Ten Tips for Creating a Terrific Employee

Face the facts: Creating a new performance appraisal system is a difficult undertaking. It's even more difficult if the organization doesn't have a logical, well-tested, step-by-step process to follow in developing their new procedure.

Based on my experience in helping dozens of companies create performance appraisal systems that actually work, here are ten tips that will help any company create a new performance evaluation system that will provide useful data and be enthusiastically supported by all system users.

One — Get top management actively involved. Without top management's commitment and visible support, no program can succeed. Top management must establish strategic plans, identify values and core competencies, appoint an appropriate Implementation Team, demonstrate the importance of performance management by being active participants in the process, and use appraisal results in management decisions.

Two — Establish the criteria for an ideal system. Consider the needs of the four stakeholder groups of any appraisal system: Appraisers who must evaluate performance; Appraisees whose performance is being assessed; Human Resources professionals who must administer the system; and the Senior Management group that must lead the organization into the future. Identifying their expectations at the start helps assure their support once the system is finally designed. Ask each group: "What will it take for you to consider this system a smashing success?" Don't settle for less.

Three — Appoint an Implementation Team. This task force should be a diagonal slice of both appraisers and appraisees from different levels and functions in the organization. The implementation team is responsible for accomplishing the two major requirements for a successful system. First, developing appropriate appraisal forms, policies and procedures. Second (and the task too often overlooked) assuring a successful deployment.

Four — Design the form first. The appraisal form is a lightning rod that will attract everyone's attention. Design the form early and get lots of feedback on it. Don't believe anybody who tells you that the form isn't important. They're wrong. If you're designing a new form internally, make sure it assesses both behaviors and results.

Five — Build your mission, vision, values, and core competencies into the form. Performance appraisal is a means, not an end. The real objective of any performance management system is to make sure that the company's strategic plan and vision and values are communicated and achieved. Core competencies expected of all organization members should be included, described and assessed. If your mission statement isn't clearly visible in the performance appraisal system, cynicism will likely result. Values become real only when people are held accountable for living up to them.

Six — Assure ongoing communication. Circulate drafts and invite users to make recommendations. Keep the development process visible through announcements and regular updates. Use surveys, float trial balloons, request suggestions and remember the cardinal principle — "People support what they help create."

Seven — Train all appraisers. Performance appraisal requires a multitude of skills — behavioral observation and discrimination, goal-setting, developing people, confronting unacceptable performance, persuading, problem-solving, planning, etc. Unless appraiser training is universal and comprehensive, the program won't produce much. And don't ignore the most important requirement of all: the need for courage.

Eight — Orient all appraisees. The program's purposes and procedures must be explained in advance — and explained enthusiastically — to everyone who will be affected by it. Specific skills training should be provided if the new performance management procedure requires self-appraisal, multi-rater feedback, upward appraisal, or individual development planning.

Nine — Use the results. If the results of the performance appraisal are not visibly used in making promotion, salary, development, transfer, training and termination decisions, people will realize that it's merely an exercise.

Ten — Monitor and revise the program. Audit the quality of appraisals, the extent to which the system is being used, and the extent to which the original objectives have been met. (One of the great advantages of an online performance appraisal system is that all of these data are available instantaneously.) Provide feedback to management, appraisers and appraisees. Train new appraisers as they are appointed to supervisory positions. Actively seek and incorporate suggestions for improvement.

A company's performance appraisal process is critically important. It answers the two questions that every member of an organization wants to know:

1. What do you expect of me? and
2. How am I doing at meeting your expectations?

Using these ten tips will help you develop or select a system that will give accurate and complete answers to everyone.

Boosting Employee Morale Increases

he question asked by executives and managers - "How can I motivate my employees?" – is sometimes difficult to answer. Since each employee is motivated by a variety of different incentives, you need to find out what is of value for each person. Research shows that people often leave an employer because they haven't received the recognition they want, or feedback on how they are doing. With this in mind, designing a positive, employee-driven motivation program works with some of your employees, but then what do you do for the others?

Leaders continue to look for ways to boost morale. Many organizations feel that if you want innovative and unique ways to boost your employees' morale, just ask them. Of course, employees may not want to tell employers face-to-face what they want and what they are thinking. So the employer can conduct an anonymous "morale audit," giving employees a survey to fill out. This is only one method.

Since many employers don't have the time to write the specific questions and survey their employees, don't know what specific questions to ask, or don't want to take the time to write, conduct, and evaluate a survey, here are seven ways I believe you can more easily boost your employees' morale:

1. Get Your Employees Involved: Typically, your employees want to get involved in their jobs and be part of the success and progress of the company for which they work. Asking your employees to set their own job goals, as well as having them suggest more efficient ways to do their jobs, is an excellent way to find out how they can manage their own jobs.

   With this in mind, you may want to consider forming an Employee Advisory Group within your organization. This group would include both employees and managers, and also someone from the executive staff to oversee and report back to the company executives. This is where employees can express their thoughts and feelings, and also talk about ideas of the work they do and how to better and more efficiently get things done. Through this group, employees can feel that they are making a contribution to the company decisions, especially when they see their suggestions implemented by the company.
2. Communication: Effective employee communication can have a positive impact with pride affecting the company's productivity. Make sure your employees are included in all communications, especially in policy decisions and any changes taking place.

