Strategic Performance Appraisal

Delana Eichinger

Melissa Holthaus

Erin Silver

What is Strategic Performance Appraisal and Why Does it Matter? Strategic Performance Appraisal-

employees evaluated by individual goals that are linked to overall organizational goals and objectives

Part of the performance management system, which organizes, facilitates and assesses employee contribution to overall company success

What is Strategic Performance Appraisal and Why Does it Matter? Performance management- requires

demonstration of performance outcomes using specific metrics (i.e. productivity, decrease in costs, etc…)

The process of performance appraisal, in conjunction with overall performance management, seeks to explain how employees contribute to the BOTTOM LINE.

Strategic Performance Appraisal Trends

Forced Ranking Forces managers to make serious

choices about employee performanceEmpowers managers to adhere to

strict performance objectivesRecent criticism Suggestion: make forced ranking

systems more flexible

Strategic Performance Appraisal Trends Calibration meetings- managers and

supervisors discuss performance ratings and come to a consensus on individual ratings

Improves differentiation factor Strengthens credibility and validity of

ratings Reinforces perceived importance of

process

Strategic Performance Appraisal Trends

Performance management as a function of training and development

New function deemed ‘L&P’ Workforce performance and learning

goals identified, based on organizational objectives

Developmental processes to achieve goals then formed (not courses)

Strategic Performance Appraisal Trends Reducing the scope of topics in PA

sessions Day-to-Day feedback Feedback as a valuable service, not a

reprimand Manager as a ‘coach’ instead of ‘appraiser’ Allows for future career planning and

organizational goal linkage

Strategic Performance Appraisal Trends

Changing the employee perception of performance management

Help employees set appropriate goals Establish performance metrics All metrics and rewards should be tied

to organizational strategy; goals should reinforce company culture

Examples of Traditional PA

A manager performs the appraisal annually, based on individual productivity stats

The appraiser fills out a form which states the employee’s productivity and some subjective comments about behavior

The appraisal’s main purpose is to determine raises and promotions

A ‘Performance’ Example

Examples of Strategic Performance Appraisal An organization’s core values include

continuous improvement of customer service. A goal is set during the PA process that involves reducing customer service complaints by 15% in the coming year. This is linked to organizational values and is measurable.

Examples of Strategic Performance Appraisal (cont.)

The manager establishes bi-monthly feedback sessions, where employees and managers have a brief one-on-one conversation regarding current performance goals and standards related to the status of the organization at that specific point in time.

Another ‘Performance’ Example

How are Organizations Using Strategic PA? Serono S.A. Employees set their own goals, which

must include one of the 15 core competencies

The core competencies are all tied into one of the five “pillars of excellence”

http://www.serono.com/index.html

How are Organizations Using Strategic PA? Bristol-Myers Squibb Change in focus from past

performance to forward-focus and goal attainment

Employees and managers now have an ongoing ‘performance partnership’

Expectations adjusted and based on global corporate demands

http://www.bms.com/landing/data/index.html