Chat with us, powered by LiveChat The questions and notes are attached here: Read: Chapter 8, Chapter 9, and Chapter 10 (“Employ | Office Paper
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The questions and notes are attached here: 

Read:

    Chapter 8, Chapter 9, and Chapter 10  (“Employee Assessment” in Human resource management. Retrieved from http://www.saylor.org/site/textbooks/Human%20Resource%20Management.pdf ) and Note 1 & 2. 

Please respond to each question in ONE THREAD, please ensure you highlight the topic and include subtitles to distinguish each response.

Part A: The Strategic Purpose of Training and Career Development

Why do you believe organizations invest in training and career development programs for employees? How does the organization benefit? How can training support an organization’s strategic goals? Why should HRMs focus on the career development of employees? Use the articles and resources provided to support your ideas.

Part B: Performance Management, Performance Evaluation, and Performance Issues

Part A: In your own words, define performance management and a performance evaluation system.  Summarize your understanding of the difference between these two concepts. Why is it important for HRMs to investigate performance issues to identify the root cause? What type of performance issues(s) could benefit from a performance improvement plan? Use the articles and resources provided to support your ideas.

Respond to three colleagues for further dialogue

41

8
Performance Management

and Appraisal

Case 8.1. Why Do We
Conduct Performance Appraisals?
Jennee LeBeau and the Case of the
Missing Performance Appraisal System
Jennee LeBeau was very excited to be hired as the director of human resources at
Sunshine Hotels. Her office was located at the Main Island Hotel. Jennee spent her
first year at Sunshine Hotels getting used to the processes used by HR. She spent most
of her time in her office at Main Island Hotels. She didn’t get to visit the other two
Sunshine Hotels very often. Jennee’s employees in HR like her hands-off supervisory
style. However, they also feel she would be an even better supervisor if she left her
office and interacted with the employees more often.

Jennee had spent the last 7 years as the assistant director of human resources for
a chain of 10 fast-food restaurants. She figured being in charge of HR for a growing
chain of three hotels would be similar to her experiences working in the fast-food
industry.

While working in her office, she noticed Sunshine Hotels didn’t conduct perfor-
mance appraisals. Jennee thought performance appraisals (PA) were a common pro-
cess in all companies. She was quite shocked at finding such a review process was not
in place at Sunshine Hotels since they have nearly 30 employees. She decided the hotel
chain was not overly concerned with evaluating employees in their first two hotels
since the employees were mostly family and friends. But the addition of a third hotel
has forced the Sunshine Hotel owners to create more HR policies, rules, and forms to
make sure they are following all the laws of HR.

Jennee did some research and found that a performance appraisal is an ongoing
process of evaluating employee performance. However, it is also a tool of the large

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Part III • Developing and Managing4 2

process of having a performance management system, which is the process of identify-
ing, measuring, managing, and developing the performance of the human resources
in an organization. Thus, a PA is really a mechanism to help evaluate employees so
they can develop into larger roles and to ensure the success of the company going into
the future.

The good news is that Jennee figured out she could start from scratch and develop
her own performance management system (PMS). She figured she could set up an
entirely new PMS. PAs of individuals could be part of an ongoing process of evaluating
employees.

Jennee has to decide what will be included in her new PMS. She wants the PA to
collect valid information. That means what she measures must be true and correct. She
wants to be sure to measure the performance process. Although Jennee wants to col-
lect valid information, she also has to be concerned that the process isn’t overly long
or costly. She figures she can keep costs lower by emailing the PA to each employee to
reduce mailing costs. She also wanted to use a multiple choice style PA so she could
easily quantify the results.

The PA also has to be reliable. She has to trust that the performance data collected
are consistent and that the PA works the same each time she uses it.

Jennee wants the employees to accept the process as important to their own career
development. Acceptability means that the use of PA is satisfactory or appropriate to
the employees that will use the PA to improve their work performance.

Jennee also wants to develop a process that would not be overly expensive or time
consuming to implement. If the PA is overly long to complete, then the manager and
employee will not use the PA as a tool to improve performance.

The PA has to be specific about an employee’s job performance so that it is a useful
instrument for improving areas that need development for that specific employee.

Another important goal is the PA has to help achieve the mission and goals of
Sunshine Hotels. Completing the PA process should help employees better understand
what Sunshine expects from them and how they can complete their own job to help
the company fulfill its mission.

Jennee is starting to realize that she has walked into a very large project in design-
ing a PMS from scratch. She is starting to realize she will need to organize a committee
to help develop the process, especially the PA form. In answering her own questions,
she realized she will be putting together a PA that Sunshine employees will be using
for the first time. Employees currently receive a straight raise across the board. If the
owners of Sunshine Hotels determine everyone deserves a 3 percent raise, then all
employees get the raise irrespective of their own work performance. A new perfor-
mance management system and performance appraisal process will most likely make
it easier to administer raises based on the rating each employee receives as part of the
process. However, the employees might prefer the across-the-board raises rather than
having to personally earn their raises.

Jennee decided to create a first draft of her performance appraisal form. She can
show this draft to her committee. The following is Jennee’s performance appraisal:

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Chapter 8 • Performance Management and Appraisal 4 3

PERFORMANCE APPRAISAL FORM

NAME:

HOTEL:

DEPARTMENT and JOB TITLE:

DATE OF APPRAISAL:

FROM: TO:

Employee Signature

Employer Signature

Exceptional Successful
Needs

Improvement Unsatisfactory

Demonstrates
Required Job
Knowledge

Quality of Work
& Productivity

Makes Effective
Decisions

Builds and
Maintains
Relationships
With Others

Communicates
Effectively

Exhibits
Supervisory
Abilities

Overall
Performance
Appraisal Plan
of Action

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Part III • Developing and Managing4 4

Case Questions

1. What is the real goal(s) of a performance
appraisal?

2. How can Jennee be sure to collect
valid and reliable data with her new
performance system?

3. How can Jennee get the employees to
accept the process as important to their
own career development?

4. Can Jennee develop a process that is
not overly expensive to conduct with
employees?

5. Complete the performance appraisal
form in the case using Jennee
LeBeau as the employee you are
rating. Assume you are Patrick Staal,
who is the chief financial officer (CFO)
who is rating Jennee’s first year of
performance.

EMPLOYEE PERFORMANCE APPRAISAL FORM

NAME: Jennee LeBeau

HOTEL: Main Island

DEPARTMENT & JOB TITLE: Director of Human Resources

DATE OF APPRAISAL:

FROM: January 1, 2016 TO: December 31, 2016

Employee Signature: Jennee LeBeau

Supervisor Signature: Patrick Staal

Exceptional Successful
Needs

Improvement Unsatisfactory

Demonstrates
Required Job
Knowledge

X

Quality of Work
& Productivity

X

Makes
Effective
Decisions

X

Builds &
Maintains
Relationships
With Others

X

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Chapter 8 • Performance Management and Appraisal 4 5

Exceptional Successful
Needs

Improvement Unsatisfactory

Communicates
Effectively

X

Exhibits
Supervisory
Abilities

X

Overall
Performance
Appraisal Plan
of Action

Jennee
LeBeau has
been the
Director
of Human
Resources
for the
last year.
She has
excellent
knowledge
of the
human
resource
concerns at
Main Island
Hotel.

As the
Director of
HR. Jennee
is well liked.
However,
there is
room for
improvement
since she
spends most
of the time in
her office.

Jennee
needs to
develop better
social skills.
Developing
better social
skills will
help her to
improve her
communication
and
supervisory
abilities.

Jennee will
participate in
team building
sessions to
improve her
communication
and
supervisory
skills.

Case 8.2. Performance Appraisal Problems:
The Trouble With Performance Systems
It is unfortunate that employees fear their performance appraisal since the goal of
a performance management system is to help employees develop. However, sitting
across a table from your manager and discussing your performance record is most
likely going to be a high-stress situation.

Janice Flahive didn’t look forward to her performance appraisal. As an advertising
salesperson for her local newspaper, the Miami News, it was Janice’s job to sell adver-
tising space in the newspaper. Her performance was mainly based upon how much ad
space she sold. Janice felt she should have also been evaluated on customer satisfac-
tion, creating new accounts, or developing relationships with prospective businesses
that could lead to future sales opportunities. Instead, Janice’s performance appraisals
usually ended up being a one-way communication process where her employer criti-
cized her for not selling enough advertising space.

The PMS process is full of potential problems if it is not administered properly.
Many of these problems occur because managers are not properly trained to administer

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Part III • Developing and Managing4 6

a performance management system. The lack of training can lead to “rating errors,”
where one manager grades employees easier than a fellow manager who is a tougher
grader. The result of inconsistent grading can lead to star employees receiving the
same grades as weaker employees.

Poorly trained managers do not provide continuous feedback to their employ-
ees. Feedback is provided only during the performance appraisal meeting. Managers
need to provide performance feedback more often and document their interactions
with the employee. It cannot be stressed enough that managers need to document,
document, and collect even more documentation on each employee under their
supervision. Documentation is needed to support strong employees for raises and pro-
motions. Even more important, documentation is critical if an employee needs to be
reprimanded or fired as a result of the performance appraisal.

Much in the manner of Janice’s experience, performance appraisals often fail to
critique the employee in all areas of performance. Janice’s job is in sales, which makes
it easier to evaluate her in that area since sales can be quantified—she either makes her
sales quota or she doesn’t. However, Janice still deserves to be evaluated on qualitative
areas such as customer service skills or leadership ability, which are often not able to
be quantified.

Janice’s performance appraisals should help her to develop into a better salesper-
son and potential management leader. It appears that Janice’s performance appraisal
is a meeting that tends to discuss her past performance. Instead, the meeting should
help Janice to develop a performance plan with specific goals for the coming year.

One of the more controversial rating systems is the ranking method. Ranking is a
performance appraisal method that is used to evaluate employees from best to worst.
At the Miami News, Janice’s office is evaluated using the ranking system. Since the
rank order is posted in the office, Janice knows she is currently seventh on the list of
10 employees. The list is as follows as it is displayed outside the human resources office:

1. Samuel Garcia

2. Rosa McGowan

3. Meghan Shotland

4. Albert Smithfield

5. Jerry Jones

6. Samantha Barron

7. Janice Flahive

8. Karreem Rush

9. Monique Wayne

10. Sarah Badlementi

Janice is concerned that her company will decide to keep the top three star employees,
try to develop the next three employees, and try to lay off the bottom four employees.

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Chapter 8 • Performance Management and Appraisal 47

Although there are many potential problems with a PMS that is not well organized,
such a system is still very much needed in all organizations. Dr. Samuel Culbert, pro-
fessor of management from UCLA, does not believe in the performance review; he
supports a performance preview. This would be where Janice and her manager would sit
down and together discuss how they can each help improve her overall performance.
Janice can write “I” statements such as, “I will increase the amount of time I spend
actually selling my products.” Or, her employer might say, “I will check in with Janice
on a monthly basis, instead of every six months.”1

Another option for improving the performance appraisal system is to develop a
team of people to review the employee. The traditional method is for the direct super-
visor to evaluate his or her own employee. However, a more comprehensive 360-degree
evaluation will analyze individual performance from many sides—from the supervi-
sor’s viewpoint, from subordinates’ viewpoints, from the customers’ viewpoints, from
peers’ viewpoints, and from a self-evaluation. Unfortunately, it will take extra time
and money to collect data from all the different people who would be involved in
that type of evaluation. However, the 360-degree evaluation might be worth the time
and effort to help the employee develop under the guidance of multiple stakeholders
instead of just the supervisor’s.

Case Questions

1. Why are there problems with most
performance management systems?

2. What is the potential problem with a
performance review conducted by a
team of managers?

3. Why is an “I” statement a good method
for developing a positive PA?

4. What are the positive and negative
aspects of using a ranking method at
Janice’s office at the Miami News?

5. What type of PA do you or did you have in
the company you work or worked for?

Note

1. Culbert, Samuel A., “Get Rid of the Performance Review! It Destroys Morale, Kills Teamwork
and Hurts the Bottom Line. And That’s Just for Starters,” Wall Street Journal, October 20,
2008.

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3 6

7
Training, Learning,

Talent Management,
and Development

Case 7.1. The Need for Training and
Development: Should You Use Massive
Open Online Courses (MOOCs) Such as Coursera
and Udacity to Recruit and Retain Talent?
Juan Salmeron graduated from Small-Town College two years ago and was excited
to land a job in customer service with AT&T. He rose quickly in stature at the local
AT&T office and became the go-to guy when someone needed to understand some
new technology.

After 2 years, Juan figured he was marketable and wanted to see if he could land a
larger position with another firm. He worked hard on his résumé, cover letter, refer-
ences, and copies of his college transcripts.

Juan interviewed well at California Mutual Insurance (CMI), and his dreams came
true! Juan was hired as a corporate trainer. His job responsibility was to teach the
insurance employees at CMI about how to use the latest technology to improve their
own performance on the job.

Thus, Juan had to develop a process to help teach the insurance employees about
technology in the workplace. The obvious option was to actually hold courses at
CMI’s headquarters. Realistically, Juan could offer two or three courses a week. But
each employee would have to leave desk and job duties to attend the face-to-face (F2F)
training courses.

Juan could also try to hire experts in technology topics, and they could then
develop a course to train the insurance employees. However, this would require extra
financial costs to hire the expert and videotape the lectures. Juan could also decide to
hold courses in a synchronous or asynchronous distance learning format. Synchronous

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Chapter 7 • Training, Learning, Talent Management, and Development 3 7

distance learning occurs when the trainer/teacher and his employees/pupils interact in
different places, but during the same time. Thus, students and the trainer might select
Tuesday night as the time when they hold the training class. The trainer could be on
his or her laptop computer at home, and the employees could access their training
course at night. On Tuesday night, there would be a specific class where the trainer
and all the students would meet online and discuss the material to learn. Synchronous
learning would require the trainer and employee to meet at a specific time.

Asynchronous distance learning occurs when the trainer and the employee interact
at different times. Students enrolled in an asynchronous course are able to complete
their work within a certain time period. Thus the employee would access the learning
site within a time period such as one week. The employee would review the material,
watch videos, and take any exams, as necessary. Thus, the trainer and employee would
have more freedom to complete assignments within a pre-established time period.

As a third option, Juan could use massive open online courses (MOOCs) offered by
online providers such as Coursera and Udacity. MOOCs are free online courses offered
by experts at no cost. MOOC course topics range from law, education, engineering,
management, and all areas of technology. As Coursera explains: “Coursera is an edu-
cation platform that partners with top universities and organizations worldwide, to
offer courses online for anyone to take, for free. Learners can choose from hundreds
of courses created by the world’s top educational institutions. Courses are open to
anyone, and learning is free.”1

For example, Juan could encourage his employees to take a course on Gamification.
Gamification is a course offered at the University of Pennsylvania, through Coursera,
and taught by Associate Professor Kevin Werbach from The Wharton School of
Business. The initial section of the course had 80,000 students followed by a section
of 63,000 students.2

Gamification is taught in four to eight weekly modules and is offered in different
languages. Gamification is the adaptation of digital game technology applied to human
resource and other business issues. Thus, Juan’s employees could learn to develop a
game, whereby their customers are rewarded points or in-game rewards for checking
their insurance policies, investment accounts, and so forth on a regular basis. The
goal is to make “the game” addictive so that customers check their own accounts on a
more regular basis. The idea is to simulate games such as Angry Birds where customers
actually want to check their accounts.

Many people in HR feel MOOCs could be a major part of recruiting, training, and
developing employees with online degree certifications.3 Udacity has a program that
allows employers to review the student résumés. Over 350 large organizations, such
as Facebook, have paid Udacity and Coursera to match them with high performing
students.4

MOOCs can have thousands of students sign up for a course online. Students often
earn a certificate for completing the course. HR departments can also develop their
own certificate or reward for their employees that complete a MOOC. Companies such
as AT&T are using Udacity’s MOOCs to train their employees in new areas of science
and technology. Starbucks offers employees free tuition to participate in Arizona State
University’s online courses.

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Part III • Developing and Managing3 8

Case Questions

1. Would Coursera or Udacity be a
viable option for all human resource
departments to train their employees?

2. Would HR be eliminating themselves
from their own job if they use Coursera?

3. Would MOOCs be a good recruiting
method for attracting top talent?

4. Should Juan use a synchronous or
asynchronous training format if he
decides to use a MOOC to train his
employees?

5. What are two advantages and two
disadvantages of gamification of
the HR functions?

Case 7.2. Talent Management and
Development: The Talented Harry Saunders’s
Career Development at the Big Buy Supermarket
Developing talented employees requires planning on the part of human resources.
The career of Harry Saunders is a good example. Harry progressed in his career by
using three options: formal education, experience, and employee assessment.

Harry’s father worked in the marketing department at The Big Buy Supermarket
chain in Florida. With a little help from his father, Harry was able to get a job as a bag-
boy during high school. Harry enjoyed using the cash register since he liked numbers.
Harry also displayed social skills since he liked talking to customers.

After high school, Harry went to college and tried different business majors until
he concentrated on accounting. Harry knew he had knack for numbers, and account-
ing came easy to him. After graduating from college, Harry was offered quite a few
positions to work for local and national accounting firms. At such a firm, he would
go on the road and conduct audits of his clients’ accounting books. He would travel
quite a bit—but he would be well paid and eventually would become a certified public
accountant (CPA).

However, the HR Department at The Big Buy had no desire to lose an employee it
felt had the potential to be a top-level manager. Thus, HR offered him a position in
the accounting department at a competitive salary with the CPA firms. Since Harry
liked working at The Big Buy, and even followed in his father’s footsteps, he accepted
the position.

HR departments are also interested in recruiting people who have completed
MOOCs. They were originally interested in students that completed a science- or
technology-related course. Tech-oriented companies such as Amazon, Facebook, and
Google have paid Udacity and Coursera to match them with their top students.

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Chapter 7 • Training, Learning, Talent Management, and Development 3 9

Harry enjoyed organizing the accounting department at The Big Buy for nearly a
decade. The supermarket chain grew to more than 100 stores. Harry felt he needed to
get a graduate degree in marketing to help further his rise in management. The Big
Buy offered 100 percent tuition reimbursement. It took Harry 2 years to complete his
MBA in marketing.

After 20 years in accounting, Harry felt he was tired of running the same old
accounting data. He was not as marketable as he once was because he had never
become a CPA. He also missed working directly with customers.

Thus, Harry contacted HR, and they worked closely with him to find a new spot
in the organization. Harry took a psychological test, which is a series of multiple choice
questions about what motivated Harry in a work environment. The test results indi-
cated Harry was equally happy working with data and people.

Harry was promoted to the new position of database marketing manager. In that
position, Harry would work with large amounts of sales data that were being generated
by the computer systems at the 100-plus stores Big Buy owned. Harry’s job would be to
analyze sales data to find products that were selling unusually well or poorly at each
of the stores. Harry hired two young computer science majors to run the computer
programs, sort the data, and help Harry make a weekly presentation to senior manage-
ment about the results of the data.

Harry felt a strong resurgence in his career. He was thrilled to be working with cus-
tomers again. He often visited stores to ask customers about various food items. He felt
this boots-on-the-ground strategy would help him to better understand the overall
sales data produced by his two employees back in the home office.

Harry became a popular speaker at supermarket conferences, as mining the data
from large computer systems was an increasingly important task for all supermarket
chains. Harry used his mathematical skills honed by a decade in accounting to under-
stand the trends in food shopping. Harry was the first person to create a grocery store
customer loyalty card, where shoppers paid $20 a year for the right to get lower prices
on selected products. The idea of shoppers paying for a membership to buy groceries
at a traditional supermarket was unheard of at the time Harry tested the idea. The
result was that the customers of The Big Buy loved paying for the card so they would
get lower prices on selected items throughout the store. Harry and his team could
better track customer purchases and buying habits because shoppers were using their
Big Buy card.

