3.2.1 Staff Performance Appraisals
A recent web poll asked the readers of HR Monthly what they considered to be the most important outcome from a staff performance appraisal. A surprising 64% said it was the opportunity to align individual and business objectives; 24% said more motivated and energised staff while a mere 7% responded with “correcting under-performance.”
How views of performance appraisals have changed!
When I was in the employment of a multi-national, staff appraisals ranged from the briefest of conversations exchanged at the urinals to the completion of lengthy forms designed to ensure that you were paid no more and no less than employees of equivalent status across the company and around the world.
Last year I was asked by a client to redesign their staff appraisal form. The one in current use was a mishmash of open-ended questions, many of dubious value to management and staff member alike and an over-emphasis on Key Performance Indicators. It was ten pages long and the challenge of hammering square pegs into round holes was such that both appraiser and appraisee frequently gave up the struggle. It wasn’t totally devoid of merit - the Job Performance Review section had some - but the consultant who had designed it - or rather compiled it - had clearly done a cut and paste job with other appraisal forms and the end result was a form that simply did not reflect the needs of my client.
I have always been very wary of standardisation. Too often, it’s an excuse to save time and it stifles innovation and original thought. Too often, the outcome is a compromise that doesn’t really do the job intended.
The shortfalls of standardisation were brought home to me in the early 1980’s when one of my roles was drafting supply contracts for the long-term supply of bulk explosives. I find it hard to believe now but in 1981, our office in Brisbane took delivery of its first PC. It was placed in the care of the State Manager’s secretary but she suffered a technology meltdown after three weeks so our secretary in the explosives department took over the “word processor”.
Now because I had studied contract law at university and no one else put their hand up for the job, I drafted each supply contract starting with a fresh sheet of paper and a checklist to make sure that nothing was left out. It wasn’t long before the people in our Head Office rang me and said. “Hey, we’ve had a good idea. We can file on the PC all the standard clauses in our contracts like Force Majeure, Liability and Property Passing etc and then you can simply copy and paste them when you write another contract”.
But these contracts were worth many millions of dollars and the final stage in a process that might have lasted two years or so. Every contract followed the same format but each had its own subtle differences - even with the so-called standard clauses. Lifting standard clauses from a file did not work and what was a day or two drafting a contract that accurately reflected the needs of both parties after months and months of negotiations?
It’s the same with performance appraisal forms. You have to decide what your objectives are and then you can design the form for achieving them.
This particular client has a vision statement, the last part of which reads “…. to be regarded by our clients and suppliers as the company they most enjoy doing business with”. It also has a Values statement that, among other things, acknowledges that its staff is its greatest asset and emphasises the maintenance of high standards of customer service through teamwork, motivation and enthusiasm. It was agreed that the appraisal form should reflect the Vision and Values of the company.
To this end, the form was divided into three parts. The first part - to be completed with the reviewing manager - links the role of the individual to the vision of the company. It ends with a question - “what role do you play in making XYZ the company our clients and suppliers most enjoy doing business with”. It might be accurate invoicing or providing technical support - but the point is that no matter what your level in the company, you have a role to play in achieving the Vision.
The second part has a heading - How can your job be made more enjoyable? The rationale is that the happier the staff member is the happier the clients and suppliers will be. Nine statements are tabled to each of which the staff member is asked to register his or her degree of agreement on a scale of 1 - 10. The statements range from “I feel that my good work is appreciated” to “I have a good understanding of XYZ’s commercial goals and strategies”. There is an open question at the end of this section, just in case there is any issue that has not been covered and then the reviewer and staff member are encouraged to discuss the ratings and the initiatives that might be taken by either party to address any issues raised. The actions are recorded against each statement.
Part 3 has the heading - How are you going? It is sub-divided into three sections. Everyone completes the first two sections and the first section addresses the degree to which the staff member displays the values that the company seeks to promote. For example, one statement reads “the degree to which the staff member displays service excellence towards external and/or internal customers”. (External and internal customers - and suppliers - have already been identified in Part 1) The reviewer has five “boxes” to choose from - Unsatisfactory, Needs Improvement, Competent, Above average and Outstanding. Each rating has a definition on the appraisal form. Section 2 rates the staff member on the operational requirements of the job.
Section 3 is completed by supervisory staff only and addresses issues of leadership, communication, delegation and the promotion of company values.
The whole concept of Key Performance Indicators and Objectives has been scrapped for two very good reasons. Firstly, for lower level staff in particular, KPI’s were very difficult to define but more importantly KPI’s relate to individuals and hence run counter to some extent to the promotion of teamwork and collective responsibility for meeting customer and supplier needs.
Feedback to the new appraisal form has been very positive. The recording of actions to be taken by the interviewer or the staff member result in an on-going dialogue from one appraisal to the next. Moreover, staff performance appraisal has been integrated into the Strategic Business Plan of the company. Coincidentally, it also meets the dual objectives of aligning individual and company performance and contributing to a more motivated and energised staff - the two outcomes that accounted for 88% of the votes in the recent HR Monthly poll.
There is also one further benefit that has yet to be exploited. Because much of the feedback is quantitative, it can be aggregated and compared - by staff location, by staff level, by department or, eventually, year by year. This enables management to identify common issues and trends and to take appropriate action.
There are only two things more important than recruiting good staff - retaining them and using their talents in the pursuit of organisational objectives. Researchers long ago identified the three most powerful factors that motivate staff to give off their best for the benefit of their own job satisfaction and that of the organisation for whom they work. They are:
- Appreciation for good work
- Feeling “in” on things and
- Being treated with respect