Define acceptable and unacceptable performance levels based on job-related requirements from job analysis and reflected in job description

OL 751 Module Three: Performance Management

This module focuses on the crucial employee competencies for success and the importance of alignment with the organization’s business goals and needs. The key HR role is to develop, implement, and evaluate strategic human resources programs that support both employee and organizational success.



Performance Management:

Process of creating a work environment in which employees can perform to the best of their abilities and contribute the most to the organization

Performance Standards:

Define acceptable and unacceptable performance levels based on job-related requirements from job analysis and reflected in job description

Performance Reviews:

Process, typically delivered annually, designed to help employees understand their roles, objectives, and expectations with respect to organizational success

All organizations need performance management practices for the benefit of both the organization and its employees. Everyone benefits from clear standards and expectations of performance and timely, constructive feedback. The key is to invest the time and effort in developing, evaluating, and making improvements as necessary, so that the entire process has value and managers are committed.


Purposes of Performance Reviews


Allow employee to discuss concerns

Ensure clear expectations and alignment with organization

Evaluate goal achievement

Help identify goals

Identify organizational training needs

Identify employee training needs

Identify strengths and weaknesses

Improve communication

Provide employee feedback

Recognize performance

Reinforce authority structure


Assist with HR planning

Basis for promoting employees

Determine transfers and assignments

Document personnel decisions

Evaluate training programs

Identify performance problems and improvement plan

Make merit and compensation decisions

Make retention, termination, and layoff decisions

Meet legal requirements

Validate selection criteria

There are many benefits to a comprehensive performance review program, particularly to ensure that employees’ efforts are aligned with the organization’s goals and needs. Alignment includes identifying areas of improvement from the employee, as well as identifying areas of development and opportunity for the employee, position, team, department, and organization.


Employee Performance Factors


Career ambition

Goals and expectations

Job satisfaction


Relationship with manager

Relationship with coworkers


Analytical skill



Physical limits


Right fit for job (emotionally, physically)

Technical skills


External, such as economic conditions

Job design

Job resources, such as equipment and/or materials

Laws and regulations

Manager support

Rules and policies


Employee performance is affected by three particular areas: the employee’s own motivation in his or her career, the environment in which the employee works, and the employee’s knowledge, skills, and ability to meet the needs of the position and the organization.


Performance Review Problems

Inadequate preparation by employee’s manager

Employee was not given clear objectives or expectations

Unclear alignment with organizational goals

Rating errors and resulting inconsistency among managers:

Central tendency

Leniency or strictness

Personality, not performance

Similar-to-me bias

Recency error (considering only recent performance)

Contrast and halo errors (comparing employees unfairly)

Inappropriate time span: too long or too short

Subjective or vague language and assessment

Organizational politics or underlying motive

Lack of improvement plan and/or lack of follow-up

Lack of manager training and accountability

Unfortunately, there are challenges along the way in the performance review process that can create problems with the good intentions of the process. Managers are often very busy and may not devote the time and effort necessary to provide a quality performance review. Managers may also not be well educated on their role and the requirements of an effective program. Job descriptions may also not be accurate or may not even exist for all positions in the organization (often due to the lack-of-time factor). Additionally, managers are only human and may not always apply objectivity in completing reviews. Many of these issues arise because there may not be the support and/or accountability from senior management and human resources for managers to properly carry out their responsibilities.


Importance of Leadership

Effective leadership drives employee and organizational performance by:

Creating a stronger, cohesive culture

Providing direction, challenges, and goals

Setting an example and positively influencing others (or negatively, if used wrong)

Engaging and encouraging employees’ potential

Making expectations very clear and holding employees accountable

Providing regular feedback and addressing performance issues immediately

Coaching employees on development areas

Providing counseling on areas of concern

Creating performance improvement plans with specific goals and available resources

Knowing when and how to terminate non-performers

As noted in the previous slide, many of the issues with performance reviews can arise due to the lack of support and/or accountability from senior management and/or from human resources for managers to properly carry out their responsibilities. This is exactly where the importance of effective leadership is key. Employees are the most valuable asset of any organization, and making the most of any asset requires active, effective leaders to set the example, lead others down the right path, promote a positive work environment, emphasize the coaching role of managers (and not just with negative feedback), and finally, ensuring fair, legally compliant decisions related to employee discipline and terminations.