Harry took a few quiet moments to review his career by using the four stages of
career development: Exploration, Establishment, Maintenance, and Disengagement.
He felt fortunate to have started his career in the exploration stage by considering
different job opportunities after he finished college. He experienced the establish-
ment stage in his career by working in the accounting department for what felt
like a long time—20 years. He feels refreshed to have transferred to marketing and
has found the whole process of tracking customers a great part of the maintenance
stage in his continued career at The Big Buy. Harry also felt he was in no rush to
disengage from the company anytime in the near future. With the full support of
his wife, Harry plans on working at The Big Buy instead of taking any type of early
retirement offer.

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Part III • Developing and Managing4 0

Case Questions

1. How did Harry and HR use formal
education to further his career?

2. How did employee assessment help
Harry to advance?

3. Explain how Harry went through
the career stages of Exploration,
Establishment, Maintenance, and
Disengagement.

4. What are some of the individual
and organizational consequences

that occurred as a result of the
organizational career planning process
at Big Buy?

5. Why did Harry’s attitude and
performance dramatically change after
changing from the accounting to the
marketing department?

Notes

1. https://www.coursera.org/about/.
2. McWilliams, Julie, “Coursera at Penn Surpasses One Million Enrollees,” Penn Current, May 9,

2013.

3. Quinn, Jody, “Mining the MOOC: HR Looks to Online to Recruit and Train Employees,”
Skilled Up.com, August 25, 2014.

4. Wheeler, Kevin, “Why MOOC’s Might Change Your Recruiting Methods,” ERE Media, March 4,
2014.

EBSCOhost – printed on 11/17/2021 12:21 AM via UNIVERSITY OF MARYLAND GLOBAL CAMPUS. All use subject to https://www.ebsco.com/terms-of-use

Chapter 9: Managing Employee Performance

A Dilemma

You have been the store manager for a large coffee shop for three years but have never had this type of problem employee to handle before, and you schedule a meeting to speak with your HR manager about it. Jake, one of your best employees, has recently begun to have some problems. He is showing up to work late at least twice per week, and he missed the mandatory employee meeting on Saturday morning. When you ask him about it, he says that he is having some personal problems and will try to get better.

For a bit of time, Jake does get better, comes to work on time, and is his normal, pleasant self when helping customers. However, the situation gets more serious two weeks later when Jake comes to work smelling of alcohol and wearing the same clothes he wore to work the day before. You overhear some of the employees talking about Jake’s drinking problem. You pull Jake aside and ask him what is happening. He says his wife kicked him out of the house last night and he stayed with a friend, but he didn’t have time to gather any of his belongings when he left his house. You accept his answer and hope that things will get better.

A week later, when Jake arrives for his 10–7 shift, he is obviously drunk. He is talking and laughing loudly, smells of alcohol, and has a hard time standing up. You pull him aside and decide to have a serious talk with him. You confront him about his drinking problem, but he denies it, saying he isn’t drunk, just tired from everything happening with his wife. You point out the smell and the inability to stand up, and Jake starts crying and says he quit drinking ten years ago but has recently started again with his impending divorce. He begs for you to give him another chance and promises to stop drinking. You tell him you will think about it, but in the meantime, you send him home.

The meeting with HR is this afternoon and you feel nervous. You want to do what is right for Jake, but you also know this kind of disruptive behavior can’t continue. You like Jake as a person and he is normally a good employee, so you don’t want to fire him. When you meet with the HR manager, he discusses your options. The options, he says, are based on a discipline process developed by HR, and the process helps to ensure that the firing of an employee is both legal and fair. As you review the process, you realize that ignoring the behavior early on has an effect on what you can do now. Since you didn’t warn Jake earlier, you must formally document his behavior before you can make any decision to let him go. You hope that Jake can improve so it doesn’t come down to that.

9.1  Handling Performance

Learning Objectives

1. Explain the types of performance issues that occur in the workplace, and the internal and external reasons for poor performance.

1. Understand how to develop a process for handling employee performance issues.

1. Be able to discuss considerations for initiating layoffs or downsizing.

As you know from reading this book so far, the time and money investment in a new employee is overwhelming. The cost to select, hire, and train a new employee is staggering. But what if that new employee isn’t working out? This next section will provide some examples of performance issues and examples of processes to handle these types of employee problems.

Types of Performance Issues

One of the most difficult parts of managing others isn’t when they are doing a great job—it is when they aren’t doing a good job. In this section, we will address some examples of performance issues and how to handle them.

1. Constantly late or leaves early. While we know that flexible schedules can provide a work-life balance, managing this flexible schedule is key. Some employees may take advantage and, instead of working at home, perform nonwork-related tasks instead.

1. Too much time spent doing personal things at work. Most companies have a policy about using a computer or phone for personal use. For most companies, some personal use is fine, but it can become a problem if someone doesn’t know where to draw the line.

1. Inability to handle proprietary information. Many companies handle important client and patient information. The ability to keep this information private for the protection of others is important to the success of the company.

1. Family issues. Child-care issues, divorce, or other family challenges can cause absenteeism, but also poor work quality. Absenteeism is defined as a habitual pattern of not being at work.

1. Drug and alcohol abuse. The US Department of Labor says that 40 percent of industrial fatalities and 47 percent of industrial injury can be tied to alcohol consumption. The US Department of Labor estimates that employees who use substances are 25–30 percent less productive and miss work three times more often than nonabusing employees. [1] Please keep in mind that when we talk about substance abuse, we are talking about not only illegal drugs but prescription drug abuse as well. In fact, the National Institute on Drug Abuse says that 15.2 million Americans have taken a prescription pain reliever, tranquilizer, or sedative for nonmedical purposes at least once. [2] Substance abuse can cause obvious problems, such as tardiness, absenteeism, and nonperformance, but it can also result in accidents or other more serious issues.

1. Nonperforming. Sometimes employees are just not performing at their peak. Some causes may include family or personal issues, but oftentimes it can mean motivational issues or lack of tools and/or ability to do their current job.

1. Conflicts with management or other employees. While it is normal to have the occasional conflict at work, some employees seem to have more than the average owing to personality issues. Of course, this affects an organization’s productivity.

1. Theft. The numbers surrounding employee theft are staggering. The American Marketing Association estimates $10 billion is lost annually owing to employee theft, while the FBI estimates up to $150 billion annually. [3] Obviously, this is a serious employee problem that must be addressed.

1. Ethical breaches. The most commonly reported ethical breaches by employees include lying, withholding information, abusive behavior, and misreporting time or hours worked, according to a National Business Ethics study. [4] Sharing certain proprietary information when it is against company policy and violating noncompete agreements are also considered ethical violations. Many companies also have a nonfraternization policy that restricts managers from socializing with nonmanagement employees.

1. Harassment. Engagement of sexual harassment, bullying, or other types of harassment would be considered an issue to be dealt with immediately and, depending on the severity, may result in immediate termination.

1. Employee conduct outside the workplace. Speaking poorly of the organization on blogs or Facebook is an example of conduct occurring outside the workplace that could violate company policy. Violating specific company policies outside work could also result in termination. For example, in 2010, thirteen Virgin Atlantic employees were fired after posting criticisms about customers and joking about the lack of safety on Virgin airplanes in a public Facebook group. [5]In another example, an NFL Indianapolis Colts cheerleader was fired after racy Playboy promotional photos surfaced (before she became a cheerleader) that showed her wearing only body paint. [6]

While certainly not exhaustive, this list provides some insight into the types of problems that may be experienced. As you can see, some of these problems are more serious than others. Some issues may only require a warning, while some may require immediate dismissal. As an HR professional, it is your job to develop policies and procedures for dealing with such problems. Let’s discuss these next.

Fortune 500 Focus

To handle attendance problems at many organizations, a no-fault attendance plan is put into place. In this type of plan, employees are allowed a certain number of absences; when they exceed that number, a progressive discipline process begins and might result in dismissal of the employee. A no-fault attendance policy means there are no excused or unexcused absences, and all absences count against an employee. For example, a company might give one point for an absence that is called in the night before work, a half point for a tardy, and two points for a no-call and no-show absence. When an employee reaches a certain number determined by the company, he or she is disciplined. This type of policy is advantageous in industries in which unplanned absences have a direct effect on productivity, such as manufacturing and production. Another advantage is that managers do not need to make judgment calls on what is an excused versus an unexcused absence, and this can result in fairness to all employees.

One such company with a no-fault attendance policy is Verizon Communications. However, the Equal Employment Opportunity Commission (EEOC) investigated this policy and announced that Verizon will pay $20 million to resolve a disability discrimination lawsuit. [7] The lawsuit said that the company, through use of the no-fault attendance policy, denied reasonable accommodations required by the Americans with Disabilities Act (ADA). As a result, hundreds of Verizon employees were disciplined or fired. In this case, the EEOC cites paid or unpaid leave as one way for an employer to provide reasonable accommodations for an employee with a disability. The policy specified there would be no exceptions made to the no-fault attendance policy to accommodate employees with ADA disabilities. When discussing the case, the EEOC chair justified the agency’s position by saying, “Flexibility on leave can enable a worker with a disability to remain employed and productive, a win for the worker, employer, and the economy. By contrast, an inflexible leave policy may deny workers with disabilities a reasonable accommodation.” [8] Part of the settlement also involved additional training to Verizon employees on ADA and how to administer the attendance plan. This successful lawsuit shows that even the most seemingly clear performance expectations must be flexible to meet legal obligations.

What Influences Performance?

When an employee isn’t performing as expected, it can be very disapointing. When you consider the amount of time it takes to recruit, hire, and train someone, it can be disappointing to find that a person has performance issues. Sometimes performance issues can be related to something personal, such as drug or alchol abuse, but often it is a combination of factors. Some of these factors can be internal while others may be external. Internal factors may include the following:

1. Career goals are not being met with the job.

1. There is conflict with other employees or the manager.

1. The goals or expectations are not in line with the employee’s abilities.

1. The employee views unfairness in the workplace.

1. The employee manages time poorly.

1. The employee is dissatisfied with the job.

Some of the external factors may include the following:

1. The employee doesn’t have correct equipment or tools to perform the job.

1. The job design is incorrect.

1. External motivation factors are absent.

1. There is a lack of management support.

1. The employee’s skills and job are mismatched.

All the internal reasons speak to the importance once again of hiring the right person to begin with. The external reasons may be something that can be easily addressed and fixed. Whether the reason is internal or external, performance issues must be handled in a timely manner. This is addressed in Section 10.1.3 “Defining Discipline”. We discuss performance issues in greater detail in Chapter 11 “Employee Assessment”.

Defining Discipline

If an employee is not meeting the expectations, discipline might need to occur.Discipline is defined as the process that corrects undesirable behavior. The goal of a discipline process shouldn’t necessarily be to punish, but to help the employee meet performance expectations. Often supervisors choose not to apply discipline procedures because they have not documented past employee actions or did not want to take the time to handle the situation. When this occurs, the organization lacks consistency among managers, possibility resulting in motivational issues for other employees and loss of productivity.

To have an effective discipline process, rules and policies need to be in place and communicated so all employees know the expectations. Here are some guidelines on creation of rules and organizational policies:

1. All rules or procedures should be in a written document.

1. Rules should be related to safety and productivity of the organization.

1. Rules should be written clearly, so no ambiguity occurs between different managers.

1. Supervisors, managers, and human resources should communicate rules clearly in orientation, training, and via other methods.

1. Rules should be revised periodically, as the organization’s needs change.

Of course, there is a balance between too many “rules” and giving employees freedom to do their work. However, the point of written rules is to maintain consistency. Suppose, for example, you have a manager in operations and a manager in marketing. They both lead with a different style; the operations manager has a more rigid management style, while the marketing manager uses more of a laissez-faire approach. Suppose one employee in each of the areas is constantly late to work. The marketing manager may not do anything about it, while the operations manager may decide each tardy day merits a “write-up,” and after three write-ups, the employee is let go. See how lack of consistency might be a problem? If this employee is let go, he or she might be able to successfully file a lawsuit for wrongful termination, since another employee with the same performance issue was not let go. Wrongful termination means an employer has fired or laid off an employee for illegal reasons, such as violation of antidiscrimination laws or violation of oral and/or written employee agreements. To avoid such situations, a consistent approach to managing employee performance is a crucial part of the human resources job.

The Role of the Performance Appraisal in Discipline

Besides the written rules, each individual job analysis should have rules and policies that apply to that specific job. We discuss performance appraisal in further detail in Chapter 10 “Employee Assessment”, but it is worth a mention here as well. The performance appraisal is a systematic process to evaluate employees on (at least) an annual basis. The organization’s performance appraisal and general rules and policies should be the tools that measure the employee’s overall performance. If an employee breaks the rules or does not meet expectations of the performance appraisal, the performance issue model, which we will discuss next, can be used to correct the behavior.

Performance Issue Model

Because of the many varieties of performance issues, we will not discuss how to handle each type in detail here. Instead, we present a model that can be used to develop policies around performance, for fairness and consistency.

We can view performance issues in one of five areas. First, the mandated issue is serious and must be addressed immediately. Usually, the mandated issue is one that goes beyond the company and could be a law. Examples of mandated issues might include an employee sharing information that violates privacy laws, not following safety procedures, or engaging in sexual harassment. For example, let’s say a hospital employee posts something on his Facebook page that violates patient privacy. This would be considered a mandated issue (to not violate privacy laws) and could put the hospital in serious trouble. These types of issues need to be handled swiftly. A written policy detailing how this type of issue would be handled is crucial. In our example above, the policy may state that the employee is immediately fired for this type of violation. Or, it may mean this employee is required to go through privacy training again and is given a written warning. Whatever the result, developing a policy on how mandated issues will be handled is important for consistency.

Figure 9.1 The Process for Handling Performance Issues

The second performance issue can be called a single incident. Perhaps the employee misspeaks and insults some colleagues or perhaps he or she was over budget or late on a project. These types of incidents are usually best solved with a casual conversation to let the employee know what he or she did wasn’t appropriate. Consider this type of misstep a development opportunity for your employee. Coaching and working with the employee on this issue can be the best way to nip this problem before it gets worse.

Often when single incidents are not immediately corrected, they can evolve into a behavior pattern, which is our third type of performance issue. This can occur when the employee doesn’t think the incident is a big deal because he hasn’t been correct before or may not even realize his is doing something wrong. In this case, it’s important to talk with the employee and let him know what is expected.

If the employee has been corrected for a behavior pattern but continues to exhibit the same behavior, we call this a persistent pattern. Often you see employees correct the problem after an initial discussion but then fall back into old habits. If they do not self-correct, it could be they do not have the training or the skills to perform the job. In this phase of handling performance issues, it is important to let the employee know that the problem is serious and further action will be taken if it continues. If you believe the employee just doesn’t have the skills or knowledge to perform the job, asking him or her about this could be helpful to getting to the root of the problem as well. If the employee continues to be nonperforming, you may consider utilizing the progressive discipline process before initiating an employee separation. However, investigating the performance issue should occur before implementing any sort of discipline.

Investigation of Performance Issues

When an employee is having a performance issue, often it is our responsibility as HR professionals to investigate the situation. Training managers on how to document performance failings is the first step in this process. Proper documentation is necessary should the employee need to be terminated later for the performance issue. The documentation should include the following information:

1. Date of incident

1. Time of incident

1. Location (if applicable) of incident

1. A description of the performance issue

1. Notes on the discussion with the employee on the performance issue

1. An improvement plan, if necessary

1. Next steps, should the employee commit the same infraction

1. Signatures from both the manager and employee

With this proper documentation, the employee and the manager will clearly know the next steps that will be taken should the employee commit the infraction in the future. Once the issue has been documented, the manager and employee should meet about the infraction. This type of meeting is called an investigative interview and is used to make sure the employee is fully aware of the discipline issue. This also allows the employee the opportunity to explain his or her side of the story. These types of meetings should always be conducted in private, never in the presence of other employees.

In unionized organizations, however, the employee is entitled to union representation at the investigative interview. This union representation is normally calledinterest based bargaining [9] referring to a National Labor Relations Board case that went to the United States Supreme Court in 1975. Recently, Weingarten rights continued to be protected when Alonso and Carus Ironworks was ordered to cease and desist from threatening union representatives who attempted to represent an employee during an investigative interview. [10]

Options for Handling Performance Issues

Our last phase of dealing with employee problems would be a disciplinary intervention. Often this is called the progressive discipline process. It refers to a series of steps taking corrective action on nonperformance issues. The progressive discipline process is useful if the offense is not serious and does not demand immediate dismissal, such as employee theft. The progressive discipline process should be documented and applied to all employees committing the same offenses. The steps in progressive discipline normally are the following:

1. First offense: Unofficial verbal warning. Counseling and restatement of expectations.

1. Second offense: Official written warning, documented in employee file.

1. Third offense: Second official warning. Improvement plan (discussed later) may be developed. Documented in employee file.

1. Fourth offense: Possible suspension or other punishment, documented in employee file.

1. Fifth offense: Termination and/or alternative dispute resolution.

University of Iowa’s Progressive Discipline Process

The chart below shows the typical progressive discipline process at the University of Iowa:

The Seven Tests of Just Cause

The seven test[s] of just cause represent a practical and effective way to determine whether a proposed disciplinary action is firmly and fairly grounded. It is fair to assume that these tests will be applied by arbitrators in the event that disciplinary actions are challenged, and it is therefore good practice to apply them prospectively when considering the imposition of progressive discipline.

Seven tests:

1. Notice

0. Prior to imposition of discipline, employee must have notice of rules and expectations.

0. Establish through:

1. New employee orientation

0. Orientation checklists

0. Receipts for departmental handbooks

0. Periodic reinforcement/coaching

1. Reasonable Rules and Orders

1. Cannot be inconsistent with collective bargaining agreement(s)

1. Cannot be arbitrary or capricious

1. Must be reasonably related to business necessity

1. Investigation

2. Must be thorough; consider all evidence, pro and con.

2. Must be timely:

1. Should be completed expeditiously

1. Occurs before discipline imposed

2. Give accused opportunity to respond (Loudermill hearing).

2. Allow union representation (Weingarten rights).

1. Fair Investigation

3. Result must not be forgone conclusion.

3. Test assumptions/bias.

1. Proof

4. Level of proof is normally substantial evidence.

4. Greater proof required for more serious allegations.

1. Equal Treatment

Equal treatment must be balanced against just application:

5. Rules must be applied even-handedly and without discrimination.

5. Rules must be applied justly.

5. Don’t blindly apply the same rule to all situations—managers/supervisors are expected to exercise judgment.

1. Penalty

6. Must be fair, not arbitrary and capricious, or based on emotional response.

6. Factor in length of service, prior performance history, and previous progressive discipline.

Source: Reprinted from the University of Iowa’s Office of the Vice President for Research, 
http://research.uiowa.edu/pimgr/?get=discipline
 and
http://research.uiowa.edu/pimgr/?get=7steps
 (accessed September 15, 2011).

Another option for handling continued infractions is to consider putting the employee on an improvement plan, which outlines the expectations and steps the employee should take to improve performance. We address this in greater detail in Chapter 10 “Employee Assessment”. The plan is detailed and outlined and ensures both parties understand the specific expectations for improvement. If the improvement plan does not work, a progressive discipline process might be used.

Whichever direction is taken with disciplining of the employee, documentation is key throughout the process to avoid wrongful termination issues.



Figure 9.2 Sample of a Performance Improvement Plan

Alternative Dispute Resolution

Another option in handling disputes, performance issues, and terminations isalternative dispute resolution (ADR). This method can be effective in getting two parties to come to a resolution. In ADR, an unbiased third party looks at the facts in the case and tries to help the parties come to an agreement. In mediation, the third party facilitates the resolution process, but the results of the process are not binding for either party. This is different from arbitration, in which a person reviews the case and makes a resolution or a decision on the situation. The benefits of ADR are lower cost and flexibility, as opposed to taking the issue to court. We discuss these types of systems in greater detail in Chapter 12 “Working with Labor Unions”.

