Performance Management

Performance Management BCSLA Conference September 29 – October 1, 2013 Presented By Rob Westbury, VP Human Resources inSite Housing, Hospitality & Health Services, Inc.

Performance ManagementAgenda • Performance Management – Definition and Framework • Building a Performance Management Framework • Business Goals • Three Assessment Models: Traditional, Leadership Driven, Employee-Driven • Development Plans and Rewards • Assessing an Employee: Tips for a Successful Evaluation • Performance Management in a Union Environment

Performance Management – Definition & FrameworkWhat Is It? A set of processes and tools to assess the performance of employees KEY: Link business performance to employee performance and behaviours

Performance Management – Definition & FrameworkWhere to Start? The Business! • Performance Management should be tied to business outcomes • What are your company’s long and short term goals? • What are your company’s core values? • Tying how you assess employees to your business objectives is the best way to achieve your business outcomes

Performance Management – Definition & FrameworkFramework Common themes for effective Performance Management Frameworks:* • Framework includes developmental plans for the future • Managers trained on providing effective performance evaluations • The quality of performance appraisals is measured • Process established to address/resolve poor performance • Performance appraisal includes information other than that based on the judgment of managers • The performance review process is consistent across the organization • Employees can expect feedback more than once a year • 360 degree reviews are used to support the performance evaluation process • Includes ongoing goal review and feedback from managers * From: Institute for Corporate Productivity, “Finding the Keys to Performance Management: A Study of Current Trends and Future possibilities”

Performance Management – Building a Framework1. Document Business Goals/Values You own and operate several Independent Living residences in British Columbia with 200 employees and 20 managers. Your business goals… Short term (within 1 year): • Increase NOI • Renegotiate supplier contracts • Decrease food costs • Increase employee engagement Long term (within 5 years): • Expansion: 50% increase in number of owned and operated facilities • Build community relationships

Performance Management – Building a Framework2. Develop Assessment Program What would you do?

Performance Management – Building a Framework2. Develop Assessment Program Once a framework has been established, assessing employees is a three step process: Step 1: Set Objectives (what will employees be measured on?) Step 2: Assess Employees Step 3: Create Development Plan There are many models defining step 1. We will look at three…

Performance Management – Building a Framework2. Develop Assessment Program – Model 1 Model 1 (Traditional): Score card / assessment methodology developed by job description EXAMPLE: Cook 4 = Consistently exceeds requirements; 3 = Meets expected requirements 2 = Acceptable but needs improvement to meet expectations; 1 = Unsatisfactory/Fails to meet minimum requirements

Performance Management – Building a Framework2. Develop Assessment Program – Model 2 Model 2 (Leadership Driven): Leadership develops employee objectives for each job / role based on business objectives EXAMPLE: 1. General Manager: Objective: Reduce non-labour costs in FY 2013 through inventory management, waste reduction and other process improvements Target: 2% reduction in non-labour costs in FY 2013 2. Marketing Manager: Objective: Increase occupancy in Northern region of BC through development of a targeted marketing campaign <DETAILS OF PLAN> Target: 90% occupancy in Northern region by close of FY 2013

Performance Management – Building a Framework2. Develop Assessment Program – Model 3 Model 3 (Employee Driven): Employees develop their objectives, within a leadership-defined framework and Supervisor approval EXAMPLE:

Performance Management – Building a Framework2. Develop Assessment Program – Pros & Cons

Performance Management – Building a Framework2. Develop Assessment Program – FAQs for Models 2 & 3 Question: Why not assess employees on the tasks they are expected to perform with my company (i.e. Model #1)? Answer: • Employees should be assessed on how they perform work BUT • Employees are hired with the expectation they are to perform all required job duties in a way that meets expectations. To do less suggests that the employee should not have been hired in the first place • Assessing only performance of day-to-day activities simply measures the success of the recruitment process • Objective setting models build a culture of high performance and commitment to the company. It is more than just “doing your job”, it means commitment to the company’s core values, business goals, growth and future

Performance Management – Building a Framework2. Develop Assessment Program - FAQs for Models 2 & 3 Question: What if, due to unforeseen circumstances or through no fault of my own, I do not achieve my objective(s)? Does that mean I get a poor rating? Answer: • Not necessarily. Employees should still receive a good rating even if an objective is not achieved if the objective was not achieved due to circumstances beyond the employee’s control • It is a supervisor’s responsibility to determine this. • Objectives should never be adjusted, especially targets, simply because the employee no longer believes they can achieve them • Objectives must be achievable such that success is within the control of the employee

