Only a credible performance appraisal regime is effective

The topic of performance appraisal is often in the news since the decision by Accenture to scrap their annual performance appraisal system was announced.  However, they describe why they scrapped the formal performance appraisal, mostly there is only one reason such a system will fail to work.  That is because it lacked a credible performance appraisal regime.

Whether your performance appraisal system is newly introduced or has been operating for some years, a common issue for many organisations is whether or not it is credible with employees, stakeholders and customers.  Gaining credibility is absolutely vital if your performance system is linked to pay and reward particularly.

The following 7 steps set out how you can gain the trust and confidence of all.

The rated elements of performance are clear

Not all performance will count towards a rating.  Managers might be required to evaluate several aspects of performance, such as giving individual feedback on their skill set, their ability to apply knowledge, or how they do their work.  On the other hand, a performance rating will likely be based on employee contribution usually measured against whether they have achieved pre-determined objectives or specific tasks linked to business objectives.

Feedback is grounded in facts and expressed impersonally

The review is likely to include both objective and subjective feedback.  Objective feedback is about facts, data and evidenced information. Subjective feedback is likely to be relational and can be skewed by individual opinion. Managers must understand when giving subjective feedback; they deal with behaviours, not personalities.  So, for example.   “You are rude, and it upsets the customers” might be better expressed as  “What you said upset the customer, and it resulted in a formal complaint”.

Some performance appraisal systems lose credibility because managers rate their employees based on subjective criteria.  While most performance issues are based on facts, some may be more subjective.  For example, in the above situation, one customer might have taken something said in all innocence the wrong way.

Understand different personalities have different needs

Managers benefit from being aware of their own and others’ different personality types. Understanding type is an easy and essential skill in a manager’s toolkit.  Simple understanding can save much conflict, resistance and misunderstanding, as people respond differently to different styles of giving and receiving feedback depending on their individual needs.

Focus on conflict resolution

Unless you have a team made in heaven, inevitably, giving performance feedback can create conflict.  If managers understand their own conflict resolution style, they can identify those likely situations and understand the best way to prevent, identify and resolve conflicts.

Ensure effective quality control

A good quality control system is essential. This might include, for example:

  • Ensuring that HR or third-party managers undertake independent reviews of findings
  • Introducing focus groups that can anonymously challenge results and ratings on behalf of both teams and/or individuals.

While some of these ideas may be time-consuming, they will prove worthwhile if an individual or legal challenge are eliminated.

Sell the benefits

Sell the benefits of measuring and rewarding performance, eliminate the impression it is a “tick box” activity.  When the regime works well, celebrate success.  Make it clear the objective is to help to get the best out of people.  Give people credit for work done well, as well as boosting performance and results.

Conversely, be careful not to let the system become identified with a hire-and-fire mentality. If you have big performance issues, sort them out separately and immediately, not through the performance management system. The performance management system should be seen as a tool to improve performance rather than to exit people.

Provide clear guidance

Make sure that your guidance, policies and procedures are simple and transparent so that everyone can understand and sign up to them.

So here are my tips about creating a credible performance appraisal.  Comment below and let me and the readers know your tips.

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