Some organizations use a step-review system. In this type of system, the performance issue is reviewed by consecutively higher levels of management, should there be disagreement by the employee in a discipline procedure. Some organizations also implement a peer resolution system. In this type of system, a committee of management and employees is formed to review employee complaints or discipline issues. In this situation, the peer review system normally involves the peer group reviewing the documentation and rendering a decision. Another type of ADR is called the ombudsman system. In this system, a person is selected (or elected) to be the designated individual for employees to go to should they have a complaint or an issue with a discipline procedure. In this situation, the ombudsman utilizes problem-solving approaches to resolve the issue. For example, at National Geographic Traveler Magazine an ombudsman handles employee complaints and issues and also customer complaints about travel companies.

Employee Separation

Employee separation can occur in any of these scenarios. First, the employee resigns and decides to leave the organization. Second, the employee is terminated for one or more of the performance issues listed previously. Lastly, absconding is when the employee decides to leave the organization without resigning and following the normal process. For example, if an employee simply stops showing up to work without notifying anyone of his or her departure, this would be considered absconding. Let’s discuss each of these in detail. Employee separation costs can be expensive, as we learned in Chapter 7 “Retention and Motivation”.In the second quarter in 2011, for example, Halliburton reported $8 million in employee separation costs. [11]

Resignation means the employee chooses to leave the organization. First, if an employee resigns, normally he or she will provide the manager with a formal resignation e-mail. Then the HR professional usually schedules an exit interview, which can consist of an informal confidential discussion as to why the employee is leaving the organization. If HR thinks the issue or reasons for leaving can be fixed, he or she may discuss with the manager if the resignation will be accepted. Assuming the resignation is accepted, the employee will work with the manager to determine a plan for his or her workload. Some managers may prefer the employee leave right away and will redistribute the workload. For some jobs, it may make sense for the employee to finish the current project and then depart. This will vary from job to job, but two weeks’ notice is normally the standard time for resignations.

If it is determined an employee should be terminated, different steps would be taken than in a resignation. First, documentation is necessary, which should have occurred in the progressive discipline process. Performance appraisals, performance improvement plans, and any other performance warnings the employee received should be readily available before meeting with the employee. It should be noted that the reliability and validity of performance appraisals should be checked before dismissing an employee based upon them. Questionable performance appraisals come from the real-world conditions common to rating situations, particularly because of limitations in the abilities of the raters. [12] Reliability and validity of performance appraisals are discussed in detail in Chapter 10 “Employee Assessment”.

Remember that if the discipline process is followed as outlined prior, a termination for nonperformance should never be a surprise to an employee. Normally, the manager and HR manager would meet with the employee to deliver the news. It should be delivered with compassion but be direct and to the point. Depending on previous contracts, the employee may be entitled to a severance package. A severance package can include pay, benefits, or other compensation for which an employee is entitled when they leave the organization. The purpose of a severance plan is to assist the employee while he or she seeks other employment. The HR professional normally develops this type of package in conjunction with the manager. Some considerations in developing a severance package (preferably before anyone is terminated) might include the following:

1. How the severance will be paid (i.e., lump sum or in x equal increments)

1. Which situations will pay a severance and which will not. For example, if an employee is terminated for violation of a sexual harassment policy, is a severance still paid?

1. A formula for how severance will be paid, based on work group, years with the organization, etc.

1. Legal documents, such as legal releases and noncompete agreements

1. How accrued vacation and/or sick leave will be paid, if at all

The last topic that we should discuss in this section is the case of an absconded employee. If an employee stops showing up to work, a good effort to contact this person should be the first priority. If after three days this person has not been reachable and has not contacted the company, it would be prudent to stop pay and seek legal help to recover any company items he or she has, such as laptops or parking passes.

Sometimes rather than dealing with individual performance issues and/or terminations, we find ourselves having to perform layoffs of several to hundreds of employees. Let’s address your role in this process next.

Rightsizing and Layoffs

Rightsizing refers to the process of reducing the total size of employees, to ultimately save on costs. Downsizing ultimately means the same thing as rightsizing, but the usage of the word has changed in that rightsizing seems to define the organization’s goals better, which would be to reduce staff to save money, or rightsize. When a company decides to rightsize and, ultimately, engage in layoffs, some aspects should be considered.

First, is the downturn temporary? There is nothing worse than laying people off, only to find that as business increases, you need to hire again. Second, has the organization looked at other ways to cut expenses? Perhaps cutting expenses in other areas would be advisable before choosing to lay people off. Finally, consideration should be given to offering temporary sabbaticals, voluntary retirement, or changing from a full- to part-time position. Some employees may even be willing to take a temporary pay cut to reduce costs. Organizations find they can still keep good people by looking at some alternatives that may work for the employee and the organization, even on a temporary basis.

If the company has decided the only way to reduce costs is to cut full-time employees, this is often where HR should be directly involved to ensure legal and ethical guidelines are met. Articulating the reasons for layoffs and establishing a formalized approach to layoffs is the first consideration. Before it is decided who should get cut, criteria should be developed on how these decisions will be made. Similar to how selection criteria might be developed, the development of criteria that determines which jobs will be cut makes the process of cutting more fair, albeit still difficult. Establishing the criteria ahead of time can also help avoid managers’ trying to “save” certain people from their own departments. After development of criteria, the next phase would be to sit down with management and decide who does or doesn’t meet the criteria and who will be laid off. At this point, before the layoffs happen, it makes sense to discuss severance packages. Usually, when an employee signs for a severance package, the employee should also sign a form (the legal department can help with this) that releases the organization from all future claims made by the employee.

After criteria have been developed, people selected, and severance packages determined, it’s key to have a solid communication plan as to how the layoffs will be announced. Usually, this involve an initial e-mail to all employees, letting them know of impending layoffs. Speak with each employee separately, then announce which positions were eliminated. The important thing to remember during layoffs is keeping your employees’ dignity; they did not do anything wrong to lose their job—it was just a result of circumstances.

[1] United States Department of Labor, “General Workplace Impact,” 2011, accessed March 8, 2011, 
http://www.esrcheck.com/wordpress/2011/08/12/studies-show-drugs-in-workplace-cost-employers-billions- and-small-businesses-employ-more-drug-users-but-drug-test-less/
.

[2] Barry Fisher, “Targeting Prescription Drug Abuse,” Ventura County Star, March 6, 2011, accessed March 8, 2011, 
http://www.vcstar.com/news/2011/mar/06/targeting-prescription-drug-abuse/
.

[3] “Employee Theft and Legal Aspects,” Net Industries, accessed March 8, 2011,
http://law.jrank.org/pages/1084/Employee-Theft-Legal-Aspects-Estimates-cost.html
.

[4] “Careers By the Numbers,” InfoWorld, October 2, 2000, accessed August 1, 2011,
http://books.google.com/books?id=ST0EAAAAMBAJ&pg=PA93&lpg=PA93&dq=Careers+By+the+Numbers +InfoWorld+October+2,+2000&source=bl&ots=KU2eMTa3C3&sig=rU3s8ywYcc0Z kUbuydMO3wrO1Rc&hl=en&sa=X&ei=yoVsT6PfGYSw0QH11u3TBg&ved=0CCIQ6 AEwAA#v=onepage&q= Careers%20By%20the%20Numbers%20InfoWorld%20October %202%2C%202000&f=false
.

[5] Catherine Smith, “Fired Over Facebook,” Huffington Post, July 2010, accessed August 1, 2011, 
http://www.huffingtonpost.com/2010/07/26/fired-over-facebook-posts_n_659170.html#s115752&title=13_Virgin_Atlantic
.

[6] Rick Chandler, “Ex-Colts Cheerleader Sues Team Over Dismissal for Playboy Pics,” NBC Sports, May 11, 2011, accessed August 1, 2011,
http://offthebench.nbcsports.com/2011/05/11/ex-colts-cheerleader-sues-team-over-dismissal-for-playboy-pics/
.

[7] Jim Evans, “EEOC Finds Fault with Company’s No Fault Attendance Plan,” Zanesville Times, July 17, 2011, accessed August 1, 2011,
http://www.businessmanagementdaily.com/19860/eeoc-finds-fault-with-no-fault-attendance-policies
.

[8] Jim Evans, “EEOC Finds Fault with Company’s No Fault Attendance Plan,” Zanesville Times, July 17, 2011, accessed August 1, 2011,
http://www.businessmanagementdaily.com/19860/eeoc-finds-fault-with-no-fault-attendance-policies
.

[9] National Labor Relations Board website, “Administrative Law Judge Orders San Juan Company to Respect Employee Weingarten Rights,” March 28, 2011, accessed August 17, 2011.

[10] National Labor Relations Board website, “Administrative Law Judge Orders San Juan Company to Respect Employee Weingarten Rights,” March 28, 2011, accessed August 17, 2011.

[11] Brad Lemaire, “Halliburton Posts 54% Q2 Growth,” Proactive Investors, July 18, 2011, accessed August 1, 2011,
http://www.proactiveinvestors.com/companies/news/16404/halliburton-posts-54-q2-profit-growth-16404.html
.

[12] Jeff Weekley, Academy of Management Journal 32, no. 1 (1989): 213–22.

9.2  Employee Rights

Learning Objectives

1. Be able to explain employee rights.

1. Define unions and explain their relation to the HRM function.

Employee rights is defined as the ability to receive fair treatment from employers. This section will discuss employee rights surrounding job protection, privacy, and unionization.

Job Protection Rights

If HR doesn’t understand or properly manage employee rights, lawsuits are sure to follow. It is the HR professional’s job to understand and protect the rights of employees. In the United States, the employment-at-will principle (EAW) is the right of an employer to fire an employee or an employee to leave an organization at any time, without any specific cause. The EAW principle gives both the employee and employer freedom to terminate the relationship at any time. There are three main exceptions to this principle, and whether they are accepted is up to the various states:

1. Public policy exception. With a public policy exception, an employer may not fire an employee if it would violate the individual state’s doctrine or statute. For example, in Borse v. Piece Goods Shop in Pennsylvania, a federal circuit court of appeals ruled that Pennsylvania law may protect at-will employees from being fired for refusing to take part in drug test programs if the employee’s privacy is invaded. Borse contended that the free speech provisions of the state and of the First Amendment protected the refusal to participate. Some public policy exceptions occur when an employee is fired for refusing to violate state or federal law.

1. Implied contract exception. In a breach of an implied contract, the discharged employee can prove that the employer indicated that the employee has job security. The indication does not need to be formally written, only implied. InWright v. Honda, an Ohio employee was terminated but argued that the implied contract exception was relevant to the employment-at-will doctrine. She was able to prove that in orientation, Honda stressed to employees the importance of attendance and quality work. She was also able to prove that the language in the associate handbook implied job security: “the job security of each employee depends upon doing your best on your job with the spirit of cooperation.” Progress reports showing professional development further solidified her case, as she had an implied contract that Honda had altered the employment-at-will doctrine through its policies and actions.

1. Good faith and fair dealing exception. In thegood faith and fair dealing exception, the discharged employee contends that he was not treated fairly. This exception to the employment-at-will doctrine is less common than the first two. Examples might include firing or transferring of employees to prevent them from collecting commissions, misleading employees about promotions and pay increases, and taking extreme actions that would force the employee to quit.

Table 9.1 State’s Acceptance of Employment-at-Will Exceptions

State

Public-Policy Exception

Implied-Contract Exception

Good Faith and Fair Dealing Exception

Alabama

no

yes

yes

Alaska

yes

yes

yes

Arizona

yes

yes

yes

Arkansas

yes

yes

no

California

yes

yes

yes

Colorado

yes

yes

no

Connecticut

yes

yes

no

Delaware

yes

no

yes

District of Columbia

yes

yes

no

Florida

no

no

no

Georgia

no

no

no

Hawaii

yes

yes

no

Idaho

yes

yes

yes

Illinois

yes

yes

no

Indiana

yes

no

no

Iowa

yes

yes

no

Kansas

yes

yes

no

Kentucky

yes

yes

no

Louisiana

no

no

no

Maine

no

yes

no

Maryland

yes

yes

no

Massachusetts

yes

no

yes

Michigan

yes

yes

no

Minnesota

yes

yes

no

Mississippi

yes

yes

no

Missouri

yes

no

no

Montana

yes

no

no

Nebraska

no

yes

no

Nevada

yes

yes

yes

New Hampshire

yes

yes

no

New Jersey

yes

yes

no

New Mexico

yes

yes

no

New York

no

yes

no

North Carolina

yes

no

no

North Dakota

yes

yes

no

Ohio

yes

yes

no

Oklahoma

yes

yes

no

Oregon

yes

yes

no

Pennsylvania

yes

no

no

Rhode Island

no

no

no

South Carolina

yes

yes

No

South Dakota

yes

yes

no

Tennessee

yes

yes

no

Texas

yes

no

no

Utah

yes

yes

yes

Vermont

yes

yes

no

Virginia

yes

no

no

Washington

yes

yes

no

West Virginia

yes

yes

no

Wisconsin

yes

yes

no

Wyoming

yes

yes

yes

Bold text indicates a state with all three exceptions.

Italic text indicates a state with none of the three exceptions.

When one of the exceptions can be proven, wrongful discharge accusations may occur. The United States is one of the few major industrial powers that utilize an employment-at-will philosophy. Most countries, including France and the UK, require employers to show just cause for termination of a person’s employment. [1] The advantage of employment at will allows for freedom of employment; the possibility of wrongful discharge tells us that we must be prepared to defend the termination of an employee, as to not be charged with a wrongful discharge case.

Employees also have job protection if they engage in whistleblowing.Whistleblowing refers to an employee’s telling the public about ethical or legal violations of his or her organization. This protection was granted in 1989 and extended through the Sarbanes-Oxley Act of 2002. Many organizations create whistleblowing policies and a mechanism to report illegal or unethical practices within the organization. [2]

Another consideration for employee job protection is that of an implied contract. It is in the best interest of HR professionals and managers alike to avoid implying an employee has a contract with the organization. In fact, many organizations develop employment-at-will policies and ask their employees to sign these policies as a disclaimer for the organization.

A constructive discharge means the employee resigned, but only because the work conditions were so intolerable that he or she had no choice. For example, if James is being sexually harassed at work, and it is so bad he quits, he would need to prove not only the sexual harassment but that it was so bad it required him to quit. This type of situation is important to note; should James’s case go to court and sexual harassment and constructive discharge are found, James may be entitled to back pay and other compensation.

The Worker Adjustment and Retraining Notification Act (WARN) requires organizations with more than one hundred employees to give employees and their communities at least sixty days’ notice of closure or layoff affecting fifty or more full-time employees. This law does not apply in the case of unforeseeable business circumstances. If an employer violates this law, it can be subject to back pay for employees. [3] This does not include workers who have been with the organization for less than six months, however.

Retaliatory discharge means punishment of an employee for engaging in a protected activity, such as filing a discrimination charge or opposing illegal employer practices. For example, it might include poor treatment of an employee because he or she filed a workers’ compensation claim. Employees should not be harassed or mistreated should they file a claim against the organization.

Privacy Rights

Technology makes it possible to more easily monitor aspects of employees’ jobs, although a policy on this subject should be considered before implementing it. In regard to privacy, a question exists whether an employer should be allowed to monitor an employee’s online activities. This may include work e-mail, websites visited using company property, and also personal activity online.

Digital Footprints, Inc. is a company that specializes in tracking the digital movements of employees and can provide reports to the organization by tracking these footprints. This type of technology might look for patterns, word usage, and other communication patterns between individuals. This monitoring can be useful in determining violations of workplace policies, such as sexual harassment. This type of software and management can be expensive, so before launching it, it’s imperative to address its value in the workplace.

Another privacy concern can include monitoring of employee postings on external websites. Companies such as Social Sentry, under contract, monitor employee postings on sites such as Facebook, Twitter, LinkedIn, and YouTube. [4] Lawyers warn, however, that this type of monitoring should only be done if the employee has consented. [5] A monitoring company isn’t always needed to monitor employees’ movements on social networking. And sometimes employees don’t even have to tweet something negative about their own company to lose their job. A case in point is when Chadd Scott, who does Atlanta sports updates for 680/The Fan, was fired for tweeting about Delta Airlines. In his tweet, he complained about a Delta delay and said they did not have enough de-icing fluid. Within a few hours, he was fired from his job, because Delta was a sponsor of 680/The Fan. [6]

The US Patriot Act also includes caveats to privacy when investigating possible terrorist activity. The Patriot Act requires organizations to provide private employee information when requested. Overall, it is a good idea to have a clear company policy and perhaps even a signed waiver from employees stating they understand their activities may be monitored and information shared with the US government under the Patriot Act.

Depending on the state in which you live, employees may be given to see their personnel files and the right to see and correct any incorrect information within their files. Medical or disability information should be kept separate from the employee’s work file, per the Americans with Disabilities Act. In addition, the Health Insurance Portability and Accountability Act (HIPAA) mandates that health information should be private, and therefore it is good practice to keep health information in a separate file as well.

Finally, drug testing and the right to privacy is a delicate balancing act. Organizations that implement drug testing often do so for insurance or safety reasons. Because of theDrug-Free Workplace Act of 1988, some federal contractors and all federal grantees must agree they will provide a drug-free workplace, as a condition of obtaining the contract. The ADA does not view testing for illegal drug use as a medical examination (making them legal), and people using illegal drugs are not protected under the ADA; [7] however, people covered under ADA laws are allowed to take medications directly related to their disability. In a recent case, Bates v. Dura Automotive Systems, an auto parts manufacturer had a high accident rate and decided to implement drug testing to increase safety. Several prescription drugs were banned because they were known to cause impairment. The plaintiffs in the case had been dismissed from their jobs because of prescription drug use, and they sued, claiming the drug-testing program violated ADA laws. [8] However, the Sixth Circuit Court reversed the case because the plaintiffs were not protected under ADA laws (they did not have a documented disability).

In organizations where heavy machinery is operated, a monthly drug test may be a job requirement. In fact, under the Omnibus Transportation Employee Testing Act of 1991, employers are legally required to test for drugs in transportation-related businesses such as airlines, railroads, trucking, and public

transportation, such as bus systems. Medical marijuana is a relatively new issue that is still being addressed in states that allow its use. For example, if the company requires a drug test and the employee shows positive for marijuana use, does asking the employee to prove it is being used for medical purposes

violate HIPAA privacy laws? This issue is certainly one to watch over the coming years.

Labor Unions

A union is an organization of employees formed to bargain with an employer. We discuss labor unions in greater detail in Chapter 11 “Working with Labor Unions”. It is important to mention unions here, since labor contracts often guide the process for layoffs and discipline. Labor unions have been a part of the US workplace landscape since the late 1920s, but the Wagner Act of 1935 significantly impacted labor and management relations by addressing several unfair labor practices. The National Labor Relations Board is responsible for administering and enforcing the provisions outlined in the Wagner Act. The act made acts such as interfering with the formation of unions and discriminating on the basis of union membership illegal for employers. By the 1940s, 9 million people were members of a union, which spurred the passage of the Taft-Hartley Act. This act set a new set of standards for fair practices by the unions, within a unionized environment.

The purpose of a union is to give collective bargaining power to a group of individuals. For example, instead of one person negotiating salary, a union gives people the power to bargain as a group, creating a shift from the traditional power model. Issues to negotiate can include pay, health benefits, working hours, and other aspects relating to a job. People often decide to form a union if they perceive the organization or management of the organization is treating them unfairly. Some people also believe that belonging to a union means higher wages and better benefits.

Many employers feel it is not in the best interest of the organization to unionize, so they will engage in strategies to prevent unionization. This is discussed further in Chapter 11 “Working with Labor Unions”. However, the Taft-Hartley Act says that employers can express their views about unions but may not threaten employees with loss of job or other benefits if they unionize. Some of the talking points an organization might express about unions include the following:

1. Less ability to deal more informally with the organization

1. Possibility of strikes

1. Payment of union dues by employees

1. Emphasis on what positive aspects the employer has provided

If employees still unionize, managers and HR professionals alike will engage in the bargaining process. The collective bargaining process is the process of negotiating an agreement between management and employees. This process ultimately defines the contract terms for employees. In negotiating with the union, being prepared is important. Gathering data of what worked with the old contract and what didn’t can be a good starting point. Understanding the union’s likely requests and preparing a counteraction to these requests and possible compromises should be done before even sitting down to the bargaining table. One of the better strategies for negotiating a contract is called interest-based bargaining. In this type of bargaining, mutual interests are brought up and discussed, rather than each party coming to the table with a list of demands. This can create a win-win situation for both parties.

