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  • Donald E. Hester

Performance Appraisals - Academic

Written for an academic report.


Introduction

I am writing this paper with a two-fold purpose. I am writing this as a term paper for my Security Administration class and, I am also using this paper as an opportunity to make changes within my organization. For as long as I can remember, other employees, and myself, have felt the current evaluation systems in our firm were in need of repair. The problem we had is that we were not sure what the problems with the current systems were, we just knew there was something that could be improved. But what is it?


I remember one of my first jobs after high school was working as a loan officer for a very large financial institution. The employee evaluation process consisted of me sitting there in my manger’s office while she read to me a list of my failures. I was given no opportunity to rebut any of the supposed failures. I was given no credit for being in the top 10% of loan officers in the county for that month. After she completed the interview, she offered no advice on how I could improve or even at what level I needed to be. To this day, I can remember how I felt that day after my first evaluation: I felt frustrated like there was no way out; like I couldn’t make it; like I had insurmountable problems and, like I did not belong there. I knew I wasn’t a screw up, and I knew it wasn’t fair not to at least hear my side of the story. The funny thing, is only two months before, when I was interviewing for the position, this manager seemed to be the nicest and most helpful person. What had changed in those two short months that lead to a competition between me and her within four months?

I look back on that episode now and I know it wasn’t me. It was a failure of management. I was in a corporation where the corporate culture supported doing anything you could to get a loan and get ahead in the business; even if it meant riding your employee’s coat-tails to success while you run the employee into the ground.

This episode is in stark contrast to a job I had just a year earlier. Before I got into the loan business, I was working for a contractor as a laborer in various refineries in the area. I remember, what I now consider to be one of the best jobs I had ever had, working for Steve the foreman. He was more of a coach than a foreman. He would come along side of coworkers and show them how to do things the right way and he explained why we should do it that way. When it came time for review, the outcome could be anticipated beforehand. One of the things that impressed me the most is, during one review, he asked me what I wanted to do, what my goals were. It seemed more like a friendly chat among friends about my career goals than the performance review that it was. The end result was I was put into the carpenter’s apprenticeship. I moved from laborer to apprentice. If it hadn’t been for layoffs, I would not have moved into the loan business.

Through my life experiences, I have had other good and bad examples of management and performance review. They have all taught me and lead me to the conclusion that, as a manager, I want to come along side my employees and help them grow, respect them as people with goals and desires and treat them the way I want to be treated.

In this paper, I will look at my firm’s current employee evaluation appraisals. I do not look at them as being inferior or deficient. I am going in with the perspective that there is always room for improvement. Once I evaluate the current system, I will make my humble recommendations to fine-tune the process.

Evaluation of current performance appraisal system

Current Goals

The unstated goal of our employee reviews is staff improvement. Our mission statement is "we are in business to help our clients succeed." By helping the employee learn, grow, and improve themselves we, in turn, help our clients succeed. This, of course, helps increase profits and, presumably, this means more money for the employee as well. This appears to be a win-win-win situation. The client wins with dedicated hard-working proficient staff. The employer wins by fulfilling their mission and making a profit. Finally, the employee wins by having a sense of accomplishment, meaning and purpose to their work, and increased compensation.

Current Procedures & Process

Our main line of business is audit and, most, employees are engaged in the audit process. The current process differs from department to department and on staff levels. Generally, new staff is evaluated after each specific engagement to which they are assigned. Senior staff is only reviewed once per year or as needed. Managers evaluate their department’s staff on an annual or as-needed basis. Each audit supervisor evaluates associates and senior associates. Supervisors, directors and managers are reviewed by the partners.

Some departments, such as information technologies, accounting services and administrative staff, have some form of goal-setting as a part of the evaluation process. Each department varies on how this procedure is implemented and on how it is followed through. In 2004, each individual in the firm was given goals from the partners. There was no input from the staff on what the goals should be. At the end of the year, the goals were not used as a part of the evaluation process.

There are no formal escalation processes for poor performance or unacceptable behavior. If an action by an employee requires recourse, then the supervisor would give the review and the human resources manager would get involved if it was major or the action was not being corrected. Generally, employees are given a written warning and then are terminated if there has been no improvement. This is the extent of the progressive discipline procedure.

Current Training

Generally, the reviews tend to be written in a factual manner stating in what areas the employee has done well and in what areas in the employee needs improvement. How the review meeting goes differs from supervisor to supervisor. We do not currently have a formal or documented process to ensure that a supervisor’s reviews will be consistent with the other supervisors’ reviews. There is no assurance that the review will be objective, rather than subjective, because there are neither training for supervisors nor a standard to which the supervisors can adhere to.

