appraising auditor performance: strategies and lessons learned
TRANSCRIPT
Appraising Auditor Performance: Strategies and
Lessons Learned
Susan Cohen, City AuditorCity of Seattle
May 12, 2004
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Agenda
Reflecting on performance appraisal experiences
Lessons learned about performance appraisals
Dealing with performance appraisals and other difficult conversations
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Credit
Wilson, Thomas B. Innovative Reward Systems For the Changing Workplace McGraw-Hill, New York 1994
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Definition
A PERFORMANCE APPRAISAL IS:
One of those special human encounters where the manager gets no sleep the night before, and the employee gets no sleep the night after.
--Thomas B. Wilson
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Appraising vs. Managing Performance
Appraising: Limited (annual)
feedback Artificial rewards
Managing: Continuous
management review Active and appropriate
reinforcement
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What Do We Want? Managers: Ability to recognize and reward
superior performers. Employees: Honest and timely feedback, specific
development, and an opportunity to receive effective coaching.
Compensation Managers: To ensure that dollars are allocated according to performance levels.
Human Resource Executives: Ability to identify top performers, plan for their development and succession, and reward them adequately.
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What the Experts Say
Quality management gurus (Deming, Juran) argue that appraisals should be eliminated because they:
Inaccurately portray individual performance as a major impact on results
Inadequately address system-based issues.
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Did You Know?
At least two dozen studies over the last three decades conclusively documented that people who expect a reward for completing a task, or for doing that task successfully, simply do not perform as well as those who expect no reward at all.
--Harry Levinson
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Rewards or Punishment? Pay is not a motivator Rewards have a punitive effect because they
are manipulative Not receiving an expected reward is also
indistinguishable from being punished. Rewards rupture relationships Rewards undermine interest because artificial
incentive cannot match intrinsic motivation
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Goals for Appraisal System #1
“Providing staff with information designed to maximize their individual potential and contributions to the agency
“Providing management with information needed to recognize and reward top performers
“Providing information and documentation needed to deal with poor performers”
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Goals for Appraisal System #2
“Feedback to auditors “How to improve skills and personal
qualities “Effective utilization of resources”
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Goals for Appraisal System #3 “Provide employees with feedback to improve performance “Provide basis for allocating pay increases/incentive awards “Focus training and development activities “Identify candidates for promotion “Create an opportunity for employees to receive recognition “Assure adequate documentation of performance that satisfies
the requirements of the 1964 Civil Rights Act and EEO Commission guidelines
“Improve communication between managers and employees “Establish performance goals and standards for the next
performance period”
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Goals for Appraisal System #4
“Reinforce collaboration, teamwork, and a focus on the priorities of the business”
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Overarching Goal
To create and promote a workforce that can achieve the organization’s mission to provide the most value to its stakeholders
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Evaluation Criteria #1
Planning Data Gathering and Documentation Data Analysis Written Communication Oral Communication Working Relations Supervision
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Evaluation Criteria #2 Achieving Results Maintaining Client and Customer Focus Developing People Thinking Critically Improving Professional Competence Collaborating with Others Presenting Information Orally and in
Writing Facilitating and Implementing Change Representing the Organization Investing Resources Leading Others
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Evaluation Criteria #3
Amount of Work Quality of Work Auditor Knowledge Problem-Solving Ability Communications Effectiveness Ability to Follow Instructions Planning Skills Relationships
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Remember Myers-Briggs
Anyone who supervises someone else should:
--Look carefully at the assumptions made about motivation.
--Assess the degree to which carrot-and-stick assumptions influence own attitudes.
