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The Traditional Performance Appraisal Process

Second only to firing an employee, managers cite performance appraisal as the task they
dislike the most. This is understandable given that the process of performance appraisal,
as traditionally practiced, is fundamentally flawed. It is incongruent with the valuesbased, vision-driven, mission-oriented, participative work environments favored by
forward thinking organizations today. It smacks of an old fashioned, paternalistic, top
down, autocratic mode of management which treats employees as possessions of the
company.

The Traditional Performance Appraisal Process


In the conventional performance appraisal or review process, the manager annually writes
his opinions of the performance of a reporting staff member on a document supplied by
the HR department. In some organizations, the staff member is asked to fill out a selfreview to share with the supervisor.
Most of the time, the appraisal reflects what the manager can remember; this is usually
the most recent events.
Almost always, the appraisal is based on opinions as real performance measurement takes
time and follow-up to do well. The documents in use in many organizations also ask the
supervisor to make judgments based on concepts and words such as excellent
performance (what's that?), exhibits enthusiasm (hmmm, laughs a lot?) and achievement
oriented (likes to score?).
Many managers are uncomfortable in the role of judge, so uncomfortable, in fact, that
performance appraisals are often months overdue. The HR professional, who manages the
appraisal system, finds his most important roles are to develop the form and maintain an
employee official file, notify supervisors of due dates, and then nag, nag, nag when the
review is long overdue.
Despite the fact that annual raises are often tied to the performance evaluation, managers
avoid doing them as long as possible. This results in an unmotivated employee who feels
his manager doesnt care about him enough to facilitate his annual raise.

Employee Performance Appraisal is Painful and It Doesnt Work


Why is this established process so painful for all participants? The manager is
uncomfortable in the judgment seat. He knows he may have to justify his opinions with
specific examples when the staff member asks. He lacks skill in providing feedback and
often provokes a defensive response from the employee, who may justifiably feel he is
under attack. Consequently, managers avoid giving honest feedback which defeats the
purpose of the performance appraisal.

In turn, the staff member whose performance is under review often becomes defensive.
Whenever his performance is rated as less than the best, or less than the level at which he
personally perceives his contribution, the manager is viewed as punitive.
Disagreement about contribution and performance ratings can create a conflict ridden
situation that festers for months. Most managers avoid conflict that will undermine work
place harmony. In todays team-oriented work environment, it is also difficult to ask
people who work as colleagues, and sometimes even friends, to take on the role of judge
and defendant.
Further compromising the situation, with salary increases frequently tied to the numerical
rating or ranking, the manager knows he is limiting the staff members increase if he rates
his performance less than outstanding. No wonder managers waffle, and in one
organization with whom I worked, ninety-six percent of all employees were rated one".

Eliminate Performance Appraisals as youve known


them
Am I completely against performance appraisals? Yes, if the approach taken is the
traditional one I have described in this article. It is harmful to performance development;
damages work place trust, undermines harmony and fails to encourage personal best
performance. Furthermore, it underutilizes the talents of HR professionals and managers
and forever limits their ability to contribute to true performance improvement within your
organization.
A performance management system, which I would propose to replace the old approach,
is a completely different discussion. And, I dont mean renaming performance appraisal
as performance management because the words are currently in vogue. Performance
management starts with how a position is defined and ends when you have determined
why an excellent employee left your organization for another opportunity.
Within such a system, feedback to each staff member occurs regularly.
ndividual performance objectives are measurable and based on prioritized goals that
support the accomplishment of the overall goals of the total organization. The vibrancy
and performance of your organization is ensured because you focus on developmental
plans and opportunities for each staff member.

Performance Feedback
In a performance management system, feedback remains integral to successful practice.
The feedback, however, is a discussion. Both the staff person and his manager have an
equivalent opportunity to bring information to the dialogue. Feedback is often obtained
from peers, direct reporting staff, and customers to enhance mutual understanding of an
individuals contribution and developmental needs. (This is commonly known as 360

degree feedback.) The developmental plan establishes the organizations commitment to


help each person continue to expand his knowledge and skills. This is the foundation
upon which a continuously improving organization builds.

The HR Challenge
Leading the adoption and implementation of a performance management system is a
wonderful opportunity for the HR professional. It challenges your creativity, improves
your ability to influence, allows you to foster real change in your organization, and it sure
beats the heck out of nag, nag, nag".

What Do You Think?


