06 Jul 2015 16:14 IST

The key to conducting effective appraisals

Here are some steps that can be taken to ensure a good system

My cousin recently told me he is switching jobs since he is not happy with the appraisal he received. He feels the appraisal was not fair, and so he doesn’t feel well rewarded for his efforts. Is there a way to ensure that performance appraisals are done fairly?

This is indeed a tricky issue faced by many organisations. Far too often, companies find that many of the employees are left grumbling about “unfairness” and biases after the appraisal process is complete.

First, to answer your question directly, there is no way to ENSURE that appraisals are done fairly. But there are things that can be done to maximise the chances of an appraisal being fair.

But before I talk about the steps, let me also highlight that it is not enough to be fair, it is also important to be ‘seen’ as being fair. It is quite possible that some employees who are unhappy about the appraisal may have actually had a fair appraisal but the communication has not been handled sensitively enough.

Okay…yes, that sounds like something I have heard about the British legal system. Yes, you have probably read that it is not enough for justice to be done; justice must also be seen to be done. Pretty sensible words actually.

Let us now look at some of the steps that can be taken to ensure a good appraisal system:

At the macro-level, the aim of a performance appraisal, from the company’s point of view, cannot be to solely to determine increments or promotions. Yes, that is how it affects the individuals, but that cannot be the organisation’s main aim.

The organisation’s aim has to be to put in place a system that actually improves performance, and where feedback on performance is a key input that leads to an improvement in performance.

But do companies really think like that?

Some do, and all should. Now, let’s get on to the specific steps.

The first step must be to understand clearly what is expected from each employee / each position in the organisation. And this must be done well before appraisal time, even before the appraisal year starts, in fact.

Laying out the expectations

For instance, if a Corporate Communication Manager’s job is to ensure that all mass communication about the brands and about the company is effective, and in cohesion, then these should be laid out as her primary performance appraisal criteria.

Once they are clearly laid out, they should be communicated to her in an unambiguous fashion, so that she knows what to work towards, and how she is going to be evaluated.

It is useful if these goals can be quantified. For example, one goal for a brand manager could be that his brand must have at least 90 per cent awareness in the market.

Making the goals quantitative in nature makes evaluation easier and less subjective; and therefore less susceptible to suspicion of “unfairness”.

Yes, I can see that. Objectivity is always better than subjectivity, isn’t it?

Hang on…I was going on to say…however, it is not a good idea to get too caught up in making all goals quantitative. It is a fact of life that not all things can be measured or quantified; for instance, courtesy. If a front desk’s performance is to be evaluated on the level of courtesy shown to visitors, then this cannot be quantified very easily but certain pointers can be got from the number of complaints about discourtesy; general observations about the person’s deportment etc.

Such non-quantifiable measures do involve a certain degree of subjectivity.

But subjectivity need not automatically mean bias.

But how can we control that?

There are steps that can be taken to ensure that subjectivity does not degenerate to bias.

One such step is periodicity. It is very useful if some form of appraisal can be done every three months. This would tell the person whether he or she is going in the right direction, and what extra efforts or, say, course correction is required to improve the performance.

So quantitative goal, some not quantitative goals as well…and periodicity. But will all this ensure that the employee feels fairly dealt with?

Not quite, another crucial requirement is transparency.

Too often, people are told something like: your performance has been good, but I wouldn’t say excellent, and that they need to try harder. Such feedback is little better than useless as it offers no direction whatsoever to the individual.

The individual needs to know what scores he / she is being given, and why.

Transparency

One of the main reasons why transparency is a casualty in most appraisals is that most managers are not comfortable giving negative feedback. Maybe it is a cultural issue, but pointing out problems or giving negative feedback in a one-on-one face-to-face setting, and in a calm matter-of-fact manner, is not something most managers are comfortable doing. For that matter, most individuals are not comfortable receiving this either.

This can only be tackled through extensive counselling; and this too needs to start well before appraisal time.

Okay, so we add transparency to the mix. And all this will ensure that the employee is happy with the increment given?

Increments

Let me repeat this: nothing will ensure that. But all this will make it more likely. And one more point, since you have mentioned increments, employees also need to be counselled that the amount of increment given is of course dependent on the appraisal score, but is equally dependent on the company’s financial performance and outlook. This, again, has to be handled with a certain degree of tact.

In many companies, such decisions are veiled in secrecy, and there is talk of “normalisation” which no one really understands. Here too, transparency is crucial to dispel lingering doubts of bias.

Effective performance appraisal clearly needs a lot more than the few points outlined here, but attention given to these points will go a long way in improving the way appraisals are conducted.

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