360 degree feedback offers many opportunities for conversations. Indeed it is our belief that this is one of the most positive outputs of a 360. Starting with the handing over of the report a number of opportunities are open to have a conversation that can lead to improved self-awareness and changes in how the recipient acts.
This conversation can clarify the report, challenge misperception, and begin to discuss next steps. A skilled debriefer is not a passive party to the debrief but has so much material that their own opinion is rarely required. This should be an illuminating conversation.
A line manager should be interested in the 360 feedback received by their direct report. It gives the line manager a broader perspective than they may already have. A conversation is inevitable that discusses the insights and looks to the plan of action. This should be an active conversation
Whether en masse or as individuals, the recipient of 360 feedback has a real opportunity to discuss the feedback with respondents. As well as demonstrating their willingness to talk about the feedback, it allows the recipient to discuss actions they are looking to take and how that would be received. More than anything this should be an open and honest conversation.
Many of these conversations are outside of the control of the organisation. But the organisation can frame the conversations and give support for them. Most of all, I suggest, they should encourage those conversations.
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Just before leaving corporate life I had implemented a new performance appraisal process and a new pay structure. It was ok – nothing more and I was frustrated by its impact. Not long after, as part of my MBA, I read Herzberg’s work (that he wrote it over 30 years before I was making my mistakes was just a tad frustrating!) on motivation.
I know some readers will be familiar with his findings but they are worth being reminded of anyway. Herzberg found that hygiene factos such as money, work conditions, company policy etc. would make people unhappy if they were wrong but were not motivational. Once you had satisfied someone’s pay demands they would not be motivated by more.
Instead, motivators come from factors intrinsic to the job:achievement, recognition, personal growth, responsibility.
Performance related pay offers an opportunity to create a fairer pay system – with a number of caveats. But, it should not be seen as a motivational tool. Rather if you introduce a fair performance related pay scheme then you are likely to not demotivate.
The flipside of this discussion is that when designing the performance appraisal process and performance review forms you have an opportunity to cover achievement, recognition, personal growth, etc. So a well designed and implemented performance appraisal process can play a part in motivation and support managers in building a motivated team.
One of the main elements of performance appraisals is objective setting. Objective setting falls out of goal setting theory which states that people who are set specific, difficult goals outperform those that are not set goals at all or are set general goals like "do your best".
Where appraisal is linked to pay or where there are real consequences to performance appraisal whether in terms of tangible or intangible rewards it is of course in the individual’s interest to have a lower goal that they exceed. Goal bartering was a large part of my annual efforts in a previous role in a large corporate. Knowing that bonuses (and sackings) were driven by whether we hit target, all directors and senior manager’s put great efforts into trying to get a low target. Unfortunately, our Chief Executive was all-knowing and master of the black arts and would invariably set a genuinely difficult but achievable goal.
If there are no consequences – positive or negative – to the performance appraisal process then it can be ignored. If however, the consequences are strong then there is a tendency for all concerned to moderate their goal setting based not on whether the goal is a stretch but on ensuring it is achieved.
One route around this is regular goal setting rather than annual goal setting as is often practiced with annual performance reviews. If objectives are set annualy then in many organisations they are arbitrary. If they are set monthly then there is excellent data on which to set the goal (current performance) and a realistic timeperiod over which to assess performance.
It may not always be applicable but it is regularly a better place to start than an annual target.
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Continuing a theme on rewards that may fall out of the performance appraisal process, this blog entry by Derek Irvine on HR Zone picks up the value of tangible versus intangible rewards.
Some recent entries of mine on performance related bonuses and the principles behind performance related pay can be read alongside Derek’s blog post.
There is currently a plethora of discussions on forums and blogs around the merits or otherwise of performance related pay. As ever, too strident a view is rarely correct. Rather, any process implemented well against a set of able, well trained managers will work best.
In my forthcoming white paper on performance appraisals I will spend some time critiquing performance related pay and achieving best practice.
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Clearly an outcome of our performance appraisal software is often a rating that our clients use for pay or bonus calculations. This use of our services together with a strong personal interest in the effects of bonuses on people’s motivations keeps me looking out for evidence on whether performance bonuses work and how they are perceived.
In the Observer (UK Sunday paper) yesterday there was a small article highlighting that particular government departments had paid average bonuses of £19,000 per annum to middle management. Now the article was not linked to performance appraisals nor would you expect it to be but the thrust of the article was that in the current climate – both economical and politcal – these bonus payments were high.
The question for me is are they truly bonus payments – are they somehow linked to performance (individual or organisational) over and above the call of normal practice. In a business, I believe it is right that if the organisation has a great year with great profits that everyone should share some of that financial success with a bonus payment. Why should the shareholders get all of the rewards? In the public sector this is harder to establish. I suppose efficiency gains could be used but that appears a dangerous path – cutting costs is easy, but sustaining a service at the same time is harder.
My other concern drives from whether a bonus is truly motivational. I suspect it rarely is. In general people in the private sector have greater job insecurity and so higher risk which leads to some idea that a bonus in the good times makes sense but I believe it rately motivates them on a day-to-day basis. In the public sector, those risks are reduced and a general bonus for all is less appropriate – if there is money around put it in the basic pay and then use management methods to ensure effective performance.
I have steered clear in the above analysis of individual’s bonuses. Performance appraisals often look to determine who should get what bonus but my experience is that organisational influences drive the majority stake in performance review bonuses anyway.