[ Volume Seventeen ]

Article Overview: Managers often dread performance appraisals like the plague, but - done correctly - they can actually be enjoyable and productive for both parties.

The Problem With Traditional Performance Appraisals:

The annual performance review is one of the business world's most universally disliked and hotly debated practices. Managers commonly dread having to give annual performance appraisals; anticipating conflict and feeling discomfort with the often judgemental process.

Employees are often equally uncomfortable with the traditional annual review, fearing negative feedback, judgement and recrimination.

What people want most from the performance appraisal is no surprises (1). Employees don't want to hear for the first time that they are not performing to an acceptable standard, when they no longer have an opportunity to do anything about it. Managers don't want to be the ones to break bad news, or deal with an overly defensive subordinate.

So how do you manage performance of staff in a way that helps them develop their potential, meet organisational objectives, and avoid the potential drama of an unflattering annual review?

The Goal of Performance Appraisals

The goal of conducting regular performance appraisals is threefold (2):

1. Providing Information

• letting employees know how their performance compares with pre-set job standards.
  
• giving a written record of employee performance.
  
• assisting in identifying special talents and abilities.
  
• outlining areas of performance which must improve.
  
• allowing employees to evaluate and provide feedback to management.

2. Increasing Motivation

• establishing closer supervisor-employee relationships and communicating to the employee the job requirements and required standards of performance.
  
• providing recognition for a job well done.
  
• establishing mutually agreed plans to solve performance problems.
  
• encouraging initiative and developing a sense of responsibility.

3. Planning for Development

• identifying individual employee training needs.
  
• recognising if task reassignment can be used to develop potential or improve skills that require further development.
  
• helping the employee strengthen current performance and prepare for opportunities for promotion.

Managing Employee Performance

Managing employee performance effectively should start well before the annual performance review. It begins when a job is defined, and ends when an employee leaves the company (3).

Expectations of employees must be set and documented from day one. Job descriptions are the first step in selecting the right person for the job, and for setting that person up to succeed in the role. Defining the purpose of the job, duties, responsibilities, and prioritised performance goals with measurable outcomes and standards is the first step on the path to avoiding the pitfalls (4).

One of the most common mistakes in the practice of performance appraisals is to view appraisals as an isolated event, rather than an ongoing process. Employees generally require more feedback, and more frequently, than can be provided in an annual appraisal. While it may not be necessary to conduct full appraisal sessions more than a few times per year, performance management should be viewed as an ongoing process (5).

Much of the success of performance appraisals hinges on how they are perceived within the organisation. The only way the process can be truly successful is if it is viewed by both manager and employee as an opportunity for growth (6).

How often should appraisals be done? For a new employee, they should be at least monthly for the first 1-2 quarters, depending on how quickly the new hire is at getting up to speed. Once they are through induction and probation, appraisals should be a minimum of quarterly, with regular feedback being provided in the interim.

The best way to get value from a performance appraisal is to ensure it contains no surprises (7). You shouldn't put anything in an annual performance review that you haven't already told the employee. This will prevent a situation where an employee is allowed to underachieve for a significant period.

Appraising for Improved Performance

There are several issues which must be addressed to help your appraisals be an experience that creates positive outcomes for all parties. Briefly, these are:

1. Preparation - prior to any meeting, review the staff member's history thoroughly, recognising the context of their career development, history with the business, and any external issues you're aware of. Then review their job description and measurable areas such as KPIs, KRAs and any previously identified strengths or work areas. Last, draft your plan of action and gain the approval of your direct report prior to arranging any meetings. When setting up a meeting, give plenty of notice and issue an agenda so the employee can prepare. Both the staff member and their manager should have an equal opportunity to bring information to the appraisal.(8)
   
   
2. Appropriate Setting - appraisals should always be done in a neutral environment, ideally, with a peer manager present for an independent perspective.
   
   
3. Reviewing Job Description - always allow the staff member to speak first at sharing their perspective on their role, outlining what they are responsible for and how they have set about achieving what their role requires. This will both demonstrate their understanding and create an environment more conducive to reaching agreement around the path forward.
   
   
4. Feedback - wherever possible, this should be couched positively and in an encouraging manner. Be specific in defining issues and behaviours that are barriers to the level of performance required. Where corrective action is required, always seek to involve the staff member in identifying what they can do to improve things, and help them to establish action plans that follow the SMART principle: Specific, Measurable, Achievable, Related to outcomes, and Timed (i.e. when will it be done?).
   