Once an agreement has been decided, the union members vote whether to accept the new contract. If the contract is accepted, the next task is to look at how to administer the agreement.

First, the HR professional must know the contract well to administer it well. For example, if higher pay is successfully negotiated, obviously it would be the job of HR to implement this new pay scale. The HR professional may need to develop new sets of policies and procedures when a new agreement is in place. One such procedure HR may have to work with occasionally is the grievance process. As we will discuss in Chapter 11 “Working with Labor Unions”, the grievance process is a formal way by which employees can submit a complaint regarding something that is not administered correctly in the contract. Usually, the grievance process will involve discussions with direct supervisors first, discussions with the union representative next, and then the filing of a formal, written grievance complaint. Management is then required to provide a written response to the grievance, and depending on the collective bargaining agreement, a formalized process is stated on how the appeals process would work, should the grievance not be solved by the management response. One such example is the dismissal of members of the National Air Traffic Controller Association (union). In 2011, of the 140 proposed dismissals of air traffic controllers, 58 had penalties rescinded, reduced, or deferred. [9] This is because of due-process protections used to prevent mass firings when a new administration comes to power. Federal workers, including controllers, can challenge disciplinary action penalties through a government panel called the Merit Systems Protection Board. The process is described in union contracts and mentions involvement of an arbitrator, if necessary.

[1] USLegal, “Employment at Will,” accessed March 15, 2011,
http://employment.uslegal.com/employment-at-will/
.

[2] Lilanthi Ravishankar, “Encouraging Internal Whistle Blowing,” Santa Clara University, accessed March 15, 2011,
http://www.scu.edu/ethics/publications/submitted/whistleblowing.html
.

[3] US Department of Labor, “WARN Fact Sheet,” accessed March 15, 2011,
http://www.doleta.gov/programs/factsht/warn.htm
.

[4] Teneros Corporation, “Social Sentry Lets Employers Track Their Workers across the Internet,” accessed March 17, 2011,
http://www.readwriteweb.com/archives/social_sentry_track_employees_across_the_web.php
.

[5] People Management, “Employers Should Have Monitoring Policy for Social Networks,” accessed March 17, 2011,
http://www.peoplemanagement.co.uk/pm/articles/2011/02/employers-should-have-monitoring-policy-for-social-networks.htm
.

[6] Rodney Ho, “Chadd Scott Said He Was Fired for Tweets about Delta,” Access Atlanta (blog), accessed March 16, 2011, 
http://blogs.ajc.com/radio-tv-talk/2011/03/15/680the-fans-chadd-scott-said-he-was-fired-for-tweets-about-delta-airlines/?cxntlid=thbz_hm
.

[7] US Equal Employment Opportunity Commission, “The ADA, Your Responsibilities as an Employer,” accessed August 1, 2011, 
http://www.eeoc.gov/facts/ada17.html
.

[8] Jackson lewis, “Employees’ ADA Claims on Prescription-Drug-Use Dismissals Rejected by Federal Court,” December 1, 2010, accessed August 1, 2011,
http://www.jacksonlewis.com/resources.php?NewsID=3478
.

[9] John Hughes, “You’re Fired Doesn’t Mean Fired to Four of 10 Air Traffic Controllers,”Bloomberg News, July 24, 2011, accessed August 1, 2011,
http://www.bloomberg.com/news/2011-07-25/-you-re-fired-doesn-t-mean-fired-to-four-of-10-air-controllers.html
.

9.3  Case and Summary

Chapter Summary

· Performance issues in the workplace are common. Examples of performance issues include constant tardiness, too much time at work handling personal issues, mishandling of proprietary information, family issues, drug and alcohol problems, nonperformance, theft, and conflicts in the workplace.

· Employees choose to leave organizations for internal and external reasons. Some of these may include a mismatch of career goals, conflict, too high expectations, time-management issues, and a mismatch between job and skills.

· HR professionals should develop a set of policies that deal with performance issues in the workplace. The advantage to having such policies is that they can eliminate wrongful termination legal action.

· A mandated issue is usually one that deals with safety or legal issues that go beyond the workplace. An infringement of this type of issue requires immediate attention.

· A single incident may include a misstep of the employee, and the employee should immediately be spoken with about it, to ensure it doesn’t happen again.

· A behavior pattern occurs when an employee consistently exhibits a performance issue. This type of issue should be discussed with the employee and actions taken, such as providing more training, to ensure it does not continue. A persistent pattern occurs when an employee consistently exhibits a performance issue and does not improve, despite HR’s talking with him or her.

· At some point during the persistent pattern, disciplinary action will likely need to be taken. It is important to develop consistent procedures on how to record and handle disciplinary issues.

· Employee separation occurs in one of three ways. First, the employee resignsfrom the organization. Second, the employee is terminated for performance issues, and third, an employee absconds. Absconds means the employee abandons his or her job without submitting a formal resignation.

· In some cases, a severance package may be offered to the employee upon his or her departure from the organization.

· Rightsizing is a term used when an organization must cut costs through layoffs of employees. Development of criteria for layoffs, communication, and severance package discussion are all parts of this process.

· Employment at will means that an employer can separate from an employee without cause, and vice versa.

· Even though we have employment at will, a wrongful discharge can occur when there are violations of public policy, an employee has a contract with an employer, or an employer does something outside the boundaries of good faith.

· Whistleblowing is when an employee notifies organizations of illegal or unethical activity. Whistleblowers are protected from discharge due to their activity.

· A constructive discharge means the conditions are so poor that the employee has no choice but to leave the organization.

· The Worker Adjustment and Retraining Notification Act (WARN) is a law that requires companies of one hundred or more employees to notify employees and the community if fifty or more employees are to be laid off.

· A retaliatory discharge is one that occurs if an employer fires or lays off an employee because of a charge the employee filed. For example, if an employee files a workers’ compensation claim and then is let go, this could be a retaliatory discharge.

· The privacy of employees is an issue that HR must address. It is prudent to develop policies surrounding what type of monitoring may occur within an organization. For example, some organizations monitor e-mail, computer usage, and even postings on social network sites.

· Drug testing is also a privacy issue, although in many industries requiring safe working conditions, drug testing can be necessary to ensure the safety of all employees.

· A union is a group of workers who decide to work together toward a collective bargaining agreement. This agreement allows workers to negotiate as one, rather than as individuals.

· The Wagner Act, passed in 1935, addresses many issues related to workers’ unionization.

· The process of collective bargaining means to negotiate a contract between management and workers. HR is generally part of this process.

· Interest based bargaining occurs when mutual interests are discussed, rather than starting with a list of demands.

· Once an agreement is reached, HR is generally responsible for knowing the agreement and implementing any changes that should occur as a result of the agreement. One such example is understanding the grievance process.

Chapter Case

Who Goes, Who Stays?

The consulting firm you have worked for over the last year is having some financial troubles. The large contracts it once had are slowly going away, and as your company struggles to make payroll, it is clear that layoffs must occur. The sales staff has not been meeting the sales goals set for them, resulting in incorrect budgets.

It has been decided that at least three people in the sales department should be laid off. You create a spreadsheet with pertinent sales employee data:

Name

Title

Years with the company

Last overall rating on performance evaluation (1–5 scale, 5 being highest)

Last year’s sales goal met?

Deb Waters

Sales Manager

1

3

N/A as her position is managerial

Jeff Spirits

Account Manager

5

3

Yes, 1% over

Orlando Chang

Account Manager

3

4

Yes, 10% over goal

Jake Toolmeyer

Account Manager

2

4

No, 2% under goal

Audrey Barnes

Account Manager

5

5

Yes, 15% over goal

Kelly Andrews

Account Manager

1

2

No, 20% under goal

Amir Saied

Account Manager

8

5

Yes, 5% over goal

Winfrey Jones

Account Manager

4

2

No, 10% under goal

1. Making reasonable assumptions, develop criteria for the layoffs in the sales department.

1. Develop a plan as to how layoffs will be communicated with the individual as well as within the company.

1. Discuss strategies to motivate those sales employees who stay with the organization.



Chapter 8: Training and Development

Training: Not Like It Used to Be

Imagine this: You have a pile of work on your desk and as you get started, your Outlook calendar reminds you about a sexual harassment training in ten minutes. You groan to yourself, not looking forward to sitting in a conference room and seeing PowerPoint slide after PowerPoint slide. As you walk to the conference room, you run into a colleague who is taking the same training that day and commiserate on how boring this training is probably going to be. When you step into the conference room, however, you see something very different.

Computers are set up at every chair with a video ready to start on the computer. The HR manager greets you and asks you to take a seat. When the training starts, you are introduced (via video) on each of the computers to a series of sexual harassment example scenarios. The videos stop, and there is a recorded discussion about what the videos portrayed. Your colleagues in the Washington, DC, office are able to see the same training and, via video conferencing, are able to participate in the discussions. It is highly interactive and interesting. Once the training is finished, there are assignments to be completed via specific channels that have been set up for this training. You communicate about the material and complete the assignments in teams with members of your Washington, DC, office. If you want to review the material, you simply click on a review and the entire session or parts of the training can be reviewed. In fact, on your bus ride home from work, you access the channels on your iPhone, chatting with a colleague in your other office about the sexual harassment training assignment you have due next week. You receive an e-mail from your HR manager asking you to complete a training assessment located in a specific channel in the software, and you happily comply because you have an entirely new perspective on what training can be.

This is the training of today. No longer do people sit in hot, stuffy rooms to get training on boring content. Training has become highly interactive, technical, and interesting owing to the amount of multimedia we can use. Sun Microsystems, for example, has developed just the kind of software mentioned above, called Social Learning eXchange (SLX). This type of training allows people across the country to connect with each other, saving both money and time. In fact, Sun Microsystems received a Best Practices Award from Training Magazine for this innovative software in 2010. [1] The SLX software allows training to be delivered in an interactive manner in multiple locations. The implications of this type of software are numerous. For example, SLX is used at Sun Professional Services division by delivering instructional videos on tools and software, which employees can view at their own pace. [2] There is also a channel in the software that allows the vice president to communicate with employees on a regular basis to improve employee communications. In another example, this software can be used to quickly communicate product changes to the sales team, who then begin the process of positioning their products to consumers. Training videos, including breakout sessions, can save companies money by not requiring travel to a session. These can even be accessed using application technology on cell phones. Employees can obtain the training they need in the comfort of their own city, office, or home. Someone is sick the day the training is delivered? No problem; they can review the recorded training sessions.

An estimated $1,400 per employee is spent on training annually, with training costs consuming 2.72 percent of the total payroll budget [3] for the average company. With such a large amount of funds at stake, HR managers must develop the right training programs to meet the needs; otherwise, these funds are virtually wasted. This chapter is all about how to assess, develop, implement, and measure an effective training program.

[1] “2010 Top 25 Winners,” Training Magazine, accessed July 25, 2010,http://www.trainingmag.com/article/2010-top-125-winners.

[2] “Video Community for the Enterprise,” Social Learning eXchange, accessed July 25, 2010,http://www.slideshare.net/sociallearningexchange/social-learning-exchange-slx?from=share_email.

[3] See the American Society for Training and Development Trend Review, ASTD Website, accessed July 25, 2010, 
http://www.astd.org/
.

8.1  Steps to Take in Training an Employee

Learning Objective

1. Explain the four steps involved when training an employee.

Any effective company has training in place to make sure employees can perform his or her job. During the recruitment and selection process, the right person should be hired to begin with. But even the right person may need training in how your company does things. Lack of training can result in lost productivity, lost customers, and poor relationships between employees and managers. It can also result in dissatisfaction, which means retention problems and high turnover. All these end up being direct costs to the organization. In fact, a study performed by the American Society for Training and Development (ASTD) found that 41 percent of employees at companies with poor training planned to leave within the year, but in companies with excellent training, only 12 percent planned to leave. [1] To reduce some costs associated with not training or undertraining, development of training programs can help with some of the risk. This is what this chapter will address.

For effective employee training, there are four steps that generally occur. First, the new employee goes through an orientation, and then he or she will receive in-house training on job-specific areas. Next, the employee should be assigned a mentor, and then, as comfort with the job duties grows, he or she may engage in external training.Employee training and development is the process of helping employees develop their personal and organization skills, knowledge, and abilities.

Employee Orientation

The first step in training is an employee orientation. Employee orientation is the process used for welcoming a new employee into the organization. The importance of employee orientation is two-fold. First, the goal is for employees to gain an understanding of the company policies and learn how their specific job fits into the big picture. Employee orientation usually involves filling out employee paperwork such as I-9 and 401(k) program forms.

The goals of an orientation are as follows:

1. To reduce start-up costs. If an orientation is done right, it can help get the employee up to speed on various policies and procedures, so the employee can start working right away. It can also be a way to ensure all hiring paperwork is filled out correctly, so the employee is paid on time.

1. To reduce anxiety. Starting a new job can be stressful. One goal of an orientation is to reduce the stress and anxiety people feel when going into an unknown situation.

1. To reduce employee turnover. Employee turnover tends to be higher when employees don’t feel valued or are not given the tools to perform. An employee orientation can show that the organization values the employee and provides tools necessary for a successful entry.

1. To save time for the supervisor and coworkers. A well-done orientation makes for a better prepared employee, which means less time having to teach the employee.

1. To set expectations and attitudes. If employees know from the start what the expectations are, they tend to perform better. Likewise, if employees learn the values and attitudes of the organization from the beginning, there is a higher chance of a successful tenure at the company.

Some companies use employee orientation as a way to introduce employees not only to the company policies and procedures but also to the staff. For an example of an orientation schedule for the day, see Figure 8.1.

Figure 8.1

Some companies have very specific orientations, with a variety of people providing information to the new hires. This can create a welcoming environment, besides giving the employee the information they need. This is an example of one such orientation.

Source: Sample schedule courtesy of Louis Stokes Cleveland VA Medical Center,

http://www.cleveland.va.gov/docs/NEOSchedule.pdf

 (accessed September 2, 2011).

In-House Training

In-house training programs are learning opportunities developed by the organization in which they are used. This is usually the second step in the training process and often is ongoing. In-house training programs can be training related to a specific job, such as how to use a particular kind of software. In a manufacturing setting, in-house training might include an employee learning how to use a particular kind of machinery.

Many companies provide in-house training on various HR topics as well, meaning it doesn’t always have to relate to a specific job. Some examples of in-house training include the following:

· Ethics training

· Sexual harassment training

· Multicultural training

· Communication training

· Management training

· Customer service training

· Operation of special equipment

· Training to do the job itself

· Basic skills training

As you can tell by the list of topics, HR might sometimes create and deliver this training, but often a supervisor or manager delivers the training.

Mentoring

After the employee has completed orientation and in-house training, companies see the value in offering mentoring opportunities as the next step in training. Sometimes a mentor may be assigned during in-house training. A mentor is a trusted, experienced advisor who has direct investment in the development of an employee. A mentor may be a supervisor, but often a mentor is a colleague who has the experience and personality to help guide someone through processes. While mentoring may occur informally, a mentorship program can help ensure the new employee not only feels welcomed but is paired up with someone who already knows the ropes and can help guide the new employee through any on-the-job challenges.

To work effectively, a mentoring program should become part of the company culture; in other words, new mentors should receive in-house training to be a mentor. Mentors are selected based on experience, willingness, and personality. IBM’s Integrated Supply Chain Division, for example, has successfully implemented a mentorship program. The company’s division boasts 19,000 employees and half of IBM’s revenues, making management of a mentorship program challenging. However, potential mentors are trained and put into a database where new employees can search attributes and strengths of mentors and choose the person who closely meets their needs. Then the mentor and mentee work together in development of the new employee. “We view this as a best practice,” says Patricia Lewis-Burton, vice president of human resources, Integrated Supply Chain Division. “We view it as something that is not left to human resources alone. In fact, the program is imbedded in the way our group does business.”[2]

Some companies use short-term mentorship programs because they find employees training other employees to be valuable for all involved. Starbucks, for example, utilizes this approach. When it opens a new store in a new market, a team of experienced store managers and baristas are sent from existing stores to the new stores to lead the store-opening efforts, including training of new employees. [3]

External Training

External training includes any type of training that is not performed in-house. This is usually the last step in training, and it can be ongoing. It can include sending an employee to a seminar to help further develop leadership skills or helping pay tuition for an employee who wants to take a marketing class. To be a Ford automotive technician, for example, you must attend the Ford ASSET Program, which is a partnership between Ford Motor Company, Ford dealers, and select technical schools. [4]

[1] Leigh Branham, The 7 Hidden Reasons Why Employees Leave (New York: American Management Association, 2005), 112–5.

[2] Blyde Witt, “Serious Leadership: IBM Builds a Successful Mentoring Program,” Material Handling Management, December 1, 2005, accessed July 25, 2010,http://mhmonline.com/workforce-solutions/mhm_imp_4483/.

[3] Arthur Thompson, “Starbucks Corporation,” July 24, 2011, accessed July 29, 2011,http://www.mhhe.com/business/management/thompson/11e/case/starbucks-2.html.

[4] “Automotive Technology/Ford ASSET Course,” Sheridan Technical Center, accessed July 29, 2011, 
http://www.sheridantechnical.com/Default.aspx?tabid=692
.

8.2  Types of Training

Learning Objective

1. Be able to explain and give examples of the types of training that can be offered within an organization.

There are a number of different types of training we can use to engage an employee. These types are usually used in all steps in a training process (orientation, in-house, mentorship, and external training). The training utilized depends on the amount of resources available for training, the type of company, and the priority the company places on training. Companies such as The Cheesecake Factory, a family restaurant, make training a high priority. The company spends an average of $2,000 per hourly employee. This includes everyone from the dishwasher and managers to the servers. For The Cheesecake Factory, this expenditure has paid off. They measure the effectiveness of its training by looking at turnover, which is 15 percent below the industry average. [1] Servers make up 40 percent of the workforce and spend two weeks training to obtain certification. Thirty days later, they receive follow-up classes, and when the menu changes, they receive additional training. [2] Let’s take a look at some of the training we can offer our employees.

As you will see from the types of training below, no one type would be enough for the jobs we do. Most HR managers use a variety of these types of training to develop a holistic employee.

Technical or Technology Training

Depending on the type of job, technical training will be required. Technical trainingis a type of training meant to teach the new employee the technological aspects of the job. In a retail environment, technical training might include teaching someone how to use the computer system to ring up customers. In a sales position, it might include showing someone how to use the customer relationship management (CRM) system to find new prospects. In a consulting business, technical training might be used so the consultant knows how to use the system to input the number of hours that should be charged to a client. In a restaurant, the server needs to be trained on how to use the system to process orders. Let’s assume your company has decided to switch to the newest version of Microsoft Office. This might require some technical training of the entire company to ensure everyone uses the technology effectively. Technical training is often performed in-house, but it can also be administrered externally.

Quality Training

In a production-focused business, quality training is extremely important.Quality training refers to familiarizing employees with the means of preventing, detecting, and eliminating nonquality items, usually in an organization that produces a product. In a world where quality can set your business apart from competitors, this type of training provides employees with the knowledge to recognize products that are not up to quality standards and teaches them what to do in this scenario. Numerous organizations, such as the International Organization for Standardization (ISO), measure quality based on a number of metrics. This organization provides the stamp of quality approval for companies producing tangible products. ISO has developed quality standards for almost every field imaginable, not only considering product quality but also certifying companies in environmental management quality. ISO9000 is the set of standards for quality management, while ISO14000 is the set of standards for environmental management. ISO has developed 18,000 standards over the last 60 years. [3] With the increase in globalization, these international quality standards are more important than ever for business development. Some companies, like 3M, [4]choose to offer ISO training as external online training, employing companies such as QAI to deliver the training both online and in classrooms to employees.