--Harry Levinson
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Various Scales Scale 1
Meets Expectations
Exceeds Expectations
Role Model
Below Expectations
Scale 2
Pass
Fail
Scale 3
Unacceptable
Needs Improvements
Fully Successful
Exceeds Fully Successful
Outstanding Scale 4
No scale--qualitative information only
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Typical vs. Ideal System
Highly subjective process
Unilateral from boss’s perspective
Little focus on future capacity
Uncertain link to business success drivers
Explicitly defined process
Mutually understood Strong development
focus Grounded in business
success drivers
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New Practices Pass/fail systems rather than individual
performance ratings, or no ratings at all Peer review systems rather than manager-
driven systems Using review periods as a means to counsel
employees on career and promotional opportunities
Minimizing the relationship between performance and pay raises
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Why Appraisal Systems Fail
Managers lack sufficient information to judge performance accurately
The goals and standards are unclear and subjective
Employees become defensive The process is not taken seriously Managers do not prepare adequately
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SMART
Specific Meaningful Achievable Reliable Timely
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Legal Considerations Personnel laws and court cases have established
requirements for performance appraisals:
--Performance measures must relate directly to the job
--Evaluations must be based solely on job criteria
--Results of evaluations must serve as the basis for making decisions (e.g., salary, training, promoting, layoffs, and terminations)
--Performance appraisals must be conducted at least once a year
– (Civil Rights Act, Bito v Zia Company, Griggs v Duke Power, Wade v Miss.)
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Employee Considerations
Clear sense of direction Opportunity to participate in goal-setting Timely, honest, and meaningful feedback Immediate, meaningful, and sincere reinforcement
of efforts Coaching and assistance to improve job
performance Fair and respectful treatment Opportunity to understand and influence decisions
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Susan’s Favorite Quote
If people do not participate in and “own” the solution to the problems or agree to the decision, implementation will be halfhearted at best, probably misunderstood, and more likely than not fail.
--Michael Doyle in forward to Kaner, Sam Facilitator’s Guide to Participatory Decision Making New Society Publishers, Gabriola Island, BC 1996
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Performance Management
Instead of Performance Appraisals
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Performance Management Communicate the organization’s mission,
strategies, and performance goals Establish performance measures to reflect both
quantitative and qualitative elements. Identify goals that balance short-term results with
longer-term success indicators Ensure that employees throughout the audit
function understand the organization's goals
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Performance Management (cont.)
• Foster employee involvement in goal-setting process
Provide training to managers and employees on giving and receiving feedback
Designate manager to serve as mentor and assist employees in using feedback for performance improvements
Provide training for employees to strengthen performance and advance career
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Feedback Feedback should be related to meaningful
consequence Quantitative assessments valued more than
narrative or subjective assessments Public displays for group results and private
meetings for individual feedback Daily, weekly or biweekly feedback is valued
more than annual feedback Self-assessments have little value as an
objective and meaningful source
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Five Stages of Difficult Conversations
1) Prepare
2) Imagine resolution
3) Initiate conversation
4) Explore their story, then yours
5) Collaborate on resolution
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Stage 1: Prepare
Consider your objectives and approach Coach yourself to accept multiple outcomes Focus on your purpose in initiating the
conversation Adopt a positive mindset (see next slide)
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Choose a Positive Context
When a conflict is framed in a negative context, the focus is on power, and will likely result in a winner and a loser.
“If a hammer is the only tool you have, everything looks like a nail.”
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Stage 2: Imagine Resolution
Relationship will improve as a result of conversation
Remain open-minded rather than advocate for a specific solution
Believe that a mutually acceptable solution can be achieved
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Stage 3: Initiate Conversation
Invite conversation and share your purpose Key practice: describe the issue/problem as
a difference in perspective Avoid problem solving during initial stage
of conversation Acknowledge feelings that are frequently
core issues, before attempting to solve stated problems
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Stage 4: Explore Their Story-- Then Yours
Start with their story Don’t assume that you know their story Don’t push back—Listening does not imply
agreement Express your views and feelings after their
story is finished
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Your Story
Start with the most important points State what you mean clearly to avoid
assumptions Share how you formed conclusions Avoid words like “never” or “always” or
“fault” Present your story as “your truth” not “the
truth”
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Stage 5: Collaborate on Resolution
Invite the other person to help identify solutions
Invite the other person to come back if attempted resolution is not successful
Remain hopeful that mutually acceptable solution is possible