Performance Management – Building a Framework3. Development Plans and Rewards Whether for a high or low performer, all feedback should be tied to an action or development plan… Poor performers: • Feedback should outline what is expected of the employee and where they have not met expectations: always provide specific examples of behaviour • Development plans need to be equally specific • List behaviours that need to change and the outcomes that need to be demonstrated to “prove” change has occurred • Work with employee to create a plan to achieve new outcomes: e.g. employee to take training, to shadow another employee to improve performance, etc. • Provide an expected date of completion…expectations need to be stated, not assumed. Good performers: • As with poor performers, feedback should be specific and outline examples of when employee has met or exceeded expectations • Development plans should be equally specific, but geared towards career development • Where does the employee want to go? Make sure they know they are valued and that the company is committed to their growth • Identify the career path: promotion, additional responsibilities, etc. and start a plan to get there (internal/external training, job shadowing, additional responsibilities/step-ups, etc.)

Performance Management – Building a Framework3. Development Plans and Rewards I got a great review….so what??? • High performance needs to be rewarded • It is a best practice to develop reward programs for the highest performers to retain talent and create succession plans for future leadership Key points to successful rewards programs: • Must be fair and applied consistently to truly encourage high performance: • Develop a transparent process to assess performance and to determine who receives rewards for top performance • Train, train, train: managers involved in assessing for the purpose of providing rewards need training to ensure fairness and consistency • Understand your employees: • Use surveys, focus groups or other methods (market surveys/data) to establish what programs employees want and find meaningful: promotion vs. raise; benefits vs. salary; training programs/conferences/sabbaticals vs. bonus; time off/PTO vs. bonus • Don’t underestimate the power of public recognition for a job well done (feature employees in newsletter, speak publicly of good behaviour/outcomes) • If a monetary reward program is used to incent high performance, establish a model to create a consistent approach to rewards (salary bands, formula to establish bonuses that employees understand, etc.)

Performance ManagementAgenda • Performance Management – Definition and Framework • Building a Performance Management Framework • Business Goals • Three Assessment Models: Traditional, Leadership- Driven, Employee-Driven • Development Plans and Rewards • Assessing an Employee: Tips for a Successful Evaluation • Performance Management in a Union Environment

Performance Management – Assessing EmployeesTips for a successful evaluation • Be specific: provide examples of behaviour you have observed when providing feedback, both negative or positive EXAMPLE: “Jane Doe demonstrates exceptional business acumen. In January of this year she revised kitchen inventory procedures, created a new excel spreadhseet tool to be used by the Hospitality Services Manager for inventory and trained staff on her new procedures and tool. These improvements led to a significant <USE DATA> reduction in inventory errors” • A performance review should never be a surprise • Course correct bad behaviour when observed, don’t wait for a formal annual review • Revise objectives if required • Provide feedback in real time • Allow employees to self-assess • Provides an opportunity for direct report to tell supervisor work they have performed supervisor may not be aware of / may have missed • Effective way to understand and deal with discrepancies between supervisor’s and employee’s understanding of how they are performing

Performance Management – Assessing EmployeesKnow your limits – 3 Biases Every Assessor Should Know!! Human biases you should know about to provide effective feedback • How we make decisions relies on how we take in and process information • People take in incredible amounts of information every second of every day: informational, physical, emotional • We use (or often don’t use) this information to make decisions and provide feedback • How we process information to provide feedback can be subject to biases Source for materials: Fiske & Taylor (1991). Social Cognition

Performance Management – Assessing EmployeesKnow your limits – 3 Biases Every Assessor Should Know!! Exercise You are working on a project with a co-worker. You have scheduled a regular update meeting every Wednesday at 9:00AM. For three weeks in a row, your coworker has come to the meeting late, most recently over 20 minutes late. You are frustrated… How would you assess your co-worker?

Performance Management – Assessing EmployeesKnow your limits – 3 Biases Every Assessor Should Know!! 1. The Actor-Observer Effect What is it? • In general, people explain others’ behavior as caused by internal factors and their own behavior as driven by situational or external factors EXAMPLE: “The dog ate my homework…” Why it Matters • By fully considering all of the situational factors that may have caused someone’s behaviour, we can make better decisions and form stronger relationships Exercise Revisited: Is your coworker disorganized or disrespectful? Take note of the situation and be observant…what might be causing your co-worker to be late? Are their other examples of behaviour you can draw from?