Training employees on quality standards, including ISO standards, can give them a competitive advantage. It can result in cost savings in production as well as provide an edge in marketing of the quality-controlled products. Some quality training can happen in-house, but organizations such as ISO also perform external training.

Skills Training

Skills training, the third type of training, includes proficiencies needed to actually perform the job. For example, an administrative assistant might be trained in how to answer the phone, while a salesperson at Best Buy might be trained in assessment of customer needs and on how to offer the customer information to make a buying decision. Think of skills training as the things you actually need to know to perform your job. A cashier needs to know not only the technology to ring someone up but what to do if something is priced wrong. Most of the time, skills training is given in-house and can include the use of a mentor. An example of a type of skills training is from AT&T and Apple, [5] who in summer 2011 asked their managers to accelerate retail employee training on the iPhone 5, which was released to market in the fall.

Soft Skills Training

Our fourth type of training is called soft skills training. Soft skills refer to personality traits, social graces, communication, and personal habits that are used to characterize relationships with other people. Soft skills might include how to answer the phone or how to be friendly and welcoming to customers. It could include sexual harassment training and ethics training. In some jobs, necessary soft skills might include how to motivate others, maintain small talk, and establish rapport.

In a retail or restaurant environment, soft skills are used in every interaction with customers and are a key component of the customer experience. In fact, according to aComputerworld magazine survey, executives say there is an increasing need for people who have not only the skills and technical skills to do a job but also the necessary soft skills, such as strong listening and communication abilities. [6] Many problems in organizations are due to a lack of soft skills, or interpersonal skills, not by problems with the business itself. As a result, HR and managers should work together to strengthen these employee skills. Soft skills training can be administered either in-house or externally.

Professional Training and Legal Training

In some jobs, professional training must be done on an ongoing basis.Professional training is a type of training required to be up to date in one’s own professional field. For example, tax laws change often, and as a result, an accountant for H&R Block must receive yearly professional training on new tax codes. [7] Lawyers need professional training as laws change. A personal fitness trainer will undergo yearly certifications to stay up to date in new fitness and nutrition information.

Some organizations have paid a high cost for not properly training their employees on the laws relating to their industry. In 2011, Massachusetts General Hospital paid over $1 million in fines related to privacy policies that were not followed. [8] As a result, the organization has agreed to develop training for workers on medical privacy. The fines could have been prevented if the organization had provided the proper training to begin with. Other types of legal training might include sexual harassment law training and discrimination law training.

Team Training

Do you know the exercise in which a person is asked to close his or her eyes and fall back, and then supposedly the team members will catch that person? As a team-building exercise (and a scary one at that), this is an example of team training. The goal of team training is to develop cohesiveness among team members, allowing them to get to know each other and facilitate relationship building. We can define team training as a process that empowers teams to improve decision making, problem solving, and team-development skills to achieve business results. Often this type of training can occur after an organization has been restructured and new people are working together or perhaps after a merger or acquisition. Some reasons for team training include the following:

· Improving communication

· Making the workplace more enjoyable

· Motivating a team

· Getting to know each other

· Getting everyone “onto the same page,” including goal setting

· Teaching the team self-regulation strategies

· Helping participants to learn more about themselves (strengths and weaknesses)

· Identifying and utilizing the strengths of team members

· Improving team productivity

· Practicing effective collaboration with team members

Team training can be administered either in-house or externally. Ironically, through the use of technology, team training no longer requires people to even be in the same room.

Managerial Training

After someone has spent time with an organization, they might be identified as a candidate for promotion. When this occurs, managerial training would occur. Topics might include those from our soft skills section, such as how to motivate and delegate, while others may be technical in nature. For example, if management uses a particular computer system for scheduling, the manager candidate might be technically trained. Some managerial training might be performed in-house while other training, such as leadership skills, might be performed externally.

For example, Mastek, a global IT solutions and services provider, provides a program called “One Skill a Month,” which enables managers to learn skills such as delegation, coaching, and giving feedback. The average number of total training days at Mastek is 7.8 per employee [9] and includes managerial topics and soft skills topics such as e-mail etiquette. The goal of its training programs is to increase productivity, one of the organization’s core values.

Safety Training

Safety training is a type of training that occurs to ensure employees are protected from injuries caused by work-related accidents. Safety training is especially important for organizations that use chemicals or other types of hazardous materials in their production. Safety training can also include evacuation plans, fire drills, and workplace violence procedures. Safety training can also include the following:

· Eye safety

· First aid

· Food service safety

· Hearing protection

· Asbestos

· Construction safety

· Hazmat safety

The Occupational Safety and Health Administration, or OSHA, is the main federal agency charged with enforcement of safety and health regulation in the United States. OSHA provides external training to companies on OSHA standards. Sometimes in-house training will also cover safety training.

[1] Gina Ruiz, “Cheesecake Factory Cooks Up a Rigorous Employee Training Program,”Workforce Management, April 24, 2006, accessed July 25, 2010,http://www.workforce.com/section/11/feature/24/35/18/.

[2] Gina Ruiz, “Cheesecake Factory Cooks Up a Rigorous Employee Training Program,”Workforce Management, April 24, 2006, accessed July 25, 2010,http://www.workforce.com/section/11/feature/24/35/18/.

[3] “The ISO Story,” International Organization for Standards, accessed July 26, 2010,http://www.iso.org/iso/about/the_iso_story/iso_story_early_years.htm.

[4] QAI website, accessed July 30, 2011, 
http://www.trainingforquality.com/Content.aspx?id=26
.

[5] Lance Whitney, “Apple, AT&T Reportedly Prepping Staff for iPhone 5 Launch,” CNET, July 26, 2011, accessed July 29, 2011, 
http://news.cnet.com/8301-13579_3-20083435-37/apple-at-t-reportedly-prepping-staff-for-iphone-5-launch/
.

[6] Thomas Hoffman, “Nine Nontechie Skills That Hiring Managers Wish You Had,”Computerworld, November 12, 2007, accessed July 26, 2010,http://www.computerworld.com/s/article/305966/Are_You_the_Complete_Package_.

[7] Jeannine Silkey, “Tax Preparer Certifications,” Suite 101, January 28, 2010, accessed July 26, 2010, 
http://personal-tax-planning.suite101.com/article.cfm/tax-preparer-certifications
.

[8] Julie Donnelly, “Mass. General to Pay $1M to Settle Privacy Claims,” Boston Business Journal, February 24, 1011, accessed February 26, 2011,http://www.bizjournals.com/boston/news/2011/02/24/mass-general-to-pay-1m-to-settle.html.

[9] Mastek website, accessed July 30, 2011, 
http://www.mastek.com/careers/learning-development.html
.

8.3  Training Delivery Methods

Learning Objective

1. Explain the types of training delivery methods.

Depending on the type of training occurring, you may choose one delivery method over another. This section discusses the types of delivery methods we can use to execute the types of training. Keep in mind, however, that most good training programs will use a variety of delivery methods.

On-the-Job Coaching Training Delivery

On-the-job coaching is one way to facilitate employee skills training. On-the-job coaching refers to an approved person training an employee on the skills necessary to complete tasks. A manager or someone with experience shows the employee how to perform the actual job. The selection of an on-the-job coach can be done in a variety of ways, but usually the coach is selected based on personality, skills, and knowledge. This type of skills training is normally facilitated in-house. The disadvantage of this training revolves around the person delivering the training. If he or she is not a good communicator, the training may not work. Likewise, if this person has “other things to do,” he or she may not spend as much time required to train the person and provide guidance. In this situation, training can frustrate the new employee and may result in turnover.

Mentoring and Coaching Training Delivery

Mentoring is also a type of training delivery. A mentor is a trusted, experienced advisor who has direct investment in the development of an employee. Mentoring is a process by which an employee can be trained and developed by an experienced person. Normally, mentoring is used as a continuing method to train and develop an employee. One disadvantage of this type of training is possible communication style and personality conflict. It can also create overdependence in the mentee or micromanagement by the mentor. This is more different than on-the-job coaching, which tends to be short term and focuses on the skills needed to perform a particular job.

Brown Bag Lunch Training Delivery

Brown bag lunches are a training delivery method meant to create an informal atmosphere. As the name suggests,brown bag lunch training is one in which the training occurs during lunchtime, employees bring their food, and someone presents training information to them. The trainer could be HR or management or even another employee showing a new technical skill. Brown bag lunches can also be an effective way to perform team training, as it brings people together in a more relaxed atmosphere. Some companies offer brown bag lunch training for personal development as well. For example, HR might want to bring in a specialist on 401(k) plans, or perhaps an employee provides a slide presentation on a trip he or she has taken, discussing the things learned on the trip. One disadvantage to this type of training can be low attendance and garnering enough interest from employees who may not want to “work” during lunch breaks. There can also be inconsistency in messages if training is delivered and not everyone is present to hear the message.

Web-Based Training Delivery

Web-based training delivery has a number of names. It could be called e-learning or Internet-based, computer-based, or technology-based learning. No matter what it is called, any web-based training involves the use of technology to facilitate training. There are two types of web-based learning. First, synchronous learning uses instructor-led facilitation. Asynchronous learning is self-directed, and there is no instructor facilitating the course. There are several advantages to web-based training. First, it is available on demand, does not require travel, and can be cost efficient. However, disadvantages might include an impersonal aspect to the training and limited bandwidth or technology capabilities. [1]

Web-based training delivery lends itself well to certain training topics. For example, this might be an appropriate delivery method for safety training, technical training, quality training, and professional training. However, for some training, such as soft-skills training, job skills training, managerial training, and team training, another more personalized method may be better for delivery. However, there are many different platforms that lend themselves to an interactive approach to training, such as Sun Microsystems’ Social Learning eXchange (SLX) training system, which has real-time video and recording capabilities. Hundreds of platforms are available to facilitate web-based training. DigitalChalk, for example, allows for both synchronous and asynchronous training and allows the instructor or human relations manager to track training progress and completion. [2] Some companies use SharePoint, an intranet platform, to store training videos and materials. [3] Blackboard and Angel (used primarily by higher education institutions) allows human resource managers to create training modules, which can be moderated by a facilitator or managed in a self-paced format. In any of the platforms available, media such as video and podcasts can be included within the training.

Considerations for selecting a web-based platform include the following:

· Is there a one-time fee or a per-user fee?

· Do the majority of your employees use a Mac or a PC, and how does the platform work with both systems?

· Is there enough bandwidth in your organization to support this type of platform?

· Is the platform flexible enough to meet your training needs?

· Does the software allow for collaboration and multimedia?

· Is there training for the trainer in adoption of this system? Is technical support offered?

Job Shadowing Training Delivery

Job shadowing is a training delivery method that places an employee who already has the skills with another employee who wants to develop those skills. Apprenticeships use job shadowing as one type of training method. For example, an apprentice electrician would shadow and watch the journeyman electrician perform the skills and tasks and learn by watching. Eventually, the apprentice would be able to learn the skills to do the job alone. The downside to this type of training is the possibility that the person job shadowing may learn “bad habits” or shortcuts to performing tasks that may not be beneficial to the organization.

Fortune 500 Focus

It takes a lot of training for the Walt Disney Company to produce the best Mickey Mouse, Snow White, Aladdin, or Peter Pan. In Orlando at Disneyworld, most of this training takes place at Disney University. Disney University provides training to its 42,000 cast members (this is what Disney calls employees) in areas such as culinary arts, computer applications, and specific job components. Once hired, all cast members go through a two-day Disney training program called Traditions, where they learn the basics of being a good cast member and the history of the company. For all practical purposes, Traditions is a new employee orientation.

Training doesn’t stop at orientation, though. While all positions receive extensive training, one of the most extensive trainings are especially for Disney characters, since their presence at the theme parks is a major part of the customer experience. To become a character cast member, a character performer audition is required. The auditions require dancing and acting, and once hired, the individual is given the job of several characters to play. After a two-week intensive training process on character history, personalities, and ability to sign the names of the characters (for the autograph books sold at the parks for kids), an exam is given. The exam tests competency in character understanding, and passing the exam is required to become hired. [4]

While Disney University trains people for specific positions, it also offers an array of continuing development courses called Disney Development Connection. Disney says in 2010, more than 3,254,596 hours were spent training a variety of employees, [5] from characters to management. The training doesn’t stop at in-house training, either. Disney offers tuition reimbursement up to $700 per credit and pays for 100 percent of books and $100 per course for cost of other materials. In 2010, Disney paid over $8 million in tuition expenses for cast members. [6]

Disney consistently ranks in “America’s Most Admired Companies” by Fortune Magazine, and its excellent training could be one of the many reasons.

Job Swapping Training Delivery

Job swapping is a method for training in which two employees agree to change jobs for a period of time. Of course, with this training delivery method, other training would be necessary to ensure the employee learns the skills needed to perform the skills of the new job. Job swap options can be motivational to employees by providing a change of scenery. It can be great for the organization as well to cross-train employees in different types of jobs. However, the time spent learning can result in unproductive time and lost revenue.

Vestibule Training Delivery

In vestibule training, training is performed near the worksite in conference rooms, lecture rooms, and classrooms. This might be an appropriate method to deliver orientations and some skills-based training. For example, to become a journeyman electrician, an apprentice performs job shadowing, on-the-job training, and vestibule training to learn the law and codes related to electricity installation. During the busy holiday season, Macy’s uses vestibule training to teach new hires how to use the cash register system and provides skills training on how to provide great customer service. [7]

Many organizations use vestibule training for technical training, safety training, professional training, and quality training. It can also be appropriate for managerial training, soft skills training, and team training. As you can tell, this delivery method, like web-based training delivery, is quite versatile. For some jobs or training topics, this may take too much time away from performing the actual “job,” which can result in lost productivity.

International Assignment Training

Since we are working within a global economy, it might be necessary to provide training to employees who are moving overseas or working overseas. Up to 40 percent of international assignments are terminated early because of a lack of international training. [8] Ensuring success overseas is reliant upon the local employee’s learning how to navigate in the new country. The following topics might be included in this type of training:

1. Cultural differences and similarities

1. Insight and daily living in the country

1. Social norms and etiquette

1. Communication training, such as language skills

[1] “Advantages and Disadvantages,” Web Based Training Information Center, accessed July 27, 2010, 
http://www.webbasedtraining.com/primer_advdis.aspx
.

[2] DigitalChalk website, accessed August 12, 2010, 
http://www.digitalchalk.com/
.

[3] Microsoft’s SharePoint website, accessed August 12, 2010,http://sharepoint.microsoft.com/en-us/Pages/default.aspx.

[4] Jim Hill, “Blood, Sweat, and Fur,” Jim Hill Media, May 2005, accessed July 30, 2011,http://jimhillmedia.com/guest_writers1/b/rob_bloom/archive/2005/05/03/1703.aspx.

[5] “Training and Development,” Disney, accessed July 30, 2011,http://corporate.disney.go.com/citizenship2010/disneyworkplaces/overview/traininganddevelopment/.

[6] “Training and Development,” Disney, accessed July 30, 2011,http://corporate.disney.go.com/citizenship2010/disneyworkplaces/overview/traininganddevelopment/.

[7] Macy’s website, accessed July 27, 2010, 
http://www.macysjobs.com/about/
.

[8] Sherry E. Sullivan and Howard Tu, “Preparing Yourself for an International Assignment,” Bnet, accessed September 15, 2011,http://findarticles.com/p/articles/mi_m1038/is_n1_v37/ai_14922926/.

8.4  Designing a Training Program

Learning Objectives

1. Be able to design a training program framework.

1. Understand the uses and applications of a career development program.

The next step in the training process is to create a training framework that will help guide you as you set up a training program. Information on how to use the framework is included in this section.

Training Program Framework Development

When developing your training plan, there are a number of considerations. Training is something that should be planned and developed in advance.

Figure 8.6 Training Program Development Model

The considerations for developing a training program are as follows:

1. Needs assessment and learning objectives. This part of the framework development asks you to consider what kind of training is needed in your organization. Once you have determined the training needed, you can set learning objectives to measure at the end of the training.

1. Consideration of learning styles. Making sure to teach to a variety of learning styles is important to development of training programs.

1. Delivery mode. What is the best way to get your message across? Is web-based training more appropriate, or should mentoring be used? Can vestibule training be used for a portion of the training while job shadowing be used for some of the training, too? Most training programs will include a variety of delivery methods.

1. Budget. How much money do you have to spend on this training?

1. Delivery style. Will the training be self-paced or instructor led? What kinds of discussions and interactivity can be developed in conjunction with this training?

1. Audience. Who will be part of this training? Do you have a mix of roles, such as accounting people and marketing people? What are the job responsibilities of these individuals, and how can you make the training relevant to their individual jobs?

1. Content. What needs to be taught? How will you sequence the information?

1. Timelines. How long will it take to develop the training? Is there a deadline for training to be completed?

1. Communication. How will employees know the training is available to them?

1. Measuring effectiveness of training. How will you know if your training worked? What ways will you use to measure this?

Needs Assessment

The first step in developing a training program is to determine what the organization needs in terms of training. There are three levels of training needs assessment:organizational assessment, occupational (task) assessment, andindividual assessment:

1. Organizational assessment. In this type of needs assessment, we can determine the skills, knowledge, and abilities a company needs to meet its strategic objectives. This type of assessment considers things such as changing demographics and technological trends. Overall, this type of assessment looks at how the organization as a whole can handle its weaknesses while promoting strengths.

1. Occupational (task) assessment. This type of assessment looks at the specific tasks, skills knowledge, and abilities required to do jobs within the organization.

1. Individual assessment. An individual assessment looks at the performance of an individual employee and determines what training should be accomplished for that individual.

We can apply each of these to our training plan. First, to perform an organizational assessment, we can look at future trends and our overall company’s strategic plan to determine training needs. We can also see how jobs and industries are changing, and knowing this, we can better determine the occupational and individual assessments.

Researching training needs can be done through a variety of ways. One option is to use an online tool such as SurveyMonkey to poll employees on what types of training they would like to see offered.

As you review performance evaluations turned in by your managers, you may see a pattern developing showing that employees are not meeting expectations. As a result, this may provide data as to where your training is lacking.

There are also types of training that will likely be required for a job, such as technical training, safety training, quality training, and professional training. Each of these should be viewed as separate training programs, requiring an individual framework for each type of training. For example, an employee orientation framework will look entirely different from an in-house technical training framework.

Training must be tied to job expectations. Any and all training developed should transfer directly to the skills of that particular employee. Reviewing the HR strategic plan and various job analyses may help you see what kind of training should be developed for specific job titles in your organization.

Learning Objectives

After you have determined what type of training should occur, learning objectives for the training should be set. A learning objective is what you want the learner to be able to do, explain, or demonstrate at the end of the training period. Good learning objectives are performance based and clear, and the end result of the learning objective can be observable or measured in some way. Examples of learning objectives might include the following:

1. Be able to explain the company policy on sexual harassment and give examples of sexual harassment.

1. Be able to show the proper way to take a customer’s order.

1. Perform a variety of customer needs analyses using company software.

1. Understand and utilize the new expense-tracking software.

1. Explain the safety procedure in handling chemicals.

1. Be able to explain the types of communication styles and strategies to effectively deal with each style.

1. Demonstrate ethics when handling customer complaints.

1. Be able to effectively delegate to employees.

Once we have set our learning objectives, we can utilize information on learning styles to then determine the best delivery mode for our training.

Learning Styles

Understanding learning styles is an important component to any training program. For our purposes, we will utilize a widely accepted learning style model. Recent research has shown that classifying people into learning styles may not be the best way to determine a style, and most people have a different style depending on the information being taught. In a study by Pashler et al., [1] the authors look at aptitude and personality as key traits when learning, as opposed to classifying people into categories of learning styles. Bearing this in mind, we will address a common approach to learning styles next.

An effective trainer tries to develop training to meet the three different learning styles:[2]

1. Visual learner. A visual learner usually has a clear “picture” of an experience. A visual learner often says things such as “I can see what you are saying” or “This looks good.” A visual learner is best reached using graphics, pictures, and figures.

1. Auditory learner. An auditory learner learns by sound. An auditory learner might say, “If I hear you right” or “What do you hear about this situation?” The auditory learner will learn by listening to a lecture or to someone explaining how to do something.