Please let me know what you think. Is your organization ready to toss out the traditional
performance appraisal? In future articles, I will discuss the various components of a
successful performance management system. In the meantime, I encourage you to think
about a change for your own organization and check the following additional resources.
Communicate with your Guide and author.
Definition:
Performance management is the process of creating a work environment or setting in
which people are enabled to perform to the best of their abilities. Performance
management is a whole work system that begins when a job is defined as needed. It ends
when an employee leaves your organization.
Many writers and consultants are using the term performance management as a
substitution for the traditional appraisal system. I encourage you to think of the term in
this broader work system context. A performance management system includes the
following actions.

Develop clear job descriptions.

Select appropriate people with an appropriate selection process.

Negotiate requirements and accomplishment-based performance standards,


outcomes, and measures.

Provide effective orientation, education, and training.

Provide on-going coaching and feedback.

Conduct quarterly performance development discussions.

Design effective compensation and recognition systems that reward people for
their contributions.

Provide promotional/career development opportunities for staff.

Assist with exit interviews to understand WHY valued employees leave the
organization.

Performance Management is NOT an Annual Appraisal

A Performance Management System That Makes a


Difference
Performance Management: A Whole Different Focus
Performance appraisals are a hot topic in management and organizations these days. In
fact, hundreds of resources exist to tell you how to do performance reviews. I think this is
the wrong approach. Should you do reviews at all? People want to know how to do them,
when to do them, whether to do them, and how they affect performance. The employees
who are the targets of these assessments want to know:
how they affect income,
what they assess,
how they measure contribution,
how they are archived and used, and
how they affect career advancement and success.

I am convinced that most of these are the wrong questions, especially when they
focus narrowly on the performance evaluation instrument and the appraisal
meeting with the supervisor. Ask instead, how your entire performance
management system supports your desire to create a customer serving, motivated,
accountable, reliable, creative, dedicated, and happy workforce.
I dont think the annual performance review helps you achieve these goals. In
Performance Appraisals Don't Work, I discussed the downside of performance evaluation
as traditionally practiced. Here, I'll review the components of a performance management
system, my recommendation for replacing the annual performance review.
As a Human Resources or management professional, one of your major goals is to
develop the capacity of your organization and its members to perform; you want to create
a high performance organization. You lead company efforts to create a workplace in
which people can develop their full potential. An effective performance management
system, which line managers lead and own, guarantees you will achieve your goals.

Performance Management: Both a Process and a System


Performance management is the process of creating a work environment or setting in
which people are enabled to perform to the best of their abilities. Performance
management is a whole work system that begins when a job is defined as needed. It ends
when an employee leaves your organization. Many writers and consultants are using the
term "performance management" as a substitute for the traditional appraisal system. Id
like to think of the term in this broader work system context.
The goal of performance is to achieve the company mission and vision. Almost no one
performs, for the organization, however, if his or her own mission and vision are not
accomplished as well.
As Fred Nickols, Senior Consultant with the Distance Learning Company, says, "The
blunt truth is that, if they have any work objectives at all, most people set their own. This
is the era of knowledge work and the knowledge worker " Many so-called "bosses" (if
that term has any utility at all) are in no position to set work objectives, to monitor their
accomplishment, or to supervise their pursuit.
The work, especially at the task level, is in the hands and the heads of the workers. To be
sure, a manager could formulate goals and objectives having to do with improvement in
work processes and the like, but if these must be left to the workers to realize, who needs
the manager? An even better question is "Who needs work objectives?"
An effective performance management system sets new employees up to succeed, so they
can help your organization succeed. An effective performance management system
provides enough guidance so people understand what is expected of them. It provides
enough flexibility and wiggle room so that individual creativity and strengths are

nurtured. It provides enough control so that people understand what the organization is
trying to accomplish.
Nickols summarizes, "Now, in the era of knowledge work and knowledge workers, where
work is information-based and working is a mental activity, work routines are configured
by the workers in response to fluid, changing requirements. The task of management in
this new world of work is to enable and elicit employee contributions of value to the
organization. To continue with a system designed to exact and enforce compliance is
folly."

Performance Management System Defined


Performance management begins when a job is defined. Performance management ends
when an employee leaves the company. Between these points, the following must occur
for a working performance management system.
Develop clear job descriptions. Job descriptions are the first step in selecting the
right person for the job, and setting that person up to succeed. I do not mean
traditional job descriptions that ended with "and whatever else you are assigned
by the manager." I believe job descriptions provide a framework so the applicants
and new employees understand the expectations for the position. I much prefer to
see these expressed as outcomes.
Select appropriate people with an appropriate selection process. People have
different skills and interests.