Current Rating and Ranking

There are no standards or metrics for the use of any particular rating or ranking system. The current form is a simple question and answer approach. The use of a narrative rating system is the most widely used form. Questions include, “What sections did you do?”, “What strengths were noted?”, “What areas need improvement?”, and, “Would the supervisor want to work with the staff member again?” Questions like “In what areas is the employee doing well?” will have a narrative from the supervisor that is typically a paragraph or so.

In the past, supervisors have written reviews that range from the employee is violent, unresponsive with the client, they are a liability on an audit, they have a bad attitude, or even, they have bad hair.

Employee Perceptions

In order to gauge the effectiveness of the current systems and to come up with some goals for the new system, I needed to get some candid perceptions from employees. In order to evaluate the current process, you have to be able to let management know what is working, what isn’t working, and how employees are feeling. (Finney 2003) I asked a number of employees who have worked with the company for awhile, members of different departments and, I even interviewed a partner in an attempt to get a wide range of responses. In order for them to be candid, many of them asked that their name not be used.

There were some things that there was a consensus on. Mainly, that there is not enough training for supervisors on the process or standards for writing a review or conducting the review meeting. I expected this would be the case, given there is little or no training for supervisors and, as such, there are no standards to adhere to. Comments ranged from, “We're not given the help or the guidance we need.” to “I don't think we train our supervisors to review effectively so our supervisors just fake it the best they can.”

In addition to the need for more training, employees generally felt that supervisors need to take more time to train and coach staff, but, they also felt that the supervisors do not have the needed time to perform on-the-job training. There seems to be a want and desire for the supervisors to coach and train new staff. However, time seems to be an issue; none of the supervisors feel they have the time to train effectively. Comments ranged from, "Technically speaking, they should be doing some sort of training/mentoring whatever you want to call it, to actually help the employees improve in their functions." to "Now, if there really was the ongoing teaching at the jobs that would be a different story. I think that is what is lacking because there's just not enough time."

There were other points made that were not shared by every one I talked to. This may be due to the different departments or the fact that reviews are done by different supervisors in different ways. I have listed a few of the more negative perceptions only as a means to recommend changes to increase the positive perceptions, not to say there weren’t any positive comments.

  • “Supervisors should be reporting to Directors or Partners who should then be doing the staff evaluations.”

  • “I think that personality conflicts flaw some reviews.”

  • “No, I don't think reviews are always fair.”

  • “I don't think that staff actually gets anything out of their reviews.”

  • “My impression has been that staff just gets told over and over again how bad they are doing in a section but that no one comes along side of them and helps them fix what is wrong.”

  • “What we seem to do now is just evaluate on the fly. We tend to evaluate only that which has been recent and not extend it to evaluating actual growth or change in the person's performance.”

  • “Evaluations should tell you how you have done, what you are good at, what you need to improve on, and set some goals to complete before the next year end. But, with people getting evaluated so often by so many I don't think that happens here.”

  • “When reviews are not done in a timely fashion, human nature says I'm only going to reflect on the last few months and if I have had a hard time recently, my review will not reflect past successes.”

  • “My impression is that it is not "employee friendly," they don't get to input much.”

  • “Not enough employee input and not always fair to employee.”

  • “I think HR has a handle on things, but I have experienced in the past, times where they have let someone go without having given them ample notice that they were indeed in trouble.”

  • “If you don't grow to make it to supervisor, they don't want to keep you around. The mentality comes about and that person becomes expendable.”

  • “We never really take the time to say, hey you did a great job on that.”

Proposed performance appraisal system

Goals

I do not propose any changes to the current goals. I think the goals are the right goals to have. Employee improvement is a win-win-win situation and that is important. What I will recommend is a change in how we reach those goals and changes that will help to make employees’ perceptions of the process as positive and fair as possible.

The firm will have to change its paradigm on how it views employees in order to help create a partnership between the employees and the firm. Reviews should not be seen as an adversarial process; they should be seen as part of a long term relationship or a partnership. Effective long term relationships require mutual benefit (Covey 2004). Creating a review process that focuses on the partnership is a win-win approach. An additional benefit of this approach will be to increase employee retention (Finney 2003).

There have been two major and different approaches to management. First, there is the command and control model of the industrial age, often referred to as “management theory X (Montana 2000).” This theory’s paradigm believes that employees hate work and will avoid it if they can. This management style relies on command and control to keep employees productive and does not focus on the higher needs of employees. (Covey 2004)

The other approach is the new “knowledge worker, employee empowerment management model often referred to as “management theory Y (Montana 2000).” This paradigm seeks to meet all of the higher human needs, "to live, to love, to learn, to leave a legacy” (Covey 2002). This paradigm believes that people do want to work and will work and excel if they are empowered to do so.

