Performance Appraisal Blog

Your attitude stinks! You’re fired!

 

Hold on there. Can you fire someone because you don’t like their attitude?

 

Of course, if you ask your employment lawyer, you won’t get a “yes” or “no” answer. You might get “yes you can, but…” or “no you can’t, unless…”. Using full sentences might be “yes you can but prepare to be sued” or “no you can’t unless you can prove that the employee’s attitude made it such that they did not perform their duties and responsibilities at an acceptable level”.

 

Even then the reason for employment termination would be the non-performance, not the attitude.

 

But wait a minute, many man managers complain about employee attitude because they observe behavior that is easily described as bad attitude (demeanor, posture, mindset, mentality, mood, tone, etc.).

 

At Perfecting Employee Performance (PEP) hrpep.com, we use attitude as one of our performance metrics. As with all performance metrics and competencies, we have defined what we mean with the following.

  

Attitude

Demonstrates positivity by affirming those aspects of the work to be done that are beneficial to the Company, its employees, and its customers. Helps others demonstrate positivity. Is cooperative with all levels of employees. Demonstrates and tolerates nothing less than complete integrity and forthrightness. Stimulates teamwork in others.

 

 

This definition puts “attitude” into a context that can be communicated by a manager to an employee so that the employee knows clearly what how they are expected to perform their work. The manager uses this to coach employees who do not demonstrate the stated behaviors.

 

When a manager labels an employee has having a bad attitude, the manager is abdicating responsibility for coaching that employee. not capable articulating what is really meant.  

 

People Management

Establishes meaningful and achievable goals for employees so that they know what is expected of them.  Communicates and reinforces behavior competencies so that employees know how they are to perform their jobs.  Motivates employees to meet or exceed performance measures.  Finds creative and innovative ways to sustain performance. Develops employee capabilities and provides opportunities for employees to grow in their capacities. Coaches employees by providing frequent instructive feedback and listening to input from employees.

What is a Living Wage and Why Does it Matter?

 


Has the term “living wage” come up when discussing employee wages within your organization? What exactly is a living wage, and how can it affect your business?

 

What is a Living Wage?

 

A “living wage” is the wage an individual must earn to afford an adequate standard of living, based on the individual’s location, household size, and number of working adults. Those earning a living wage should be able to afford sufficient food, shelter, and other essential needs for their families.

 

The living wage varies by state, city, and county and is based on the Living Wage Calculator, developed in 2004 by Amy Glasmeier, a professor of economic geography and regional planning at the Massachusetts Institute of Technology (MIT).

 

Living Wage vs. Minimum Wage

 

People often confuse living wage with minimum wage, but they are not the same.

 

Congress created the federal minimum wage to prevent American workers from falling into poverty. The minimum wage is roughly based on poverty guidelines, but unfortunately, it has not kept up with rising living costs and is often well below local living wages. The current federal minimum wage for covered nonexempt employees is $7.25 per hour. The minimum wage is legally mandated and must take into account business needs and overall economic impact.

 

(This does not apply to self-employed individuals, who can actually work for as low as $1.00 per hour.)

 

The living wage, by contrast, is generally notlegally mandated and focuses on average living costs for individuals and families.

 

(If your organization works under municipal contracts, receives public economic development funds, or is located in areas that have benefited significantly from public investment, you may be legally mandated to pay a living wage. Learn more here.)

 

How is the Living Wage Calculated?

 

As mentioned earlier, the living wage is based on MIT’s Living Wage Calculator, which factors in the following local costs: food, childcare, health insurance, healthcare, housing, and transportation. This calculation is based on what a single individual must earn, and it assumes that person is working full-time.

 

The calculator shows the living wage for counties in all 50 states. MIT updates the calculator during the first quarter each year.

 

Why Does Living Wage Matter?

 

There are many reasons why a business would want to be aware of the living wage in the location where it employs people.

 

According to a study by The Peterson Institute for International Economics, paying employees a living wage or higher generally:

 

  • Increases employee productivity
  • Attracts more qualified hires
  • Reduces need to micromanage employees
  • Reduces employee turnover
  • Improves employee health

 

In their article “Why ‘Good Jobs’ Are Good for Retailers,” the Harvard Business Review contrasts “vicious” and “virtuous” labor cycles.

 

Businesses that follow the virtuous cycle pay employees higher wages and experience lower turnover, fewer mistakes or accidents, and attract more productive workers.

 

Businesses that fall into the vicious cycle pay low wages and experience high turnover, frequent mistakes and accidents, and disengaged, unproductive workers.

 

Supporters of paying a living wage claim it grows the economy by enabling workers to buy more goods and services.