Jobs have different requirements. Selection is the process of matching the skills
and interests of a person to the requirements of a job. Finding a good job "fit" is
exceptionally important. Use a selection process that maximizes input from
potential coworkers and the person to whom the position will report. See What
Great Managers Do Differently for more discussion about selection.
Negotiate requirements and accomplishment-based performance standards,
outcomes, and measures. Ferdinand F. Fournies, in his long-lasting book, Why
Employees Dont Do What Theyre Supposed to Do and What to Do About It,
clearly states the first reason why people sometimes fail to meet your
expectations. He says employees dont know what theyre supposed to do.
Provide effective orientation, education, and training. Before a person can do
the best job, he or she must have the information necessary to perform. This
includes job-related, position-related, and company-related information; an
excellent understanding of product and process use and requirements; and
complete knowledge about customer needs and requirements.
Provide on-going coaching and feedback. People need ongoing, consistent
feedback that addresses both their strengths and the weaker areas of their
performance. Effective feedback focuses more intensely on helping people build
on their strengths. Feedback is a two-way process that encourages the employee
to seek help. Feedback is usually more effective when requested. Create a work
environment in which people feel comfortable asking, "How do you think Im
doing?"

Conduct quarterly performance development discussions. If supervisors are


giving employees frequent feedback and coaching, performance reviews can
change from negative, evaluative, one-sided presentations to positive, planning
meetings. Held quarterly, employees always know how they are performing and
their next goals and challenges.
Design effective compensation and recognition systems that reward people
for their contributions. The power of an effective compensation system is
frequently overlooked and downplayed in some employee motivation-related
literature. I think this is a mistake. It is often not so much about the money as it is
about the message any reward or recognition sends to an individual about their
value. Money has become a metaphor for value.
Provide promotional/career development opportunities for staff. The
supervisor plays a key role in helping staff develop their potential. Growth goals,
changing and challenging job assignments and responsibilities, and cross-training
contribute to the development of a more effective staff member. Help to create an
environment in which people feel comfortable to experiment and make mistakes.
Assist with exit interviews to understand WHY valued employees leave the
organization. When a valued person leaves the company, it is necessary to
understand why the person is leaving. This feedback will help the company
improve its work environment for people. An improved work environment for
people results in the retention of valued staff. If your environment truly
encourages discussion and feedback, you will learn nothing new in an exit
interview.

The impact of the Human Resources professional on this performance management


system is powerful.

You can encourage managers and supervisors to take responsibility for managing
performance in their work area and cooperating for performance improvement
across the organization.
You can promote the understanding that even if one individuals work area, shift,
or department is successful, this will not result in a well-served customer. Because
all components of your organization are part of a system that creates value for
your customer, all components must be successful.

So, too, in your performance management system, all components must be present and
working to create value for each employee and the organization.

Performance Management Process Checklist


Performance appraisals, performance reviews, appraisal forms, whatever you want to call
them, let's call them gone! As a stand-alone, annual assault, a performance appraisal is
universally disliked and avoided. After all, how many people in your organization want to
hear that they were less than perfect last year? How many managers want to face the
arguments and diminished morale that can result from the performance appraisal process?
How many supervisors feel their time is well-spent professionally to document and
provide proof to support their feedback - all year long? Plus, the most important outputs
for the performance appraisal, from each person's job, may not be defined or measurable
in your current work system. Make the appraisal system one step harder to manage and
tie the employee's salary increase to their numeric rating.
If the true goal of the performance appraisal is employee development and organizational
improvement, consider moving to a performance management system.
Place the focus on what you really want to create in your organization - performance
management and development. As part of that system, you will want to use this checklist
to guide your participation in the Performance Management and Development Process.
You can also use this checklist to help you in a more traditional performance appraisal
process.
In a recent Human Resources Forum poll, 16 percent of the people responding have no
performance appraisal system at all. Supervisory opinions, provided once a year, are the
only appraisal process for 56 percent of respondents. Another 16 percent described their
appraisals as based solely on supervisor opinions, but administered more than once a
year.
If you follow this checklist, I am convinced you will offer a performance management
and development system that will significantly improve the appraisal process you
currently manage. Staff will feel better about participating and the performance
management system may even positively affect - performance.

Preparation and Planning for Performance Management


Much work is invested, on the front end, to improve a traditional employee appraisal
process. In fact, managers can feel as if the new process is too time consuming. Once the
foundation of developmental goals is in place, however, time to administer the system
decreases. Each of these steps is taken with the participation and cooperation of the
employee, for best results.

Performance Management and Development in the General Work System

Define the purpose of the job, job duties, and responsibilities.

Define performance goals with measurable outcomes.