   Also, any communication that takes place with your employees requires that you listen to them. If your employees feel that they are not being listened to, negative effects will result and will impact on productivity. Listening to your employees shows that you have an interest in them.
3. Job Satisfaction: According to The Wall Street Journal - Career Journal.com (July 13, 2005), nearly eight of ten employees are satisfied with their jobs. Beyond achievements and getting recognition for accomplishments, three factors that contribute to employee longevity are:

   1. being challenged in the work they are given,
   2. given increased responsibilities for the work they do, and
   3. getting training in new skills to help them complete their tasks more efficiently and give them room for promotion.

   Satisfaction on the job is just as important as getting the recognition for completing the tasks assigned. Otherwise, boredom sets in and your employees will do the minimal effort just to get by. Allow your employees to get creative in how they complete the work. You will find that this will also help on a company-wide basis.
4. Tools to Get the Job Done: In order to get work done, and done right, you as the leader need to give your employees the skills and tools for them to complete their tasks. This includes giving them the support and the training they need. Then your employees will stay motivated.
5. Independency/Empowerment: Sometimes knowing when to step back and let your employees do their work is what they need. Employees want to feel that they are trusted to get their work done. They do not need to be micromanaged in everything they do. As a leader, when you delegate or assign a task to your employees, tell them what your expectations are and them let them do the work. You will find that your employees will take pride in their work when they are allowed to make some decisions on their own. They feel that they own it, especially if the decision of how to best do their job is from them.
6. Rewards: Your employees need to be motivated to do a great job. For this to be consistent, give your employees praise and appreciation. This should be done in front of others. Whether you give a personalized written note, a positive compliment, or other type of incentive, you need to give these to all employees to keep their motivation going. At your company staff meetings, your employees can be given the chance through a company drawing for a prize such as gift certificates to a local store or even an "Employee of the Month" special parking space. If you have weekly meetings, do this type of reward once a month. If you do not have staff meetings, consider implementing them as a way of communicating (see point #2).

   For some employees, depending on the events that take place, the incentive of giving a bonus or even a promotion is a significant boost. People like to see their name in print, so put the employee's significant contributions in the company newsletter with their name and their picture. This typically makes people feel really good about themselves. Over the years, it has been found that employees sometimes would prefer something different. Some employers have given gift cards to the grocery store, bookstore, or even for the employee to relax going out to a restaurant or to a movie.

   Make sure all of your employees are valued and recognized for the contributions they make to your company. Remember, not all employees respond to the same incentives as others. Some companies have a company softball, baseball, or bowling team. These things boost morale for many employees. Having a consistent employee rewards program in place is a good way to retain employees. Your company's reputation also does not hurt.
7. Care About Your People: Beyond the point of assigning work tasks and providing the tools needed to complete the tasks, leaders need to look at further educating and training their talented employees. If your employees believe that their boss does not care about either the task or them, then they will not care either. The company then suffers for that.

There are some companies who have built their reputations as companies where people want to work. This is translated into "employers of choice." Leaders knowing about motivation are able to be more effective in meeting their organizational goals through delegating and knowing that the work will get done by their employees. High employee morale increases productivity, as well as reduces employee turnover rates, decreases employee complaints, and improves job satisfaction. Company leaders need to provide the leadership to create and maintain the morale of your organization. Your impact as an executive or manager is immeasurable when it comes to motivating your employees.

In implementing these specific keys to your company's benefits, you will find a significant positive impact throughout your organization. These benefits to the organization include a more creative work environment for productivity to increase, which will result in higher employee performance, and an increase in employee retention. On top of this, you will find that for your employees to be satisfied in their work, they will have better internal and external relationships with customers, as well as company profits would increase all at the same time. The more of these keys you implement, the greater the organizational reward because you will find motivational incentives for a greater number of employees.

Building morale in your organization is not as hard as you might think. The key to motivating your employees is having them feel valued and appreciated by their boss and within the company.

Process Mapping: The Way to Engaged

Business pundits have recognized now for a number of years that a motivated employee is a productive employee. This is true across international boundaries, as major research studies have shown. Studies conducted by research houses such as Towers Perrin, BlessingWhite and Gallup Consulting consistently reveal a strong correlation between the level of employee engagement in an organization and its ability to meet its business goals.

There are many organizational and personal factors that contribute to an employee's commitment level. One powerful but often unused method for raising employee motivation and effectiveness is mapping business processes. Process mapping entails identifying and representing in simple graphical form the steps used to deliver a product or service to both internal and external customers. Mapping processes is a central activity in all quality initiatives. And it's no wonder. You can't improve what you don't understand.

Many organizations continue to struggle with poorly defined and communicated processes. How an invoice is processed, customer complaint handled or engineering drawing approved in many organizations depends more on who does it and what day of the week it was done on rather than on sound business reasoning. With this lack of process and role clarity, employee motivation takes a tumble as personal idiosyncrasies and political maneuvering take over decision making.

Moreover, research indicates that less than 20 percent of product defects and service problems are due to non-random factors, such as malicious employees, machine breakdown and poor raw materials. The other 80 percent or more of problems is due to systemic deficiencies with processes. So, although mapping your business processes is relatively simple to do and involves no costly capital expenditure, it pays huge dividends in business efficiency and employee commitment.

In helping companies, both large and small, map their processes, I have played a part first hand in pushing the twin levers of clarifying business processes and motivating employees. Below are some key pointers for maximizing this natural synergy between defining processes and engaging employees.

