Truth and Consequences

Why tough ''360'' reviews and employee ranking are gaining fans.

Flint once did traditional evaluations on its 4,000 employees — a massive undertaking, according to Tom Emerson, director of employee relations, and one the company didn’t do very well. “We talked to our employees about what they didn’t like about evaluations, and they said [evaluations] had no credibility,” he says. “The managers didn’t know what they were talking about; they micromanaged small problem areas, but overlooked big areas of strengths and competencies.” Employees called it “evaluation by ambush,” noting that they were told to “meet a standard that they’d never even heard of before.”

So when Flint revamped the evaluations three years ago, it created an employee development plan (EDP) in which half an employee’s score derives from performance in the core-competency areas of teamwork, productivity, quality, problem-solving, dependability, and communication. Supervisors weigh each area by its importance to a specific job, then score the employee on a 1-to-4 scale in each area. The other half of the evaluation reflects performance of job-specific responsibilities, and this is where the employee input comes in. While the boss identifies macro responsibilities, the employees develop judging standards — and interestingly, often set standards unrealistically high, requiring supervisors to intercede and lower those standards before the evaluation, according to Emerson.

A crucial element of the program is a series of workshops showing managers how to give feedback and, more important, showing employees how to receive it. The EDP system also ties employees’ scores directly to company succession-planning. “That shows our senior executives that we’re very serious about everyone being part of this,” says Emerson.

The company is planning to use a revenue-per-employee measurement to track the program’s success. But Flint president and chief operating officer Dave Frescoln already considers it a hit, based on employee response. “We tell people that they’re our most important asset,” he says. “If we really believe that, we ought to be spending a significant portion of our time developing our people.”

Kris Frieswick is a staff writer at CFO.

For Your Benefit

Top reasons that executives give for doing reviews.

  1. Provide information to employees about their performance.
  2. Clarify organizational expectations of employees.
  3. Identify developmental needs.
  4. Gather information for pay decisions.
  5. Gather information for coaching.
  6. Document performance for employee records.
  7. Gather information for promotion decisions.

Source: SHRM® /PDI 2000 Performance Management Survey

Who’s the Boss?

Groups that contribute to performance appraisals.

  • Supervisor: 96%
  • Other Management: 49%
  • Self: 61%
  • Peers: 16%
  • Reports: 12%
  • Customers: 13%
  • Others: 4%

Source: SHRM® /PDI 2000 Performance Management Survey

Reviewing Without Reviews

Some companies get so frustrated with the limitations of traditional employee evaluations that they choose not to do any at all.

According to Mary Jenkins, co-author of Abolishing Performance Appraisals, companies don’t need to critique workers to determine their pay levels, or to create a legal paper trail if an employee needs to be disciplined. “We have a love affair with performance appraisals,” says Jenkins. “We’ve been trying to do them for 50 years, and there’s about a 90-percent dissatisfaction rate with the process.”

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