Performance appraisals have been around since the first world war (Cappelli and Tavis,2016) when they were developed as a means of identifying poor performers. “After World War II, about 60% of U.S. companies were using them (by the 1960s, it was closer to 90%.” (Cappelli and Tavis, 2016). Many companies are now reviewing their approach to performance appraisals (Cappelli and Tavis, 2016) however, this does not appear to signal the end of appraisals but a significant number of organisations are changing the process in some way (CIPD’s Could do better? Assessing what works in performance management, 2016).
Researching the theory around Human Resource Management (HRM) lead me to the following statement ” ..often seen as the major factor differentiating between successful and unsuccessful organisation,…” (Marchington and Wilkinson, 2008 quoted in Managing and Leading People Module Day 3, Loughborough University, p5, 2017). It appears fundamental then that as Bos-Nehles et al, (2013) state “HRM managers should also ensure that line managers understand their HRM role…” and one of the four guidelines suggested by Hiltrop (2005) “Build HR capability into the role and mindset of every manager” is key to successful delivery of HRM.
Bos-Nehles et al (2013) also argue that “In many studies, the quality of HRM is measured by assessing the HRM practices that a company has in place…..”. “rather than the effectiveness of their implementation.”. The implementation of HR policies is seen as a less important aspect as can be seen in Gratton & Truss (2003) in the “The three-dimensional people strategy: Putting human resources policies into action” where they argue that the little attention has previously been paid to implementation but their research shows “translating HR policies into action would appear to be absolutely fundamental to the question of whether an organization is delivering in the area of people management.”
The ability of managers to successfully implement HR policies, is covered by Boxall and Purcell (2003, quoted in Managing and Leading People Module, Day 3, Loughborough University, p5, 30 November 2018), who look at a the complexity of human behaviour when they state “There is no such thing as the single HR practice of the firm. It is more accurate to imagine the HR practices of the firm as norms around which there is variation due to the idiosyncratic behaviour of line managers” from this we could deduce that line managers may be able to implement the HR policies but there will always be differences on how this actually happens. Subjectivity and bias will always be key variables in the performance management process and this relates to managers and employees who will be influenced by a large number of factors including, how they have been appraised in the past and bias from own views and beliefs. A Harvard Business Review article goes a stage further with the argument that “each of us is a disturbingly unreliable rater of other people’s performance.” (Buckingham, 2015). Buckingham (2015) throws another ‘curve ball’ at managers/implementers when referring to “Idiosyncratic Rater Effect”, here he argues that in an appraisal situation so many variable are brought into the rating that it ends up saying “my rating reveals to the world far more about me than it does about you.”.
Bos-Nehles et al, (2013) also argue that “It is generally accepted that competence in performing HRM practices can be developed through training.”. The training budgets of organisations must reflect this given the importance placed on it by organisations (YBSG, Goldman Sachs) and evidence from research (Marchington and Wilkinson (2008, quoted in Managing and Leading People Module, Day 3, Loughborough University, p5, 2017). Considering that in my experience individuals are promoted on the basis of their technical expertise or experience with little emphasis on the ability to lead, training is fundamental to the development of the employee into a successful manager.
de Geus (1997) suggested that the reason so many companies “die young” was that the focus of the management was on producing something that impacts the economics of the company. de Geus found that companies forget that they are “a community of human beings that is in business – any business – to stay alive”. This is important when we consider the public statements made by companies regarding people being the most important assets of the business.
Nishii & Lepak (2008) find that “…employees respond attitudinally and behaviorally to HR practices based on the attributions they make about management’s purpose in implementing the actual HR practices.” with the example used of safety at work and one employee might see that as a means of ensuring a safe working environment but others might look at this as cost cutting based on saving claims for injury through insurance policies. The “why” as Nishii and Lepak (2008) put it is the key to determining the impact on employee response and engagement.
When an organisation ensures its HRM policies are linked with the strategy of the firm this increases the chance of success, see Hiltrop (2005) guidelines “Maintain a high level of consistency between strategy and HR practices”. This also fits with my second recommendation for improvement where I have suggested this linkage is a requirement of the objective/goal setting exercise involving the employee (McGregor, 1957).
An added complexity of performance management is the variety of the workforce. As an example, Millenials have different views and needs. They demand more from an employer regarding development according to Henderson (2012) who cites research showing that a lateral career move would be an option to gain beneficial work experience. Henderson also states than millennials are willing to “travel frequently for work” and job satisfaction is more important than the size of salary. Calk and Patrick (2017) conclude in their research regarding Millennials, that they are “…more positive and collaborative than previous generations. The low score on safety reinforces a willingness to change jobs in search of more leisure or a more challenging and satisfying work environment…”