Involve employees who actually do the work in the mapping

Employees who do the actual work are in the best position to know the detailed steps in each process. They are also most familiar with the common roadblocks and bottlenecks and the key contacts in the organization to get things done. Managers will need to step right back from wanting to be seen as "experts" and give frontline employees a voice. So, tap in to the enormous wealth of experience that walks through your doors each morning and walks out again each night. Start by explicitly inviting your employees to join the new process mapping teams.

Getting your employees to map their own processes is a powerful morale booster. Apart from mutual goal-setting, there is no more powerful method that I know of for engaging the hearts and minds of employees. I have seen employees' eyes light up during briefing sessions in which I offered them the opportunity to identify and remove the roadblocks to them doing a great job. Most employees are tired of the day-to-day fire fighting that comes with many jobs. At one briefing session, employees were so enthused that they all volunteered to join the team!

Identify process objective and inputs and outputs

This is where work starts to take on new meaning for employees. For each process, get the process mapping team to ask why it is performed and what the expected results of each process are. Not only does this help to focus attention on removing non-value add activities, it also gives employees a sense of purpose in their working life. Instead of work being a disconnected set of meaningless activities, employees begin to appreciate that everything they do helps to achieve a larger goal. So, Joe Worker no longer just removes boxes from one shelf to put them on another. He is maximizing the use of warehouse space and reducing pick times so that the warehouse team can deliver widgets to their customers faster and cheaper.

Then ask each team to identify the inputs to each process and the expected outputs. Doing this will clarify for them what each process needs before it can begin. It also clarifies what customers of the next process will get before they can begin. For example, agreeing that widget assembly cannot begin until the joining screws are supplied will eliminate a lot of idle work in progress.

Identify Customer and Supplier requirements

Next, get each team to work out who the suppliers and customers are of each process. This step is critical as it identifies who the team needs to work with collaboratively to maximize business results. If a process does not have a customer, then eliminate it as it has no useful purpose. Every employee working in a process should serve either an internal customer or an external customer or both. Each team should then ask of their customers what it is they want from the process, in terms of quality, turn around time, and so on. For example, the internal customers of the purchasing team may require orders to be fulfilled within two days unless placed on backorder.

Conversely, the team needs to clarify what it is they need of their suppliers, both internal and external, to perform their process effectively and efficiently. A purchasing team may require other departments, for example, to fill in all fields of the Purchase Order prior to submission.

Seeing how their own local processes fit into the wider organizational processes and goals allow employees to view the "big picture". For many people, this is incredibly empowering and motivating. Through engaging customers and suppliers and taking responsibility for the complete process, employees, supervisors and managers will all start singing from the same hymn sheet.

Identify a Process Owner for each process

For each process, get the team to specify one Process Owner who is responsible for the process end to end. Where processes flow through departments, as all major processes do, the Process Owner will need to have sufficient authority and credibility to make decisions spanning these departments. I know of no more effective way of dismantling the silo walls that get built separating departments. With communication lines opened up, your employees will feel enabled to get the job done more efficiently and effectively.

Distribute the process documents

Once the processes have been documented, ensure that they are easily accessible to all who need them. All of your organization's efforts will be wasted if the documents are hidden in someone's bottom drawer. Fix them to operator machines, post them on the corporate intranet or place them in a loose-leaf binder on each officer's desk. Put them where people do their work and make sure that they are accurate, concise and easily understandable. Train all employees in how to read the process maps and keep them up to date. Your newly motivated employees will quickly become disengaged if they cannot use the documents.

Convey management commitment and train your teams

Although mapping business processes will not cost you much in capital expenditure, it does require concerted effort. Get the management team to show visible support and commitment to the project. Activities here include holding regular project progress meetings and rewarding the most productive teams. Teams will loose faith and energy quickly if management support is seen as piecemeal or being given grudgingly. Team leaders will need to be able to organize effectively and manage their time, along with possess the necessary interpersonal and analytical thinking skills. Each team will also need a mix of abilities; people who can think creatively, bond the team and follow through on tasks, to name just a few. Where these skills are lacking, they will need to be learned. Do not skimp on training the teams and their team leaders. This is a very wise commitment, as such teams have proved to be a fertile ground for developing the next line of leaders.

Use as a basis for further improvement

Business Process Reengineering was a big buzzword in the 80s and 90s. A common objective of such reengineering efforts was radical technological implementations that required significantly less manual steps in the new processes. In these cases, the consequent ruthless downsizing led to a dramatic downturn in employee morale. What is not so well recognized is that through engineering their processes for the very first time, organizations can dramatically improve employee enthusiasm and business efficiency.

There is a lot to be gained from initially mapping your organization's core processes. Every team that I have worked with has uncovered many areas for improvement. One team dramatically reduced the incidence of lost inventory items whilst another substantially improved the pass rate of electronic circuit modules.

Once you have mapped your key processes, they make for excellent induction and training resources. However, their utility does not stop there. The process maps will now serve as the agreed baseline for ongoing process improvement. Turn your process mapping teams into continuous improvement teams and watch your employees remain emotionally engaged with the organization and motivated to continue working towards a common organizational goal.

Poor Performance Reward

The most effective tool in a manager's toolkit for dealing with poor performance is coaching. Not screaming at them from the stands and withholding rewards, but working with them down on the pitch to find out what's causing the problem and building their fitness and stamina like the corporate athletes they should be.

