The Appraisal Process
Introduction An Ongoing Process Pre-requisites of an Effective Appraisal Process Setting Objectives How can we make the Appraisal Process more effective ? Abiding Factors Appraisals must focus not only on the ³What´ but equally on the ³How´ Understanding Competencies Performance Rating Health Establishing a Forum for Dialogue Understanding Potential Develop yourself and your people
The Appraisal System is a key human resource management system. Whilst the system enables the setting of objectives and facilitates a review of performance against these objectives, it can also be effectively used to build customer focus and enhance competitiveness in order to deliver sustained shareholder value. This is possible if the nature of objectives and the manner in which they are achieved answer the following questions : y When achieved, to what extent will customer value be enhanced ? y When achieved, to what extent will they help the company respond to change ? y When achieved, to what extent will the organisation¶s competitiveness be enhanced ? However, the value of any system does not lie in the system per se, but in the manner in which it is implemented. An effective appraisal process helps the employee focus on objectives, enables him to understand how he is performing against these objectives, helps the organisation adapt to change and implement strategies that create unity of purpose and enhance value creation. In order to win in the market place in a highly competitive environment, we need to continuously strive towards raising the quality index of the human resource. In a few weeks from now, we will be formally engaging in the appraisal process. It is an opportunity for us, in our dual roles as appraiser and appraisee, to add value and meaning to this very important human resource management system.
An Ongoing Process
It is necessary to engage in a formal appraisal process once a year. However, we must guard against the danger of the process degenerating
into a year-end ritual ± something to be got over with for the sake of form. Once objectives are set at the beginning of the year, any time is a good enough time for the job holder and his appraiser to engage in a review of how things are going. Periodic review and feedback on performance as well as the process of dialoguing whereby the individual feeds back his own feelings, difficulties, challenges, etc., spurs on performance and enables the achievement of results against agreed objectives as well as reinforces µdesired behaviours¶ which in turn enhance the competitiveness of the business in order to deliver sustained shareholder value.
Pre-requisites of an Effective Appraisal Process
y A clear definition of the purpose of the job that summarises the overall role of the job holder from the organisation¶s point of view; why the job exists and what contribution it is expected to make ± all this normally expressed in a single sentence. y A statement of the key result areas that flow from the purpose of the job ± statements of the continuing end results and outcomes required of the job, statements which identify what the job achieves and why. y Having listed the key result areas, it is necessary to clearly state the objectives for the year. These objectives must flow from the business, unit and functional plans. Also, how do the objectives contribute to enhancing customer value and the competitiveness of the business. Most importantly, these objectives must be agreed at the beginning of the year and not contrived from memory at the time of the appraisal interview. y For objectives to invoke commitment, they must be agreed between the job holder and the appraiser and not set unilaterally. The process of mutuality engaged in when setting objectives builds commitment and sets the tone for effective empowerment. In involving the job holder intimately in this task of objective setting, criteria for performance are inherently established. For objectives to be meaningful, they must be specific, measurable, y attainable, relevant and time bound.
y The appraisal process must focus on performance against agreed objectives, enable the individual to feed back to the organisation his own feelings, aspirations, difficulties, etc., and serve as a forum for dialogue between the individual and the organisation. y The process must focus on performance, not personality; on facts, not perceptions; and demonstrated behaviour, not hunches. The appraisal process is also an opportunity to comment on the y appraisee¶s managerial and functional competencies in order to identify gaps in these competencies so that he can focus on their enhancement.
Objectives must flow from the business, unit and functional plans and address the key result areas of the job. Most importantly, they must be agreed at the start of the appraisal year. Objectives cannot be set unilaterally if they are to invoke commitment. They must be mutually discussed and agreed between the job holder and his appraiser. It is important that the job holder sees the objectives as helping achievement of the larger objectives of the business so that he sees that achievement of his objectives connect with the larger objectives of the enterprise. Objectives must be : y Specific appraisee must understand them clearly Measurable y quantity, quality, cost and time y Attainable inbuilt stretch but yet be : : : the
in terms of
targets must have
within the capabilities of the appraisee. y Relevant and responsibilities of the job and : to the role
link up Business, Unit, and Functional plans y Time Bound frame within which : agree to a time
Objectives must be achieved, which will also help prioritisation. Objectives can be both task and development focused. Remember, objectives must be S. M. A. R. T.
How can we make the Appraisal Process more effective
y The appraiser and appraisee must see the appraisal process as a two-way process ± as an ideal opportunity to dialogue.
y It is not a process where the appraiser sits in µjudgement¶ over the appraisee. It is a process of review against agreed objectives, attempting to understand how the appraisee can be helped to perform better, exploring together how the individual can build upon and leverage his strengths, mutually exploring ways and means of bridging gaps in functional and managerial competencies.
y Review of performance must be data based, looking at facts rather than at mere perceptions, looking at demonstrated behaviours rather than mere hunches, consciously putting aside past prejudices and µimages¶ in order to take an objective view of performance and behaviour in the immediate past.
y Feedback must focus on task and not personality. Positive and negative feedback must have to do with how results were impacted either positively or negatively. Feedback is not a commentary on the personal worth of the individual as is often understood to be the case. Only then will we be able to give and receive feedback positively without getting inhibited or defensive.
