Despite widespread usage of annual staff appraisals within all sizes and types of organisations, in the vast majority of cases the process is time-consuming and unpopular because in most people’s experience appraisals deliver little value, to the employee or the organisation itself.
Peter McHugh, CEO of Covalent Software suggests that the employee performance review processes and systems in use in most organisations today are fairly immature and at an early stage of development with a surprisingly high number still using manual, paper based systems. As such, few are properly exploiting the potential offered by electronic appraisal solutions to streamline the process and considerably increase the value of performance reviews, for both employees and the organisation.
McHugh recommends that organisations need to embark on a journey that takes them through four levels of performance review, with each level building on the one prior and delivering increasing value from the exercise.
The Challenge:
If the past couple of years have prepared organisations for one thing, it is to begin streamlining processes and delivering the same desired results with tighter budgets. The first thing I would advise is to ensure the teams delivering these results continue to feel involved and engaged during this process. An engaged workforce is more likely to commit to changes and work with management to make sure these changes are successful, as well as helping to identify where further improvements and savings could be made.
Employee performance reviews are typically used as an engagement tool however they tend to happen only once a year and involve both the manager and employee completing a series of questions. This is then followed by a meeting where priorities are agreed and are most likely re-visited again, the following year.
Through ongoing or full circle performance reviews, staff will be remain engaged as personal development will be targeted and relevant. This can also be incorporated into the overall development of an organisation. To achieve this level of performance review, however, organisations need to begin a four step journey away from traditional paper-based appraisals to a more holistic system characterised by two key dimensions; scope and frequency.
Level 1 – Paper-based appraisals
Organisations introducing appraisals for the first time will start with a paper-based system which offer very little that can be extracted in terms of analysis, indentifying skills gaps and investigating competency patterns. The process of administering appraisals needs to be significantly streamlined and so implementing an electronic system will allow for organisations to begin considering a more sophisticated system that captures useful and relevant intelligence, benefitting HR decision-making.
Level 2 – eAppraisals
As an organisation moves to an electronic system, the benefits of the change will be immediate as organisations take advantage of a smoother, more flexible process, engaging staff more effectively. From here organisations can look to introduce more sophisticated factors such as competency frameworks and performance factors to improve employee capabilities and address competency gaps through actionable personalised development plans (PDPs).
Level 3 – Siloed appraisals:
With this foundation in place, expanding the range of factors that employees are assessed on, and creating PDPs to address identified gaps will significantly improve the value of appraisals to all concerned. Staff appraisals at this level will shift from being an isolated event at the end of the year to be more “round-the-clock.” With more frequent reviews, training and development action plans can be broken down into more digestible chunks increasing success rates, motivation and engagement.
At this level however, appraisals remain “siloed” in terms of the scope of the appraisal itself. Managers and employees may have better performance reviews but the appraisal operates as a self-contained unit, lacking the wider organisational context particularly in terms of corporate goals. Appraisals at this level also lack input from other members across the organisation with valid observations about the employee in question. Addressing both these factors will take an organisation from level three to the final stage in achieving Full Circle Performance Reviews.
Level 4 – Full circle performance reviews:
At this level, organisations will routinely be able to define employee goals to be aligned with broader organisational priorities. Another important distinguishing feature is that Full Circle Performance Reviews will also incorporate a broader assessment of performance on the action plans, KPIs and risks that form part of the employee’s workload of priorities throughout the year. Taking account of these elements will provide for a more rounded view of how the employee has actually been producing results, day to day and whether certain areas need addressing.
Naming this final level Full Circle Performance Reviews aims to capture two key concepts that define the most ideal appraisal system; appraisals will be round the clock and round the organisation simultaneously. The key to successfully reaching this final stage is to persevere with building on each level, once the previous has been fully achieved. This will finally deliver greater value from the once laborious and often fruitless exercise of appraisals and performance reviews to both the employee and organisation.
Peter McHugh is CEO of Covalent Software
9 Responses
Appraisals
I agree with some of the views posted that appraisal should not be a process, but a skill and cultural norm.
Appraising staff ranges from the quick thank you, to informal 121s right up to the annual formal review. I dont think it really matters how its done in terms of paper, e-appraisals etc. The important thing is that it IS done , is done skillfully and consistently by all managers and is driven from the top.
Too often the first thing that people think about when introducing appraisals is the "system", forms, instructions, on line reporting etc.