The study of how we interact with one another in society is called Transactional Analysis. This research has broken down the complexities of the hundreds of interactions that we have every day into a simple model.

In principle, there are three modes we can adopt in any transaction that we participate in with another human being. We can choose to be Adult, which is a non-judgmental, constructive approach. We can choose to play the role of a Critical Parent, which involves being highly scathing and negative, or we can choose to take the role of Child. There are a few variations on the child role, but the simplest is the submissive, fearful role; a bit like catching a rabbit in your headlights.

It goes without saying that the most progress in any transaction is going to made if both parties adopt an Adult role. Parent-to-Parent transactions tend to be about how good things would be without the others.

It is a common phrase used to describe everyone from a small schoolchild to old-age pensioners; he or she just has "the wrong attitude". Unfortunately, telling someone this is never going to make a difference. It will always get the reaction, "I don't think there's anything wrong with my attitude" and, if there's nothing wrong, why fix it?

To communicate your feelings better it may be worth breaking down what "Wrong Attitude" actually means in each case. This is because it acts as a sort of umbrella phrase to cover a wide range of behaviors. It is also a very aggressive criticism and can be very hurtful to hear, causing a defensive reaction.

Child to Child transactions tend to be about having fun and let's not bother with work. Practical jokes, for example work at the child level in transactional analysis and are harmless as long as they are infrequent and risk-free.

Coaching should always be conducted on an Adult-to-Adult basis if a change in behavior is to be brought about. Adopting a critical Parent approach will bring out the Child in anybody and is more likely to reveal displacement behavior "It's not my fault", "What about the others?"

With effective coaching, each individual should be encouraged to identify their weaknesses and to implement an improvement plan for their self-development. The coach can help along the way by introducing the person to good role models, by making development opportunities available and by helping to monitor progress on a regular basis.

Poor performers don't have to stay that way. They can pretty quickly get themselves into the recognition league by concentrating on the issues that really matter and proving that they have the will to excel.

Should You Measure Individual People's

Introduction

Performance Appraisal, Individual Performance Review, Personal Performance Development Plan. There are numerous names for this artifact of the post-1990s organisation, but they are names for basically the same concept: the measurement, review, evaluation and management of the performance of an employee. And it is one of the most contentious management processes of them all!

Why Organisations Do It

There are many reasons why managers continue to use individual performance appraisals, despite their love-hate relationship with them:

• to motivate staff to perform better, to contribute more to the organisation's results
• to reward and recognise great performers
• to validate decisions to get rid of (or manage) poor performers
• to give staff the opportunity to continually learn and develop
• to make the organisation and its processes perform better – to inform succession planning and promotion decisions

The intentions behind almost every employee performance management system are good and just. It's about making things better. But are they really making things better, the way most organisations currently design and implement them?

Why People Are Asking for Help

It seems that the majority of organisations will claim they have some kind of individual performance evaluation process, but that it doesn't work the way they want it to. There are some very common criticisms about it. For one, when they come to doing the evaluation or appraisal, managers don't have much objective evidence about how the person performed, what they really produced or the size of their contribution to team or organisational outcomes. In such cases, the appraisal process leans to shaky subjective impressions of the boss, or a tick-and-flick review of the actions that the person was supposed to take. Objectively isolating the value the person contributed to the organisation is impossible.

Another common criticism is that the appraisal process drives the wrong behaviours. People know they can only be judged on how much they do or contribute, so they try to do a lot, or try to do things alone in order to isolate their contribution from the contributions of others. Outcomes and teamwork are not the focus, and the organisation actually suffers as a result. Resources are wasted on activities that don't improve business growth or customer service. Conflict and competition arises between employees that should otherwise be collaborating for the betterment of the organisation. This can result in performance actually getting worse, not better. There is a lot of activity, but not much in the way of results. There are a lot of people striving to get quick, local results, but often at the expense of the larger organisation or the long term.

Then there can be the problem where people can't agree on what the performance standards are or should be. They have different ideas about what is possible, about what is achievable, and therefore what can be judged in the performance appraisal process. People don't want to be held accountable for the results they contribute to, because they are not in complete control of those results. And in many instances, the performance appraisal reduces to a check of whether or not activities were completed, as opposed to the size of the impact those activities had on organisational performance.

And, in general, we just don't like criticizing each other, or taking anything away from others. Especially when performance reviews are tied to remuneration, managers can find themselves in an ethical quandary when the numbers say that someone doesn't get their bonus, but their gut feel is that the numbers are missing something more important. People who stick to their performance plans are rewarded, and those that stray from the plan and produce innovative solutions to organisational problems are not able to be rewarded. People who follow the safe road of predictable results are rewarded, and those that make mistakes that contribute to organisational knowledge and learning are "performance managed". People whose performance measures achieve targets despite their inaction are rewarded, and those that have diligently monitored, analysed and managed root causes to turn around a bad trend (but which hasn't yet achieved its target) are not rewarded.

Managers conducting performance appraisals are not finding it to be a meaningful process – they are just jumping through the hoops (especially if their organisation has a KPI like percentage of performance appraisals completed on time). One of the objectives of individual performance appraisal is to develop people, but very few examples exist of where it dignifies people.

Because of all this criticism about performance appraisals, some have put their thinking caps on and tried to come up with improvements or alternatives. What I have found interesting is that the different schools of thought regarding the measurement of people are tied to very different world views, or belief systems. And this affects the success rate of different approaches to performance appraisal in different organisations.

