Page 215 - Bruce Ellig - The Complete Guide to Executive Compensation (2007)

Chapter 5. Salary 201

Output Based. This type of appraisal (also called performance based) is one of three types:
what, how, and a combination of the two. The “what” approach is a detailed list of what is to
be done when. An example of a grid that might be used to evaluate each assignment in terms
of timeliness and quality is shown in Table 5-18.

Final Completion Date
Very On or
Not Significantly Significantly Slightly Ahead of
Quality Finished Late Late Late Schedule
Perfect 1.0 2.0 2.8 3.7 4.0

Outstanding 0.7 1.7 2.5 3.3 3.8

Superior 0.4 1.4 2.2 2.9 3.4
Very good 0.1 1.1 1.8 2.5 3.0
Good 0.0 0.8 1.4 2.0 2.5

Acceptable 0.0 0.5 1.0 1.5 2.0

Marginal 0.0 0.2 0.6 1.0 1.5
Very marginal 0.0 0.1 0.3 0.5 1.0
Unacceptable 0.0 0.0 0.1 0.2 0.5

Table 5-18. Performance matrix, quality vs. timelines
A brief description of an objective, or goal-oriented, performance management process,
sometimes called management by objective, is shown in Table 5-19. It is a process, not simply a
program: a program is something of limited time frame; a process is an ongoing event.

1. Identification and written description of specific goals to be accomplished (including timetable and
basis of measurement) by supervisor.
2. Vertical linkage of individual with group goals is carried out.
3. The subordinate makes a commitment to meeting the objectives.
4. Horizontal balance must be assured by the supervisor to ensure equal stretch by subordinates in
achieving goals.
5. Real-time assessments and feedback are given to the subordinate by the supervisor, assessing the
degree of accomplishments in relation to the stated objectives.
6. Closure at year-end measures the extent of achievement on each goal and aggregates these
component parts for the job as a whole.
7. The overall appraisal is “leveled” by adjusting for rater strictness or leniency, and is then expressed
in numerical or key word form for the purpose of determining the appropriate size of pay
adjustment.
8. The process begins all over again.

Table 5-19. Goal-oriented performance management process