Appraisals - a good investment?  research summary  2007

Research conducted by  prosell in a range of organizations 2007

The information contained here is by no means a complete set of research data but does summarise on the key elements identified in the research as to why appraisal systems were not deemed to be either effective or contributing towards the achievement of business goals.  These observations covered 72% of the organizations surveyed.  That is to say 72% of companies doubted that appraisals improved business performance and that the points below were common to these companies.  On average, of the 13 summary points listed, at least 7 were applicable to those who doubted appraisal effectiveness.

We would add that some systems do work - those where the mistakes listed below are not made, or where the systems are discreet to small teams.

1. Many organisations have standard documentation, which is at odds with day to day priorities.  They also utilise the same documents for everyone within the organisation.  The research shows that this ‘one size fits all’ philosophy is not correct.  That senior management expect to and should be appraised on different attributes and capabilities than engineers, for example.  With standard documentation there is also a danger that the elements being measured bear no relationship to the attributes required in the job.  Many appraisal systems for example evaluate dress standards, time keeping and other basic elements, which are neither a concern nor a subject of discussion within the organisation.
2. Many individuals have a fear of appraisals in as much as they feel that it is a rating system, which is a permanent record of their weaknesses or lack of contribution in certain areas.  There is a general feeling within the training fraternity that any system which seeks to evaluate historic performance should not simply give it a rating (specifically if this is a below standard rating) but should seek the reasons behind that rating and devise clear ways with which to improve.
3. Many appraisal systems only exist at staff and first line management levels but tend to be dissipated or even ignored as one moves further up the hierarchy.  Most HR experts would agree that the high flyers and senior managers within any organisation are role models for those within their departments and divisions.  If it is seen that these managers/directors pay little or no attention to appraisal systems and they themselves neither appraise their senior managers or are appraised themselves, then the whole organisation attaches little or no importance to the process.  It is therefore seen as a bureaucratic exercise to satisfy personnel as opposed to core techniques to improve performance and profitability.
4. When managers move from one job to another very few organisations ensure that there is a clear handover to the incoming manager of appraisal documentation, performance development plans and the managers’ commitment to them.  Therefore even when isolated managers are enthusiastic and use appraisal systems well to develop staff, these managers by virtue of their ability and their commitment are likely to move within the organisation and therefore the impetus is lost with them.
5. Appraisal systems which are directly linked to remuneration and salary reviews tend to be ineffective.  If an individual is to be formally rated and this rating is to affect their future salary they are unlikely to be open and honest about weaknesses or areas of non performance.  The appraisal therefore becomes less a discussion of performance and becomes a negotiation (i.e. which box to put the ticks in).
6. Appraisals tend to run either annually or bi-annually in the bulk of UK organisations.  Research shows that this is too infrequent to be used as a method to focus people on performance goals and methods to achieve them.  The appraisal system therefore sits outside of the day to day activities completed by the manager; resulting once again in a perception that it is an infrequent bureaucratic process. 
   
   Research indicates US performance company Technikron 1993), that to change (as opposed to maintain) behaviour and skills, an individual needs to be focused on the desired change (through coaching, feedback and support) 2/3 times a week.  This research was conducted in a range of call centres and clearly the level of input is different depending on the job, but there is a large gap between weekly and annually.
7. Many of the judgements made in appraisals are subjective and therefore open to interpretation by both   managers and staff.  When one considers the more subjective areas that some appraisals systems ask individuals to evaluate (attitude/ability to get on with the team etc.), it is no wonder that some managers abuse their position and use appraisals as a means of keeping people in check by intimating that they may rate them lower than perhaps they otherwise would.  For example, dealing with attitude problems by saying “that will not look good on your appraisal”.
8. This links with the previous area.  Most managers asked to carry out appraisals feel uncomfortable with the process. They by and large do not feel that they have either the skills or the data to be able to make objective and informed judgements on staff.  It is also true to say that if one receives one or two days appraisal skills training and then simply carries out the process once a year then the individual never practices the skills enough to get good at them.  There therefore exists a low level of skill, which means that managers do not like to be involved in an appraisal process and have their discomfort exposed.
9. Many organisations when surveyed considered the appraisal process to be unimportant.  This relates to a previously made point around the importance attached to the process by senior members of the organisations.   One manager within the survey said,
   “How many of the main board got there because of their ability to appraise individuals effectively?  Also how many of them now bother to do it?”
   
   If an organisation perceives the process is unimportant then in the current day and age  when we are all required to work harder with less resource some obligations will naturally slip.  Research shows that most people in business these days have to prioritise the activities given to them because they are unlikely to ever be able to complete them all effectively.  If appraisals are rated as unimportant they naturally slip to the bottom of the pile and therefore get delayed to the point where they become nothing but a constant irritation.
10. One of the truisms about business life, particularly in this frenetic age is that if it doesn’t get measured it doesn’t get talked about.  Many organisations commit to the idea of appraisal and performance reviews but never bother to take the step of measuring and rewarding managers and staff for how well they:
    
    a) Improve performance through the system.
    b) Effect team results and team attitudes.
    c) Have an impact upon peer group feedback and group perception of management.
    
    Most managers are intelligent enough to work out that if the company doesn’t measure something it doesn’t feel that it is necessarily that important.  If this perception exists within an organisation what tends to happen is those who carry out appraisals consistently and well are those who are naturally comfortable with the people management side of their role.  Those who are uncomfortable with this discipline (in essence those who need the training and the formality to make them better) are the ones who tend to ignore the system, deride it and carry it out at a very low level when they absolutely have to.
11. A point briefly touched on in the previous section.  If improvement in people through use of the system is not measured, then it is unlikely they are ever to be rewarded for achieving above average performance either amongst their team or from individuals who have improved significantly as a result of the management time devoted to them.
12. The research shows that staff like and want the appraisal because they wish to discuss goals, objectives and training requirements.  Mangers tend not to like the process because they see it as unimportant and feel uncomfortable by and large with their skill levels.  This perception is made worse when standards, objectives and measurements are unclear.  Most people understand the basics of their role but if you were to ask every individual within an organisation to explain exactly how the qualitative elements of their job were measured and how those quality standards were discussed one would receive a range of different and uncertain answers.  In essence, most organisations measure quantity but attempt to appraise quality.
13. Appraisal training tends to exist purely for management, ignoring the fact there are two people in the room; both roles are equally important and require an equal level of skill and analysis in order for the process to be effective.

• Prosell offers a program that combines sales training and sales coaching.  It is based on recognised research, which tells us that training alone has limited impact and that when supported by skilful coaching, has 74% more chance of being implemented.
• Prosell has resources to deliver these programs across Australia, covering Sydney, Melbourne, Brisbane, Perth, Adelaide and Canberra.