The process of implementation of PMS consists of the following steps, which are also depicted in the figure given below.
1. Communication Plan: Generally, employee satisfaction and acceptance increase when they become fully aware of the performance management system.
In this regard, organizations often formulate a communication plan so as to ensure that information about the system is distributed throughout the organization.
An effective communication plan is able to answer the following questions:
i) What is meant by Performance Management? The answer to this question basically involves imparting overall knowledge about performance management, how other organizations implement performance management systems, and the broad objectives of performance management systems.
ii) How does Performance Management System Fit into the Organisation’s Strategy? The answer to this question involves establishing a relationship between performance management and strategic planning.
Particularly, information is given to illustrate how a performance management system can help in attaining strategic goals.
iii) What’s in it for me? An effective communication plan illustrates the benefits accruing to the person involved in the process from performance management systems.
iv) How does it function? This question involves providing information about the functioning of performance management systems in detail.
Besides, it answers queries as to when meetings will take place, what will be the objectives of the meeting, and when decisions related to rewards will be taken.
v) What are my Responsibilities? It is of utmost importance that the communication plan has details about the duties and responsibilities of each and every employee who is part of the implementation process.
For example, the information may relate to the explanation of the primary duties and responsibilities of employees and managers in the implementation process.
vi) How is Performance Management Related to Other Initiatives? The communication plan must contain information relating to the relationship that exists between performance management and other initiatives.
For example, how performance management is related to training, recruitment, promotion, career planning, etc.
2. Appeal Process: The appeal process has an important place in the process of implementing PMS.
It facilitates gaining employee acceptance for the system since it ensures the employees that in case of any disagreement relating to any performance ratings or results, employees can appeal against it.
Further, the appeal process creates an environment wherein the system is considered as fair and just in nature.
When such an appeal process is functioning in the organization, employees have the right to discuss two kinds of issues:
i) Judgmental Issues: These issues question the validity of the performance evaluation process.
For example, an employee may question a manager’s judgment about his performance ratings. The concerned employee may not be convinced of the style of judgment applied by the manager for performance analysis.
ii) Administrate Issues: These issues relate to the question of whether policies and procedures devised for implementing the system were followed by the management.
For example, an employee may question the policy of his supervisor wherein the supervisor devotes less time in discussing crucial matters with him and rather devotes more time in discussing less important matters with others.
Moreover, he may argue that the feedback received by him is not comprehensive and complete in comparison to others.
3) Training Programmes for Acquisition of Essential Skills: It is an important step in the implementation of PMS. It involves providing requisite training to the raters while launching the system of performance management.
Training not only imparts essential skills and methods for successful implementation of the system but also enhances satisfaction level.
A number of training programmes have been developed over the years for developing the skills of rater, some of which are discussed below:
i) Rater Error Training (RET): A number of performance management systems face problems relating to errors by the raters.
As such, rater error training aims at reducing these errors by making raters aware of common rating errors and the measures for reducing them. The primary aim of RET is to enhance the accuracy of rating by eliminating accidental rating errors.
ii) Frame of Reference Training (FOR): Frame of reference training enhances the accuracy of the raters by making them aware of the different performance aspects which are to be evaluated.
The overall aim is to impart necessary rating skills so that raters can provide an accurate rating of different employees on different parameters of performance. This is done by developing a common frame of reference.
Generally, FOR training involves the following steps:
a. Raters are asked to evaluate three individuals on three different performance aspects;
b. Raters are provided with an appraisal form and are asked to read it. As the rater reads the form, he comes to understand clearly the meaning of different aspects of performance;
c. The trainer discusses different forms of employee behaviors that demonstrate the various performance levels demarcated for each rating scale.
The purpose of the activity is to formulate a common performance theory among the raters with a view that the raters agree on the right performance aspects for effective performance behaviors.
d. A videotape is shown to the participants containing illustrations of effective performance behaviors related to different performance aspects.
On the basis of the footage, participants are asked to rate the employees with the help of performance scales.
e. Ratings given by different participants are shared with other members. Participants are allowed to take decisions on the basis of their respective ratings and clarify any inconsistencies.
f. Feedback is provided to participants by the trainer, discussing why a particular employee should be given a particular rating on different aspects of his job and demonstrate differences between the target score and the score allotted by the trainee.
iii) Behavioural Observation (BO) Training: This is another kind of program which is implemented for reducing various unintended rating errors.
