Are you satisfied with the way your organization's performance appraisal process is working?
Yes, no, or maybe?
One of the most debated issues among Human Resource professionals for the past several years has been arguments regarding effective performance appraisal processes. Everyone seems to have their oar in the water, anxious to join the debate about what works and what doesn't.
In one corner you have the performance management crowd who want to divorce pay increases from the performance appraisal process. They prefer to focus attention on performance improvements and career counseling - issues that tend to have a longer-term focus. Looking forward, not backward. The subject of pay determination (the increase) would come later, during some vaguely defined subsequent conversation.
In another corner, you have the so-called traditional practitioners, those who tie rewards directly to the work effort and in so doing combine performance/reward determination and career counseling steps into a single conversation. Desired performance improvements and the where-are-we-going? discussion become the epilogue, not the main topic.
Finally, you have the seldom reported employee perspective, those who have delivered the performance and await management's assessment and reward determination. They expect to see a direct connection between their efforts and a subsequent reward.
What's Wrong?
Part of the reason for such debate between opposing viewpoints is that performance appraisal systems are flawed; it's commonly recognized that they're the object of numerous well-deserved criticisms.
- Managers do a poor job of it: Whether it's lack of training, lack of interest or simply an attitude of "I've got more important issues to deal with," the result is often rushed, poorly thought through and . . . sloppy.
- Favored son (or daughter) treatment: The "I like you" or opposite syndrome, regardless of performance. Fair treatment can be a casualty if appraisals are too subjective. Refer again to the training issue.
- Job responsibilities not clarified: When the manager expects performance "A" and the employee thinks "B" is called for, while the outdated description shows a muddled "C" - what follows is going to be an awkward conversation.
- Forms gone wild: Human Resources and systems people are always tinkering with forms, creating ever longer, more complicated processes. The usual result is a manager's passive resistance and poorly handled assessments in a process that they don’t like.
- The focal date review: "Let's do these things all at once." Procedures that mass produce performance appraisal forms and discussion meetings usually result in a loss of quality - and credibility for the process. Pity the manager who has ten of these to work on at the same time.
What's Good?
The process of performance appraisal has been around since the first manager - subordinate conversation, and that learning curve of experience has highlighted several advantages:
- How else are you going to tell an employee how they're doing?
- If your compensation strategy is to have a pay-for-performance program, you'll need a performance appraisal to assess the employee's contribution, and to somehow assign a corresponding reward -- to pay . . for. . performance.
- Employees expect a connection between performance and pay. That's what they're listening for during the performance discussion.
- It makes sense to periodically review performance/pay levels, to eliminate the need for employees to stress over when to ask for a raise.
Practical Realities
During any performance appraisal discussion, the employee's first question is likely going to be, "how much is my raise?" If you're not prepared to discuss that, even mentioning your "recommendation," you're in trouble. Because employees tend to pay closer attention to career counseling and next steps after the raise for past performance has been resolved.
When an employee expects a performance appraisal discussion to include a reference (at least) to a likely pay raise, and you don't cover that topic, the meeting will rapidly slide downhill from there.
- They won't be hearing your thoughts for the future, as they've stopped listening. You're not talking about what they want to hear.
- Frustration and lost engagement are going to seep into body language, tone, and perhaps even conversation, with the recognition that pay-for-performance is somehow not viewed as a primary concern by management (you).
- To make the assessment process work employees need to be engaged in the conversation. Otherwise, what you're left with is delivering a boring lecture to a half-interested employee who only hears blah-blah-blah.
My Two Cents
Personally, I recommend connecting performance to rewards because performance rewarded is performance repeated.
I like to acknowledge the elephant in the room, that employees want and expect that their performance appraisal meeting will cover reward determination as a key component, even if senior management approval remains pending.
I don't like to artificially separate performance from reward as if somehow the two aren't connected. The employee considers it a solid, direct line connection.
Chuck Csizmar CCP is the founder and Principal of CMC Compensation Group, providing global compensation consulting services to a wide variety of industries and non-profit organizations. He is also associated with several HR Consulting firms as a contributing consultant. Chuck is a broad-based subject matter expert with a specialty in international and expatriate compensation. He lives in Central Florida (near The Mouse) and enjoys growing fruit and managing (?) a clowder of cats.
Creative Commons image "Bureaucrat," by Delmarva.Dealing
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