A Result-Oriented Approach to Performance Appraisal

Employee performance appraisal is arguably the top business-enabling functional process,  in knowledge based industries and professional service organizations where human capital and their performance are the fuel that drive the business engine. HR community is constantly trying to innovate and refine the appraisal process  that includes the popular 360 degree feedback system invented in the 90's.  The 360 degree system, in particular, added new dimensions and provided aspects which were never thought of earlier and was an important milestone. Yet,  I have a feeling that different systems being followed by organizations are far from comprehensive and never address the performance related issues faced by industries like IT in a holistic manner

Current Pain Points

• Appraisal systems are mostly generic and don't address the needs of industries like IT where the knowledge of the employees is the real competitive edge
• Current systems don't differentiate between different roles and their needs
• Current systems don't consider different experience levels and their needs
• Current systems don't recognize the different stages of employee life cycle

New, Value Added Performance Appraisal System

Crux of the new system are the identification and endorsement of different stages of employee life cycle, different approach to KPAs and the customized appraisal questionnaires

Employee Life Cycle

Career Beginners	New to the company, new to the role, new to the industry,  new to the professional circle
Organization Beginners	New to the company but established in the role
Role Beginners	Established in the company, but assumed new role
Organization/role Beginners	New to the company, new to the role even though they are generally experienced
Established Professionals	Established in the company, established in the role

Categories of KPAs (key performance areas)

Role based KPAs (subjective in nature)	Nothing but the requirements of any role. Suited for role beginners, less experienced people and certain roles where targets cannot be set objectively
Target based KPAs (objective in nature)	Suited for established and experienced professionals and certain roles where targets can be set objectively
Hybrid KPAs	Mix of role and target based KPAs. Suited for certain combination of role and life cycle stage. Example- a young sales person may need this. It will evaluate her adoption to the new role as well as set an objective sales target

Customized Appraisal Questionnaires

In most of the current systems, the ratee (person being evaluated) fills out a KPA form with her own comments and score for each KPA. The rater (person who evaluates the ratee) also fills out the same form with her comments and score. The difference between the rater's and ratee's perspectives become the moot point of discussion in the appraisal meeting. Seeking the opinion of the ratee is a refreshing change brought out by the 360 degree system. We can still try to improvise the system.

In the new system, the ratee and the raters shall be asked to respond to a tailor made, customized survey question set to make the environment more lively and interesting. The new system doesn't try to eradicate the KPAs, but try to judge the performance in the key performance areas rather intelligently and indirectly by asking questions.

Success of the system depends on the tactful preparation of the questions. It requires thoughtful contributions from expert HR specialists and senior resource managers. Most questions may be indirectly checking one or more specific aspects of the ratee's performance or ratee's perspective or the environment/constraints under which the ratee is working

Ex: Are you able to continue your hobbies/passions (like Yoga, meditation or a simple body work-out) which you were pursuing before joining the company?

[This question attempts to gauge whether or not the ratee's work-life balance got affected after joining the company]

The large question pool may have many sub sets to address different requirements

o    Questions to check the ratee's comfort with the new company and  team

o    Questions to check the ratee's comfort with the new culture

o    Questions to check the ratee's comfort with the new role

o    Questions that check the ratee's fit-gap with the current role (these are very important performance evaluation questions)

o    Questions that check the ratee's target performance (questions like whether or not the target profitability achieved) 

o    Questions to check  whether the ratee commands the cooperation of all the stake holders (these questions try to gauge the team working ability of the ratee, but sometimes may throw surprises like there is no problem with the ratee, but the organization culture itself is poor)

o    Questions that just seek facts without being judgmental (this gives an opportunity for the ratee and raters to think over just what had happened in the evaluation period without pre-conceiving anything)

o    Questions that check the future relevancy of the ratee in the organization

o    Questions for each employee life cycle stage

o    Questions for each experience category

o    Questions for ultra high performers and people who had performance problems in the past

o    Questions that check the longevity of the ratee in the company

o    Questions that check the current band width of the ratee

o    Questions that check the glorious moments of the ratee

o    Questions that check the major and minor irritants in the company

o    Dummy questions (they don't evaluate anything, just a mental trap)

o    Etc. etc.

From this large pool, a customized set needs to be prepared for the each role, each life cycle stage or even for some important individuals like department heads, COO etc. This requires careful and sharp thinking by the HR specialist and resource managers. Once again emphasizing the point - mostly questions will not be direct, they are carefully and tactfully crafted to objectively evaluate performance.

Questions must be randomly mixed to avoid detecting any patterns. Generally the questions set is to be designed in such a way that makes the filling out process more interesting and enjoyable one.

Appraisal Strategies

By now, it must be clear one single strategy will not fit the needs of different sections of the company.

Career Beginners	Conduct appraisals once in 3 months in the first year Check and find out how they are settling down in the company Check and find out how they are seamlessly migrating from the campus to the professional circles Check and find out how long they will take to make meaningful contributions (Recommended: 6~9 months) Coach them to become great individual contributors Set them role based KPAs Reward their learning aptitude, learning attitude and quest for knowledge Coach them to sustain their initial enthusiasm to last long
Organization Beginners	Conduct appraisals once in 4 months in the first year Check and find out how they have adopted to the organization culture Check and find out the organizational barriers to excel in the already familiar role, then work to remove the barriers Check and find out how the work-life balance is affected after joining the company Check and find out how quickly they can start meaningfully contribute (recommended: 3 months) Check and assess their longevity in the organization Initially set role based KPAs, once they are comfortable with the environment, introduce target based KPAs
Role Beginners	Conduct appraisals once in 4 months in the first year Check and find out how they have adopted to the new role Check and ensure that they are not promoted to the new role because of 'Halo effect' Check and find out the organizational barriers to excel in the new role, then work to remove the barriers Check and find out how quickly they can start meaningfully contribute in the new role (recommended: 3 months) keep the options open to revert the role if needed. If the role reversal is inevitable, do that sensitively Set role based KPAs for the first year. Once they are comfortable with the new role, introduce target based KPAs
Organization/role Beginners	Most vulnerable category, handle them with care Conduct appraisals once in 3 months in the first year Apply and implement all those applicable to organization beginners and role beginners Set role based KPAs Check their longevity in the organization. 50% of this category may resign in the 6~12 months period because of cultural mismatch Check and ensure they are stress free, they enjoy the new atmosphere Check and find out how quickly then can start meaningful contribution (recommended: 6 months)
Established Professionals	Conduct appraisals once in every 6 months Set target based KPAs Ensure their longevity in the organization Set an innovative reward system based on their accomplishment of KPAs Inspire them to be even more great performers Baseline them to be the performance bench mark within the organization

Finally any system or process is only as good as the people who implement it (though die hard fans of process oriented approach may not agree). In order to make it a success, following shall be the recipe

• HR shall have a great understanding of the system. All the time they train people on the importance of high performance and how to approach the new system
• One person from HR shall become the 'High Performance Coach (HPC)'
• HPC shall work with managers to identify the different needs of the employees.
• HPC and the manager shall formulate the questions for each appraisal period, each role, selected few individuals etc.
• Questions and responses are analyzed in an intelligent manner to get new aspects and unexplored dimensions
• Appraisal questions are continually reviewed and revised
• Appraisals are not merely conducted to reward the past performance, but for exploiting the promise an individual holds for the future
• Finally HPC is a full time job