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Performance Appraisal Process- Getting it Right

March 13, 2010

Is it enough if you have done your best during the year, and even made sure that everyone who matters knows how good & competent you are ?

Few days ago  I wrote about simple steps to follow so that one can get ready for the appraisal. While the focus was on helping the employee to get ready, there is no denying the fact that there are a number of gaps in whole appraisal process, the way it is done across organisations & domains.

Across a vast majority of organisation, Appraisals are once a year exercise rather than being a continuous process. Many a times subjectivity and perception-that deadly word that can make or mar a career-take precedence over facts. The so-called Balanced Goal sheets/performance cards are not always balanced and are predominantly tilted towards revenue generation and sales, sacrificing the process and the learning that needs to be encouraged to positively impact the revenue & sales in the longer term.

With this being the case, it might be helpful to talk about the key issues and aspects that are part & parcel of the Appraisal Process. Lets start by asking some questions.

Why do organisations need Performance Appraisal ?

Theoretically, Performance Appraisal is a process driven way of

  • Identifying the best talent that exists in the organisation and grooming them to perform the expected tasks, to assist them in learning new skills, nurturing them to take up higher or more responsibilities and thereby grow
  • Rewarding people for their contribution to the organisation by meeting expectations which were clearly explained to them
  • Encouraging more and more employees to do better and better
  • Sending out signal to future employees about how meritocracy is rewarded & honoured

Any other objective, will more or less fall in one of these categories. If we look at these objectives closely, they cover the entire lifespan of an employee in the organisation ,starting from his first day in any company till the last ( in fact it even impacts the after-life i.e an employee’s career in the next organisation too). This leads us to few more questions

a) Is the Appraisal Process carried out in true spirit of these objectives ?
b) How can the Appraisal process be intertwined in the daily life of an employee so as to lead to the achievement of these objectives ?
c) Is it justified to make the Appraisal once a year exercise ?

It would be wrong to give a generalised answer to the question about the spirit in which the process is carried out. In my opinion, the intention is right when the whole process starts at the top. However as it goes down the ranks, the message, the objective and the spirit, all get diluted. So we may have the CEO expounding the noble goals that are to be achieved through the Appraisal process, however the sales manager may have something else in mind while evaluating his team members.  Therefore, in spite of having a well-defined KRA  or scorecard, a sales supervisor may end up looking only at the Achievement Vs Budget while taking a view on the performance  or an operations supervisor may be unable to justify his department’s performance.

There is , however, a flip side too. I have seen organisations where the whole process is sabotaged by the top bosses, because they have to fit in the ratings/rewards into a pre-decided formula and then there are some individuals who have to be rewarded at any cost.

The problem is three-fold. One, the vision & thinking behind the process of meritocracy is not sacrosanct. The very people who define these policies & rules, don’t mind flouting them.

Two, even if it is sacrosanct, it is not communicated with same energy , Passion & importance & three, the people down the line are not trained enough to handle this.

a mail her & an announcement there is not enough to get the seriousness. The vision & the direction needs to be demonstrated and that too right at the top.

One way to bridge this gap to some extent is to make the performance review a continuous process in form of weekly, monthly or quarterly.  The whole exercise has to be participative and interactive. The involvement of employees right from the goal setting ( More about this later) ensures buy-in. Subsequent feedbacks and informal/formal reviews ensure that every employee knows where he/she stands and where they are headed in terms of year-end performance.

This eliminates 1) the Fear of final feedback and 2) surprise/shock element of the year-end appraisal ( this is more due to mismatch in what the employee feels he has done and what his supervisor perceives)

Even more importantly, this helps iron out the perception and brings the supervisor face to face with reality. So instead of seeing the final score line, they have a ringside view of the match ball-by-ball. And if this process is religiously followed at every level from bottom to top, you can be assured that the intent & seriousness will percolate down very soon.

But then, does it need to be driven by the supervisors alone for it to become a continuous process? Not at all. This is where technology can help. A system, where an employee can see the metrics pertaining to his goal sheet can do the trick. A daily visit to the system ensures that the employee has an eye on the expectations and knows exactly how far they are being met. For smaller organisations, where the cost may not justify the use of extensive technology, simple dashboards prepared on a spreadsheet can be enough.

Some of the questions you need to ask, to streamline the Appraisal process, are

1. Do my employees have the opportunity to participate in Goal setting and are they in sync with the expectations and have clear understanding of each goal?
2. Do they have the skill sets to achieve these goals & if not, does the organisation make sure to fill the gap well in time ? ( this is where training comes in )
3. Do they have tools to know how they are progressing ?
4. Are they provided regular guidance & direction whenever they seem to be losing sight of the objectives & even otherwise ?

If you say YES to these you are right on track.

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