements and leads to an unbalanced performance assessment of the individual. For example, a manager rates a worker eery high on quality because of her immaculate attention to details and of defects in her work. Then assuming the individual to be an overall high performer based on the quality of his/her work output, the manager rates her very high on efficiency, responsibility, punctuality, etc., without taking an objective look at her performance in these areas.2) Strictness, Leniency, and Central Tendency Bias: People differ in their tendency to evaluate people or performance. Some supervisors are very strict or conservative in their ratings and generally give low scores in their evaluations. This tendency may make high performers attain somewhat average ranking and average performers appear as poor performers. Raters with such tendency are known to have a strictness bias.

Data CollectionPerformance evaluations should not be a one time event. Supervisors are encouraged to gather data regarding employee performance in a systematic manner throughout the year. The Performance Record and the Coaching Log are guides that can he used by supervisors, in addition to their own best practices, to gather data throughout the year and provide ongoing feedback to employees regarding performance. This information will then be available to supervisors when drafting the annual performance evaluation.Questionnaire: This method is usually used to obtain information about jobs through a mail survey. The job incumbents who can easily express themselves in writing are asked to provide date about their jobs in their own words. This method is, therefore, best suited to clerical

27

workers. But it is often a very time consuming and laborious process to analyze the data obtained in this manner.

Observation: This method can be followed right on eh job. The analyst observes the incumbent as he performs his work and questions him to get the required data. Besides being slow and costly, this method also interferes with normal work operations. However, it generally produces a good and complete job description. This method is particularly desirable where manual operations are prominent and where the work cycle is short. Working conditions and hazards can also be better described when observed personally by the analyst.

Interview: In this method a group of representative job incumbents are selected for extensive interview usually outside of the actual job situation. The interview may be carried out either individually on in a group to save time. The replies obtained from the interviewees are then combined into a single job description. This method though very costly and time consuminghelps in getting a complete picture of the job.

Participation: In this method the job analyst actually performs the job himself. In this way he is able to, obtain first-hand information about what - characteristics comprise the job under investigation.

Conducting an Appraisal Interview:

An appraisal culminates in an appraisal interview. Appraisal interview has been considered by most of the organizations, as well as employees, as the most essential part of appraisal system. This interview provides the employee the feedback information, and an opportunity to the appraiser to explain the employee his rating, the traits and behavior he has taken into consideration for appraisal etc. Few people like to receive or give negative feedback. So, adequate preparation and implementation is necessary.

How to Conduct the Appraisal Interview?Preparation is essential. Review the person's job description, compare performance to the standards, and review the employee's previous appraisals. Give the employee atleast a week's notice to review his or her work, analyze problems, and gather questions and comments.Find a mutually agreeable time for the interview and allow enough time for the entire interview. Interviews with lower-level personnel like clerical workers and maintenance staff should take no more than an hour. Interviews with management employees often take two or three hours. Be sure the interview is done in a private place where you would not beInterrupted.

Guidelines while Conducting Appraisal InterviewThere are four things to keep mind when actually conducting the interview:

28

I) Talk in Terms of Objective Work Data: Use examples such as absences, tardiness, quality records, orders processed, productivity records, order processing time., accident reports, and so on. 2) Don't Get Personal: Don't say, "You are too show in producing those reports". Instead, try to compare the persons's performance to a standard. (These reports should normally be done within 10 days.") Similarly, do not compare the persons's performance to that of other people. ("He is quicker than you arc')

How to Ensure the Interview Leads to ImprovedPerformance?Many managers bring to the appraisal an erroneous (and unstated) assumption that simply revealing the gap between where the employee should be and is, will trigger improved performance. But in most human endeavors, that is not enough. For example, if getting someone to lose weight merely required a scale, there'd be little need for all there diet programs on the market. Similarly, identifying the gap is just the first step in improving an employee's performance. Doing so often requires providing the tools and support theperson needs to move ahead. Here, clearing-up job-related problems with the employee and setting measurable performance targets and a schedule for achieving them - an action plan - are essential

Follow Up and Validation:

Any recommendations for action that have been made in the appraisal must be followed-up.If the appraisal identifies training needs then these needs should be met as soon as practical.There is little point in identifying an immediate training need and then not providing the training for 12 months. How can the individual be expected to perform if they do not have the opportunity to develop their skills? It might save the cost of the training course but it is potentially 12 months' extra productivity lost, and that productivity is likely to be worth much more than the cost of the training. There is also the danger of demotivating the employee byrecognizing a training and then failing to provide it. Providing appropriate training is parti cularly important in jobs where there is rapidly changing technology. For example, a computer programmer will need regular training to keep up-to-date with the latest programming languages and development. It is widely acknowledged that an organization which fails to keep-up with changes in technology is likely to be unsuccessful – but there is little point in keeping-up with technology if employees do not receive appropriate training. Appraisal will help to ensure that training keeps pace with changes in technology.Making RecommendationsIf the appraiser is only able to recommend training rather than authorize it. Then the appraiser should make sure they put forward the recommendations quickly, to ensure that the organization can set-up the training quickly. if for some reason the organization refuses to authorize the training, then the appraise should be told immediately, and provided with the

29

reasons why the training is not forthcoming. They can then appeal against this if they feel it is appropriate. After all, the decision to recommend training will have been based on a detaileddiscussion during the appraisal, so the organization will need to have very good reasons why they should not receive that training. Importance of Follow-UpBy following-up all the recommendations of the appraisal, the organization is showing the employee that they are important. The appraisal should show this, by not only assessing performance against objectives, but also assessing individual needs – e.g., ensuring the work-life balance is met – and providing for these needs.

How to Validate the System?The organization should consult with employees regarding the appraisal system; how it works, where it does not work well. If the organization does not consult with employees the system will not be accepted, and the organization will be seen as uncaring about its staff. After all, employees are the ones who use the system, and they are likely to know best about why it works or why it does not work.There are several ways in which the organization can validate the system. The most important are:I) Detailed Interviewing,2) Questionnaires.1) Detailed Interviewing: Interviewing is time-consuming, and there may be issues of confidentiality; but interviews are very effective. In order to carry-out the validation, accurate records need to be kept. The records include those which are kept in the employee's personal file, alongwith the job descriptions and person specifications for the job. There are also the detailed records of the appraisal itself, the preappraisal reports, the appraisal reports, and any records of job performance

2) Questionnaires: Questionnaires are faster; the organization can obtain information from a large sample quickly, but will not provide as much depth of information. Validation should be carried-out regularly, to ensure the smooth working of the appraisal system. Remember, the appraisal system should belong to the employees of the organization. It should not be imposed on them, so introducing this kind of consultation will help to ensure that employees feel thatthe system is theirs – which it is,

Present Thoughts and Future Directions:

Present thoughts and future directions emphasize on the following issues:1) What is the state of appraisal?2) Work-life balance,3) Legal and ethical issues,

30

1) What is the State of Appraisal? Staff appraisal has many supporters and perhaps even more detractor s. Some argue that it is essential to organizational effectiveness; others argue that is should be done away with asa waste of money. Unfortunately, research into the effectiveness of staff.2) Work-Life Balance: The work-life balance has taken on an increasing importance in the last few years, with both forward-thinking organizations and the British Government recognizing that we have to take into account the personal and individual needs of employees; that by taking these needs into account the person will have higher job satisfaction and be moreproductive. There are moves both nationally and internationally to reduce working hours.

Legal and Ethical Issues: It is important to ensure that there is a fair appraisal system, otherwise there ate potential legal issues. For example, an employee could leave and claim constructive or unfair dismissal if they thought the appraisal was conducted unreasonably. Also, if the employer has a contractual appraisal system then if they fail to follow it there couldbe legal consequences. It i s important to ensure that the system does not discriminate on race, sex, marital status, or disability.

31

MODULE 3

Performance management & employee development

Personal Development plans:

Personal development plans are perhaps the most important output of performance management processes. They are agreed during performance and development review meetings and progress in implementing them is reviewed at consequent meetings, although progress should also be monitored continuously.

Development Plan Objectives:

A personal development plan may concentrate on the development required to improve performance in the current job. It may extend to the development required for future career moves and is thus part of a career development program. Career moves could be by promotion or by lateral development to gain expertise in new areas of work. The latter is particularly important in smaller organizations when there are limited opportunities for promotion butmore scope for lateral development.1) Improve Performance in Current Job: A good performance and development plan helps employees to meet performance standards. Thus, a performance and development plan includes suggested courses of action to address each of the performance dimensions that are deficient.2) Sustain Performance in Current Job: A good performance and development plan provides tools so that employees can continue to meet and exceed expectations regarding the current job. Thus, the plan includes suggestions about how to continue to meet and exceed expectations for each of the performance dimensions included in the appraisal form.3) Prepare Employees for Advancement: A good performance and development plan includes advice and courses of action that should be taken so that employees will be able to take advantage of future opportunities and career advancement. Specifically, a good plan indicates which new competencies and behaviors should be learned to help with career advancement.4) Enrich the Employee's Work Experience: Even if career opportunities within the organization are not readily available, a good plan provides employees with growth opportunities and opportunities to learn new skills. These opportunities provide employees with intrinsic rewards and a more challenging work experience, even if the new skills learned arc not a formal part of their jobs. Such opportunities can make jobs more attractive and serve as a powerful employee retention tool. In addition, the new skills can be useful in case of lateral transfers within the organization.5) Optimal results: It helps in integrating internal and external and inhibiting factors with individual efforts

32

Content of Developmental Plan:

Plans should include a description of specific steps to be taken and specific objectives to reach. In other words, what is the new skill or knowledge that will be acquired and how will this occur? This includes information on the resources and strategies that will be used to achieve the objectives. For example, will the employee learn the skill from a co-worker through another job training? Will the company reimburse the employee for expenses associated with taking an online course? The plan's objectives should include not only the end product, such as the newskills to be learned, but also the completion date and how the supervisor will know whether the new skill has indeed been acquired. Overall, objectives included in the developmental' plans should be practical, specific, time-oriented, linked to a standard, and developed jointly by the supervisor and the employee.

Preparing a Personal Development Plan:

Personal development plans are prepared on the basis of the outcome of performance and development reviews. These consist of a joint examination of progress and achievements — comparing what people have done and how they were expected to do it.In other words, the objectives they have attained and the capabilities they have demonstrated.The personal development plan, as its name implies, is very much the property of individuals. They have to set the direction in which they want to develop and decide on the actions required to get there. The role of manager is to provide guidance as necessary in preparing the plan and to support them when it comes to implementation. Of course, you should also monitor progress and stimulate action or provide further support as required. The steps required to prepare a personal development plan are:1) Identify development needs: these can be defined in terms of knowledge skills and capabilities competencies). These needs should be specified as precisely as possible in terms of what people have to know and be able to do when the plan has been implemented.2) Set Goals for Meeting these Needs (Personal Development Objectives): These can be defined under headings such as:i) The extension of relevant knowledge.ii) The improvement or acquisition of skills, especially transferable skills, which will enable them to ex t end their role and take on new responsibilities.iii) The development of specified areas of capability or competence.iv) Enlarging the current role.v) Working towards future developments in the current role.vi) Extending a career laterally across the organization to roles at broadly the same level but which will enrich the individuals expertise and capabilities.vii) Increasing potential for provision in general or, possibly, in a specified ,direction.3) Prepare Action Plans for Meeting the Development Needs: Action plans specify both the means by which needs will be satisfied and how individuals and their managers will check that they have been met. The areas could include any of the following:

33

Y'' 'Learning new skills or improving existing skills dur ing the normal course of work, with coaching as appropriate from managers, team- leader s, mentors or specialized t r ainer s ( learning on the job).ii) Taking on additional responsibilities or moving to a different role in the team (job rotation) and acquiring additional skills (multi-skilling) through coaching and with the help of co-workers.iii) Being appointed a member of a project team to develop something new, to achieve a task or to solve a problem, extending knowledge and skills through their experience (learning on the project) with guidance and coaching as required.iv) Spare- time study to learn new skills, acquire extra knowledge, or obtain a qualification (distance learning, guided reading, attendingcourses provided by local educational institutions).v) Attending in-company or external training courses designed to help people in learning new skills and/or increase knowledge.vi) Action learning programs.4) Implement the Plans: Individuals should be encouraged, or indeed, expected to monitor their own progress but their managers should review how things are going from time-to-time.5) Evaluate: Evaluate the outcome of the personal development plan and decide if anything more is needed to be done in any existing or new area.

360 dergree feedback:

Meaning of 360 Degree Feedback360- degree feedback is can be defined as the systematic collection and feedback of performance data on an individual or group derived from a number of the stakeholders in their performance. This technique measures in detail the behaviors and competencir shown by the individual or group in achieving goals. Participants can be confidentially assessed by themselves, their boss, their staff, team members, internal/external customers, suppliers, family and friends.

Objectives of 360-Degree Feed back

The objectives of the '361 Degree Feedback" system can therefore, be summarized as follows:I) Identification of developmental needs and preparation of development plans more objectively in relation to current or future roles, to facilitate performance improvements for an individual or a group of individuals.2) Provision of insights into the strong and weak areas of a candid late in terms of the effective performance of roles, activities, styles, traits, qualities, competencies, etc.3) Impact of knowledge, attitude, and skills.4) Reinforcement other change management efforts and interventions directed at organization effectiveness. These may include: TQM efforts, customer focused or internal customer satisfaction enhancing interventions, flat structures, quality-enhancing and cost-reducing interventions, decision process changes, etc.

34

360-Degree Feedback as a Developmental Tool

"360 Degree Feedback" is used purely as a developmental tool instead of as a method of performance appraisal."360 Degree Feedback" is a developmental device to a method of appraisal. It can be treated as an assessment-oriented approach to appraisal. There has been remarkable progress in the adoption of this system by various organizations as more and more of them are getting attracted towards it because it facilitates a shift towards a less hierarchical, more flexibly structured and knowledge-based on organizations of future also a powerful developmental tool because when conducted at regular intervals (say yearly) it helps to keep a track of the changes others' perceptions about the employees. A 360-degree appraisal is generally found more suitable for the managers as it helps to assess their leadership and managing styles. This technique is being effectively used across the globe for performance appraisals. Some of the organizations following it are Wipro, Infosys, and Reliance Industries, etc.

