Appraising Employee Performance in a Downsized Organization

In today’s economy, scaling back and working towards finding economies of scale within an organization have become requirements. Along with this responsibility comes an obligation to accurately appraise your current employees and to reassign duties and workflow with fewer staff members. Doing this efficiently and effectively can also reinforce morale and keep motivation at appropriate levels.

Additionally, some of your best employees can become disenchanted if their interests have changed and their current position doesn’t relate to these new passions. Assigning them new tasks which relate to their current interests can assist in keeping them happily entrenched within your organization.

A current employee appraisal during the course of their career is also important to ensure that additional training is not required for these individuals. Skills and aptitudes change over time and long tenured employees are often overlooked for additional training and/or assessments. An employee’s growth could have taken them in an entirely new path – deficient skills need to be identified so that these areas can be enhanced in order to make every employee more effective for the future.

I found the attached article to be of great relevance and hope that you do as well.

David Lammert

Appraising Employee Performance in a Downsized Organization
Abridged Harvard Business Publishing, By: Tom Krattenmaker

The experts call it “ghost work”; it’s what’s left for the survivors to do when layoffs have cut an organization’s staff to a bare-bones minimum. Work that still has to get done is reassigned to people who may not have the skills — and certainly don’t have the time — to do it.

Even though managers may be tempted to avoid performance appraisals, it’s no time to back away. Done right, performance appraisals can give employees a better understanding of the new and different demands of their jobs in the context of the company’s changing needs. Don’t duck the tough issues, say the experts, but don’t overlook the opportunity to emphasize the future, either. The performance appraisal is a great opportunity to emphasize that employees have a stake in reengineering work processes and helping the company stay competitive in tough times.

No matter what challenges confront the company or the business unit, a manager must avoid the temptation to give all her reports a good review.

Performance appraisals strengthen the organization In a downturn, employees’ concern about their own performance is greater than ever, even among the star performers, says Lila Booth, a Philadelphia-area management consultant. In the face of silence about performance, she warns, people are apt to think, “I’m next in line for the ax.” Employees need ongoing feedback on performance and on the financial state of the company, she says, to avoid “the fear and fury” such anxiety can cause.

Make the bottom line clear Furtwengler stresses the need for managers to set expectations about raises and bonuses long before appraisal time. If a company’s financial picture has darkened, he suggests senior management get a notification out as quickly as possible, describing the potential lost raises and bonuses. Establishing this context can make all the difference in how a high-performing employee interprets a below-average raise.

Say an employee typically has received 4% raises in years past, but this year is getting only a 2% raise. “An employee’s interpretation of a 2% raise is going to be different with the information that most employees are getting no raises and only those doing very well get 2%,” says Lynn Oppenheim, president of CFAR. Similarly, if employees hear that raises are being reduced so that jobs can be saved until demand in their industry increases, “no one will be happy about this, but it may serve to limit the damage.”

Spend compensation dollars wisely Judicious use of what money is available for raises is key, experts say. Some managers admit to giving all their people a standard raise just so they can avoid having to explain subpar pay increases to underachievers. While the approach may succeed as a strategy for avoiding conflict, think of the cost to an organization. Not only has the manager undermined the effectiveness of compensation as a means of rewarding and motivating, but he has probably stirred resentments among the high achievers, who are left to feel as through their initiative and hard work have been in vain.

Reshaping after downsizingWhat about employees who are struggling with new work responsibilities in the wake of a layoff? How should managers answer those employees who protest, “This isn’t what I signed up for”?

Furtwengler suggests that the manager and the employee evaluate the new responsibilities together to determine which aspects of the “new job” interest the employee and which do not, which work is a “must have” from the manager’s perspective and which is just a “nice to have.”

“Reevaluating work, especially if done jointly with the employee, will help [her] find effective ways to deal with the new workload,” he says, and discover efficiencies. “Because we are all creatures of habit and comfort, we no longer question the usefulness of what we’re doing or whether there are better ways to accomplish the task. That’s why a joint reevaluation of the work will often diminish the workload and allow the employee to become more interested in the ‘new job.'”

A problem of skill or will?And what happens with an employee who is in a “reshaped” job and not performing up to standard? Managers need to determine first if the poor performance is a “skill” or “will” issue. In the first case, the employee feels he doesn’t have the skills needed: “I’ve got to maintain this database, but I don’t have enough background.” In the second case, the employee simply dislikes the new chore: “I hate all the detail work I have to do now.”

“Reshaping of jobs is very common — the appraisal is an opportunity to listen if the particular shape of a job fits the employee,” she says. Sometimes the performance appraisal forces the manager to face a harsh reality: that the employee just isn’t a good match for the company anymore.

In a time of layoffs and restructuring, performance appraisals bring challenges to both parties in the conversation. The employee confronts the task of adapting to a changed role in a changed context. The manager has to determine how best to support the development and morale of the employee in that changed role, while recalibrating performance expectations.

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