Making Reviews More Efficient and Fair - performance-appraisal software

Workforce, April, 2001 by Gail Dutton

Ideally, performance-appraisal software streamlines the evaluation process, reduces paperwork, and encourages objectivity. But the gains aren't givens. Managers have to spend some time tailoring the systems to their own workforces. If they don't, says Gene Drumm, senior partner with the Vector Group, Inc. in Denver, "it's a more efficient way of doing a bad process."

The problem, Drumm says, is that many software programs have a generic set of questions that too often aren't customized for the jobs being evaluated. It doesn't have to be that way. Despite charges of "cookie-cutter" evaluations, managers have the option of customizing most programs so they accurately reflect the goals and values of the organization and, perhaps more importantly, so they fairly evaluate the jobs being appraised.

Independent research on performance-appraisal software, as yet, is virtually non-existent. Anecdotal reports tend to focus on speed and objectivity. For example, Walker Information, a survey firm in Indianapolis, developed its own 360-degree appraisal software for in-house use only, three or four years ago, according to Ray Becker, senior vice president for organizational effectiveness and ethics. "It's easier, faster and uses less paper." Appraisals done with paper-and-pen would take about six weeks from the beginning of the process to the time that final reports were issued. Now reports can be completed in one day. As a result, Becker says that more appraisals are completed on time. As for the outcomes, "Some employees don't like the results, but they're happy with this system."

For managers, many of whom are uncomfortable giving feedback, performance-appraisal software helps to pinpoint areas that need improvement and to communicate the information to their staffs. According to the "2000 Performance Management Survey," conducted for the Society for Human Resource Management, only 33 percent were satisfied with coaching efforts. The survey also found that only 34 percent were satisfied with their developmental planning. Yet, if companies focused on the developmental side of performance management as identifying training needs or coaching, they got far more out of the evaluation process, says Scott Snell, professor of business administration at Penn State University. When goals are agreed to by the employee and the manager, he says, employees are more likely to accept the standards, because they had some input.

Since software-based performance-appraisals tend to focus on results and actions rather than personality traits, employees are more likely to view them as fair. They provide objective facts that can be used to craft individual development plans, and to help employees not only improve performance but also focus more closely on achieving the organization's key goals.

Small Company

Company Name: Red Hat, Inc.

Location: Durham, North Carolina

Number of Employees: 575

Type of Company: Linux operating system developer

Web address: www.red hat.com

System: Performaworks Performance eWorkbench

Moving from paper to Web-based performance appraisals was a natural decision for Red Hat, the fast-growing company that took on Microsoft with its Linux open source operating system. "Everybody at Red Hat has Internet access," says Karen Clark, director of corporate human relations. Given the company's business interests throughout the world, it was important to provide real time access to a performance management system to every employee from any computer at any time, she says.

Ensuring around-the-clock access meant putting the system on the Internet. The data actually resides on Performaworks' server, Clark says, which allows employee access from any computer--not just those issued by Red Hat. Since the system can handle a million users simultaneously, continued growth won't become a problem. Red Hat has no limit on the number of hits to the Performaworks system, says Sandra Gault, vice president of marketing and business development for Performaworks.

The Internet-based system also has the advantage of openness. Employees can see their performance evaluations and track progress toward goals. This allows them to make strategic changes to improve their progress, question comments, and correct mistakes in the documentation. Ultimately, a more accurate appraisal is achieved.

The Performance eWorkbench system provides a cascade of company goals, from top management on down, so employees enter their own goals to support the corporate objectives. That input increases their commitment to those goals. Additionally, Clark says, they have a view of how their goals align with their manager's goals and how they all fit into the corporation's goals. The software also lists the competencies that apply to each job.

As a result, employees and managers can design development plans to help employees achieve those goals and can document their progress, thus helping employees maintain a more consistent focus on what's really important to the company. That information is then used for performance reviews, providing accurate, objective data over a 12-month period. In contrast, performance appraisals using the old paper-based method tended to focus on events of the past 6 to 12 weeks, Clark says.