 

However, adjusting your organization’s wages to more closely match the living wage has potential drawbacks. Some opponents of the concept of a living wage argue that the calculator cannot effectively account for the many choices each family makes, such as gardening or family childcare.

 

Other opponents point out that the greatest burden of paying a living wage falls on small businesses and individual employers, who have fewer options to offset increased expenses.

 

An important note: The wage for jobs requiring specified skills, education, and qualifications should be based on the cost of labor instead of the cost of living. A Compensation Analyst or Compensation Consultant can analyze what employers are currently paying and determine the prevailing wage or the market rate.

 

Living Wages in Idaho

 

How does Idaho rank in terms of living wages?

 

A search of the Living Wage Calculator shows that the living wage for a single adult with no children is $14.12 per hour, or a full-time salary of $29,370. A family of four in Boise, Idaho with a single income must earn $31.86 per hour, or a full-time salary of $66,269.

 

By comparison, Idaho’s minimum wage as of 2021 matches the federal rate of only $7.25 per hour, which is barely more than half the living wage for a single worker.

 

There are substantial differences from state to state and from city to city. The chart below shows the living wage for a single adult with no children for various locations.

 


 

 

Conclusion

 

Your business should be aware of the living wage for your area. It is a tangible data point in determining what a company should pay employees. Just as companies cannot be expected to sell products for an amount less than it costs them to produce the product, companies cannot expect employees to devote their full working time for less than it costs them to pay their living expenses. 

 

As a reminder, the living wage is calculated for full-time jobs. It is not meant for full-time students, temporary employment, seasonal work, or part-time jobs.

 

Continue to be mindful of how the living wage affects your organization. The large gap between the minimum wage and the calculated living wage will likely continue to have potential repercussions going forward.

 

Sources

A Living Wage For Workers

 

Living Wage

 

Living Wage and How It Compares to the Minimum Wage

 

What a ‘Living Wage’ Actually Means


Most HR Data is Bad Data – A Response

 

Marcus Buckingham wrote an article published in the February 9, 2015 issue of Harvard Business Review titled "Most HR Data is Bad Data". He asks the question, "If you were my manager and you watched my performance for an entire year, how accurate do you think your ratings of me would be on attributes such as my “promotability” or “potential?” 

What Marcus Buckingham is saying is that no one can rate another person and therefore rating systems are of no use.  He states that "The research record reveals that neither you nor any of your peers are reliable raters of anyone. And as a result, virtually all of our people data is fatally flawed." He goes on to cite research conducted over the last 15 years and documented in the Journal of Applied Psychology and Personnel Psychology in which it was found that ratings done were more reflective of the rater than of the person being rated.  " Bottom line: when we look at a rating we think it reveals something about the ratee, but it doesn’t, not really. Instead it reveals a lot about the rater."

Marcus Buckingham, like many academicians and theoreticians, over shoots the mark.  He is trying, through research and studies to predict future performance in abstract terms.  Meaning that he is looking at the more esoteric attributes of employees. Many companies have fallen into this trap thinking they are more advanced or sophisticated and are molding employees in the image of the "founder" or some other fictitious profile. 

They think they should be able to foretell if a person will be successful beyond what the person is currently doing. While such endeavor would not only be nice, it would be miraculous. If someone could devise a prognosticating system to do this, that person would become wealthy selling it to companies.

The problem is the focus. The studies Mr. Buckingham cites focus on factors like "promotability", "potential", "competency", "strategic thinking", "adaptability", "assertiveness", "motivation", "creativity", "initiative", etc.  These factors are subjective and yes, rating them or teaching someone else to rate them is difficult if not impossible.

Effective performance management systems focus on results using factors that can be measured and rated.  For example, "productivity", "accuracy/quality", "job knowledge/skills", "planning", "communication", "problem solving", "teamwork", and "people management" are Performance Metrics that can be observed.  For productivity, did the employee get his/her duties/responsibilities completed in the time frame given? Did he/she escalate issues properly and timely? Did the employee seek additional work when done with regular work? Did the employee demonstrate a sense of urgency in accomplishing work?  All of the above Performance Metrics can be used to communicate expectations to employees. Employees can be coached to achieve success with these metrics. Managers can be trained to rate employees' results in each of these metrics.

The key is to keep it simple and focus on results and achievements, not abstruse and subjective factors.

The next question should be, "then what does a company use to help determine promotions and rewards?" The best predictor of future performance is past achievement. If an employee has achieved sound results in the past, then provide the opportunity to take on more.  This is not fool proof, but it is more sound than using factors with unintelligible definitions, subjective measurement, and unproven value.