µAbiding Factors¶, are the bedrock of our organisation which transcend functional and managerial competencies. These are sacrosanct. These µAbiding Factors¶ are : y Demonstrated commitment to value creation for the shareholder and other stakeholders. y Living by the Company¶s core values. y Demonstrated commitment and adherence to ITC¶s Code of Professional Conduct.
Appraisals must focus not only on the ³What´ but equally on the ³How´
The appraisal process must focus on ³how´ as much as it focuses on ³what´. It is only then that the process becomes effective in reinforcing ³desired behaviours´ in the organisation. Therefore, the process must focus on whether in the achievement of objectives, the following ³behaviours´ were demonstrated : Strategic Mindset y Approaches problems and opportunities from a broad, business and a strategic perspective rather than from a narrow functional view. y Displays capability to foresee trends, analyses and anticipates subsequent developments or possible outcomes of actions so as to pre-empt losses/exploit opportunities. y Is able to appreciate the impact of day-to-day decisions and actions on medium and long term goals of the unit. y Displays ability to ask insightful questions, identify the core of a problem or an issue and is able to see things from different perspectives. Customer Focus
y Is always pre-occupied with delivering the value proposition of the business. y Is aware of internal and external customer needs. y Listens to customers and assigns the highest priority to customer satisfaction, including internal customers. y Lives customer service and creates a service mind-set amongst all team members. y Looks at work issues from the customer¶s point of view. y Attends to customer feedback with zest and enthusiasm.
Making Things Happen y Displays high energy levels and drive in achieving goals. y Displays cost consciousness and an overriding desire to get best value for money spent. y Exhibits initiative in taking on higher responsibilities. y Displays a positive µwill do¶ approach, spreads enthusiasm, excitement and a winning attitude. y Displays a strong bias for action and a desire to actively seize opportunities. y Takes initiative, anticipates problems. y Recognises the pace of obsolescence ± strives to revitalise and update knowledge and skills all the time. y Listens attentively. Shares information effectively. y Ably negotiates and reaches win-win arrangements with colleagues, suppliers and customers. y Forms cross-functional relationships. Networks and communicates effectively.
Leading Change y Is comfortable with and gets used to new situations easily. y Does not resist change or view it with suspicion. y Experiments with unconventional approaches. Comes up with unique and creative ideas and solutions in the course of his work. y Thinks outside existing boundaries to generate innovative and practical solutions to problems. y Shares his understanding of the need for change with others. y Anticipates apprehensions and uncertainties in times of change and seeks resources to deal with them.
People Leadership y Leads by personal example and creates in others the desire to excel. y Energises people to action, to a sense of belonging, to recognition and self esteem. y Whilst being sensitive to others, demands accountability and commitment to task. y Promotes co-operation and trust within the team. y Demonstrates team spirit, generates involvement, commitment and enthusiasm amongst team members. y Builds respect for different points of view. y Demonstrates a belief in collaboration and mutuality. y Builds a climate of trust and encourages boundaryless behaviour.
Competencies are the building blocks, DNA, of an organisation. They contribute to the distinctive characteristics of each organisation and when nurtured provide sustained competitive advantage. Competencies can be broadly divided into FUNCTIONAL and MANAGERIAL. COMPETENCIES are skills, knowledge effective managerial performance. and behaviour, which underlie
Competencies are clearly defined behaviours which ± y Create a universal language y Set standards
y Maximise objectivity in assessment y Focus assessment on demonstrable behaviours y Anchor assessment in evidence rather than unsubstantiated evaluation Positive indicators are examples of expected results when a competence is employed effectively; contra-indicators state the symptoms of inadequate competence in the defined areas. Competence assessment is the route through which one¶s managerial style as well as results delivered can be discussed, and development needs specifically highlighted. Competencies can be knowledge based and/or skill based and each type of competence has its own set of learning contexts. y Both Functional and Managerial Competencies are equally important in order to build a high performance organisation. Demonstration of both Functional Leadership and Managerial Leadership are essential for Business Leadership positions. Where Managerial Leadership may not be an area of one¶s strength, deep Functional Specialism which contributes to ITC¶s competitive advantage will also be encouraged, nurtured and rewarded.