1. Kinesthetic learner. A kinesthetic learner learns by developing feelings toward an experience. These types of learners tend to learn by doing rather than listening or seeing someone else do it. This type of learner will often say things such as “This feels right.”

Most individuals use more than one type of learning style, depending on what kinds of information they are processing. For example, in class you might be a visual learner, but when learning how to change a tire, you might be a kinesthetic learner.

Delivery Mode

Depending on the type of training that needs to be delivered, you will likely choose a different mode to deliver the training. An orientation might lend itself best to vestibule training, while sexual harassment training may be better for web-based training. When choosing a delivery mode, it is important to consider the audience and budget constrictions. For example, Oakwood Worldwide, a provider of temporary housing, recently won the Top 125 Training Award for its training and development programs.[3] It offers in-class and online classes for all associates and constantly add to its course catalog. This is a major recruitment as well as retention tool for its employees. In fact, the company credits this program for retaining 25 percent of its workforce for ten years or more. Table 8.1 “Types of Training and Delivery” looks at each of the types of training and suggests appropriate options for delivery modes.

Table 8.1 Types of Training and Delivery

Delivery Method

Type of Training Suggested

On-the-job coaching

Technical training

Skills training

Managerial training

Safety training

Mentor

Technical training

Skills training

Managerial training

Safety training

Brown bag lunch

Quality training

Soft skills training

Professional training

Safety training

Web-based

Technical training

Quality training

Skills training

Soft skills training

Professional training

Team training

Managerial training

Safety training

Job shadowing

Technical training

Quality training

Skills training

Safety training

Job swapping

Technical training

Quality training

Skills training

Professional training

Team training

Managerial training

Safety training

Vestibule training

Technical training

Quality training

Skills training

Soft skills training

Professional training

Team training

Managerial training

Safety training

Budget

How much money do you think the training will cost? The type of training performed will depend greatly on the budget. If you decide that web-based training is the right delivery mode, but you don’t have the budget to pay the user fee for the platform, this wouldn’t be the best option. Besides the actual cost of training, another cost consideration is people’s time. If employees are in training for two hours, what is the cost to the organization while they are not able to perform their job? A spreadsheet should be developed that lists the actual cost for materials, snacks, and other direct costs, but also the indirect costs, such as people’s time.

Delivery Style

Taking into consideration the delivery method, what is the best style to deliver this training? It’s also important to keep in mind that most people don’t learn through “death by PowerPoint”; they learn in a variety of ways, such as auditory, kinesthetic, or visual. Considering this, what kinds of ice breakers, breakout discussions, and activities can you incorporate to make the training as interactive as possible? Role plays and other games can make the training fun for employees. Many trainers implement online videos, podcasts, and other interactive media in their training sessions. This ensures different learning styles are met and also makes the training more interesting.

Audience

Considering your audience is an important aspect to training. How long have they been with the organization, or are they new employees? What departments do they work in? Knowing the answers to these questions can help you develop a relevant delivery style that makes for better training. For example, if you know that all the people attending the training are from the accounting department, examples you provide in the training can be focused on this type of job. If you have a mixed group, examples and discussions can touch on a variety of disciplines.

Content Development

The content you want to deliver is perhaps one of the most important parts in training and one of the most time-consuming to develop. Development of learning objectives or those things you want your learners to know after the training makes for a more focused training. Think of learning objectives as goals—what should someone know after completing this training? Here are some sample learning objectives:

1. Be able to define and explain the handling of hazardous materials in the workplace.

1. Be able to utilize the team decision process model.

1. Understand the definition of sexual harassment and be able to recognize sexual harassment in the workplace.

1. Understand and be able to explain the company policies and structure.

After you have developed the objectives and goals, you can begin to develop the content of the training. Consideration of the learning methods you will use, such as discussion and role playing, will be outlined in your content area.

Development of content usually requires a development of learning objectives and then a brief outline of the major topics you wish to cover. With that outline, you can “fill in” the major topics with information. Based on this information, you can develop modules or PowerPoint slides, activities, discussion questions, and other learning techniques.

Timelines

For some types of training, time lines may be required to ensure the training has been done. This is often the case for safety training; usually the training should be done before the employee starts. In other words, in what time frame should an employee complete the training?

Another consideration regarding time lines is how much time you think you need to give the training. Perhaps one hour will be enough, but sometimes, training may take a day or even a week. After you have developed your training content, you will likely have a good idea as to how long it will take to deliver it. Consider the fact that most people do not have a lot of time for training and keep the training time realistic and concise.

From a long-term approach, it may not be cost effective to offer an orientation each time someone new is hired. One consideration might be to offer orientation training once per month so that all employees hired within that month are trained at the same time.

Development of a dependable schedule for training might be ideal, as in the following example:

1. Orientation is offered on the first Thursday of every month.

1. The second and third Tuesday will consist of vestibule training on management skills and communication.

1. Twice yearly, in August and March, safety and sexual harassment training will be given to meet the legal company requirements.

Developing a dependable training schedule allows for better communication to your staff, results in fewer communication issues surrounding training, and allows all employees to plan ahead to attend training.

Communication

Once you have developed your training, your next consideration is how you will communicate the available training to employees. In a situation such as an orientation, you will need to communicate to managers, staff, and anyone involved in the training the timing and confirm that it fits within their schedule. If it is an informal training, such as a brown bag lunch on 401(k) plans, this might involve determining the days and times that most people are in the office and might be able to participate. Because employees use Mondays and Fridays, respectively, to catch up and finish up work for the week, these days tend to be the worst for training.

Consider utilizing your company’s intranet, e-mail, and even old-fashioned posters to communicate the training. Many companies have Listservs that can relay the message to only certain groups, if need be.

What can happen if training is not communicated to employees appropriately?

Measuring Effectiveness

After we have completed the training, we want to make sure our training objectives were met. One model to measure effectiveness of training is the Kirkpatrick model, [4]developed in the 1950s. His model has four levels:

1. Reaction: How did the participants react to the training program?

1. Learning: To what extent did participants improve knowledge and skills?

1. Behavior: Did behavior change as a result of the training?

1. Results: What benefits to the organization resulted from the training?

Each of Kirkpatrick’s levels can be assessed using a variety of methods. We will discuss those next.

Figure 8.7 Kirkpatrick’s Four Levels of Training Evaluation

Review the performance of the employees who received the training, and if possible review the performance of those who did not receive the training. For example, in your orientation training, if one of the learning objectives was to be able to request time off using the company intranet, and several employees who attended the training come back and ask for clarification on how to perform this task, it may mean the training didn’t work as well as you might have thought. In this case, it is important to go back and review the learning objectives and content of your training to ensure it can be more effective in the future.

Many trainers also ask people to take informal, anonymous surveys after the training to gauge the training. These types of surveys can be developed quickly and easily through websites such as SurveyMonkey. Another option is to require a quiz at the end of the training to see how well the employees understand what you were trying to teach them. The quiz should be developed based on the learning objective you set for the training. For example, if a learning objective was to be able to follow OSHA standards, then a quiz might be developed specifically related to those standards. There are a number of online tools, some free, to develop quizzes and send them to people attending your training. For example, Wondershare QuizCreator [5] offers a free trial and enables the manager to track who took the quiz and how well they did. Once developed by the trainer, the quiz can be e-mailed to each participant and the manager can see how each trainee did on the final quiz. After you see how participants do on the quiz, you can modify the training for next time to highlight areas where participants needed improvement.

It can be easy to forget about this step in the training process because usually we are so involved with the next task: we forget to ask questions about how something went and then take steps to improve it.

One way to improve effectiveness of a training program is to offer rewards when employees meet training goals. For example, if budget allows, a person might receive a pay increase or other reward for each level of training completed.

Career Development Programs and Succession Planning

Another important aspect to training is career development programs. Acareer development program is a process developed to help people manage their career, learn new things, and take steps to improve personally and professionally. Think of it as a training program of sorts, but for individuals. Sometimes career development programs are called professional development plans.

Figure 8.9 Sample Career Development Plan Developed by an Employee and Commented on by Her Manager

As you can see, the employee developed goals and made suggestions on the types of training that could help her meet her goals. Based on this data, the manager suggested in-house training and external training for her to reach her goals within the organization.

Career development programs are necessary in today’s organizations for a variety of reasons. First, with a maturing baby-boom population, newer employees must be trained to take those jobs once baby boomers retire. Second, if an employee knows a particular path to career development is in place, this can increase motivation. A career development plan usually includes a list of short- and long-term goals that employees have pertaining to their current and future jobs and a planned sequence of formal and informal training and experiences needed to help them reach the goals. As this chapter has discussed, the organization can and should be instrumental in defining what types of training, both in-house and external, can be used to help develop employees.

To help develop this type of program, managers can consider a few components: [6]

1. Talk to employees. Although this may seem obvious, it doesn’t always happen. Talking with employees about their goals and what they hope to achieve can be a good first step in developing a formal career development program.

1. Create specific requirements for career development. Allow employees to see that if they do A, B, and C, they will be eligible for promotion. For example, to become a supervisor, maybe three years of experience, management training, and communication training are required. Perhaps an employee might be required to prove themselves in certain areas, such as “maintain and exceed sales quota for eight quarters” to be a sales manager. In other words, in career development there should be a clear process for the employees to develop themselves within the organization.

1. Use cross-training and job rotation. Cross-training is a method by which employees can gain management experience, even if for short periods of time. For example, when a manager is out of the office, putting an employee “in charge” can help the employee learn skills and abilities needed to perform that function appropriately. Through the use of job rotation, which involves a systematic movement of employees from job to job within an organization, employees can gain a variety of experiences to prepare them for upward movement in the organization.

1. Utilize mentors. Mentorship can be a great way for employees to understand what it takes to develop one’s career to the next level. A formal mentorship program in place with willing mentees can add value to your career development program.

Figure 8.10 Career Development Sample Process to Become an Accounts Payable Manager

There are many tools on the web, including templates to help employees develop their own career development plans. Many organizations, in fact, ask employees to develop their own plans and use those as a starting point for understanding long-term career goals. Then hopefully the organization can provide them with the opportunities to meet these career goals. In the late 1980s, many employees felt that career opportunities at their current organizations dwindled after seeing the downsizing that occurred. It gave employees the feeling that companies were not going to help develop them, unless they took the initiative to do so themselves. Unfortunately, this attitude means that workers will not wait for career opportunities within the company, unless a clear plan and guide is put into place by the company. [7] Here is an example of a process that can be used to put a career development program in place: [8]

1. Meet individually with employees to identify their long-term career interests (this may be done by human resources or the direct manager).

1. Identify resources within the organization that can help employees achieve their goals. Create new opportunities for training if you see a gap in needs versus what is currently offered.

1. Prepare a plan for each employee, or ask them to prepare the plan.

1. Meet with the employee to discuss the plan.

1. During performance evaluations, revisit the plan and make changes as necessary.

Identifying and developing a planning process not only helps the employee but also can assist the managers in supporting employees in gaining new skills, adding value, and motivating employees.

Figure 8.11 Career Development Planning Process

[1] Harold Pashler, Mark McDaniel, Doug Rohrer, and Robert Bjork, “Learning Styles: Concepts and Evidence,” Psychological Science in the Public Interest 9, no. 3 (2008): 109–19, accessed February 26, 2011, 
http://www.psychologicalscience.org/journals/pspi/PSPI_9_3.pdf
.

[2] “What’s YOUR Learning Style?” adapted from Instructor Magazine, University of South Dakota, August 1989, accessed July 28, 2010, 
http://people.usd.edu/~bwjames/tut/learning-style/
.

[3] “Oakwood Worldwide Honored by Training Magazine for Fifth Consecutive Year Training also Presents Oakwood with Best Practice Award,” press release, February 25, 2011,Marketwire, accessed February 26, 2011, 
http://www.live-pr.com/en/oakwood-worldwide-honored-by-training-magazine-r1048761409.htm
.

[4] Donald Kirkpatrick, Evaluating Training Programs, 3rd ed. (San Francisco: Berrett-Koehler, 2006).

[5] WonderShare QuizCreator, accessed July 29, 2010, 
http://www.sameshow.com/quiz-creator.html#172
.

[6] Martha Heller, “Six Tips for Effective Employee Development Programs,” CIO Magazine, June 15, 2005, accessed July 28, 2010,http://www.cio.com/article/29169/Six_Tips_for_Effective_Career_Development_Programs.

[7] Peter Capelli, “A Balanced Plan for Career Development,” n.d., Microsoft, accessed July 29, 2010, 
http://office.microsoft.com/en-us/word-help/a-balanced-plan-for-career-development-HA001126815.aspx
.

[8] Jose Trueba Adolfo, “The Career Development Plan: A Quick Guide for Managers and Supervisors,” n.d., National Career Development Association, accessed July 29, 2010,http://associationdatabase.com/aws/NCDA/pt/sd/news_article/6420/_PARENT/layout_details/false.

8.5  Case and Summary

Chapter Summary

· Employee training and development is a necessity in today’s work environment. Training and development can lead to lower turnover and increased motivation.

· There are four basic steps to employee training: employee orientation, in-house training, mentoring, and external training.

· Different types of training can be delivered, each falling into the steps of employee training. These include technical or technology training, quality training, skills training, soft skills training, professional training, team training, managerial training, and safety training.

· Within the types of training, we need to determine which method is best for the actual delivery of training. Options include on-the-job training, mentor training, brown bag lunches, web-based training, job shadowing, job swapping, and vestibule training.

· Development of a training development framework is the first step in solidifying the training.

· Considerations and steps to developing the training framework include determining the training needs, delivery modes, budget, delivery style, audience, content, time lines, communication of the training, and measurement of the training.

· Career development programs can be an essential piece to the training puzzle. A comprehensive program or plan, either developed by employees or administered by HR, can help with motivation and fill the gap when people in the organization leave or retire. It can also be used as a motivational tool.

Chapter Case

New on the Job

JoAnn Michaels just started her job as human resources manager at In the Dog House, a retail chain specializing in dog apparel and accessories. She is a good friend of yours you met in college.

The organization has 35 stores with 250 employees in Washington, Idaho, and Oregon. As the chain has grown, the training programs have been conducted somewhat piecemeal. Upon visiting some of the stores in a three-week tour, JoAnn has realized that all the stores seem to have different ways of training their in-store employees.

When she digs further, she realizes even the corporate offices, which employ seventy-five people, have no formal training program. In the past, they have done informal and optional brown bag lunch training to keep employees up to date. As a result, JoAnn develops a survey using SurveyMonkey and sends it to all seventy-five corporate employees. She created a rating system, with 1 meaning strongly disagree and 5 meaning strongly agree. Employees were not required to answer all questions, hence the variation in the number of responses column. After this task, JoAnn creates a slightly different survey and sends it to all store managers, asking them to encourage their retail employees to take the survey. The results are shown here.

In the Dog House Corporate Employee Survey Results

Question

Number of Responses

Average Rating

I am paid fairly.

73

3.9

I feel my group works well as a team.

69

2.63

I appreciate the amount of soft skills training offered at In the Dog House.

74

2.1

I can see myself growing professionally here.

69

1.95

I feel I am paid fairly.

74

3.8

I have all the tools and equipment I need to do my job.

67

4.2

I feel confident if there were an emergency at the office, I would know what to do and could help others.

73

2.67

I think my direct supervisor is an excellent manager.

55

2.41

The orientation training I received was helpful in understanding the expectations of the job.

75

3.1

I would take training related to my job knowing there would be a reward offered for doing so.

71

4.24

In the Dog House Retail Employee Survey Results

Question

Number of Responses

Average Rating

I am content with the benefits I am receiving.

143

1.2

I feel my store works well as a team.

190

4.1

I appreciate the amount of product training and information offered at In the Dog House.

182

2.34

I can see myself growing professionally here.

158

1.99

I feel I am paid fairly.

182

3.2

My supervisor works with my schedule, so I work at times that are convenient for me.

172

3.67

I feel confident if I had to evacuate the store, I would know what to do and could help customers.

179

2.88

I think my store manager is a great manager.

139

3.34

The orientation training I received was helpful in understanding the expectations of the job.

183

4.3

I am interested in developing my career at In the Dog House.

174

1.69

Based on the information JoAnn received from her survey, she decided some changes need to be made. JoAnn asks you to meet for coffee and take a look at the results. After you review them, JoAnn asks you the following questions. How would you respond to each?

1. “Obviously, I need to start working on some training programs. Which topics do you think I should start with?”

1. “How do I go about developing a training program that will be really useful and make people excited? What are the steps I need to take?”

1. “How should I communicate the training program to the corporate and retail employees? Should the new training I develop be communicated in the same way?”

1. “Do you think that we should look at changing pay and benefits? Why or why not?”

1. “Can you please help me draft a training program framework for what we have discussed? Do you think I should design one for both the corporate offices and one for the retail stores?” (Hint: Look at Figure 8.8 for guidelines.)



Chapter 10: Employee Assessment

A Tough Conversation

As you wake up this morning, you think about the performance evaluation you will give one of your employees, Sean, later this morning. Sean has been with your company for two years, and over the last six months his performance has begun to slide. As the manager, it is your responsibility to talk with him about performance, which you have done on several occasions. However, the performance evaluation will make his nonperformance more formalized. You know that Sean has had some personal troubles that can account for some of the performance issues, but despite this, you really need to get his performance up to par. Your goal in the performance evaluation interview today is to create an improvement plan for Sean, while documenting his nonperformance.

When you arrive at work, you look over the essay rating part of Sean’s evaluation. It details two client project deadlines that were missed, as well as the over-budget amounts of the two client projects. It was Sean’s responsibility to oversee both aspects of this project. When Sean arrives at your office, you greet him, ask him to take a seat, and begin to discuss the evaluation with him.

“Sean, while you have always been a high performer, these last few months have been lackluster. On two of your projects, you were over budget and late. The client commented on both of these aspects when it filled out the client evaluation. As a result, you can see this is documented in your performance evaluation.”

Using defensive nonverbal language, Sean says, “Missing the project deadlines and budget wasn’t my fault. Emily said everything was under control, and I trusted her. She is the one who should have a bad performance review.”

You say, “Ultimately, as the account director, you are responsible, as outlined in your job description. As you know, it is important to manage the accountability within your team, and in this case, you didn’t perform. In fact, in your 360 reviews, several of your colleagues suggested you were not putting in enough time on the projects and seemed distracted.”

“I really dislike those 360 reviews. It really is just a popularity contest, anyway,” Sean says. “So, am I fired for these two mistakes?” You have worked with people who exhibited this type of defensive behavior before, and you know it is natural for people to feel like they need to defend themselves when having this type of conversation. You decide to move the conversation ahead and focus on future behavior rather than past behavior.

You say, “Sean, you normally add a lot of value to the organization. Although these issues will be documented in your performance evaluation, I believe you can produce high-quality work. As a result, let’s work together to develop an improvement plan so you can continue to add value to the organization. The improvement plan addresses project deadlines and budgets, and I think you will find it helpful for your career development.”

Sean agrees begrudgingly and you begin to show him the improvement plan document the company uses, so you can fill it out together.

When you head home after work, you think about the day’s events and about Sean. As you had suspected, he was defensive at first but seemed enthusiastic to work on the improvement plan after you showed him the document. You feel positive that this performance evaluation was a step in the right direction to ensure Sean continues to be a high producer in the company, despite these mistakes.

10.1  Performance Evaluation Systems

Learning Objectives

1. Define the reasons for a formal performance evaluation system.

1. Explain the process to develop a performance review system.

A performance evaluation system is a systematic way to examine how well an employee is performing in his or her job. If you notice, the word systematic implies the performance evaluation process should be a planned system that allows feedback to be given in a formal—as opposed to informal—sense. Performance evaluations can also be called performance appraisals, performance assessments, or employee appraisals.

There are four reasons why a systematic performance evaluation system should be implemented. First, the evaluation process should encourage positive performance and behavior. Second, it is a way to satisfy employee curiosity as to how well they are performing in their job. It can also be used as a tool to develop employees. Lastly, it can provide a basis for pay raises, promotions, and legal disciplinary actions.

