| I am currently involved with a client in facilitating the | | | | performance, not on a judgmental evaluation of the |
| development of a new performance appraisal system | | | | past. |
| for the company. It has given me the opportunity to | | | | The annual appraisal form is simple and consists |
| benchmark best practices and to research the entire | | | | mainly of narrative comments. A single number or |
| area of performance management. As I found with a | | | | scale is not used to measure performance. |
| previous article on pay and performance, there is no | | | | Grading or categorizing performance is difficult. In an |
| perfect system for performance management. | | | | attempt to simply ratings scales and reduce |
| Next to firing someone, doing an annual performance | | | | subjectivity in ratings scales, I would suggest using a |
| appraisal is the task that managers dread the most. | | | | similar concept that we use in our customer |
| Employees probably rate having an appraisal just | | | | satisfaction work. When talking about customers, we |
| below having a root canal as something they look | | | | put them into three categories-dissatisfied, satisfied, |
| forward to. Yet despite this pain, people and | | | | and advocates. Customers are dissatisfied when their |
| organizations endure this annual activity. Most | | | | expectations are not met. They are satisfied when |
| managers would say that performance appraisals are | | | | expectations are met. A customer becomes an |
| necessary to manage organizational performance. | | | | advocate when they have a positive experience that |
| The fundamental problem is that most managers | | | | was not expected. |
| equate the annual review with performance | | | | In evaluating employee performance, the same three |
| management. In reality, a once per year review of | | | | categories can be used. The first category is "Did Not |
| performance has little impact on individual or company | | | | Meet The Expectation". If objective |
| performance. Most appraisal systems reflect on the | | | | expectations-outcomes and observable behaviors-are |
| past, rather than provide guidance to the future. The | | | | clearly established and agreed to by the employee up |
| most important purpose of the annual review should | | | | front, then there should be less chance of employee |
| be to improve performance in the future-not just for | | | | defensiveness to this rating if the rating is applied to |
| the employee, but also for the organization. | | | | each expectation. The focus on the appraisal session |
| When asked for reasons for having an annual review | | | | is understanding why the expectation was not met |
| system in place, the following answers are usually | | | | and what can be done to meet it in the future. |
| given-a way to motivate employees to better | | | | The second category is "Met The Expectation". This |
| performance, encourages communication between | | | | rating communicates that the employee is valuable and |
| boss and subordinate, a vehicle for coaching, a way to | | | | contributed to the success of the organization. It should |
| make objective pay, promotion, and termination | | | | not be construed as an average or middle-of-the -road |
| decisions, and documentation in case of legal action. | | | | rating. If the boss and employee establish a good set |
| The reason that most appraisal systems are | | | | of expectations, and the employee achieves them, |
| ineffective is that they try to achieve all of the above | | | | then everyone should be happy and satisfied. If a |
| purposes in one document. | | | | rating of "meeting expectations" is considered average |
| For example, an analysis of the use of performance | | | | or mediocre, then it is not the employee who is |
| appraisals in legal proceedings found that the | | | | mediocre, but rather the expectation. |
| appraisals generally benefited the plaintiff-the | | | | The third category is "Achieved A Positive Outcome |
| employee-more than the company. Too often, there | | | | That Was Not Expected". Note that this is different |
| was a track record of favorable ratings prior to an | | | | than the traditional "Exceeded Expectations" rating |
| unfavorable rating. Juries can be easily convinced that | | | | used in many systems. The problem with exceeding |
| the problem is notthe employee, but rather a new boss | | | | expectations is that it is impossible to do better than |
| or a hidden agenda by the company to get rid of the | | | | meet expectations for many desired outcomes and |
| person. | | | | behaviors. For example, if the expectation is to be on |
| If the performance management system focuses on | | | | time and at work every day, how does an employee |
| the primary objective of improving organizational | | | | exceed that? |
| performance, it will have the following elements: | | | | The third category is reserved for outstanding |
| A clear definition of results, outcomes, and | | | | accomplishments. Again it is applied to specific areas |
| behaviors expected in the job. The focus on lower | | | | of performance, not a general rating. It also provides a |
| level jobs is behavior and outcomes directly under the | | | | sound basis for providing bonuses and other pay |
| control of the individual. | | | | incentives and recognition. |
| Reviews of performance will happen informally | | | | Any grading system will fail if expectations are not |
| throughout the year. | | | | clearly defined. Employees have the right to know |
| Performance discussions are a two-way dialog | | | | what is expected of them and how they will be |
| between boss and subordinate that focus on future | | | | measured. |