A few good examples of employee empowerment come from the stories in Jason Jenning’s book Less is More. All of the world’s most efficient companies seek to empower their employees. One example is a factory in the Midwest where management taught every employee how to read financial statements and openly posted the financial statements in the employee break room. Every employee in that organization could explain how their job affected the various portions of the financial statements. Employees had the power to make suggestions on how to cut costs and what could be done to make them more efficient. By empowering their employees they became one of the world’s most efficient companies (Jenning 2002).

Process

One of our firm’s overall approaches in management is to keep policies as simple as possible. By keeping policies simple, we can empower employees to excel and eliminate wasteful bureaucratic systems that bog processes down and kill efficiency. So, any policy we adopt should be simple (Finney 2003).

Any process we develop should meet the needs of all departments and should be consistent across the firm. The standard should be set to be an objective standard that is fair and unbiased. This process will ensure two things: one, that there is a fair standard that is applied to all employees and, two, that any reviews that have been given will be legally defensible (Weiss 2000). As it is now, there is no standard and reviews vary from supervisor to supervisor. As such, it is not be fair and unbiased, nor would any review be legally defensible. Poor standards can lead to wrongful-discharge suits and possible discrimination litigation.

The proposed process will have 3 phases. The first phase will be the goal setting phase, where employees and supervisors jointly develop goals for the employee. The next phase will be the support phase where the supervisor acts as a coach giving the employee support and direction. This phase should include constant feedback to the employee regarding their performance. The final phase will be the evaluation itself, consisting of a written evaluation and a meeting where the employee is given respect and a chance to bring up any issues they may have with the process or support they were given. Below is a diagram that illustrates the process.

Evaluation Phases

Goal Setting

In order to empower employees, I recommend the use of management by objective approach to set employee goals. These goals should take into consideration the goals and aspirations of the employees (Covey 2004). There should be an alignment between the company’s goals and mission and the employee’s own career goals (Pacetta 1994). The setting of goals, long term and short term, should be done at the beginning of the review period. This is accomplished by creating an employee performance record that will be used throughout the entire process. The performance record will serve to document the goals that were set, how often employees will check in with the supervisor, and specific tactical plans to help them reach those goals.

A number of sources recommend that you have employee job descriptions as even before there is any goal setting. According to Donald H. Weiss in his book Fair, Square & Legal, the job description should drive the appraisal process; otherwise you do not have anything to measure performance against. Written, clearly stated, job-related standards, communicated to the employee at the start of the rating period, should be the only basis on which performance is judged. If the employee does not know and understand fully what is expected, or what the goals and standards of the job are, he or she cannot be held accountable for job’s outcomes. (Weiss 2000).

I believe the use of management by objectives and setting goals with the employee serve the purpose. The employee and management will clearly know what is expected from the other. Job descriptions may, however, bring some additional benefits to the process. Job descriptions help build morale, protection against misunderstandings, aid in the performance evaluation and can be used as the foundation for the wage and salary program (Renckly 2004) (Sandler 2004).

Performance Management & Coaching

It is not enough to set goals for the employee; there must be support and follow up. Rarely can an individual achieve goals on their own. There is always a need for some level of support. Performance management and coaching employees can help give them the support they need to grow and excel.

The idea behind this is to assist the employee in reaching the goals. This process will also engage the supervisor and help them learn to be better supervisors. (Weiss 2000) The firm will get better results by cooperation leading to a true win-win situation. Supporting them and giving them what they need in order for them to reach their goals is critical to their success. An army can not be expected to win a war if they do not have the support they need.

Employees should also be given continuous feedback on their performance. One benefit to this approach will be that employees will not be surprised by any evaluation. They would have been given feedback as they progress and they will also be given the support they need to succeed in their goals. If the employee has a problem with attitude or performance, they should have been coached a number of times on the problem. I would go so far as to say the employee should be able to write his or her own review. They will know where they need to improve.

Positive and negative feed back should be put in the employee’s performance record. The statements that are put in the performance record should be objective and to the point. They should relate to the goals that have been set at the beginning of the evaluation period. It is important that the records are updated in a timely manner. If the records are not updated at the time, and instead done at a later time, the firm may be found to be engaged in retroactive documentation (Weiss 2000), which can lead to legal liability. For negative feedback or corrective actions taken, Paul Falcone has some advice to ensure the record is accurate and legally defensible:

  1. Dos and Don’t (Falcone 1999)

    1. Traditional who, what, when, where, how

    2. Use senses to describe event e.g. saw, heard

    3. Take subjective comments and make them objective by adding concrete objects or facts to substantiate

    4. Include the negative or positive impact it had on the organization

    5. Document employees response

If, during the year, we have employees with potentially job-ending problems, the coaching can include a performance improvement plan (PIP). With this type of plan, the employee and his or her supervisor work together to come up with a performance improvement plan when the employee has discipline or performance problem. These are short-term goals in order to avoid disciplinary action (Falcone 1999).