The First School of Thought: Make People Work Better for the Organisation

People are our most expensive resource. People are our greatest asset. These are the catch-cries of organisations with what Colins and Chippendale¹ might refer to as having an "institutional" worldview.

With this worldview, the leaders of the organisation collectively instil such values as patriotism and loyalty, self-worth, upholding tradition, achievement and success, administration and management, family and belonging. And employee performance management is about making sure that employees are managed just as other organisational assets need to be managed. Just as other organisational assets are owned, so too are the people. The organisation is the subject, the priority organism, and the people are objects, the servants to the organisation.

These organisations, even if with the best of intentions, adopt a controlling relationship with their workforce. At one extreme, employees are almost a consumable, bitten off, chewed up and spat out when they are no longer needed, become difficult to handle or when they are so burned out they can no longer endure the organisation's impact on their lifestyle and health. This dynamic is glaringly obvious in many sales oriented businesses, small businesses whose owners are not capable managers and leaders, or any bureaucracy that is lead by a tyrannical productivity maniac that believes the only information he needs to manage the organisation is this month's and last month's financial results.

At the other extreme of the "institutional" worldview organisation, employees are taken under the organisation's wing and nurtured, supported and developed, but still in a way that serves the organisation's greater purpose. Something like a "father knows best" philosophy presides, and the higher a person is in the hierarchical ranking of the organisation, the more wisdom they are assumed to have, and the better placed they are to know what is best for everyone under their care or command. The military comes to mind as an example of this kind of organisation, and organisations like the mafia, and organisations that are based around a profession like engineering or medicine or law.

Performance management of people in the "institutional" worldview organisation is usually to avoid the risk of carrying people that just don't produce results for the organisation. People will be judged by the results they individually produce, such as sales or on-time project completion or keeping to budget or caseloads, and for doing what they were told. But this is not the only type of organisation that exists, and not the only way to manage people's performance.

The Second School of Thought: Make the Organisation Work Better for People

Leadership coach Shelley Holmes, from The Centre for Breakthrough Leadership², says "organisations need profit in the same way that humans need oxygen, but it's not their reason for existing". Their reason for existing is to help people fulfil their potential. So are people really another asset or resource of the organisation? Or are they its purpose? If we treat people as assets (even if we say they are our greatest asset) or as resources, we are treating them as objects that need to be controlled by the organisation. Assets are owned, people are not. (I personally prefer the point of view that people control organisations in a way that makes their lives, and the lives of others, more meaningful.)

An organisation whose leaders instil these values might be said to have a "collaborative project" worldview. What is important is equality, actualisation, service, autonomy, dignity and justice, ethical accountability, personal authority, empathy and generosity. And this puts performance management into a very different light. If performance management was instead value management, it would be about how the organisation can better serve the needs of the humans for which it exists.

You can see this kind of worldview in organisations like The Body Shop, which designs it processes around the social needs of its employees, customers and suppliers. They have créches for their working mothers, they develop their products from resources that don't harm the planet and that support local communities. The organisation's purpose is not to make skincare products, it's to enrich and dignify the lives of all people that choose to associate with it.

These organisations don't make the fundamental assumption that each individual's impact on an organisational result can be isolated, singled out, independently and objectively assessed. How can this be so, when each of us interacts constantly with each other, sharing knowledge, sharing ideas, helping each other out, working on the same activities, collaborating to produce the same results? This line of thought gives rise to some other ideas about how to better motivate and reward people for the value they add to the organisation. Role-modeling, coaching, encouraging, rewarding and celebrating behaviours like sharing knowledge, sharing ideas, helping each other out, working on the same activities, collaborating to produce the same results, seeking regular feedback, acting on feedback to improve results, are more the flavour of performance management in "collaborative project" worldview organisations.

Borrowing from the Second to Improve the First

The one-size-fits-all approach to managing the performance of people clearly doesn't work. And there is enough research suggesting that traditional approaches are certainly not working for everyone. At best, there are some basic flaws in how those 'people measures' are designed. And at worst, the whole concept of measurement of people performance is completely a waste of time.

The debate shouldn't, in my opinion, be about which people performance management approach is the correct one. It's more about which approach achieves the intent you have for your organisation and your people, from the points of view of all stakeholders. And this means understanding the diversity of values that people in your organisation have, and the worldview that this collectively gives your organisation as a whole. So you won't likely find an approach that does work for your organisation, unless you can answer quite thoroughly several important questions:

• Why do you want to measure the performance of people?
• What is the end result you want it to create?
• What are the unintended consequences, or risks, of getting and having this end result?
• What other ways could you create this end?
• What worldview does your organisation have, and hence how is the relationship of people to the organisation understood?
• What values do the individual people in your organisation have, and what does this say about what will really motivate them (and keep them motivated)?

References:

1. New Wisdom II, Colins & Chippendale, Acorn Publications, 1995
2. The Centre for Breakthrough Leadership is at http://www.breakthroughleadership.com.au
3. Abolishing Performance Appraisals, Coens & Jenkins, Berrett-Koehler Publishers, Inc., 2002

Performance Management Survey Votes

How effective are organizations at driving superior performance from their employees? If we are to believe human resources professionals, then the answer is that our performance management systems are failing to make the grade. This is the sobering conclusion from Sibson Consulting's worldwide survey.

