M E M O
From: David E. Edell, President
Date: May 19, 2003
Re: Appraisals - Do It Right or Do Damage
DRG is a national Executive Recruitment Firm working exclusively within the Nonprofit sector. Learn about DRG's services, resources, recruitment strategies and current search assignments at our website http://www.drgnyc.com/
The "Career Tips" section of our website contains valuable information for organizations and job seekers on recruitment, compensation, relocation, resume preparation and interviewing.
Creating Effective Performance Appraisalsby Clinton O Longenecker and Laurence S Fink
Copyright (c) 1999 Bell & Howell Information and Learning Company. All rights reserved. Copyright Institute of Industrial Engineers. Reprinted with Permission
Part 2 of 2
MANAGERIAL SYSTEMS PRACTICES
The following standard operating procedures reflect and influence the organizational performance appraisal culture.
Lesson 5: Managers must conduct effective performance planning. At the beginning of the appraisal cycle, managers must work closely with employees to review their job descriptions and duties, set clearly defined goals, and communicate expectations of behaviors and results for which the employee will be held accountable and be rewarded. Important behaviors and activities that critically affect performance and the appraisal form itself (which should include evaluation of these behaviors and activities) should be discussed early in the performance evaluation cycle. When managers conduct effective performance planning, the credibility of the formal performance appraisal is enhanced and employees are motivated to perform behaviors and activities that support the organization. Failure to plan effectively eliminates a valuable performance enhancing tool and decreases managers' and employees' satisfaction with the process and its results.
Lesson 6: Managers should provide their direct reports with ongoing informal performance feedback. Effective appraisal systems do not consist solely of once-a-year formal performance reviews. Failure to provide ongoing informal feedback allows minor, easily correctable problems to grow into more serious ones. Lack of ongoing coaching can lead to employees disengaging from work, looking for alternative employment, and demonstrating decreased productivity Lack of ongoing coaching also makes it difficult to conduct reviews of employee performance and can fray the bonds between managers and their employees, since employees may interpret the lack of feedback as a sign of supervisors' disinterest in employees' professional growth.
Lesson 7: Raters must be motivated to conduct effective appraisals. An organization will never achieve effective appraisal practices if the managers are not motivated to follow procedural guidelines and use information from training to conduct effective written and face-to-face performance reviews. Unmotivated managers can undo even the best performance appraisal system because they most directly impact the overall quality of the appraisal process and the motivation of employees to perform. Managers will be motivated to conduct effective appraisals when their supervisors conduct effective appraisals on them. Effective appraisal of managers by their supervisors signals the importance of appraisals in the organization and models proper procedure. In addition, a manager's motivation to conduct effective appraisals will increase when manager appraisals are based in part on how effectively they execute their role in the appraisal process and how well they coach their employees. Failure to motivate supervisors to conduct effective appraisals can lead to poorly documented, poorly run appraisals in which ratings of subordinates are inflated or deflated for expediency or in the pursuit of personal agendas. This, in turn, tends to reduce employee faith in the performance appraisal system, motivation to perform, and willingness to accept and pursue organizational goals.
Even a properly designed system will fail if these suggested managerial practices are not followed. The manager responsible for employee performance must be proficient at these activities if appraisals are to get desired results.
APPRAISAL SYSTEM SUPPORT
Appraisal system support directly affects managerial motivation to perform required appraisal activities diligently, it also protects the system from problems caused by inconsistent or improper execution of appraisal procedures. The lessons below can help companies develop effective appraisal system support.
Lesson 8: Top management must support and demonstrate effective appraisal practices. For appraisal systems to be effective, they must get support from top management. Support for effective appraisal practices can be demonstrated through written and oral communications with managers and employees in memos, testimonials, videotaped messages, and company newsletters. Top executives can also show support by practicing the same appraisal practices when they appraise managers. Our research clearly indicates that when top managers don't practice what they preach, lower-level managers emulate those practices instead of stated policies.
Lesson 9: Effective appraisal systems link performance ratings to organizational rewards. Research consistently indicates that, to maximize the effectiveness of a pay-for-performance program, organizational rewards must link greater rewards to superior job performance. When employees feel that their rated performance is accurate and reflects the full range of their contributions to the organization, their motivation to perform increases. On the other hand, when employees feel that performance ratings are inaccurate or a function of politics, they tend to perform only to minimum standards, be absent more often, engage in theft, or quit.
Lesson 10: Appraisal systems require ongoing systems review and corrective action. It is important to systematically and regularly review system operations to make sure that processes and practices are being followed and are effective. Examples of measures that can be used to assess the health of your appraisal system include employee acceptance and trust of the appraisal system; the relationship between level of performance and rewards-, level of individual performance and organizational financial performance; consistency of implementation of policies and practices across levels, departments, and locations-, and turnover and absenteeism rates compared to other organizations or to levels at the organization itself before and after the start of the performance appraisal system.
All the support components function to encourage effective rating practices on the part of individual managers who determine the ultimate effectiveness of most appraisal systems.
Ineffective appraisals lead to a number of serious problems that negatively affect both individual and organizational performance. To avoid these problems, it is important to focus on the three critical appraisal system components and make sure that managers have the skills needed to complete each stage of the appraisal process effectively. Attention to all three appraisal system components and all four appraisal system stages is vital for a formal performance appraisal system to motivate employees and to improve manufacturing organizations' competitiveness.
CONCLUSION
"If your organization does formal appraisals, it is imperative to do them right. This requires time, effort, discipline, and proper support. If you do appraisals in a cavalier or ineffective fashion you are making trouble for yourself in a time when the last thing organizations need is more problems."
###
Clinton O. Longenecker, Ph.D., is the Stranahan distinguished professor of management at the University of Toledo. He holds a B.B.A. in marketing and an M.B.A. in management from the University of Toledo, and a Ph.D. in management from Pennsylvania State University. He is a management consultant whose clients include a number of Fortune 500 firms.
Laurence S. Fink, Ph.D. is an assistant professor of management at the University of Toledo. He holds a B.A. in psychology from the State University of New York at Albany and a Ph.D. in organizational behavior/human resource management from Purdue University. He is a researcher in performance management, selection and recruitment, turnover, and compensation.
