February 1995

Warranty Conditions

Do you want your reinvented performance management program to work? According to researchers David N. Ammons and Stephen E. Condrey, you will need to clearly spell out and meet certain warranty conditions. While the concept of warranties is well understood in the marketing of consumer products (i.e., the conditions the consumer must meet for the product—car, television, etc.—to work properly), it also applies to performance management.

• Under Warranty
• Seven Warranty Conditions

Under Warranty. If you purchase a television, the manufacturer will provide a warranty against defects in material and workmanship. The warranty will not be honored, however, if the television is abused or misused. If you adhere to the warranty conditions and a product does not work, the manufacturer will honor the warranty. Likewise, a performance management program will be successful only when implemented in an environment with certain characteristics present, that is, with certain "warranty conditions" met. If the organization fails to meet and maintain those conditions and the program ends up misused or misapplied, the program "won't work" to produce meaningful results. The same bad environment would defeat any new efforts.

Seven Warranty Conditions. In an article entitled "Performance Appraisal in Local Government: Warranty Conditions" published in the Spring 1991 issue of Public Productivity and Management Review, researchers Ammons and Condrey say that for any performance management system to have a fair trial, an organization must meet seven warranty conditions, which are:

• Commitment to careful selection and conscientious development of employees. Organizations must commit to selecting employees who have a reasonable chance of success in their work and to providing additional development opportunities to increase their skills. Using performance feedback to point out deficiencies in employees who have little aptitude or training for their jobs is unlikely to produce productive workers.
• Commitment of thought and action across organizational levels. Organizations require employees and supervisors who know what their managers expect of them, and managers who are attuned to both organizational goals and priorities and the needs of their workforce. Performance appraisal by itself cannot create order where none exists.
• An organizational culture that makes performance management a key supervisory responsibility. Organizations must make goal setting and feedback a core element of supervisory responsibility and devote the resources necessary to prepare supervisors to carry out their responsibility. An attitude that the feedback process interrupts more important duties can doom any appraisal system.
• Commitment to conscientious and objective discrimination of performance. Organizations must have open and explicit methods and criteria for distinguishing among levels of performance. If formal appraisal does not exist or is meaningless in its application, the distinctions that are made will often be obscure and a source of employee dissatisfaction.
• Positive relationships between performance and rewards. Organizations must use timely and meaningful monetary and non-monetary rewards to send a clear message to employees that their achievements are appreciated and recognized. In the absence of such a relationship, employees may feel their efforts are of no significant consequence.
• Commitment to extraordinary action on exceptional cases. Organizations must take appropriate actions on both extremes of performance. Employees whose performance is excellent should be recognized through promotions and rewards. Poor performers should be counseled on their deficiencies and removed if necessary. Failure to take such actions invalidates any performance management system.
• Upper management that is attentive to the process and products of performance appraisal. To be credible, a performance management system requires visible reinforcement of its importance by upper management. If the executives of an organization ignore the system or appear to be cynical about its worth, it will become a paper shuffling exercise.