Define the priority of each job responsibility and goal.
Define performance standards for key components of the job.
Hold interim discussions and provide feedback about employee performance,
preferably daily, summarized and discussed, at least, quarterly. (Provide positive
and constructive feedback.)
Maintain a record of performance through critical incident reports. (Jot notes
about contributions or problems throughout the quarter, in an employee file.)
Provide the opportunity for broader feedback. Use a 360 degree performance
feedback system that incorporates feedback from the employee's peers, customers,
and people who may report to him.
Develop and administer a coaching and improvement plan if the employee is not
meeting expectations.

Immediate Preparation for the Performance Development Meeting

Schedule the Performance Development Planning (PDP) meeting and define prework with the staff member.
The staff member reviews personal performance, documents self-assessment
comments and gathers needed documentation, including 360 degree feedback
results, when available.
The supervisor prepares for the PDP meeting by collecting data including work
records, reports, and input from others familiar with the staff persons work.
Both examine how the employee is performing against all criteria, and think about
areas for potential development.
Develop a plan for the PDP meeting which includes answers to all questions on
the performance development tool with examples, documentation and so on.

The Performance Development Process (PDP) Meeting

Establish a comfortable, private setting and rapport with the staff person.
Discuss and agree upon the objective of the meeting, to create a performance
development plan.
The staff member discusses the achievements and progress he has accomplished
during the quarter.
The staff member identifies ways in which he would like to further develop his
professional performance, including training, assignments, new challenges and so
on.
The supervisor discusses performance for the quarter and suggests ways in which
the staff member might further develop his performance.
Add the supervisor's thoughts to the employee's selected areas of development
and improvement.
Discuss areas of agreement and disagreement, and reach consensus.
Examine job responsibilities for the coming quarter and in general.
Agree upon standards for performance for the key job responsibilities.
Set goals for the quarter.

Discuss how the goals support the accomplishment of the organization's business
plan, the department's objectives and so on.[\li]
Agree upon a measurement for each goal.
Assuming performance is satisfactory, establish a development plan with the staff
person, that helps him grow professionally in ways important to him.
If performance is less than satisfactory, develop a written performance
improvement plan, and schedule more frequent feedback meetings.
Remind the employee of the consequences connected with continued poor
performance.
The supervisor and employee discuss employee feedback and constructive
suggestions for the supervisor and the department.
Discuss anything else the supervisor or employee would like to discuss, hopefully,
maintaining the positive and constructive environment established thus far, during
the meeting.
Mutually sign the performance development tool to indicate the discussion has
taken place.
End the meeting in a positive and supportive manner. The supervisor expresses
confidence that the employee can accomplish the plan and that the supervisor is
available for support and assistance.
Set a time-frame for formal follow up, generally quarterly.

Following the Performance Development Process Meeting

If a performance improvement plan was necessary, follow up at the designated


times.
Follow up with performance feedback and discussions regularly throughout the
quarter. (An employee should never be surprised about the content of feedback at
the performance development meeting.)
The supervisor needs to keep commitments relative to the agreed upon
development plan, including time needed away from the job, payment for courses,
agreed upon work assignments and so on.
The supervisor needs to act upon the feedback from departmental members and
let staff members know what has changed, based upon their feedback.
Forward appropriate documentation to the Human Resources office and retain a
copy of the plan for easy access and referral.

What Is a PDP Process?


Are you looking for the process that provides the heart of your performance management
system? You've found it. The Performance Development Planning (PDP) process enables
you and the people who report to you to identify their personal and business goals that are
most significant to your organization's success.

The process enables each staff person to understand their true value-added to the
organization. They do so when they understand how their job and the requested outcomes
from their contribution "fit" inside your department or work unit's overall goals.

Personal Developmental Goals


In the process, staff members also set personal developmental goals that will increase
their ability to contribute to the success of your organization. The accomplishment of
these goals also provides a foundation for their career success whether in your
organization or elsewhere, so they ought to be motivated and excited about achieving
these goals.
Your system of Performance Management, with the PDP process for goal setting and
communication, will ensure that you are developing a superior workforce.
As one CEO remarks daily, "The only factor that constrains our growth is our ability to
hire a superior workforce." Why not grow that talent from within your organization as
well?
PDP meetings are held, at least, quarterly to review the staff person's progress on the
overall goals and objectives. Your staff person's progress on the action plans, that result
from the PDP goals, is reviewed at your weekly one-on-one meeting. This weekly
meeting allows you to offer assistance and to identify any help or tools the staff person
needs to succeed.

Immediate Preparation for Performance Development


Planning
Wonder what to do to make the Performance Development Planning (PDP) meeting
successful? These recommendations tell you and your staff person what to do prior to the
Performance Development Planning meeting.

