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Guidelines for Performance Appraisal As at 24 January 2006
Guidelines for Performance Appraisal As at 24 January 2006
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Contents 1 Introduction ................................................................................................................. 3 2 Target groups.............................................................................................................. 3 3 How does performance appraisal work? ..................................................................... 4 4 Instruments of performance appraisal......................................................................... 7
4.1 Target agreements .............................................................................................8 4.1.1 How to use target agreements for performance appraisal............................8 4.1.2 Preparing target agreements........................................................................8 4.1.3 Contents and procedure...............................................................................8 4.1.4 Target agreements with groups and teams ................................................14
4.2 Structured appraisal systems............................................................................14 4.2.1 How to use structured appraisal systems for performance appraisal .........14 4.2.2 Preparing a structured appraisal system ....................................................15 4.2.3 Contents and procedure.............................................................................17
4.3 Advantages and disadvantages of the instruments ..........................................18 5 What about the traditional evaluation systems?........................................................ 21 6 What else to consider with the new system............................................................... 24
6.1 Appraisal period................................................................................................24 6.2 Pace of the procedure ......................................................................................24 6.3 Understandable and coherent appraisal ...........................................................25 6.4 Special groups and situations...........................................................................25
7 Procedures for settling disputes ................................................................................ 26 8 Legal aspects ............................................................................................................ 26 9 Checklist for agreements on working conditions ....................................................... 28 10 Bibliography .............................................................................................................. 39 11 Contact...................................................................................................................... 31
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1 Introduction
Performance-related pay aims at strengthening personal responsibility, motivation and commitment in public service and at rewarding accom-plishments of skilled staff also financially.
Personal responsibility and commitment
Performance-related pay depends on performance appraisals. De-pending on the individual performance, it may result in higher or lower remuneration. Hence the significance of performance appraisal. It needs to be understandable, transparent, up-to-date and non-discrimi-natory in order to achieve acceptance among staff and encourage the necessary commitment and self-motivation.
Individual performance and performance appraisal
These guidelines are intended to help government agencies by provid-ing an introduction to the subject of performance appraisal and the sub-sequent considerations and staff discussions. For this purpose, the guidelines introduce the basic instruments and demonstrate how au-thorities may derive full benefit from these opportunities considering their respective structures. There is however no general rule for “accu-rate” or “inaccurate”, or “good” or “bad” performance appraisals. Bear-ing in mind their own needs, individual ministries decide on the specific elements and standards of performance appraisals themselves. Details will be determined in employer/staff council agreements on working conditions and/or appraisal guidelines.
Individual appraisal guidelines
2 Target groups
The introduction of performance-related pay will affect all employees alike, although the development, introduction and application of per-formance appraisal systems will vary between groups:
o Personnel administrations
In cooperation with staff councils, they are responsible for develop-ing new appraisal systems and corresponding guidelines, thereby establishing the framework and criteria for performance appraisal. Later, they will advise supervisors in applying the working condition agreements and/or appraisal guidelines. They are responsible for ensuring that performance criteria are applied consistently in order to obtain comparable and equitable ratings.
Introducing performance appraisal
4 o Supervisory staff
Supervisors have the obligation and responsibility towards employ-ees to provide informative and differentiated performance reviews which are the basis for performance-related pay. To this end, they have to set sustainable goals, openly communicate strengths and weaknesses, and assess individual accomplishments using the ob-served criteria.
Differentiated performance appraisal o Staff Willingness to change They should be familiar with the criteria and methods used to as-
sess their performance. They must also be willing to recognize their strengths and weaknesses to find ways of improvement together and in dialogue with their supervisors.
3 How does performance appraisal work?
The vital question is: What is performance in public service? Performance is not only quantity
A general definition of performance includes objectively measurable results achieved in a certain time (output) and activities (input). At first sight, measurable performance is often understood only in quantitative terms, e.g. number of items, quotas, and percentages. This limited per-ception often results in the rash decision that performance measure-ment would not work in many public service areas.
But performance cannot be defined in terms of predetermined “units”. A differentiated approach is needed to assess it. Depending on the indi-vidual structure and tasks, performance within public administration is defined using various criteria including
Performance criteria • Quantity criteria for a quantitative rating level, e.g. number of in-
quiries answered, number of notifications, or number of “clients” served,
• Quality criteria for a qualitative rating level, e.g. few complaints or
objections, short waiting time, or low error rates, • Efficiency criteria for a results-oriented rating level, e.g. cost or
manpower reduction, or increase in revenue, • Influence or behaviour criteria for a behaviour-oriented rating
level, e.g. communication skills, teamwork, persuasiveness or ne-gotiating skills.
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Moreover, jobs cannot be described by only one performance criterion. By only assessing quantity for example, other criteria for good and reli-able task performance would be neglected. Efficiently and effectively performing tasks includes not only producing high quantities but also delivering good and useful results.
Combining performance criteria
Therefore, performance appraisal must be based on several perform-ance criteria. Only a combination of different criteria ensures a valid performance appraisal. In this context it is essential to determine per-formance criteria in line with the job requirements.
Combination of various performance criteria re-flects job requirements Performance criteria should however not be used to assess “basic
tasks” which all employees have to fulfil as a part of their job. Fulfilment of these tasks is covered by the “base pay” and does not require per-formance appraisal with a view to variable remuneration. Ideally, per-formance criteria should apply to accomplishments beyond the basic tasks, i.e. appraisal should focus on “how” tasks are being performed rather than “which” tasks. However, this does not imply a formal distinc-tion between base and performance-related pay. A performance ap-praisal may also address outstanding performance in fulfilling basic tasks.
After defining performance criteria, the next step is to decide whether
performance is to be measured or evaluated. This mainly depends on whether the selected performance criteria lend themselves to numeric measurement. For example, qualitative and quantitative performance criteria can be rated, which as a rule does not work for behavioural cri-teria.
Measuring or evaluating performance?
Performance measurement requires setting a standard against which performance is assessed. The major task of measuring is to determine how individual employees actually should meet their specific job re-quirements and according to which “units” (rating level). In measuring performance, individual performance is compared with the standard to determine any deviations. The standard can be defined on the basis of a specific job description or within a reference group, e.g. desk officers or assistant desk officers. The standard forms the basis for the require-ment level and the individual performance to be assessed.
Standard for measuring performance
The complexity of an evaluation system depends on the number of veri-fiable units used to measure performance, whether by comparing
Using indicators only if available
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figures or by statistical methods. In areas where “indicators” are avail-able through controlling or cost-benefit accounting, statistical or com-parative performance measurement is often already in place. These indicators could be used to develop appropriate parameters for per-formance appraisal.
If these instruments are not established, however, methods using indi-cators run the risk of demanding extensive bureaucratic efforts since all kinds of activities would need to be assessed to measure performance reliably. This is not the aim of performance appraisal.
Thus, in many cases it will be more favourable to evaluate performance. However, not all appraisal methods are equally suitable. As a rule, those procedures which look at overall performance without focusing on specific elements should be avoided. Such summary procedures result in global judgements which do not take into account individual perform-ance criteria. Nor are “open” evaluation procedures suitable for per-formance appraisal since the appraisers decide at their own discretion which standards and types of description to use. Using different ap-praisal standards and requirements leads to a high risk of subjective and strategic ratings.
Evaluating performance
Analytical procedures Analytical procedures, on the other hand, are suitable. These proce-
dures involve assessing each specific dimension of employee perform-ance (performance criteria) individually and then adding them up to ar-rive at an overall assessment. In this respect, it is crucial that the vari-ous aspects of performance are assessed first and that the overall as-sessment is a sum of these results.
Whether an agency should use measurement, evaluation or a combina-tion of both can be decided only in the context of the individual agency’s tasks. In the following, complex measurement methods will not be ad-dressed, because they are applicable only in individual cases when they had already been introduced before and may build on existing structures.
No additional bureaucracy
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4 Instruments of performance appraisal Two instruments are equally suited for performance appraisal:
o Target agreements and/or o Structured appraisal systems.
Both instruments may be combined within one procedure.
Performance appraisal
Target-oriented Appraisals Feature-oriented
Appraisals
Target Agreement Periodical, joint target-setting
Structured
Appraisal System Periodical performance appraisal
against set criteria
Combined Procedures
Each of these instruments is subject to different requirements and offers various possibilities of performance appraisal. Their outcomes, proce-dures and objectives are different.
Each of these instruments is subject to different requirements and offers various possibilities of performance appraisal. Their outcomes, proce-dures and objectives are different.
Target agreements Target agreements make it possible to evaluate each employee indi-
vidually. At the same time they serve as a management tool for super-visors by providing well-defined performance expectations, and as a clear indication for staff how to perform their tasks. Goals reflect the key work areas and offer appraisal standards, i.e. they make it possible to compare the set targets with the actual performance results.
Structured appraisal systems address employees’ skills and character-istics. Individual characteristics are selected for a certain job and in-cluded in the performance appraisal. On the basis of general criteria defined for a certain group it is possible to conduct a comparative evaluation.
Structured appraisal systems
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4.1 Target agreements 4.1.1 How to use target agreements for performance ap-
praisal Supervisors and employees agree on targets for the next performance
period. Performance is either measured directly against the level of goal attainment (if targets are measurable) or by evaluating goal attainment.
4.1.2 Preparing target agreements Limiting regulation Target agreements may be used for performance appraisal only if an
agency has provided for them in a working condition agreement or regulation. Since target agreements are always individually tailored to specific positions, the agency has to make only few general provisions. However, a schedule should be included as an aid. But details such as the number of targets and their weighting do not have to be expressly regulated.
4.1.3 Contents and procedure Step 1: Setting targets Establishing targets An important basis of target-oriented appraisal systems is to define pre-
cise targets since they are the reference parameter to be achieved. Usually, targets are established top-down and may thus be part of a target-setting system within the agency, i.e. be aligned with agency or section goals. These goals are the standard for appraisal. If a target-setting system is not (yet) established, targets may be set at different levels. Particularly in “creative departments” it is common to reverse the process.
The process of finding and agreeing on targets
Advantages Disadvantages
Top-Down Agency-relevant targets Involvement of supervisors Harmonized target-setting system
Discipline
Bottom-Up Staff motivation Risk of individual, uncoordi-nated targets Team solutions No notion of the overall goal
Targets should be developed in a cooperative process. Both supervi-sors and employees may make suggestions.
Jointly developing targets
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The target agreement is tailored to the individual position requirements, i.e. contents, extent and timeframe of the agreed targets are based on the job requirements. However, the target agreement does not include the basic tasks (the “what”) which everyone has to perform and which are covered by the base pay (see above). It only defines “how” tasks have to be fulfilled. To put it in a nutshell: “We agree on targets for ar-eas where we want to improve.”
Targets may be quantitative or qualitative, individual, temporal and be-haviour-oriented.
Quantitative targets might include: Examples
• Number of applications to be processed should increase by 2% by 31 July (quanti-tative and temporal).
• 90% of employees of a certain work unit should attend a specific advanced training course.
Qualitative targets might include: • The number of objection notices should fall by 5% by 1 October (improved quality
through fewer objections). • The error rate in written translation must not exceed 3% (error rate as a measure of
quality).
Target agreements are most suitable for quantifiable and qualifiable activities which aim at certain results, always provided that an employee can influence these independently.
Target requirements For example, the “basic task” of a messenger is to deliver files (“what”).
However, this task may be performed in different ways (“how”). Mes-sengers have no influence on the number of files to be delivered each day. Hence, the quantity of delivered files is not suitable for a target agreement. They can however influence correct delivery, for example. The target agreement could address performance quality, defined as a low error rate. Also, a time factor or initiative (queries in case of vague information on the file covers about the recipient) could be included as a target.
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SMART principles offer criteria to assess targets: SMART principles S pecific
• Targets have to be clear, precise and specific. M easurable
• Targets have to be measurable or able to be evaluated to measure and evaluate goal attainment. Specific criteria must be set.
A mbitious
• Targets have to be ambitious. They have to challenge the employees on the basis of their individual skills.
R ealistic
• Targets have to be realistic, and the employees must be able to reach them.
T ime-bound
A deadline for achieving the target must be set.
Determining targets One way to determine relevant targets is to analyse the job tasks. For
this purpose, all tasks of one position are summed up in an activity list, either on the basis of the job description or in cooperation with the em-ployees.
Right targets When setting targets a distinction needs to be made between critical
and non-critical targets. The target agreement should include only criti-cal targets, i.e. targets in line with the primary results (“What is most important this year?”). The simplest way to do this is by defining general outcomes, e.g. a project result or conclusion. But this does not mean that only special tasks, e.g. projects or working groups, may be ad-dressed in target agreements. This would be discriminatory toward em-ployees whose job does not include special tasks. If it is not possible to define general outcomes, it is not advisable to use non-critical targets instead. In a ministry, for example, it is not recommended to set a cer-tain number of reports as a target since conceptual work cannot be de-fined in this way. With non-critical targets it is easy to lose track of the actual task because employees focus only on their individual targets.
Critical tasks It is helpful to filter the list for critical tasks, i.e. tasks characteristic of the
position and pivotal to its success. It is crucial that employees perform these tasks as precisely as possible in order to avoid negative conse-quences in the work environment or immediate measures by other par-ties (colleagues or supervisors). Among all tasks relevant to perform-ance, the elements need to be singled out where unacceptable per-formance must be avoided.
11 The following checklist is useful for defining goals: Checklist to define goals
Source: B
1.
2.
3.
4.
5.
Step 2:The joinsetting There snumbergeneral Targetstargets period) in a furt It is imptential mfied. In the nthe basstandarties andminimuexpectamust be
What does success/performance mean for our authority?
How are we expected to contribute to success?
Who are our “clients”? Which service do our clients wish for? What would be an improvement for our clients?
Should we do things differently?
o faster o better o less bureaucratic
Should we do anything else for our clients?
o new products o different behaviour o …
What do we need to do to prepare for future challenges?
Which developments important to our tasks do we recognize, how do we react?
Are there any important projects we need to address?
Where is potential for internal cooperation? What can we do to improve coop-eration with other areas?
aumgartner & Co., Hamburg
Agreeing on targets tly found targets are agreed on and written down in a target-
discussion. Few targets hould be no more than three to five targets, since only a small
of targets can be reliably monitored and finally evaluated. In , it is also allowable to set only one target.
do not have to be defined immediately. However, setting “open” (e.g. 30% which will be set later in the course of the appraisal requires trust and some practice, and should thus be done only her step at a later date.
“Placeholder targets”
ortant to describe targets as precisely as possible to avoid po-isunderstandings. In particular “soft” targets need to be speci-
ext step, the goal level is determined for individual elements on is of different performance standards (= reference performance / d) which employees can use as a reference point for their activi- against which their performance is rated. For this purpose,
m (“What is the least that has to be achieved?”) and maximum tions (“When is the maximum fulfilled?”) are defined. Targets attainable within regular working hours, and supervisors should
Defining the goal level
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recognize when the employee has reached the maximum or optimum performance. A good target agreement provides for overfulfillment and at least three levels of goal attainment.
Source: Position in the HR office
Main goal: Faster promotion procedure Target: Reduce competitor’s complaints to less than 2% of
cases Level 4: clearly exceeded, if there are no competitor’s com-
plaints and the procedure takes no more than 8 weeks Level 3: exceeded, if there are competitor’s complaints in 1% of
the procedures, and all the other procedures take no more than 8 weeks
Level 2: exceeded, if there are competitor’s complaints in 2% of
the procedures, and all the other procedures take no more than 8 weeks
Level 1: exceeded, if there are competitor’s complaints in 3% of
the procedures, and all the other procedures take no more than 8 weeks
Since performance cannot always be increased infinitely, a target agreement may also set the goal of maintaining a high performance level.
Maintaining high performance levels
It may prove reasonable or necessary to weight the individual targets. By assigning them priorities (high, medium, or low) or percentages, the different emphases of the targets can be highlighted or determined. The weighting also shows that individual targets can be influenced.
Weighting targets
Source: Position at the Citizens Service division
Target 1: General Answering each e-mail within 24 hours 50% Target 2: General Conclusive reply by telephone in the first conversation 20% Target 3: Qualitative Number of complaints about replies less than 10% 20% Target 4: Individual Take ownership of a new and current topic 10%
Step 3: Pursuing and adjusting targets
During the performance period there should be supervisor/employee discussions about the status of goal attainment. If necessary, targets should be revised if it turns out during the performance period that set goals cannot be achieved, priorities shift towards individual or other goals or if there is a shift in tasks (e.g. covering for someone else’s tasks).
Goal revision
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The procedure for adjusting targets should be as unbureaucratic and simple as possible. For example, the adjusted targets could be put down in a note without concluding a new – revised – target agreement. In exceptional cases, it might be necessary to draw up a new target agreement if a target is dropped and the target agreement cannot be upheld by the remaining targets.
Step 4: Target achieved? (set targets vs. actual performance) Goal attainment discussion
At the end of the target agreement period the actual performance and targets achieved have to be determined. Each employee should receive comprehensive information about the work they have performed.
It is advisable to analyse possible deviations from the set targets. This helps to identify the reasons why some targets could not be achieved successfully. Often, it does not only depend on the employees whether certain targets can be achieved or not. Thus, the analysis needs to in-clude further factors which may seriously influence the level of goal at-tainment (e.g. employee absences due to illness or changeover, or planning and organization errors).
Accountability
Setting targets
1. Determining targets Listing and weighting the
major tasks 2. Formulating targets Jointly formulating target
agreements 3. Meeting to agree on tar-
gets Writing down individual
performance targets, criti-cal tasks and perform-ance standards
Pursuing targets Employees look for ways to reach their goals and inde-pendently implement meas-ures If necessary, supported by supervisors Constant monitoring by su-pervisors Progress reviews; targets may be revised if necessary
Fulfilling targets 1. Comparison of actual performance
against the set goals 2. Appraisal 3. Meeting to discuss at-
tainment of targets 4. Determining the per-
formance level
Subsequent targets shou
Performance period
ld be agreed on during the goal attainment discussion.
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4.1.4 Target agreements with groups and teams Just as for assessing the performance of individual employees, the tar-
get agreement instrument can be used for the performance appraisal of groups or teams.
Team goals are useful if there is Common team goals - a result that the group has to account for together, - a measurable or definable task for the whole group as an indica-
tor of success,
only restricted scope for independent work within the team.
In addition to common team goals, supervisors or team leaders and employees can agree on individual targets for each team member. In these cases, an individual performance assessment is necessary. This procedure is suitable for structured teams where the team members perform very different tasks or if there are considerable and long-term performance differences between individual team members.
Individual target agreements within a team
In special situations which particularly require team work (e.g. customs squads, police), the target agreement may be concluded with the whole team. The evaluation of (the level of) goal attainment applies to the whole group and will be the basis for performance pay for the whole group or the individual group member in case of a uniform level. There will be no individual performance assessment.
Advantages Disadvantages
Individual per-formance
- direct relation between per-formance and variable pay
- promotes individual interests - impedes development of com-
mon improvement processes Team perform-ance
- promotes cooperation - relatively easy to measure
- weaker relation between per-formance and pay
- Possibly high peer pressure Performance measurement in the team
- promotes cooperation - common interest in im-
provement - fewer conflicts due to self-
interest
- competition between different teams
- risk of individual careerism
4.2 Structured appraisal systems 4.2.1 How to use structured appraisal systems for perform-
ance appraisal Structured appraisal systems are closer to current evaluation proce-
dures. Performance is measured against pre-defined performance crite-ria. To make it possible to compare between larger groups appraised by different people, an appraisal scale is provided.
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4.2.2 Preparing a structured appraisal system
Compared to target agreements, the employing agency and staff coun-cils need to provide more detailed evaluation standards or working con-ditions agreements for structured appraisal systems in order to ensure a consistent evaluation system within the agency. Hence, staff councils need to develop a new evaluation matrix for performance appraisal.
More precise criteria Reference groups As a first step, reference groups have to be drawn up. Within each
group, appraisal should be based on the same performance criteria to make evaluation comparable. Reference groups can be defined by
- function, - pay grade, or - job description.
The next step is to define performance criteria for each reference group. Various performance criteria should be determined for each group to be able to assign specific requirements to each reference group – similar to the target agreements. Therefore, in particular the functional re-quirements have to be defined for a standard position (job require-ments).
Performance criteria of the reference group
Performance appraisal, like any other official evaluation, requires dis-tinct criteria. Very general and abstract criteria increase the appraisal’s subjectivity. This also holds true if personal and performance features are mingled. Objectivity means, however, that the performance ap-praisal can be verifiable and thus understandable to the appraisee.
A maximum of five criteria should be selected for each reference group. In contrast to current evaluation systems, performance appraisal does not seek a comprehensive assessment of each employee but of the performance relevant to variable pay (see above).
Max. 5 performance cri-teria No gender differences Performance criteria should be equitable along gender lines. The crite-
ria should not refer to personal attributes but rather to tasks and results. Further, their wording should be gender-neutral, since certain perform-ance criteria tend to be assigned to male, other criteria to female em-ployees. When using writing guides (sample texts), descriptions of top performance must not contain features which are mostly assigned to male employees, as studies have shown (“authority”, “willingness and courage to take on any responsibility”, “performs much longer than the
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regular working hours”). In contrast, descriptions of moderate perform-ance would reflect the female stereotype of a “patient”, “agreeable”, “understanding” employee who “for cooperation’s sake abandons her own interests”.
rather negative better
Self-assertive Persuasive. Makes decisions and is able to carry them out despite objections, while taking other inter-ests into account.
Determined Takes and implements decisions at the proper time and is able to commit him-/herself bindingly.
Resilient Is up to deadline pressure, changing and challeng-ing work and supervisory situations.
Ready to take on responsi-bility
Aware of the consequences of his/her responsibility for work flows and decision-making, and ready to take on responsibility within his/her area of discre-tion while also considering social and health as-pects.
Decision-making ability Able to come to appropriate and quick decisions within his/her area of responsibility and to be ac-countable for them.
Commitment Stands up for other employees’ concerns.
Source: BMFSFJ
In addition, a rating scale needs to be defined, which serves as a measure for the “achievement level”. An easy approach would be a five-tiered scale, e.g. exceptional, very good, good, satisfactory with occa-sional errors, often unsatisfactory, or in numbers 1, 2 … etc.
Evaluation scale Any existing rating system may be used, but also new ones. Since pre-
sent rating systems are often associated with the traditional evaluation system, a new scale is recommendable. In any case it should be easy to use, comprehensible and self-explanatory.
Example for assistant desk officers at a ministry
General cri-teria
out-standing
exceeds re-quirements
meets re-quirements
mostly meets requirements
meets require-ments to a certain
extent
weighting of the cri-
terion Conceptual work
Versatility
Technical precision
Presentation
The appraisal guidelines must also determine whether the appraisal should be based on the traditional, more hierarchical system or whether further “evaluation dimensions” should be included. A useful further “dimension” could be upward feedback. However, additional perspec-tives within an appraisal system would require practice for all parties concerned. These perspectives should be included in the first step of
3600 appraisal?
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performance appraisal only if they are already used in the respective agency. Otherwise the transition should be effected in several stages.
It is advisable to give two evaluations because this ensures a more ob-jective performance appraisal. This procedure is particularly reliable if two persons assess the performance separately.
More than one ap-praisal Finally, the appraisal guideline or working condition agreement needs to
determine whether evaluation conferences should be held. Under data protection aspects such conferences are considered problematic, in particular if they refer to specific persons and ratings. They are however necessary to make performance comparable within an agency or at least within a section, and they increase appraisal transparency.
4.2.3 Contents and procedure
In contrast to target agreements, the structured appraisal system closely abides by the appraisal guidelines or working condition agree-ments and the respective forms. Nevertheless, supervisors and em-ployees have to take various steps together to complete the appraisal and improve performance.
Step 1: Task description
Since performance should be assessed against the tasks of a specific position, supervisors and employees have to discuss and formulate the major activities. They should be based on the criteria of the reference group. As a general rule, a maximum of five tasks should be listed.
Tasks and requirements Just as during the target-setting process, supervisors and employees
should discuss both the tasks and the job requirements at the beginning of the appraisal period. This helps in finding potential deficiencies at an early stage, so that specific advanced training can be initiated. The aim is to align the employee’s performance with the job requirements.
Step 2: Performance feedback
During the performance period, supervisors and staff should discuss how they perform and fulfil their tasks. Employees need a clear pro-gress review so they will not be surprised by the final performance ap-praisal. Also in structured appraisal systems this dialogue is crucial to arrive at an acceptable and comprehensible performance appraisal.
Discussions for good results
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Step 3: Goal-performance comparison At the end of the appraisal period, the actual performance of the em-ployee is assessed against his or her specific tasks. If separate ap-praisals produce different results, the appraisers should meet for a moderated discussion to analyse deviations and reach a consensus.
Step 4: Future-oriented discussion of results
It is important that structured appraisal procedures are concluded by discussing the employee’s performance during the completed appraisal period. Only through such an objective error analysis and relevant ad-vice can performance be improved in the future.
Taking advantage of the result in the future Procedure
4.3 Advantages and disadvantages of the instruments The advantage of target agreements is that performance, results and the level of goal attainment are clearly defined and measurable. In case of new job requirements or performance expectations of supervisors, targets can easily be adjusted via goal revision. Target agreements are future-oriented and flexible. They do not have a “memory”, i.e. they al-ways start from scratch since the accomplishments of the last cycle are the new basis. Goal-oriented evaluation procedures are more likely to prevent discrimination. With target agreements it is however difficult to establish comparability within large work units. Since they are very individual, aligned with the
Decision on the appropriate instrument
Target agreement
Struct. apprai-sal system
Preparation: Works agreements
Appraisal guidelines
Beginning: Setting specific goals
Discussing ex-pectations
½ year Goal revision? Improvement potential?
1 year Goal achieved? Requirements fulfilled?
6 weeks later Performance pay
Disadvantages
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results of an individual position and the requirements for individual em-ployees, each target agreement is different in the number of require-ments and their weighting. Also it is often a bureaucratic process to de-fine targets later on because trust and reliability still need to stand the test. Nor are target agreements suitable for all jobs. A basic require-ment is that employees can influence goal attainment individually.
The advantage of a structured appraisal system is that performance appraisals can be easily compared with each other. Within functional groups the same features are assessed so that reference groups can be established. Structured appraisal systems are suitable for all jobs. Since they are similar to the traditional evaluation systems, they seem more familiar and, at first, simpler and easier to introduce.
Advantages of structured appraisal systems
Structured procedures are however not very flexible since the criteria do not change. In the beginning, there will be a “tendency towards the mid-dle” followed by an “automatic” increase. Another disadvantage of struc-tured procedures is that despite detailed guidelines for equal standards (e.g. sample texts) the supervisor’s evaluation is based on “soft” criteria. Therefore, the subjective element is higher, and the results are hardly verifiable. A critical review of individual results is possible only to a lim-ited extent. Further, the basis for a performance appraisal is the previ-ous rating because unlike target agreements the structured appraisal system does have a “memory”. Hence, supervisors need to be well trained to be aware of subjective factors which might affect their evalua-tion (see figure below), but also to exercise comparable evaluation stan-dards.
Disadvantages
20 Influences on performance appraisal Agency influence
Agency culture Management style
Organizational structure Experience with evaluation systems
External influence Political environment Social environment
Legislation
Performance appraisal
Job Job description
Complexity
Skills
Personal characteristics
Target agreements and structthe agency’s various task, orgBoth instruments can be usedfor an individual performance It is also possible to use differe.g. target agreements for supfor employees of a work unit. praisal does not mean opting realistically assess the performagency.
Supervisors
S
Results Activities
Staff
s
Target agreementstruct. appraisal system
Skills
s
Evaluation error
Personal characteristicsured appraisal systems meet the needs of anizational and personnel structures. within the same agency or be combined appraisal (cf. section 5 below).
ent systems for different functional levels, ervisors and structured appraisal systems
Opting for one type of performance ap-against the other. The crucial point is to ance of different groups within an
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5 What about the traditional evaluation sys-tems?
When introducing performance appraisal systems, their relation to tradi-
tional evaluation systems needs to be examined. Work evaluation aims at assessing employees’ performance, behaviour
and potential. In civil servant law, the evaluation serves various pur-poses, such as hiring or promotion, decision on staff deployment and personnel development policy. Since both civil servants and public em-ployees work at federal agencies, usually the same evaluation systems are used for both groups. They normally include
"Promotion appraisal"
- performance appraisal of past accomplishments, and - aptitude appraisal for suitability for future tasks and possibilities
of further professional development.
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For public employees an aptitude appraisal is not legally required. How-ever, they often move through the same evaluation cycles as civil ser-vants.
Performance appraisal Aptitude appraisal past-oriented future-oriented performance subject to short-term, regular changes
aptitude may change in the long run
constant process of assessing a specific situation or behaviour
selecting and assessing certain skills and behaviour with a view to a future function to be filled
measurement by goal-performance comparison
assessing certain features and their mutual relation
overall appraisal information for personnel planning
For payment-related performance appraisal it is possible to choose the “performance evaluation” system. In this respect, the first step is to de-cide whether the present evaluation will be kept as a whole or whether individual modules will be used for different purposes. For example, there are the following alternatives:
Considering the pur-pose of appraisal
Performance appraisal complements the present evaluation e.g. annually a structured performance appraisal or target agreement, every two or three years additionally a regular evaluation plus aptitude appraisal.
Performance appraisal replaces the present evaluation e.g. annually a structured performance appraisal or target agreement plus a
separate aptitude appraisal every two or three years.
Moreover, personnel departments have to decide whether, in which in-tervals and to what extent they need aptitude appraisals, i.e. on which and how many data they want to base personnel decisions. The overall purpose is to develop a coherent system which includes and reasonably combines the various evaluation types.
Aptitude appraisal in addition to perform-ance appraisal
Merging different requirements for appraisals and evaluations into one harmonized evaluation system requires different modules for different requirements. Thus, the appraisal aims need to be clear for each mod-ule. For example, a combined system may include the annual perform-ance appraisal and also parts of the overall evaluation. After a couple of years, this part may be used for the promotion appraisal.
Modular evaluation and appraisal systems
23Example of a combined procedure: Integrating target agreements and performance appraisal into one “goal chart”
Name of employee:
Name of supervisor:
Goals / appraisal criteria
Observed goal attainment / Evaluation
Points not
achieved partly achieved
achie-ved
slightly exceeded
clearly ex-ceeded
0 2.5 5 7.5 10 Targets: 70 % Participating in semi-nar on new evalua-tion systems
5 % x 25
Developing new evaluation model 20 % x 200
Negotiating evalua-tion standards with staff council by 1 May 2006
35 % X 87.5
Lifting team spirit in project group 10 % x 75
Sub-total 70 % 387.5 Performance evaluation: 30 %
Accuracy (reliability, punctuality, consis-tent action)
10 % X 25
Commitment (ambi-tion, innovative con-tributions, willing-ness to learn)
10 % x 100
Communication (able to communi-cate and motivate)
5 % x 37.5
Share in overall re-sult (responsibility, team player, willing-ness to help out)
5 % x 25
Sub-total 30 % 187.5 Result for 2006 575 min. points: 0 max. points: 1000
Other aspects to be considered: e.g. partial release from work, temporary drop in performance through no fault of their own…
Comment: In this example, performance is measured against a target agreement plus per-
formance appraisal. The variable pay is calculated on the basis of the result in both areas. In the above example, the total sum is below 750 points indicating a “normal performance” level.
The first part of the performance appraisal, the target agreement, would be re-negotiated annually. The second part, the performance evaluation, is valid be-yond the annual performance appraisal. This part is added together across the period defined for a regular or promotion appraisal. Thus, the performance criteria are selected in a way to also give information about employee’s aptitude. In con-nection with target agreements, which also serve to improve deficiencies, the human resource elements become apparent. Finally, the individual annual per-formance appraisals add up to a comprehensive evaluation.
24
The regular assignment of performance steps indicates performance. Therefore, the modules of the appraisal procedures do not have to be identical but should also not contradict each other, neither systemati-cally nor in individual appraisals. Employees having regularly received performance steps will hardly be rated below average in the subsequent regular evaluation.
It is not necessary to continue with the previous system and to intro-duce another performance appraisal system at the same time.
Avoiding two parallel evaluation systems 6 What else to consider with the new system
6.1 Appraisal period Advantages of annual performance appraisal
Performance appraisal needs to be conducted regularly. Experience shows that one-year periods are accepted and manageable intervals for performance appraisals.
Advantages of annual appraisals: Over longer periods, the validity of the performance appraisal drops; the dialogue
between appraisers and appraisees becomes more difficult and runs the risk of inaccuracy;
Longer periods blur the connection between performance-related pay and actual performance;
Long periods are discouraging because employees who overcame a drop in per-formance have no chance of improving;
Short appraisal periods prevent employees from resting on their past performance. 6.2 Pace of the procedure
The performance appraisal procedure needs to be short in order to es-tablish a relation to the accomplishments. But this implies keeping ad-ministrative effort as low as possible.
Short duration
Hence, the procedure should be carried out in a standardized form within a few weeks, preferably one month. It is advisable to include the exact times for each appraisal cycle in the appraisal guidelines in addi-tion to the deadline.
25 6.3 Understandable and coherent appraisal
A transparent procedure makes performance comparable, which is a prerequisite for employees’ trust and acceptance of the performance appraisal. Therefore, the overall results should be published at the end of the appraisal cycle and with the personnel administration’s approval.
Transparency = Publishing results
In this context, it is advisable to statistically evaluate the results in a dif-ferentiated manner. Functional levels and groups are still not evaluated equally as compared to the average. Experience in individual Länder shows that the appraisal attitude improved by making results public.
Statistics necessary
6.4 Special groups and situations
Parental leave, basic military service or alternative civil service and other periods of leave have to be appropriately taken into account when evaluating performance. Direct or indirect discrimination is inadmissible.
Part-time staff and teleworkers have to be assessed against the same
standards as full-time staff. However, the prohibition of discrimination pursuant to Section 15 para. 1 of the Act on Gender Equality needs to be taken into account. In practice, this means that the limited temporal availability of part-time staff may not be included as an appraisal crite-rion. The same holds true for teleworkers working from a home office.
Part-time and telework
The last performance appraisal of employees on family or other types of
leave may be notionally continued, i.e. these employees are assigned to a reference group, and the average result of the reference group members is conferred to the absent employees. This procedure is ap-plied to staff council members on leave. However, no advantage or dis-advantage may accrue to them due to their release. This procedure might be more favourable than simply copying the last rating since in practice the appraisals usually improve as the employees gain experi-ence. The employees concerned would benefit from this generally posi-tive development. Then again the employees’ appraisal may also change for the worse if the reference group’s development is negative.
Family leave Leave from work
The reference group has to be determined at an early stage. It must not be too small because there might be developments, such as seconding a reference group member to an international organization, which would make a later comparison difficult.
26
Within an appraisal period, performance might temporarily drop due to an unforeseen event, e.g. illness, death of loved ones or family issues. In such cases, a loss of efficiency within a certain tolerance range is not to be taken into account. Supervisors are responsible for finding an in-dividual and acceptable solution for the persons concerned.
Drop in performance through no fault of the employee
Also employees who temporarily take up part-time work due to illness (e.g. “Hamburg Model”) must not be discriminated against for this rea-son.
Temporary part-time work: “Hamburg Model”
Secondary posts Activities of professional interest such as teaching, serving as an exam-
iner or staff council without leave, or volunteering and other activities going beyond the defined job requirements need to be taken into ac-count.
When evaluating the performance of severely disabled persons, their reduced ability to work needs to be considered.
Severely disabled persons 7 Procedures for settling disputes Settling disputes Since performance appraisal has financial implications, conflicts are
likely to arise in particular during the introductory period. To prevent legal proceedings, the parties should first try to settle these conflicts amicably. To this end, an institutionalized internal procedure would be suitable.
If employees do not accept the performance assessment, they can ap-
peal to a panel composed of an equal number of agency and staff rep-resentatives. This should be the standard procedure for all types of per-formance evaluation, i.e. both structured appraisal systems and target agreements.
8 Legal aspects When introducing a performance appraisal system, some legal aspects
need to be considered and perhaps laid down in working condition agreements. So far however, there has been hardly any relevant legis-lation. Current legislation on performance appraisal procedures either refers to existing evaluation systems in public administration or to pro-cedures or systems in private enterprise, which are not comparable to public administration structures.
27
Basic principles are: Appraisal systems must be able to assess the employees’ potential. Appraisal systems must be transparent. Appraisal systems must be up-to-date. Appraisal criteria must be standardized, though not be the same for
each position/job but allow for differentiated criteria selection for in-dividual appraisals.
Appraisals must be non-discriminatory. The following questions need to be solved, in particular concerning tar-get agreements, an instrument which is still relatively new in public ser-vice.
Level of goal attainment -
-
-
If a goal was only partly reached, it needs to be clarified whether and to what extent employees may assert claims from the target agreement. Therefore, the target agreement needs to be as precise as possible (e.g. school marks system). Determining the level of goal attainment is much easier if the targets can be measured against the provisions of the target agreement. The burden of proof is still an unsettled issue. The best solution would surely be a graded burden of specification and proof. This means that the em-ployee has to coherently demonstrate the reasons for the claim. In turn, the employer has to substantiate the deficiencies in goal at-tainment. If the employer is successful, the employee bears the burden of proof.
Level of goal attainment Redundant goals
In case a goal becomes redundant, the target agreement may be amicably adjusted if the basic conditions of the target agreement have materially changed. Pursuant to the general rules of frustration of contract (§ 313 German Civil Code), parties may be obliged to conclude a new (partial) target agreement.
Redundant goals Lack of a target agreement
It might happen that parties have agreed on concluding a target agreement but that it was not accomplished. In this case, the condi-tions for agreeing variable pay and its amount need to be specified.
Lack of a target agreement
28
9 Checklist for agreements on working condi-tions
The scope of the working condition agreement depends on the selected
instrument of performance appraisal. Whereas there is little need for regulation with target agreements (cf. 4.1.2), more details have to be agreed on for structured appraisal systems (cf. 4.2.2). Also a mixed form of performance appraisal, i.e. both target agreement and struc-tured appraisal system, requires more regulation (cf. 5.1).
1. For a target agreement the working condition agreement should include: Summary as checklist Possibility of the target agreement,
Parties to the target agreement, Target requirements (SMART principles), Possibility to evaluate targets, Minimum and maximum number of targets,
Request to define goal attainment levels, Possibility to weight targets (min. 10%, max. 60%), Target categories (output, personal), Possibility to adjust targets during the appraisal period,
Necessity of semi-annual and annual goal attainment discussions.
2. The working condition agreement concerning target agreements should not include:
Mandatory number of targets for all employees, Mandatory requirements for contents or goal attainment levels, Scope of documenting obligations in case of weak performance; this
will always depend on the individual case.
3. For introducing structured appraisal systems, the working condition agreement should include:
Reference groups, Performance criteria for each reference group,
Definition of an appraisal scale, Second appraiser (group-related), (If available) upward evaluations, A progress review,
Necessity of a final discussion, Technical questions (e.g. holding appraisal conferences)
4. Combined procedures must include provisions for both target agree-
ments and structured appraisal systems. In addition, they must determine the relation between target agreement and structured
appraisal system, establish the connection between the structured appraisal system
and the “promotion appraisal”.
29
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