Two of the most obvious management functions are the combination of objective setting and the subsequent monitoring of the resulting performance and objectives achieved. It is surprising then that managers in firms so seldom engage with performance review or appraisal unless driven by their HR department. If that’s the case, this pretty well limits appraisal to larger firms. What then does the SME principal do? What sort of appraisal system can the principal successfully implement?
This brief blog reviews the methods and benefits of staff appraisal and makes a recommendation for getting started.
The rationale for appraisal is blindingly obvious. Managers convince staff to do their bidding by giving instruction. As staff increase competence they need less direct supervision and tasks are set at a higher level, leaving staff to get on with the job. In a system sense however, if the loop is not closed the system runs out of control. In the human sense, the employee doesn’t know what is expected of him or her and therefore has no benchmark to use to improve. If performance changes or indeed when it needs to change, there is no control loop to cause the corrective action.
Managers from larger firms know the benefits. And managers learn appraisal in management training. Yet many are reluctant to implement appraisal. Many don’t like the confrontation. Others grudge the time it takes from everyday activities. Our view is simple. Implement appraisal and drive appraisal to happen regularly. Everyone will get used to it and the firm will soon benefit.
Appraisal has five features:
- It allows management to measure results against objectives and standards;
- It gives employees feedback on how they are doing;
- It allows managers to give positive reinforcement to staff;
- It allows an exchange of views on performance, and
- Managers can use review meetings to gain acceptance of action plans.
There are several aspects to staff appraisals. This blog goes on to consider each in turn.
Measurement demands answer to the question ‘against what?’ Appraisal measures behaviour and achievements. Behaviour has norms, set out in the staff member’s job description. Achievements come from objectives. Where there are no objectives, again the job description gives guidance.
Every person should have a personal development plan. A plan identifies personal strengths; what the person is good at. It also identifies weaknesses and hence what needs to be strengthened through developmental activities. The review is an opportunity to assess development progress.
Loosing good staff costs firms dearly. It’s essential that managers ‘keep their finger on the pulse’ of all staff. The appraisal is an opportunity to discuss how the staff member is feeling about work and address any issues that might then arise in discussion.
Whilst the job description gives broad objectives (such as meeting sales targets), objective setting allows more specific targets to be agreed (such as the monetary value of these sales targets this coming year).
Appraisal meetings need to be planned for and need a degree of formality and structure if they are to be successful. An appraisal form is essential. Simply, this needs to cover what was to have been achieved, space for what has actually been achieved and space for discussion about the difference between these two. The traits needed should be noted along with an assessment of the traits demonstrated. Finally an area should be included to document the development plans agreed. It is essential that the employee is given scope to comment. And both manager and employee should sign to say that they have come to an agreement about the contents.
Adequate time must be given over to the review meeting. Typically three hours should be allowed though often 60-90 minutes will be adequate. A private room is essential.
Implementing formal appraisals is a lot about changing the culture in the firm: managers need to overcome fear and get used to sitting down with their staff once every six or twelve months. Staff need to be convinced that it’s not all a waste of time. Start then with the most positive of the aspects – development review. Complete a personal development plan for each employee and be prepared to put some money and effort into that development. Folk will then see that positive things come from the review. Then introduce discussions about wellbeing. Subsequently start to introduce objectives. Once introduced, review these at the next appraisal meeting. Finally, discuss behaviours and traits.
More elaborate developments of performance review can be investigated. Wait until the base system is in place and the employees trust is established before investigating things like ‘360-degree appraisals’. Do also try to avoid linking performance appraisal to pay. See other blogs on this subject.
Finally do train all managers in appraisals. One-to-one meetings like this are not part of everyday life. Once manages are trained they should of course be encouraged to use the techniques whenever giving feedback on performance.
TimelessTime offers a rolling programme of management training. See theSME HRM Academyfor more information.