The fact that the appraisal system requires an overall performance rating must not detract from the effectiveness of the process. Overall ratings are a fact of life and something we need to manage without allowing it to adversely impact the other objectives of the appraisal process. Sometimes the pre-occupation is with the µbottomline¶ ± what finally does all this boil down to rather than how can the process help build greater effectiveness on the job and enhance competencies. We must, therefore, consciously work towards achieving the primary objectives of the appraisal system. At the beginning of the year, when objectives are set and agreed, it is important that the individual knows what makes for µoutstanding¶, µgood¶, µsatisfactory¶, µbarely adequate¶ or µpoor¶ performance. It is important that these are defined in advance and the individual knows what standards will be used to measure performance.
The rating descriptions are as follows: Outstanding Performance y Has exhibited through performance, complete mastery of the present job. y Is a resource to the Organisation beyond his present assignment particularly in the building of People and Systems. y A high level contributor to organisational results and displays outstanding leadership qualities Good Performance y Performance which is over and above the allotted responsibilities and expected standards. y Something extra in the form of a higher output or effort, better quality or insight and improvement in systems. y Dependable without supervision.
Satisfactory Performance y This implies full performance of allotted responsibilities and achievement of expected standards. y Exhibits a fair amount of self-reliance and can be depended on for results with minimum supervision Barely Adequate Performance y Has only partially achieved objectives and not with effective utilisation of resources y Needs to be pushed y Can improve substantially Poor Performance y Has not achieved the objectives despite resources being made available y Lack of effort, apathy and indifference in his job y Miscast in his job
This is an opportunity to emphasise on the importance of well being, share concerns and identify health promoting measures. Here again, it is
important to emphasise that the primary responsibility for good health and well being lies with the individual.
Establishing a Forum for Dialogue
The appraisal interview is also an ideal opportunity for the appraiser and job holder to dialogue on his career ± career not necessarily understood in terms of climbing up the ladder but more importantly in terms of the scope and width of the job, opportunities for job enlargement and learning. Here are a few questions that can constitute the basis for dialogue: Current Assignment y What do you find challenging and exciting about your current assignment ? y Do you feel you are being fully utilised in your current assignment? If not, what suggestions do you have. y What initiatives are you taking to enhance your performance and to deliver greater value ? y What are the training and development efforts that will help you perform your current assignment more effectively ? Goals and Aspirations y What objectives/goals have you set for your personal and professional growth ? y How do you intend to pursue these ? y What specific initiatives are you taking in this regard ? y How can the organisation assist in the process ? Career Plan y What responsibilities do you see yourself capable of assuming ? y What do you see yourself doing three years from now ? y What do you plan to do to prepare yourself for the assignment you see yourself doing three years from now ? It is important to note that the career development process in ITC places the primary responsibility for growth on the individual, with the organisation assisting in the process.
A person¶s potential is the range of abilities and talents that he/she has although not always fully utilised. Potential is an individual¶s reservoir of capabilities and an unquenchable thirst for learning and achievement. Potential capabilities comprise three elements: y Knowledge Technical know-how y Skills Ability to apply know-how y Attitude The pre-disposition that drives positive behaviour The knowledge and skill elements reflect an individual¶s ³can do´ dimension. In the absence of the requisite knowledge and skills an individual cannot perform consistently in the long run. The ³attitude´ reflects an individual¶s ³want to´ and ³will do´ dimensions. For example, a manager with excellent ³know-how´ and ³skill-set´ to accomplish a given task may fail to deliver in the absence of a positive attitude and desire and confidence to deliver. Potential talent is visible and identifiable over consistent observable performance. BEFORE WRITING POTENTIAL, ONE SHOULD THEREFORE FIRST CONSIDER "POTENTIAL FOR WHAT" IDENTIFYING THE APPRAISEE'S POTENTIAL MUST BE DONE BY THE FIRST APPRAISER AND SECOND APPRAISER TOGETHER ON THE BASIS OF: y Skills, knowledge and behaviour as exhibited in the past year while achieving the Objectives, as identified in Section A-II. y Strengths and Areas for Improvement as identified in Section AIII. y An analysis of what competencies the next Higher/Different job (for which the Appraisee might be considered ) entails : the requirements in terms of skills, knowledge, attitude and behaviour.
Develop Yourself and Your People
The Appraisal System is a key process in management development. The Appraisal interview is a significant forum at which development needs are agreed and development plans formulated to maximise potential. Development thus, is the joint responsibility of the Appraiser and the Appraisee.
The Section is, therefore, an important aspect of the Appraisal Process which brings out the development needs of the Appraisee, which when met, enhance individual, team and organisational effectiveness. A specific development plan must be generated by the First Appraiser along with the Appraisee during the course of the Appraisal interview. The Second Appraiser is also required to give his comments on the development plan. Formal Training Programmes are only one of the several development inputs available. Other inputs include: Task Forces
Special Assignments Committees Projects Visits to places of Best Practice Teaching, Guest Faculty Assignments Participation in Professional & Management Fora, etc. A paradigm shift has to take place from Company-driven Learning to Selfdriven Learning, i.e., the responsibility for development rests with the individual, with the organisation assisting in the process. Therefore, the individual must take the initiative for his development.