Advantages of 360-Degree Feedback System:

The advantages of 360-degree feedback system are:1) Improved Feedback from More Sources: This is a participative method of employee assessment. It provides a well- rounded feedback from many sources, such as peers, reporting staff, co-workers, and supervisors. This broadbased assessment is better than that from a single supervisor. It can save the managers' time, as they would be spending less time and energy forproviding feedback. For co-workers also this is an opportunity to be more objective while assessing their peers. The recipient employees gain as it helps people to understand how other employees view their work. 2) Team Development: I t helps team member s , learn to work more effectively together. Teams know more about how their members are performing than their supervisor. It makes team members more accountable to each other as they share the knowledge that they will provide input on each member's performance. A well-planned process can improve communication and team development.3) Personal and Organizational Performance Development: 360-degree feedback is one of the best methods for understanding personal and organizational developmental needs.4) Responsibility for Career Development: The Individual employees can take charge of their career development program, as they are directly informed by many sources about where they need to focus. This is more so, because the employees feel that this method is more accurate and dependable than the traditional evaluation by the supervisor.5) Reduced Discrimination Risk: When feedback comes from a number of individuals in various job functions, discrimination because of race, age, gender, and so on, is reduced.6) Improved Customer Service: As this process involves the internal or external customer, each person receives valuable feedback about the quality of his product or services. This would enable the individual employee to improve his contribution towards the quality, reliability,promptness, and comprehensiveness of the products and services.

35

7) Training needs assessment: 360-degree feedback provides: comprehensive information about organization training needs and thus allows planning for courses regarding cross-functional responsibilities.

Disadvantages of 360-Degree Feedback System:

The disadvantages of .160-degree feedback system are:I) Expeem Hints by the Managements: The managements expect too much from this system, as those who propose this may put too much emphasis on it to gain support from the management. It should be remembered that 360-degree feedback is not the same as a performance management system. It is merely a part of the feedback and development system.2) Problems in Designing the System: Often, a 360-degree feedback process is introduced with a recommeedation from the HR department or is promoted by an executive who had learnt about it from a seminar or a book. These recommendations could be very far removed from the ground realities in the organization. To be effective, it should incorporate effective change management guidelines and it should be reviewed by a cross - section of management and employees and discussed at length before any decision is taken in this regard.3) Failure to Link the Process with the Strategy of the Organization: It will fail if it is viewed as an additional system for employee assessment. On the other hand, it must be linked with the overall long-term strategic aims of the organization. It should be treated as a support system to give specific inputs for the organizational strategy, the big picture and as a guide for the organization to measure its accomplishments in relation to its goals. For example, if the organization has identified the requisite skills and competencies to reach the goal, the employees should get the feedback on their skills, competencies, and performance.4) Insufficient Information: Since 360 -degree feedback processes are usually anonymous, employees receiving the feedback have no way of getting further clarifications even if it is crucial. Ilene, it does not prevent employees from giving unpleasant remarks, thus crushing the motivation of the employees. Under these circumstances, it is imperative to train the Supervisors, HR staff people, interested managers, and others to assist the employees to understand their feedback. The elaborate training should also include aspects such as developing action plans based upon the feedback. 5) Focus on Weaknesses: It 'nay focus too much on the negative aspects of employee performance, totally ignoring the achievements. This could be dangerous for employee.6) Raters may not he Chosen Properly: The raters chosen for this may not have the requisite experience. Or if very senior managers with expertise are chosen, they may not have the titre or the inclination and so may take this assignment lightly. 'Him ate numerous ways the raters can go wrong.

Performance Management & Reward System:

Reward System:Reward system in the context of performance management is defined as an integrated system that ensures equitable avenues to employees for fulfillment of

36

their f inanc ia l and non-f inanc ia l needs and recognit ion urge for their contribution to attainment of organizational goals.

An employee reward system consists of an organization's integrated policies, processes and practices for rewarding its employees in accordance with their contribution, skill and competence and their market worth. It is developed within the framework of the organization's reward philosophy, strategies and pol ic ies and contains arrangements in the form of processes, practices, structures and procedures which will provide and maintain appropriate types and levels of pay, benefits and other forms of reward.

Characteristics of Reward System:

P e r f o r m a n c e - s t i m u l a t e d r e w a r d s y s t e m p o s s e s s e s t h e f o l l o w i n g characteristics:

1 ) Reward emphasizes not only f inancial compensat ion, but a lso non financial rewards l ike enrichment of job, work autonomy/freedom, company sponsored family tours, best employee awards and popularization of employee achievements in house journals, etc.

2 ) R e w a r d s m u s t b e o f f e r e d i n p r o p o r t i o n t o r e s p e c t i v e e m p l o y e e contribution/services in fulfillment of organizational responsibilities and achievement of organizational goals.

3 ) Reward must be equitable implying that there should be equilibrium in reward offered to an employee in comparison to others.

4 ) Reward must be integrated implying that there must be balance and comprehensiveness in design and application of the reward management strategy.

Elements of Reward System

I) Base Pay: Base (or basic) pay is the level of pay (the fixed salary or wage) that constitutes the rate for the job. It may provide the platform for determining additional payments related to performance, competence or skill. It may also govern pension entitlement and life insurance. The basic levels of pay for jobs reflect both internal and external relativities. The internal relativities may be measured by some form of job evaluation which places jobs in a hierarchy (although the trend now is to play down the notion of hierarchy in the new process-based organizations). External relativities are assessed by tracking market rates.2) Contingent Pay: Additional financial rewards maybe provided that are related to performance, competence, contribution, skill and/or experience. These are referred to as 'contingent pay' . i f such payments are not consolidated into

37

base pay, they can be described as 'variable pay'. Variable pay is sometimes defined as 'pay at risk'. For example, the pay of sales representatives on a `commission-only' basis is entirely at risk. The main types of contingent pay are:i ) Individual Performance-Related Pay: In which increases in base pay or cash bonuses are determined by performance assessment and ratings (also known as merit pay).

ii) Bonuses: Rewards for successful performance which are paid as cash (lump) sums related to the results obtained by individual teams or the organization.

iii) Incentives: Payments linked with the achievement of previously set targets which are designed to motivate people to achieve higher level s of performance; the targets are usually quantified in such terms as output or sales.

3) Allowances: Allowances are elements of pay in the form of a separate sum of money for such aspects of employment as overtime, shift working, call-outs and living in London or other large cities. London or large-city allowances are sometimes consolidated; organizations which are simplifying their pay structure may 'buy out' the allowance and increase base pay accordingly.

4) 'Total Earnings: Total earnings are usually calculated as the sum of base pay and any' additional payments. .

5) Employee Benefits: Employee benefits, also known as indirect pay, include pensions, sick pay, insurance cover and company cars, They comprise elements of remuneration additional to the various forms of cash pay and also include provisions for employees that are not strictly remuneration, such as annual holidays.

6) Total Remuneration: Total remuneration is the value of all cash payments (Total earnings) and benefits received by employees.

Essentials of Reward System in Performance Management

Performance-based reward and compensation opportunities are highly effective in

developing the performance of employees. Therefore, a performance- oriented

compensation system seeks to achieve the following:

1) Cost-effectiveness for the organ ization,2) Internal, external, and individual equity for employees, and3) Performance excellence for the organization.

38

Techniques of Designing a Reward System

1) Job Evaluation: This is a popularly employed technique to establish relative worth of jobs in an organization for the purpose of determining pay. Job evaluation process identifies contribution of each job for organizational functioning and effectiveness. Job evaluation also determines:

i) Skills required to perform a job,ii) Degree of responsibility involved,iii) Effort required to perform the job, andiv) Related working conditions.

Information as obtained, forms the basis for establishing compensation. There are four techniques that are used as a part of job evaluation exercise. These are:Job ranking method, Classification, Factor comparison, Point system.

Application of one or more of these job evaluation techniques yields valuable information that can be effectively used to establish logical comparison and relative worth of jobs in order to determine compensation level correspondingly.

2) Hay Guide Chart Profile Method: This is one of the techniques used in On of jobs. This is similar to the point method but a more reliable isticated technique. Hay guide determines the worth of a job based on four vital parameters. These are: Know-how: Knowledge and skills required to perform job effectively. Problem-Solving: Abilities related to analyzing, reasoning, evaluating, developing solutions and making execution plans. Ability: Additional compensable elements such as unique and ea ceptional condition s in which a job is to be performed.These parameters are broken into further measurable elements_ Points are accorded to each of these elements that form the basis for establishing said relative worth of a job.

3) Gain-Sharing Techniques: Gain-sharing plans are primarily employed to distribute benefits of cost-cutting interventions, increased production, increased quality, etc., to employees organization-wide. However, gain-sharing techniques are more often used for enhancing production than anything else. Basically, there are four techniques in gain-sharing. These are as follows:

i) Lincoln Electric Plan: This plan is named after its author John Lincoln. This technique comprises four fundamental principles such as:

a) There is no basic pay and only piecework pay,b) No mandatory retirements implying that as long as an employee is producing

he/she continues in employment,c) No pre-requisites, leaves, bonus, andd) Employees who have worked for more than two years cannot be laid off.

39

In brief, this is a technique that provides for compensation in lump-sum, proportionate to the service rendered. This means there will be a direct relationship between compensation and results.

ii) Scanlon Plan: This is also named after its author Joe Scanlon. This technique comprises activities such as suggestion, group incentive and employee participation. Employees are organized into teams and whichever team invents and practices methods to reduce waste, save time and increase productivity, is rewarded. This is a comprehensive technique because it allows employees to participate and influence decision-making.

ii i) Rucker Plan: Like the Scanlon plan, this plan also promotes suggestions from employees and their participation in improving productivity. But this plan provides limited freedom to employees to participate in organizational decision-making. Here employees give suggestions, which are evaluated by a screening committee before they are adapted. Proportionate monetary reward is offered to employees if their suggestions result in profits to the organization.

iv) Improshare: This technique is derived from consultative style of management. Here employees do not have scope for participation or involvement, but managers in the process of improving production and efficiency consult them. Employees are offered bonus compensation if that.cores ithati on process results in the organization making profits.

I m p l i c a t i o n s o f P e r f o r m a n c e M a n a g e m e n t o n Organizational Reward System

Reward management plays a pivotal role in improving organizational performance by:

1. Stimulating by bringing forward new ideas.2. Promoting commitment.3. Motivating the business development team.4. Attracting 'talents' into the organization at all levels from both internal and external

sources.5. Communicating a change in organizational values in conjunction with

requirements of environment from time-to-time.6. Rewarding exceptional value creation.7. Linking incentives to key business, development goals, including new ones.8. Ensuring reward systems are appropriate to attract the right talent to the organization

at the right time.

40

Performance linked remuneration system:

Contingent Pay

Contingent pay (CP) is any form of financial reward that is added to the base rate or paid as a cash bonus and is related to performance, competence, skill or services

Contingent pay is used as a means of incentivizing workers and promoting shared interests in higher output, productivity, customer satisfaction, and other indicators of business success.

Selecting a Contingent Pay Plan

A critical issue to consider is that of organizational culture. An organization's culture is defined by its unwritten rules and procedures. For example, is the organization fundamentally built around individual performance, or is teamwork the norm? Is the organization one in which high-level performers are regarded as role models who should be emulated, or are they viewed as a threat to upper management? Are we happy with the current culture, or do we wish to change it? CP plans are powerful tools that help solidify the current culture, and that can be used to create a new type of culture. There should be a careful consideration of the culture of the organization before a specific type of CP plan is selected.

Consider the types of systems that can be implemented in cultures that we can label traditional or involvement cultures. Traditional cultures are characterized by top-down decision-making, vertical communication, and clearly defined jobs. What type of plan should be implemented in organizations with this type of culture? An effective choice would be a plan that rewards specific and observable measures of performance, where that

performance is clearly defined and directly linked to pay. Examples of such CP systems are the following:

1) Piece gate: Employees are paid based on the number of units produced or repaired. This system is usually implemented in manufacturing environments. In service organizations, this could involve the number of calls made or the number of clients, or potential clients, contacted. This system is usually implemented in call centers.

2) Sales Commissions: Employees are paid based on a percentage of sales. THis system is usually implemented in car dealerships.

3) Group Incentives: Employees are paid based on extra group production based on result-oriented measures (e.g., sales volume for the group).This system is implemented frequently in the retail industry.

41

Involvement culture is „different from traditional culture. Organizations with Involvement cultures are characterized by shared decision-making, lateral communications, and loosely defined roles. Examples of systems that work with in organizations with involvement cultures are the following:

1) Profit Sharing: Employees are paid based on the performance of a group (e.g., team or unit) and on whether the group has exceeded a specific financial goal. This type of system is implemented in many large law firms.

2) Skill-Based Pay: Employees are paid based on whether they acquire new knowledge and skills that are beneficial to the organization. This type of system is usually implemented in knowledge-based organizations such as software development companies.

In addition to the organization's culture, an important consideration in selecting a CP plan is the organization's strategic direction. Strategy is not only a key element in designing the performance management system; it is also a key element in designing a CP plan.

If employee development is a key strategic priority, rewards should emphasize new skills acquired. If customer service is a priority, then rewards should emphasize competencies related to customer service and gain sharing. Gain sharing links individual and group pay to an organization's overall profitability: the greater the organization's overall profit, the greater the rewards given to individuals and teams in the organization. In this case, gain sharing would be based on whether customer service ratings improve during the review period. If the major goal of the CP plan is to increase the organization's overall profit, choices include executive pay and profit or stock sharing. Executive pay includes cash bonuses that are given in response to successful organizational performance.

Possible Problems Associated with Contingent Pay plans

1) Poor Performance Management System is in Place: When a CP plan is paired with a poorly designed, poorly implemented performance manage- ment system, one that includes biased ratings and the measurement of unrelated performance dimensions may lead some employees to challenge the CP plan legally. Also, rewarding behaviors and results that are not job related is likely to cause good performers to leave the organization. Finally, those who stay are not likely to be motivated to perform well.

