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Where next for appraisals?

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For more than ten years, performance appraisals have been a recurring issue. HR staff and managers have been looking for ways of achieving greater performance from employees or of motivating them better; others have been searching for ways of dealing with under-performance. Amongst staff teams, criticism and critical comparison of individual appraisals form the subject of many an informal discussion. So, what have we learned from these experiences and what should we carry forward into the future?

Much has been written about the conduct and outcome of appraisals. It is certainly easier to find examples of poor appraisal practice than enjoyable ones. A range of techniques have been advocated, used, and sometimes discarded - continuous appraisal, 360 degree appraisal, upward appraisal, peer appraisal - and yet there is no widely accepted model of what works best.

The link between appraisal and pay or reward is a common connection, but one which is fraught with difficulty. Just at the moment when government appears to be pushing the public sector towards a closer relationship of performance to pay, many large private sector companies are breaking the link. There are good reasons for this. Research has shown that where the level of pay or bonus is the primary outcome of an appraisal, the review meeting rarely develops into a forum to explore and tackle problems and difficulties in the workplace. One interesting survey reported that 75% of the questioned workforce believed that they worked harder than the average amongst their work peers - and yet statistically this cannot be true; even if the appraisal system correctly identified the best performers, a significant group of staff would not be rewarded by the system even though they personally believed they were contributing 'above average'. A number of organisations have developed ways around some of these problems: some use a team reward approach in which bonuses reflect the overall achievement of the whole team, shared equally between all members (similar in nature to tip-pooling in a restaurant); others have chosen to give merit rewards on the basis of some quantifiable outcome measure whilst still retaining an appraisal meeting to discuss the less tangible aspects of workload, work performance and job satisfaction.

The 'new science' of management emphasises the importance of the sub-conscious and intangible aspects of the workplace to the overall health of the individual employee and the culture of the work space. In an era where many staff earn a reasonable wage or salary, and skilled employees become an increasingly scarce commodity, people's commitment to their work is likely to depend far more on the level of indirect reward and individual satisfaction which they derive from spending time at work. This is the context which appraisal needs to both foster and sustain. Kenneth Blanchard has written elsewhere of the purpose of the manager being 'to catch people doing it right'; in another handbook, I have described the need to shift appraisal from detecting 'trial and error' to rewarding 'trial and success' in people's approach to their work. Assuming that people are already earning a reasonable amount of money, what do they need to motivate them?
1 A workplace where they are recognised as individuals, contributing in their own way to the common goals.
2 A sense that their unique contribution is valued and welcomed.
3 A place in which to freely and honestly explore limitations and difficulties in their work, in an atmosphere of problem solving and without a sense of judgement.
4 An opportunity to discuss aspirations and ambitions and the means of working towards them.

If these sound like desirable outcomes, then the challenge is to make our appraisal meetings reflect them in the future. Effective appraisals are never likely to occur in a routine or systematised format - although they require a clear procedure for the process to take place. Quality appraisals are dependent on the essential relationship and goodwill between two human beings, each wanting to achieve optimum results in the workplace. Utopian? Maybe. But this approach starts to reflect what many people are wanting from their opportunity to discuss their work abilities with a caring and skilled managers. The demands on a manager's ability will inevitably increase as they seek to respond to the differing, unique aspirations and capacities of their team members.

Tim Pickles is a management consultant and author of more than a dozen books and manuals including 'Performance Appraisal' published by Russell House Publishing. He is the Managing Director of TrainingZone, the UK's largest interactive training, development and HR internet community.

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