Honesty the best policy in performance appraisals

Do your employee's perform well? Do you? Employees waiting to find out whether they measure up in terms of job performance can be understandably anxious or defensive, which is why employers need to get performance measurement processes right, say organisational consultants.

"The model of performance measurement needs to be thought out properly. How are you going to connect people to business goals, communicate that they are working towards something worthwhile, provide them with feedback, and then explain how their performance will be measured?" says organisational development consultant Crispin Garden-Webster.

Wellington-based Garden-Webster says traditional models of performance measurement that revolve solely around annual form-filling are inadequate for today's labour market where job candidates size up employers rather than the other way around.

"Forms are just forms; if you manage performance through interactions and having conversations, it's much easier to work through the sensitive stuff," says Garden-Webster.

He says employees today want ongoing feedback and opportunity for growth - they don't want to sit around hoping they're on track and waiting a year to find out.

Kristen Cooper, a Christchurch-based independent management consultant, says while most performance measurement systems have "scientific aspects" that can be recorded, these won't be meaningful if they're generic and ignore an employee's individualism, specific role and the company's business objectives.

"If performance measurement is not secured to a particular project or business goal, then how well the employee performs comes down to manager opinion, and this opinion may not always be valued or agreed with," says Cooper.

She says annual performance appraisals should be pre-empted by regular management feedback every two to three months so there are no surprises for the employee.

"An annual formal appraisal session is probably enough for most people, but that appraisal is not the [ongoing] measurement, it's just the recording process," says Cooper.

Garden-Webster says: "Employers need to have performance measurement conversations that go: 'This is what we want to do this year; this is what you will work on and what I will work on. Whether the measurement is broken up into quarters or years let's talk about it regularly and meet once a month'. If a formal review process is also necessary, you just document those interactions as you go.

The consultants say many New Zealand organisations don't understand what performance measurement requires, and lack the people management and 'soft' skills among managers to do it well.

"[New Zealand managers] are just not good at having honest conversations with people in a developmental context. There's a lack of self confidence on both sides, and some managers even have the philosophy that people should know they are doing a good job; they don't need to be told," says Cooper.

Garden-Webster says that's a pity, because employers have a lot to gain when performance measurement is conducted intelligently - employees can become partners working towards common business goals and accountable for their own performance. Additionally, supportive performance discussions aid staff retention, help businesses to target training and development needs, and result in a happier customer.

"If a front-line customer interaction is positive, that is a direct result of an engaged employee; the employee is engaged because they have skills and knowledge to do the job and are getting regular feedback and encouragement; that can only happen if a manager is providing that feedback, informing the employee of what's important, and ensuring they have all the skills and knowledge they need on a regular basis," says Garden-Webster.

Sarah Brown, a talent executive for IBM, oversees performance measurement for 10,000 IBM staff in Australia and New Zealand. She says IBM has ongoing success with a legacy performance measurement process that includes customer feedback, pre-identified business goals and numeric quotas, and formal annual appraisals.

"We take our employees through the [wider] business priorities for the year then set personal business commitments for individual employees linked to those priorities and the employee's role," says Brown.

She says IBM's focus is on the tasks individual employees need to do, how they are going to do them and the tools they need to perform. Development and training needs are planned simultaneously and reviewed periodically throughout the year. IBM captures performance results against objectives as the year progresses and links them to rewards and incentives.

"It is challenging to link performance measurement to compensation - that's the bit we need to continually focus on. We are keen on putting a numeric value on performance and we assess each person's performance against that of others in similar roles. There are quite rigorous calibration sessions to ensure this happens properly," says Brown. She says employees need to know what's expected of them and managers need to articulate these requirements as well as providing feedback about how people are tracking.

"IBM has learnt to ensure managers have good skills to support this process; some are not so good at providing feedback and so we invest a lot into helping them hone and fine tune their own [people management] performance."

Brown says IBM likes to provide opportunities for its employees to say when they are having difficulty - something rarely possible without an open employee/manager relationship.

"A manager should always be in a position to continually assess an individual," says Brown.

Cooper says performance measurement can be stressful for some people, and even good performers worry that they haven't performed in the way they were expected to. The written material around performance measurement exacerbates this anxiety as people worry about where the documentation will end up, she says. In large organisations, it is normal practice for the employee, manager, and HR department to have a copy of the appraisal for an HR file; however, unionised organisations often object to performance appraisals being on personnel files, says Cooper.

"These kinds of debates need to happen when an employer first sets up a performance measurement system - the aim is to ensure that only the right people have access to the right information," says Cooper.

Interestingly, Garden-Webster says when employees don't have individual performance measurement, this can cause problems too.

"Some businesses measure the performance of teams rather than individuals, but the nature of people's work is different so if they're not being recognised as an individual contributor that can be quite demoralising for them," he says.

Brown says there are compelling financial reasons for measuring staff performance well - the need to support an external employment brand is just one.

"There's also ROI on the cost of salaries and ensuring accurate training and development targets. The challenge is always to make sure the performance measurement system is integrated with the business process. If it sits on its own, there's no value in it for the employee or the organisation," says Brown.

Top tips

* Set clear directions on the results needed to achieve business goals and be clear about who is accountable for what. Ensure everyone knows the delegated authority people have to deliver the desired results, and talk and agree on how performance will be measured.

* Keep the measurement process simple and connect staff to financial business performance - provide reward and recognition, focus on strengths and the future. Decide through discussion what's working well, how to do more of that, and how people can be better at, or share what they are already good at.

* Ensure reviews are mutually planned and there are no surprises. Encourage staff to keep track of their own performance, take responsibility for their success and identify their own development needs.

* Don't just buy performance measurement software off a shelf, or photocopy a performance management checklist from a book. Tailor your own programme in partnership with staff and then find resources.

GardenWebster