Employee Appraisal – are we getting value for effort?
Just a comment!

Many organisations invest a lot of time, effort and emotion into their employee appraisal process and may not get value for money. There could be better ways that cost less and deliver more.

Firstly, consider the administrative effort/cost 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? If an outdated system is being used it is.

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 is only achieved through more efficient processes for all, not just HR, which in turn can assist with positive attitudinal change towards the performance review process.

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 annual or half yearly events.

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 a significant 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 we think about it most organisations continue to use the same basic tools to manage appraisals as they did in the eighties and nineties, 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 software 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 reconsider the range of IT solutions. There have been massive improvements in recent years. Some organisations have been given a ‘bonus’ appraisal module as an add-on to their payroll system, of course this option should be evaluated but don’t be surprised if it is found wanting. There are much better specialist products now available at affordable prices.

Any software solution must greatly reduce the administrative cost of appraisals but we 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 (goal alignment - my passion).
  • Providing employees the opportunity to update their own training plan that then flows through to a rolling corporate training plan and history (enter data once and only once).
  • 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 time and money is really being saved. 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 could also adversely impact on employee morale.

What do you think?

Gary Bourke