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Appraising Performance: Strategies and Lessons Learned. Wendy K. Soo Hoo, Assistant City Auditor City of Seattle November 2004. Agenda. What the Experts Say About Performance Appraisals What Do You Think? Performance Appraisals Versus Performance Management… and Other New Practices

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appraising performance strategies and lessons learned

Appraising Performance: Strategies and Lessons Learned

Wendy K. Soo Hoo, Assistant City Auditor

City of Seattle

November 2004

  • What the Experts Say About Performance Appraisals
  • What Do You Think?
  • Performance Appraisals Versus Performance Management… and Other New Practices
  • Conducting Effective Meetings About Performance (and Other Difficult Conversations)
performance appraisal definition
Performance Appraisal Definition


One of those special human encounters where the manager gets no sleep the night before, and the employee gets no sleep the night after.

—Thomas B. Wilson

overarching goal
Overarching Goal
  • To create and promote a workforce that can achieve the organization’s mission to provide the most value to its stakeholders
elements of traditional appraisals
Elements of Traditional Appraisals
  • Goal Setting—Supervisors set performance objectives or standards for individual employees;
  • Measures—Tasks or levels of performance are used to gauge whether person has achieved his/her goals;
  • Feedback—Comparison of performance to goals is usually provided at end of performance period;
  • Performance Rating—Supervisor judges overall performance and gives numeric rating;
  • Merit Pay—Pay increase based on performance rating and market price for position.
performance appraisals in your organization
Performance Appraisals in Your Organization
  • Are managers in your organization required to conduct performance appraisals?

1 = Yes 2 = No

  • Do you give performance appraisals, do you receive a performance appraisal, or both?

1 = Give Appraisal 2 = Receive 3 = Both

appraisal process objectives
Appraisal Process Objectives
  • Managers: Recognize and reward top performers.
  • Employees: Obtain honest, timely feedback, development and coaching.
  • Compensation Managers: Ensure that dollars allocated according to performance.
  • Human Resource Executives: Identify top performers and plan for their development and succession.
what s wrong with this picture
What’s Wrong With This Picture?
  • Managers are usually uncomfortable with appraisal process.
  • Employees are not happy with the assessment of their performance.
  • Most organizations (90%) do not consider performance appraisals to be effective.
Appraisal process can effectively serve several functions

One-size-fits-all works well for supervisors and employees

Ratings are motivating

People withhold effort without incentives

Often one function undercuts the other (e.g., employees focus on pay)

Different preferences in coaching, receiving feedback

Ratings don’t provide useful information and can be demoralizing

People are intrinsically motivated to perform well when work is meaningful


why appraisal processes often fail
Why Appraisal Processes Often Fail
  • Appraisal process only operates for part of the year—not meaningful if goals are not monitored.
  • Ratings are based on managers’ opinions, only include what managers remember.
  • Managers avoid honest feedback to prevent conflict.
  • Organizations try to meet too many objectives (feedback, development, pay raises, etc.).
  • Employees believe criteria are vague, subjective; can be demoralized by ratings, especially when pay is involved……
linking pay to appraisals a good idea
Linking Pay to Appraisals—A Good Idea?
  • At least two dozen studies over the last three decades conclusively documented that people who expect a reward for completing a task, or for doing that task successfully, simply do not perform as well as those who expect no reward at all.

—Harry Levinson

rewards or punishment
Rewards or Punishment?
  • Pay is not a motivator, but it can be a de-motivator when it is inequitable
  • Rewards can create conflict between managers and staff, or among staff members
  • Rewards undermine interest because artificial incentive cannot match intrinsic motivation
merit pay increases and performance appraisals
Merit Pay Increases and Performance Appraisals
  • Should merit pay increases be included in the performance appraisal process?
  • If the purpose is to provide feedback, encourage development, probably not.
  • If the purpose is to reward the individual—maybe.
  • Merit pay increase should be given when individual shows new capabilities over a sustained period, rather than end-of-the-year appraisal.
remember myers briggs
Remember Myers-Briggs

Anyone who supervises someone else should:

  • Look carefully at the assumptions made about motivation.
  • Assess the degree to which carrot-and-stick assumptions influence own attitudes.

—Harry Levinson

what do you think
What Do You Think?
  • On a scale of 1 to 5, what do you think of the performance appraisal process?

1 = Performance appraisals always meet these objectives.

2 = They meet some of these objectives.

3 = They are a necessary evil.

4 = They could/should be improved if we continue to use them.

5 = Performance appraisals should be eliminated altogether.

what do you think17
What Do You Think?
  • Do appraisals encourage you to work harder?

1 = Yes, I work harder because of the appraisals.

2 = Yes… at least for the the month before or after my appraisal.

3 = No, my effort would have been the same with or without an appraisal.