Designing a Performance Appraisal System

There are a number of things to consider before designing or revising an existing performance appraisal system. Some researchers suggest that the performance appraisal system is perhaps one of the most important parts of the organization, [1]while others suggest that performance appraisal systems are ultimately flawed, [2]making them worthless. For the purpose of this chapter, let’s assume we can create a performance appraisal system that will provide value to the organization and the employee. When designing this process, we should recognize that any process has its limitations, but if we plan it correctly, we can minimize some of these.

The first step in the process is to determine how often performance appraisals should be given. Please keep in mind that managers should constantly be giving feedback to employees, and this process is a more formal way of doing so. Some organizations choose to give performance evaluations once per year, while others give them twice per year, or more. The advantage to giving an evaluation twice per year, of course, is more feedback and opportunity for employee development. The downside is the time it takes for the manager to write the evaluation and discuss it with the employee. If done well, it could take several hours for just one employee. Depending on your organization’s structure, you may choose one or the other. For example, if most of your managers have five or ten people to manage (this is called span of control), it might be worthwhile to give performance evaluations more than once per year, since the time cost isn’t high. If most of your managers have twenty or more employees, it may not be feasible to perform this process more than once per year. To determine costs of your performance evaluations, see Table 10.1 “Estimating the Costs of Performance Evaluations”. Asking for feedback from managers and employees is also a good way to determine how often performance evaluations should be given.

Table 10.1 Estimating the Costs of Performance Evaluations

Narrow Span of Control

Average span of control

8

Average time to complete one written review

1 hour

Average time to discuss with employee

1 hour

Administrative time to set up meetings with employees

1/2 hour

8 employees × 2 hours per employee + 1/2 hour administrative time to set up times to meet with employees = 16.5 hours of time for one manager to complete all performance reviews

Wider Span of Control

Average span of control

25

Average time to complete one written review

1 hour

Average time to discuss with employee

1 hour

Administrative time to set up meetings with employees

1 hour

25 employees × 2 hours per employee + 1 hour administrative time to set up times to meet with employees = 51 hours

Once you have the number of hours it takes, you can multiply that by your manager’s hourly pay to get an estimated cost to the organization

16 hours × $50 per hour = $85051 hours × $50 per hour = $2550

Should pay increases be tied to performance evaluations? This might be the second consideration before development of a performance evaluation process. There is research that shows employees have a greater acceptance of performance reviews if the review is linked to rewards. [3]

The third consideration should include goal setting. In other words, what goals does the organization hope to achieve with the performance appraisal process?

Once the frequency, rewards, and goals have been determined, it is time to begin to formalize the process. First, we will need to develop the actual forms that will be used to evaluate each job within the organization. Every performance evaluation should be directly tied with that employee’s job description.

Determining who should evaluate the performance of the employee is the next decision. It could be their direct manager (most common method), subordinates, customers or clients, self, and/or peers. Table 10.2 “Advantages and Disadvantages of Each Source for Performance Evaluations” shows some of the advantages and disadvantages for each source of information for performance evaluations. Ultimately, using a variety of sources might garner the best results.

A 360-degree performance appraisal method is a way to appraise performance by using several sources to measure the employee’s effectiveness. Organizations must be careful when using peer-reviewed information. For example, in the Mathewson v. Aloha Airlines case, peer evaluations were found to be retaliatory against a pilot who had crossed picket lines during the pilot’s union strike against a different airline.

Management of this process can be time-consuming for the HR professional. That’s why there are many software programs available to help administer and assess 360 review feedback. Halogen 360, for example, is used by Princess Cruises and media companies such as MSNBC. [4] This type of software allows the HR professional to set criteria and easily send links to customers, peers, or managers, who provide the information requested. Then the data are gathered and a report is automatically generated, which an employee can use for quick feedback. Other similar types of software include Carbon360 and Argos.

Performance Appraisal System Errors

Before we begin to develop our performance review process, it is important to note some of the errors that can occur during this process. First, halo effects can occur when the source or the rater feels one aspect of the performance is high and therefore rates all areas high. A mistake in rating can also occur when we compare one employee to another, as opposed to the job description’s standards. Sometimes halo effects will occur because the rater is uncomfortable rating someone low on a performance assessment item. Of course, when this occurs, it makes the performance evaluation less valuable for employee development. Proper training on how to manage a performance appraisal interview is a good way to avoid this. We discuss this in Section 10.3.4 “Performance Appraisal Interviews”.

Validity issues are the extent to which the tool measures the relevant aspects of performance. The aspects of performance should be based on the key skills and responsibilities of the job, and these should be reviewed often to make sure they are still applicable to the job analysis and description.

Reliability refers to how consistent the same measuring tool works throughout the organization (or job title). When we look at reliability in performance appraisals, we ask ourselves if two raters were to rate an employee, how close would the ratings be? If the ratings would be far apart from one another, the method may have reliability issues. To prevent this kind of issue, we can make sure that performance standards are written in a way that will make them measurable. For example, instead of “increase sales” as a performance standard, we may want to say, “increase sales by 10 percent from last year.” This performance standard is easily measured and allows us to ensure the accuracy of our performance methods.

Acceptability refers to how well members of the organization, manager and employees, accept the performance evaluation tool as a valid measure of performance. For example, let’s assume the current measurement tools of Blewett Gravel, Inc. are in place and show validity for each job function. However, managers don’t think the tool is useful because they take too much time. As a result, they spend minimal time on the evaluation. This could mean the current process is flawed because of acceptability error.

Another consideration is the specificity, which tells employees the job expectations and how they can be met. If they are not specific enough, the tool is not useful to the employee for development or to the manager to ensure the employee is meeting expectations. Finally, after we have developed our process, we need to create a time line and educate managers and employees on the process. This can be done through formal training and communicated through company blogs or e-mails. According to Robert Kent, [5] teaching people how to receive benefit from the feedback they receive can be an important part of the process as well.

Performance Appraisal Legal Considerations

The legality of performance appraisals was questioned in 1973 in Brito v. Zia, in which an employee was terminated based on a subjective performance evaluation. Following this important case, employers began to rethink their performance evaluation system and the legality of it.

The Civil Service Reform Act of 1978 set new standards for performance evaluation. Although these standards related only to public sector employees, the Reform Act began an important trend toward making certain performance evaluations were legal. The Reform Act created the following criteria for performance appraisals in government agencies:

1. All agencies were required to create performance review systems.

1. Appraisal systems would encourage employee participation in establishing the performance standards they will be rated against.

1. The critical elements of the job must be in writing.

1. Employees must be advised of the critical elements when hired.

1. The system must be based exclusively on the actual performance and critical elements of the job. They cannot be based on a curve, for example.

1. They must be conducted and recorded at least once per year.

1. Training must be offered for all persons giving performance evaluations.

1. The appraisals must provide information that can be used for decision making, such as pay decisions and promotion decisions.

Early performance appraisal research can provide us a good example as to why we should be concerned with the legality of the performance appraisal process. Holley and Field [6] analyzed sixty-six legal cases that involved discrimination and performance evaluation. Of the cases, defendants won thirty-five of the cases. The authors of the study determined that the cases that were won by the defendant had similar characteristics:

1. Appraisers were given written instructions on how to complete the appraisal for employees.

1. Job analysis was used to develop the performance measures of the evaluation.

1. The focus of the appraisal was actual behaviors instead of personality traits.

1. Upper management reviewed the ratings before the performance appraisal interview was conducted.

This tells us that the following considerations should be met when developing our performance appraisal process:

1. Performance standards should be developed using the job analysis and should change as the job changes.

1. Provide the employees with a copy of the evaluation when they begin working for the organization, and even consider having the employees sign off, saying they have received it.

1. All raters and appraisers should be trained.

1. When rating, examples of observable behavior (rather than personality characteristics) should be given.

1. A formal process should be developed in the event an employee disagrees with a performance review.

Now that we have discussed some of the pitfalls of performance appraisals, we can begin to discuss how to develop the process of performance evaluations.

Table 10.2 Advantages and Disadvantages of Each Source for Performance Evaluations

Source

Advantages

Disadvantages

Manager/Supervisor

Usually has extensive knowledge of the employee’s performance and abilities

Bias

Favoritism

Self

Self-analysis can help with employee growth

In the employee’s interest to inflate his or her own ratings

Peer

Works well when the supervisor doesn’t always directly observe the employee

Relationships can create bias in the review

Can bring a different perspective, since peers know the job well

If evaluations are tied to pay, this can put both the employee and the peer in an awkward situation

If confidential, may create mistrust within the organization

Customer/Client

Customers often have the best view of employee behavior

Can be expensive to obtain this feedback

Can enhance long-term relationships with the customer by asking for feedback

Possible bias

Subordinate

Data garnered can include how well the manager treats employees

Possible retaliation if results are not favorable

Can determine if employees feel there is favoritism within their department

Rating inflation

Subordinates may not understand the “big picture” and rate low as a result

Can be used as a self-development tool for managers

If confidential, may create mistrust within the organization

If nothing changes despite the evaluation, could create motivational issues among employees

[1] J. Lawrie, “Prepare for a Performance Appraisal,” Personnel Journal 69 (April 1990): 132–36.

[2] Marjorie Derven, “The Paradox of Performance Appraisals,” Personnel Journal 69 (February 1990): 107–11.

[3] Brendan Bannister and David Balkin, “Performance Evaluation and Compensation Feedback Messages: An Integrated Model,” Journal of Occupational Psychology 63 (June 1990): 97–111.

[4] Halogen Software, accessed March 22, 2011, 
http://www.halogensoftware.com
.

[5] Robert Kent, “Why You Should Think Twice about 360 Performance Reviews,” ManagerWise, accessed March 22, 2011, 
http://www.managerwise.com/article.phtml?id=128
.

[6] Hubert Field and William Holley, “The Relationship of Performance Appraisal System Characteristics to Verdicts in Selected Employment Discrimination Cases,” Academy of Management Journal 25, no. 2 (1982): 392–406.

10.2  Appraisal Methods

Learning Objective

1. Be able to describe the various appraisal methods.

It probably goes without saying that different industries and jobs need different kinds of appraisal methods. For our purposes, we will discuss some of the main ways to assess performance in a performance evaluation form. Of course, these will change based upon the job specifications for each position within the company. In addition to industry-specific and job-specific methods, many organizations will use these methods in combination, as opposed to just one method. There are three main methods of determining performance. The first is the trait method, in which managers look at an employee’s specific traits in relation to the job, such as friendliness to the customer. The behavioral method looks at individual actions within a specific job.Comparative methods compare one employee with other employees.Results methods are focused on employee accomplishments, such as whether or not employees met a quota.

Within the categories of performance appraisals, there are two main aspects to appraisal methods. First, the criteria are the aspects the employee is actually being evaluated on, which should be tied directly to the employee᾿s job description. Second, the rating is the type of scale that will be used to rate each criterion in a performance evaluation: for example, scales of 1–5, essay ratings, or yes/no ratings. Tied to the rating and criteria is the weighting each item will be given. For example, if “communication” and “interaction with client” are two criteria, the interaction with the client may be weighted more than communication, depending on the job type. We will discuss the types of criteria and rating methods next.

Graphic Rating Scale

The graphic rating scale, a behavioral method, is perhaps the most popular choice for performance evaluations. This type of evaluation lists traits required for the job and asks the source to rate the individual on each attribute. A discrete scale is one that shows a number of different points. The ratings can include a scale of 1–10; excellent, average, or poor; or meets, exceeds, or doesn’t meet expectations, for example. Acontinuous scale shows a scale and the manager puts a mark on the continuum scale that best represents the employee’s performance. For example:

Poor

Excellent

The disadvantage of this type of scale is the subjectivity that can occur. This type of scale focuses on behavioral traits and is not specific enough to some jobs. Development of specific criteria can save an organization in legal costs. For example, in Thomas v. IBM, IBM was able to successfully defend accusations of age discrimination because of the objective criteria the employee (Thomas) had been rated on.

Many organizations use a graphic rating scale in conjunction with other appraisal methods to further solidify the tool’s validity. For example, some organizations use amixed standard scale, which is similar to a graphic rating scale. This scale includes a series of mixed statements representing excellent, average, and poor performance, and the manager is asked to rate a “+” (performance is better than stated), “0” (performance is at stated level), or “−” (performance is below stated level). Mixed standard statements might include the following:

· The employee gets along with most coworkers and has had only a few interpersonal issues.

· This employee takes initiative.

· The employee consistently turns in below-average work.

· The employee always meets established deadlines.

An example of a graphic rating scale is shown in Figure 11.1 “Example of Graphic Rating Scale”.

Essay Appraisal

In an essay appraisal, the source answers a series of questions about the employee’s performance in essay form. This can be a trait method and/or a behavioral method, depending on how the manager writes the essay. These statements may include strengths and weaknesses about the employee or statements about past performance. They can also include specific examples of past performance. The disadvantage of this type of method (when not combined with other rating systems) is that the manager’s writing ability can contribute to the effectiveness of the evaluation. Also, managers may write less or more, which means less consistency between performance appraisals by various managers.

Checklist Scale

A checklist method for performance evaluations lessens the subjectivity, although subjectivity will still be present in this type of rating system. With a checklist scale, a series of questions is asked and the manager simply responds yes or no to the questions, which can fall into either the behavioral or the trait method, or both. Another variation to this scale is a check mark in the criteria the employee meets, and a blank in the areas the employee does not meet. The challenge with this format is that it doesn’t allow more detailed answers and analysis of the performance criteria, unless combined with another method, such as essay ratings. A sample of a checklist scale is provided in Figure 10.3 “Example of Checklist Scale”.

Figure 10.1 Example of Graphic Rating Scale

Figure 10.3 Example of Checklist Scale

Figure 10.2 Example of Essay Rating

Critical Incident Appraisals

This method of appraisal, while more time-consuming for the manager, can be effective at providing specific examples of behavior. With a critical incident appraisal, the manager records examples of the employee’s effective and ineffective behavior during the time period between evaluations, which is in the behavioral category. When it is time for the employee to be reviewed, the manager will pull out this file and formally record the incidents that occurred over the time period. The disadvantage of this method is the tendency to record only negative incidents instead of postive ones. However, this method can work well if the manager has the proper training to record incidents (perhaps by keeping a weekly diary) in a fair manner. This approach can also work well when specific jobs vary greatly from week to week, unlike, for example, a factory worker who routinely performs the same weekly tasks.

Work Standards Approach

For certain jobs in which productivity is most important, awork standards approach could be the more effective way of evaluating employees. With this results-focused approach, a minimum level is set and the employee’s performance evaluation is based on this level. For example, if a sales person does not meet a quota of $1 million, this would be recorded as nonperforming. The downside is that this method does not allow for reasonable deviations. For example, if the quota isn’t made, perhaps the employee just had a bad month but normally performs well. This approach works best in long-term situations, in which a reasonable measure of performance can be over a certain period of time. This method is also used in manufacuring situations where production is extremely important. For example, in an automotive assembly line, the focus is on how many cars are built in a specified period, and therefore, employee performance is measured this way, too. Since this approach is centered on production, it doesn’t allow for rating of other factors, such as ability to work on a team or communication skills, which can be an important part of the job, too.

Ranking Methods

In a ranking method system (also called stack ranking), employees in a particular department are ranked based on their value to the manager or supervisor. This system is a comparative method for performance evaluations.The manager will have a list of all employees and will first choose the most valuable employee and put that name at the top. Then he or she will choose the least valuable employee and put that name at the bottom of the list. With the remaining employees, this process would be repeated. Obviously, there is room for bias with this method, and it may not work well in a larger organization, where managers may not interact with each employee on a day-to-day basis.

To make this type of evaluation most valuable (and legal), each supervisor should use the same criteria to rank each individual. Otherwise, if criteria are not clearly developed, validity and halo effects could be present. The Roper v. Exxon Corp case illustrates the need for clear guidelines when using a ranking system. At Exxon, the legal department attorneys were annually evaluated and then ranked based on input from attorneys, supervisors, and clients. Based on the feedback, each attorney for Exxon was ranked based on their relative contribution and performance. Each attorney was given a group percentile rank (i.e., 99 percent was the best-performing attorney). When Roper was in the bottom 10 percent for three years and was informed of his separation with the company, he filed an age discrimination lawsuit. The courts found no correlation between age and the lowest-ranking individuals, and because Exxon had a set of established ranking criteria, they won the case. [1]

Another consideration is the effect on employee morale should the rankings be made public. If they are not made public, morale issues may still exist, as the perception might be that management has “secret” documents.

Fortune 500 Focus

Critics have long said that a forced ranking system can be detrimental to morale; it focuses too much on individual performance as opposed to team performance. Some say a forced ranking system promotes too much competition in the workplace. However, many Fortune 500 companies use this system and have found it works for their culture. General Electric (GE) used perhaps one of the most well-known forced ranking systems. In this system, every year managers placed their employees into one of three categories: “A” employees are the top 20 percent, “B” employees are the middle 70 percent, and “C” performers are the bottom 10 percent. In GE’s system, the bottom 10 percent are usually either let go or put on a performance plan. The top 20 percent are given more responsibility and perhaps even promoted. However, even GE has reinvented this stringent forced ranking system. In 2006, it changed the system to remove references to the 20/70/10 split, and GE now presents the curve as a guideline. This gives more freedom for managers to distribute employees in a less stringent manner. [2]

The advantages of a forced ranking system include that it creates a high-performance work culture and establishes well-defined consequences for not meeting performance standards. In recent research, a forced ranking system seems to correlate well with return on investment to shareholders. For example, the study[3] shows that companies who use individual criteria (as opposed to overall performance) to measure performance outperform those who measure performance based on overall company success. To make a ranking system work, it is key to ensure managers have a firm grasp on the criteria on which employees will be ranked. Companies using forced rankings without set criteria open themselves to lawsuits, because it would appear the rankings happen based on favoritism rather than quantifiable performance data. For example, Ford in the past used forced ranking systems but eliminated the system after settling class action lawsuits that claimed discrimination. [4] Conoco also has settled lawsuits over its forced ranking systems, as domestic employees claimed the system favored foreign workers. [5] To avoid these issues, the best way to develop and maintain a forced ranking system is to provide each employee with specific and measurable objectives, and also provide management training so the system is executed in a fair, quantifiable manner.

In a forced distribution system, like the one used by GE, employees are ranked in groups based on high performers, average performers, and nonperformers. The trouble with this system is that it does not consider that all employees could be in the top two categories, high or average performers, and requires that some employees be put in the nonperforming category.

In a paired comparison system, the manager must compare every employee with every other employee within the department or work group. Each employee is compared with another, and out of the two, the higher performer is given a score of 1. Once all the pairs are compared, the scores are added. This method takes a lot of time and, again, must have specific criteria attached to it when comparing employees.

Management by Objectives (MBO)

Management by objectives (MBOs) is a concept developed by Peter Drucker in his 1954 book The Practice of Management. [6] This method is results oriented and similar to the work standards approach, with a few differences. First, the manager and employee sit down together and develop objectives for the time period. Then when it is time for the performance evaluation, the manager and employee sit down to review the goals that were set and determine whether they were met. The advantage of this is the open communication between the manager and the employee. The employee also has “buy-in” since he or she helped set the goals, and the evaluation can be used as a method for further skill development. This method is best applied for positions that are not routine and require a higher level of thinking to perform the job. To be efficient at MBOs, the managers and employee should be able to write strong objectives. To write objectives, they should be SMART: [7]

1. Specific. There should be one key result for each MBO. What is the result that should be achieved?

1. Measurable. At the end of the time period, it should be clear if the goal was met or not. Usually a number can be attached to an objective to make it measurable, for example “sell $1,000,000 of new business in the third quarter.”

1. Attainable. The objective should not be impossible to attain. It should be challenging, but not impossible.

1. Result oriented. The objective should be tied to the company’s mission and values. Once the objective is made, it should make a difference in the organization as a whole.

