Seminar 4 case reading

CHAPTER 7 PERFORMANCE APPRAISAL This level of managerial change makes it difficult for the manager to develop a good understanding of the work of the employee and effectively assess their performance. High managerial turnover also inhibits the development of a close working relationship between manager and employee. Better quality reviews occur when both parties know each other well leading to a more open and useful discussion at the performance review. Coverage Experience with the pre-2007 appraisal system demon- strated that senior managers varied in their willingness to undertake appraisals of their junior managers. Senior managers would complain that: … appraisals are time consuming and get in the way of good relationships with my employees. As a result only up to a third of those whose per- formance was supposed to be assessed was actually assessed. The post-2007 appraisal system built in incentives for managers to undertake their appraisal responsibilities: one of the performance objectives of managers is to appraise their staff. The timely com- pletion rates of appraisals is now near 100 per cent, though as one HR official noted, the average rating score for employees at Federation Hospital has also increased from 3.1 to 3.9. Documentation The appraisal system rates employees on a 5-point scale (1 = needs improvement; 5 = outstanding). A copy of the form supplied by HR to all supervising managers is provided in Table 7.1. Reactions among managers to the form were mixed. Some managers felt that the form was a good general framework to help them assess their employee’s performance. Other managers were very unclear about how they were to evaluate their employees. As one manager noted, ‘what is an outstanding in conflict management?’ The appraisal meeting Once a year the supervisor and the employee have a face-to-face meeting to review progress towards the performance goals set at the beginning of the evalua- tion cycle and come up with a performance rating. The younger employees regarded the appraisal meeting as a good opportunity to find out how they were doing. For the most part, younger employees were seen to be Table 7.1 Appraisal form at Federation Hospital Employee name: Employee ID: Supervisor: Date of appraisal: needs Improvemen t Avera ge Go od Very Good outstandi ng Effective conflict management skills 1 2 3 4 5 Meets punctuality standards 1 2 3 4 5 Quality focus 1 2 3 4 5 Completes work in a timely manner 1 2 3 4 5 Works accurately 1 2 3 4 5 Works well under pressure 1 2 3 4 5 Courteous to others 1 2 3 4 5 Follows instructions 1 2 3 4 5 Total score Comments: Employee signature: 200

regular informal feedback from my supervisor regard- ing my progress towards agreed targets and objectives.’ Employees with a more positive experience point out that they have requested and received, additional mid cycle review. They saw mid cycle reviews as useful to fine-tune, and often to replace, objectives that had been rendered obsolete by a rapidly changing organisational environ- ment. Mid cycle reviews allowed for individual objectives to be kept in line with changes in business strategy. In addition to the lack of informal feedback there was some concern about the quality of the infor- mal feedback. For some employees, the mid cycle reviews were rushed ‘corridor and canteen chats’ that tended to focus on the negatives (e.g. patient complaints) rather than any positives (e.g. success- fully dealing with difficult patient families). Some employees worried that this would bias their perfor- mance rating: their manager would recall only the negatives at their formal appraisal meeting. objective setting The increased emphasis on work objectives and meas- urability promoted by the CEO is reflected in the issues covered in the appraisal process, with employees reporting that the achievement and planning of work objectives were the most thoroughly discussed issues in the appraisal process (see Table 7.4). In Table 7.6 employees provide insights into the qual- ity of the objective setting process. Supervisors were doing a good job at setting clear goals with 46 per cent agreeing or strongly agreeing with the statement ‘the

CHAPTER 7 PERFORMANCE APPRAISAL Table 7.6 Objective setting process 5 4 3 2 1 Stron gly neith er Agree nor Strongly Agree % Agree % Disagree % Disagree % Disagree % The goals that I am to achieve are clear. 8 38 22 24 8 The most important parts of my job are emphasised in my performance appraisal. 3 31 38 21 7 The performance appraisal system helps me understand my personal weaknesses. 5 47 19 26 3 My supervisor allows me to help choose the goals that I am to achieve. 13 29 31 18 9 The performance appraisal system helps me to understand my job better. 3 29 27 32 9 The performance appraisal system gives me a good idea of how I am doing in my job. 6 39 25 24 6 than being measured against something which you yourself have declared as being in need of being done and finding that you couldn’t possibly do it. The connection between the objectives and an employee’s jobs was not clear for 32 per cent of employees. This seems to be due, in part, to the increasing emphasis on teamwork in the hospital but the emphasis on individual performance in the appraisal process. The focus on identifying and mak- ing improvements was clear to employees: 52 per cent agreed or strongly agreed with the statement: ‘the per- formance appraisal system helps me understand my personal weaknesses’. Accuracy of appraisal HR encourages both supervisors and employees to collect data on performance throughout the year and then bring it along to the appraisal meeting. I always try to get my facts right first before approaching an employee, rather than going on hearsay. Try to establish some substance towards giving that feedback, and if they say it was just hearsay, you’ve got evidence to back it up. Supervisors prefer to rely on the objectives set at the beginning of the evaluation cycle. 204

Questions How effective is the appraisal system at Federation Hospital? Think about its impact on employee perfor- mance and retention. Should Federation Hospital retain the current appraisal system? Why or why not? What challenges do managers at Federation Hospital face when rating employee performance? How effective are the managers at evaluating employee performance? How would you rate the fit between the appraisal system, the objectives of the hospital and nature of the work undertaken? Should the CEO of Federation Hospital include a 360-degree feedback system for all managers? Why or why not? Would a feedforward system be appropriate for Federation Hospital?