Performance Appraisals - Are You Ready for a 360? part 1

Tips and Tools“Julia, we are a small company, why should I waste time doing employee appraisals – that’s for big companies!”

Why Have Performance Appraisals?

Over the last few years, the use of “360 Degree Feedback” has grown in popularity. 360 Degree Feedback is a system or process you develop in which the employees received feedback from those who work around them. This can be managers, peers, direct employees, or employees from other departments in which they interact with regularly. However, before we discuss the pros and cons of 360 Degree Feedback it is important to gain a general familiarity with performance appraisals. In particular, what are the advantages of performance appraisals?

Performance Appraisals offer several advantages to the individual, team, and to the company.

Individual

At an individual level, performance appraisals offer a number of advantages. These include:

  • Recognition of past effort
  • Developmental/training requirements can be uncovered

Research has consistently demonstrated that these items are extremely important for an individual. Without recognition for past efforts it can be difficult to consistently motivate an individual to engage in future efforts, or willingly accept developmental activities.

Team

In addition to the benefits achieved at an individual level, a number of team benefits come straight to mind. These include:

  • Alignment of effort with objectives
  • Motivation of team members

The effectiveness of any team is clearly aligned to the team’s set of objectives. Without opportunity for feedback in a trusting and transparent setting, the team will not know where they collectively are in relation to those objectives.

Organization

The subsequent advantages to the company become evident:

  • Development of staff
  • Achievement of key objectives
  • Best and focused utilization of human resources

Overall Benefits of Appraisals

  • Increased employee performance
  • Greater control of work
  • Improved motivation and commitment
  • Increased information flow
  • Better relationships within & across the company

360 Degree Feedback is a continuous process of improvement and must be always perceived as being so.

Roles within Performance Appraisals

The simplest form of performance appraisals involves two individuals – the manager and the employee.

Manager’s Role in Performance Management

  • Set Objectives with Employees
  • Manage Rewards and Ensure Fair Compensation for an observed level of Job Performance
  • Offer Accurate, Timely, Regular & Specific Feedback

Advantages to Managers

Through Performance Appraisals, Managers can:

  • Translate business goals into individual job objectives and standards
  • Monitor performance against solid standards and offer feedback
  • Communicate and seek buy-in / agreement on objectives
  • Coach employees on how to achieve their performance objectives
  • Identify employees strengths and weaknesses
  • Generate and agree upon development plans to best serve the company’s and the individual’s needs

One of the most important advantages to performance appraisals is the employee’s role in performance management!  When employees are actively involved in their own development and set objectives with their manager, there is a natural tendency to take ownership in their own performance.

Advantages to Employees

Through Performance Appraisals, employees can:

  • Openly discuss performance with managers
  • Be provided with an opportunity to develop skills
  • Reinforce and sustain current good performance
  • Improve existing performance
  • Determine career progression goals
  • Identify training needs
  • Link rewards to performance

Eight Appraisal Techniques

Below is a list of the main performance appraisal techniques. Most companies use these forms of performance appraisals. Whatever you choose to include as part of your 360 Degree Feedback will vary depending on the type and history of your company.

Ranking Strengths Weaknesses
Appraiser ranks employees from the worst to the best based on specific characteristics or on overall job performance
  • Simple
  • Facilitates comparisons
  • Subjective
  • Poor basis for decisions
  • Degree of difference between employees difficult to specify
Paired Comparisons    
Appraiser ranks employees two at a time and decisions on which is superior are included in the final ranking order for the whole company
  • Simple
  • Ease of decision making
  • Complicated within a large workforce
  • Challenges associated with ranking
Critical Incident     
Appraiser observes incidents of good and bad performance and uses this information for judging and leading the performance appraisal
  • More objective than previous techniques
  • Job related
  • Time consuming
  • Requires skilled observation

 

Free-Form/Narrative     
General free-written evaluation by the appraiser
  • Flexible
  • Comparisons challenging
  • Subjective
Self-Assessment     
Employee evaluates themselves based on a particular template that has been supplied by the company
  • Promotes self-analysis
  • Participative
  • Facilitates discussion
  • Employee may be more lenient
  • Conflict can occur between appraiser and employee
Assessment Center     
Employee receives a series of assessments supplied, performed and evaluated by specialized external assessors
  • Objective
  • Range of techniques employed
  • Range of dimensions analysed
  • Expensive
  • Not necessarily job specific
Performance     
Appraiser evaluates the degree to which the Employee has achieved specific objectives
  • Objective
  • Job related
  • Participative
  • Requires awareness of measurable targets
Rating     
Appraiser specifies on a scale to what degree relevant characteristics are possessed by the Employee.
  • Ease of comparison
  • Capacity to assess characteristics from the very simple to the complex
  • Subjective
  • Personality and behavioral traits difficult to measure

