Bowland Solutions has been seeing a growth in demand for 360 feedabck - in particular a demand for a full 360 degree appraisal service including design of competency framework, online system, traning and debriefs.  What is driving this demand.  For a recent newsletter of ours, I wrote an article about who corporate values and behaviours are even more important in challenging times.

The essence of the article, and what we are experiencing from our clients, is that great organisations know that managers need support, training, development and self-awareness when managing in difficult times.  In particular, younger managers who may have only experienced managing growth and positive change need support when under revenue and cost pressures.

Being consistent with your behaviours and values says alot about you as an organisation.   Assuming that we want to be around for a long time ensuring we handle challenging times as well as we handle the good times leaves employees with a certainty and even a loyalty that can be lost if tough decisions are poorly handled.

We believe that great performance appraisal processes and well thought through 360 degree appraisal offers a supporting mechanism that they need.  It has been particularly rewarding to see our existing clients increase use of these tools and new clients arrive.

Brendan

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.

Debrief

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.

Line manager

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

The respondents

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.

Brendan

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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.

Brendan

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.

Brendan

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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.

Brendan

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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.

Brendan

I was reading an article by HSBC on motivating employees.  The article is geared to small business owners and I would support much of the content.  But, right at the beginning is a simple statement

I was reminded of something I was once taught on a coaching programme.  It is often better to get people to do more of what they are good at, and build on strengths, than it is to point out weaknesses.

Generally a sporting analogy is used here but I believe it works in most walks of life.  At work, we often construct feedback around what you can do to improve, and often we then construct the questions and responses around "development areas" and "weaknesses".  Often, individuals and teams would benefit from simply developing their strengths and leaving their weaknesses to be covered by other team members.  Not always of course, but most teams work well because they are composite and complementary.

This thought can influence how you word the narrative responses in 360 degree feedback questionnaires, or the feedback sections in the annual performance appraisal.  A subtle change can change the emphasis of the feedback and the discussion afterward - leading to a much more positive conversation.

Brendan

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This isn't for the faint of heart but my research just found this article entitled "Building a practically useful theory of goal setting and task motivation".  One of the authors is Edwin A. Locke who is heavily associated with most of goal theory.

Although in parts it is a fairly dry read and academic in language, I would suggest that if you are working around goal setting (and most performance appraisal forms have an objectives section!) then this would be worth a read.  It covers why goals work, what affects the performance benefit you get from goals, stretching targets and much much more.  

It would be wrong to suggest that there are no criticisms of Locke and goal setting theory but I'd recommend this to anyone who needs to set goals on a regular basis or needs to design performance appraisal forms or performance appraisal training.

Brendan

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There is an interesting article on the CIPD website regarding the impact of the economic downturn on performance management.  In parts the article draws conclusions from the data that I would be less certain about but there are two interesting points that I see.

First, performance appraisal particularly the management of underperformance is being seen as critical and second, hr managers are making use of the downturn to put their procedures and processes in order ready for the busy times again.

The interest in our 360 degree feedabck and annual performance appraisal systems certainly reflect the latter point with the last couple of months being record months for us. 

The former item intrigues me.  What is it about a downturn that makes managing underperformance more important?  The guess is that managers feel less able to carry underperformers in the downturn.  I suspect that some of this response is driven from a need to support selection procedures for redundancy programmes.  Organisations are looking at their performance appraisal data and finding it wanting.  A lesson for all of us would be that accurate performance appraisals benefit both the individual and the organisation.  But its too late to sow seeds in September.

Brendan

Completely off topic, I'm going to use our IT knowledge rather than our HR knowledge for a change!  As a subscriber to the google friends newsletter I get a number of "things you can do with google" and thought I'd share a few with you.

The google search bar has some not so obvious functionality built into it

Conversions

Try typing "1 dollar in sterling", or "20 pounds in kilos" - google handles a variety of conversions

Calculator

Nice simple calculator - try "30 * 50"

Weather

Type "weather stafford"

Time

Type "time new york"

There are many more - go here for googles list http://www.google.com/help/features.html



Brendan

Our software allows our clients to change the text within the system - and all of our clients have more than a preference about whether their process is called performance appraisal, performance review of performance evaluation.  I guess mostly it is history and people become used to a particular term.  But, just for a moment I was thinking through which one is the one I would use.

