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JWI 521 – Week 3 Lecture Notes (1192) Page 2 of 5
PERFORMANCE MANAGEMENT
What it Means
Performance management must be based on a detailed assessment of current and past
performance. In most companies, this assessment is done in the form of an annual performance
review. Most people would agree that candid, timely, accurate performance evaluation and
feedback are important responsibilities of a good manager. Yet, in most companies, the annual
performance review process is chock full of problems, the managers doing the assessing generally
dislike it, and the employees being assessed like it even less. Why is it so difficult to do
performance management well? And what is the impact when an organization’s performance
management systems are ineffective?
Why it Matters
• Accurate assessment leads to performance feedback that enables employees to
improve
• Effective evaluation allows managers to fill positions with the most qualified people
• Competent assessments form the basis for good reward systems for your top talent
“Performance management has become a rule-based, bureaucratic process,
existing as an end in itself rather than actually shaping performance.”
Laszlo Bock
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copied, further distributed, or otherwise disclosed, in whole or in part, without the expressed written permission of Strayer University.
JWI 521 – Week 3 Lecture Notes (1192) Page 3 of 5
GETTING PERFORMANCE EVALUATIONS RIGHT
Every company, of course, will have its own practices and processes for performance review and
management, but the most effective companies generally follow these four best practices.
1: Give timely performance reviews
Most organizations direct their managers to formally review employee performance once a year. Too often,
the review is treated as a check the box process, with no follow-up in terms of future planning or rewards.
The problems with an annual performance review are numerous. For the manager: if you only do
something once a year, you never get good at it; nearly half the feedback you give will be more than six
months old, by which time dysfunctional behaviors have grown into habits; and it feels hard to give candid
feedback when pay increases depend upon it. For the employee: the review feels overwhelming since it
covers a whole year’s work; compensation and career prospects for the next year are on the line; self
esteem and confidence may plummet or soar, depending on what is said in a single meeting.
Performance should be assessed and formal reviews conducted at least twice a year. Regular informal
appraisals should happen much more often. Good managers have regular meetings with each of their direct
reports – ideally once or twice a month – to discuss projects, tackle challenges, adjust goals, and set clear
expectations. This approach addresses many of the problems inherent in the traditional annual performance
review by reducing the high stakes associated with a single annual performance evaluation.
2: Include a performance-development component
Regular informal appraisal meetings allow managers to focus on different objectives throughout the
performance period and to adjust expectations. It enables them to include a developmental and coaching
element in the review process. The level of candor rises sharply. Managers are less likely to avoid criticism
when talking to their direct reports, because no one will be fired as a result of the conversation.
The mid-year performance review is a time for looking back at past performance and forward to the
upcoming second half of the year. The employee will be much more receptive to criticism at this time
because his or her whole future does not depend on this meeting. There is time to improve on any areas of
weakness before the annual performance review. The employee is given a fair chance to respond to
feedback and expectations before they face an evaluation with significant consequences for their career.
This formal end-of-year review should focus mainly on the past year. It will include discussion of the
following topics: the employee’s strengths, based on observed behaviors and accomplishments during the
year; development needs, based on observed behaviors and accomplishments; implications of his or her
performance on compensation and career progress, and establishment of some initial plans and goals for
the upcoming year.
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copied, further distributed, or otherwise disclosed, in whole or in part, without the expressed written permission of Strayer University.
JWI 521 – Week 3 Lecture Notes (1192) Page 4 of 5
3: Base evaluations on both quantitative and qualitative measures
There is, in fact, no such thing as an objective measure of performance. When asked to name a business
activity that can be assessed objectively, most people confidently reply, “Sales.” But even salespeople
cannot be evaluated objectively. For example, salespeople are always measured on how much they sell and
how profitable those sales are to the company. These metrics are very useful for keeping track of how well
the company is doing, and for comparing employee performance. But such quantitative metrics cannot tell
you whether customer goodwill was enhanced or systematically degraded because of a salesperson’s
interactions. Nor will they let you know whether your senior people are mentoring and sharing best practices
with the newer salespeople, or whether they are representing your company well in the community.
When comparing the performance of one salesperson with another, quantitative evaluation measures do not
usually reflect the level of difficulty of the jobs being compared. For example, which do you think is the more
important determinant of sales success – the skill of the salesperson, or the prosperity of the territory? In a
national chain of real-estate sales offices, salespeople who are canvassing the most affluent neighborhoods
will inevitably bring in more money. But that does not necessarily prove that their sales techniques are
better, since they start with a built-in advantage due to their wealthier customer prospects.
Quantitative measures are valuable, but they rarely tell the whole story. For example, to improve customer
service, many call centers keep track of how many times an employee’s telephone rings before it is
answered. Of course, this metric tells the company nothing about how courteously the customers are treated
or whether their problems are resolved, which are more important to customers than whether the phone is
picked up on the second or third ring. These dimensions of performance cannot be measured with
quantitative metrics, but can be assessed through qualitative measures. They may be overlooked, since
courtesy and problem resolution are harder to measure than the time taken to answer the phone.
