From the category archives:

Performance Appraisal

Throw out performance reviews?

May 7, 2010 · 1 comment by Terry Lauter Comp

in Benefits, Business Strategies, Employee Communication, Employee Surveys, Feedback, Leadership, Organizational Growth, Performance Appraisal, Performance Development, Performance Feedback

Performance appraisals have taken another hit in the media recently.

Get rid of performance reviews, author says (http://tiny.cc/rhc2r)
Are performance reviews a waste of time? (http://tiny.cc/9z4la)
Yes, Everyone Really Does Hate Performance Reviews (http://tiny.cc/sa77l)

These articles argue that performance appraisals are: pretentious, fraudulent, ill-advised, intimidating, send the wrong message and so on.

So should we throw the baby out with the bathwater? Should the entire process be overthrown?

But wait! Some companies are actually enjoying a great deal of success with their appraisal programs. In fact, a recent American Management Association study of 437 publicly traded companies found that 205 of these had transitioned to more progressive types of performance “development” vs. the standard appraisal process. Those that had, demonstrated the following results:

Increased profits, better cash flows, stronger stock market performance, and higher stock value
Significant gains in financial performance and productivity

Significant sales growth per employee
Lower real growth in numbers of employees

Here’s the key: Providing valid and valuable feedback on performance is a process, not an event. In fact, performance reviews are often despised and vilified not because they are done, but because of the way in which they are accomplished by managers.

Too often, the individuals are poorly trained and the system itself is both ineffective and inefficient. But open and honest feedback on how an individual is doing in their job is something that most individuals actually appreciate having.

Our recommendation would be to adopt a simple, practical tool for measuring performance objectively; and train managers thoroughly, not just on the appraisal system, but on the process of providing ongoing communication and feedback.

We also counsel our clients on teaching individual employees how to receive feedback. This type of preparation is very effective, but can only accomplish the ultimate goal when a genuine culture of trust exists in the work environment.

To read on about “Getting More From Your Appraisal Program” visit: http://www.ltcperformance.com/Getting-Appr-Program.html.

{ 1 comment }

In a Recession: Recognize & Retain Your Star Performers, Part V

July 13, 2009 · 0 comments by Terry Lauter Comp

in Compensation, Economy, Management, Performance Appraisal

By now, it’s a foregone conclusion: Top performers should not be taken for granted or lumped into the mix, and then rewarded like the many “average” performers each organization has on the payroll roster. This truism applies even for continuing or enhancing cash compensation components, when many businesses have limited financial resources.

Therefore, savvy leaders are focusing on new and creative means of tweaking their total rewards to keep the super stars motivated to take their personal performance to new heights. In the last few posts, we’ve been offering up some ideas to jump-start your movement in this direction. Ideally, you’ll consider new and different low or no cost rewards, as well as modifications to your salary and incentive programs. But here’s a thought, as you’re trying to make sense of the total plan and its inherent out-of-pocket cost:

Don’t worry about the fact that you may be paying above market for your super stars. If they are truly delivering more for less, your payroll efficiency will be high. In other words if you have 4 or 5 higher-compensated stars doing the work of 7 or 8 average performers, it is still a win for the individual and the organization.

Under more normal business conditions, we tend to place great emphasis on market competitiveness and benchmarking jobs in the external world. In today’s environment, it may well make sense to worry less about that data, and think more about your total outlay for getting the job done. In other words, your increased dollars might be allocated to fewer people, but that’s okay as long as the results are there. In our brave new world, getting more with less is not just “allowable”, it makes good business sense.

What do you think? Is payroll efficiency a good way to measure your compensation effectiveness in a recession?

{ 0 comments }

Seize the Moment!

April 15, 2009

I remembered recently an interesting conversation with a colleague after a training session. The discussion centered around a particular employee in a key position who was repeatedly demonstrating poor human relations skills in interactions with others internally, and even with external clients and vendors. When I asked my friend what she did in the situation [...]

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The “What” and the “How”

March 26, 2009

A cartoon I saw recently describes performance appraisals as the event that “causes managers to lose sleep the night before, and employees to stay up the night after”. I think we’d all agree that appraisals aren’t wildly popular with anyone, but often we’ve found the problem to be in the “how” and not the [...]

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Performance Appraisal

Throw out performance reviews?

In a Recession: Recognize & Retain Your Star Performers, Part V

Seize the Moment!

The “What” and the “How”

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