2) There is the Folly of Rewarding a while hoping for B: When the system rewards results and behaviors that are not those that will help the organiza- t i o n s u c c e e d e m p l o y e e s a r e l i k e l y t o e n g a g e i n t h e s e o f t e n counterproductive behaviors

42

when this behavior is what will earn them the desired rewards. One such example is the hope that executives will focus on long-term growth and environmental responsibility when, in fact, they are rewarded based on quarterly earnings. Given this situation, what are these executives likely to do? Will they think in the long term, or quarter by quarter?

3) Rewards are not Considered Significant: When a CP plan includes pay increases, and other rewards, that are so small that they don't differentiate between outstanding and poor performers. Rewards are not viewed as performance-based rewards, and they do not make an impact. The message sent to employee is that performance is not something worth being rewarded. For rewards to be meaningful, they need to be significant in the eyes of the employees. Usually, an increase of approximately 12%-15% of one's salary is regarded as a meaningful reward and would motivate people to do things they would not do otherwise.

4) Managers are not Accountable: When managers are not accountable regarding how they handle the performance and the performance evaluation of their employees they are likely to inflate ratings so that employees receive what the manager thinks are appropriate rewards.

Performance Linked Career Planning & Promotion Policy:

Performance appraisal is a part of career development. The latest mantra being followed by organizations across the world being – "get paid according to what you contribute" – the focus of the organizations is turning to performance management and specifically to individual performance. Performance appraisal helps to rate the performance of the employees and evaluate their contribution towards the organizational goals. Performance appraisal as career development leads to the recognition of the work done by the employees, many a times by the means of rewards and appreciation, etc. It plays the role of the link between the organization and the employees' personal career goals.

Potential appraisal, a part of performance appraisal, helps to identify the hidden talents and potential of the individuals. Identifying these potential talents can help in preparing the individuals for higher responsibilities-and positions in the future. The performance appraisal process in itself is developmental in nature.

Performance appraisal is also closely linked to other HR processes like helps to identify the training and development needs, promotions, demotions, changes in the compensation, etc. A feedback communicated in a positive manner goes a long way to motivate the employees and helps to identify individual career developmental plans. Based on the evaluation, employees can develop their career goals, achieve new

43

levels of competencies and chart their career progression. Performance appraisal encourages employees to reinforce their strengths and overcome their weaknesses.

Poli cy Objectiv es:

1) To integrate the growth opportunities of the executives with the fulfillment of the Company's objectives.

2) To identify, train, and develop competent personnel with growth potential and to provide a policy environment for high levels of performance.

3) To provide a system of equality in opportunity, equity in assessment arc uniformity in implementation among ail the Units, Business Groups Directorates, and Officers of the company in the matter of promotion.

4) To seek and provide a continuous team of work sustained high levels o competence in the company.

Scope

This Promotion Policy shall cover all promotions made in PS Grade posts arse shall apply to all Units, Business Groups/Functional Directorates, Corporate and other Offices of the company.

Definitions

1) Cadre: 'Cadre' means a group of grade put together for purposes o consideration for promotion specifically at the unit or corporate level, to the case may be.

2) Eligibility: 'Eligibility' means fulfillment of standards laid-down fo various norms such as qualification, attendance, performance appraisal etc., as shall be prescribed by the management from time-to-time.

3) Group: 'Group' means a grade or a set of grades codified for the purpose of promotion.

4) Outstanding: 'Outstanding' means a Total Appraisal Score of more tha 200 for three consecutive years in Performance Appraisal.

5) Promotion: 'Promotion' means placement of an employee in th immediate higher grade within the group or between the groups.

6) Qualifying Period: 'Qualifying Period' means the number of years k minimum service prescribed for promotion from one grade to another froi time-to-time.

Cadres

The PS Grades shall be divided into two broad cadres:

44

1) The unit cadre comprising executives in the Scales PS Ito PS VI.2) The corporate cadre comprising executives in the Scales PS VII and abov,

Promotion in the Unit Cadre shall be organized in respective Units. Promotion in the Corporate Cadre shall be organized in the Corporate Office.

Promotion System

There shall be two systems of promotion within the executive positions in the company:

1)Promotions with in the groups,2) Promotions between the groups.

All the promotions made in accordance with this Promotion Policy will be from ore scale of pay to next without skipping any scale of pay.

Promotion Norms:

The promotion norms shall consist of two parts:

1) Eli!tibilIity Factors: Which include a qualifying period, qualification norms, attendance, conduct, prescribed standards in Performance Appraisal.

2) Suitability Factors: Which include an interview and art assessment of the potential ofthe executive in his own channel of promotion or for a post other than in his own channel of promotion.

Promotions within the Groups:

These promotions shall be made in accordance with the above eligibility and suitability factors and will be based on the availability of vacancies and the organizational need to fill-up such vacancies. In considering the promotion of an executive from one group to another, merit wi l l be the primary consideration, which will include an assessment of the executive's potential and aptitude for higher managerial position.

Outstanding Performers: Executives who have outstanding reports for three consecutive years shall be considered for promotion in accordance with the qualifying periods prescribed be

for outstanding category. However, the outstanding ratings of these executivesshall be reviewed in detail before such consideration by the respective performance review committees

Counseling Low Performers: The low performers who fail to fulfill the prescribed eligibility norms for 3 successive years shall he counseled by the Committee. This is in

45

addition to the counseling done by their respective Reporting Officers as laid-down in the Appraisal System. The Committee(s) may also recommend developmental training and/or change of job to enable such low performers to improve their performance.

Dates of promotion: Promotions shall be processed once a year in the month of May/June The qualifying period shall be reckoned as First of July in the current year. Subject to fulfillment of other promotion norms, promotion orders shall be released effective from 1stJuly only. Promotions with retrospective effect are totally discouraged. Exceptions should have prior approval of the Director, Personnel.

Vigilance Cases: The Vigilance cases shall be dealt with under the 'Sealed Cover Procedure' prescribed by the Bureau of Public Enterprises.

Interview:An interview shall he conducted in all cases of promotion by the Departmental Promotion Committee or the Selection Committee, as the case may be.

Channels of Promotion

For considering promotions in the same or similar disciplines in the Unit Cadre, a Division may be taken as unitary channel of promotion wherever this is practicable. Otherwise, the unit could be taken as a channel of promotion. •

Departmental Promotion Committees:DPCs will be constituted for considering Promotions. Following will constitute DPC for:

I) Supervisory Group

i) Head of the Works or Division,ii) Representative of Finance Department,iii) Representative of Personnel Department,iv) Concerned Head of the Department/Sectional Head,v) Representative of SC/ST.

Note: The Committee should invariably be headed by JGM/DGM and the members of the Committee should be atleast 2 levels above the level of the candidates.2) Executive GroupUnit Chief,Chief of Finance,Chief of Personnel,Chief of Works,Representative of SC/ST.

Selection Committee for Inter Group

I) Unit Cadre

46

i) Unit Chief,ii) Chief of Finance,iii) Chief of Personnel,iv) Chief of Works/Division,v) Representative of SC/ST.

2) Corporate Cadre

i) CMD or his Nominee,ii) Director/ED concerned,iii) Unit Chief,iv) Representative of Personnel Directorate,v) Representative of Finance Directorate,vi) Representative of SC/ST.

47

MODULE 4

Performance Consulting

Concept of Performance Consulting

Perform &rice consulting is a flow of steps with an entry and an exit. It is a systematic and data-driven process that helps consultants and business managers make sound decisions about people and their performance in the organization.

Performance consulting is a process in which a trainer (either internal or external to the organization) and the organizational client work together to decide how to improve organizational and individual results. That may or may not include training. Performance consulting takes a broad approach by:

1) Focusing on identifying and addressing root causes of performance problems;2) Recognizing that the interaction of individual and organizational factors influences

employee performance;3) Documenting the actions and accomplishments of high performers and comparing

them with actions of more typical performers.

Regardless of whether the trainer is an internal employee or an outside consultant, a performance consulting approach recognizes that training alone cannot automatically solve every employer performance problem. Instead, training is one piece of a larger "bundled solution". For example, some employee performance issues might be resolved by creating a training program for employees, and others might call for compensation or job design changes.

According to Jim and Dana Robinson, "Performance consulting is a process in which a client and consultant partner to accomplish the strategic outcome of optimizing workplace performance in support of business goals".

Need of Performance Consulting

Performance Consulting is needed for the following reasons:

1) Organizational assessment,2) Change management,3) Performance improvement,4) Process improvement,5) Performance measurement,6) Strategy implementation.

48

Performance consulting provides middle and upper management with the tools and techniques they need to improve company and human perfortnance. Performance consultants have the skills to lead company assessment, change management, performance improvement, process improvement, re-engineering, and performance measurement projects.

Performance Consulting Process

The purpose of this eight step process is to turn a reactive situation into a proactive partnership to achieve a performance improvement result. Here is the eight-step process:

1) Contact: Assess the initial contact for assistance by asking yourself these three questions:

i ) Who Contacted you? Where does this person report in the organization? What level of authority does this person have? What is this person's relationsnip to you? Is he or she a peer, your supervisor, or merely a messenger? Ele aware that this contact person might not be the client. A client is one who has both a need to be involved in the project and the authority to make critical project decisions.

i i ) What did this Person Ask for? Were you asked to investigate or fix a problem, put on a training event? Was the contact posed as a request, or was the person merely complaining about a troublesome situation? Based on the request, which role(s) might be appropriate for this situation? It is critical at this point to understand the request and initially determine your appropriate role. if the training manager is only comfortable with the traditional training approach, then every problem may be seen as a training problem.

2)Explore: Begin to look at the issue by asking several questions. Listen forfacts and feelings as the issue is described. Use this fact-finding step to discover as many dimensions about the issue as you can.

Validate the assumptions made by your contact. Determine whether this is a training problem or not. Determine whether this contact is the true "client" and decision-maker or only a messenger. Identify what performance consulting roles) may he appropriate for you. Identify how this request is related to a business need and sort out what is truly needed

versus what is wanted. Determine at what point you are being asked to jump in.

3) Contract: Agree with the client on the outcome or results desired or objective to be achieved. Note that at this point you have not agreed on a solution or event. Gain agreement on the next step and mutually, decide the boundaries of the needs assessment that will develop enough information to create a performance improvement plan. Decide when you will present your plan.

49

4)Diagnose: Conduct a needs assessment using a performance analysis methodology and other assessment tools as appropriate. This is the time to validate hypotheses made during the Exploration step. Quantify as much factual information as you can.

5)Plan: Develop a performance improvement plan that contains these elements:i) Defines the performance issue(s) and how it is related to a business need,ii) Re-affirms the outcome, results, or objectives of the plan,iii) Clearly states the performance deficiency and its causes,iv) Identifies (or develops through a benchmarking process) performance standards,v) Identifies the target population involved in the intervention,vi) Establishes criteria for four levels of evaluation,vii) Describes the intervention,viii) Estimates the cost of the plan,ix) Builds a partnership with management,x) Creates a schedule for the intervention.

6)Act: Carry-out the intervention according to the agreed schedule. This can include a variety of activities that may or may not include training. There can he multiple bias-free solutions and may include: Establishing or clarifying a policy, Setting-up a process or procedure, Creating a job aid, Distributing information in a written or brief presentation, Conducting a demonstration, Conducting a training program, Setting individual action plans.

7) Evaluate: Ask for the reaction of the new analysts who attend orientation and case management training. Conduct a test to identify what the new analysts have learned. Check the log to identify whether the analysts have changed their behavior and are using the log and case management techniques appropriately. Check for bottom-line results by monitoring the forty-eight hour resolution standard and user satisfaction/complaints

8) Integrate: By providing a job aid for the case management process and revised case management training, the IS department can function independently following your assistance.

Using this eight-step performance consulting process allows the organization to save time, money, and employee satisfaction because inappropriate training (time management) was not conducted. A real solution is possible because the problem was diagnosed correctly and ways to measure the intervention provides concrete results.

Role of the Performance Consulting

Performance consulting teaches training and HR professionals how they can become performance consultants. In addition to providing FIR and learning solutions, these consultants also address the performance needs of employees and:

50

I) Assist management in identifying the performance required to achieve business goals;

2) Determine the degree to which the work environment of employees will support and encourage the performance required; and

3) Determine the impact of the work done to support performance change, In the process, performance consultants become valued partners to management, assisting in identifying business goals and objectives and taking all actions needed for employees to support them successfully.

Effective performance consulting and training can provide big pay-offs for the employer in increased staff productivity, knowledge, loyalty, and contribution. These resources increase your ability to do performance consulting, measure performance improvement, and provide resultant training using internal staff. Increase your self-sufficiency in performance consulting and improvement.

A. skilled group of in-house consultants can help your organization achieve these benefits:

1) Performance results will be improved through the joint efforts of consultants and line business units.

2) Development resources will be focused on priority areas, which enhances business results and support business strategies.

3) Business units will be presented with options that combine performance improvement expertise with business realities.

4) Consultants will choose from a number of performance improvement strategies, including training, to help clients to solve problems, meet needs, and grasp opportunities. More opportunities for performance improvement will be discovered.

5) Trainees are more motivated to learn and use new skills as a result of "just in time" training addressing immediate needs. Pay-off from the investment in training will be more immediate.

6) Human resource development staff will have increased credibility in the organization as a result of their increased knowledge of each Unit's business strategies.

Training to Performance Consulting:

Strategic Plans for Moving from Training to Performance

Following steps, when followed, result in a strong plan:1) Identify the current and future desired state for the function;2) Form the framework for the function's purpose:

i) Mission statement,ii) Vision statement,iii) Guiding principles for the function, andiv) Clients and customers for the function.

3) Define the business context in which the function will operate:

51

i) Identify business goals and initiatives for the organization in the next three to five years;

ii) Conduct environmental scan of forces within and outside the organization that will either encourage or challenge the department's plans and fulfillment of its mission.

4) Form strategic (three-year) goals:

i) Goals in support of client requirements, andii) Goals regarding the department itself.

5) Form tactical (one-year) goals:

i) Goals in support of client requirements, andii) Goals regarding the department itself.

6) Farm an implementation plan with milestones.

A strategic plan identifies the hopes and visions for the function and integrates them into the business requirements of the organization. In this manner a "win-win" plan is formulated.