In mid-2010, Sibson Consulting, in concert with the WorldatWork association, surveyed the association's members on the status and effectiveness of their organizations' performance management systems. Some 750 members responded in a variety of countries and industries and covered organizations of less than 100 employees to those employing more than 500,000.

Performance management systems, as set up and administered by HR functions, typically serve to rate the performance of individual employees and shape their behavior towards superior performance for the next rating period. Those employees not so fortunate may be moved out of the organization. Such systems are very pervasive in today's organizations, with 91% of respondents reporting that their organization has a formal performance management system in place. The results of this survey, therefore, have very wide application.

How do HR professionals rate their own performance management system? After over four decades of fine tuning the system, less than half of them saw their system as helping the organization achieve its strategic objectives. Let's tease out this disturbing result.

For a start, what are HR professionals hoping to achieve with their appraisal systems? Two thirds (66%) of survey respondents identified the distribution of rewards based on individual performance as a key objective. A little over one half (54%) selected greater individual accountability. Only 46% selected talent development as a key goal.

And what kinds of rewards are being distributed? Four in five respondents (80%) report that their organization is using performance evaluations to grant merit increases. One half of organizations (51%) link performance to short-term incentives, whilst only one-third (30%) link performance to long-term incentives. The upshot is that in 65% of organizations, low performers suffer with their pay packets and in 42% of organizations, high performers are rewarded with bigger pay checks.

What is surprising is the popularity of grading employees with the hope of increasing their motivation, given that differential monetary rewards have been found to work in but a limited number of scenarios. Daniel Pink, Jeffrey Pfeffer and Robert Sutton, for example, continue to highlight the poor research base behind the idea that paying for performance is generally effective in lifting employee productivity. Pay and bonus incentives, they demonstrate, do not work when the task is complex, requires judgment and relies on collaboration with others. And these are the types of jobs that predominate in organization's today. Perhaps this is a primary reason why performance management systems are failing to live up to the expectations of human resources staffs.

Many organizations are finding out the hard way how financial disparities based on perceived performance differences bring with it significant risks. For a start, employees are set in competition with each other when co-operation and teamwork are needed. In addition, overly simplistic performance criteria can drive dysfunctional behaviors. Salaries can also blow out and put enormous financial strain on the organization, especially during times of low economic activity and recession.

How are organizations implementing their employee appraisal systems? Only half of the respondents reported their organization using any kind of goal setting in their performance management process. And only half of those again use quantitative measures in their performance evaluation. With the low incidence of setting measurable goals at the start of the appraisal cycle, it is not surprising then that employees by and large rate the appraisal process subjective and capricious. Only one third of all employees, the survey respondents felt, had trust in the appraisal process.

In those cases in which employee goals are set, the alignment of the goals to the organization's objectives rapidly loosen as we slide down the organization's hierarchy. For senior managers, goals are completely or largely aligned in 70% of cases, sliding to 45% at middle manager level and bottoming at 17% for frontline employees. With such poor line of sight between individual goals and company strategy, it is not difficult to see how for the majority of workers the appraisal system is an irrelevant nuisance.

On the question of employee participation in the appraisal process, only 61% of professionals surveyed said their organization allows employees to have input into shaping their goals. In 28% of organizations, goals cascade down from the top of the hierarchy. Interestingly, 72% of respondents said that in their organization, employees are asked to complete a self-assessment. So, notions of employee empowerment remain quite weak for many organizations in the study. Many such organizations are content to simply listen to their employees' self-appraisals on their performance. In many cases, this only serves to set the scene for confrontation, especially considering that most people regard themselves as performing above average. With only one quarter of organizations using any kind of quantitative measures, the battle of the "opinions" is set.

Such a confrontational atmosphere is often further inflamed by the nature of the appraisal. More that half of respondents reported that their organization uses a five-point scale for rating employees. For many organizations, ratings are scrutinized to positively encourage differentiation amongst employees. This is done in a variety of ways. For 37% of organizations, ratings are audited by the HR department, 30% specify a ratings distribution, 29% require managers to calibrate ratings and 12% use forced rankings. Nearly half of all organizations in the study (46%) compile and disseminate ratings distribution reports to their managers. For 35% of organizations (mainly smaller), ratings are not formally validated in any way. The battle lines are drawn for each employee to fight for that all important "number" that will win them greater status and money.

What of the link between individual performance ratings and overall organizational performance? Only 20% of survey respondents reported employee ratings going down when organizational performance is poor. This may suggest that managers predominantly give high performance ratings irrespective of changes in employee performance. However, the story is not so simple. Poorer employee performance may not be reflected in actual business results until the following year. In some cases, there may be a lag effect as loyal employees and customers hang on, existing stocks diminish and cash reserves fill the gap. Secondly, poor organization performance is not always caused by poor performing employees. Economic downturns and the entrance of aggressive new competitors are outside the influence of employees, but can send any organization into a tail spin.

How are organizations supporting workers and managers in the performance management process? Little more than half of organizations (56%) conduct training sessions on using the performance management system. It is perhaps not surprising then that only 55% of respondents said that their managers complete the performance evaluations on time. Over one quarter of respondents (28%) felt that their managers saw performance management as a form filling exercise instead of having quality conversations with employees.

It seems that tying the appraisal cycle to employee anniversary dates is well out of favor. No survey respondents reported this way of timing the appraisal process. Two thirds (68%) reported that their appraisal cycle was tied to the annual budget and goal-setting process. As laudable as this timing may be, lumping all of the appraisals to one time in the year only serves to burden managers who already feel overworked.

