Nobody wakes up in the morning and looks forward to conducting performance appraisals. So how can this “appraisal aversion” be changed?
Here are 8 tips for people who are looking for an alternative:
Separate discussions on pay and performance
There must be a complete separation of performance communication and any changes related to compensation. When the two elements take place at the same time, people have a strong tendency to focus on pay increases, not on performance outcomes. Therefore, performance discussions should be completed before any compensation adjustments are communicated and approved.
Budget constraints and compensation guidelines can place restrictions on financially rewarding employee results. When pay adjustments are perceived to be insufficient, people lose sight of the other important aspects of their contributions during the performance discussions. Talk about pay will often overshadow other factors associated with working and making an impact.
Know that ratings are de-motivating
There must be no ratings of any kind associated with performance management. Just because there is a letter, number or word beside the employee’s performance does not make it objective. There are a myriad of reasons for avoiding ratings that include the complexity of jobs, changing requirements, a lack of consensus on the criteria, the judgments of others, the lack of rating consistency and ease of manipulation. There is no negative impact to eliminating ratings.
However, there are some employees who want to know their performance relative to others. In this case, there can be informal communication, such as “Your performance is at least equal to others where a high standard of outcomes is required” or “You can be proud that your achievements exceed those of others in our department.”
Organizations put themselves into a bind. On the one hand, managers want better-than-average performance but have a pre-defined distribution of ratings. Additionally, some roles do not have a significant impact on overall or departmental results. Where arbitrary parameters exist, management and employees find themselves in a situation where the process promotes a negative working relationship.
Know who owns the system
Under this suggested approach, ownership of the performance management process changes from HR to operational departments. It is no longer about completing the HR performance appraisal form. Now, HR acts as a critical facilitator.
Therefore, each designated department or group will need to develop its own approach within the parameters of each organization’s overall goals and the objectives of the performance management process.
So, how does HR adopt a facilitator role? One approach is to develop a set of questions to help management and employees build their own unique process. Because both managers and employees lack experience in constructing their performance management system, there is a set of example questions that can be used:
• What information is available on the performance of the company and designated unit that can be shared with employees?
• How frequently is this available?
• From employees’ perspective, how often would they prefer to receive formal feedback?
• From a management’s perspective, how often is it possible to provide this feedback?
• How do employees know their performance outcomes?
• How do employees communicate what they have accomplished?
• What is the best way for employees to communicate their accomplishments to their manager?
• How will management and employees know the process is working?
• When this review takes place, what approach will be used to improve the process?
• What role, if any, would HR play to facilitate an effective approach?
• How does the process reflect the nature of the work and management’s style?
For some groups, the caveat is further assistance will be needed. Here, HR can provide performance management examples from which models could be adapted. Also, for example, there needs to be a common approach within a given department such as marketing or engineering, across a number of individual managers who report to a common senior person.
In other words, some trade-offs will need to be made between every leader “doing their own thing” and having some commonality within natural organizational structures and reporting relationships.
There is no one roadmap that will work for everyone. In a consultative environment, the parties concerned have to find a way that will function effectively.
This previous tip may be difficult to understand as there are many options. However, the following example may better explain how the process is operationalized.
A group of people provide support services over the phone to customers who have bought a software solution for their business. There are about 50 people in the group under one manager and four team leads. Service providers work independently after three months of intensive hands-on training. Research has shown the quality of the custom service is one of the top three factors that matters for customer retention. Every two to three years, an external research firm formally obtains feedback from customers and this information is shared with management.
For implementation, the team leads, along with an internal HR consultant, asked staff how they would like feedback on their performance and how their results ought to be assessed beyond “If there are no complaints, performance is fine.” There was considerable difficulty in the beginning as the service providers felt they had very little control and so most of the issues were not theirs. Customers rarely provided any formal positive feedback.
After much deliberation, the agreed-upon new performance management process was to be implemented, as a trial, for eight months. It included:
• The external consultants’ results, on the service elements, would be shared with the service providers in a meeting with the manager.
• Each service provider would call a sample of customers on a random basis within five business days about the quality of the service based upon an agreed set of questions. The results would be shown to the entire group every two to three weeks without the name of the employee who provided the service. No one would request feedback from a customer to whom they had provided a solution.
• A meeting would be scheduled between the service provider and the team lead within five to eight months to review their individual customer feedback results.
• A committee of the most senior service providers would meet every three months to determine if there were any common issues that could be supported in other ways such as developing an in-house online video to provide another service solution avenue.
• The HR internal consultant would review with staff how the new process was
working and the results would be shared with team leads and the manager for potential action.
Even though ownership of performance management moves out of HR, it must vet all recommended approaches to determine if it fits within the culture of the organization, the objectives of the performance management process and has a reasonable chance of success. Generally, the approach develops out of discussions between management and employees.
HR has an important role to play that may include building skills, providing feedback on draft performance management proposals and suggesting options to enhance the process. As with any newly delegated responsibility, assistance and support will be required. This can vary considerably depending upon the competency of roles and the skills of the parties concerned. The focus is on building commitment and ownership through involvement by adopting a performance management approach that recognizes both differences and commonalities.
Make an investment
Be prepared to invest time and energy to put in place an effective performance management approach. For many, this is a learning exercise and a change from the status quo, so expect there to be some rough-going.
To reduce the pressure on putting together the perfect plan, let management and employees know there will be a debriefing within a specified period of time after implementation. Here, the review will enable the parties to iron out the kinks once they have had a chance to employ the program. By providing this review commitment, the negative impact to the new approach and the associated change will be reduced.
It is worth repeating that the provision to make changes and feedback on the process is an integral part of successful performance management. Roles and requirement change, there is turnover of both managers and employees and significant re-organization does occur. All may have an impact on the application of performance management. Additional resource investment may be required over and above what was arranged at the beginning.
Find out the value
There are 13 factors that make a difference in organizational performance, according to First Break All the Rules — What the World’s Greatest Managers Do Differently by Marcus Buckingham and Curt Coffman. Five of these relate to performance management — feedback, recognition and praise, encouragement of development, communication of progress and the opportunity to learn and grow. In other words, the performance management approach does not stand alone. Performance management is integrated and is one of the tools management can use to encourage organizational and personal effectiveness.
Know the options for implementation
Expect that some will not comprehend the benefits and value of this type of performance management. A lack of familiarity and experience with this new approach may impose too high a resistance level for a successful implementation. As well, an employer may not have the resources to roll it out through the entire enterprise. It may need, instead, to garner champions within the organization to trial a new performance management process for about a year. The advantage of such a beta trial will increase competencies and confidence when the performance management system is applied within the entire organization.
Use a separate process for non-performers
Often, organizations will use the regular performance management process to identify, track and ultimately fire or improve outcomes. Once a non-performer is identified, a separate process is needed to handle such situations. Typically, this situation accounts for only a small percentage of the total employee population. A well-designed performance improvement plan will garner about a 60 per cent to 70 per cent success rate. (Success here is defined as either improvement or the employee resigns of his own accord).
Is all this effort worth it for a successful performance management system? In my experience, not one manager has ever wanted to return to the traditional performance appraisal form. More importantly, negative attitudes are dissipated by both employees and management with the more progressive approach.
There is also a greater level of commitment due to a perceived value to the process. There will be movement on the scale from “I have to do a performance appraisal” to “I am looking forward to receiving formal feedback.”
Earl Silver is an HR consultant based in Toronto. He can be reached at firstname.lastname@example.org.
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