Defining Performance and Choosing a Measurement Approach

4.1.

Defining Performance Performance management systems usually include measures of both behaviors (what an employee does) and results (the outcomes of an employee’s behavior). The definition of performance does not include the results of an employee’s behaviors but only the behaviors themselves. Performance is about behavior or what employees do, not about what employees produce or the outcomes of their work. Also, there are two additional characteristics of the behaviors we label “performance.” First, they are evaluative. This means that such behaviors can be judged as negative, neutral, or positive for individual and organizational effectiveness. In other words, the value of these behaviors can vary based on whether they make a contribution toward the accomplishment of individual, unit, and organizational goals. Second, performance is multidimensional. This means that there are many different kinds of behaviors that have the capacity to advance (or hinder) organizational goals. As an example, consider a set of behaviors that can be grouped under the general label “contribution to effectiveness of others in the work unit.” This set of behaviors can be defined as follows : Works with others within and outside the unit in a manner that improves their effectiveness; shares information and resources; develops effective working relationships; builds consensus; and constructively manages conflict. Contribution to the effectiveness of others in the work unit could be assessed by using a scale including anchors demonstrating various levels of competence. For example, anchors could be words and phrases such as “outstanding,” “significantly exceeds standards,” “fully meets standards,” “does not fully meet standards,” and “unacceptable.” This illustrates the evaluative nature of performance because this set of behaviors is judged as positive, neutral, or negative. In addition, this example illustrates the multidimensional nature of performance because there are several behaviors that, combined, affect the overall perceived contribution that an employee makes to the effectiveness of others in the work unit. In other words, we would be missing important information if we only considered, for example, “shares information and resources” and did not consider the additional behaviors listed earlier. Because not all behaviors are observable or measurable, performance management systems often include measures of results or consequences that we infer are the direct result of employees’ behaviors. Take the case of a salesperson whose job consists of visiting clients to offer them new products or services. The salesperson’s supervisor is back in the home office and does not have an opportunity to observe the salesperson’s behaviors firsthand. In this case sales volume may be used as a proxy for a behavioral measure. In other words, the supervisor makes the assumption that if the salesperson is able to produce high sales figures, then she is probably engaging in the right behaviors.

4.2.	What factors cause an employee to perform at a certain level? Why do certain individuals perform better than others? A combination of three factors allows some people to perform at higher levels than others: (1) declarative knowledge, (2) procedural knowledge, and (3) motivation. Declarative knowledge is information about facts and things, including information regarding a given task’s requirements, labels, principles, and goals. Procedural knowledge is a combination of knowing what to do and how to do it and includes cognitive, physical, perceptual, motor, and interpersonal skills. Finally, motivation involves three types of choice behaviors :
	1.	Choice to expend effort (e.g., “I will go to work today”)
	2.	Choice of level of effort (e.g., “I will put in my best effort at work” versus “I will not try very hard”)
	3.	Choice to persist in the expenditure of that level of effort (e.g., “I will give up after a little while” versus “I will persist no matter what”)
		Table 4.1. summarizes the components of declarative knowledge, procedural knowledge, and motivation. All three determinants of performance must be present for performance to reach high levels. In other words, the three determinants have a multiplicative relationship such that. Performance = Declarative Knowledge * Procedural Knowledge * Motivation If any of the determinants has a value of 0, then performance also has a value of 0. For example, consider the case of Jane, a salesclerk who works in a national clothing retail chain. Jane has excellent declarative knowledge regarding the merchandise. Specifically, she knows all of the brands, prices, sizing charts, and sales promotions. We would consider her declarative knowledge to be very high. Jane is also intelligent and physically able to conduct all of the necessary tasks. We would consider Jane’s procedural knowledge also to be very high. Jane does not, however, show motivation to perform. When customers enter the store, she does not approach them; instead, she sits behind the cash register and talks on the phone. When her manager is in the store, she shows a high level of effort, but her coworkers complain that, as soon as the manager leaves, Jane stops working. Her overall performance, therefore, is likely to be poor because, although she has the declarative and procedural knowledge necessary to do the job, she is not motivated to apply them to her job when her supervisor is not watching her.