The administrative workload has been lessened thanks to technological improvements over the last several years. One third of organizations (34%), the survey found, have transferred their performance management process completely online. For another 40% of organizations, the process is a combination of online and offline. Not surprisingly, paper-based forms are favored more by smaller organizations.

In spite of this ease of administration in the majority of performance management system implementations, how effective is the process? Less than half of HR professionals (47%) surveyed see their system as helping the organization achieve its strategic objectives. HR professionals are also at the frontline in gauging employee confidence in the system. Alarmingly, less than one third (30%) reported their employees as having trust in the system. Another one third felt that their employees lack a sense of trust in the appraisal process. Overall, only 43% of respondents rated their performance management system as effective.

The survey uncovered significant challenges ahead for HR professionals in moving forward with their appraisal systems. The top three roadblocks to enjoying an effective system, as seen by the human resources staffs themselves, are:

• managers lack the courage to have difficult performance conversations with employees (63%)
• performance management is viewed as a HR process instead of as a business-critical process (47%)
• poor goal setting at the start of the employee appraisal cycle (36%)

Only a little over one third of HR professionals thought that managers complete thorough performance assessments. Another one third of respondents openly disagreed. Not even half (46%) thought the system worthwhile considering the amount time expended in conducting and reporting the evaluations.

The real challenge ahead for all of us now is to confront the underlying causes for these maladies. In this article, I have touched briefly on some of those causes for our dysfunctional performance management systems. We can keep tinkering with the system, hoping that we will discover the right combination of processes, forms and skills that will make all of the problems disappear. Or we can learn the lessons from this study and begin with a clean slate. We can start on the task of creating a new type of performance management system; one that is based on evidence and true collaboration between all of the stakeholders. The challenge is ours.

Using Performance Appraisals to Enhance

The annual performance appraisal is an opportunity to enhance employee performance and create greater success for the company and the individual. My intent is to explore how coaching skills can be used in creating a good performance appraisal experience for both the employee and the supervisor and how to keep good performance going throughout the year. As a manager for 18 years my experience was that performance appraisals were a tense time for the employee and the supervisor. In either position, for me it often felt uncomfortable, so how do we reframe it so that it is a good experience for both?

Start with vision:

It's important to start with vision: the company's and the employee's. What is the company vision? The company vision should be compelling and known by staff. When staff don't know the owner's vision for the company it is hard for them to help move it forward. Having a clear and compelling vision that employees can buy into provides a foundation for success.

But what drives the individual isn't the bosses vision, the company's vision, but their own compelling vision.

• Employees can embrace the company vision but ...
• True success comes from within and from personal vision.
• Personal vision should be compelling and tied into the company vision.
• Do you know your employees' dreams and visions for their lives and career?

Take time to create a vision:

If the employee hasn't thought about their vision, take the time to create a vision with them. Does their vision, their passion tie into the company vision? Can you as the supervisor help the employee to achieve their vision? What if their vision is your job? Well, that's great. As supervisors, managers and leaders part of our role is mentoring and developing our employees. It's great to have employees that are motivated to learn and grow. It's also great to have employees that know your job and can do it competently.

Compelling visions are personal, written in the present tense, as if ... they are happening now, and point to an exciting future. Encourage your staff to write their own compelling vision and share it with you.

Our current appraisal framework:

Often the manager talks about issues that the employee didn't know was coming. Today we are talking about how to reframe the experience for both the employee and the manager. With the manager as a coach and partner committed to the employee's success the environment can shift. The goal is to reframe the experience, creating a positive, goal-oriented environment that thrives on success and enhancing performance. In working with many groups of people solving problems, when they focused on what was going well and built upon it they were more successful than when they worked on what the problems were that they were having and what they needed to improve. In focusing on solutions, they ultimately identified the things that needed improvement as well.

It's important to recognize your feelings about performance appraisals and to imagine the employee's perspective.

• History of being an uncomfortable experience.
• Reframe the experience and create a positive, goal-oriented environment that thrives on success, enhancing performance.
• An opportunity to tune into the person and find out what is going on with them.
• Create a plan for the upcoming year.
• Most individuals (most employees) want to be successful.

Use coaching skills to develop success and excellence:

Where are we at now? After you have created a compelling vision, find out where we are at right now. Using five key coaching questions you can quickly get to where the employee is at. In these questions you have the opportunity to create powerful positive energy, find out what the gaps are and what the resources needed are. In talking about what would be ideal you are also focusing a bit back on the vision, but you are also pointing in the direction that you need to go – so how do we get there?

When meeting with a staff member:

• Be present
• Tune into them and tune out everything else
• See their greatness

Use Five Coaching Questions:

• What's going right?
• What makes it right?
• What is it that would be ideal?
• What's not quite right yet?
• What resources do you need?

As the supervisor, I see my role as one of supporting my staff so that they can do their job. I'm their coach, their success partner and the person that is helping to get them the resources they need to do their job. As the director of an outdoor center, my job was to get the clients there, but it was also to make sure that our resources were there for the client; we had the infrastructure we needed to provide the service, the ropes course, trained staff, food for meals ...

Create a plan for excellent performance:

You, the supervisor, become the partner or the coach – coaching for success. In creating a plan focused on success for the employee, the manager begins to shift the paradigm to one of employee and coach/partner. As supervisors, our role is to build successful teams and we have to have successful team members in order to do that. If we focus on creating success we are more likely to create it. Focus on the positive, the solutions. What's going right, how do we create more of it? In working with teams I have found that when I focus on what they are doing well and how we do more of it – we build on our success.

