The Performance Appraisal Process: A Better Way
Meet Catherine, A Human Resources Professional
“There has got to be a better way!” Catherine, now with 25 years of human resources experience, shouted out loud to herself in frustration as another performance appraisal deadline approached and only 30% of the managers had submitted completed appraisals. When annual performance appraisals were first instituted at the company 10 years ago she had received high praise for the successful rollout and participation. However, upon deeper reflection, she could pinpoint to the third year when issues and concerns started to surface.
Catherine had heard all the complaints from the management staff: “I don’t have enough time.” “I have 20 appraisals to write.” “I have higher priorities.” “We have a business to run.” Nothing had really changed over the previous ten years since the company began administering yearly performance appraisals.
Then there were even more complaints from employees: “I never receive my appraisal on time, it’s always late.” “I never get any valuable feedback.” “My manager really doesn’t know what I do.” “My yearly appraisal only reflects my performance for the last 30 days and not the whole year.” “My appraisal is always a surprise to me.” Yes, Catherine had heard it all from everyone. She needed to done something drastic to make the performance appraisal process a success again.
Catherine continued to reflect over the last ten years of the performance appraisal processes she instituted. The first year was very successful with nearly 80% of the appraisals completed and delivered on time. She remembered the extensive training she personally delivered to the management staff. How she detailed every aspect of the appraisal form and even provided tips to make the process more effective.
The following year she made some revisions to the appraisal form to allow for more commentary to support the ratings managers were giving their direct reports. She had noticed a pattern developing with some managers that were giving higher ratings to the employees they favored and lower ratings to those considered “problem” employees.
Catherine recognized how over time she’d become lax in following up with the managers to complete the appraisals on time.
Then there was the lawsuit three years ago. That was a shocker to the company. The operation’s manager had fired a seven year employee because of some differences with his immediate supervisor. The employee had previously received seven years of appraisals with the highest ratings. Then the employee and supervisor had a falling out resulting in the employee’s termination.
The supervisor had terminated the employee for unsatisfactory job performance. It wasn’t until after the terminated employee had filed a lawsuit that Catherine realized she had not reviewed the employee’s performance appraisals before signing off on the termination documentation. A mistake she vowed never to make again.
The more Catherine reflected on the issues and problems the more determined she became to find a better way. The first thing Catherine decided to do was to get some feedback from others. Her objective was to gain a greater and deeper perspective of the issue or problems with the performance management process. In order for her to obtain the “whole” picture she decided to invite both managers and direct reports to provide feedback.
The Feedback Meeting
Catherine selected ten persons for her feedback meeting, five managers and five direct reports representing the company’s customer service, operations, marketing, finance, and sales departments.
The meeting began with Catherine stating her objective and ground rules. Everyone one in agreement, the meeting began with a brainstorming session. The topic: How can the performance management process be improved for timely participation and richer feedback?
Louise, the customer service manager, started off the brainstorming, “I have too many people to appraise at one time, so the form needs to be simple and easy to fill out.” There were several nods of agreement. Then Jose from operations expressed that, “my job is repetitive and boring at times, so I never receive any detailed or quality feedback, it’s always just an appraisal with ratings and no comments.” More nods of agreement. Collette, sales manager, popped up with the comment, “My feedback comes from my clients, that’s how I know I am doing a good job!” “Yeah but clients don’t provide feedback to our performance appraisals,” shouted Jose. “Well they should” said Jennifer from marketing, “We certainly receive feedback from them, don’t we?”
As Catherine posted the comments and suggestions on a flipchart, she felt rather pleased with herself in arranging the meeting. She was getting excellent feedback, some she expected and some she never thought of until Collette made a suggestion. “Why can’t we have feedback to our performance from others that are impacted by our work?” This time every head in the room was nodding in agreement. Collette continued, “I have a friend that works for a major food company and she gets what is called a 360-degree feedback.”
As soon as Catherine heard Collette’s comment she audibly said, “Of course!” Catherine made a note to follow up and do some research on using 360-degree feedback in performance appraisals.
As the meeting progressed more great ideas surfaced. Louise suggested providing feedback more frequently than on a yearly basis. “I have a high turnover in my department and I think if I were able to provide performance feedback more frequently it might decrease the turnover.” Several of the other managers responded in unison, “We don’t want more work!” “I don’t either, but this is a serious issue for my department that actually causes more work having to constantly interview and hire replacements.” Catherine interjected saying, “These are valid points and I will definitely look into how we can provide more frequent feedback without creating undo hardship for the manager.”
The meeting came to an end and everyone left exhausted but feeling hopeful that the company’s performance appraisal process could surely be improved. The feedback was even better than she expected and everyone seemed enthusiastic and supportive of revising the old performance appraisal process. Catherine had her work cut out for her and she was excited about it. Suddenly Catherine had an epiphany, “I just experienced a form of 360-degree feedback!”
The New Performance Management System
Six months after her initial meeting Catherine and her “performance improvement team” were ready to roll out the new and improved performance management system. The senior management team gave her full support for the new system and now it was time to present it to all employees.
Catherine and her team decided to make it a festive event. They created a YouTube video that detailed the new system’s highlights in a comedic format complete with music. The video would be posted on the company’s website as well, which the team felt would be an excellent recruiting tool.
Highlights of the new performance management system presented in the YouTube video included:
- Quarterly informal performance reviews that would be complied into the annual appraisal. This feature would enable management to take corrective measures to improve performance and reduce turnover.
- The appraisal form would be on the company’s Intranet so managers could complete the appraisal on-line. Additionally, each manager would have an “on-line journal” to document employee performance to make it easier to recall positive as well as performance areas for improvement.
- The yearly appraisal would now include 360-degree feedback that in addition to their manager’s feedback would now include feedback from peers, direct reports if they have employees reporting to them, and other key personnel from other departments they interact with on a regular basis.
The rollout was well received by everyone and the new system would be put to the test within the next 30 days for the first quarterly informal performance feedback.
One Year Later
The new system is a success! Even after a few problems getting managers acclimated to the new system, the process proved to be easier to manage than expected. Catherine began receiving positive feedback from both managers and employees including Louise, the customer service manager, who said, “Once I got familiar with the new system I was able to complete my appraisals in half the time it took me with the old process. But best of all, I’ve been able to reduce my turnover by 60%!”
Jose from the operation’s department approached Catherine to thank her for instituting the new system with the 360-degree feedback. He explained, “I just had the best meeting with my manager about my performance evaluation.” He went on to say, “For the first time since I’ve been receiving performance appraisals, I finally got some meat to chew on!” “I never realized before just how much my work impacts other departments and many of the comments I received were very positive!”
Yes, the new system was working out better than she expected. The overall quality of the appraisal process had greatly improved. Over 90% of the appraisals were now completed by the deadline. No longer were employees surprised by the feedback, which now incorporated feedback from others including peers. The discussions managers were having with their direct reports about their performance were richer and resulted in well-thought-out action plans. However, Catherine realized, the most difficult part of the new performance management system was still to come and that fully rested on her shoulders. Catherine would need to follow-up and keep the momentum moving forward.
As Catherine reflected over the events since the last year and the success of the new process, she exclaimed confidently, “There is a better way!”