Performance Relationship Maps:

We know that we can best influence management when we can illustrate how actions being proposed will have a positive effect on the business. To do this we must be able to illustrate the interrelationship between business goals, performance requirements, training, and °work environment needs. What performance is needed if the business goals arc to be realized? What is the current capability of individuals to demonstrate this required performance? And what training and work environment actions will be needed to change performance? These are the types of questions we need to address with management.

A specific business need is written at the top of the rnap (e.&., 'Increase reliability" or "improve profits"). The map then indicates that information is required under box I (Should operational results). Far this box the specific business goals regarding the business need will be noted, e.g., How much waste is acceptable? How much profit is desired?

The map requires information regarding the type of perforra2nc-e that people should demonstrate if the desired operational results are to be realized. If the organization wants to increase profits, what must people do to make that happen? If product reliability is to be increased, how will people liaye to perform?

52

we identify the current performance (or the is) of people as compared to the desired performance, or should, as noted in box 2. What kinds of gaps exist? Of course, it is this performance that yields the currant operational results, or is, in box 4.

we identify the various factors and forces that impact upon the desired performance.

External causes are factors that are outside the control of a client team yet affect the achievement of operational results and performance requirements. For example , i f the economy is in a recession, i t impacts upon an organization's ability to achieve its revenue and profitability goals. Also, corporate headquarters can make a policy decision that affects the performance of a plant; for a plant manager, this would be an external factor.

Internal causes are factors that are within the control of a client team and that impact upon achievement of operational and performance goals. If employees lack the skill and knowledge to do what is required of them on-the-job, this will be a reason for their non-performance. This cause can be addressed through training and development. lf, however, employees lack any incentive or reward to do what is being asked of them, this will also be a reason for their nonperformance. However, it cannot be addressed through training actions; a client team will need to re-design the incentive system.

Designing and Using Performance Relationship Maps:Performance consultants are continually seeking information. This can be done both formally through performance assessments and informally over lunch with a manager. But information must be obtained within the framework of a plan. Performance consultants need to know where they are headed as they ask questions, targeting each question like a laser beam to help to clarify the situation.

The plan used by performance consultants should be based upon a model or conceptual framework which is the performance relationship map. This map is something that has been developed and used over the past six years; it serves three purposes:

1) Provides Guidance to the Data Gatherer: It provides the data gatherer (performance consultant) with guidance in determining what information is important to obtain and what information may be unnecessary.

2) Alerts: It alerts us when we are missing data in one area – e.g., information about what successful performers do.

3) Vehicle for Displaying Information: It acts as a vehicle for displaying information to management. The map specifically i l lustrates the interrelationship between business, performance, training, and work environment needs. This is critical because managers are most likely to support actions when they

53

understand that these actions will affect the achievement of business goals in a positive manner.

We have been ash, the map for the past six years; we know it works. It has been adopted by several hundred individuals with whom we have had the opportunity to work.

Performance Consulting Services

1) Executive Coaching: Coaching helps individual in enhancing their skills, overcoming performance blocks, and maximizing their performance. Areas of coaching expertise include the following:

i) Oral presentation,ii) Written presentation,iii)Leadership and supervision,iv)Facilitation,v)Interpersonal skills, andvi)Myers-Briggs analysis.

2) Team Development: Team development services to help organizations to create and sustain high performing work teams. We work at varying levels of development. These are:

i) New Teams: These teams need to define their mission, goals, and operating guidelines.

ii) Struggling Teams: These teams need to work-out their difference constructively to re-build team relationships and re-focus on their mission.

iii) Est:delished Teams: These tears need to continually renew and re- energize to remain motivated and productive.

3) Meeting Facilitation: It is both an art and a science. Three critical and interdependent areas to make your meetings more efficient, effective, and interesting are as follows:

i) Meeting Purpose: Define a clear purpose which includes meeting issue, deliverables, and a compelling rationale to secure buy-in and appropriate participation.

ii) Participants and Stakeholders: Determine whose input is needed to best serve the meeting's purpose, and how to manage attendees' comfort zones to get maximum appropriate . participation. A lso., understand and define the roles of facilitator, recorder, leader, and facilitative participant.

54

iii) Process: Balancing task and relationship, define the most effective process techniques and tools to achieve the meeting's purpose and deliver its outcomes.

iv) Management Skills Training: Learning is accomplished through presentation, discussion, demonstration, and small and large group activities and simulations.

Contracting For Performance Consulting Services:

Organizations use consultants for these reasons:

1) To provide expertise for a special project.2) To augment the workforce when the load is greater than the existing staff

can handle.3)To provide an outside and unbiased opinion on a controversial topic.4)To assume responsibility for a particular phase of operations (otherwise known as outsourcing).

Before hiring a consultant one should examine the objectives, because they affect the choice of consultant. Some consultants specialize in a narrow field.Some confine their operations to a particular geographical area. There are multi-consultant firms and sole operators. The objective in selecting a consultant is to match his or her capabilities as closely as possible to your needs. Ask yourself these questions – why, when, and where do I need a consultant; what do I want the consultant to do; and what should the outcome be? Note that these are the same as the five questions reporters ask – what, where, when, why, and how – except for the how, which should be left to the consultant. You should not have to specify how; if the consultant is truly an expert, he or she will know that better than you.

Organizing Performance Improvement Department:

The focus will be shifted from the individual to the entire department. How must the department (typically referred to as the training department or HRD department) be structured if it is to truly encourage and support the role of Performance Consultant? What accountabilities and reward systems need to be formed? What roles and skill sets will be required of those who are in the department?Key elements of a performance improvement department have been identified noting how they are different from those of a more traditional training department.One company's training department operates on a charge-back system, meaning that internal customers must pay for the services they receive from the department. Unfortunately, the only service with a fee is delivery of a training program. No fees are incurred for completing the performance consulting services, such as developing performance models, identifying performance gaps and causes, and measuring the performance and operational results from an intervention. This system encourages delivery of training (which yields fees) and not provision of performance services.

Another organization has the expectation that people of similar titles or levels will work directly with peers; however, trainers often are at a "lower" level in the organization than the clients they are to support. They-- therefore are precluded from direct access to their clients.

55

The performance measures for a member of the training department in another organization are based upon the number of training programs conducted and favorable ratings on the reaction evaluation forms. There are no measures for the quality of the client-consultant relationship or the contribution to performance and operational impact.

Use the name training department to refer to functions formed to address the traditional roles of training and development; .use the term performance improvement department to refer to the type of function believed is required in the 1990s and beyond.

Six components of organizational structure separate a traditional training department from a performance improvement department. These are: 1) The name of the department

2) The mission of the department,3) The services offered by the department,4) The roles of those within the department,5) The actual organizational structure of the department.,6) Accountability and measures for the department.

56

Module 5

Competency Method in HRM

Meaning and Definition of Competency

Competency is a fairly deep and enduring part of a person's personality and can predict behavior in a wide variety of situations and job tasks. A competency is something that describes how a job might be done, excellently; a competence only describes what has to be done, not how. A competency is a combination of tacit and explicit knowledge, behavior, and skills that give somebody the potential for effectiveness in task performance.

A competency can be defined as a specific, identifiable, definable, and measurable knowledge, skill, ability, and/or other deployment-related characteristic (e.g., attitude, behavior, physical ability) which a human resource may possess and which is necessary for, or material to, the performance of an activity within a specific business context".

Characteristics Of CompetencyThere are five types of competency characteristics – motives, traits, self -concept, knowledge, and skills. Of these, motives, traits, and self-concept are invisible whereas knowledge and skills are visible. These are described hereunder:1) Motives: Things a person constantly thinks about or wants, which result in actions.2) Traits: Physical characteristics and consistent responses to situations or information.3) Self-Concept: A person's attitudes, values, or self-image.4) Knowledge: Information that a person has in specific content areas.5) Skills: The ability to perform a certain mental or physical task.

Types of Competency The three types of competencies are:1) Universal: These competencies emphasize that all the employees of an organization

must reflect the company's values, culture, and business imperatives, e.g., customer focus, teamwork, communication skills, and cost-effective service delivery.

2) Transferable: These competencies include skills and abilities needed to perform several roles in varying degrees of importance and mastery, e.g., leadership and managerial skills.

3) Unique: These competencies refer to specialized know-how or abilities required within a specific role or job.

57

Competence Versus Competency:

Competence CompetencyMeans the ability to perform a job. Means behavioral competencies.Skill and standard of performance

reached.

The behavior by which theCompetence has been achieved.

Skill based. Behavior based.

Standard attained. Manner of behavior.What is measurable? I low the standard is achieved.Result of Intelligence Quotient. Result of I motional Quotient.It is about the knowledge required to

perform a job effectively.

It is about the underlying feelings, emotions,

& behavior to perform a job effectively

Features Of Competency MethodsCompetency mapping methods are:

1) Assessment centers2) Critical incident method3) Interview techniques4) Questionnaires

1) Assessment CentersOrganizations are using assessment centers for mapping competencies.An assessment center is a comprehensive, standardized procedure in which multiple assessment techniques are used to evaluate individual employees for a variety of decisions.

Assessment center technique is a process that allows participants to demonstrate behaviors specifically related to a job role. It engages participants in structured exercise designed to elicit specific behaviors, utilize activities that reflect "real life" situations by simulating individual, group, and one-to-one tasks and involves trained assessors to observe and evaluate performance.

An assessment center for performance appraisal of an employee typically includes the following:1) Social/Informal Events: An assessment center has a group of participants and also

a few assessors which gives a chance to the employees to socialize with a variety of people and also to share information and know more about the organization.

2) Information Sessions: Information sessions are also a part of the assessment centers. They provide information to the employees about the organization, their roles and responsibilities, the activities and the procedures, etc.

58

3) Assignments: Assignments in assessment centers include various tests and exercises which are specially designed to assess the competencies and the potential of the employees. These include various interviews, psychometric tests, management games, etc.; all these assignments are focused at the target job.It is mainly used for executive hiring, assessment centers are now being used for evaluating executive or supervisory potential. An assessment centre is a central location where managers may come together to have their participation in job-related exercises evaluated by trained observers. The principal idea is to evaluate managers over a period of time, say one to three days, by observing (and later evaluating) their behavior across a series of selected exercises or work samples. Assesses are requested to participate in in-basket exercises, work groups(without leaders), computer simulations, role playing. and other similar activities which require the same attributes for successful performance, as in the actual job. After recording their observations of rate behaviors, the raters meet to discuss these observations. The decision regarding the performance of each assesses is based upon this discussion of observations.

Uses of Assessment Center1) Selection: ACs help organizations in getting the right people in.

2) Career Development: The identification of the competencies possessed by the individual helps organization to decide his career plans.

3) Potential Appraisal: ACs help organizations to identify if the pL.son can handle the challenges offered in the next higher position.

4) Identification of High Potential Managers: This creates a pool of managerial talents and multi-functional managers that would be available Across the business group, etc.

5) Succession Planning: Identifying the right individual for critical positions such as CEO, CFO, etc., is very important for the success of the organization. ACs reduces the risk of such wrong identification.

6) Allocations of Challenging Assignments: ACs provide the organization with the strengths and weaknesses of every participant. This helps the organization in deciding the candidates who would have the necessary abilities to undertake the proposed challenging assignments.

7) Management Development: ACs provide ample opportunity to its participants to reflect on one's capabilities and to improve by observing others performance in the AC.

8) Identification of Training Needs: Assessment centers provide candidates and organization with concrete data on the improvement areas, which can be utilized, for training.

9) Identification of a Global Pool of Talented Managers: Adjusting oneself in the global scenario is a critical requirement of some positions in the organization. ACs help organizations to identify such managers.

59

2) Critical Incident Technique

Flanagan developed the critical incidents technique. In the literal sense, critical means serious, vital, crucial, derogatory, and precarious. But in an organizational context it is difficult to define critical incidents. Nevertheless, we can definitely opine that critical incidents can contribute to the growth or decay of an organizational system, of the organization as a whole. The critical incidents technique uses a set of procedures to systematically identify behaviors that contribute to the success or failure of individuals or the organizations in specific situations. This technique requires observers who are frequently doing the job, such as supervisors, clients, peers, or subordinates. Observers are interrogated to describe the incidents of effective and ineffective behavior of a person over a long period of time. Organizations initially prepare an exhaustive list of good or bad job behavior. The help of a panel of experts is sought to rate how good or how bad the behaviors are. Next, the organization prepares a checklist of the good or bad behavior.There are certain criteria for the successful use of the critical incidents technique. Some of these are:1) Data are collected on direct observations of real critical incidents that occurred

while accomplishing a task in a real-life situation.2) The actual jobholders perform tasks.3) Data is gathered in the real-work environment.4) Users are located in a real-work environment.5) Users are required to report the critical incidents after they have occurred.6) Direct interaction between the users and the evaluators does not take place.7) Qualitative data can be gathered by the users at a very low cost.

Steps of Critical Incidents TechniqueThere are three steps involved in this technique, namely:Step 1: Gathering Facts: Retrospective data are captured through an open-minded questionnaire. Much gap is not allowed between the happening of the events and capturing the data. In case of a longer time period, it becomes difficult to gather the true responses as imagined stereotyped responses replace the true responses.

For gathering facts, generally two approaches are adopted — unstructured approach and moderate structured approach. In the unstructured approach, individuals are asked to submit two good things and two bad things while performing a given task or set of activities. In the moderate structured approach, the individuals are requested to respond to certain questions on the happenings relating to the activity he/she was performing. The questions may be of the type:

1) What exactly had happened?2) What might be the reason behind the happenings?

60

3) How did the happenings affect the outcome or result?

Step 2: Content Analysis: This step facilitates identification of incidents capable of representing content dimensions or categories. Recording of incidents is an ongoing process. Several incidents are recorded and submitted to the analysts, who study the cluster of incidents and categorize and sort the incidents into content dimensions. This process is just grouping the incidents based on the dimensions. The sorted incidents resemble the affinity diagram of total quality management. The basis of grouping is 'identical', 'quite similar', or 'could be similar'. Each category is assigned a name and the number of incidents are counted and recorded. The number of incidents in a category is expressed as a percentage of the total number of incidents. The categories are often arranged in descending order of the percentage counts. Then the report is compiled.

