Welcome to the June 21, 2006 issue of The Total View

Published by Success Performance Solutions, Written by Ira S. Wolfe

Visit our Human Resources Blog and Perfect Labor Storm Blog where we can post daily (and more often) human resource updates, news, and Perfect Labor Storm facts. 

What's Inside:

1.  360 Degree Feedback: Mistakes Managers Make and How to Avoid Them

Ask any manager what he or she just hates to do and very likely you'll hear "performance reviews." If it doesn't make number one on your list, you can bet it is in the top three.

Single source evaluations, the traditional once-a-year performance review (if employees are lucky to get that), are not only dreaded but ineffective too. Studies consistently show that nearly every employee receives ratings higher than their actual performance using the single source evaluation.

Supervisors have motives - although not always in the best interest of the organization - to boost ratings. These may include:

1. A belief that a higher rating might encourage the employee to perform better next time.
2. The employee has had a lot of personal problems during the last review period. He feels sorry for him and chooses to postpone dealing with the performance issues until a later time.
3. The department already has a number of vacancies. The supervisor doesn't want the employee to get angry and quit. As a result, the employee receives a "halo" to keep him/her happy.

Another problem with single source reviews is turnover - both managers and employees. Unlike the past when employees enjoyed a career with the same company for decades and managers were organically promoted over time, employees today are mobile and managers are reassigned, promoted or terminated. More often than not, managers don't work with the same employees long enough to get to know them and subsequently don't have the knowledge or motivation to give fair performance appraisals.

The result is that mediocre, even poor, performance is tolerated and superior performance is ignored. Every employee then feels entitled to a pay raise and promotion as a reward for good performance.

An alternative to the annual review - multi-rater feedback, also called 360 degree feedback - is experiencing a comeback. Multi-rater assessment has been around for decades but the late 1980s and 1990s saw an increase in popularity for these programs, simultaneous with the U.S. productivity boom. Then interest waned during the dot-com boom and for a few years afterward.

But skilled labor shortages and increasing productivity demands have put a lot of pressure on managers to find more effective feedback processes. The once-a-year, single source performance review is just not cutting it any more. Managers are turning to 360 degree feedback as a more effective, equitable, and valid process for developing employees' competencies and improving performance.

While multi-rater feedback has its distinct advantages, it also can be a disaster if not planned and implemented carefully. The most common mistake managers make is believing that multi-rater feedback is a replacement for the annual review. That's wrong, wrong, wrong. Multi-rater feedback is a development tool: it allows an employee to get interim feedback from several sources on his behavior and skills so that he/she can improve his performance. It's like a map, guiding the employee on his improvement journey. The annual review is just the toll gate.

A second mistake is believing feedback from multiple sources will "fix" a problem employee. That too is wrong, wrong, wrong. Employees who receive low ratings or significant gaps between raters may not care about their performance, which obviously needs to be addressed quickly. Alternately, they may not know what to do or how to do it. That latter reason is the perfect opportunity to work with the employee to create and implement a performance improvement plan, identifying specific work areas, behaviors or competencies to develop.

The third biggest mistake I see is trying to evaluate too much at one time. For instance, let's say a manager has five reports. A survey is designed to assess ten core competencies, each having six behavioral statements. Each questionnaire then includes a total of sixty questions. That means the manager has to respond to 300 questions for his team. This manager may also be called upon by peers to evaluate their performance. If each employee is also supposed to obtain evaluations from their peers, they too will be responding to 100s of questions. You can see where I'm going with this: responding to all the surveys becomes so time-consuming there is no time left for the feedback, which leads me up to the fourth mistake.

No time for feedback! The goal of multi-rater assessment is feedback, an opportunity for employees to understand how others view their work performance and behavior and learn what they need to do to improve. Time needs to be carved out for the employee to review his reports and meet with his direct supervisors to work on an improvement plan.

What I'm about to outline has been an effective solution to implement and execute multi-rater feedback within organizations - small and large.

1. Management buy-in and enforcement is a must. Management must require every participant to respond in a timely manner. Too often both employees and managers drag their feet at responding to surveys, frustrating many employees who get partial or no feedback.

2. The competencies selected for evaluation must be linked to organizational goals and purpose.

3. Limit the number of competencies to ten, preferably less.

4. Begin the process with a self-assessment or 180 degree. ( A 180 degree evaluations includes just the employee and his/her manager.) Allow the employee to assess his own skills and possibly get feedback from his manager.

5. After the initial assessment, each employee writes a performance development plan to improve specific core areas. Each goal for improvement should include specific actions with milestone dates for monitoring and/or completion.

6. Six month to one year after this initial assessment, the employee is ready for multi-source evaluation.

Actual implementation includes much more planning and forethought than what I described above but it's a bare-bones plan to get started. Many of the best companies in the world utilize multi-rater feedback. It is considered a best-practice. Isn't it time to follow their lead?

2.  Perfect Labor Storm Alerts # 545 to 546

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Fact #545: Living longer through technology doesn't come free. The average per-capita drug spending for insured people age 65 and older increased from $827 in 1997 to $1,378 in 2000, an 18.5 percent annual increase. Average annual expenditures for people under age 65 rose from $231 to $358 during the same time period, representing a 15.6 percent annual increase.

Fact #546: Annual per capita health spending increases by about $74 on average (2001 dollars) for each additional year in age between 18 and 64. Then spending starts rising more rapidly after age 50-about $152 for each additional year in age between 50 and 64.

Don't be caught in storm without all the facts. "The Perfect Labor Storm Fact Book: Why Worker Shortages Won't Go Away" is a must-read leading edge forecast that predicts workforce trends for decades to come. Order your copy today - Only $7.95.

3. Perception 360 Degree Feedback - Multi Rater Assessment (MRA)

Perception 360 is a Web-based assessment designed to meet a variety of needs and applications necessary for increased personal productivity and effectiveness.

Perception 360 lets you design your own 360 surveys using our standard questions, writing your own survey questions or simply using our ready-made surveys. Your surveys can contain any number of questions and have an unlimited number of respondents. We do not charge by the number of respondents. You simply pay per target person (each person you wish to receive feedback from others).

More about Perception 360.

4.   Quotes from Hire Authorities

Giving people self-confidence is by far the most important thing that I can do. Because then they will act.
Jack Welch

5.  Assess360 Feedback Survey

This web-facilitated multi-rater survey component of the ASSESS platform utilizes dimensions and behaviors populated directly from the organization's competency model. A participant can rate multiple people at a time and the system allows for comparative ratings. Reports provide detailed individual feedback on:

Competency Rankings

Behavior Ratings

Developmental Suggestions

Action Planning Guidance

View a sample Leadership ASSESS 360 report.

Ira S. Wolfe Copyright 2006 - All Rights Reserved. Reprints and other distribution by permission