Tabel 4.1. Factors Determining Performance
Declarative Knowledge	Procedural Knowledge	Motivation
Facts	Cognitive skill	Choice to perform
Principles	Psychomotor skill	Level of effort
Goals	Physical skill	Persistence of effort
	Interpersonal skill

		We can think of a handful of individuals who have achieved the top level of performance in their fields. Think about Tiger Woods as a golf player, Bill Gates as Microsoft’s founder and businessman, Bobby Fischer as a chess player, Thomas Edison as an inventor, and Socrates as a philosopher. How did they achieve such excellence? What made these individuals’ performance so extraordinary? How were they able to improve their performance constantly even when others would believe they had reached a plateau? What these individuals have in common is that they devoted large number of hours to deliberate practice. Deliberate practice is different from regular practice and from simply working many hours a week. Professor K. Anders Ericsson of Florida State University gives the following example: “Simply hitting a bucket of balls is not deliberate practice, which is why most golfers don’t get better. Hitting an eight-iron 300 times with a goal of leaving the ball within 20 feet of the pin 80% of the time, continually observing results and making appropriate adjustments, and doing that for hours every day that’s deliberate practice.” Top performers in all fields engage in deliberate practice consistently, daily, including weekends. The famous pianist Vladimir Horowitz was quoted as saying: “If I don’t practice for a day, I know it; if I don’t practice for two days, my wife knows it; if I don’t practice for three days, the world knows it.” Deliberate practice involves the following five steps :
		1.	Approach performance with the goal of getting better and better.
		2.	As you are performing, focus on what is happening and why you are doing things the way you do.
		3.	Once your task is finished, seek performance feedback from expert sources, and the more sources the better.
		4.	Build mental models of your job, your situation, and your organization.
		5.	Repeat steps 1– 4 continually and on an ongoing basis.

	4.2.1.		Implications for Addressing Performance Problems The fact that performance is affected by the combined effect of three different factors has implications for addressing performance problems. In order to address performance problems properly, managers must find information that will allow them to understand whether the source of the problem is declarative knowledge, procedural knowledge, motivation, or some combination of these three factors. If an employee lacks motivation but the manager believes the source of the problem is declarative knowledge, the manager may send the employee to a company-sponsored training program so he can acquire the knowledge that is presumably lacking. This would obviously be a waste of time and resources for the individual, manager, and organization in Jane’s case because it is lack of motivation, and not lack of declarative knowledge, that is causing her poor performance. This is why performance management systems need not only to measure performance but also to provide information about the source of any performance deficiencies.
	4.2.2.		Factors Influencing Determinants of Performance The factors that determine performance are affected by the employee (i.e., abilities and previous experience), human resources (HR) practices, and the work environment. For example, some companies offer more opportunities for training than do others. At the top of the list in terms of annual training investment are IBM ($1 billion), Accenture ($717 million), and Ford Motor ($500 million).5 In these companies, declarative knowledge is not likely to be a big problem because, when lack of knowledge is identified, employees have multiple opportunities to fill in the gap. However, performance problems may be related more to procedural knowledge and motivation. In terms of procedural knowledge, employees may actually have the knowledge to perform certain tasks but may not have the skill to do them because of lack of opportunity for practice. In terms of motivation, downsizing interventions may have caused a “survivor syndrome,” which includes retained employees’ feelings of frustration, resentment, and even anger. These feelings are likely to have strong negative effects on motivation, and employees may expend minimal energy on their jobs. Thus, there are three individual characteristics that determine performance : procedural knowledge, declarative knowledge, and motivation. In addition, HR practices and the work environment can affect performance. When addressing performance problems, managers first need to identify which of these factors is hampering performance and then help the employee improve his or her performance.
4.3.	Performance Dimensions As noted earlier, performance is multidimensional, meaning that we need to consider many different types of behaviors to understand performance. Although we can identify many specific behaviors, two types of behaviors or performance facets stand out: task performance and contextual performance.  Some authors also use the labels “prosocial behaviors” and “organizational citizenship behaviors” in referring to contextual performance. Contextual and task performance must be considered separately because they do not necessarily occur in tandem. An employee can be highly proficient at her task, but be an underperformer regarding contextual performance.8 Task performance is defined as :
	-	Activities that transform raw materials into the goods and services that are produced by the organization
	-	Activities that help with the transformation process by replenishing the supply of raw materials, distributing its finished products, or providing important planning, coordination, supervising, or staff functions that enable the organization to function effectively and efficiently.
	Contextual performance is defined as those behaviors that contribute to the organization’s effectiveness by providing a good environment in which task performance can occur. Contextual performance includes behaviors such as the following :
	-	Persisting with enthusiasm and exerting extra effort as necessary to complete one’s own task activities successfully (e.g., being punctual and rarely absent, expending extra effort on the job)
	-	Volunteering to carry out task activities that are not formally part of the job (e.g., suggesting organizational improvements, making constructive suggestions)
	-	Helping and cooperating with others (e.g., assisting and helping coworkers and customers)
	-	Following organizational rules and procedures (e.g., following orders and regulations, showing respect for authority, complying with organizational values and policies)
	-	Endorsing, supporting, and defending organizational objectives (e.g., organizational loyalty, representing the organization favorably to outsiders)