Step 3: Creating Feedback: Everybody has strengths and weaknesses that often remain unidentified. In specific organizational situations, the person's strength becomes useful. The supervisors in the HRD system bear the responsibility of observing, identifying, and providing feedback to the junior colleagues about their strengths and weaknesses. Added to this, they should have guidance to improve enabling capacities and performance capabilities. It is important to provide both positive and negative feedback.

3 QuestionnairesInterview technique as a method of competency mapping is unique, as a direct interaction takes place between the interviewer and interviewee. The interviewer can observe the body language of the interviewee from which he/she can record his/her readings. An interview is the most commonly used personal contact method and many organizations use this technique for competency mapping, they are as follows:

Certain steps must be observed for successful mapping:Step 1: Preparation of a checklist of questions to identify the judging ability and skills. The questions are to be framed based on the critical areas. The responses may be rated on five-point or ten-point rating scales.

Step 2: The responsible person scrutinizes the information provided to identify the skills, incidents, and experiences in the career of the candidate. He/she gets the answers to the questions raised on critical areas. This procedure ensures that the interview is 'to the point' without being removed from reality. The interviewee feels comfortable because it is focused on his/her experiences.

Step 3: The interviewer must use tact and sensitivity to create a sense of ease and informality so that the interviewees can get rid of tension, nervousness, and be at ease. If tensed and afraid, they will lose creativity and originality. The interviewers should create an environment where the interviewees are relaxed and open. They should also honor the interviewee's motivation, attitude, feelings, temperament, etc.

Step 4: The interviewer must cautiously build rapport with the interviewee. This can be

61

done if the interview process starts in a chatting fashion. The focus is on the interviewee's fields of interest and the initial questions are framed on this. Otherwise, one may chat on the weather, tourism, sports and games, and similar subjects.Step 5: After creating an environment conducive to fruitful interaction, the interviewer may start asking questions from the critical areas. Asking difficult and complex questions at the beginning should be avoided. Gradually, confidence will build up and the interviewee may then be able to answer complex questions. Thus, the pattern should be from simple to complex questions.

Step 6: Disapproval or disagreement of answers inhibits the interviewee from responding spontaneously. The interviewer must try to examine the viewpoint of the interviewee. However, disagreement can definitely be expressed tactfully.

Step 7: The interviewer must avoid leading questions as the interviewee may feel that a certain stereotyped response is expected. At the same time, the interviewer is alerted that he/she must not allow the interview to get out of hand. He/she should check the interviewee if the interviewee tries to lead the discussion in areas in which he/she has mastery and feels himself/herself competent.

Step 8: The interviewer should prepare a checklist of questions, or else must study carefully the questions or statements of the checklist prepared by others. He/she should not take much time to prepare the questions, yet the checklist should be perfect.

Historical DevelopmentThe competency approach to human resources management is not new. The early Romans practiced a form of competency profiling in attempts to detail the attributes of a "good Roman soldier". The introduction of competency-based approaches was realized around 1970, and their development since then has been rapid. The distinguished Harvard psychologist David McClelland is credited with introducing the idea of "competency" into the human resource literature, in his efforts to assist the United States Information Agency in improving its selection procedures. The latter argued that traditional intelligence tests, as well as proxies such as scholastic grades, failed to predict job performance. McClelland's counterargument to the growing dissatisfaction with intelligence testing and the traditional job analytic approaches to personnel selection was the proposal to test for competency. As a case study, he proposed the selection of foreign service information officers. In the research, it was found that competencies such as interpersonal sensitivity, cross-cultural positive regards, and management skills differentiated superior from average information officers.

Throughout the years, competency-based approaches have proven a critical tool in many organizational functions such as workforce and succession planning, performance appraisal, etc.

The main reasons for selecting these approaches are as follows:1) They can provide identification of the skills, knowledge, behaviors, and capabilities

62

needed to meet current and future personnel selection needs, in alignment with the differentiations in strategies and organizational priorities.

2) They can focus the individual and group development plans to eliminate the gap between the competencies requested by a project, job role, or enterprise strategy and those available.

Approaches to MappingThere are eleven approaches to competency analysis, and these approaches are also used as tools to identify competencies. These approaches or tools are as follows:1) Expert Opinion: The simplest method is for 'experts' (members of the personnel

department and representatives of line management) to get together and draw data list from their own understanding of 'what counts', possibly by reference to other published lists. This will certainly save time and trouble, but it may not be particularly analytical and reliance on other people's ideas could result in a list being drawn up which is irrelevant to the real needs and requirements of the business. When defining generic or individual, role competencies it is essential to ensure that they flow directly from the core competencies of the business so that people competencies are fully integrated with and support business competencies.

2) Workshops: A more structured approach through a workshop is likely to produce better results, particularly if the workshop is mainly comprised of people who are actually doing the job. The competence definitions will then be expressed in the language of the job-holders and are likely to be much more acceptable as well as realistic.

The workshop facilitator's roles are to help the group to analyze its findings, to prompt, to provide examples and to assist generally in the production of a set of competence dimensions which can be illustrated by behavior-based examples. The facilitator may have some ideas about the sort of headings that may emerge from this process but should not try to influence the group to come to a conclusion which it has not worked out for itself, albeit with some guidance.

3) Questionnaire Method: The most popular and widely used technique in assessing competencies is questionnaire method. This method helps in all the three levels of competency assessment: organization, function and job. A few relevant variables need to be identified and developed. For example, competency variables for the job of human resource manager can be:i) Knowledge of human resource management theoretical aspects,ii) Knowledge of best human resource management practices,iii) Knowledge of organization's human resource policies and procedures,iv) Knowledge about organization, it's business strategy and plans, operations,

financials competitors, various stakeholders,v) Ability to use tools and techniques in human resource functions like recruitment,

63

performance appraisal, training and career planning systems,vi) Interpersonal relationship skills,vii) Communication skills,viii) Conflict management skills,ix) Change management skills, andx) Commitment to the organization.

These variables must be operationalized into measurable statements. These statements can be open-ended or in shape of checklist or with multiple choices or in a form of scale like strongly agree to strongly disagree.

Similarly, this questionnaire method can be used for assessing competency profile at all levels.

4) Interview Method: Interviewing job incumbents to elicit what competencies are required to perform a job effectively reveals valuable information that helps in identifying the most relevant competencies of a job. Resource persons who are trained on interview method use both a standardized and contingency format to collect information. Format contains combination of structured and open-ended questions. Taking into account the scope of study, either all or representative sample of employees will he subjected to these interviews. Likewise, interviewing head of department, chief executive can reveal function and organizational level competencies.

5) Observation Method: Resource persons observe the top and average performers while working and taking decisions, interacting with people, leading co-employees, learning new aspects and applying them. Typically, the first part of such report contains record of observations and the second part observer's own interpretation and analysis of this record. This observation of extreme performers in action facilitates identification of the competencies required to carry out a task or job in the most efficient manner and also, what inadequacy in competencies result in average performance. However, effectiveness of this method depends upon the objectivity and neutrality of observers.

6) Story Writing Method: In this method, employees and their superiors will be asked to write in descriptive fashion, tasks they perform and knowledge, skills and behavioral characteristics required performing such tasks with quality, precision and results. Writings from all employees and superiors will be collected and analyzed to assess competency requirements of various jobs and functions at the organizational level.

7) Critical Incident Technique: Major incidents either resulted in remarkable results or failures to organizations and individuals if studied can provide wealth of information on competencies required to handle such incidents. In this method, a few incidents happened in the past or situations likely to arise at present or future will be chosen for a special study. Both observers and incumbents of the jobs will write a descriptive version on the origin of incident. how this has been tackled, why a particular approach is used over others, what knowledge, skill or soft skills are used in resolving such an incident and what results are expected and actually what is achieved. Data collected using this method particularly helps in identifying critical competencies.

64

8) Repertory Grid: This method is somewhat similar to critical incident technique. Repertory grid is used to identify dimensions of good and poor standards of performance. These dimensions are developed through interviewing and surveying jobholders to explore what behaviors make some to perform exceedingly well while others give poor performance.

9) 360-degree Survey: Collecting views as well as perceptions of all stakeholders regarding what competencies are desirable and essential to lead an organization, manage departments and perform various jobs in an organization effectively, yields a lot of information. This data involving all stakeholders on all competency levels can be collected using questionnaires, essay writings, debates and conferences.

10) Focus Groups: In this method, employees:i) Who are performing exceedingly well, andii) Whose innovation rate is far superior and who have the record of breaking

status quo will be formed as a focus group. This group will work on identifying and suggesting the ideal competency model to put into practiceat organizational, functional and job level for magnificent results.

11) Case Study Method: Highly successful performances which employees cherish and regard the best in their career in an organization and events of under performances must be studied in depth in order to understand circumstances in which performance goes to peak and conditions that cause below average performance. Skills required to successfully manage adverse conditions and skills required to create conducive conditions of superior performances can be identified. The case study method is used where a detailed study is required. Resource persons conduct the study with the help of a structured and unstructured information seeking formats.

Methods of Competency MappingCompetency mapping is necessary at an individual and organizational level. At the individual level, competency mapping spells-out the performance level required to be exhibited by an individual in order to achieve job goals and objectives successfully, whereas it is the basis of performance management system for achieving organization wide success in human performance. Therefore, competency mapping holds the key to success of performance management in any organization. There are various methods for competency mapping as explained below:

1) Past Performance-Based Method: This approach uses Behavioral Event Interview (BEI). It is an adaptation of critical incident interview. This method uses Thematic Apperception Test (TAT) in probing data about individual personality and cognitive styles of thinking, feeling, etc. This is an interview technique based on the premise that the best predictor of future behavior is past behavior. Steps followed in this method are:

i) Identifying the position to be mapped.ii) Identifying outstanding performers, and below average, or average performers.

65

iii) Interviewing them by using BEI.iv) Generating the list of competencies needed (from outstanding performers)

and not needed (from below average or average performers).

2) Job-Focused Method: Job-focused approach/method has the task, role, orjob profile of the incumbent as the central point. The starting point of thismethod makes use of position information questionnaire, which gathersinformation on the incumbent's position. This method includes:i) Understanding the purpose of the job.ii)• Asking incumbents to list down the job's major activities and accountabilities.iii) Mapping each accountability or major task.

3) Value-Based Method: This method uses normative, cultural, and traditional values of the organization to construct competencies. It ranges from a very careful and structured dialogue process involving top leadership, to simple pronouncements made by the CEO or HR Head on the competency list generated by HR group.

Model for Competency MappingThere are three models in mapping the competencies described as follows:1) One-Size-Fits-All Competency Model: This model uses the data obtained from existing

job descriptions and job analysis. The data pertaining to a class of jobs, e.g. civil structural engineers/sales representatives will be consolidated and key features will be identified to convert them into competency traits. The general features like organizational mission, objectives and culture related competence would be added to build a competency model for a civil structural engineer/sales representative likewise.

2) Multiple Job Competency Model: There are three steps in this. In the first step, competencies required for organizational function will be identified. Secondly, these competencies will be classified into technical, social, marketing, management, finance and general. In the third step, combination of competencies will be grouped to draw a particular role like finance manager, technical manager, quality manager likewise.

3) Single Job Competency Model: This is a traditional, time tested and commonly used method. A position that is most important and being performed well will be identified from a class of positions (jobs). Data will be obtained observing its incumbent while performing the job, discussing with him/her and other related departments, past records, decisions taken by that person, formal job description, etc. The data so obtained will be used to build competency model for that particular position.

Module 6

66

Competency Mapping Procedures and Steps

Business Strategies: At the heart of any successful activity lies a competence or a skill. In today's competitive world it is becoming particularly important to build on the competitive activities of business. There has been much thinking about business strategy over the last three decades, particularly regarding what competencies a business needs to have in order to compete in a specific environment. Top management is identifying corporate core competencies and working to establish them throughout the organization. Human resource development builds competency-based models that drive business results.

All organizations are talking about competencies. Some have truly worked the concept into several of their processes. A few have a fully implemented competency modeling and reporting system in place. These address the development of people from process design through succession. However, quite a few organizations are still striving to build a competency model and implement it. Most organizations of all sizes are still struggling with defining, designing, and implementing competency model projects.

The process is completely customizable. The decisions of competency design are driven by a number of organizational factors, including management philosophy, customer requirements, business needs, and in-place processes. These factors vary from one organization to another, requiring a customized approach to competencies in the workplace. Customization is essential to the overall success of competency efforts, since every organization must integrate competency concepts into its own job design, recruitment, hiring orientation, development, and succession processes.

Performance Criteria:

Performance criteria basically define what an individual needs to accomplish in order to be deemed competent based upon a specific competent statement.

Performance criteria are expectations for performance of a specific competency. They define the performance behaviors that are necessary for an identified competency.

Performance criteria have been used in the past to define the required standards for a job applicant. Similarly, performance criteria have been used to monitor and manage job performance through appraisals, and training and development programs have been designed and evaluated using performance criteria.

As Human Resources (HR) departments have become more integrated it makes sense to have one common set of criteria to cover common themes in different people-management processes. This would ensure that key criteria used to select an individual are also used to monitor and manage their performance and to focus their training and development. Competencies are an efficient way of providing a common framework of performance

67

criteria for use across the full range of people-management processes.

Characteristics of Performance Criteria 1) Describe employee behavior,2) Describe behavior that is observable and measurable,3) Are limited to a single behavior,4) Include sufficient description of the behavior,5) Include desired conditions imposed on performance,6) Include a performance standard,7) Include essential aspects of performance.

Benefits of Performance Criteria A common framework of performance criteria for all people-management processes has two further benefits, as it provides:I) A common language . across all parts of an organization for describing effectiveness

in that organization. For example, users of the framework will have a common understanding of what good leadership looks like or what it means to be effective when working in a team

2) An opportunity to achieve a high level of consistency when assessing performance. Whether for selection or in appraisal, all 'assessors' will know what good performance should look like and will know what needs to be assessed and what can be ignored.

Criteria SamplingCriteria Sampling or Sampling Criteria also referred to as eligibility criteria; include a list of characteristics essential for membership or eligibility in the target population. The criteria are developed from the research problem, the purpose, review of literature, the conceptual and operational definitions of the study variables, and the design. The sampling criteria determine the target population, and the sample is selected from the accessible population within the target population. When the study is complete, the findings are generalized from the sample to the accessible population and then to the target population.

