The traditional model for performance appraisals is proving to cause more problems than employers intended. Studies show that performance appraisals typically yield skewed results, have the ability to psychologically impact the employees, and are time-consuming with little ROI. In this webinar we will discuss: • Specific problems with the traditional performance appraisal system affecting employees, managers, and the organization as a whole • Effective tools that have been proven to accurately measure performance with valid outcomes • Why employers should move away from the traditional performance appraisal model and move towards the performance management model

1. Performance
Appraisals:
A
Broken
Prac3ce
Anu
Mannathikuzhiyil
HR
Generalist

2. What
will
be
covered
• Problems
with
the
tradi3onal
performance
appraisal
(PA)
system
• Employee
problems,
manager
problems
and
problems
for
the
organiza3on
as
a
whole
• Effec3ve
tools
that
measure
performance
with
valid
outcomes

3. Defini3on
• “The
prac3ce
of
performance
appraisal
is
a
mandated
process
in
which,
for
a
specified
period
of
3me,
all
of
a
group
of
employees’
work
performance,
behaviors
or
traits
are
individually
rated,
judged
or
described
[…]
and
the
results
are
kept
by
the
organiza3on”
Source:
Coens
&
Jenkins,
Abolishing
Performance
Appraisal:
Why
They
Backfire
and
What
to
do
Instead
(2009)

4. A
simple
process?
Head
of
HR
Department:
Determine
salary
increase
guidelines,
forward
guidelines
to
managers
HR
Department:
Inform
all
managers
of
impending
performance
review
dates,
distribute
a
list
of
their
employees
to
each
manager
and
request
iden3fica3on
of
co-­‐workers
who
regularly
interface
with
each
of
these
employees
Manager:
Return
completed
co-­‐worker
list
to
HR
HR
Department:
Select
co-­‐workers
to
complete
peer
review,
forward
peer
review
form
to
selected
reviewers,
forward
managerial
appraisal
forms
to
every
company
employee
Employee:
Return
managerial
appraisal
forms
and
peer
review
forms
as
appropriate
to
HR
Manager:
Request
comple3on
of
self-­‐appraisal
from
each
employee
Employee:
Complete
performance
self-­‐appraisal
and
send
to
manager
HR
Department:
Assemble
and
distribute
performance
review
packets
for
each
manager
Manager:
Review
records
and
files
pertaining
to
the
review
period
and
go
through
peer
review
and
self-­‐appraisal
forms

5. There’s
more?!
A
Manager:
Write
performance
review
No
Manager:
write
performance
review
Salary
adjustment
is
appropriate?
Manager:
Complete
employee
profile
Manager:
Forward
performance
review
documents
to
manager
for
approval
Manager’s
manager:
Review
performance
review
documents
Performance
review
approved?
Manager’s
manager:
Discuss
concerns
with
employee’s
manager
and
resolve
difference
Yes
No
B
Review
needs
to
be
rewriaen?
No
Manager’s
manager:
Sign
and
return
performance
review
documents
C
Yes
A
Yes

6. Are
you
serious?
Manager:
Schedule
and
conduct
performance
review
with
employee
Employee
wishes
to
study
the
review?
Yes
Manager:
Provide
copy
to
employee
Employee:
Study
review
and
prepare
comments.
Meet
with
manager
to
discuss
Manager:
Aaach
employee
comments
to
review,
if
provided
Manager:
Ask
employee
to
sign
review
No
Employee
refuses
to
sign?
Manager
and
HR
Rep:
Meet
with
employee
to
discuss
issues
and
concerns
Employee:
Sign
performance
review
Yes
No

7. Finally!!!
Manager:
Distribute
copies
of
performance
review
and
send
original
copies
to
the
HR
Department
HR
Department:
Record
results
of
performance
review
and
enter
performance
ra3ng
HR
Department:
File
review
documents
in
employee
personnel
file
Salary
adjustments
required?
HR
Department:
Forward
Employee
Profile
to
payroll
Yes
End
No

8. Did
I
lose
you?

9. Issues:
Just
to
name
a
few
• Does
not
assess
actual
performance
• Infrequent
feedback
• Discounted
from
rewards
• Lack
of
accountability

10. Issues:
Just
to
name
a
few
• Liale
legal
support
• The
factors
are
all
equal
• Inconsistent
ra3ngs
on
same
forms
• Not
coordinated
with
business
cycle