I concluded I didn't like any of them!  First I think they are all backward looking and that is only a part of the process.  Second, appraisal and evaluation are too hard - they make me, the appraisee, a subject of the appraiser.  Generally, they are limiting - not describing the whole of the process or document but just a small part of it.  

I actually like "performance discussion".  But, I suspect that is too soft and doesn't imply the importance (do tell me if this blog post sounds like something from Goldilocks.)

I'm off on a search for terminology around this document and process.  Is performance discussion the best I can come up with?

Brendan

Let's contrast Neil Armstrong, a sports person (footballer, baseball player), and a city trader and whether bonuses would work.

General idea of a bonus is that you get some extra money for hitting some sort of target (cheap jokes about bankers would be easy to write here).

But I often wonder whether they work.  I know they are nice to receive - but do they generate additional effort to get them?

Let's take our list

Neil Armstrong.  Now, I don't know whether he got a bonus for walking on the moon but I'd bet that he would have been no more or less motivated by a financial incentive.

A sports person.  Often sports people are paid win bonuses.  If they win a game they get a bonus.  Strikers in football are often paid more for scoring goals.  I've never understood that one.  Do you change the way you play for the bonus?  Perhaps in a meaningless end of season game, but really does it work?

A city trader.  Now, on a principle level I can see that a city trader's personal goals are likely to be money driven - and so a bonus is likely to motivate them.  But, motivate them to do what?  It needs to be a very well-crafted bonus system that does not drive short-term inappropriate behaviour.

I have rarely seen or experienced a truly motivational bonus structure.  In looking at performance appraisals, I'm starting to craft my thoughts on how a bonus system could work both for the organisation and the individual.  A performance review against objectives may form part of a sensible process.  But its taking a lot of thinking to really ensure that the organisation get what it wants and the individual is not manipulated away from better behaviours than the bonus is likely to generate.

Brendan

A continued research effort around our performance review whitepaper led me back to a model we work with to describe how performance related pay fits in with performance appraisals.  The model is built from a range of standard theories - Vroom's expectancy theory, Locke's goal setting, Porter/Lawlers views on intrinsic and extrinsic rewards and others.  Diagramatically it is represented as follows



The model demonstrates the basic "line of sight" required for performance related pay to work.  If I increase my effort, then my performance should increase which lead to rewards that are aligned with my personal goals.

To achieve the link between effort and performance we need : effective goal setting for alignment, we need the opportunity to deliver that performance (e.g. the external market allows it) and the ability (often where training plays a part).  We also need to be sure that our role is clear - we don't want to be doing the wrong thing!

That performance is then rewarded - either through a feeling of a job well done, or other intrinsic rewards or through extrinsic rewards such as pay and bonuses.  That reinforcement (think Pavlov's dogs) makes us want to do it again!  Finally those rewards need to be linked to something we are seeking - our personal goals.

When put like this it leaves me a little cold and has a large company imposing managerialistic processes feel about it.  But, if you are implementing performance related pay it forms a very useful checklist and model to have in mind as to why and how you link the sections on the performance appraisal form with the pay and bonus and of course why you are doing performance appraisals at all.

Brendan

This blog post http://www.allthingsworkplace.com/2007/06/360_feedback_it.html came to my attention today.  Although it is from 2007 it identifies the feedback conversation as the important part of 360 degree appraisals.

We made a conscious decision about a year ago to emphasise the conversations that follow 360.  We often use a quality feedback=>meaningful conversation=>better choices=>performance improvement schematic to emphasise how 360 feedback starts a useful process.

Holding that meaningful conversation is an art - one that can be trained but one that many people do not find natural.  This blog post reminded me that we should continue to emphasise that the 360 feedback process has a purpose that is much more than completion rates and efficiency.  

Brendan

There is an element of advertising in this - so please forgive me.  We're seeing a number of people approach us for managed service of 360 degree appraisals.  My instinct is that organisations are tightening the size of HR departments - and those HR departments are coping with increased work volumes.

What is also interesting is we're finding that when we manage a 360 degree feedback process we are able to gain higher completion rates than the internal team.  That may sound boastful - it is not meant to be.  Two factors are in play here: first, we have a lot of experience of sending out emails and reminders.  Second, an email from an external party feels like it needs responding to.

