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Mar 20, 2011

Employee Appraisal - are you getting value for effort?


The article suggests that employees and organisations will achieve greater value for effort by managing the employee appraisal process through the use of specialist software now readily available.

Category: General
Posted by: gary


Are employee appraisals a hollow process in your organisation?  Many organisations invest a lot of time, effort and emotion into their employee appraisal process and most don’t get value for money.  There is a better way that costs less and delivers more.

Firstly, let’s consider the administrative effort of a typical appraisal process, it goes something like this:

The HR area advises when the appraisal is due, forwards copies of the previous appraisal, details of completed and planned training and a copy of the position description to the relevant manager and employee.  They might also need to remind participants of the appraisal procedures as outlined in a policy document.  HR periodically checks the appraisal progress and may need to remind the manager that the appraisal has to be completed and then follow up the paperwork.  Upon receiving the completed appraisal, the training and development needs are entered into a separate database, all paperwork is re-filed and finally the next appraisal date is diaried.  Of course, if senior reviewers are involved or issues are raised during the appraisal there will be additional layers of administration effort.  It has been estimated that a single appraisal will take two to three hours of support effort on top of the time allocated by the manager and employee.

Seems onerous doesn’t it?  Well if you are using an outdated system it is, and also costly.

Whilst likely to be a little different for each organisation, most would be content if their employee review process was completed on time along with outcomes such as:

  • Feedback on performance
  • Individual goal setting
  • Review of position descriptions
  • Determining individual development plans
  • Remuneration adjustment

This is not best practice but only just satisfactory.  Organisations delivering less will likely also struggle with accountability, internal communication and a range of other governance issues.  Improvement can only be achieved through more efficient processes that in turn assist with attitudinal change.

Most managers now understand the importance of providing frequent and timely feedback, they know that surprises during appraisal discussions will guarantee a negative and, perhaps, unpleasant event.  It would then seem logical to incorporate this informal but more frequent practice into a performance management system, substantially lessening the emphasis on an annual or half yearly event.

It makes sense that as workplans, goals and objectives are continually reviewed and updated, along with training and development, that the associated feedback provides the basis for the formal appraisal.  A simple and obvious concept, but the additional workload to collect and collate all this information has always been seen as prohibitive.  Unless there are tangible benefits for employee, manager and organisation trying to introduce this system, using traditional methods, will meet with resistance and probably fail.  It will be seen as an added burden that gets in the way of the ‘real work’.

So how can we reduce the support effort and deliver better results for all?  When you think about it most organisations continue to use the same basic tools to manage appraisals as they did in the seventies and eighties, these are characterised by paper flying back and forth, copying, filing and re-filing.  Sure there is a greater use of electronic spreadsheets and simple databases to keep track of where things are up to and emails are now used as reminders, but these are merely peripheral improvements.

The only way to significantly improve is to consider the current range of IT solutions.  Many organisations have been given a ‘bonus’ appraisal module as an add-on to their payroll system, of course you should evaluate this option but don’t be surprised if it is found wanting.  There are much better specialist products now available at affordable prices.

As a minimum, any software solution must greatly reduce the administrative cost of appraisals but you should also expect additional higher level corporate benefits that would simply not be possible with a traditional approach, such as:

  • Completely eliminating the need for manual filing and central data entry.
  • The capability to easily flex the appraisal process to suit specific employee groups and individual employees.
  • An ability to set KPIs for supervisors and managers that are aligned to employee support and performance.
  • Options to set measurable individual objectives that continuously and automatically update higher level business plans and governance requirements.
  • Providing employees the opportunity to update their own training plan that then flows through to a rolling corporate training plan and history.
  • Far greater analysis of performance data.
  • Compatibility with other software.

It’s not a fanciful or costly concept - the reality is that there are now affordable software solutions for small and large organisations to not only reduce the administrative cost of employee appraisals but to enable them to have an obvious positive effect for the whole of the organisation.

You may still think that the ‘traditional’ approach is as far as your organisation needs to commit to employee feedback, if so consider whether you are really saving time and money.  Apart from the obvious costs associated with administration also think about the hidden costs that occur from ineffective goal alignment, internal communication and employee development.  Of course, a second best employee support system also adversely impacts on employee morale.

Gary Bourke

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