Key Implementation Areas

Before we begin to briefly examine an effective 360 Degree Feedback Process, it is important that we understand implementation areas. These are:

360 Degree & Employee Development

Within the area of employee development, 360 Degree Feedback will:

  • Focus on development of skills and competencies to meet organizational objectives
  • Identify Training & Development Needs
  • Identify Areas for Improvement
  • Develop Action Plans
  • Assist Career Development Opportunities

360 Degree & Performance Appraisals

Within the area of performance appraisals, 360 Degree Feedback will:

  • Set Performance Objectives
  • Review Past Performance
  • Improve Current Performance
  • Assist Career Development & Promotion Opportunities
  • Assess Salary/Position Levels

Stay tuned for part 2 – we’ll talk about “An Effective 360 Degree Feedback Process” and the top 10 Reasons 360 Degree Programs Fail.

Stanford’s “Back to Basics” “Beyond the Basics” “Executive Boot Camp” “Fiscal Fitness”

 

Termination: The Result of a Poor Hiring Process

6/1/09
Have you ever had to fire an employee? Most of us would agree that it is an unpleasant task or at least not on the top 10 things we like to do in a day. A solution to this problem is to have a system in place that helps you in the process of hiring the right people. Once you master the hiring process, you may never have to fire anyone again. We can refine the hiring process to such a precise science that it is a rare occasion when a candidate doesn’t succeed. There are three stages of the hiring process, and each stage has proven strategies that you can use to weed out poor candidates and get new hires off on the right foot.

1.The Pre-hiring Process

Interview people who already work for you. Pick your best employees and talk to them. Get feedback from them as to what makes a good team player. Make a list of common qualities; write profiles of perfect employees. Define exactly what you are looking for, even if it changes your current job description. Look for candidates who match those profiles.

Do your best not to hire anyone. Just because you lose a worker, don’t immediately assume you have to hire a replacement. Can you reassign work without overburdening people? Can you eliminate unnecessary work? Can you make changes in the work flow? What about replacing full time with part time? In this economy, many managers who hire as a first reaction realize later that they did not need to fill that open position and then are faced with letting go of someone.

The first place to look for “new” employees: your own company. Hiring and promoting from within increases morale, encourages cross-training, loyalty, and gives you candidates with track records you already know.

Write down on a piece of paper: “I will not lower my standards. Many managers get desperate after the 20th interview and convince themselves that a particular candidate is good enough.” Put your promise to yourself where you can see it, and stick to it. Hiring subpar candidates inevitably leads to firing subpar workers.

2. The Interview Process

Learn to spot “producers.” Don’t focus on job descriptions- anyone can write those. Focus on specific projects candidates completed and the results. Have them talk at length about the process. Remember you are hiring for a position not a person. Hire people with a proven production record- not fancy resumes.

Send top candidates to lunch with a trusted employee after the interview. Candidates are on their best behavior during interviews, often giving rehearsed answers to canned question. At lunch they let their guard down- especially when the interviewer is not present. Have your trusted employee brief you on the lunch.
Ask this question to test their maturity level: “What were the strengths and weaknesses of your past supervisors?“ If they take repeated stabs at former bosses, no matter how subtle, you may be dealing with someone who has a problem with authority.

Ask this question to see if they can accept blame: “What was your biggest failure in your last job?” If the candidate puts it off on others and doesn’t accept any of the responsibility, you may have a problem on your hands.

Use this test to see if you are dealing with a team player: When candidates answer the questions above regarding former employment, listen to the pronouns they use. Do they always say “I” this and “I” that? Or do they refer to “we” when talking about their former jobs? You want “we” people. It means they built strong team bonds- and probably will again, with your team.

Write things down! Studies have shown that interviewers who don’t take notes retain one-forth of what they’ve heard. If you are interviewing a dozen people, you will mix up observations and start to run every candidate together. Develop a shorthand code for writing down personal observations, characteristics you like or don’t like. You may want to use a scoring model to help with your decision.

3. The Initiation Process

Once you’ve hired the right person, the last step is crucial: Get them off on the right foot. Use these strategies to welcome new hires and turn them in to productive motivated workers right from the start.