There are three primary actions steps in an effective Employee Performance Management System.

·         Communicate Expectations - set performance goals (what you want the employee to do) and set performance metrics/competencies (how you want employees to do their jobs)

·         Coach for Success - daily observation of results with appropriate feedback and documentation

·         Recognize Results - fair, objective, timely evaluation

 

In three basic steps, employee performance management is made simple.  As Leonardo da Vinci said, "Simplicity is the ultimate sophistication."

 

There are practitioners of performance management who focus all or almost all on coaching.  While coaching is critical, it is not everything that is needed to successfully manage performance. Coach for Success means the frequent interaction between the manager and the employee. This is where the manager observes actions, sees achievements, and sees areas needing improvement.  The manager should be continually providing feedback to the employee so that the employee can make changes in order to achieve the desired results.  If an employee is "surprised" at year end by his/her performance rating, the manager has failed to properly coach the employee. Year end is too late for the employee to make changes.

 

A point of irritation or frustration to managers and employees is that at year end, it is difficult to remember everything that occurred during the year. Assessments often are superficial and focused on the last couple or few months. Perfecting Employee Performance has a feature called PEPtalk. It is a 24/7/365 continuous coaching tool for managers and employees to be in constant communication about progress toward goal achievement. It is mobile-enabled communication between manager and employee providing an archived coaching/performance record as empirical backup for performance appraisals and which eliminates surprises for both managers and employees. PEPtalk is the reigning tech-based coaching tool on the planet. Recognizing the employee’s results is streamlined using PEP’s automated online self-evaluation and online manager evaluation. With PEPtalk providing a record of coaching communication between employee and manager, completing the evaluation is simple.

 

Performance measured improves performance. Performance measured and reported, quickens improvement.

Engagement Announcement

 


Exchange of Vows:

  • I Fit – I am in the right job for my skills, knowledge, and training.
  • I Understand – I know what I am expected to do and how to do it.
  • I’m Valued – I am respected by management and heard when I speak.
  • I’m supported – I know that won’t be thrown under the bus.
  • I’m inspired – I have trust in the leadership, vision, mission, and values of this company.

Want your employees to be able to join in these vows? PEP can help create an “engagement” between your employees and your company goals, too.

It’s time to overcome obstacles that keep employees from success—such as lack of enthusiasm, understanding or competence. We can help you implement and maintain performance plans to support employee and company success.

Learn how to create a people-centric culture where:

  • Exceptional employees achieve significant goals and objectives.
  • Managers and employees alike fully comprehend the connectedness of individual performance with organizational success.
  • Everyone shares a vision of success.
  • Technology drives employee engagement through any-time and every-time coaching.
  • Performance management magnifies the symbiotic power of the employee and leadership relationship.

PEP disrupts ineffective performance management methods to support success.

For More Information:


The Good, Bad and Truly Ugly about 360-degree Feedback

 



Just what is 360-degree feedback?

Does your organization gather feedback about employees’ interactions from a variety of source types (such as customers, suppliers, colleagues, and supervisors)? That’s called multi-source feedback, or 360-degree feedback.

What’s GOOD about it?

The 360 strategy can provide insights into an employee’s leadership ability, customer service satisfaction, and readiness for advancement.

The 360 strategy can provide insights into an employee’s leadership ability, customer service satisfaction, and readiness for advancement. Research shows that gathering multi-source feedback can benefit the organization by helping develop leaders (London and Beatty), improving customer loyalty (Smither and Walker), and creating a host of other positive outcomes, like increasing revenues, profit margins, sales, and contracts (Erickson and Allen). 360 feedback has been linked to higher employee satisfaction, lower turnover, and deeper engagement with the organization (Kazi et al.).

What’s BAD about it?

When multi-source feedback is used for appraising—but not developing—employees, they may feel it’s merely an excuse to refuse them incentives or promotions.

In certain circumstances, 360 feedback may have negative repercussions. A meta-analysis of 600 studies found that only one third of the studies actually found an improvement in performance. Another third showed no change (Kluger and DeNisi). Worryingly, the last third reported negative changes in performance (Taylor). When multi-source feedback is used for appraising—but not developing—employees, they may feel it’s merely an excuse to refuse them incentives or promotions.

What’s truly UGLY about it?