4: Take into account the importance of the work performed
Organizations often fail to consider not only the value of the work an individual actually does, but also the
value of the work assigned to a particular position. As you have learned, positions that are strategically
important today may not be tomorrow. Consequently, every company needs to continually assess whether or
not the tasks their employees are performing are still adding value.
The best-run organizations do this form of performance evaluation, but many companies do not. Leaders
and senior managers have a responsibility to step back on a consistent basis, so as to assess teams and
individual employees in terms of the value added by their work. Without periodic reevaluation of performance
across teams, departments, and the company, situations invariably develop in which hardworking, loyal
employees continue their unbroken record of high performance, while the tasks they are performing have
ever-lower strategic value.
© Strayer University. All Rights Reserved. This document contains Strayer University confidential and proprietary information and may not be
copied, further distributed, or otherwise disclosed, in whole or in part, without the expressed written permission of Strayer University.
JWI 521 – Week 3 Lecture Notes (1192) Page 5 of 5
GETTING THE MOST OUT OF THIS WEEK’S CLASS
As you read the materials and participate in class activities, stay focused on the key learning outcomes for
the week:
• Compare different approaches to performance review and assessment
Think about your own experience with performance review. As an employee, do you dread the
annual performance review? As a manager, do you find the process valuable, or does it frustrate
you? Would more frequent, informal reviews help to reduce the stress level for all concerned? As
you increase your understanding of what an effective performance review system looks like, think
about what is needed to build a culture of regular informal performance review and, thus, take the
pressure off the annual review meeting.
• Explore HR’s role in coordinating people management and review
HR is generally the department in charge of managing performance review across the company.
How can performance review systems be structured to obtain the most value from the process?
Does your company’s performance review include both quantitative and qualitative measures? Do
managers hold regular informal meetings with employees to monitor progress and adjust goals? If
not, how can HR introduce changes to performance management in a way that will gain buy-in from
both employees and managers? What will it take to introduce more frequent, informal meetings with
direct reports in an organization where this practice has never been the norm?
• Discuss the value of stretch assignments to challenge top employees
What are the advantages of using job content as a training mechanism, rather than formal training?
Are there some skills that cannot be easily taught through formal training? What about project
management? While it may be useful to take a short training session to learn how to navigate a new
project management system, nothing beats a workplace project for testing the employee’s ability to
implement the system in the real world. How about leadership and decision-making? Can these be
taught in the classroom, perhaps using a simulation? Or does it make more sense to use the handson approach to develop the leadership skills that top employees will need in the future?
Struggling with where to start this assignment? Follow this guide to tackle your assignment easily!
Performance Management Summary
Definition & Importance:
Performance management involves evaluating and improving employee performance through assessments. These evaluations typically happen annually, but the process is often flawed. Ineffective performance management systems lead to inaccurate feedback, missed opportunities for growth, and can even hinder career progression. Accurate assessments are essential for providing valuable feedback, filling roles with qualified individuals, and rewarding top talent.
Why It Matters:
Accurate assessments help employees improve.
Good evaluations help managers place the right talent in positions.
Competent assessments form the basis for rewarding top performers.
Challenges with Performance Reviews:
Annual reviews are too spaced out to catch issues early.
The reviews are high-stakes, creating pressure for both employees and managers.
A rigid, bureaucratic system hinders performance improvement and can become an end in itself rather than serving its true purpose of enhancing performance.
Best Practices for Performance Evaluations
Timely Reviews
Conduct performance reviews more frequently (e.g., twice a year, with regular informal feedback).
This reduces the pressure of the “annual review” and allows for better improvement tracking.
Developmental Component
Performance reviews should focus on coaching and development, not just past performance.
Provide feedback in smaller, more manageable chunks to allow for better receptivity from employees.
Quantitative & Qualitative Measures
Use both numerical metrics (e.g., sales figures) and qualitative assessments (e.g., customer service quality, teamwork).
This provides a fuller picture of performance, beyond just sales or output.
Importance of the Work Performed
Evaluate employees based on value added by their work, not just the tasks they perform.
Regular reassessment of roles ensures that employees are focusing on tasks that align with the company’s strategic goals.
Reflection Questions for Class Participation
Compare Approaches:
Reflect on your experience with performance reviews—either as an employee or manager. Do you find the process useful, or do you think more frequent, informal reviews would help improve outcomes?
HR’s Role:
Consider the role of HR in performance management. What systems can be put in place to ensure reviews are more beneficial, and how can HR encourage managers to hold informal meetings?
Stretch Assignments:
Think about the benefits of stretch assignments (tasks that challenge employees beyond their normal responsibilities). How do these assignments contribute to the development of high-performing employees, and can they replace some formal training?
Practical Steps for Implementing Best Practices:
If you’re considering how to implement better performance management in your own organization or academic project:
Advocate for More Frequent Reviews:
Encourage managers to engage with their teams more regularly—quarterly or bi-monthly check-ins could significantly reduce the stress surrounding annual reviews.
Encourage Continuous Feedback:
Develop a culture of feedback that goes beyond annual evaluations. This could involve weekly or bi-weekly feedback sessions or a feedback tool that employees can use to self-assess and improve continuously.
Focus on Career Development:
Link performance reviews directly to career development. Use reviews to identify growth opportunities for employees, including leadership roles or cross-functional training.
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