Performance Appraisal

We're going to discuss Performance Appraisal today, perhaps in a way you haven't considered - as the Key to Productivity. We hear about improving productivity in many forms and we also hear about Performance Appraisal - either we should do it, or that we should improve OURS (because they are so difficult to conduct, subjective, vague, essentially unproductive and sometimes traumatic experiences).

What you will see today is a system that will shed new light on many of your ideas about
Performance Appraisal. When used properly it will become a pleasant experience to looked
forward to by both the employee and the manager - rather than an experience to avoid and dread.

"Motivation increases in direct proportion to the certainty that performance will be measured."

You, as a manager, have had the experience of seeing your own work improve when someone
was monitoring your results (for whatever reason). Therefore, you know that in this situation you performed better, and sometimes faster than when no one was watching. You probably also felt good when the project/task was completed, appraised, and complimented. It is important that you afford that same opportunity, the chance to do something well and know it, for your people. Appreciation of a job well done is the most powerful motivator you can use. Performance Appraisal is your formal opportunity to use it.

A closer look at the concept of Performance Appraisal will help you identify many more benefits that will be returned for your efforts. Throughout your day you constantly assess whether or not the tangible materials and resources you use meet your needs and expectations. If something is not up to par you arrange to take care of it - a new copier, a new computer, less expensive suppliers, etc. If the copier isn't working properly you call someone to fix it. Your people are also a resource, many believe your GREATEST resource, so why do we often leave them unmeasured and thus uncorrected?

If you had a piece of equipment that was functioning at 25% of its capacity, how long would you wait before calling someone to fix it? Probably not for very long. Research indicates that most people function below their capacity, yet we appraise performance every 6-12 months (longer or never in many cases). Before you can fix or improve the copier you must determine what is working and what isn't. This applies to people also. Training and development needs can only be determined when inadequacy is known. Furthermore, when people's performance improves so does the use of materials, tools, and equipment.

It is through improved performance of both these resources that productivity and profitability are increased. Performance Appraisal is a clear path to increased profits and productivity.

Before we discuss Performance Appraisal in depth, let's put it into perspective and look at the big picture to see how Performance Appraisal fits into the Corporate system.

A Performance Appraisal system begins with the setting of Organization Goals which are then
translated into Divisional, Departmental, and finally individual goals. However, these goals cannot stand alone. The other key factor in effective performance appraisal is managers who are managing. Not managers who constantly fight fires or who are busier than a one-armed paper hanger.

When managers are caught up in their own activity they cannot objectively observe and measure the performance of their people. This system will help you even if you are operating in a crisis mode. Keep in mind, however, that your behavior and attitude directly affects your people.

To begin this process the manager must sit down with each employee and write out their goals. These goals may be unique to each employee because when setting these goals you must consider the personal aspirations of the employee. This is called "mutual goal-setting" which benefits both the company and the individual.

WHY set goals? We mentioned earlier that motivation increases when performance is measured. We must also predetermine what results we desire. How do you know what your results will be? "If you don't know where you're going you'll probably end up somewhere else".

Goals give us our targets. Can you imagine an archer who is blindfolded? Sure he may hit the
target if he is pointed toward it. But what are the chances of him hitting the bull's-eye? Once?
Twice?

The work that needs to be done is determined by the Organization's Goals. Job descriptions define the responsibilities and tasks of the individual so they may set personal performance goals which will contribute to the achievement of Organizational Goals.

Performance Appraisal is NOT a salary review. Discussion of money is not the purpose of a
Performance Appraisal. If you conduct quarterly or semi-annual sessions, then one of those may be a salary review, but that depends on organizational policy.

The first step, as we mentioned, is to set goals - divided into short, intermediate, and long range, which contribute to the overall Organizational Goals. To begin you must set standards, which you already have whether you realize it or not. When you tell Joe he's doing a good job or Helen that she is a little behind, it is in relation to some standard. All you need to do is formalize that standard. To do so ask yourself, "How much of what must Joe produce to rate him poor, fair, good, outstanding?" Write these specific figures down and you've begun to establish standards. What specific scrap/waste figures do you consider acceptable? When your manager complains to you about your department, what terms and numbers does he use? Won't they apply to your subordinates as well? In some cases, one standard may apply to everyone in the department; in other cases you may have to develop individual standards for individual jobs and employees.

Even seemingly intangible areas of performance can often be measured objectively. You can
check absenteeism/tardiness records to measure dependability which can also be measured by evaluating the number of jobs you delegated which are properly and completely carried out. Initiative can be measured by the number of positive, constructive suggestions made by an individual since his last P.A., or by how many times he attended special outside training
opportunities. Cooperation can be measured by the number of times the employee agrees to work overtime or help out in a pinch. If your company has clear standards you can use those. If not, write down the factors you want to measure and review them with your manager for his
comments and feedback.

Next, step 2, is to get agreement and commitment from management and employees. Contrary to some archaic beliefs, direct orders and force fail to elicit commitment. Only when a person has input will he be truly committed to a task or project. He or she must "own" a part of the goal and its benefits.