When we create goals that are SMART, we can measure them, and track their progress. If goals are soft, not measurable, it becomes difficult to progress the plan or give any feedback. So, how do we make them measurable? Measurable is countable; how many, when, who?

Goal planning:

• Goals tie into the company vision and the employees' vision.
• Goals point to an exciting future.
• They are positive, specific, measurable, attainable, relevant and time bounded.

Tips for setting goals:

• Start with the RESULT in mind.
• Set SMART goals.
• Make it easy to see the next steps.

SMART Goals:

SMART Goals have certain attributes that make them measurable. When you can measure the goal you then know if you are attaining it. Goals should be results or outcome oriented and not process oriented.

Specific:

Has clear deliverables or results

Measurable:

Can be counted: How many? How much? Who?

Attainable:

Can be attained at least 80%

Relevant:

Important to the people you serve, your future viability and relevant to your vision and values

Time-Bounded:

Think big, but it's a 12-month plan, an annual plan

For example: My partner works for a yacht club, maintaining their fleet of boats, so he might have a goal of refurbishing three boats this winter, including hull, topsides, interior and undersides.

Another example could be:

A sales staff might have a sales goal such as increasing personal sales by 20% during the year.

Or The CEO might have a goal of hiring four new staff.

Annual goals are typically big. It's important to break them down into smaller steps. Refurbishing three sailboats is big, one boat per month over the course of the winter becomes more manageable.

But the sales goal – can also be the foundation for creating a plan to accomplish the goal. How are you going to accomplish it?

• Certain number of cold calls
• A systematic follow-up plan for each lead
• Direct mail, advertising – what are the specifics that are going to create the success?

Build in accountability:

Building in accountability in your annual success plans is the key to success. How many performance appraisals have you had or have you done that didn't get looked at until the next year?

You need to meet with people regularly and review the goals. It's unfair to come at a staff person at the end of the year and say you didn't accomplish what we outlined in your plan. Yes, you can accomplish some things just by writing down the goal, but the level of accomplishment is usually lower than what we want in our companies.

• The key to success is building in accountability through regular meetings, weekly or monthly.
• We often fall short on keeping a plan alive.
• Regular meetings that keep focus on the plan and keep it moving forward.
• Celebrate success, write down accomplishments, build on success.

Monthly accountability:

Meet with staff at least monthly and review the plan. Bringing out the plan and talking about it keeps it alive. If it is never mentioned it gives staff the impression that it wasn't that important and they don't need to work on the goals outlined. Remember, the goals outlined are focused on creating better results for the company. You want that. Focus on the plan. At the monthly meeting spend time to:

• Review the vision
• Review the accomplishments (What's going right?)
• Review the goals
• Score each goal – give it a percentage; 60%, 85%

When a goal is falling short use coaching skills to help figure out what the problem is and how to change it.

Does the leadership need to shift to provide more supervision, training, and direction ...

You are looking for success of at least 80%. If the person is in their own way, do they need to make a shift in their feelings, beliefs, paradigm, to move forward and get themselves out of the way? Are they choosing not to make the necessary shift? It's an opportunity to talk about choices that we make. We each operate from a place of personal responsibility. We are responsible for ourselves, our actions.

• Measurable goals can be scored.
• Score the goals each month.
• If the goal is below 80% talk about what's in the way. Is the individual in their own way?
• Go back to the five coaching questions.

Create a partnership:

The monthly review of the PLAN gives you the opportunity to really check-in with staff and support them in developing success. It also prevents the annual performance review dread. They know you are invested in their success as well as that of the company. This is powerful. It develops you as a leader and partner of the staff member and lets you know where the focus needs to be. It also creates a regular stream of communication – both ways that can only improve results. Use the five coaching questions:

• What's going right?
• What makes it right?
• What's the ideal, the vision?
• What's not quite right now?
• What are the resources needed?

Coach them to succeed.

Handling poor performance:

I believe that coaching skills can help you as a supervisor create better success. When there is poor performance the coaching questions give you an opportunity to build success. But you have also built a framework for having real conversations. We are all adults, and we each have personal responsibility and make choices about our behavior. If you do discipline or progressive discipline in your organization you need to have a clear policy on it and employees need to be informed of the policy. They also need to know the expectations and job responsibilities. And with that foundation believe you can have real conversations about their behavior and choices and the position it puts you in. Your behavior as a supervisor is a consequence of their behavior.

I've had this conversation with staff in a union shop, in a supervisory session that involved poor performance. It went something like: Fred, you have great skills and talents that we see here, and you also know why we're here – you didn't show up for work and you didn't call, it's considered a no show/no call. It puts me in a position where I have to take action, and if it continues then I have to continue taking actions. You are responsible for you and you are making choices for how you handle your position.

And in having these conversations – it's important to remember that our goal is success and the employee's goal is to be successful also. Employee retention is important to everyone.

Go back to the coaching questions – it gets them talking about what is going right, what their vision for success is and what is in their way.

Help staff to identify limiting behaviors, how they are in their own way, and shift their paradigms to get out of the way.

To create the success you want, keep focused on your goals

Staying focused on your goals and those of your employees keeps the momentum going. As the supervisor you can create a positive and encouraging environment and create a performance culture.