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Tuesday, January 09, 2007

Managing Employee Performance Part 4: Appraising Performance

Welcome back!

Have you read the previous three parts? If you haven’t, I suggest that you click on the archive links on your left so that I can also share with you my thoughts on the other elements of Performance Management…

To tell you frankly, I was in a bit of quandary on how to go about writing this fourth article. There are so many concepts and approaches out there on this topic that trying to cover all of them may make me end up writing a book rather than an article (although that might not be a bad idea isn’t it?). There are so many concepts and methodologies out there that trying to say a little about each may end us up with a useless article, so I decided to just write some of what I consider as important in a performance appraisal system.

Here I go…

My General View of Performance Appraisals

In a perfect world, I see performance appraisal as a means to validate what the performance manager and the employee worked on together during the whole season. If both performance manager and employee did what they had to do in planning, monitoring and developing capability to perform, and if performance discussions are done on a regular basis, both will breeze through this process.

In the real world however, I see a lot of people wishing they don’t have to go through this for so many reasons like:

  • The performance manager is not so sure what to put in the performance appraisal sheet. Have you heard of those self appraisals? (silly!)

  • The performance appraisal tool does not capture the employees’ performance that it almost always result into frustrations, envy, suspicions of favoritism, etc.

  • Performance appraisal discussion becomes a painful exercise of finger-pointing, blame placing and “and you better shape up or ship out” warnings.

  • Top management gets the shock of their lives after looking at the performance appraisal trend that does not reflect the true performance of the organization.

As I have mentioned before, the success of the whole performance management process is evidenced by the performance appraisal trends. Assuming that the appraisal tool is able to capture reality, an uptrend may indicate that the company has a performance management system that is working. If you cannot the same about your system or there is no way of knowing how your system is helping people’s performance then a lot has to be done.

Objective Vs. Subjective or Objective combined with Subjective

MBO, 360 degrees appraisal, competency, behavior based appraisal, balanced score cards, traditional appraisal tools appraising knowledge, skills, attitude and habits. I won’t say any of these are better than the others although I have my favorite in balanced score card not only as a performance appraisal tool but as a holistic management tool.

Now, going back to the subject matter. I believe that if it is possible, the performance appraisal tool should consider both objective and subjective aspects of people’s performance. When I say objective, I mean actual production vs. target, quality vs. standard, customer satisfaction or number of complaints and other solid indicators of performance. When I say subjective, I mean the behavioral attributes that demonstrate competencies like leadership, customer orientedness, teamwork, etc. I say they are subjective because they are based on the limited observation of people knowing fully well that you cannot have a 100% accurate appraisal of these factors. You might now be asking, so what should be the ratio? Let me tell you about my experience. In one company that I worked with. We used the objective factors as basis for salary review, adjustments and promotions. We used the subjective aspects on the other hand as a developmental tool, a means to communicate to employees where they’ve exerted and where they’ve faltered. We did this under the assumption that we picked the right competencies that lead to performance results hence, the performance behavioral ratings should be correlated with the performance results. This also forced the performance managers to keep their appraisal ratings as close to reality as possible. Before this, we used a very subjective performance appraisal tool that is almost always abused by managers who want to give raise to their employees even if the raised is undeserved. Although we were confident that we’re able to come up with a very objective performance appraisal tool, many began to feel that we failed to give consideration to genuine efforts to improve or innovate that do not automatically translate to results. In my next company, I’ve decided to give the subjective rating some weight in the overall result of the performance rating. But the ratio is not 50/50 but 80/20, still putting more weight on the results.

The Performance Appraisal Discussion is the Most Important Thing.

Ok, assuming that your tool measures the right stuffs, and that appraisal is done properly. Without communicating the result to employees, these are all useless exercise. Do I even need to explain?

The fact is, a lot of times performance appraisal results is either not discussed or discussed haphazardly. This adds to the frustrations people feel about this exercise. Some people see the performance appraisal discussion as judgment day, a day of reckoning or a day of facing the music. I imagine the manager saying, “This is the rating that I gave you because this is what you did, next time do better so that I can give you a better rating”. Oh, here’s another favorite, “Go rate yourself and then let’s discuss and have our final rating together.” Sweet!

Here’s my personal criteria for a good performance appraisal discussion
The performance manager shows the employee that the performance appraisal result is a result of both their efforts, hence whatever improvements need to be taken have to be taken by both of them

  • The manager makes the employee feel the coach-player relationship rather than judge and the accused kind of relationship.

  • The manager gives clear basis for the appraisal rating and explores opportunities for improvement with the employee.

  • Involves self in the improvement process by indicating personal role and setting dates for follow-up.

  • Both parties mutually commit to the improvement agreement as a renewed performance plan and draw a map for pursuing it.

  • The manager always seek understanding, acceptance and commitment and models the same.

How well are your performance managers discussing people’s performance with them? Are your managers equipped? Are you sure they are able to demonstrate effective communication? Come on, give me a sure answer. If you can’t I suggest that you put this as part of your to do list. An evidence that managers are effectively communicating performance appraisal results with employees are high morale, and improved performance, appraisal after appraisal, I hope that’s what you see in your organization, if not, call me and let’s discuss how I can be of help.

This article has gone awfully long so I will stop right about now.

Next topic, Rewarding and Recognizing Good Performance.

See you next week!

1 comment:

  1. Anonymous10:07 AM


    I read this post 2 times. It is very useful.

    Pls try to keep posting.

    Let me show other source that may be good for community.

    Source: Performance appraisal factors

    Best regards


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