The first thing you need is absolute commitment from the top that 121 reviews will happen. If there is no performance management framework, this is cultural CHANGE and needs to be managed as such.
Not just talk, but leaders who will prioritise people management high on the agenda. Too many times leaders will talk a good game on appraisals, but the minute a junior manager says they dont have time to do them, they are allowed to skip 121s or "catch them up another time", and the employee suffers. Once you let this start to happen, appraisals are immediately seen as low priority and the appraisal culture is doomed.
Next on the list of priorities is line manager capability. Its the first line managers who make or break performance management frameworks. If they are untrained, lacking in confidence, or simply dont like managing people , the reviews will drop further and further down the pecking order, unless they are measured themselves on the quantity AND quality of reviews. What is monitored, praised and criticised gets done……….
You may be lucky and have team leaders who enjoy this part of their job, but sadly many dont, and have been promoted due to being the best at what the team does ! It does not make sense to get the best plumber, who loves plumbing, to give up his trade to manage a team of plumbers, just because thats the only way to get a pay rise !
You must have effective succession planning to develop the right people into the line manager roles, who want to be there for the right reasons. They should have an interest in the business as a whole, want to manage people and not just get a few more thousand in their wallet.
You then need to train them, not just in the appraisal process, but the skills and emotional intelligence to have difficult conversations. Giving praise effectively is difficult. Constructively criticising is difficult. Supporting a stressed worker is difficult. Managing a genius for the good of the team, is difficult. Disciplining for poor conduct is difficult. The manager must take time to understand each individual that reports to them to create the trust and rapport that allows these conversations to happen effectively. Being let loose on these conversations without the right training and mentoring is a recipe for disaster and stress for all.
Eventually, if you have the right line managers in place, with the right skills, led by a senior team committed to performance management, then you can start worrying about pretty forms and the best on line appraisal systems !
Making appraisals more worthwhile
You’ve all made good points and I totally agree that ‘workforce management’ is all down to people and their engagement in the appraisals process, and of course the underlying organisational culture. A software tool on its own is certainly not the magic bullet! The appraisals process needs to be managed with enthusiasm and the drive to nurture ‘appraisals-friendly’ employees. And I’m certainly not saying that paper-based systems don’t work, but that there is a way to support the task of making appraisals more worthwhile.
When appraisals are managed online, there is no need to gather appraisals results manually from ‘siloed’ departments where managers have their own way of doing things and results take time to collate and interpret. The process of gathering intelligence for HR decision-making is streamlined. The data is joined up and available quickly, and managers can easily track completion rates and pinpoint areas in need of improvement. Emphasis can then move from ‘ticking the appraisals box’ to developing staff.
Jeremy, I’m with you that formal appraisals are not a substitute for regular, informal one-to-ones but a software system can actually serve to enhance these meetings, helping managers and employees to have better conversations and keep a true record that can be referred to throughout the year to engage employees in their own development.
Mike, I would also argue that having information that can quickly show competency gaps across the organisation ensures that the ‘cracks’ aren’t in fact ‘plastered over’ but that senior managers are able to identify problem areas and train where training is needed. Surely this is the best use of management time so there are more hours available to build the business and develop key employees? Managers are assisted in every area of their role by having processes in place so why should appraisals be any different?
I firmly believe that software can support the requirement, as Jeremy points out, that appraisals are ‘done and done well’, and maybe about doing the ‘right thing righter’!
Visit Covalent Software: http://www.covalentepm.com
Come the revolution … again!
You rebel Mike!
Personally, I think there should be several more levels of appraisal; we should endlessly appraise people ……let’s have a family tree of the things, and audit them, and monitor the auditors, and quality assure the monitors……………oh! and then externally assess the quality assurers – get my drift everyone!!
Hurrah for HR – John
are appraisals really needed?
I Start with the premis that why do we have these processes in the first place – ultimatly they are there for one of two reasons:
1) we don't trust our managers to manage their people
2) our managers cannot manage our people
So what do HR & consultants do…? introduce a process to plaster over the cracks.. the real solution is for senior manager to manage their managers – and train them. If they cannot manage people without such processs then get rid of the manager – for they are a cost that is not worth paying!
— Mike Morrison
blog – http://rapidbi.com/blog
Twitter – http://twitter.com/rapidbi
Appraisals
Dear Respondents
Apart from correcting my attribuition to this article to a Howard in my last post (who he, I wonder!) – I really don’t think it helpful to blame ‘HR’, or even software developers, for poor appraisal processes…
I still maintain that ‘good practice’ is down to senior managers to support and implement in the first instance, which I think may be common ground between us all?