4 = No, I find performance appraisals discouraging and ineffective, which impacts my work effort.

typical process ideal process
Highly subjective

Unilateral (only from the manager’s perspective)

Little focus on future capacity

Uncertain link to business success drivers

Explicitly defined

Mutually understood, with multilateral communication

Strong development focus

Grounded in business success drivers

Typical ProcessIdeal Process
  • Specific—Goals and criteria should be clearly defined;
  • Meaningful—Evaluation process should impact behavior;
  • Achievable—Goals should be realistic; process should provide incentive to perform beyond expectations;
  • Reliable—Process should achieve desired objectives;
  • Timely—Performance reviews and feedback should occur more frequently than once each year.
performance management
Performance Management
  • Performance management is the process of creating a work environment in which people are enabled to perform to best of their abilities.
  • Begins when a job is defined and ends when the employee leaves your organization.
performance management at the organization level
Performance Managementat the Organization Level
  • Clearly define and communicate the organization’s mission, strategies, and performance goals.
  • Provide appropriate training for managers on giving feedback.
  • Ensure employees receive ongoing feedback and appropriate training.
  • Align job descriptions with organizational goals.
  • Conduct exit interviews to understand why valued employees leave the organization.
performance management at the manager level
Performance Managementat the Manager Level
  • Involve employees in goal-setting process; goals should be flexible enough to reflect changing workplace conditions.
  • Clearly articulate performance metrics used to measure employee’s success in meeting agreed-upon goals.
  • Provide training to employees to strengthen performance and advance career.
  • Provide ongoing “on the job” feedback.
performance management at the employee level
Performance Managementat the Employee Level
  • Develop performance goals with his/her manager.
  • View manager as a coach or mentor rather than someone who passes judgment.
  • Be receptive to feedback.
  • Don’t rely on manager to provide all the feedback—employee is also responsible for providing information on his/her performance.
other new approaches
Other New Approaches
  • Evaluations in new systems are not conducted for raises, promotions, or bonuses—instead for development and communication.
  • Most important aspect in all is multilateral communication between employee, managers, and others, rather than one-way communication.
  • Pass/fail systems or no ratings at all
  • Peer reviews
  • Self-reviews
  • Upward assessments
  • 360-degree feedback
owning the solution
Owning the Solution

If people do not participate in and “own” the solution to the problems or agree to the decision, implementation will be halfhearted at best, probably misunderstood, and more likely than not fail.

—Michael Doyle in forward to Kaner, Sam Facilitator’s Guide to Participatory Decision Making New Society Publishers, Gabriola Island, BC 1996

recapping the key points
Recapping the Key Points
  • Expectations should be linked to business objectives;
  • Performance goals should be established;
  • People should be coached, mentored—employees should be motivated; and
  • Assessments relying solely on supervisor’s perspective will have limited value.
are you using any new techniques
Are You Using Any New Techniques?

1 = Yes, and it’s more effective than the traditional appraisal process.

2 = Yes, we’re still evaluating the effectiveness.

3 = Not yet, but we’re thinking about it…

4 = No, we’ll probably always use the traditional appraisal process.

four stages of difficult conversations
Four Stages of Difficult Conversations
  • Prepare
  • Initiate conversation
  • Explore their story, then yours
  • Collaborate on resolution
stage 1 prepare
Stage 1: Prepare
  • Consider your objectives and approach
  • Conduct research—if you’re the manager, review the employee’s file, outline some topics and talking points, do a mental walk-through.
  • Employee should consider their performance as well and prepare notes or jot down concerns and questions.
  • Be open to multiple perspectives
  • Adopt a positive mindset (see next slide)
choose a positive context
Choose a Positive Context
  • When a conflict is framed in a negative context, the focus is on power, and will likely result in a winner and a loser.
  • Focusing on improvements instead of mistakes can defuse the tension.
stage 2 initiate conversation
Stage 2: Initiate Conversation
  • Invite conversation and share your purpose
  • Key practice: describe the issue/problem as a difference in perspective
  • Avoid problem solving during initial stage of conversation
  • Acknowledge feelings, which are frequently core issues, before attempting to solve stated problems
stage 3 get their story then tell them yours
Stage 3: Get Their Story-- Then Tell Them Yours
  • Start with their story
  • Don’t assume that you know their story
  • Don’t push back—Listening does not imply agreement
  • Express your views and feelings after their story is finished
your story
Your Story
  • Start with the most important points
  • State what you mean clearly to avoid assumptions
  • Share how you formed conclusions
  • Avoid words like “never” or “always” or “fault”
  • Present your story as “your truth” not “the truth”
stage 4 collaborate on resolution
Stage 4: Collaborate on Resolution
  • Invite the other person to help identify solutions
  • Invite the other person to come back if attempted resolution is not successful
  • Remain hopeful that mutually acceptable solution is possible
  • Recap major points, be sure to end on encouraging note
key sources
Key Sources
  • Wilson, Thomas B. Innovative Reward Systems For the Changing Workplace, McGraw-Hill, New York 1994.
  • Flannery, Thomas P., et. al., People, Performance, and Pay, The Free Press, New York 1996.
  • Various articles published on human resource websites