Have their business cards waiting for them. It’s a great way of saying, “Welcome to the team.”

Outfit the employee’s workstation. Make sure the computer is working and loaded with the appropriate software; stock the desk with office supplies; provide a company directory and handbook. Extra touches: buy a plant or coffee mug.

Use the buddy system. Remember summer camp? Pick an employee with good communication skills and assign him or her to be the new hire’s “buddy”. Buddies are in charge of showing the new employees around, going to lunch with them the first few days, explaining the company hierarchy and culture- and most important, answering the many questions all new hires have.

Make time to meet with new hires – every day. At least for the first week, meet with new hires for 15 minutes at the end of every day: Answer their questions, review their responsibilities, and so on. Let new hires know you’re behind them from the beginning.
Good employees are out there: make sure they are working for you!

Do Your Policies and Procedures Help or Hurt You?

Policies and Procedures are the strategic link between the Company’s Vision and its day-to-day operations. But why is that so important? It’s because well written policies & procedures allow employees to understand their roles and responsibilities within predefined limits. Basically, policies & procedures allow management to guide operations without constant management intervention.In order to understand why policies & procedures are so important we need to know what they are and differences between them. 

A ‘Policy’ is a predetermined course of action established to provide a guide toward accepted business strategies and objectives. In other words, it is a direct link between an organization’s ‘Vision’ and their day-to-day operations. Policies identify the key activities and provide a general strategy to decision-makers on how to handle issues as they arise. This is accomplished by providing the reader with limits and a choice of alternatives that can be used to ‘guide’ their decision making process as they attempt to overcome problems. I like to think of ‘policies’ as the “What” that guides the foundation and structure in our business.  They set the boundaries for all operational decisions.  With that concept in mind let’s take about procedures next.

The ultimate goal of every procedure is to provide a clear and easily understood plan of action required to carry out or implement a policy. A well written procedure will also help eliminate common misunderstandings by identifying job responsibilities and establishing boundaries for the job holders. Good procedures actually allow managers to pro-active and prevent the organization (and employees) from making costly mistakes. The procedure is the road map that guides you to your destination and keeps you from getting lost.  I like to think of procedures as the “How” that supports all operational policies.

The major differences between policies & procedures are identified below:

Policies:

  • Are general in nature
  • Identify company rules
  • Explain why they exist
  • Tells when the rule applies
  • Describes who it covers
  • Shows how the rule is enforcement
  • Describes the consequences
  • Described using simple sentences & paragraphs

Procedures:

  • Identify specific actions
  • Explain when to take actions
  • Describes alternatives
  • Shows emergency procedures
  • Includes warning & cautions
  • Gives examples
  • Shows how to complete forms
  • Are normally written in outline format

Policies & procedures are required when there is a need for consistency in your day-to-day operational activities. Policies and procedures also provide clarity to the reader when dealing with accountability issues or activities that are of critical importance to the company, such as, health & safety, legal liabilities, regulatory requirements or issues that have serious consequences.

If your organization already has established Policies & Procedures, how can you determine if they are meeting your needs? A few ‘Critical’ signs that your policies and procedures need to be reviewed and updated would include an increase in the number of accidents, higher failure rates or costly overruns. The workforce can also provide important clues that your company’s policies and procedures need to be reviewed. These clues could include more staff questions on ‘normal operations’ or a feeling of general confusion within a department or division. Employees may also be demonstrating inconsistency in their job performance and there may be an increase in the workforce’s stress levels. Finally, your customers may provide additional clues in the form of increasing complaints.

Now that we have a better understanding of policies & procedures let’s take a look at the major benefits they provide. First, employees are provided with information that allows them freedom to carry out their job and make decisions within defined boundaries. Second, employees understand the constraints of their job without using a ‘trail and error’ approach. Third, policies & procedures enable the workforce to clearly understand individual & team responsibilities. Finally, clearly written policies & procedures allow managers to exercise control by exception rather than ‘micro-manage’ their staff.

It’s easy to see that well-written policies & procedures benefit the company as well as the employee. From an employee perspective the guidelines provided in policies and procedures allow workers to perform their jobs with respect and dignity. Polices provide guidance on how to handle issues properly as well as clearly identifying their job constrains. The organization benefits by allowing managers the freedom to concentrate on strategic issues because policies and procedures are in place to guide the normal-day-to-day operations.

If your policies and procedures are incomplete, outdated or inconsistent, then you are probably not driving the performance improvement you intended.