A researcher might identify very broad sampling criteria for a study, such as all adults over 18 years of age able to read and write English. These criteria ensure a large target population of heterogeneous or diverse potential subjects. A heterogeneous sample increases the ability of the researcher to generalize the findings to a larger target population. In descriptive or correlational studies, the sampling criteria may be defined to ensure a heterogeneous population with a broad range of values for the variables beiag studied. The sampling criteria may be specific and designed to make the population as homogeneous as possible or to control for extraneous variables. In quasi-experimental

68

or experimental studies, the primary purpose of sampling criteria is to limit the effect of extraneous variables on the particular interaction between the dependent and independent variables. Subjects are selected to maximize the effects of the independent variable and minimize the effects of variation in other variables. The number of restrictions that can be imposed by the sampling criteria depends on the typical patient load in the selected setting.

Sampling criteria may include characteristics such as the ability to read, to write responses on the data collection instruments or forms, and to comprehend and communicate using the English language. Age limitations are often specified, such as adults 18 years and older. Subjects may be limited to those who are not participating in any other study. Persons who are able to participate fully in the procedure for obtaining informed consent are often selected as subjects. If potential subjects have diminished autonomy or are unable to give informed consent, consent must, be obtained from their legal representative. Thus, persons who are legally or mentally incompetent, terminally ill, or confined to an institution are more difficult to access as subjects. Sampling criteria can become so restrictive that an adequate number of subjects cannot be found.

A study might have inclusion or exclusion sampling criteria (or both). Inclusion sampling criteria are those characteristics that a subject or element must possess to be part of the target population. Exclusion sampling criteria are those characteristics that can cause a person or element to be excluded from the target population.

Tools for Data CollectionFollowing are the tools of data collection for mapping are: 1) Observation method2) Repertory grid

3) Critical incidence technique 4) Expert panels5) Surveys6) Automated expert systems7) Job task analysis8) Behavioral event interview.

Data AnalysisData analysis is a practice in which raw data is ordered and organized so that useful information can be extracted from it. The process of organizing and t hinking about data is key to understanding what the data does and does not c ontain. There are a variety of ways in which people can approach data Analysis, and it is notoriously easy

69

to manipulate data during the analysis phase in push certain conclusions or agendas. For this reason, it is important to pay mention when data analysis is presented, and to think critically about the data and the conclusions which were drawn.

Analysis of data is a process of inspecting, cleaning, transforming, and nodding data with the goal of highlighting useful information, suggesting conclusions, and supporting decision-making. Data analysis has multiple facets and approaches, encompassing diverse techniques under a variety of names, in different business, science, and social science domains.

Data analysis in competency mapping contains the following steps:

I) Review List of Competenciesi) Review the competencies that are identified, to check if they fulfill the purpose or

objective of the job.i i ) Competencies are finalized for each job role.i i i) Identify and list meta competencies.iv) Have it agreed with the management teams.v) Each role profile in turn would now have a detailed set meta- and sub-competencies.

Each of the competencies are now defined in the context of the role profile.

2) Assign Proficiency Leveli) Define what proficiency means to the organization and what use would it be

put to within the organization.

ii) Define levels and differentiate between appraisal ranking and proficiency levels.

Validating The Competency ModelValidation can be done in three stages, which are as follows:1) Content Validation Session

i ) Bring together an appropriate focus group consisting of top management, cross-section managers, and typical role profile-holders. '

i i ) Validate the skills identified and competencies profiled.i i i ) Conduct a validation exercise to check for the ease of understanding implementation

possibility, time, and the process involved to roll it out through the enterprise.i v ) Define milestones for such an implementation work.

v) Tabulate the learning process.v i ) Evaluate whether the exercise has generated adequate information to

progress with the competency definition proficiency mapping exercise.v i i ) Re-establish the business case for implementing a competency development

work process.

70

v i i i ) Run pilot workshops wherever necessary.

2) Reinforce Proficiency of Critical Competenciesi) At this stage, proficiency analysis and validation is essential to be conducted

through similar cross-management focus groups.ii) Illustrate with examples how proficiency levels have been articulated, valued, and

how they would be used.iii) Handle insecurities and threat perceptions in the usage of proficiency levels.iv) Run pilot workshops where necessary.

3) Refine Competency Definitions, if Necessaryi) Focus on the competency definitions obtained through the validation exercise.ii) Conduct a top management workshop and finalize the definitions.

iii) Run a pilot focus group, if necessary.

Ways to Validate Competency ModelThe competency model can be validated in three ways, which arc as follows:

I) The researcher can collect BEI data on a second criterion sample of superstar and average performers. BEI stories from the second sample are then scored to see if the competency model based on the first study predicts the superior and average performers in the second sample. This approach is called "concurrent cross-validation", meaning the competency model is tested by seeing if it predicts the performance of people in a second group at a current point in time.

2) Tests can be developed to measure the competencies described by the competency model and used to test people in a second criterion sample of superior and average performers. Alternatively, managers and other knowledgeable observers can be asked to rate and rank members of the second criterion sample on competencies using rating forms or Q-sorts. If the competency model and the tests or rating forms are valid, superstars in the second sample should get higher scores on these tests and rating forms. I his is called "concurrent construct validation", meaning-,different constructs or measures, the competency tests; are used to predict performance of people at a certain point in time.

3) The third and most powerful way to validate a competency model is to select (using tests or data from BEIs) or train people using the competencies and see if these people actually perform better in the future. This is called "predictive validity" because the competency model is expected to predict, how people will perform. This is what traditional education, grades, test scores and credentials do not do–predict actual job performance or success in life.

71

Clearly, predictive validity is the bottom line for selection or training. I mployers hiring people want to use criteria that predict the people hired will (10 the job well. Trainers want to teach skills that will enable people to do the lob well.

Short Competency Model Process Based on Expert Panels

Developing a Model

Step 1: Convene Expert Panels: For resources specialists, managers, and following:1) Key Accountabilities: The most important duties, responsibilities, & product or service outcomes.2) Results Measures: The result measures for these accountabilities that can be Used to

identify superior performers in the job.Ideal criteria are hard outcome measures such as productivity data. In the absence of such criteria, supervisor, peer (if peers have an opportunity to observe one another's performance), subordinate (e.g., organizational climate survey) and/or customer ratings can be used. Even if a criterion sample is not identified, these data are useful for designing performance management systems and in focusing the panel on the key results outputs of the job when identifying characteristics that predict getting these results.

3) Career Paths Optional: Career paths that typically lead to the job.

4) Competencies: The employees need toper form the job at:

i) A baseline or "threshold" level, andii) A superior level.

Expert panel members may also:

5)' Complete a Competency Requirements Questionnaire (CRQ), a survey that assesses competencies required for threshold and superior performance in the job.

6) Respond as a group to questions posed by the computer-based "expert system".

Step 2: Conduct Behavioral Event Interviews (BEls) [Optional]: If possible, a few superior incumbents are interviewed to confirm and provide narrative examples of competencies identified by the expert panel. BEIs are most valuable in identifying the nuances of how competencies are expressed in an organization's unique culture and context. For example, a panel, survey, or expert system can identify "Uses Influence Strategies" as a competency, but not how, when, or what an effective influence strategy looks like in this particular organization. Even one BEI can provide the richness of detail to make competencies identified "come alive" in sufficient detail to he useful for selec tion or training applications.

Step 3: Analyze Data and Develop a Competency Model: Data from the expert panels,

72

surveys, expert system, and BEIs are content analyzed to identify behaviors and personality characteristics that:I) Distinguish superior from average job incumbents, or2) Are demonstrated by all incumbents adequately performing the job.

Step 4: Validate the Competency Model: A competency model can be quickly validated by rating or ranking a criterion sample of superior and average performers on the competencies identified in step 3 and confirming that superior performers are ranked higher than averages on the competencies,

Outputs of a Short JCA

The outputs of a short JCA are one or more job description "competency models" that include:

1) Purpose and Content of the Job/Job Family: Tasks, responsibilities, and performance measures for the job rated as to level, frequency, and importance in a form that can be used to compare the job's content with other jobs.

2) !Optional' Career Paths: Career paths for the job, with some estimate of when, where, and how key competencies for the job are developed.

3) Competency Requirements: The skills and characteristics required for adequate and superior performance in the job.

Mapping Future Jobs & Single Incumbent Jobs

Mapping future jobs means determining future work requirements. Forecasting or planning for future work requirements is a fourth important component of an effective SP&M program. After all, it is no more likely that work requirements will remain static than it is that the organization itself will remain static. Organizational needs change, and so do work requirements. It is therefore important to engage stakeholders and decision-makers in planning for the changes that may be expected in the organization and in its work requirements. That is essential if individuals are to be prepared to meet future requirements. Even though few organizations regularly and systematically forecast future work or competency requirements, the need to do that is growing. It is simply not possible to prepare people if future work requirements remain unknown.

Online and high-tech approaches have, however, provided new approaches to job forecasting, scenario planning, and future-oriented competency modeling. Job forecasting estimates future job requirements, addressing such questions as these:1) What will be the future purpose of the job? How will that be different from the job's

present purpose?2) What are the expected work duties or responsibilities of the job in the future, and

73

how are they expected to change?3) Summaries of individual skills (e.g., a personal skill inventory that details previous work

experience and language skills).

Special challenges are posed in determining the competency requirements for future jobs and single incumbent jobs where there may be only one incumbent or the job being defined does not yet exist. How can competencies for thesejobs be determined?

Approaches for Studying Future JobsThree approaches for studying future jobs (in inverse order of desirability) areas follows:1) Expert Panels "Guesstimates": An expert pane analysis of future jobs is similar to that

described for the short competency model process. Experts first list the accountabilities, results measures and competencies of the most s imi lar current job(s) in the organizat ion, then identi fy accountabilities and competencies likely to be required by the future job(s). Experts can even construct critical incident scenarios for future jobs by imagining typical situations a person in the future job might face and then identifying competencies needed to deal with these situations effectively.

2) Extrapolation from Job Elements with Known Competency Correlates: Elements or accountabilities for some future jobs may include competencies already identified by previous competency research. Competency models for a future job can be assembled from these elements. For example, a U.S. telecommunications firm needed a model for senior marketing representatives capable of winning European Government and community officials' approval for telecommunication equipment to be sold in the European Common Market. With no overseas personnel or experience, the firm had no superior or average performers to study.

An analysis of this future "technical ambassador" job indicated it will combine elements of diplomatic and high-tech sales jobs. Competency models already exist for both diplomats and high-tech salespeople. From the diplomatic model, competencies for the "technical ambassador" job included "cross-cultural interpersonal sensitivity", "overseas adjustment" (adaptability, liking for novelty, resistance to stress caused by living overseas), and "speed of learning (foreign) political networks" from the diplomatic model; from the high-tech sales model competences include achievement organization and consultative selling skills.

3) Analysis of Analogous Present Jobs: The best way to identify competency requirements for future jobs is to:

i) Study superior performers in similar jobs now, thenft) Use labor economics studies to extrapolate how many people will be employed in

these jobs, hence need the requisite competencies, at future points in time.

74

Competencies for Single Incumbent Jobs

Competencies for single incumbent jobs can be determined by assembling data from key people (dependencies) who interact with the person in the job.

A model was created for the Vice President of Human Resources of a certain hospital. This position was empty; the incumbent had been fired. Competencies for this job were identified by conducting BEIs with superiors (the hospitals' CEO and directors), peers (other functional and operating vice presidents), key subordinates, and customers (union leaders and prominent members of the community who dealt with human resource issues with the hospital). Respondents were asked to identify critical incidents in which they had seen previous VPs of human resources be particularly effective or ineffective. If they could not think of incidents involving a previous job incumbent, respondents were asked for incidents involving any health care VP of human resources.

It is not hard to identify competencies important to the CEO (or other respondents) from these critical incidents – strategic thinking, concern for impact, presentation skills, customer service orientation, quality concern, innovativeness, political influence skills. Reasonably complete and accurate competency studies can be prepared using the Short Competency Model Process and modified BEIs with key dependencies of a job, even if its is single-incumbent job – and empty.

Using Competency Profiles In HR Decisions.

Meaning of Competency Profiling

Competency Profiling is a method utilized to identify the specific Knowledge, Skills, Abilities, and Other Qualities (KSAOs) that are needed to complete and achieve particular tasks and activities. Typically, these KSAOs are linked with specific behavioral indicators to achieve the ultimate aim of fulfilling the needs of external clients and customers. Competency profiling can be conducted through various job analysis methods such as critical incidents technique and behavioral event interviews.

With well-designed competency profiling measures, an organization can ensure that its objectives are fulfilled by providing clearly defined standards and methods for the employees. The employees will also be provided with clear guidelines regarding what is expected of them and provide them with the opportunity to address any potential competency gaps so as to improve their individual performance. Having clearly defined competencies is critical for activities such as recruitment, succession planning, and organizational restructuring as it provides a map to the necessary knowledge, skills, abilities, and other qualities that are necessary for the organization to fulfill its goals.

Competency profiling aims to identify all of these KAPS in order to help to create a real and sustainable change in behavior:I) Knowledge: Information that is organized, learned, and applied through experience,

75

study, or investigation.2) Ability: Innate potential to perform mental and physical actions.3) Personal Attributes: Individual traits, values, motives that indicate employee's

behavior.4) Skills: Result of repeatedly applying knowledge or ability.

Advantages of Competency Profiling

The advantages of competency profiling are as follows:1) It provides a clear guideline to all members of staff regarding the behavioral

indicators that they will be assessed on, when staff are involved in the competency profiling process, they will gain insight and clarity regarding their role and responsibilities;

2) It can also serve as motivation when employees track their development over their career;

3) It allows for training needs and Return on Investment (ROI) to be readily assessed and measured and finally it provides managers with key information with which to make decisions on the selection or development of employees.

Personal Attributes

Competency Approach in Recru i tment and Retention Companies very conveniently use the competency approach in the important HR function of recruitment and retention. 'Competency mapping plays a significant role in recruitment, selection, induction, and placement as it gives a more accurate analysis of the job requirements and the candidate's capability.

