Salz Review - Wall Street Journal

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Salz Review
An Independent Review of Barclays’ Business Practices
Review, we identified issues which indicate that performance assessment was not
very effective. For example, a number of employees appear not to have been set clear
objectives at the beginning of the year. Across business units, the performance
development system was skewed towards placing staff of all seniorities in the top
performance bands – approximately 90% of RBB employees (in 2011) and 97% of
the investment bank’s employees (in 2010) were placed in the top two of four
bands. 197 These numbers partly reflect the fact that the investment bank made a point
of acting quickly on what it saw as under-performance. There was also limited
training for managers on how to conduct performance reviews effectively, including
a lack of clear and specific guidance for managers on how to assess their staff. An
effective performance development process will inevitably trigger performance
improvement plans for some employees. We would expect Barclays to apply ever
greater diligence in this area. Addressing these issues will be critical to ensuring the
successful and consistent use of the new balanced scorecard across the whole Group.
10.14 To address the issue of grade inflation, Barclays has over time placed increasing
emphasis on ‘target distribution’ – whereby managers are “encouraged strongly” to
allocate ratings for the individuals they are evaluating into a pre-specified
distribution, so that the lowest grades have to be used. Staff members responding to
our survey were noticeably unenthusiastic about this recent emphasis. Forced
distributions can have a positive impact in requiring managers to identify poorly
performing staff, but care should be taken when applying this approach to small
teams.
10.15 While 79% of employees in the UK retail bank found their performance reviews
helped them improve their job performance, employees elsewhere in the bank were
far less positive. Many employees said to us that their managers placed limited weight
on performance objectives other than their financial targets, causing employees to
believe that performance reviews are not linked effectively enough to either
compensation decisions or promotions. Additionally, performance development was
rarely used as a tool to drive continuous professional development through training
and other actions; managers infrequently gave explicit references to concrete actions
their reports should take to continue their development. The inconsistency between
messages sent by the performance development process and other elements of
people management limits its effectiveness in reinforcing behaviours.
197 From 2011, the investment bank followed a new grading approach. For 2011, only 6% of its employees
were graded as having not fully met expectations. This figure reached 11% for 2012. For RBB in 2012, the
equivalent number was 12%.