Using multi-source feedback to generate performance reviews can lead to inaccurate performance reviews and employee resentment due to several common issues:

  • Those giving feedback may not understand the job’s objectives, performance metrics, or the employee’s work on cross-functional teams, leading to irrelevant feedback.
  • The anonymous nature of 360 feedback may preclude constructive follow-up that leads to behavioral improvement.
  • Office politics, biased reviews, or immature reviewers can devastate a career.
  • Those being reviewed may use their networking and positional power to “arrange” to get better reviews than a less-connected but higher-performing peer.
Multi-source reviews don't give a full picture of performance. 360 reviews provide only a snapshot—performance must be examined continuously.

HR experts urge caution in basing evaluations on multi-source feedback—especially when it impacts pay and promotion opportunities.

According to Dick Grote, author of the book How to be Good at Performance Appraisals (Harvard Business Press, 2011), managers “do virtually nothing on the back end [to hold] people accountable for doing something with the data they get.” Grote said that applying 360 feedback to development or coaching “probably doesn't do much harm,” but when it's used for determining compensation and/or promotion, misleading information might be provided “by the office screw-up who doesn't know anything anyway. And also by the guy down the hall bucking for the same promotion I am [who] wants to put a dagger in my ribs.”

Even if such corruption is not present, there are frequently highly specialized skills involved that outside raters do not understand. They are also less likely to be trained observers of human behavior, which means that multi-source reviews don't give a full picture of performance. 360 reviews provide only a snapshot—performance must be examined continuously.

Moreover, cost is a factor. Gathering multi-source feedback might involve the employee, the supervisor, several peers, and a few direct-reports—up to a dozen people filling out reports. The numbers of staff hours necessary to complete a 360 review can be intense.

To 360 or not to 360?

360 feedback can enhance the information gathered directly by the supervisor but shouldn’t replace it.

If you want to gather as much feedback as possible for employee development purposes, a 360 review may help.

However, if your goal is to improve behavior quickly and effectively, consider coaching by the direct supervisor—the person responsible for setting standards, assigning tasks, and overseeing the work. The supervisor can provide timely feedback on the employee’s overall performance.

Setting expectationscoaching toward success, and assessing performance are the duties of a supervisor.

360 feedback can enhance the information gathered directly by the supervisor but shouldn’t replace it.

References

Erickson, A., and T. Allen. “Linking 360 Feedback to Business Outcome Measures.” 18th Annual Conference of the Society for Industrial and Organizational Psychology, Orlando, FL, 2003.

Kazi, Abdul Subhan, et al. “The Impact of the 360 Degree Feedback Systemon Employee Satisfaction in Higher Educational Institutes.” NICE Research Journal of Social Science. ISSN: 2219-4282, vol. 7, no. 14, 2018, pp. 29–47.

Kluger, Avraham N., and Angelo DeNisi. “The Effects of Feedback Interventions on Performance: A Historical Review, a Meta-Analysis, and a Preliminary Feedback Intervention Theory.” Psychological Bulletin, vol. 119, no. 2, American Psychological Association, 1996, p. 254.

London, Manuel, and Richard W. Beatty. “360‐degree Feedback as a Competitive Advantage.” Human Resource Management, vol. 32, no. 2‐3, Wiley Online Library, 1993, pp. 353–72.

Smither, James W., and Alan G. Walker. “Measuring the Impact of Multisource Feedback.” The Handbook of Multisource Feedback, Jossey‐Bass San Francisco, 2001, pp. 256–74.

Taylor, S. “Assess Pros and Cons of 360-Degree Performance Appraisal.” SHRM, 12 July 2011, https://www.shrm.org/resourcesandtools/hr-topics/employee-relations/pages/360degreeperformance.aspx.

History’s Lessons for Modern Managers



If performance management is the process of ensuring employees perform better, you first must define what you mean by “better.” Front-line managers may define it as staff accomplishing daily tasks. Senior leadership may define it as improving the organization’s overall efficiency. A team member may define it as developing new skills to advance a career. Good performance management tools must link all three definitions.

When you have clear performance standards—and straightforward metrics for demonstrating whether they have been achieved—you can fit those standards into your organization’s culture, leadership styles, and business model.

With the dawn of the Industrial Age and its shift from farming to factories, came a more organized approach to performance management.

A quick look at the history of performance management can help you decide on the best strategies, methods, and evaluation metrics for employee performance.

Performance management is as old as work itself—our ancestors could count whether this year’s hunting had more success than the last’s. Farmers could assess their fields’ productivity year by year. Merchants evaluated which items were becoming more popular with customers.

With the dawn of the Industrial Age and its shift from farming to factories, came a more organized approach to performance management. Supervisors devised new tools to improve productivity such as assembly lines. An innovator named Frederick Winslow Taylor was among the early proponents of scientific management: the science of doing each task exactly right with a minimum of wastage. Both Henry Ford and Frederick Taylor used time and motion studies to determine work processes and performance standards.

