By Heather Cameron

In a time of austerity, there is increasing pressure to get the best out of staff in order to improve organisational performance, particularly in the public sector.

Staff performance appraisals are a well-established practice in most organisations but there has been much debate over their effectiveness. Many say they are time-consuming and involve too much paperwork. Others say they are a key part of an organisation’s human resources strategy and align the strategy and objectives of an organisation with those of individuals, which is necessary for effective service delivery.

Why performance management?

A number of reasons have been highlighted for implementing performance management in any organisation, including:

• to provide information on organisational and/or employee effectiveness and efficiency
• to improve organisational and/or employee effectiveness and efficiency
• to improve employees’ levels of motivation
• to link employees’ pay with perceptions of their performance
• to raise levels of employee accountability
• to align employees’ objectives with those of the organisation

In the public sector, the aim of performance management is to motivate staff and managers to improve organisational performance and therefore effectively deliver services.

But while this may seem simple enough, is this what is happening in practice? Some would argue that performance appraisals have the opposite effect of motivating staff and lead to increased pressure and stress, resulting in poorer performance.

Concerns

A recent survey of over 25,000 civil servants highlighted widespread concern over how performance management is working in practice.  A huge majority (94%) said it was unfair that 10% of staff should be ranked as ‘must improve’, a recommendation that has been suggested to lead to discrimination against black and minority ethnic (BAME) staff, those who are disabled and part-time workers.

Performance appraisals have also been described as a “waste of time” or “tick-box exercise”.

The CIPD Employee outlook surveys have consistently revealed a general dissatisfaction with performance management practices among employees, with the most concern shown in the public sector. The most recent survey highlights a slump in job satisfaction and a lack of motivation among employees, and an increase in the number believing their performance management processes are unfair.

And this is not new. There have been concerns over the effectiveness of such systems in the public sector for some time. Research by the World Bank in 2003, which considered factors influencing better performance in public administration, concluded that performance management systems demonstrated remarkably little influence on anything and in some cases produced negative effects.

Lack of understanding

The literature suggests that the reasons for such criticism of performance appraisals more recently include: people generally don’t like to evaluate or be evaluated; the nature of public affairs being hard to quantify makes it difficult to develop performance objectives and measureable performance indicators; these systems tend to create more paperwork and increase both performance pressure and stress; and a lack of understanding of such systems among managers.

As a former chief executive of the Institute for Leadership and Management (ILM) emphasised:

“One of the skills that is often not developed is understanding what an appraisal is and why it is relevant to the whole organisation’s success… Being able to appraise is a fundamental management skill.”

So rather than scrapping them all together, perhaps a culture change within organisations is what is needed.

Good practice

Indeed, there have been signs of innovation within the public sector when it comes to performance appraisals.

An innovative approach to the employee appraisal form was taken by South Lakeland district council which has shown promising results. A personal qualities framework was created which was used to redesign the appraisal form. It was tested, staff were informed about it and line managers received training in how to use it.

After two years of the framework being introduced, peer reviews were good, their Investors in People award was the best yet, the staff survey highlighted many positive messages, and customer and member satisfaction had improved significantly.

Similarly, Wiltshire Council developed a successful transformation and ongoing culture change programme which resulted in significant efficiencies being delivered.

The council’s behaviours framework was developed to clarify social expectations of staff by defining ‘how’ staff are expected to approach work alongside ‘what’ they deliver. The behaviours have since been embedded into: a new on-line appraisals solution, job description templates, recruitment procedures, human resource policies and employee well-being initiatives, and corporate awards categories and selection criteria.

A training programme for all people managers also inspired new thinking and provided approaches and skills for performance managing for the behaviours, skills and objective setting.

Research by Nesta suggests that performance appraisal can also help to harness motivation to innovate in the public sector by valuing appropriate behaviours.

So perhaps staff appraisals have a future after all.

---

Read our previous blog post on performance-related pay in the public sector.

Follow us on Twitter to see what developments in public and social policy are interesting our research team.