Performance Management – Assessing EmployeesKnow your limits – 3 Biases Every Assessor Should Know!! Exercise # 2 John is a hospitality worker and has been a very good performer throughout the year. He consistently has met or exceeded his ability to complete his rounds of cleaning on time, every shift and the quality of his work is good. Recently, you received a complaint from a tenant’s family member about the cleanliness of their mother’s room. The family member indicated that her mother’s floor was not swept and counters not wiped on two occasions. On the last visit, this family member also found John to be rude. John was given a rating of “requires improvement” from his supervisor for that year. Thoughts?

Performance Management – Assessing EmployeesKnow your limits – 3 Biases Every Assessor Should Know!! 2. Availability Short Cut What is it? • People use shortcuts to make decisions and judgments about uncertain events. Availability: to evaluate the frequency or likelihood of an event based on how quickly instances or associations come to mind. The ease with which one can imagine particular events can bias how frequently we think they occur EXAMPLE: In the late 1960s, the airline industry was concerned about how surveys showed the average individual considered travel by commercial airliner to be far less safe than it actually was. Why? Why it Matters • We can provide better feedback by making sure we are not unduly biased into believing certain events or behaviours occur more often than is actually the case What Can I Do?? • When providing feedback, take care to evaluate the facts carefully: • Write a list of contributions each of your direct reports makes throughout the year. Ensure you list both positive and negative behaviours. • When making rating recommendations, review your list to ensure you are not being biased by only salient information

Performance Management – Assessing EmployeesKnow your limits – 3 Biases Every Assessor Should Know!! Exercise 3 Last year, Julie had an exceptional year as chef of a retirement residence. She reduced food costs by 4% and improved tenant food quality satisfaction scores by 5%. As a result, Karen, her manager, gave her the top performance rating for her work: 4 out of 4. This year, Julie has maintained food costs, however tenant food quality satisfaction scores have decreased to their levels of two years ago. Karen did receive several compliments about the quality of food from family members for two theme night dinners in which families and friends were invited to the residence. In the last few months Karen has received some complaints from kitchen staff about Julie’s management style being abrupt and even aggressive. Karen gives Julie the top performance rating again: 4 out of 4. Thoughts?

Performance Management – Assessing EmployeesKnow your limits – 3 Biases Every Assessor Should Know!! 3. Theory Perseverance What is it? • People have a tendency to cling to their conclusions (theories) even after being presented with evidence that discredits their conclusion EXAMPLE: Conspiracy theorists Why it Matters • To be effective decision makers, we need to be willing to take in and evaluate new information and potentially adopt it even if contrary to our previous beliefs. What Can I Do?? • If you look for evidence to confirm your theory, that is all you will find! This confirmation bias can be overcome by looking for evidence to both confirm AND negate your beliefs • Availability: it’s easier to recall instances or evidence that confirms our beliefs…be sure to take note (write down?) all perspectives

Performance Management – Union EnvironmentKey Considerations Collective Agreements (CA): • They are “the law”: performance management frameworks must operate within the confines of your collective agreement • Consider making your performance evaluation framework part of your CA: • If negotiating your CA, outlining and negotiating the terms and conditions of your performance management process may avoid grievances down the road, especially outlining process for poor performance • Model 1 (Traditional) assessment method widely used/accepted Poor Performance • No one has an issue with a good review but what about a bad review? • Most CAs have language relating to “culpable” behaviour and discipline • Key to success is consistency: process needs to apply to all in the same way • Performance reviews will have an expiration. Find one the business can work with to meet it’s performance objectives

Performance Management – Union EnvironmentKey Considerations Rewards Program Programs that reward some but not all employees are rare. Some options: • Voluntary programs/contests: • Programs that are voluntary with participation optional are rarely contested • Consider contests or employee-nominated programs. Example: • Best business idea wins cash prize • Nominated “employee of the year” • Site with highest tenant satisfaction score receives prize • Differential Rewards Program: • Administers a bonus to all non-excluded employees but in varying amounts based on performance (i.e. largest bonus received by best performer, lowest performer receives smallest bonus)

QUESTIONS?

Performance Management