4.4.	Approaches To Measuring Performance  Before we discuss how to measure performance, we must remember that employees do not perform in a vacuum. Figure 4.1 shows that employees work in an organizational context, engaging in certain behaviors that produce certain results. The same employee may behave differently (and produce different results) if placed in a different situation (e.g., working with a different supervisor or using better or worse equipment). Given the model shown in Figure 4.1, there are three approaches that can be used to measure performance: the behavior, results, and trait approaches.
	4.4.1.	Behavior Approach The behavior approach emphasizes what employees do on the job and does not consider employees’ traits or the outcomes resulting from their behaviors. This is basically a process-oriented approach that emphasizes how an employee does the job. The behavior approach is most appropriate under the following circumstances :
		-	The link between behaviors and results is not obvious. Sometimes the relationship between behaviors and the desired outcomes is not clear. In some cases, the desired result may not be achieved in spite of the fact that the right behaviors are in place. For example, a salesperson may not be able to close a deal because of a downturn in the economy. In other cases, results may be achieved in spite of the absence of the correct behaviors. For example, a pilot may not check all the items in the preflight checklist but the flight may nevertheless be successful (i.e., take off and land safely and on time). When the link between behaviors and results is not always obvious, it is beneficial to focus on behaviors as opposed to outcomes.
		-	Outcomes occur in the distant future. When the desired results will not be seen for months, or even years, the measurement of behaviors is beneficial. Take the case of NASA’s Mars Exploration Rover Mission program. NASA launched the exploration rover Spirit on June 10, 2003, which landed on Mars on January 3, 2004, after traveling 487 million kilometers (302.6 million miles). Its twin, the exploration rover Opportunity, was launched on July 7, 2003, and landed on the opposite side of Mars on January 24, 2004. From launching to landing, this mission took about six months to complete. In this circumstance, it is certainly appropriate to assess the performance of the engineers involved in the mission by measuring their behaviors in short intervals during this six-month period rather than waiting until the final result (i.e., successful or unsuccessful landing) is observed.
		-	Poor results are due to causes beyond the performer’s control. When the results of an employee’s performance are beyond the employee’s control, it makes sense to emphasize the measurement of behaviors. For example, consider a situation involving two assembly-line workers, one of them working the day shift and the other the night shift. When the assembly line gets stuck because of technical problems, the employee working during the day receives immediate technical assistance, so the assembly line is back in motion in less than five minutes. By contrast, the employee working the night shift has very little technical support and, therefore, when the assembly line breaks down, it takes about 45 minutes for it to be up and running again. If we measured results, we would conclude that the performance of the day-shift employee is far superior to that of the night-shift employee, but this would be an incorrect conclusion. Both employees may be equally competent and do the job equally well. The results produced by these employees are uneven because they depend on the amount and quality of technical assistance they receive when the assembly line is stuck.
	4.4.2.	Results Approach The results approach emphasizes the outcomes and results produced by the employees. It does not consider the traits that employees may possess or how employees do the job. This is basically a bottom-line approach that is not concerned about employee behaviors and processes but, instead, focuses on what is produced (e.g., sales, number of accounts acquired, time spent with clients on the telephone, number of errors). Defining and measuring results usually takes less time than defining and measuring behaviors needed to achieve these results. Also, the results approach is usually seen as more cost-effective because results can be less expensive to track than behaviors. Overall, data resulting from a results approach seem to be objective and are intuitively very appealing.
		The results approach is most appropriate under the following circumstances :
		-	Workers are skilled in the needed behaviors. An emphasis on results is appropriate when workers have the necessary knowledge and skills to do the work. In such situations, workers know what specific behaviors are needed to achieve the desired results and they are also sufficiently skilled to know what to do to correct any process-related problems when the desired results are not obtained. Consider the example of a professional basketball player. A free throw is an unhindered shot made from the foul line and is given to one team to penalize the other team for committing a foul. Free throw shooting can make the difference between winning and losing in a close basketball game. Professional players know that there is really no secret to becoming a great free throw shooter : just hours and hours of dedicated practice besides actual basketball play. In assessing the performance of professional basketball players, the free throw shooting percentage is a key results-oriented performance indicator because most players have the skills to do it well. It’s just a matter of assessing whether they do it or not.
		-	Behaviors and results are obviously related. In some situations, certain results can be obtained only if a worker engages in certain specific behaviors. This is the case of jobs involving repetitive tasks such as assembly-line work or newspaper delivery. Take the case of a person delivering newspapers. Performance can be measured adopting a results approach: whether the newspaper is delivered to every customer within a particular time frame. For the employee to obtain this result, she needs to pick up the papers at a specific time and use the most effective delivery route. If these behaviors are not present, the paper will not be delivered on time.
		-	Results show consistent improvement over time. When results improve consistently over time, it is an indication that workers are aware of the behaviors needed to complete the job successfully. In these situations, it is appropriate to adopt a results approach to assessing performance.
		-	There are many ways to do the job right. When there are different ways in which one can do the tasks required for a job, a results approach is appropriate. An emphasis on results can be beneficial because it could encourage employees to achieve the desired outcomes in creative and innovative ways.

