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Special Report -
Establishing A Valued Appraisal System
Performance appraisals can be an
organization’s greatest leadership tool. So why are performance
appraisals often “the job nobody wants”? Because of the way the
appraisal process is designed and implemented. Organizations that
establish their strategic objectives and values, design their appraisal
system to specifically measure progress toward these objectives, and
involve their employees in the process report substantial increases in
productivity and morale, and outperform organizations without
performance management systems in almost every measurable financial and
productivity category.
Many of the organizations we work with have experienced dramatic changes
in both the way people work and the actual outcomes of the work when
they developed a different approach to their appraisal system. Their new
system clearly outlines individual performance objectives, provides
employees with feedback about areas of success and areas needing
improvement, and recognizes employees for their contribution to the
organization.
We are often asked to help organizations looking for a boost in
productivity and morale. What we find are employees who frequently
express the same concern...“It doesn’t matter how hard I work or how
much value I add to the organization, I get the same recognition and
reward as my co-workers who contribute substantially less.” In these
organizations, performance management centers on unclear statements of
business objectives, and feedback is reduced to uncomfortable
discussions of personality traits. Even worse, rewards are seen as
either whimsical, bearing no relation to performance, or as ironclad
entitlements that follow cycles as predictable as the seasons. In either
case, there is no motivation for employees to improve their performance.
Our Employee Opinion Survey Benchmark of the top twenty-five percent of
the companies that we have surveyed clearly demonstrates that in
organizations where managers provide employees with constructive
feedback and timely performance appraisals, employees report better
teamwork, higher morale, and an increased ability to accept and
implement constructive feedback. Organizations with structured
performance appraisal systems also boast of organizational growth beyond
the projected measurements.
To capture these benefits, be sure that your performance appraisal
system addresses the following ten key elements:
1. Align individual performance expectations with the organization’s
vision and values
A successful performance appraisal system always starts with a clear
definition of the organization’s vision, strategic objectives, goals,
and values. Then, align performance expectations for each position with
the organization’s strategic objectives by clearly defining what is
expected for each position, and ensuring that each performance measure
directly supports the organization’s strategic objectives and goals.
2. Measure key results and competencies
Key results define what is to be accomplished or the job’s end result,
e.g., the number of parts to be manufactured or the amount of sales.
Competencies reflect the organization’s values and describe what the
organization feels is important in regard to how the work is to be
accomplished, e.g., teamwork, initiative, communication. Measuring both
key results and competencies is critical to an effective performance
appraisal process.
3. Appraise clearly defined performance expectations
Employees must know exactly what they are to accomplish if they are
truly expected to add value to the organization. Performance
expectations should be objective and data-oriented, and should be
designed to allow employees to count, rank, or rate their progress on a
regular basis so that they can make adjustments as needed. Employees
should be able to accurately evaluate their own performance and should
not be “taken by surprise” at the annual performance appraisal meeting.
4. Work together to develop performance expectations
Employees who have a role in developing their own performance
expectations are more likely to view the goals as achievable and to make
a greater commitment to accomplishing the goals. Individuals who help
develop their objectives have a greater understanding about the link
between their job and the organization’s larger purpose. Employees who
clearly see their role in the organization’s success are substantially
more motivated.
5. Provide frequent and timely feedback
Measures alone will have little impact on performance if they are not
translated into feedback or rewards. Feedback should be frequent and
provided at regular intervals throughout the appraisal period. Feedback
must be timely enough to allow employees an opportunity to make
appropriate adjustments. A simple way to frustrate employees is to
withhold feedback until the annual appraisal when it is too late for the
employee to do anything to improve.
6. Conduct performance appraisals as scheduled
Managers and supervisors who conduct performance appraisals on time send
a message loud and clear to their employees that says, “I care about
you. Your performance and success is important to me and the
organization.” By contrast, managers who delay performance evaluations
also send a clear message that employees interpret as, “I expect you to
meet your goals, but I’m not really interested in you or your success.”
The appraisal should be representative of performance throughout the
entire appraisal period not just the week before the appraisal meeting.
7. Encourage employees to conduct a self-appraisal
Organizations that promote self-appraisal as part of the annual
appraisal process report increased productivity and greater rapport
between supervisor and employees. Employees that participate in the
appraisal are more familiar with their standards of performance, work
harder to exceed the standards, and come to the appraisal meeting
prepared to identify ways to improve rather than passively waiting for
their supervisor to “pass judgment” on them.
8. Evaluate employee performance against established performance
standards
Performance should be compared against standards of acceptable
performance for the position, not to a co-worker’s on-the-job
performance. A system that compares employees to each other, requires
managers to rank order employees, or evaluates performance on a curve,
is a sure way to undermine teamwork, communication, and morale.
9. Schedule training on the appraisal process
Successful implementation of the appraisal process is the responsibility
of every employee. The organization’s responsibility is to provide
adequate training for every employee to ensure that the program is
implemented successfully at every level. In addition, it is important to
provide managers and supervisors with training on coaching, providing
constructive feedback, and effectively dealing with performance problems
and difficult employees.
10. Demonstrate management commitment
A successful performance appraisal system starts at the top of the
organization. Senior managers must be committed to the program.
Commitment is best demonstrated by managers who work with their
employees to define performance expectations, help them develop skills
to meet the expectations, and conduct performance appraisals on time.
When managers and supervisors view performance appraisals as part of an
ongoing process which can positively lead to improved employee
performance, there are far-reaching benefits not only for the
individual, but also for the organization as a whole. Managers with that
perspective no longer view conducting performance appraisals as “the job
nobody wants.” Instead, they recognize the valuable treasure of this
leadership tool.
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