Management Articles


 

Performance Appraisal -- An Important Managerial Responsiblity

By: Gordon L. Simpson

Toronto Managing Partner of The Mansis Development Corporation, Gordon has conducted extensive workshops and seminars on the supervisory and management topics in which Mansis specializes, including performance management, delegation, the hiring and selection process, employee performance problems and performance appraisal. In addition he has worked with many organizations in a consulting capacity in areas related to human resource management, implementing change and team building, and has published articles for a variety of magazines and news publications.

Introduction

Performance Appraisal is an important, if not essential, managerial responsibility. Yet all too often it is not done well if at all.

There are a number of reasons why performance appraisal is not as effective as it could be. The first is that many organizations do not have clearly established corporate objectives for undertaking performance reviews. Many managers, particularly in large organizations, routinely complete the required forms which are then filed and the subject not mentioned again until the next review period, usually a year hence. To be effective, there should be clear objectives for doing performance appraisals and everyone in the organization should understand why it is being done. Performance appraisal, as a process, will fail if it is not linked to a common philosophy of good personnel management and its purpose is not clear. The effort should do more than meet the need of a Personnel Department's view of a sound personnel management practice; it has to be of value to the organization as a whole.

Another problem in many organizations is that the process of performance evaluations lacks credibility. This is usually due to the failure of management to spell out clearly what aspects of the job are to be evaluated and to define the standards against which performance is to be measured. It is simply unfair to appraise performance if it not made clear to employees at the start of the reporting period what aspects of the job will be rated and what standards will be used to measure performance. Lack of clearly defined measurements can lead to intellectual dishonesty in the evaluation, unfair ratings and loss of credibility of management and the appraisal process. As a consequence the value of the appraisal exercise is forfeited. A recent study of major U.S. corporations revealed that 40% of managers admitted to fudging performance data because it was obvious to them that the appraisal served no useful purpose in the way it was managed in their organizations. The key player in establishing the credibility of the process is the CEO who must not only promote it as a corporate objective but must conscientiously evaluate the performance of those individuals who report to him or her. If the CEO is not a role model in this respect, the whole process is doomed to failure.

Benefits

Performance appraisal should be a positive experience and contribute to the overall welfare of the organization. If done properly, performance appraisal is a very effective tool to improve performance and productivity and for developing employees. It helps individuals to do better, raises self-esteem and motivation. Above all it strengthens the management/subordinate relationship and fosters commitment. Performance evaluation is not a process to be avoided; rather it should be implemented in all organizations and promoted as a key management activity. The benefits to be realized from a proper evaluation system far outweigh the time and effort required to develop, implement and maintain the process.

There is much research to show that individuals have a strong need to know how they are doing and where they stand in the eyes if their supervisor. Recognizing the importance of performance feedback, it follows that discussions of performance should take place more than once a year. Frequent, regular discussions of performance should occur on an on-going basis and be seen as an opportunity for useful communication between the individual who assigns work and those performing it. These regular meetings serve to provide feedback so good performance is recognized and performance problems are nipped in the bud. The more formal periodic reviews can then simply be a summary of what has occurred throughout the reporting period recorded on the official performance evaluation form.

Consequences

No evaluation system will achieve its objective unless there is some consequence to the evaluation. It is of no value, and simply adds to the administrivia of any organization, to evaluate employee performance, record the information on a form and file it away. This is the norm in many organizations and is a waste of time. Unfortunately the participants often believe they are doing the right thing. Yes an evaluation was done on each employee - but to what end?

If an employee is rated outstanding for example, what is the consequence of that effort? Does it result in a raise, a promotion, increased responsibilities? Also if an organization rewards high performers, an effective evaluation process is needed to differentiate those high achievers from others in a credible way.

Similarly, if an employee is rated as a marginal performer, there must be some consequence to that low standard of performance. Ignoring poor performance or assigning higher than earned ratings to avoid unpleasantness is poor management and does a great disservice to the organization and to the individual concerned.

Communicating performance in an interview is an essential part of the process. Anyone who directs the activities of others should be capable of conducting an effective performance review meeting. An appraisal interview should not be adversarial nor meaningless chit chat. It should be approached by managers and subordinates as an opportunity for a serious discussion about present performance and future goals. It should be a planned structured event and follow a prescribed agenda.

Summary

To summarize, performance appraisal should be viewed as a beneficial process within the context of an effective system of personnel management. It should be accepted as a normal management responsibility to review the performance of all employees and for all managers to discuss performance with their subordinates on a regular basis.

The key elements of an effective performance appraisal system are:
  1. Clearly defined performance standards.

  2. An effective monitoring system.

  3. Regular discussions of performance.

  4. Development of appropriate action plans as a consequence of the appraisal.
Those elements will help to ensure that performance appraisals conducted in any organization will yield the desired benefits and be more readily accepted by all concerned.

© Copyright 2001 The Mansis Development Corporation

Other Articles by Gordon L. Simpson

The author assumes full responsibility for the contents of this article and retains all of its property rights. ManagerWise publishes it here with the permission of the author. ManagerWise assumes no responsibility for the article's contents.

 

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