   
5. Documentation - always ensure that minutes are taken so there is a record of the performance appraisal. These should be documented and signed by all present as a written record of the occasion, with a specific focus on agreed action points. If performance has been unsatisfactory, develop a written Performance Improvement Plan (9), and schedule more frequent feedback meetings.

What To Avoid The most important thing to avoid is the appraisal deteriorating into a destructive blame-filled meeting. This is most likely when appraisals have been run poorly, or staff members know they have been underperforming and are frightened of the consequences. It goes without saying that good managers never let situations of poor performance delivery develop; when someone is not doing something correctly, it should be dealt with immediately (10). While everything should be done to turn around non-performers (especially those you have inherited), it is not acceptable to let staff continually get away with the same behaviours that are negatively impacting on themselves, their work colleagues and the entire organisation. The bottom line is that when a situation deteriorates, you must take decisive action. While sometimes destructive behaviour has a logical explanation (e.g. outside work stress), it should never be used to continually excuse a long term situation of underperformance. In these situations, corrective action should be swift, while maintaining fairness and integrity to the appraisal process.

'The Praise Sandwich' Feedback Technique Managers who get the most from their employees are typically those who use praise as a standard motivational technique. If you feel you have to criticise an employee, and you want him or her to listen to you, try the "praise sandwich" approach. Offer a "slice of praise first": "Jimmy you're beginning to develop a great writing style for our proposals", then a quick slice of constructive criticism "But Jim, you really ought to focus on doing one final spell check before you submit your final version", and finish with another positive "Our sales conversion ratio has been steadily improving and I'm sure with even more care to the final proof read our conversion rates will only continue to improve".

Conclusion

It is clear that if done correctly, performance appraisals are a valuable tool for improving both individual and organisational productivity. Although often requiring significant time to establish, there are few better processes that involve staff in improving their own contribution to the company. If effectively run, the increase in staff productivity and commitment to the business from performance appraisals can only have positive outcomes for all.

References:

(1) Six Steps to Successful Performance Appraisals - http://www.rpconsult.com/article19.htm
(2) Conducting Quarterly Performance Appraisals - http://www.positiveresults.com/sen/archives/quarterly_appraisals.pdf
(3) Performance Management is NOT an Annual Appraisal - http://humanresource.about.com/od/performancemanagement/l/aa_perf_mgmt2.htm
(4) HR Tool: Performance Development Checklist- http://humanresource.about.com/cs/performancemanage/l/aa020501a.htm
(5) Common Mistakes - http://www.performance-appraisal.com/mistakes.htm
(6) Conducting Quarterly Performance Appraisals- http://www.positiveresults.com/sen/archives/quarterly_appraisals.pdf
(7) The Annual Review - http://management.about.com/cs/peoplemanagement/a/aa032703.htm
(8) Performance Appraisals Don't Work - http://humanresources.about.com/cs/perfmeasurement/l/aa061100a.htm?terms=Performance+Appraisals
(9) Performance Management: Performance Improvement Plan - http://humanresources.about.com/od/performancemanagement/a/PIP.htm
(10) "Killing Bambi", BRW November 18-24, 2004

About Regent Recruitment Regent Recruitment is a recruitment consultancy that assists leading Australian employers to attract and retain talented staff on a contract, temporary or permanent basis. Whether we are filling one permanent role or recruiting contract staff for a 400-seat call centre, we deliver an exceptional recruitment service. Unlike other recruitment consultancies, Regent Recruitment is unique in that it combines the capabilities of a large-scale multinational recruitment operation with exceptional service levels typically only associated with small boutique agencies. How can we assist you? We would welcome the opportunity to have a confidential meeting to discuss your staffing needs in more detail. If you are interested, in the first instance please call Howard Mereine, General Manager, on (03) 9909 7150 or e-mail Howard at hmereine@regentrecruitment.com.au. We look forward to speaking with you.

This article was licenced by Regent Recruitment for the Regent Recruitment client newsletter.
Written by Victoria Small and edited by Paul Quinn, Quinntessential Marketing Consulting Pty Ltd.


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The views and opinions expressed in this document are those of the authors and do not necessarily reflect the view of Regent Personnel Pty Ltd.