If you are looking at small or large scale 360 degree feedback interventions can I suggest you give managed service a thought.  It is cost effective and offers great results - leaving you to concentrate on the 360 feedback rather than the 360 process.

Brendan

I'm putting together a white paper on performance appraisals.  Together with researching it is a great opportunity to stop for a moment and think through the performance appraisal process.

Just to keep myself fresh as I approach the topic I've looked at thinking it through from the appraisee's perspective.  And drawing on my time in corporate life and experience with a variety of clients looked at what does the appraisee want to discuss.  I've come to the following conclusions on what I wanted and what I have observed others to want.

(Please note, I am currently thinking more broadly than some 1 hour annual appraisal)

• How am I doing?  I was always very self-motivated but I did want to know my managers' and the organisation's view of how I was doing
• Am I doing the right things?  I probably wouldn't have expressed it that way - but you do sometimes get these moments of doubt at work that you may be barking up the wrong tree
• What am I going to be doing next?  I hated stagnating - I always wanted to have something different to do and something challenging
• Is there any relevant training I can access?   Most of us want to learn.
• How are things going more broadly?  I always found the appraisal time a useful moment to check out how my manager was getting on, whether there were any changes afoot.

When I was in HSBC I also wanted to know my performance grade - but I only wanted to know that because I wanted to know my pay rise.  Frankly I used to dismiss the grade as a poor method of representing a year's work.

When I look at this list I notice that it is easy to fit these appraisee needs into the appraisal process.  And you can even design performance appraisal forms that hint and nudge the appraiser to give this information.

Not a bad perspective to have taken for a while - right, back to the research.

Brendan

After an earlier post on a military perspective on 360 degree feedback I found in my inbox, a blog post from an admiral.

From the initial "Shipmates,..." that opens up the blog post I am immediately struck by the difference in language from what we may consider normal business language.  But, when you read the article you see he actually advocates an unusual method of collecting the feedback (he considers online solutions to be expensive ... clearly he visited some of our competitor's websites!)

This question came up in a discussion group I was visiting (sorry, can't remember which one!).  You can see the theory - really the appraiser and appraisee should be big enough, brave enough, and knowledgeable enough to work out what needs to be said and what needs to be recorded.

My heart likes this - it appeals on many levels.  But my head spots the flaws.  First, the performance appraisal process has a number of objectives and some of them are organisational.  This is fine, important and easily justifiable.  The orgnisation needs some information from the process that it can analyse and a big blank piece of paper is going to make that difficult.

Second, I'd like to think that HR professionals have thought about the performance review process more than the appraiser and appraisee.  If they have, then I bet the appraiser and appraisee would like the benefit of that knowledge and a well constructed form with useful communication is the best way of that knowledge infusing the performance appraisal process.

I'm sure this question was posed to be provocative.  Examining it though quickly advertises to you the role that HR should be playing in the design of a great performance appraisal form.

Brendan

I just responded to a post on CIPD regarding designing a performance apprasial form.  Just in case you don't avidly read CIPD forums ! I thought I'd outline my response here.

"In broad principle, I would follow the following process

• What purposes has the form got to serve (rightly or wrongly the performance appraisal form is important to the organisation for a variety of reasons), e.g.

• Record objectives for later reference
• Cascading of organisational objectives / goals
• Identify individual training needs
• Assign a grade for performance related pay purposes
• Identify the competencies that you wish employees to be strong in
• Gain c.v. like information for internal recruitment
• Identify high flyers etc.

• Decide now whether the form/process can deliver all of this
• Begin to design the form content - go for completeness initially.  I'd be surprised if a couple of other organisations wouldn't give you their forms to give you a flavour of what people capture and to get some ideas going on how best to garner the infromation
• Look more at the performance review process than the performance appraisal form.  The form only needs to capture the salient parts of the conversation on performance, objectives or development.  So, a nicely laid out form with a couple of opportunities to add free text is more likely to be completed than endless free text options.
• Get a small number of people involved to review your proposal - I don't know the size of your organisation.  If it is large, then do this earlier
  • HR
  • Training
  • Manager(s)
  • Appraisee(s)
• Start to look at the communication process....ok, I'm starting to go off your original topic."

I'm currently writing a white paper on performance appraisals - you can register to receive our newsletters from this blog or our website - and this will be a starting point for me.  It doesn't feel complete yet, but it's not the worst start on getting the performance review form designed.

Brendan