1. Objective performance appraisals: The final frontier

2. Appraisals – an overview Why do we hate them? Givers: “ineffective managers” Receivers: “malcontents” (1) Rator Bias, Subjective, Hidden Agendas Complex, time-consuming and cumbersome Imposed systems, Cut-and-paste systems –Multi-nationals & multi-site organisations

3. Appraisals – an overview Why do we appraise performance? Evaluation of an employee’s performance against specified job goals (2) Vehicle for managers and employees to develop a mutual understanding of responsibilities and goals (2) Powerful means of managerial control, by setting objectives in a hierarchical fashion and a review of success or failure in achieving these objectives (4) Satisfaction: The employer must be satisfied that the employee is functioning well, in terms of the needs of the organisation, and the employee needs to be satisfied that the employer and the organisation is looking after his/her needs (5)

4. Appraisals – an overview Why do we appraise performance? To measure is to know Quantifying team and/or individual contributions to organisation success Employee Development Behaviour shaping & Value entrenchment Compensation and incentives/bonuses Motivating employees (3)

5. Appraisals – an overview Subjectivity – good, bad or ugly Bias, halo-effect Fairness, balance of power “Actual” & “Real” observations & measurement Perception vs Reality –Link to outcome action –If Developmental – various perceptions from various contexts –If Remunerative – Facts and Evidence based

6. Appraisals – an overview What should we consider? System –objectives, –design, –processes, –outcomes, –credibility and buy-in Organisation –structure –culture –technology Employee needs Managerial needs

7. Appraisals – an overview Which appraisals aspects impact its objectivity? Measurement tool Measurement standard (goals, objectives) Measurement process (cycle) Measurement action –Outcome action of appraisal

8. Measurement tool Documentation to facilitate appraisal process –The appraisal document is not an end in itself –Ease of use –Transparency –Structure Policy Process –Role clarity –Who drives the appraisal process?

9. Measurement Standard Goal setting – how long is a piece of string? Goals vs Behaviours Goal setting –Measureable & Quantifiable –Timelines –Quality of completion –Achieved, Exceeded and Not Achieved –SMART Source and implement an Employee Assistance Programme, within budgetary framework, by 31 July 2010. EAP should address as minimum: –Financial education –Counseling services Context specific

10. Appraisal for Jimmy You are a customer at Le Fancy Restaurant Jimmy is your waiter In groups of 2, compile a performance appraisal for Jimmy How will you measure whether he is a good waiter or not? “I want to have a good body, but not as much as I want dessert” Greta Garbo

11. Measurement process Appraisal cycle Goal setting Agreement Implementation Review Agreement Implementation Final review Compensation impact and/or incentive Development plan

12. Measurement Action To pay or not to pay – that is the question? Incentives & Bonuses Salary adjustments Developmental reviews Single-rater model Agenda? Independence? Multi-rater (360) model Multiple contexts

13. So, how do we build more objective appraisals - practically? Performance diary & evidence-based assessment Buy-in Appraiser Training Appraisal dispute resolution process Appraisal methodology –Traditional Top-down –Multi-rater (360) Goal setting

14. Critical Success Factors Defined appraisal policy and/or philosophy –Delineates appraisal objectives and process –Addresses the impact on compensation, if any –Timelines (must I still be employed to be paid the incentive?) –Entitlement (levels/jobs that are entitled) –Review process (grievance) Buy-in –Employees and their representatives –Managers –HR Legitimacy –Is this is “tick-the-box” exercise? –Consequences for poor appraisals? Training and communication System review

15. References (1)Coens, L.M & Jenkins, M. 2000. Abolishing performance appraisals. Koehler Publishing, San Francisco (2) Olson, R.F. 1981. Performance Appraisal: A guide to greater productivity. John Wiley & sons, Toronto (3) Williams, R.S. 2002. Managing employee performance: Design and implementation in organisations, Thompson learning, London (4) Edmonstone, J. Appraising the state of appraisal, Health Manpower Management, vol. 22, no. 6, p 9, 1996 (5) Hunt, N. 2005. Conducting staff appraisal: How to set up a review system that will ensure fair and effective appraisal and improve individual and organisational results, How to books, Oxford.