When I first sat down to write this article, I thought my topic might be Performance Appraisal. Then, I asked myself "What about Performance Planning?" "Goal Setting?" "Measurement?" "Rewards?" and I quickly realized that this is a huge topic. There is even Corporate Performance to consider.

With that said, maybe it is no wonder that all of the surveys continue to indicate that employees and managers alike are not enamored with their performance appraisal processes so possibly it is something to consider in more depth this month.

I think we all are familiar with the textbook problems associated with Performance Appraisal that include the issues of favoritism, excessive criticality or severity, the just like me syndrome, the recency or what have you done for me lately factor, the central tendency or rate everyone alike error, the first impression error, or the spillover error that maintains an individual´s evaluation the same as past or initial evaluations.

Couple that with the fact that "no one wants to be average" and we run the risk that everyone in the department will be rated "above average." I have even had managers tell me right to my face "I only hire outstanding people so how can I rate them average or below?" My responding question has been "If that is the case, and I don´t doubt what you are saying why (a) are your accounting results generally late for the monthly reconciliation, (b) are your staffing levels significantly higher than the national average, (c) are our systems not state of the art?" or (d) a similar, relevant, qualifying question for the manager of that department. And even if we get the appraisal right, there is always the issue of determining how and how much to reward the individual based on performance.

So, is there a better way? I think so. Let me offer the following for your consideration. When someone asks me "What do you think about Performance Appraisal?" I respond that I really only like to talk about Performance PLANNING and appraisal. Let me elaborate. I highlight the PLANNING and downplay the appraisal because I think that this just makes more sense and really goes a long way to eliminate the confrontational nature that the process has taken on over the years. How often have you had a manager procrastinate on giving an appraisal because he or she "didn´t have time," "didn´t like to confront an employee," was afraid that "if they get upset and leave because of a critical appraisal the next person might be worse," or some other lame excuse. Could it be that they are a weak manager who has not been effectively trained or counseled by his or her supervisor or manager?

The PLANNING process simply means that you tell your employee what you want them to achieve and how you will be measuring their progress toward that goal. Sales are simple - get orders for X dollars worth of this mix of products. Other positions are less concrete but I would offer not that much more difficult if we just take a little time to think about the process. In the sales arena, we tell the salesperson what results we expect and the associated reward and then let them figure out (with our help as needed or requested) how to reach that goal. Why should it be any different in the office? Just because we are in the same building or complex does not mean that we have to (or should we) stand over that employ and look over their shoulder at every task they try to complete.

This obviously suggests setting goals and letting the employee figure out the best way to get there within the generally established limits of good conduct and general business practices. Where to start? I would like to suggest that you start with the job description for the position, first to insure that it accurately reflects the duties and responsibilities of the position and then to set measures for those individual accountabilities. Some examples might help - if one of the job accountabilities was "Insure that all requisitions for new employees are filled in a timely manner" a simple, easily measured and verifiable goal might be "To have all requisitions filled within three weeks from approval." Obviously, something easy for you and your employee to continually monitor so everyone knows how he or she is performing. Another employee´s accountability might be to "Implement, debug, and make the new software operational in a timely manner" with a associated measure of "Have the HRIS system operational by 9/1 which is the minimally acceptable date while the target date is 7/1 and outstanding performance would be 6/1. Acceptance will be defined as a signoff by both the systems and department managers."

When I talk about Performance PLANNING I am reminded of the joke about the old accounting manager who worked for the same firm for 50 years and who upon first sitting down at his desk each morning would open his lower left drawer and look at the contents for a moment, then close the drawer and proceed with the day´s work. Over the years his fellow employees began to wonder what was in that drawer, but no one would dare ask so the questions and suspicions grew over time. When the manager finally died and after everyone had returned from the funeral, the employees could not wait to open that lower left hand drawer. When they did they found a single piece of notebook paper inscribed with the handwritten words "Debits on the left, Credits on the right." He needed a reminder or guide of how to do his daily work. Performance PLANNING is no different, you and the employee should both have a copy of the targets that you can look at from time to time to determine how close we are to being on track. Is the employee ahead, on, or behind schedule? The airlines or railroads would not try to operate without a schedule, why would you think that you can manage without a plan?

From my perspective, one of the major advantages of using a system like this is that the appraisal process becomes a simple codification and recording of the mutually acknowledged results, not an argument or a contest. This also leads directly to discussions of what we will try to achieve over the next measurement period. I think it is worthy to note here that it does not always mean that the next years goals should be higher than the just completed period, rather they should reflect realistic expectations based on both internal and external conditions. I have clients who have very distinct capacity limits so if this year we are not approaching those limits we could set targets as high as the limits allow but if next year we have gained significant market share and are approaching our physical limits a goal calling for compound sales growth would be both unrealistic and demotivational.

The same could be said of territorial sales targets. It is unrealistic to think that a salesperson in a well established territory where we enjoy an 85 to 90% market share can increase his or her penetration at the same rate as another salesperson who is working in a new territory that we are just opening in an expansion move (assuming we have a dominant product). The same logic can be applied to any position - the incremental gains for a person approaching the top of their game or function is going to be smaller, albeit not necessarily of less impact on operating profit, than the relative new employee who has a multitude of things to learn and skills to perfect.

These discussions lead, I believe, to some thoughts on goal setting. When we talk about goals, performance planning, and rewards several thoughts need to be considered. Some of these are (1) the goals need to be realistic or attainable, (2) the employee needs to believe that he or she can impact or control the events leading to achievement of the goal, (3) the goals should certainly be measurable, (4) the employee should be motivated by the end result that achievement of the goal will provide and, (5) the employee must believe that they have a chance of reaching the goal. For some people keeping their job might be motivation enough, for others just the personal achievement of the target might be enough, still others might well be motivated by the recognition (non-monetary) that they get before their peers while others still might need a bonus to really pursue achievement of the target.

Well, it seems that while we have answered some questions, we have also raised others. To summarize, there are issues for both managers and employees with most performance appraisal systems. These issues range from subliminal fear to outright mistakes and mistrust of the system. That aside, taking the time to first determine what the employee is being asked to achieve (end results of the position), what motivates that employee, what achievement of that goal will generate for the company and then establishing goals or targets and associated meaningful and achievable rewards will go a long way to enhancing employee performance which in turn will lead to improved department and company performance and profits. All in all a worthwhile investment of your time and effort I would suggest.

© Copyright 2004 J.E. Mittler & Company. All rights reserved.