April means one thing, it’s time for appraisals

Well, we’ve almost reached that time of year … No, I don’t mean the clocks changing, or Easter, although we’re almost at both! I mean April, the month after many business’ years end when the annual accounts are totted up, annual performance figures examined, and individual performance appraisals conducted. Yes, I know, some people do this at other times of the year – but for many, it’s now!

How are you feeling? If you are about to conduct those performance appraisals as a manager or to be the subject – as the person being appraised? Maybe a sense of excitement? Maybe apprehension? Or perhaps a feeling of doom, at the thought of having to talk to people one-to-one in a succession of meetings and completing reams of paperwork.

For some managers, this time holds an additional joy. In larger organisations, they may be about to sit in a succession of ‘moderation meetings’. Some call them ‘levelling meetings’. Either way, their official purpose is normally to ensure consistency across teams/departments/even business locations. The cynical view is that the actual purpose is more sinister: to ensure a ‘bell curve’ distribution of appraisal markings to help prevent ‘grade creep’; or, more common still, to manage the pay/bonus bill by keeping awards within budget.

When we run in-house training for employers on appraisals, we often recommend training for both managers and those who will be subject to performance management appraisals. This helps everyone understand the purpose of the system and their role in it. It also provides everyone concerned, with the necessary skills to make a success of the processes involved. However, we recommend taking a step back before we get into all that.

As an employer, what do you hope a performance management system will achieve?

For some, it’s about setting some time aside for discussions with colleagues and consideration of their ongoing development. For others, it’s about managing the annual pay bill (so far as increases and bonuses go). The most successful use the performance management system as a major tool in the armoury, to help align departments, teams, and individuals with organisational strategy and goals. These goals establish and motivate the achievement of the right individual objectives, and monitor performance, take corrective action, reward, and consider future development – (this is a rather complex and idealistic loop). Why then, do so many of these systems fail, or fall into disrepute or even disuse. How many times have we heard the phrase ‘Neither of us really want to do this do we?’

Unless you run the smallest of businesses with the most efficient of approaches to management, most performance management systems involve a major investment, at least in time, often in systems and occasionally in training. How many businesses consider those costs, the opportunity costs, and evaluate what return is gained from those investments? Hardly any. Can you, hand on heart, confirm that your system aligns people to the business goals and helps them understand what needs doing? Does your system [and the people on whom it relies] really motivate the right behaviours and actions? I’ve come across plenty that motivate less than ideal actions or have unintended consequences.

I’ll let you in on a secret. I once worked in an organisation where one of the key performance management measures, was how quickly a substantive decision was made on what to do with a new incoming case. Now, I won’t say exactly where or what a case might involve, as it doesn’t matter. A rejection of said incoming case on the basis that more information was required, to make a decision on the next steps, counted as a substantive decision. The target for such a substantive decision was 18 days, but my average was less than 1 day. How did I do that? Easy, within about an hour of receiving any given case I had read it, found several items of additional information that could be legitimately be requested, and so I rejected the case with a request that the information be submitted. Objective not only achieved but blown out of the water. My first-time case rejection rate: 100% but that wasn’t measured and no one ever noticed! A great example of the wrong target promoting unintended consequences and looking back, maybe not the best of behaviours.

So, an excellent starting point would be to consider whether the system that you may have operated for some years is fit for purpose. We can help with that if required, but it’s most important to ensure performance measures align top to bottom of the business. Does it help each employee recognise what’s important? Furthermore, it is also important to keep objectives achievable in number. In conversation with a public sector chief executive some years ago, I was told his organisation was working towards achieving over 2,000 ‘key performance indicators’. No one can focus on that many things at a time. Three or four key targets, accompanied by perhaps five or six demonstrable behaviours – (for example, leadership, teamwork, customer service) – will be far more effective.

Then a review of the process, what works and what doesn’t. In an ideal world, objectives are set at the beginning of a reporting year, reviewed at least quarterly, and brought together in an overall assessment at year end. What commonly happens is that objectives are set, forgotten about all year and then the assessment is fudged to make things fit at year end. No wonder these processes lose credibility!

Make the system work for you 

The system is important, but only in so far as it should work without pain, cost as little as possible and produce the best return for the investment. Here’s a clue: The more inaccessible and complex it is, the less likely it will work and the more likely it will fall into disuse. Don’t let the system be a barrier. Keep it simple and effective. I’ve seen everything from no box markings to 16 box markings! None work perfectly, but if you want a tip if you must have box markings – an even number forces managers to decide between the higher and lower middle ground and promotes more reasoned decision making. Whether box markings should be attached to pay is a policy decision for the business and has been the subject of countless academic papers. On balance, we favour detaching pay and bonuses from performance management, but that is probably being idealistic because you don’t want an unlinked performance management system that is usurped by the ‘real one’ where pay is decided.

It is essential that everyone concerned understands what must be done and has the skills to do it. This is where, however good or bad the actual system or process, most performance management falls down. When we deliver training for clients, we make sure that everyone understands the policies, related policies, and systems.

Most importantly on our course we work through:

• Practical exercises for setting objectives (not just about SMART objectives, but objectives that will work for real people in their daily lives).
• Gaining commitment.
• The role of regular one-to-one meetings.
• Ongoing assessments.
• Preparing end-of-year assessment.
• Perhaps most importantly, being ready and holding the conversation.
• We also look at how to handle things when an appraisal meeting goes wrong and how to handle difficult people.

Once your managers and employees have completed our course, they will feel more confident during the sessions.

To find out more about our course & sign up, click here: https://red-tc.com/performance-management-and-appraisals/

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