Performance appraisals have become much more relevant in recent years. Yet, many appraisals simply do not work. Most are biased or have little or nothing to do with performance. They are ineffective as a motivator to improve performance.
Comparing PA with 360.Typically, the immediate boss is the primary evaluator and key rater (and rating) on a performance appraisal. That rating may not be as accurate as some employees would like, but the boss is the boss and generally his or her rating prevails. Other appraisals include feedback from the employee. Still others include the direct reports when the employee is in a managerial role.
Performance-based 360-feedback measures what people do on the job and how effectively they do it. The 360-degree process includes feedback from the employee or participant and those who surround the participant and interact with him or her on daily-weekly basis--the immediate boss, and depending on the role or position, the direct reports, peers, team members, and customers (internal or external).
Some advanced 360-systems provide employees with directional feedback. Employees clearly understand the strengths they can build upon, what behaviors they need to do more of or less of to become more effective and influential with those they interact with. Typically, performance appraisals do not provide directional feedback.
Performance appraisals have often lacked a developmental component. There is little or no prescribed follow-up and progress-checks to help the employee stay on any identified performance improvement track. Employees receive a performance ranking, yet without a developmental component they may not know which higher priority areas to build upon, nor which areas they need to resolve first to minimize identified weaknesses. Performance-based 360-feedback fills that void.
Aligning feedback with compensation. This can be scary to some folks. Linking a single feedback source with compensation should not be done lightly. The behaviors and practices measured through the feedback process should be treated as a baseline and not as a sole input to the reward process. Nor should employees be compared with a national or industry. If you consider your organization to be unique, then comparing your people with folks from organizations that are not unique, however you define uniqueness, is pointless. Keeping these suggestions in mind can help you avoid problems associated with using subjective criteria for a substantive decision.
Pre- and Post-Assessments. 360-feedback can help you connect multiple feedback sources and developmental processes with compensation. Consider implementing two assessments to employees within a thirteen month period. The pre-assessment acts as a baseline and identifies strengths and areas for development. Training, coaching, and mentoring can help the employee accelerate their developmental efforts.
If your performance appraisal includes ethics and integrity, for example, include them in your 360-assessment and training program(s). Connecting observable behaviors with feedback appraisal processes reinforces those behaviors and underscores their importance to employees.
Monthly follow-up meetings with the immediate manager can reinforce progress towards self-directed action planning efforts. The post-assessment can identify how effectively the employee has applied what they have learned from their developmental efforts. Employees create subsequent action plans based on their post-assessment feedback.
Compensation is not based upon the first or pre-assessment, but a combination of assessments over time.
Compensation Entitlements. You can align and link your performance appraisal process with a pre- and post-assessment process and compensation. The mindset of many people is to expect a raise each year, regardless of their performance. This is a difficult attitude to let go of regardless of the title or function of the employee. People go quiet when they realize that their salary or wage is their compensation for simply showing up at work and performing acceptable or average results. Compensation should not be linked to mediocrity, but to exceeding expectations, for performing beyond expectations. If you reinforce mediocrity you may actually achieve it.
Separate the feedback-appraisal event from the reward-compensation event.
Providing additional compensation, how much and how often, is an important decision for each organization. Consider the following to get you thinking: "Do you compensate people for improving performance? If so, how much do they have to improve? What if they improve, yet are still considered performing in the ineffective range. Should they be given compensation anyway? What if the employee was and continues to be highly effective? What compensation is due to them?" The critical point is to identify why you compensate at all. Is it to reinforce average performance and mediocre performers or performance and performers who consistently exceed expectations?
Door No. 1 or Door No. 2. Some employees get all funny when they hear about 360-feedback or any appraisal process. Consider giving employees a choice with respect to their performance appraisal process. For example, they could remain with the present performance appraisal system (which may or may not be primarily boss-driven feedback). Or they could choose a 270-degree or 360-feedback process along with feedback from other sources, such as your performance appraisal. Once the employee and boss decide which option is appropriate, the employee lives with that option and the feedback results for that appraisal cycle.
The world of performance appraisals has changed. There is a need for a more balanced way to assess performance. The boss may still be the boss, but the employee is becoming more of a partner with that boss. That partnership requires not only top down feedback, but bottom up and side to side feedback as well.
Credible, relevant feedback can help individuals recognize competency and behavioral areas that need improvement. Performance-based 360-feedback can help people understand the consequences of their actions. It can act as a catalyst for change. It enables your employees to create self-directed action plans that guide them in the direction of exceptional performance.
The competitive trend in the marketplace is not simply to appraise performance, but to accelerate and maximize it. Multi-rater feedback helps eliminate bias by providing more balanced feedback from different sources.
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