11. Variables
Affec3ng
Performance
• Personal
life
• Sickness
• Stress
• Inadequate
amounts
of
sleep

12. Rater
Bias
• Halo/Horn
effect
• Leniency
error
• Self-­‐serving
bias
• Recency
error

13. Unintended
Consequences
• Long-­‐las3ng
psychological
effects
• Feelings
of
unfairness
and
ineffec3veness
• Dissa3sfac3on
• Fear/Dejec3on
• Anger

14. Organiza3onal
Problems
• Average
cost-­‐
over
$2,500
per
employee
• Average
3me
per
year
(employee):
3
hours
• Average
3me
per
year
(manager):
400
hours
• Rates
of
voluntary
turnover
increase
aler
review
periods

15. By
The
Numbers
• 66%
of
employees
say
the
performance
review
process
interferes
with
their
produc3vity
• 65%
say
it
is
not
relevant
to
their
jobs
• 90%
of
HR
professionals
do
not
believe
their
companies’
performance
reviews
provide
accurate
informa3on
• 95%
of
managers
are
not
sa3sfied
with
their
organiza3ons’
performance
management
processes
Source:
Corporate
Execu<ve
Board

16. What
you
can
do
• Move
towards
a
Performance
Management
Model
• Organiza3ons
need
to
“focus
on
improving
the
overall
system
of
the
organiza3on,
instead
of
individual
performance”
• Companies
that
have
eradicated
tradi3onal
PAs
from
their
annual
processes
are
rated
highly
in
employee
surveys

17. Alterna3ves
• Journaling
• Decide
between
a
monthly
or
quarterly
3me
range
and
set
reminders
for
both
the
manger
and
employees
• Have
employees
send
3-­‐5
accomplishments
from
the
previous
month/quarter
• Have
employees
send
3-­‐5
goals
for
the
current
month/quarter
• Manager
should
provide
feedback
for
accomplishments
and
goals
• Does
not
need
to
be
for
each
point
and
does
not
need
to
go
into
great
detail

18. • Engage
in
high-­‐quality
one-­‐on-­‐one
conversa3ons
with
employees
• Schedule
a
session
every
three
to
four
weeks
• Fosters
professional
development
Coaching

19. Benefits
• Call
for
a
constant
flow
of
feedback
that
gives
employees
direc3on,
provides
paths
to
career
developments
• Keep
both
the
manager
and
the
employee
aware
of
each
other’s
professional
wants
and
needs

20. Performance
Previews
• Discussions
about
how
to
improve
working
rela3onships
in
the
future
to
meet
specific
goals
• “I”
statements
from
manager
and
employee

21. Feedback
Ques3ons
• Is
this
role
living
up
to
your
expecta3ons?
• When
people
ask
what
you
do
for
a
living,
are
you
proud?
• Do
you
feel
comfortable
voicing
your
ideas?

22. Adobe’s
“Check-­‐In”
• Used
to
rank
employees
on
a
scale
from
1
to
4
• “Soul-­‐crushing
exercise”
• Caused
spikes
in
voluntary
turnover
• 2012-­‐
replaced
rankings
with
frequent
informal
conversa3ons,
no
annual
ra3ngs
• Es3mated
savings:
80,000
hours
a
year,
40
full-­‐3me
posi3ons

23. Deloiae’s
Performance
Management
System
1. Given
what
I
know
of
this
person’s
performance,
and
if
it
were
my
money,
I
would
award
this
person
the
highest
possible
compensa3on
increase
and
bonus
2. Given
what
I
know
of
this
person’s
performance,
I
would
always
want
him
or
her
on
my
team
3. This
person
is
at
risk
for
low
performance
4. This
person
is
ready
for
promo3on
today
Future
Focused
Statements

24. Benefits
• Less
of
a
3me
commitment
• Less
money
spent
regarding
produc3vity
• Surveyed
employees
highly
rate
these
new
methods,
and
call
them
more
effec3ve
• Builds
rela3onships
between
managers
and
employees
• Improves
produc3vity
• Helps
support
a
high-­‐performance
culture

25. Summary
• Performance
appraisals
cause
more
problems
than
they
solve
• Adop3ng
a
performance
management
style
will
help
alleviate
all,
if
not
most,
of
the
problems
with
PAs
• If
you
want
to
s3ck
to
a
PA
model,
there
are
ways
to
tweak
the
process
to
alleviate
issues

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*This webinar has been recorded and will be posted on the G&A website by Friday.