The emphasis of BO training is on the manner in which raters notice, store, memorize, and make use of information about the performance.
Generally, BO training enhances the observation skills of the raters for monitoring employees’ performance. BO training is used in combination with FOR training program.
Besides FOR training, there are classes conducted on the significance of behavioral observation and common observation errors like stereotypes, halo effect, first impression, etc.
iv) Self-Leadership (SL) Training: The purpose of self-leadership training is to enhance the rater’s confidence in managing performance.
Self-leadership training involves techniques like positive self-talk, positive beliefs and thoughts, and mental imagery.
The notion behind the program is that the rater’s accuracy will improve if there is enhanced self-direction, self-motivation, and confidence.
Largely, self-leadership training underlines the importance of improving internal behavioral standards and practices for continuous improvement.
Self-leadership training has become a common instrument in relation to performance management systems. It is an effective program for training supervisors, even when they are not directly involved in performance management systems.
4. Pilot Testing: It is better to test a prototype of the newly designed system for its effectiveness before the system is finally launched throughout the organization.
Pilot testing enables the management to adjust and revise the system if required with limited impact on the functioning of the organization.
It is noteworthy that in pilot testing, assessments are not recorded in employee files. When it is finally decided to implement the system, it is implemented in its complete form containing all the steps.
Thus, on implementation, meetings are held between employee and supervisor, information on performance is collected, improvement plans are developed, and feedback is given.
The most significant aspect of pilot testing is that all the participants maintain accounts of any difficulties experienced by them, whether they are related to appraisal form or performance measurement or feedback.
Pilot testing facilitates early detection and correction of any errors before the system is finally implemented for attaining desired results.
Pilot tests deliver important information about the system, which can be effectively used for improving the system. Pilot tests can contribute to making significant savings.
It may identify possible problems which may afterward become intricately complex to solve.
5. Continuous Monitoring and Evaluation: Finally, when the performance management system is implemented after pilot testing, it is important to closely monitor and assess the system.
This is done with the help of several measurement instruments. In short, it is of utmost significance to decide:
- How to assess the system’s effectiveness?
- How to assess the extent of the system’s implementation?
- How to assess that the system is producing the desired results?
There are several measures for regularly monitoring and assessing the system. Some of them are discussed below:
i) Number of Individuals Assessed: One of the most important scales of measure is to assess the number of individuals who are really part of the system.
If some employees have been left out of the performance evaluation process, it is necessary to know who they are and why they have been left out.
ii) Distribution of Performance Ratings: One of the effective indicators of performance evaluation is to know whether most of the scores obtained are high, low, or grouped at the mean of the distribution.
This will reflect many errors like leniency, severity, and central tendency. The distribution of performance ratings can be broken down into smaller components by the manager and employee to know whether any pattern exists in the ratings and also whether these patterns are present in a particular area.
iii) Quality of Information: Quality of information is another indicator of the quality of the performance evaluations. This information is provided in the open-ended sections of the forms.
For example, how much was written by the rater? What is the importance of the illustrations given?
iv) Quality of Performance Discussion Meeting: From time to time, employees should be given a confidential survey for collecting information about their supervisors.
The information may reveal the manner in which supervisors are managing performance discussion meetings.
For example, the survey may include questions like – Is the feedback relevant? Has the supervisor made enough arrangements for resources? How significant was the discussion on performance review? And to what extent developmental objectives have been discussed?
v) System Satisfaction: In a similar manner, the confidential survey could be distributed to evaluate the thinking of both the raters and the rates. The survey can deal with issues related to equity and fair treatment, satisfaction, and accuracy.
vi) Total Cost/Benefit Ratio: A rather easy way to measure the overall effect of the system on the organization is to ask the participants to rate the total cost/benefit ratio for the performance management system.
It is a kind of the centerpiece of question that can provide reliable proof of the value of the system. The cost/benefit ratio question can be asked in relation to an employee, his role, or his organizational unit.
vii) Organisation-Level and Unit-Level Performance: The measurement of organization and unit levels is another measure indicating that the system is performing well.
Such performance indicators may include items like customer satisfaction, the financial performance of different units, etc.
It is noteworthy that the conversion of changes in individual and group performance level into organization level results may take some time. One should not expect delivery of results as soon as the system is implemented.
However, results are visible even within a few months at the unit-level.