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How to get the best out of staff
24 January 2010
Annual reviews can provide employers with valuable insights into the concerns, priorities and motivations of their staff - a must in difficult economic times.
According to Stephanie Duffy, business improvement manager with Russell Brennan Keane, savvy companies can use the appraisals process to boost business and realise a more profitable bottom line.
‘‘For businesses in survival mode, the performance appraisal process is vitally important.
Smart companies are adapting their performance appraisal process to fit with the company’s current short-term outlook, so that the employee leaves the meeting with a clear awareness of the priorities for the business and a clear understanding of what is expected of them in their own role and how they can contribute to improving business performance," said Duffy.
Louise Campbell, managing director, Robert Walters Ireland, advised employers to use regular performance reviews to communicate with staff.
If performance appraisals are carried out well, Campbell said, they could affect productivity greatly. She said, however, that the majority of organisations did not conduct successful appraisals.
‘‘In difficult market conditions, appraisals are often put on the back burner, while employees concentrate on holding on to their job, and employers are too busy with business-critical matters," said Campbell.
‘‘This is understandable, but a mistake. An appraisal is a great platform to set out clear benchmarks that people need to achieve to improve their productivity and move to the next level of their career."
Implementing change
Joe Ungemah, managing consultant with SHL Ireland, said that companies should avoid using the annual review process to instigate unwelcome change without offering anything to staff in return.
‘‘Appraisals provide a formal opportunity to introduce new responsibilities or work practices for employees. However, the relationship is two way and managers must be clear about the type of support they are prepared to give employees through the transition.
Asking more of employees, without offering support, threatens the psychological contract which can lead to anger, withdrawal, and eventually exit from the company," said Ungemah.
Campbell advised employers to prepare thoroughly for each appraisal, compiling all of the relevant information relating to each staff member under review.
‘‘Both parties should be well prepared in order to achieve a successful review. The appraiser should take time to consider how well the appraisee has performed in the period, see if they have achieved the goals set for them in the last appraisal, review factors which affected performance, consider possible future directions for the individual’s career and think about objectives to set for the next period," she said.
In companies that have undergone structured change as a result of the downturn, employers face a specific set of challenges.
‘‘It can be awkward for the employee not knowing the manager, and also for the manager who might not know what their predecessor had previously agreed with the employee.
For the manager in that situation, preparation is absolutely key," Ungemah said.
‘‘This means doing your homework and understanding how the person has performed, not just over the last year, but over the last couple of years, as well as understanding their career development thus far and their motivation. That can mean meeting with HR or other supervisers in the organisation to get extra context and information prior to the meeting."
Training the ‘appraiser’
Structured training can teach managers about how best to conduct appraisals.
‘‘The crux of successful appraisals is training the managers who will be conducting them," said Campbell.
‘‘A good appraisal is one where appraisees do most of the talking. There is active listening from the appraiser and scope for reflection and analysis.
Emotion is taken out of the meeting as much as possible and there is objective appraisal of the employee’s work, concluding with a consensus from both parties about what needs to be achieved in the future. To control such a meeting can be a skill in itself."
Simple metrics or Key Performance Indicators (KPIs) can be used to measure employee performance.
‘‘Metrics should be kept relatively simple and serve as a guideline for what needs to be achieved. They can include easilymonitored financial elements such as, ‘ Did the employee generate their revenue target?’ " said Campbell.
‘‘Non-financial metrics can include activity targets such as number of clients met, new business wins, repeat business or deadlines met. KPIs can range from the very simple - for example, ‘All calls need to be answered within three rings’- to the more abstract - ‘Ensure successful integration of new business into the company’ - or wide-ranging:
‘Open a new office in Frankfurt by June’."
Honest approach
Employers must be open and honest about the strengths and weaknesses of each employee under review.
‘‘The employee should receive insight into how their performance and contribution is seen by their manager and co-workers. Feedback on strengths and areas that need improvement, if delivered in the right way, gives a sense that they are valued. Knowing that someone has taken time to focus on them and listen to them can be very motivational," said Duffy.
Failure to address poor performance directly can have negative consequences for other staff members.
‘‘Irish managers understand what is expected of them when conducting appraisals. However, in practice, they have difficulty dealing with conflict and tend to gloss over underperformance. The mixed messages sent by managers delay action to the detriment of coworkers, who often pick up the slack," Ungemah said.
Organisations unable to increase salaries could, he added, incentivise employees with training opportunities that could boost their career prospects down the line.
‘‘Managers can build the skills of employees through job rotation, mentoring and formal training or encourage employees to work on projects external to the company. Over time, the skills and experience gained by employees during the downturn can be formally recognised by an increase in salary or promotion."
Low-cost incentives
There are plenty of low-cost incentives available to employers and managers.
‘‘These include flexible working hours, better work-life balance, time off to facilitate some personal interest - perhaps training, travel or family - more decision-making responsibility, opportunity to work in a particular area for a period of time," said Duffy.
‘‘The best approach is to ask your employee what would make a difference to them and look for ways to keep them motivated during these uncertain times.
‘‘Praise for good work is inexpensive, does not take much time, is easy to do and makes a big difference, but unfortunately is still under-used in most companies."
Formally separating the appraisals process from salary or benefits negotiations can help employees to focus more on the non-monetary elements of the discussion.
‘‘Appraisals are about past performance and setting future goals, and linking this to salary increases can cause problems.
‘‘If an individual thinks they will be discussing their salary raise, they will spend less time discussing important areas of their performance in order to get to the end of the conversation," said Duffy.
Ungemah advised employers to align the appraisal processes with strategic business goals.
‘‘Irish companies need to work on aligning their corporate strategies to the appraisal process. Attention needs to shift to how employees can support larger organisational needs, which can be accomplished by redefining performance criteria and drafting objectives that tie directly into the strategy," he said.
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