201503 CM March

HR SPECIAL
FEATURE
SPECIAL
WHAT A
PERFORMANCE
Glyn Thomas considers why staff appraisals are so important and how they
are best conducted.
IN a competitive world, managers and
their staff alike are expected to perform
to the best of their abilities, but just what
does this mean in practice? How can
this performance be best judged? Quite
often high expectations are not matched
by an effective method of evaluation yet
without it, can you really rely on intuition
alone?
There are three main reasons for having an
appraisal system:
To monitor the overall progress of the
business
A staff appraisal scheme actually
provides a framework for measuring the
performance of the business through
assessing individual staff against jointly
agreed targets that fit into the company's
overall aspirations. A good appraisal
system should be like having an ‘internal
barometer’ measuring the state of the
company.
To develop the business to meet
changing circumstances
It is widely acknowledged that a static
organisation will not survive and that a
healthy organisation is one that can adapt
and change to market forces. This will
often involve introducing new methods
of working, developing new products
and ultimately changing the direction of
the business. In reality this can only be
achieved by ensuring that staff are similarly
able to adapt and be flexible, perhaps even
being retrained in new skills. Appraisal also
should therefore not be a static process,
but be developed to respond to new
circumstances such as revised business
aims and encourage the organisation to
change to meet new requirements.
To encourage and motivate employees
Staff are usually the largest, most
expensive and most valuable asset and
their motivation and success will result in
a similar performance for the business.
Regular meetings and informal chats
praising, or indeed chiding individuals, are
all part of a good management technique,
but they are no substitute for being able
to set reasonable targets that can then be
measured. A job that is either well done
or `botched’ should not be allowed to
go unnoticed as the former may not be
repeated whilst the latter may become
the norm. An appraisal system is not a
substitute, but a longer-term method of
measurement and will provide a better
and more consistent picture of employee
abilities.
Appraisal should not be seen as a
remote process from the day-to-day
work undertaken, but rather a part of the
overall management and development
of individual members of staff. After all,
each employee in some way influences
the overall performance of the business
– something that they and managers
overlook sometimes.
The employee perspective
The value of performance appraisal to the
organisation is fairly obvious, but what
are the benefits for individual employees?
What's in it for them?
• Employees are recognised for the value
and worth they bring to the organisation
• They are able to contribute to the
development of the business through
participation
• They are allowed and in fact encouraged
to develop their own personal skills
Preliminary work
The best time to introduce an appraisal
system is obviously now, but to be
successful other groundwork must be
completed first. As the system needs
to relate to the main aspirations of the
business, these must be defined, although
they should already be in your business
plan. The difficult part is then converting
these aims into clear targets that can be
built into the day-to-day work of staff.
After all, it is no use to state that your
organisation is ‘committed to a policy of
equal opportunities’ or ‘considers customer
care a priority’, unless these can be seen in
context together with an indication of how
such policies are to be carried through in
practice. The process at this initial stage is
top down from senior managers having to
consider how targets are to be effectively
handled by the next tier of management.
This cascade principal is logical and assists
all parties to identify with the eventual
targets that are set. However, once passed
down from that upper level of management,
a two way process is needed.
It is useful to look at the job descriptions
of each employee and ensure that each
manager has the job descriptions of the
staff over which they are responsible
– this will also help to identify areas of
responsibility and activities that can be
appraised. If the company is particularly
small, no job descriptions may exist, but
still a list of key tasks can be drawn up and
agreed jointly by the manager and each
member of staff to help focus on the areas
to be appraised.
So, having established company
aims, and how individuals contribute to
their achievement, next it is necessary to
discuss and agree the specific areas of
performance that need to be appraised on
a one to one basis.
The interview
Often an appraisal system of sorts already
exists through regular formal interviews,
but these are often undertaken without
focus and can easily lead to a feeling of
dissatisfaction for both parties. When it is
over neither should be thinking ‘what was
it all for?’ and ‘what has been agreed?’.
This problem can be overcome by having
a structure for the interview that will help
both parties and ultimately the organisation
to benefit.
The appraisal interview must therefore
be a two way process and negotiated
and discussed rather than just imposed.
Another way of ensuring success is
encouraging the individual being appraised
54 March 2015 www.cicm.com The recognised standard in credit management