In order for this stage to be effective and successful, the supervisors will have to be trained in how to coach and how to give ongoing feedback to the employee. We cannot assume that all supervisors have theses skills or that they are at the same levels of skill. For a quality process we must have training for the supervisors (Weiss 2000). If supervisors cannot support and give positive and negative feedback, the employee cannot be expected to reach the goals they have set.

Evaluations

In the final stage, the employees will be given a written review by their supervisor and have a meeting to discuss the results of the review. Employees will be given an opportunity to add any comments to the review they feel are necessary in order to maintain the aspects of partnership that were started in the first phase of goal setting.

This phase will start with a review of the employee’s performance record. Any major points of concern or any praise should be put in the record prior to the employee meeting. It is important to insure that supervisors have been taught good practices in writing narrative accounts for employee performance records to ensure the comments are objective, unbiased, accurate and comprehensive.

During the meeting the supervisor should start with the goals that were set at the beginning of the period. Any progress throughout the period should also be discussed. It is important that the employee be given an opportunity to voice their concerns or add any comments they feel are needed. Finally the evaluation will rate them on their performance to the goals and/or job description (Sandler 2004).

After the supervisor completes the discussion, or during the discussion, the supervisors should ask the employee if they have any comments to include in the performance report. The employee should focus in on what they could have done to meet the goals if they fell short. The employee should also rate how well the supervisor gave them continuous feedback and support to reach those goals. The process of managing up (Bing 2001) helps to give the employee a sense of fairness and recourse if they feel they are not being treated fairly. It also serves as a performance indicator for the supervisor.

The meeting should end on a positive note. In addition, the employee should sign and receive a copy of the evaluation before the meeting ends. The performance record should also be turned into to the human resources department to be filed.

Conclusion

With this process, we have sought to empower the employee by partnering with them to help create mutually beneficial goals. We have not left the employees to fend for themselves, but we have set up a structure to help support the employees in their needs and have given them continuous feedback so they can improve on an ongoing basis. Finally, we can objectively evaluate their performance against the mutual goals.

This process supports the value the firm has for the employee. It is a process that is fair and objective and genuinely seeks the good of the employee. It creates a win-win-win situation in which the client, the firm, and the employee are all rewarded.

Bibliography

Bing, Stanley, Throwing the Elephant; Zen and the Art of Managing Up, (New York: Harper Business, 2001)

Carrison, Dan & Walsh, Rod, Semper Fi; Business Leadership the Marine Corps Way, (New York: AMACOM, American Management Association, 1999)

Cline, Ami, Project Editor, Managerial Leadership, (Boston, Course Technology, 2001)

Covey, Stephen R., The 7 Habits of Highly Effective People, (New York, Simon & Schuster, 1989)

Covey, Stephen R., The 8th Habit, From Effectiveness to Greatness, (New York, Free Press, 2004)

Covey, Stephen R., Principle-Centered Leadership, (Franklin Covey Co., 2002)

Drucker, Peter F., The Essential Drucker, (New York: Harper Business, 2001)

Falcone, Paul, 101 Sample Write-ups for Documenting Employee Performance Problems, (New York, American Management Association, 1999)

Finney, Sartain, HR from the Heart, (New York, American Management Association, 2003)

Freedman, David H., Corps Business; the 30 Management Principles of the US Marines, (New York, Harper Business, 2000)

Heller, Robert and Hindle, Tim, Essential Manager’s Manual, (New York, DK Publishing, 1998)

Jennings, Jason, Less Is More: How Great Companies Use Productivity As a Competitive Tool in Business, (Portfolio, 2002) ISBN 1591840015

Julian, Larry, God is My CEO, (Avon: Adams Media Corp., 2001)

Massie. Joseph L., Essentials of Management, 4th Edition (New Jersey, Pearson Education, 2001)

Massie. Joseph L., Managing, a Contemporary Introduction, 3rd Edition (New Jersey, Pearson Education, 1983)

Matteson, Michael T., & Ivancevich, John M., Management & Organizational Behavior Classics, 7th Ed., (New York, Irwin McGraw-Hill, 1999)

Montana, Patrick J., and Charnow, Bruce H., Management, 3rd Edition (Hauppauge, NY, Barron’s Educational Series, 2000)

Pacetta, Frank, Don’t Fire Them, Fire Them Up, (New York, Simon & Schuster, 1994)

Potts, Michele A., California Employer’s Guide, (New York, Aspen Publishers, 2004)

Renckly, Richard G., Human Resources, Second Edition, (Hauppauge, Barron’s Business Library, 2004) ISBN 0-7641-2449-8

Sandler, Corey, & Keefe, Janice, Performance Appraisal, (Avon, Adams Media, 2004)

Weiss, Donald H., Fair, Square & Legal, 3rd Ed., (New York, American Management Association, 2000)

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