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Appraisals for Room 101


Andrew Mayo, director of human capital management consultancy Mayo Learning International, looks at why appraisal systems so often fail to meet their own objectives and recommends getting back to basics.

A recent IRS Study reported 78 per cent of organisations have made changes to their appraisal system in the last 12 months. One would think that such a simple concept of a dialogue on performance had been solved by now, so why do we continue to struggle with this process?

If we go back to the basic question of "what are we trying to achieve?" immediately we hit a problem – maybe the problem – because there are many answers. Although the prime and original purpose is to review and discuss performance, it seems we are constantly trying to add things to it to support other initiatives from HR. There is a long list of these.

The process may also be for objective setting, personal development planning, career discussions, cultural and values "fit" evaluations, performance based pay decisions, competency based pay assessments, plus motivation and feedback. All these important employee interactions are frequently consolidated into one set of forms and the poor manager has to cope with them all. No wonder surveys frequently show dissatisfaction on the part of both employees and their managers.

Some organisations split development discussions into a separate meeting, but there is a fundamental HR assumption that all these activities must be done by a manager. At the same time we know that only a proportion are really skilled at having effective dialogues.

Suppose we consign all our assumptions to room 101 and start again. Clearly an employee needs to receive feedback on performance against targets and discuss any improvements needed. Performance is about delivering results. It is usually based on preset objectives, but wherever possible should be in terms of creating some benefits for one or more stakeholders. Consultants who have no manager know very well that performance is critical and it is only measured in terms of the satisfaction to clients.

In the case of trainers, they have two main stakeholders – the learners themselves and the client who commissioned the learning because they saw a need. Their feedback is essential to help understand and improve performance. So we could empower employees to collect feedback themselves – a self managed "360" perhaps – from all the people they serve – including of course their manager. This can include how they are seen to live the values if this is a current topic, or how they demonstrate relevant competencies. They can then have a mentor or guide of their own choosing who can work with them on interpretation and action planning.

The same principle can apply to development planning – issues arising from the performance feedback, and from personal career planning. Better to sit down with someone who really understands people development than the lottery of how good a manager might be. A contract for time and money may be needed with the manager once it is complete.

Pay rise
When it comes to managing pay, if we want to have part of pay based on competencies, again we need several inputs and the 360 principle applies again. For performance-based pay (which in my opinion should be primarily a bonus based on results), using overall performance rating scales is fraught with problems – and everyone knows the problem of "upwards drift", which HR counters with the hated forced distribution approach. Surely managers (or a partnership with HR) can be trusted to distribute their "pay rise pot", with guidelines, without rating scales

There is one important managerial role which is about motivation and understanding what employees are feeling about their job, their future and the company. This does not need a form and definitely needs to be done more often than annually. The concept of frequent pulse surveys can provide a good basis for 1:1s here.

First principles
So before you tweak your forms one more time, go back to first principles. What are you trying to achieve and for whom? An employee is part of system of people surrounding him or her, and the manager is not the only person in their working life who can help them. The best thing we can do is to train employees in how to manage these quite different dialogues - for and by themselves.


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