MANAGING HUMAN

RESOURCES AND PERFORMANCE

Session 4 Feedback, Managing Expectations and an introduction to the Psychological Contract

Last week we looked at• Appraisals• 360 degree feedback• Learning and development• Objectives and performance standards• Measurement• Pay and reward

This week we will be considering• More detail on using some performance management tools• Feedback• Managing expectations• Key Performance indicators• Psychological contract (an introduction)

• We will also look at High Performance Working article to gain a further perspective

Appraisals and 360 degree feedback • Design and usage

• Getting it wrong the employer• Getting it wrong the employee• A 30 min US based training video that is nice and clear (not for

now –just a sample)• Examples

Giving (and getting) FeedbackNumber One Rule: Try to Make it a Positive Process and Experience

•Before giving feedback make sure you remind yourself why you are doing it. The purpose for giving feedback is to improve the situation or performance. You won't accomplish that by being harsh, critical, or offensive.

•That's not to say you must always be positive. There is a role for negativity However this should be used sparingly. You'll most often get much more from people when your approach is positive and focused on improvement.

•Outline Approach•Be Timely•Make it Regular•Prepare Your Comments•Be Specific•Criticise in Private•Limit Your Focus•Talk About Positives •Provide Specific Suggestions•Follow Up

The Power of Expectations• It’s not the performance alone that determines people’s response,

it’s what was expected before the event that makes all the difference. •Where expectations are

zero, even small pleasant surprises will please.•The higher the expectations, the more difficult it becomes to please.

The basic principles about expectations and emotional responses

The basic principles about expectations and emotional responses can probably be best described diagrammatically using this simple scale.

Managing Negative Expectations

Something nasty coming?•There are only two alternatives if you want to avoid trouble :

•Improve the content of the announcement until it does match expectations

•Take time to prepare employee expectations, or reduce them to a level where you can announce

Using KPI - Key Performance Indicators•Understanding the context•What is the vision for the future?•What is the strategy? How will the strategic vision be accomplished?

•What are the organisation's objectives? What needs to be done to keep moving in the strategic direction?

•What are the Critical Success Factors? Where should the focus be to achieve the vision?

•Defining KPIs•Which metrics will indicate that you are successfully pursuing your vision and strategy?

•How many metrics should you have? (Enough, but not too many!)

•How often should you measure?•Who is accountable for the metric?•How complex should the metric be?

•What should you use as a benchmark?•How do you ensure the metrics reflect strategic drivers for organizational success?

•How could the metrics be cheated, and how will you guard against this?

•What negative, perverse incentives would be set up if this metric was used, and how will you ensure these perverse incentives are not created?

•KPIs and Rewards, Recognition, and Development•When you are satisfied that you have meaningful metrics for measuring organizational or employee performance, you now have to make sure that the supporting elements of employee performance are aligned as well.

•Just as what gets measured, gets done; so does what gets rewarded!

What is the psychological contract?Source see this CIPD link

•It has been defined as '…the perceptions of the two parties, employee and employer, of what their mutual obligations are towards each other'. These obligations will often be informal and imprecise: they may be inferred from actions or from what has happened in the past, as well as from statements made by the employer, for example during the recruitment process or in performance appraisals. Some obligations may be seen as 'promises' and others as 'expectations'. The important thing is that they are believed by the employee to be part of the relationship with the employer. 

•The psychological contract on the other hand looks at the reality of the situation as perceived by the parties, and may be more influential than the formal contract in affecting how employees behave from day to day. It is the psychological contract that effectively tells employees what they are required to do in order to meet their side of the bargain and what they can expect from their job. It may not - indeed in general it will not - be strictly enforceable, though courts may be influenced by a view of the underlying relationship between employer and employee, for example in interpreting the common law duty to show mutual trust and confidence.

GUEST, D.E. and CONWAY, N. (2002) Pressure at work and the psychological contract. London: CIPD.

• Guest identifies the following key points: :• the extent to which employers adopt people management

practices will influence the state of the psychological contract• the contract is based on employees' sense of fairness and trust

and their belief that the employer is honouring the 'deal' between them

• where the psychological contract is positive, increased employee commitment and satisfaction will have a positive impact on business performance.

If the psychological contract is broken there are a number of impacts:

• a negative impact on job satisfaction• a negative impact on the commitment of the employee• a negative impact on employee engagement.

• Managers need to remember:• Employment relationships may deteriorate despite management’s best efforts:

nevertheless it is managers’ job to take responsibility for maintaining them.• Preventing breach in the first place is better than trying to repair the damage

afterwards.• Where breach cannot be avoided it may be better to spend time negotiating or

renegotiating the deal, rather than focusing too much on delivery.

Changes currently affecting the workplace include:

•more employees on part-time and flexible work.•organisations downsizing and delayering, meaning remaining employees have to do more.

•markets, technology and products constantly changing.• technology and finance becoming less important than human resources as sources of competitive advantage.

• traditional organisational structures becoming more fluid.

•The traditional psychological contract is generally described as an offer of commitment by the employee in return for job security provided by the employer  - or in some cases the legendary 'job for life'. The recession of the early 1990s and the continuing impact of globalisation are alleged to have destroyed the basis of this traditional deal since job security is no longer on offer. The new deal is said to rest on an offer of fair pay and treatment by the employer plus opportunities for training and development. On this analysis, an employer can no longer offer security and this has undermined the basis of employee commitment.

•Research suggests that in many ways the 'old' psychological contract is in fact still alive. Employees still want security: interestingly labour market data suggest that there has been little reduction in the length of time for which people stay in individual jobs. They are still prepared to offer loyalty, though they may feel less committed to the organisation as a whole than to their workgroup. In general they remain satisfied with their job.

Strategic implications• Process fairness: people want to know that their interests will be taken

into account when important decisions are made; they would like to be treated with respect; they are more likely to be satisfied with their job if they are consulted about change.

• Communications: an effective two-way dialogue between employer and employees is a necessary means of giving expression to employee 'voice'.

• Management style: in many organisations managers can no longer control the business 'top down' - they have to adopt a more 'bottom up' style. Crucial information, which management need, is known by employees from their interactions with customers and suppliers. 

• Managing expectations: employers need to make clear to new recruits what they can expect from the job. Managing expectations, particularly when bad news is anticipated, will increase the chances of establishing a realistic psychological contract.

• Measuring employee attitudes: employers should monitor employee attitudes on a regular basis as a means of identifying where action may be needed in order to improve performance.

Ambitious week, but you need this as there is no formal session in week 5• More detail on using some performance management tools• Feedback• Managing expectations• Key Performance indicators• Psychological contract (an introduction)

• We will also look at High Performance Working article to gain a further perspective

Remember

•I will be here next week at 3.15pm if you want to review any aspects covered to date.