The real sadness to me is that although good practice has been so well codified over some decades, there are clearly some senior managers who have grown up througth the ranks who have never experienced it themselves.
But they might well benefit from asking their more junior colleagues, or even their family members, what it is really like to be on the end of a really poor appraisal process however execxuted (or not followed through thereafter), or even with none at all.
I have personally met many members of the ‘so-called awkward squad’ in particular, as both an employer and consultant in many sectors, whom many managers might fight shy of. But *never* one who didn’t value an honest appraisal of their work, whether they liked it or not, as long as they felt it was fair.
Doing the wrong thing righter?
Peter,
I’m afraid that I’m broadly on the same page as David.
It seems to me that there is an unchallenged assumption in your proposition that an e-enabled version of performance appraisal would improve individual and organizational performance. That is, the notion that performance appraisal has the potential to add value in the first place – whether e-enabled or not.
Perhaps the clue is in your introductory paragraph, where you say, "… in most people’s experience appraisals deliver little value, to the employee or the organisation itself." You suggest that this is due to a lack of sophistication in their application. Might it simply be the case that the process itself, and the view of people embodied within it, actually dis-ables rather than enables people to perform at their best?
To draw a parallel, John Seddon attacks the use of targets in organizations. In particular, he decries the argument that, because targets manifestly don’t work in the way intended, managers should use fewer of them. He calls this seeking to "do the wrong thing righter." Could it be that making it easier for managers to do something that most have found little value in for at least four decades runs the risk of falling into a similar trap?
Regards, Chris
Performance appraisal
Despite widespread usage of annual staff appraisals within all sizes and types of organisations, in the vast majority of cases the process is time-consuming and unpopular because in most people’s experience appraisals deliver little value, to the employee or the organisation itself.
Peter is absolutely correct he can get on with marketing his software but unfortunately the flaw is not in the paper system – the performance of the appraiser or any of the other pointers the perpatrators offer in explanation for a pretty useless exercise – it is the product of HR muddled thinking as usual – employee performance is not contained in a bubble they affect and are affected by other performers in the organisation – isn’t it remarkable that such a so called enlightened ‘human’ function constantly babbling on about teams and team working should have such a low level of understanding of the reality of the workplace – there seems to be no operational understanding of the organisation as a system with a network of internal customers and suppliers working in an interdependent way to add value for the external customer while the HR ‘add cost’ . You are on to a sure thing Peter it will be another plaything for busy executives (see the Ackoff definition)
David Smith
[email protected]
What is said and how is crucial
Jeremy – I agree – the process provides a very useful structure but it is still what is said and how it is said and the building of the relationship between line manager and team member that is the key part of profitable and rewarding working partnerships.
Sue
Appraisals
I welcomed Peter’s article, but I don’t completely agree with his analysis…
I agree that some appraisals are often very poorly performed, not that ‘best practice’ isn’t already very widely established and codified. And I think we will all know at first hand that, done badly, many employees hate what they see as a meaningless and even potentially-demoralising/damaging appraisal process.
But done well, I find many employees actually complain when their formal appraisal hasn’t taken place, rather than heave a huge sigh of relief that they have ‘escaped’!
In my experience, the problem is not nearly so much in the use of any computerised process-methodolology, which of course can help, but a) the lack of commitment to whatever process is used by very busy senior management and their subordinates downstream, and b) their lack of training in conducting a truly useful formal appraisal that serves all parties best and, most especially, their organisation.
Perhaps the problem is that appraisals too often fall under the title of ‘Performance Management’, rather than ‘Workforce Development’?
To my mind, formal appraisals should never be substituted for much more regular, informal appraisals of current performance by immediate line-managers, which should still best be recorded for good practice however informally.
However, formal appraisals should then concentrate at least as much on future development and agreed targets over the longer period and at least annually, with of course a review of past achievements against those discussed on the last formal occasion, both signed off by the appraiser’s own manager to help ensure fairness – rather than as ‘a data-base for any future disciplinary action’ as so many managers may actually use this for , and as many employees may very reasonably fear.
I personally find that the mechanics of how this is done and recorded is not nearly the most significant issue – but that it is done, and done well.
Kind regards
Jeremy