Elements of Recruitment and RetentionIn any organization, recruitment needs consideration of the following points: I) Identifying and recruiting good and talented people is difficult.2) Retaining them is truly a much more difficult task.3) Increasing attrition rate at managerial level.4) Looking for responsibil it ies, recognition, comfortable working environment,

satisfaction, autonomy, etc., by high level managers.

76

5) Deriving satisfaction from saying 'I have done this', 'This is my achievement', etc., by achievers.

6) Shaping individual's behavior through his/her need satisfaction.7) Recognizing, appreciating, and nurturing subordinates' talents bring rewards.8) Helping to take drives, and fulf i l l ing desires directed towards achievements.

Competency-Based Selection ProcessCompetency-based selection can gain a greater competitive advantage. The market for human talent is imperfect. High turnover is usually done with the high failure rate amongst the newly hired. Competency-based selection increases performance and also decreases turnover rates. High job performance and satisfaction in turn predict retention because good performers need not be fired and satisfied employees are less likely to be dissatisfied with their job. The people well-matched to their jobs intrinsically enjoy their work more while producing a better organizational climate.

Steps to Develop a Competency-Based Selection SystemThere are concrete steps in developing a competency-based selection system:1) Develop competency model for the target jobs.2) Select or develop assessment methods.3) Trainers certainly assessment that had.4) Assess the competencies of candidates for jobs.5) Make job person match decisions for selection placement and promotion.6) Valid data selection system – wherever possible organization should track the

performance of people selected using competency assessment methods to confirm the validating and return on investment in the method.

7) Develop a competency-based job and person database and matching system.8) Many standard assessment center exercises can be observed and coded for competencies.9) In basket exercises.10) Stress exercises and interviews.11) The presentation, vision, and strategy speeches.12) Job interview.

Competency Mapping Procedures and Steps (Module 6) , 267

13) Leaderless group exercises14) Treasure hunt.15) Business production game.16) Role plays.17) Peer coaching and counseling exercises.

In a selection interview, rating of the candidates by managers can be completed to 360 degree meeting or appropriate rating methods can be used. This can include competency assessment questionnaire or a competency queue starts, customer survey,

77

systematic multiple level observation of groups, manager style, and organizational climate.

Preparing Organizations to Facilitate Competency-Based Selection Process Organizations commence at the socialization stage as a part of the selection process and follow it through formal training interventions, feedback mechanisms, appraisals mentoring, etc., the roles and responsibilities at each of these stages of the competency selection process is explained below:

Stage 1: Socialization: Organizations today, particularly those at the leading edge of technology, are faced with a dynamic environment, shaking the very roots of humanvalues and organization competency-driven culture. There is an increasing need for experimentation, for learning from experience, for Ilexibility, and adaptability for growth.

A strong competency-driven culture is a set of shared meanings – values, norms, and beliefs, a way of doing things, that make it possible for members and new members of an organization interpret and act upon their environment thereby helping everyone to head in a unipolar direction as that of the organization.

In organizations to get new recruits too acclimatize into a competency-driven culture an elaborate familiarization and socialization program is being drawn for various level.

stage 2: Selection Standards and Hiring Demands: The corporation in search for talent has articulated policies for hiring of top performers would subject applicants for employment to a selection process so rigorous and extended that it often seems designed to discourage individuals rather than encourage them to take on the company and the job. By employing selection standards and methods, by grilling the applicants through the several stages of assessment interviews, highlighting strengths and weaknesses and making sure not to oversell the job or the company, the organization prods the candidate.

Stage 3 Basic Familiarization Program: This is followed by a business familiarization program to all new recruits through a orientation of the corpora ion by providing them a bird's eye view of our business/functions and the leavers these businesses and functions. The objective of this familiarization program is to help the new recruit to meet with a random assortment of managers of the company including senior managers, understand the profile of people across the company, appreciate the values, the climate and the competency-driven culture in which the company operates.

Stage 4: On-the-Job Training: An specific instances for professionals like field/territory sales managers, production managers in far-flung locations the company is expected to conduct an on-the-job training program completely structured ranging between a periods of 24-46 weeks as the case may be, depending upon the needs of the individual manager.

78

Stage 5: Unit/Factory/Sales Branch Familiarization: Soon after the new recruit completes his/her corporate familiarization, he/she is sent to the concerned unit where he is being located for his initial placement for on-the-job training. On joining at. the unit, the unit head in turn draws a 3-5 day familiarization program providing more in-depth information the overall unit's operations.

Competency-Based Feedback

The feedback is regular, planned, and is a joint endeavor to make improvements happen. Tasks and agreements are recorded and action plans drawn for improvement. Therefore, there are quarterly appraisals that are completed by the unit head on each of the managers working at the unit and the appraisals are so designed to provide upfront feedback on the strengths, areas of development of the new recruit, This feedback is based on the experience that the unit head has encountered alongwith the new recruit during the first quarter or second quarter as the case may be. This feedback is of vital importance as the new manager is constantly curious know-how the new organization is looking at his performance, learning, and his contribution.

It is, therefore, the organization's responsibility to provide the manager complete inputs on how he has been shaping-up and settling-down in the organization and, at the same time, also tell him frankly and fairly, the areas he needs to sharpen or develop. The unit head, while going through his feedback session will not stop at identifying areas but would also take pains to help the new recruit to identify ways and means to overcome these weaknesses.

79

Module 7Methods Of Data Collection For Mapping

Following are the methods of data collection for mapping:1) Observation method,2) Repertory grid,3) Critical incidence technique,4) Expert panels,5) Surveys,6) Automated expert systems,7) Job task analysis,

8) Behavioral event interview

1) Observation MethodResource persons observe the top and average performers while working and taking decisions, interacting with people, leading co-employees, learning new aspects, and applying them. Typically, the first part of such report contains record of observations and the second part observer's own interpretation and analysis of this record. This observation of extreme performers in action facilitates identification of the competencies required to carry-out a task or job in the most efficient manner and also, what inadequacy in competencies result in average performance. However, effectiveness of this method depends upon the objectivity and neutrality of observers.

Advantages of Observation Method

1) Used in Competency Studies: Because observations provide a sample of what the job is like in "real life", they are often used in competency studies to provide preliminary information. This serves as an excellent orientation to the job for the research team.

2) Validity is High: If representative samples of employees are observed, the validity of the competencies identified is high because actual job behavior is viewed.

3) Provide a Full Perspective of the Job: Observations can provide a full perspective of the job when incumbents' interactions with colleagues, managers, and clients are observed.

4) Verbal and Non-Verbal Behavior can be Observed: Both verbal and non-verbal behavior can be observed. Many employees in an organization tend to have greater confidence in competencies identified through observations.

5) Directness: A major advantage of observation as a technique is its directness. One does not ask people about their views, feelings, or attitudes; interviewer watches what they do and listens to what they say.

80

6) Presented in Natural Setting: Moreover, data collected by observation may describe the observed phenomena as they occur in their natural setting. Other data collection methods introduce elements of artificiality into the research environment.

Disadvantages of Observation Method

1) Time-Consuming: The primary disadvantage is that these are very time-consuming and expensive, especially for complex jobs.

2) Validity and Credibility Low: if only a relatively small proportion of job incumbents are observed, the validity and credibility of the results can be low.

3) Extensive Experience is Required: Extensive experience in competency work and strong analytical ability is required to accurately infer the competencies from the observations.

4) Biasness of the Observer: There is considerable opportunity for bias by the observer in filtering and documenting the job behavior.

5) Need for trained Observer: Requires that observer be trained to observe relevant job behaviors.

2)Repertory GridIn a repertory grid analysis, the jobholder is asked to write on separate cards the names of atleast six people whom .he supervises or works with. The jobholder separates the cards into two sets, one those who are good at work and other those who he considers are less efficient. The cards are shuffled with name face down and the jobholder is asked to pick two cards from a pile and one from the other. The jobholder has to now describe the ways in which the two are similar to each other and different to the third. This process generates a list of attributes. The jobholder is asked to describe the behavioral indicators that made it possible to distinguish the good and less efficient.

The repertory grid technique can help a company to identify its core competencies as well as superior performance competencies. This technique is best used by businesses that are either in the introductory stage, where it is important to identify key success factors, or in the maturity stage, where becomes critical. This is done at the level of "elements". For example, the team might identify a company with an excellent distribution network as a threat; distribution is the element in this case. These constructs are laddered, or taken to their logical denouement to understand the core competencies of the business. The same approach is used to arrive at superior-performance competencies; only, this time instead of companies, the team identifies three people:

1. A superior performer,2. performer, and3. A low performer.

Thus, the competencies stand revealed.

81

Advantages of Repertory Grid

The advantages of repertory grid are as follows:1) Effective in both picking-up unexpected competencies.2) Avoids the existing bias or prejudice.3) It has the ability to focus on the key aspects which are important performance.4) If does not predetermine the outcome of the analysis by confining responses to

predetermined formats.

Disadvantages of Repertory Grid

1) Need skilled practitioners to undertake them.2) Rely upon view points of effective performance, is that biases about the way in which jobs

should be performed creep into the process for being selected.3) Overlook the crore standards which are essential for all levels of performance.

3)Critical Incidence Technique

The jobholders are interviewed in a systematic manner. They are asked structured questions about what situation and challenges they have faced. The remarks about what they thought did and consequences of the actions are note down. Both the incidences, ones in which the interviewee has been successful and also unsuccessful, are recorded. The interviewee is asked about what factors he/she attributes to the success or failure in an incidence. The recorded observations are analyzed to infer the needed competencies.

This approach draws on the learning from the past behavior. Due to the dynamic nature of the business and strategies, there is a danger that past learning may not be a correct indicator of the competencies_ needed today and in the future.

Advantages of Critical Incidence Technique

1) Focus on unusual or extraordinary may be more helpful than routine data2) Does not force the respondents into any given framework3) Flexible method4) Inexpensive and provides rich information5) Identifies even rare events that might be missed by other methods which only focus on

common and everyday events6) Useful when problems occur but the cause and severity are not known7) Emphasizes the features that will make a system particularly vulnerable and can bring

major benefits.Disadvantages of Critical Incidence Technique1) Respondents may be reluctant to express incidents that reflect badly on themselves.2) The critical incidents are recorded after the events have already taken place — both

routine and non-routine.3) The process of collecting a fairly good number of incidents is a lengthy one.4) The analysts overseeing the work must have analytical skills and ability to translate the

82

content of descriptions into meaningful statements.5) Respondents may reply with stereotypes, not actual events (using more structure

improves this).6) The meaning of "critical incident" must be clear to participants.

4)Expert PanelsIn this method, a team or panel of experts is constituted to identify the competencies required in the organization.

The experts are the following members:1) Top management representatives (Strategic decision-makers).2) Experts from different functional background who have a fair idea of the nature of

tasks performed in each function.3) Representatives from the Human Resource Department.

The panel goes into the details of the critical behaviors needed for successful performance in each job or a group of jobs. The business strategy and the expected behavior for achieving the desired results is studied and documented. The panel could start with a list of standard competencies and arrive at modifications needed. The advantage of this method is that it is a faster process and a politically expedient way to define competencies as experts may question the validity of the methodology.

Advantages of Expert Panels1) Quick and Efficient collection of Data: Quick and efficient collection of a great deal of

valuable data.

2) Knowledgeable for Panel Members: Panel members become knowledgeable in competency concepts, assessment methods, and variables; and their involvement can develop consensus about and support for study findings.

Disadvantages of Expert Panels1) Possible Identification of Folklore or Motherhood Items: Such items sound good and

reflect the traditions of the organization but do not predict competent performance.

2) Omission of Critical Competency Factors for which Panel Members Lack Psychological or Technical Vocabulary: For example, superior furniture salespeople have competency called "eliciting visual and tactile imagery", which means they think in terms of color (mauve, taupe, rust) and textures (nubby, silky, scratchy). They also get their customers to think in these terms, and thus can steer the prospect to specific pieces of furniture. Expert panel members may not know a concept such as "eliciting imagery", and hence would miss this important competency.

SurveysA survey is "a process of collecting data from existing population units, with no particular

83

controle over factors that may affect the population characteristics of interest in the study".Almost every country in the world uses surveys to estimate their rate of unemployment, basic prevalence of immunization against disease, opinions about the Central Government, intentions to vote in an upcoming election, and people's satisfaction with services and products that they buy. Surveys are a key tool in tracking global economic trends, the rate of inflation in prices, and investments in new economics enterprises. Surveys are one of the most commonly used methods in the social sciences to understand the way societies work and to test theories of behavior. In a very real way, surveys are a crucial building block in a modern information-based society.

Characteristics of SurveysSurveys that have the following characteristics:1) Information is gathered primarily by asking people questions.2) Information is collected either by having interviewers ask questions and record

answers or by having people read or hear questions and record their own answers.3) Information is collected from only a subset of the population to be described — a

sample — rather than from all members.

Advantages of Surveys

1) Quick and Inexpensive Data Collection: Considerable data can be collected quickly and inexpensively.

2) Easy Information Gathering: Information can be easily collected from geographically dispersed respondents.

3) Convenient: Respondents may complete the survey at a time and place that is convenient for them.

4) Facilitate Acceptance of Competency Study: Surveys permit the input of many people in the organization, and thus facilitate acceptance of the competency study.

5) Can be Easily Customized: The survey questionnaires can be easily customized for sub-groups of respondents.

6) Encourage Candid Responses: The anonymity of surveys encourages candid responses.

7) Data can be Easily Summarized and Analyzed: The multiple-choice or rating-type questions result in quantitative data that can be easily summarized and analyzed.

Disadvantages of SurveysI) Collected Data is Limited to Job Content or Competencies: The data collected is often

limited to the job content or competencies included in the survey. For example, respondents may be asked to list additional job competencies that they believe are important, but there is no opportunity to probe their responses as you might in interviews and focus groups.

2) Lack of Mechanism for Understanding Questions: There is no mechanism to

84

check for respondents' understanding of the questions.

3) Low Response Rates: Response rates are typically low, so it can be challenging to secure an adequate representative sample.

4) Difficult to Summarize and Analyze: It is difficult to summarize and analyze the responses in open-ended questions.