Step 3 is to hold quarterly or semi-annual meetings to formally feedback both positive and
negative results. We liken the managers' role here to that of a coach. In effect, you appraise
performance daily with offhand comments like, "good work, Joe" and "You've got to stop making so many mistakes on these reports, Helen". Usually we don't collect and review these comments regularly. The end result is that neither manager nor employee can see the proverbial "forest through the trees". Add to this the fact that quick comments rarely serve as adequate corrective steps and we quickly see the need for a formal communication process; its sole purpose is to provide opportunity to appraise, compliment, coach, and plan for further development. The only way to turn errors and mistakes into positive work habits is to identify and correct them - if you don't know you're doing something wrong or ineffectively, how can you fix it?

Providing feedback on performance to your people is a continuous process. It is the
informal, ongoing process which contributes to the formal appraisal system. Improved
performance often requires a change in the attitudes of an individual. Sometimes it is easier
to bring about that change by first changing behavior rather than confronting the attitude directly.

One of the most effective methods of improving attitudes and productivity is to give SPECIFIC
feedback about effective and ineffective behavior. Even "good" workers are often at a loss to
know just what behaviors are appropriate; they must learn how to choose behaviors that are most acceptable by receiving several instances of feedback . Feedback has a greater impact on productivity when these principles are observed:
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1. Feedback should be given immediately.

The purpose of giving feedback is to reinforce desirable behavior and discourage undesirable
behavior, and its effect is most powerful when it immediately follows the behavior. When you
praise someone on a task well done immediately, you increase the chances of them repeating the good performance. This is more likely to encourage continued high level achievement or additional increases in productivity than a good rating on a semi-annual or annual performance review. It is also true that immediately correcting an error accompanied by positive suggestions for avoiding further problems is more likely to produce a desirable change than a unfavorable P.A. six months later.

2. Make feedback specific and impersonal.

Feedback is most effective when it focuses on a specific situation, action, task or decision and its result rather than on the individual. If you tell someone "You're the sloppiest worker in the
department; you're going to have to shape up or I'll be forced to do something about it", they may change but it may not be the way in which you expected. The worker doesn't know whether to get a haircut, lose weight, clean his desk, or be more careful with the quality of his output.

Instead, give the worker a chance to define the problem. You may say, "I've noticed a big pile of scrap collects around your work station almost every day, We may have a safety problem. Would you tell me about it?" Listen carefully to what the worker says. You may learn
there is a problem the worker cannot control. But, if the worker is truly responsible, explain why the current behavior is unacceptable. Then state what behavior is acceptable and gain his commitment to change.

3. Give feedback on both positive and negative factors.

If you only use feedback to correct errors, people become discouraged. They may be convinced that the only way to get your attention is to do something wrong. Since most people like recognition, lack of positive feedback often encourages negative performance. Being criticized is better than being ignored. Feedback should include praise for jobs well done, innovative ideas pursued, and extra effort expended to meet a deadline. People who receive praise and recognition for good work are less likely to become defensive when it is necessary to criticize or correct.

4. Regard feedback as coaching for growth.

Successful managers believe that feedback is an opportunity to coach people for growth.
They are concerned with both the organization's success as well as the individual's. The manager's job is to get the company's work done through the people available. Short term goals might be reached using people at their present level of productivity, but benefits are greatly increased when individuals grow and increase their productivity.

Picture, if you will, a football scoreboard that reads:

VISITORS = GOOD, HOME TEAM = AVERAGE. Now you have a good idea of the frustration
an employee feels when he is told about his performance in vague, unspecific terms. The
measurement of an employee's performance standards should be done specifically and regularly enough to let him know his score, whether he's winning or losing. Once you establish the standards, determine how often they'll be measured. Some, attendance and tardiness for example, you can measure daily, others will be weekly, monthly, quarterly, or at random (as in spot-checking quality). Once you establish how often, it is imperative to do it! When you commit to regular Performance Appraisal, and your people expect it, you can anticipate improved performance and fewer problems - if you follow through.

In order to prepare for the P.A. we suggest 7 steps.

First, review the employee's file to familiarize yourself with the information.
Second, write down your explanation of how you measured the results.
Third, set a goal for what results you expect in this meeting.
Fourth, determine whether you'll be conducting a casual appraisal or a more formal one.
Fifth, block out an uninterrupted time to meet.
Sixth, at the onset, encourage the employee to participate, and finally,
Seventh, set your attitude. Remember the importance of feedback to produce desired results, and that this is one of your few formal opportunities to give and get it.

Some of the problems with conducting Performance Appraisal are shared by most managers. Four of the most common include:

1. Inconsistent appraising of performance which is resolved by simply setting a regular schedule and sticking to it.

2. Favoring one individual over another. When you set objective, measurable standards you
greatly decrease the chances of favoritism occurring. . .or being accused of it.

3. Inadequate or useless, outdated forms. If your company isn't presently upgrading its forms you can still create your own "support" forms to contribute to a more effective appraisal system.

4. Stress - between manager and individual over what the outcome will be. Mutually agreeing up front to what the employee will be measured by, eliminates any surprises. More frequent feedback also helps, along with the positive attitude projected by the manager.

REMEMBER! To make a Performance Appraisal System work you need:

1. A system of goals
2. Managers who manage
3. Objective performance standards
4. Regular schedule for appraisal
5. Employee input
6. Commitment

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