Schedule the Performance Development Planning meeting and define pre-work


with the staff member.
The staff member reviews personal performance for the quarter, writes business
and personal developmental goal ideas on the PDP form and gathers needed
documentation, including 360 degree feedback results, when available.
The supervisor prepares for the PDP meeting by clearly defining the most
important outcomes needed from the staff person's job within the framework of
the organization's strategic plan.
The supervisor writes business and personal developmental goal ideas on the PDP
form in preparation for the discussion.
The supervisor gathers data including work records and reports and input from
others familiar with the staff persons work.

Both the supervisor and the employee examine how the employee is performing
against all criteria, and think about areas for potential development.
The supervisor develops a plan for the PDP meeting which includes answers to all
questions about the performance development planning process with examples,
documentation, and so on.
Recognize that this process takes place quarterly and that the most time and work
are invested in the first PDP meeting.
he rest of the quarterly PDP goals, maybe for years, are updates to the initial
goals.

So, while seemingly time consuming on the front end, the PDP process, with a formal,
effective foundation of solid personal and business goals, is less time consuming as
quarters pass. The PDP continues to create business and employee success and value
during its lifetime. With quarterly updates, the PDP process contributes into the future.

During the Performance Development Process (PDP)


Meeting
During the Performance Development Planning (PDP) meeting:

Establish a comfortable, private setting and chat a few minutes to establish


rapport with the staff person.
Discuss and agree upon the objective of the meeting: to create a performance
development plan.
The staff member is given the opportunity to discuss the achievements and
progress accomplished during the quarter.
The staff member identifies ways in which he would like to further develop his
professional performance, including training, assignments, new challenges and so
on.
The supervisor discusses the employee's performance for the quarter and suggests
ways in which the staff member might further develop his performance.
The supervisor provides input to the employee's selected areas of personal and
professional development and improvement.
Discuss areas of agreement and disagreement, and reach consensus.
Examine job responsibilities for the coming quarter and, in general.
Agree upon standards for performance for the key job responsibilities for the
quarter.
Discuss how the goals support the accomplishment of the organization's business
plan and the department's objectives.
Set goals together for the quarter.
Agree upon a measurement for each goal.
Assuming performance is satisfactory for the quarter, agree on a personal and
professional development plan with the staff person, that helps him grow
professionally in ways important to him and to your organization.

If performance is less than satisfactory, develop a written Performance


Improvement Plan (PIP), and schedule more frequent feedback meetings.

Remind the employee of the consequences connected with continued poor


performance.
The supervisor and the employee discuss the employee's feedback and constructive
suggestions for the supervisor and the department.
Discuss anything else the supervisor or employee would like to discuss, hopefully,
maintaining the positive and constructive environment established thus far, during the
meeting.
Mutually sign the Performance Development Planning document to indicate the
discussion has taken place.
End the meeting in a positive and supportive manner. The supervisor expresses
confidence that the employee can accomplish the plan and that the supervisor is available
for support and assistance.
Set a time-frame for formal follow up, generally quarterly. I recommend you set the
actual date for follow-up.

Following the Performance Development Planning


Meeting

If a Performance Improvement Plan (PIP) was necessary, follow up at the


designated times.
Follow up with performance feedback and discussions regularly throughout the
quarter. (An employee should never be surprised about the content of feedback at
the quarterly performance development meeting.)
The supervisor needs to keep commitments relative to the agreed upon personal
and professional development plan, including time needed away from the job,
payment for courses, agreed-upon assignments and so on.
The supervisor needs to act upon the feedback from departmental members and
let staff members know what has changed, based upon their feedback.
Forward appropriate documentation to the Human Resources office and retain a
copy of the plan for easy access and referral.

When your organization develops the discipline and commitment necessary to carry out
regular performance development planning, your organization will win.
This systematic method for cascading goals and commitment throughout your
organization will ensure your success. Can you think of a better way to communicate and
measure your key strategic objectives to ensure progress and success? I can't.

Performance Management: Performance Development


Plan Format
Employee Name:
Position:
Department:
Reason for Evaluation: Quarterly / Other? __________________________
Job Description:

Performance Goals:
List the employee's most important work performance goals for the quarter.
Specific Duty / Goal / Tools Needed for Goal / Completion Date

Additional Tools or Training Needed:

Discussion and Measurement:

Personal and Professional Developmental Goals:


List the employee's most important personal and professional developmental goals for the
quarter.
Specific Goal / How will we know it is being achieved? / Tools Needed for Goal /
Completion Date

Additional Tools or Training Needed:

Discussion and Measurement:

Employee Comments:

Employee Suggestions for Supervisor or Departmental Development:


Date for Next Development Meeting: (Schedule quarterly.)

Employees Signature:
Date:
Supervisors Signature:
Date: