People & Process Thoughts

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ISO9001 and the Challenges of the Appraisal Process

Performance Appraisal. Two words that will usually raise a groan from both line managers and employees alike. It appears to be a challenging area for a majority of companies.

  • Problem number 1 -- Getting them to happen in first place

This issue seems to be particularly prevalent in companies where the performance appraisal is not directly linked to any kind of subsequent salary review/bonus scheme and therefore no drop dead deadline. For the busy line manager, it's time consuming. There will always be what is deemed to be a more pressing issue. The client delivery is late. A short notice meeting is called. A new urgent job request has come in. The line manager thinks, 'oh well, we'll just postpone the appraisal for a couple of weeks'. Before you know it, the appraisal that was due at the end of the month is now several months late. In fact, it's almost coming up to 2 years since the last one. Not good. So, it's all rather 'hit and miss'.

  • Problem number 2 -- Getting them to really deliver

There are many organizations where the performance appraisal does happen on a regular basis. Especially when there is a direct link between the performance management process and a bonus scheme or salary review, even if there is a time lag between them.

But levels of discontent amongst employees with this kind of scheme are often still high. Some of that is due to the ways in which potential salary increments / bonuses might be calculated. It doesn't seem right that in some companies, people have to be 'ranked' within their department for example in line with the Bell Curve. If all staff are excellent, forcing any kind of ranking is de-motivating at best, and even worse, may cause a good employee to leave. If the level to which you meet 'expectations' will determine your increment, it feels harsh if there is no mechanism to ensure consistency between managers 'expectations' - a very subjective measure. How frustrating if you have one of those bosses who never likes to grade more than 'meets expectations', because they say 'my expectations are naturally high'.

But, leaving the complexities of if and how appraisals results link in to financial rewards aside, the point is that regardless of what type of company you work in, unless the appraisal is well structured with a focus on development planning and training, it can feel like a box ticking and rather bureaucratic exercise. And one that no one enjoys.

If you are looking to achieve ISO9001 compliance, this is certainly an area that will need close attention.

The first thing you'll notice in ISO9001:2008 section 6.2.2 'Competence, Training and Awareness' is that there is no specific reference to the words 'performance appraisal', 'performance review' or 'performance management' . However, you are required to 'determine the necessary competence for personnel performing work affecting conformity to product requirements'. And 'where applicable, provide training or take other actions to achieve the necessary competence' and to evaluate the 'effectiveness of the actions taken'. Some of this will be met at the initial recruitment stage. Firstly, in the creation of job specifications that clearly call out the skills and qualifications specifically required for the job role itself. Secondly, this should be followed up in the selection of a candidate that matches those requirements.

But, once recruited, it is then necessary to ensure that the person in the role is actually demonstrating those skills. If any weaknesses are detected or enhancements required, then action to address this must be taken -- typically via training, whether that be internal or external.

It's here where the performance appraisal comes in. There needs to be some kind of documented evidence that people have the relevant competence, and the review process is a clear way in which this can be achieved. Perhaps not the only way, but the obvious way.

And whilst the review must look at performance over the time period being assessed, it is equally important to plan future action to address any issues or concerns in skills or competence. When that action has been taken, time must be taken to analyze whether that action has addressed the concerns in question. (Of course, if the person in question is consistently under-performing, then records of poor performance may be vital to show just cause for termination and avoid potential unfair dismissal claims).

The standard also calls to 'ensure that its personnel are aware of the relevance and importance of their activities and how they contribute to the achievement of quality objectives'. So there is clearly a need for any objective setting to reflect key company goals. Management must be held responsible for ensuring that their line managers have the relevant understanding of those objectives in order for them to filter down through the organization.

The final element of section 6.2.2 'Competence, Training and Awareness' is that the organization 'should maintain appropriate records of education, training, skills and experience'. So the performance appraisal can act as a record as to what training, skills and experience has been gained by that individual as time goes on.

So all this considered, what best for the company aiming to achieve ISO9001 compliance?

Focus on eliminating the most common grumbles so that both employee and line manager buy in to the performance review process. The main ones being:

  • A typical tendency to focus on recent events rather than the full year, because that's what people can most clearly remember. Meaning that earlier achievements and problems can be overlooked.
  • Overambitious complicated forms, which are extremely time consuming to complete.
  • Objectives are set, which over the duration of the year become impossible to meet due to changes in circumstances within the business, outside of the employees control.
  • Too many surprises in the appraisal itself.
  • The person doing the appraisal does not have full view of your work and without input from others can only provide a limited perspective.
  • The person doing the appraisal is poorly trained in the process.
  • Too little time is spent looking ahead at future needs, training and development

There is a strong case for short, interim quarterly reviews with key points recorded in simple forms making the compilation of the years annual (and streamlined) appraisal much easier. No forgetting what happened at the start of the year that way. Maybe you want to do away with the big annual assessment altogether -- no reason why not, but you have to have something else -- nothing isn't an option!

The following points seem most relevant for consideration:

  • Provide training/guidance for those running the appraisal. It really is a skill and should not be overlooked. (If a key requirement of a role is management of staff, then to fail to provide this is surely a failure of the business to address the competencies needed for the job -- which therefore goes against the premise of 6.2.2).
  • Keep forms simple, not too long. No one should have to spend days and days preparing for paperwork for an appraisal. Ensure however that:
    • You assess key competencies identified for the role.
    • You incorporate effectiveness of any training undertaken into the review.
    • You can demonstrate identification of any skills or training required for the future period, ideally incorporating into specific objectives.
    • At least one or two objectives relate to company quality objectives as a whole.
    This does mean some real thought into the design and specific phrasing and structure of the forms you use and questions you ask.
  • Obtain 360 feed-back from relevant people to provide a balanced view, especially where the employee -- manager relationship is not 1-2-1.
  • At the very least, when setting objectives, ensure that there is a review date set 6 months down the line to check that objectives set are still relevant and that business circumstances have not invalidated the goal. If it has, then amend and update as necessary.
  • Don't store up 'issues' to discuss in the appraisal itself -- any problems should be addressed at the time and therefore the appraisal should contain no major surprises.
  • Make sure everyone gets some benefit out of the appraisal -- development planning is something which should not be overlooked, Employees should be provided with direction on how they can grow. Manage and develop performance, don't just review it.

Do be mindful. Complying with this part of the standard brings an administrative burden. Poor records of skills, training, experience and assessment of effectiveness of training will lead to non-conformities and a breakdown of the process as a whole will result in a major non-conformity. ISO9001 is not forgiving of lack of evidence. But it does not tell you how to do it. It's up to you find something that works for you organization.

Unless your performance management process is already working smoothly -- and well done if it is, it isn't an easy one to crack -- it feels like a good time for a rethink.

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