However, not every new idea was an advancement. Douglas McGregor of MIT devised Theory X, which says that employees love to shirk their duties and take no personal pride in their jobs. Managers adhering to this type of performance management model were prone to pay poorly, limit rewards, fire workers who struggled to meet quotas, and place more emphasis on meeting daily targets than on the employees’ potential for long-term contributions to the organization. Early managers disregarded the inherent human differences in their employees, often to the detriment of both the organization and the staff.

Management theorist Henri Fayol believed that while individual interests should be subordinate to the organization, the organization must allow employees to innovate and should build team spirit. However, most work environments were not designed to encourage positive employee involvement in these ways.

While advances have been made since those early years, deplorable working conditions still exist in today’s world, as evidenced by the horror stories that have come out of Sports Direct’s U.K. warehouses.1 (Goodley and Ashby, 2015; Lawrence, 2016). Some managers have yet to learn that treating employees well and enabling their rise in the organization is crucial for long-term business success. Unrealistic performance standards and punitive working conditions create attrition, absenteeism, and health issues; and leave the company susceptible to legal and regulatory action.

Going back to the history of management, the Hawthorne experiments began changing managers’ long-held notions by showing that creating a positive social environment among employees can improve their productivity.

In time, McGregor’s Theory Y, which argued that people desire to work hard toward goals and will respond to positive reinforcement, gained a greater following. Today’s norms of feedback and employee engagement are proofs of how communication, attention, and consideration can improve employee performance. However, despite these positive shifts, human relations movement remained more paternalistic than progressive.

Until the 1950s, the most popular tool for measuring performance and results were annual appraisals conducted by the supervisor. These appraisals were kept confidential and served as a basis for promotions, increase in salaries, incentives, and dismissals. In most cases, decisions were not reviewable. Many employees felt that performance management was out of their control and often more punitive than beneficial. Even today, managers who maintain dictatorial control over performance appraisals reduce the efficacy of performance management as a tool for employee development and engagement.

Peter Drucker revolutionized perspectives on performance management with his Management by Objectives (MBO) technique, which included tenets such as identification of organizational objectives; the creation of specific, measurable, achievable, realistic, and time-based (SMART) goals; joint goal-setting between employee and supervisor, periodic feedback about performance, frequent monitoring of performance, and honest evaluation of results. The change was meaningful: as employees gained a voice in their performance standards, they saw a link between their performance and the organizational objectives. They could also then improve performance based on transparent feedback. Today’s performance standards have built on the MBO approach by linking themselves to the firm’s strategic objectives through the Key Result Areas (KRA) and Key Performance Indicators (KPI).

In this new approach, employees communicate more easily with supervisors, are better aligned with organizational objectives, and tend to accept decisions stemming from their appraisals. Employees are also more likely to improve performance according to the received feedback and remain engaged in their work.

In the last few decades, performance appraisals have begun to include an estimation of an employee’s potential. This metric compares the employees’ historical performance with their potential for further development. Potential appraisals can provide HR managers with a rich source of internal candidates who can be developed to rise within the organization. However, this entails several caveats. First, supervisors must be trained as mentors or coaches in order to effectively identify the employees’ capacity for professional growth. Second, performance management must be supported with development opportunities. Finally, employees must be given opportunities for promotion and other rewards that build trust and faith in the system.

In this new approach, employees communicate more easily with supervisors, are better aligned with organizational objectives, and tend to accept decisions stemming from their appraisals.

In this era of agile HR, performance management has become a highly sophisticated exercise. Rapidly developing software, artificial intelligence, and swift advances in communication technology can help in determining standards, providing feedback, and measuring performance while eliminating psychological errors.

Despite vast historical changes in performance management and the degree of technological sophistication available to your organization today, one thing remains unchanged: unless employees truly believe your performance management system can help them develop, they will lose faith in it just as their predecessors lost faith in the punitive systems of the Industrial Age.

Today, you can apply a sophisticated performance management tool that systematizes goal setting, synchronizes employee expectations, monitors employee accomplishments, gives continuous contemporary feedback, and decreases time spent on writing performance reviews. That tool is called Perfecting Employee Performance.

References

1Goodley, S. and Ashby, J. (2015) ‘A day at “the gulag”: what it’s like to work at Sports Direct’s warehouse’, The Guardian, 9 December.
Lawrence, F. (2016) ‘This is a brutal and inhumane way to treat staff – and Sports Direct is not alone’, The Guardian, 8 June. Available at: https://www.theguardian.com/commentisfree/2016/jun/08/inhumane-sports-direct-mike-ashley-workforce.