4.4.3.

Trait Approach The trait approach emphasizes the individual performer and ignores the specific situation, behaviors, and results. If one adopts the trait approach, raters evaluate relatively stable traits. These can include abilities, such as cognitive abilities (which are not easily trainable) or personality (which is not likely to change over time). For example, performance measurement may consist of assessing an employee’s intelligence and conscientiousness at the end of each review period. This approach is justified based on the positive relationship found between abilities (such as intelligence) and personality traits (such as conscientiousness) and desirable work related behaviors. Several vendors provide tools to assess relatively stable traits such as these, sometimes with the capability of administering them online. Vendors who describe their products online include ddi.com, www.appliedpsych.com, www.previsor.com, www.kenexa.com, www.personneldecisions.com, and www.vangent-hcm.com. What are some of the challenges of implementing a system that emphasizes the measurement of traits only? First, traits are not under the control of individuals. In most cases, they are fairly stable over one’s life span. They are not likely to change even if an individual is willing to exert substantial effort to do so. Consequently, employees may feel that a system based on traits is not fair because the development of these traits is usually beyond their control.  Second, the fact that an individual possesses a certain trait (e.g., intelligence) does not mean that this trait will necessarily lead to desired results and behaviors. As noted in Figure 4.1, individuals are embedded in specific situations. If the equipment is faulty and coworkers are uncooperative, even a very intelligent and conscientious employee is not likely to engage in behaviors conducive to supporting the organization’s goals. In spite of these challenges, there are situations in which a trait-oriented approach can be fruitful. For example, as part of its business strategy, an organization may anticipate drastic structural changes that will lead to the reorganization of most functions and the resulting reallocation of employees. In such a circumstance, it may be useful to assess the traits possessed by the various individuals so that fair and appropriate decisions are made regarding the allocation of human resources across the newly created organizational units. This is, of course, a fairly unique circumstance. In most organizations, performance is not measured using the trait approach. This is why two more popular approaches to measuring performance are based on behaviors and results, as we discussed earlier.