Employee Performance Appraisal Failure - who pays the price?

by Duncan

It’s that time of year again. You can sense it as you walk the halls of your organization: there’s an undefined tension among the employees that has nothing to do with the way day-to-day operations are going. Your subordinate managers are cringing whenever you ask a question, fearing that it will be the dreaded one: “How are the employee Performance Appraisals coming?” You retreat to your office and wish it could be different, not so painful and laborious, and, let’s face it, downright meaningless, at times. But how can you change such a behemoth? Something so ingrained as the Performance Appraisal System?

Who Pays The Price... when the system is bad?
First, you have to come to a comprehensive understanding, as a senior manager, as to who really pays the price for a faulty performance appraisal system. The answer may surprise you. And when it does, you should be willing to make the investment of your personal time and effort to correct the situation to get the desired return that will pay off in employee engagement and satisfaction, as well as organizational effectiveness.

  • First, you have to come to a comprehensive understanding, as a senior manager, as to who really pays the price for a faulty performance appraisal system. The answer may surprise you. And when it does, you should be willing to make the investment of your personal time and effort to correct the situation to get the desired return that will pay off in employee engagement and satisfaction, as well as organizational effectiveness.

  • Your managers fare no better under such a construct. Once a year, they go through this fruitless exercise of trying to match incidents of performance against subjectively-written standards, relying on memory to come up with an overall picture of how an individual employee has contributed to the vision, mission and goals of your organization over the preceding twelve months. This might easily be done if they were responsible for only one employee, but even then, that is a lot of time to cover, and they are busy people with fallible memories. But, being dutiful, they break out the antacids, and write up their annual performance appraisals, which, in fact, are based largely on employee popularity, and call it another year. Is this what you want, truly, as a manager?

  • But there’s a third, more important, organizational component to this equation, and that is your customer. For it is your customer that each employee’s performance really impacts the most, isn’t it? Stop and think about it for a moment: if you are selling products and an employee botches an order and you lose the customer and that customer spreads the word about your inefficient customer service, where does the blame lie? It is the same in a service environment. Or think about working in a team environment, where an employee always is contributing negativity to the team, thereby inhibiting team progress on a customer’s assigned project or task, causing the whole team to fail – it wasn’t the team’s fault, but one particular employee that caused missed deadlines, shoddy reports, etc. Can you afford to let your customer down by letting a faulty employee performance appraisal system stand, even if it has stood that way since your organization began? Not in today’s competitive business environment. It might be the key to your downfall.

How Do You Change A Performance Appraisal System?
So you must have a concrete mechanism in place whereby you can as easily recognize outstanding employee performance as you can remove deleterious employee performance in your organization, and a well-founded performance appraisal system can do both. It is not as hard as you might think, and in the process you will build a stronger, more cohesive and cooperative workplace. It will, however, take time and dedication by everyone in your workforce because it is, after all, a new approach.

  • First off, get your Human Resources Manager involved and let her know that you want to revise Performance Elements, Standards and/or Position Descriptions for your employees, for you will need her help and cooperation. The extent of the work involved depends on the state of the Position Descriptions as they exist today. If they already are based on your vision, mission and goals, then you are off to a good start. If not, work with your subordinate managers – and it is suggested you involve employee teams here to get increased employee engagement – to craft new Position Descriptions.

  • Once you have identified the organizational goals that each employee supports in the individual Position Descriptions (these must be specific goals, not generalized), you can start identifying the specific tasks that each employee performs against these goals to perform successfully on-the-job every day. Again, a good tasking for employee teams. These tasks become the Performance Elements. These must be specific, measureable and under that employee’s control. This control factor must be stressed to the employee, for it is here that they exercise control over their own Performance Appraisal. They have control over how they perform their assigned tasks, the order in which they perform sub-tasks, how efficiently they perform them, etc. This is their empowerment for successful performance. Likewise, you cannot hold them accountable for a part of the process to which they have no input. Instead, move that Element under the appropriate employee’s Performance Elements, even if that work is performed in another area.

  • A word about measurement: there are two ways to measure your employee’s performance, objectively, by metrics, and subjectively, by additional input. If an Element lends itself to metric measurement, say, the number of days it takes the employee to award a contract, then that is the preferred method of measurement. Always search for a metric measurement before resorting to subjective measurement, and have as many of these metrics system-generated as possible. There are, however, Performance Elements, such as Teamwork, that require subjective measurement. In this case, it is recommended that a cross-generational employee team be tasked with developing a feedback tool for providing this input and that it be administered several times throughout the year for each employee, not just at annual appraisal time. Again, this fosters employee engagement. This will give managers a truer picture of how their employee rates on this Performance Element among their teammates. For Elements such as Customer Support, a similar team can be tasked to develop a questionnaire to send to major customers of each employee to solicit their feedback. Ask the hard questions – this isn’t a popularity contest, you are seeking the truth and a source of improving your workforce. Have the teams that develop these feedback tools hold meetings with the general workforce to solicit their buy-in until the majority of employees are satisfied and understand that outliers will be discarded when they are administered to avoid prejudice. Then develop Performance Standards to assess competence levels.

  • Ideally, there should be instances of informal supervisor-employee dialog taking place on a daily basis that provide both parties with feedback on performance. Praise and corrective feedback should be given in-the-moment, not saved up for months down the line. A timely word here and there is much more effective. Once the new Performance Standards are in place, however, have your first-liners start holding documented, but informal, quarterly reviews where they bring the employee up-to-speed on their progress and address any concerns. This serves two purposes: it gives the employees more frequent opportunities for formal praise and recognition as well as giving them time and opportunity to address any concerns they have about their personal performance, perceived skill deficiencies or plans for career development. It also provides additional documentation should disciplinary action become necessary.

Reap Your Rewards
Now it is a year later (yes, it might really take that long if you do it correctly) and performance appraisal time has rolled around once again. But this time your first-line managers have a tool in their hands when they call in each employee. They can offer true praise instead of empty words, and they can show proof of progress over the past year in critical performance elements that support the organization’s vision, mission and goals, thereby increasing the likelihood of both employee engagement and organizational success. They can offer specific recommendations for training courses or developmental assignments, where needed, to address any weaknesses revealed. Your employees will finally feel valued and that they are getting their due recognition and the help they need to fully develop their skills and abilities. And in the unlikely event that a dismissal is warranted, your first-line managers have all the supporting documentation showing the employee’s failure to meet the measureable Performance Standards. Now you have, truly, an organization whose very day-to-day performance is driven by the satisfaction of your customer’s needs, as defined by your vision, mission and goals and reflected in the supporting, measureable tasks accomplished by your employees.

Click here to read Employee Performance Appraisals (part 2) - a Guide to the informal review

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