1. Time limited. The objective should have a reasonable time to be accomplished, but not too much time.

Setting MBOs with Employees

To make MBOs an effective performance evaluation tool, it is a good idea to train managers and determine which job positions could benefit most from this type of method. You may find that for some more routine positions, such as administrative assistants, another method could work better.

Behaviorally Anchored Rating Scale (BARS)

A BARS method first determines the main performance dimensions of the job, for example, interpersonal relationships. Then the tool utilizes narrative information, such as from a critical incidents file, and assigns quantified ranks to each expected behavior. In this system, there is a specific narrative outlining what exemplifies a “good” and “poor” behavior for each category. The advantage of this type of system is that it focuses on the desired behaviors that are important to complete a task or perform a specific job. This method combines a graphic rating scale with a critical incidents system. The US Army Research Institute [8] developed a BARS scale to measure the abilities of tactical thinking skills for combat leaders. Figure 11.4 “Example of BARS” provides an example of how the Army measures these skills.

Figure 10.4 Example of BARS

Figure 10.5 More Examples of Performance Appraisal Types

How Would You Handle This?

Playing Favorites

You were just promoted to manager of a high-end retail store. As you are sorting through your responsibilities, you receive an e-mail from HR outlining the process for performance evaluations. You are also notified that you must give two performance evaluations within the next two weeks. This concerns you, because you don’t know any of the employees and their abilities yet. You aren’t sure if you should base their performance on what you see in a short time period or if you should ask other employees for their thoughts on their peers’ performance. As you go through the files on the computer, you find a critical incident file left from the previous manager, and you think this might help. As you look through it, it is obvious the past manager had “favorite” employees and you aren’t sure if you should base the evaluations on this information. How would you handle this?

Table 10.3 Advantages and Disadvantages of Each Performance Appraisal Method

Type of Performance Appraisal Method

Advantages

Disadvantages

Graphic Rating Scale

Inexpensive to develop

Subjectivity

Easily understood by employees and managers

Can be difficult to use in making compensation and promotion decisions

Essay

Can easily provide feedback on the positive abilities of the employee

Subjectivity

Writing ability of reviewer impacts validity

Time consuming (if not combined with other methods)

Checklist scale

Measurable traits can point out specific behavioral expectations

Does not allow for detailed answers or explanations (unless combined with another method)

Critical Incidents

Provides specific examples

Tendency to report negative incidents

Time consuming for manager

Work Standards Approach

Ability to measure specific components of the job

Does not allow for deviations

Ranking

Can create a high-performance work culture

Possible bias

Validity depends on the amount of interaction between employees and manager

Can negatively affect teamwork

MBOs

Open communication

Many only work for some types of job titles

Employee may have more “buy-in”

BARS

Focus is on desired behaviors

Time consuming to set up

Scale is for each specific job

Desired behaviors are clearly outlined

No one performance appraisal is best, so most companies use a variety of methods to ensure the best results.

[1] Richard Grote, Forced Ranking: Making Performance Management Work (Boston: Harvard Business School Press, 2005).

[2] “The Struggle to Measure Performance,” BusinessWeek, January 9, 2006, accessed August 15, 2011, 
http://www.businessweek.com/magazine/content/06_02/b3966060.htm
.

[3] Lisa Sprenkel, “Forced Ranking: A Good Thing for Business?” Workforce Management, n.d., accessed August 15, 2011, 
http://homepages.uwp.edu/crooker/790-iep-pm/Articles/meth-fd-workforce.pdf
.

[4] Mark Lowery, “Forcing the Issue,” Human Resource Executive Online, n.d., accessed August 15, 2011, 
http://www.hrexecutive.com/HRE/story.jsp?storyId=4222111&query=ranks
.

[5] Mark Lowery, “Forcing the Issue,” Human Resource Executive Online, n.d., accessed August 15, 2011, 
http://hre.lrp.com/HRE/story.jsp?query=ranking&storyId=4222111
.

[6] Peter Drucker, The Practice of Management (New York: Harper, 2006).

[7] George T. Doran, “There’s a S.M.A.R.T. Way to Write Management’s Goals and Objectives,”Management Review 70, no. 11 (1981): 35.

[8] Jennifer Phillips, Jennifer Shafter, Karol Ross, Donald Cox, and Scott Shadrick, Behaviorally Anchored Rating Scales for the Assessment of Tactical Thinking Mental Models (Research Report 1854), June 2006, US Army Research Institute for the Behavioral and Social Sciences, accessed August 15, 2011, 
http://www.hqda.army.mil/ari/pdf/RR1854.pdf
.

10.3  Completing and Conducting the Appraisal

Learning Objectives

1. Be able to discuss best practices in performance review planning.

1. Be able to write an improvement plan for an employee.

So far, we have discussed the necessity of providing formal feedback to employees through a systematic performance evaluation system. We have stressed the importance of making sure the HR professional knows how often performance evaluations should be given and if they are tied to pay increases.

The next step is to make sure you know the goals of the performance evaluation; for example, is the goal to improve performance and also identify people for succession planning? You will then determine the source for the performance evaluation data, and then create criteria and rating scales that relate directly to the employee’s job description. Once this is done, the successful functioning of the performance evaluation system largely depends on the HR professional to implement and communicate the system to managers and employees. This will be the primary focus of our next section.

Best Practices in Performance Appraisals

The most important things to remember when developing a performance evaluation system include the following:

1. Make sure the evaluation has a direct relationship to the job. Consider developing specific criteria for each job, based on the individual job specifications and description.

1. Involve managers when developing the process. Garner their feedback to obtain “buy-in” for the process.

1. Consider involving the employee in the process by asking the employee to fill out a self-evaluation.

1. Use a variety of methods to rate and evaluate the employee.

1. Avoid bias by standardizing performance evaluations systems for each job.

1. Give feedback on performance throughout the year, not just during performance review times.

1. Make sure the goals of the performance evaluation tie into the organizational and department goals.

1. Ensure the performance appraisal criteria also tie into the goals of the organization, for a strategic HRM approach.

1. Review the evaluation for each job title often, since jobs and expectations change.

Figure 10.6 Best Practices in Performance Appraisal Systems

As you can see from Figure 10.7 “Performance Review System”, the performance appraisal aspect is just one part of the total process. We can call this a performance review system. The first step of the process is goal setting with the employee. This could mean showing the employee his or her performance appraisal criteria or sitting down with the employee to develop MBOs. The basic idea here is that the employee should know the expectations and how his or her job performance will be rated.

Constant monitoring, feedback, and coaching are the next step. Ensuring the employee knows what he or she is doing well and is not doing well in a more informal manner will allow for a more productive employee.

Next, of course, is the formal performance evaluation process. Choosing the criteria, rating scale, and source of the evaluation are steps we have already discussed. The next step is to work with the employee to develop improvement plans (if necessary) and offer any rewards as a result of excellent performance. The process then begins again, setting new goals with the employee.

Figure 10.7 Performance Review System

Training Managers and Employees

As HR professionals, we know the importance of performance evaluation systems in developing employees, but this may not always be apparent to the managers we work with on a daily basis. It is our job to educate managers and employees on the standards for completing performance evaluation forms as well as train them on how to complete the necessary documents (criteria and ratings), how to develop improvement plans when necessary, and how to deliver the performance appraisal interview.

Employee Feedback

First, after you have developed the new performance appraisal system (or adjusted an old one), consider offering training on how to effectively use it. The training, if required, can save time later and make the process more valuable. What we want to avoid is making it seem as if the performance appraisal process is “just one more thing” for managers to do. Show the value of the system in your training or, better yet, involve managers in developing the process to begin with.

Set standards should be developed for managers filling out the performance ratings and criteria. The advantage of this is accuracy of data and limiting possible bias. Consider these “ground rules” to ensure that information is similar no matter which manager is writing the evaluation:

1. Use only factual information and avoid opinion or perception.

1. For each section, comments should be at least two sentences in length, and examples of employee behavior should be provided.

1. Reviews must be complete and shared with the employee before the deadline.

1. Make messages clear and direct.

1. Focus on observable behaviors.

Once your managers are trained, understand how to fill out the forms, and are comfortable with the ground rules associated with the process, we can coach them on how to prepare for performance evaluations. For example, here are the steps you may want to discuss with your managers who provide performance evaluations:

1. Review the employee’s last performance evaluation. Note goals from the previous evaluation period.

1. Review the employee’s file and speak with other managers who interface with this person. In other words, gather data about performance.

1. Fill out the necessary forms for this employee’s appraisal. Note which areas you want to address in the appraisal interview with the employee.

1. If your organization bases pay increases on the performance evaluation, know the pay increase you are able to offer the employee.

1. Write any improvement plans as necessary.

1. Schedule a time and date with the employee.

Most people feel nervous about giving and receiving performance evaluations. One way to limit this is to show the employee the written evaluation before the interview, so the employee knows what to expect. To keep it a two-way conversation, many organizations have the employee fill out the same evaluation, and answers from the employee and manager are compared and discussed in the interview. When the manager meets with the employee to discuss the performance evaluation, the manager should be clear, direct, and to the point about positives and weaknesses. The manager should also discuss goals for the upcoming period, as well as any pay increases or improvement plans as a result of the evaluation. The manager should also be prepared for questions, concerns, and reasons for an employee’s not being able to meet performance standards.

Improvement plans should not be punitive, but the goal of an improvement plan should be to help the employee succeed. Improvement plans are discussed in Chapter 7 “Retention and Motivation”. Coaching and development should occur throughout the employee’s tenure, and he or she should know before the performance evaluation whether expectations are not being met. This way, the introduction of an improvement plan is not a surprise. There are six main components to an employee improvement plan:

1. Define the problem.

1. Discuss the behaviors that should be modified, based on the problem.

1. List specific strategies to modify the behavior.

1. Develop long- and short-term goals.

1. Define a reasonable time line for improvements.

1. Schedule “check-in” dates to discuss the improvement plan.

An employee improvement plan works best if it is written with the employee, to obtain maximum buy-in. Once you have developed the process and your managers are comfortable with it, the process must be managed. This is addressed in Section 10.3.3 “Organizing the Performance Appraisal Process”.

Organizing the Performance Appraisal Process

While it will be up to the individual manager to give performance appraisals to employees, as an HR professional, it will be up to you to develop the process (which we have already discussed) and to manage the process. Here are some things to consider to effectively manage the process:

1. Provide each manager with a job description for each employee. The job description should highlight the expectations of each job title and provide a sound basis for review.

1. Provide each manager with necessary documents, such as the criteria and rating sheets for each job description.

1. Give the manager instructions and ground rules for filling out the documents.

1. Work with the manager on pay increases for each employee, if your organization has decided to tie performance evaluations with pay increases.

1. Provide coaching assistance on objectives development and improvement plans, if necessary.

1. Give time lines to the manager for each performance review he or she is responsible for writing.

Most HR professionals will keep a spreadsheet or other document that lists all employees, their manager, and time lines for completion of performance evaluations. This makes it easier to keep track of when performance evaluations should be given.

Of course, the above process assumes the organization is not using software to manage performance evaluations. Numerous types of software are available that allow the HR professional to manage key job responsibilities and goals for every employee in the organization. This software tracks progress on those goals and allows the manager to enter notes (critical incidents files) online. The software can track 360 reviews and send e-mail reminders when it is time for an employee or manager to complete evaluations. This type of software can allow for a smoother, more streamlined process. Of course, as with any new system, it can be time-consuming to set up and train managers and employees on how to use the system. However, many organizations find the initial time to set up software or web-based performance evaluation systems well worth the easier recording and tracking of performance goals.

No matter how the system is managed, it must be managed and continually developed to meet the ultimate goal—continuing development of employees.

Performance Appraisal Interviews

Once a good understanding of the process is developed, it is time to think about the actual meeting with the employee. A performance review process could be intricately detailed and organized, but if the meeting with the employee doesn’t go well, the overall strategic objective of performance reviews may not be met. In Norman R. F. Maier’s famous book The Appraisal Interview, he addressed three types of appraisal interview styles. The first is the tell and sell interview. In this type of interview, the manager does most of the talking and passes his or her view to the employee. In the tell and listen type of interview, the manager communicates feedback and then addresses the employee’s thoughts about the interview. In the problem-solving interview, the employee and the manager discuss the things that are going well and those that are not going well, which can make for a more productive discussion. To provide the best feedback to the employee, consider the following:

1. Be direct and specific. Use examples to show where the employee has room for improvement and where the employee exceeds expectations, such as, “The expectation is zero accidents, and you have not had any accidents this year.”

1. Do not be personal; always compare the performance to the standard.For example, instead of saying, “You are too slow on the production line,” say, the “expectations are ten units per hour, and currently you are at eight units.”

1. Remember, it is a development opportunity. As a result, encourage the employee to talk. Understand what the employee feels he does well and what he thinks he needs to improve.

1. Thank the employee and avoid criticism. Instead of the interview being a list of things the employee doesn’t do well (which may give the feeling of criticizing), thank the employee for what the employee does well, and work on action plans together to fix anything the employee isn’t doing well. Think of it as a team effort to get the performance to the standard it needs to be.

The result of a completed performance evaluation usually means there are a variety of ramifications that can occur after evaluating employee performance:

1. The employee now has written, documented feedback on his or her performance.

1. The organization has documented information on low performance, in case the employee needs to be dismissed.

1. The employee has performed well and is eligible for a raise.

1. The employee has performed well and could be promoted.

1. Performance is not up to expectations, so an improvement plan should be put into place.

1. The employee hasn’t done well, improvement plans have not worked (the employee has been warned before), and the employee should be dismissed.

In each of these cases, planning in advance of the performance appraisal interview is important, so all information is available to communicate to the employee. Consider Robin, an employee at Blewett Gravel who was told she was doing an excellent job. Robin was happy with the performance appraisal and when asked about promotion opportunities, the manager said none was available. This can devalue a positive review and impact employee motivation. The point, of course, is to use performance evaluations as a development tool, which will positively impact employee motivation.

10.4  Case and Summary

Chapter Summary

· A performance evaluation system is a systematic way to examine how well an employee is performing in his or her job.

· The use of the term systematic implies the process should be planned.

· Depending on which research you read, some believe the performance evaluation system is one of the most important to consider in HRM, but others view it as a flawed process, which makes it less valuable and therefore ineffective.

· The first step in designing a performance appraisal process is to determine how often the appraisals will be given. Consideration of time and effort to administer the evaluation should be a deciding factor.

· Many companies offer pay increases as part of the system, while some companies prefer to separate the process. Determining how this will be handled is the next step in the performance appraisal development process.

· Goals of the performance evaluation should be discussed before the process is developed. In other words, what does the company hope to gain from this process? Asking managers and employees for their feedback on this is an important part of this consideration.

· After determining how often the evaluations should be given, and if pay will be tied to the evaluations and goals, you can now sit down and develop the process. First, determine what forms will be used to administer the process.

· After you have determined what forms will be used (or developed), determine who will be the source for the information. Managers, peers, and customers are options. A 360 review process combines several sources for a more thorough review.

· There are some errors that can occur in the process. These include halo effectsor comparing an employee to another as opposed to rating them only on the objectives.

· Performance evaluations should always be based on the actual job description.

· Our last step in the development of this process is to communicate the process and train our employees and managers on the process. Also, training on how best to use feedback is the final and perhaps most important step of the process.

· When developing performance appraisal criteria, it is important to remember the criteria should be job specific and industry specific.

· The performance appraisal criteria should be based on the job specifications of each specific job. General performance criteria are not an effective way to evaluate an employee.

· The rating is the scale that will be used to evaluate each criteria item. There are a number of different rating methods, including scales of 1–5, yes or no questions, and essay.

· In a graphic rating performance evaluation, employees are rated on certain desirable attributes. A variety of rating scales can be used with this method. The disadvantage is possible subjectivity.

· An essay performance evaluation will ask the manager to provide commentary on specific aspects of the employee’s job performance.

· A checklist utilizes a yes or no rating selection, and the criteria are focused on components of the employee’s job.

· Some managers keep a critical incidents file. These incidents serve as specific examples to be written about in a performance appraisal. The downside is the tendency to record only negative incidents and the time it can take to record this.

· The work standards performance appraisal approach looks at minimum standards of productivity and rates the employee performance based on minimum expectations. This method is often used for sales forces or manufacturing settings where productivity is an important aspect.

· In a ranking performance evaluation system, the manager ranks each employee from most valuable to least valuable. This can create morale issues within the workplace.

· An MBO or management by objectives system is where the manager and employee sit down together, determine objectives, then after a period of time, the manager assesses whether those objectives have been met. This can create great development opportunities for the employee and a good working relationship between the employee and manager.

· An MBO’s objectives should be SMART: specific, measurable, attainable, results oriented, and time limited.

· A BARS approach uses a rating scale but provides specific narratives on what constitutes good or poor performance.

· There are many best practices to consider when developing, implementing, and managing a performance appraisal system. First, the appraisal system must always tie into organization goals and the individual employee’s job description.

· Involvement of managers in the process can initiate buy-in for the process.

· Consider using self-evaluation tools as a method to create a two-way conversation between the manager and the employee.

· Use a variety of rating methods to ensure a more unbiased result. For example, using peer evaluations in conjunction with self and manager evaluations can create a clearer picture of employee performance.

· Be aware of bias that can occur with performance appraisal systems.

· Feedback should be given throughout the year, not just at performance appraisal time.

· The goals of a performance evaluation system should tie into the organization’s strategic plan, and the goals for employees should tie into the organization’s strategic plan as well.

· The process for managing performance evaluations should include goal setting, monitoring and coaching, and doing the formal evaluation process. The evaluation process should involve rewards or improvement plans where necessary. At the end of the evaluation period, new goals should be developed and the process started over again.

· It is the HR professional’s job to make sure managers and employees are trained on the performance evaluation process.

· Standards should be developed for filling out employee evaluations, to ensure consistency and avoid bias.

· The HR professional can assist managers by providing best practices information on how to discuss the evaluation with the employee.

· Sometimes when performance is not up to standard, an improvement plan may be necessary. The improvement plan identifies the problem, the expected behavior, and the strategies needed to meet the expected behavior. The improvement plan should also address goals, time lines to meet the goals, and check-in dates for status on the goals.

· It is the job of the HR professional to organize the process for the organization. HR should provide the manager with training, necessary documents (such as criteria and job descriptions), instructions, pay increase information, and coaching, should the manager have to develop improvement plans.

· Some HR professionals organize the performance evaluation information in an Excel spreadsheet that lists all employees, job descriptions, and due dates for performance evaluations.

· There are many types of software available to manage the process. This software can manage complicated 360 review processes, self-evaluations, and manager’s evaluations. Some software can also provide time line information and even send out e-mail reminders.

· The performance evaluation process should be constantly updated and managed to ensure the results contribute to the success of the organization.

Chapter Case

Revamping the System

It is your first six months at your new job as an HR assistant at Groceries for You, a home delivery grocery service. When you ask the HR director, Chang, about performance evaluations, he just rolls his eyes and tells you to schedule a meeting in his Outlook calendar to discuss them. In the meantime, you gather some data that might be helpful in your discussion with Chang.

Number of managers

4

Number of employees

82

Average span of control

Delivery—38

Warehouse—24

Marketing/technology—16

Job types

11—customer service

1—delivery manager

1—warehouse manager

1—marketing and technology manager

38—delivery drivers

24—warehouse workers

1—tech support

5—marketing and website design

When you meet, Chang is very forward with you about the current process. “Right now, managers groan when they are told they need to complete evaluations. The evaluations are general—we use the same form for all jobs in the organization. It appears that promotion decisions are not based on the evaluations but instead tend to be based on subjective criteria, such as how well the manager likes the individual. We really need to get a handle on this system, but I haven’t had the time to do it. I am hoping you can make some recommendations for our system and present them to me and then to the managers during next month’s meeting. Can you do this?”

1. Detail each step you will take as you develop a new performance evaluation system.

1. Identify specifics such as source, type of rating system, and criteria plans for each job category. Discuss budget for each performance evaluation. Address how you will obtain management buy-in for the new process.

1. Develop PowerPoint slides for your presentation to management about your proposed process and forms.



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