6) Automated Expert SystemExpert system tools can be used to analyze the need to re-schedule based on progress toward expected performance. They can also identify problems in production schedules developed for alternative scenarios and present them in an easy-to-interpret format. They can extend the scheduler's experience and greatly ease the data analysis requirements.

Expert systems could perform data reductions as well as analyze the output. They could make decisions to generate alternative scenarios and select the best. This application of expert system technology would also be of use in automated environments, where the user of the scheduling module might be a cell controller, or another CPU. In this circumstance, the need is to be able to reschedule and evaluate the results of the simulation scheduling application without human intervention. If the analysis procedures could be captured in an expert system, the decisions could be made automatically.

Advantages of Expert SystemsI) Access to Data: Access to several hundred competency studies in the database can

provide comparison data for reality-testing competencies suggested by other data collection methods (e.g., filling in competencies found in previous studies of a job when missed by a current study).

2) Efficiency: Serving as "smart" questionnaires, expert systems quickly narrow questions to those relevant to the job being analyzed, rather than eliciting answers on all questions from all respondents as surveys do.

3) Productivity: Expert systems analyses can provide in an hour what other competency study methods require days or weeks to produce. Expert systems do not require highly trained experts, saving labor time and expense.

Disadvantages of Expert Systems1) Dependency: Data depend on the accuracy of responses to questions (i.e., expert

systems are subject to "garbage in garbage out" problems). This is also true of panels, surveys, and other data sources, but the computerized expert system may be more vulnerable when used in an unsupervised setting.

2) Overlook Specialized Competencies: The method may overlook specialized competencies not in the database. Like questionnaires, expert systems can find only those competencies that have been programmed in. They cannot discover new competencies or organization-specific nuances of known competencies.

85

3) Prohibitive Cost: Costs of system hardware and software may be prohibitive (although with personal computers, these costs rarely exceed three days of specialist consultant time).

7) Job Task AnalysisBasically, task descriptions are generated through the review training manuals or direct observation of the job performance. The task descriptions are then clustered and weighed to reflect the essence of the job.

The steps involved are:I) Generation of task description item banks by scientific staff,

2) Subject matter specialists review the consolidated list and delete the tasks not performed or out-of-date tasks,

3) The task list narrowed down to most representative tasks,4) Experts rank the tasks based on the importance (least/most, sort tasks into clusters

based on the performance requirements,5) Competencies required performing the tasks identified.

This method requires a great deal of time and effort.

Advantages of Job Task Analysis

1) Produces complete job descriptions.2) Can validate or elaborate on data collected by other methods.3) Easily done.4) Does not require elaborate skills or training.5) Appropriate for lean form of analysis.6) Very job related.

Disadvantages of Job Task Analysis1) Provides characteristics of job rather than those of the people who do the job well.2) Task lists too detailed to be practical and do not separate truly important tasks from

the routine activities.3) Inappropriate for broader goals.

8) Behavioral Event InterviewThe behavioral interview technique (BEI) is used by employers to evaluate a candidate's experiences and behaviors in order to determine their potential for success. The interviewer identifies desired skills and behaviors, then structures open-ended questions and statements to elicit detailed responses. A rating system is developed and selected criteria are evaluated during the interview. This methodology is used to identify competencies in a person. It includes sitting through with the candidate in an interview situation carrying-out a behavioral interview followed by recording of responses

86

and identification of behavioral codes. These codes will in turn help in identifying the competencies in a person and arriving at a form of relative ranking for each competency:

1) Empirical identification of competencies,2) Precision about how competencies are expressed,3) Freedom from gender, cultural, bias,4) Generation of data for assessment, training, etc.

Advantages of Behavioral Event Interview1) Provide Perspectives of Job Challenges and Competencies: The interviews provide

an in-depth perspective of the job's challenges and the competencies needed to master them.

2) Discriminate Between Top Performance and Baseline Competencies: When average and low performers are interviewed as well as high performers, BEIs clearly discriminate between the competencies required for top performance and the baseline competencies needed for acceptable performance.

3) Identify Interpersonal and Management Competencies: BEIs are an excellent method for identifying the interpersonal and management competencies that are often difficult to define.

4) Used to Develop Behavioral Examples: The very specific descriptions of effective and ineffective behaviors produced in BEIs can be used to develop behavioral examples for competency models or case studies, role-plays, or other simulations for training.

5) Empirical Identification of Competencies Beyond or Different from those Generated by other Data Collection Methods: BEI data are by far the most valuable for validating competency hypotheses generated by other methods and for discovering new competencies.

6) Precision about How Competencies are Expressed: This refers not only to the "use of influence" but to how influence is used to deal with specific situation in a specific organization's political climate.

7) Identification of Algorithms: BEI data can show exactly how superior perfimiter, handle specific job tasks or problems. For example, the Navy wanted to help officers to handle race-relations issues. The BEI method was used to ask superior and average officers to describe the toughest race relations incidents they had faced. Analysis of about 60 stories of volatile situations revealed eight specific actions superstar officers took either to avoid racial conflicts or to deal with them quickly, fairly, and effectively. These action steps could then be taught to other officers.

8) Freedom from Racial, Gender, and Cultural Bias:i) The BEI approach has been adopted by many organizations because it is

predicatively valid without being biased against minority candidates.

87

ii) Generation of Data for Assessment, Training, and Career Pathing: Behavioral event interviews provide very specific descriptions of effective and ineffective job behaviors that can show and teach others what to do — and what not to do — on the job.

Disadvantages of Behavioral Event Interview1) Time and Labor Intensive: BEIs are time and labor intensive. Up to a full day can be

required to conduct an interview and then analyze the data.

2) Requires Highly Trained and Skilled Interviewer: A highly trained and skilled interviewer is essential to obtain accurate information. The interviewer must have strong analytical ability and experience in competency identification to accurately infer the competencies.

3) Inefficient for Analyzing Series of Jobs: BEIs are not practical for analyzing a series of jobs because of the time, expense, and expertise required for administration and data analysis.

4) Focus on Current and Past Behaviors: BEIs focus solely on current and past behaviors, which may be different from those needed in the future.

5) Because BEIs focus on critical incidents, the competencies needed for the more routine aspects of work may be missed.

6) The data collected may not be widely accepted by stakeholders because it is provided by a small number of interviewees.

88

MODULE 8Developing Competency Models From Raw Data

Competency model can be developed from

1) Behavioral Event Interview (BEI),2) Survey,3) Panel,4) Expert,5) System, and6) Observation Data.

Analyzing Behavioral Event Interview DataTwo "thematic analysis" methods are used to identify competencies in BEI data:

1) Coding interview transcripts for known competencies, using the Competency Dictionary; and2) Conceptual iz ing new competence themes from interv iew narrat ives. Thematic analysis is the most difficult & creative part of the competency analysis process.

Thematic Analysis: This ability is itself two levels of the competency conceptual Thinking:1) Use of concepts Is the ability to recognize or apply a concept already known from

previous study or research.2) Concept creation or "Conceptualization" is the ability to recognize a pattern arid

invent it new concept to make sense of raw data.

Thematic analysis is a continual comparing and contrasting of superior and average performers. Any difference may suggest a competency.

It may be helpful to organize observations of difference into general categories, such as the following three:

1) Cognitive/Intellectual: Skills involved in creating, getting, or using information; learning from experience; objectively analyzing data; or th ink ing through a l ternat ives for ac t ion . Use o f concepts , conceptualization, analytic thinking, logical thought, and divergent thinking are cognitive/intellectual competencies.

2) Interpersonal: Skills involved in communicating with, understanding, and influencing others, such as accurate empathy, positive regard and expectations, articulateness

89

and public speaking ability are interpersonal competencies.

3) Motivational: The needs or drives that cause people to want and do different things; achievement, affiliation, and power motives; and emotional self-control, are motivation competencies.

Identifies Competencies: What To Look For

One systematic way to organize thematic analysis of competency data is to look at how superior & average people answer each of the key questions:

1) Situation: Do supiror & average talk about different kinds of things in their BEIs? Do they focus on different parts of job? Self-concept competencies are often indicated by the way people think about their lobs (e.g., "I am a salesman" versus "I am an administrator").

2) Who is Involved: Are there differences in the why superiors and averages see their involvement with people or equipment? Do they regard others positively or negatively?

For Example: Alcoholism Counselors, Diplomats Consultants.

Superiors express positive regard Averages express negativeand expectations for clients. sentiments toward clients.

She was having a bad time, but I Face it – we get the real dregs hereknew she was a strong person – there is not much we can do forwho was going to get it together. them.

3) Thoughts: Are there differences between superiors and averages in the way they think, use concepts or knowledge, make sense of complex data, remember details, organize things in logical order

For Example: Manufacturing Managers, Military Officers, PilotsSuperiors are high in attention todetail: They think in checklists and

Averages talk about tasks in vague,general terms, appear

are able lo tick-off numerous items overwhelmed by detail, and do notinvolved in planning tasks; they prioritize or schedure tasks byare also high in logical thoughtprioritizing tasks in order ofimportance and scheduling them inlogical order.

detail, or in logical order.

There were 20 steps required to get I am in a continual state of crisisthe aviation fuel-pumping system management. There is no way to

4) Motivation: Do superiors and averages talk about wanting different things? Do they see situations in different terms?

90

For Example: Small-Business EntrepreneursSuperiors think about Averages think about power,achievement, doing better against influencing others, enhancing theirgoals. status.I set my goal at 110% of quota, for I knew the way to impress thethe challenge – last year I'd made competition was to put on aquota, and just doing that again did splashy show with a big booth atnot seem like much fun. the trade fair, so I did it, even

though I could not really afford it.

5) Actions: Do superiors or averages do different things or show different skills in dealing with similar situations or people?

For Example: Entrepreneurs, Managers, Superstars in Almost EveryFieldSuperiors are proactive: take initiative Averages are reactive: tend notnon-routine action to accomplishobjectives or solve problems - and

to take non-routine actions,and give up rather than persist

persist (try two or more action steps toovercome obstacles) when blocked.

when blocked.

She wanted a transfer - she was a good I sent the request throughkid and I wanted to keep her. I called channels. Personnel said no. IPersonnel; they said "no way". I called patiently explained to her thatCorporate; they said the same. I kept there was not much I could dosubmitting the request. Then Iremembered I had a friend in Texas whohad some clout at Corporate and whoowed me one. I called him, and hepounded it through.

- it was out of my hands.

Identifying Competencies: How to Look

The following team approach has been found to help researchers in identifying competencies. This approach consists of three analysis and four validation steps.

Analysis StepsStep 1) Form the Analysis Team: Ideally, a competency thematic analysis team should

include atleast four persons who conducted the BEIs for the study. If fewer interviewers were used, non-interviewers experienced in thematic analysis may also be suitable. Interviewers are preferred because the very experience of interviewing and observing subjects in their work settings makes team members more sensitive to the nuances, language, and culture of the people and job being

91

studied.

Step 2) Individual Analysis of Interviews: Analysis team members work in pairs. Each analyst receives BEI transcripts for a mix of four to six superior and average interviewees drawn from a sample of half of the interviews conducted (but atleast 10). Analysts should receive some of their own interviews and some done by other team members. This minimizes analyst bias yet ensures a variety of analyst perspectives.

Working independently, each analyst reads each assigned transcript and identifies competency themes. Good practice is to underline everything in an interview that might suggest a competency theme. Any competency recognized from the competency dictionary is noted, or coded, on the margin of the transcript opposite the words underlined. The analysts use their own words for themes and/or the abbreviation for the competency and its level.

A high-tech method of coding uses a word processor with multiple windows. The transcript is in one window and the competency dictionary in another. Examples of competencies can be copied from the transcript to the dictionary to provide custom examples of each competency level coded. The dictionary itself can be customized by tailoring the definitions of competencies and competency levels to describe the data.

Step 3) Thematic analysis team definition of competencies: The analyst team meets in daylong sessions to discuss & document competency themes identification by individual analysis of transcripts

Validation Steps:If the competency model is to be used for research or selection, additional validation steps can be used to refine the Competency Model Dictionary and develop inter-rater reliability.

Step 4) Preliminary Testing of the Competency Coding System: Individual Coding: Analyst team pairs receive copies of the codebook and copies of BEI transcripts not previously coded. Each analyst codes the transcripts assigned to him or her, indicating the competency abbreviation from the codebook after each note in the transcript.

Step 5) Analyst Team Meets to Reconcile Coding: Analyst team pairs meet to discuss their coding, reconcile differences, and agree on coding for each interview transcript. This process results in further refinement of the competency code book.

Step 6) Statistical Analysis of preliminary BEI sample: Interview code is analyzed statistically to see: if codes have reached an acceptable level of inter-rater reliability.

Step 7) Coding the Remainder of the BEI Sample: The revised codebook is validated by scoring applied to the remainder of the BEI transcripts (i.e., transcripts not

92

considered in Steps. 1-5). Two members of the core interview team will ordinarily be selected to code these interview transcripts. Coders independently score these transcripts blind (i.e., they do not know whether the transcript they are scoring is that of a superior or average performer), They meet only to discuss problem cases or examples that are difficult to code.

Step 8) Final Statistical Analysis: Statistical analyses are performed on the scores given to the BEI transcripts in the validation sample to see if the codebook competencies really distinguish superiors from averages.

Step 9) Preparation of Final Competency Codebook for the Job: The final Competency Codebook is prepared. It contains precise definitions of each competency with detailed rules and examples of scoring from BEI transcripts.

Issues In Developing Competency Model

Competency practitioners and consultants have followed various combinationssteps in developing the model and assessing the competencies. Steps have been added,

deleted, modified, and refined depending on both the internal and external factors.

In general, all the practitioners or consultants have addressed the following six issues while developing the model:

1 )Strategize: Assess business needs, evaluate contextual drivers, engage ,stakeholders, and set goals.

2) Initiate: Identify methodologies, develop project plans, review existing data, benchmark competencies, and collect competency data.

3) Model: Analyze and synthesize data, identify competencies and develop models, and validate models.

4) Pilot: Develop implementation and evaluation plans, develop and initiate competency applications, and continuously communicate activities.

5) Link: Link to all human resources system components, and phase in implementation of other competency-based applications.

6) Evaluate: Establish and evaluate measures, and continuously improve the system.

93

94