A modern and differentiated view on a traditional HR tool that rarely works in an agile environment.

1. Performance Appraisal
Prof. Dr. Armin Trost
HFU Business School

2. 2Prof. Dr. Armin Trost Performance Appraisal www.armintrost.de
Traditional Performance Appraisal
ObjectivesReview
Overall Objectives  Between an employee and
his/her immediate supervisor
 Leads to decisions and
judgments
 Common approach across
levels and functions
 Supervisor is in the leading
position
 It‘s a system – not an event
 Central system-owner (usually
HR)
Mid-year Review

3. 3Prof. Dr. Armin Trost Performance Appraisal www.armintrost.de
Interfaces to other HR-related Processes
Performance
Appraisal
Talent-
management
Compensatio
n
Learning
Out-
placement
Balanced
Scorecard
Employee
Retention

4. 4Prof. Dr. Armin Trost Performance Appraisal www.armintrost.de
Focus on Tool versus Results
Tool Design Conditions Results
?
Results Conditions Tool Design

5. 5Prof. Dr. Armin Trost Performance Appraisal www.armintrost.de
Intended Results
Retain
employees
Motivate
through
objectives
Management
by objectives
Develop
employees
Treat low-
performers
Identify
potential
Track
suitability
Offer
perspectives
Reward high-
performers
Learn
through
feedback
Judgements &
Decisions

6. 6Prof. Dr. Armin Trost Performance Appraisal www.armintrost.de
Principal, Customer, and the Role of HR
Ex
E
HR
M
A
HR
E
Ex
M
B
E
Ex
C
HRM
Ex
M
E HR
D
Executive Board (Ex), Manager (M), Employees (E)

7. 7Prof. Dr. Armin Trost Performance Appraisal www.armintrost.de
The man who gives Flowers to his Wife
Intrinsically
motivated
behavior
Policy Behavior
Attribution to
extrinsic
motivation
Behavior
not valued

8. 8Prof. Dr. Armin Trost Performance Appraisal www.armintrost.de
Relevand Conditions
 Employee-Organization-
Relationship
 Employee-Supervisor-
Relationship
 Employee-Work-
Relationship

9. 9Prof. Dr. Armin Trost Performance Appraisal www.armintrost.de
Agility of Work
low
high
lowhigh
certainty
of results
certainty
of process
large
project
small
B
E
D
A
C
Scope

10. 10Prof. Dr. Armin Trost Performance Appraisal www.armintrost.de
Task Interdependance
D
A
B
E
C
strong effect
weak effect

11. 11Prof. Dr. Armin Trost Performance Appraisal www.armintrost.de
Task Dynamics (Sensitivity Model)
strong
weak
strongweak
Reaction
Influence
reactive critical
activebuffering
neutral
AB
E D
C

12. 12Prof. Dr. Armin Trost Performance Appraisal www.armintrost.de

13. 13Prof. Dr. Armin Trost Performance Appraisal www.armintrost.de

14. 14Prof. Dr. Armin Trost Performance Appraisal www.armintrost.de
Roles of supervisors
Boss
Enabler
CoachPartner Employee

15. 15Prof. Dr. Armin Trost Performance Appraisal www.armintrost.de
„
The role of judge
and the role of
counselor are
incompatible
-- Douglas McGregor
Source: McGregor, D. (1960). The human side of
enterprise. New York: McGraw-Hill.

16. 16Prof. Dr. Armin Trost Performance Appraisal www.armintrost.de
Social Judgement Process
Criterion
interpretation
Recall relevant
memory content
Initial
judgement
Anticipation of
consequences
Judgement
communication
Required
adjustment
Judgement
available?
yes
no

17. 17Prof. Dr. Armin Trost Performance Appraisal www.armintrost.de
Employee-Organization-Relationship
Autonomy/
self-control
Professional
independence
Social
collaboration

18. 18Prof. Dr. Armin Trost Performance Appraisal www.armintrost.de
Employee-Organization-Relationship
Autonomy/
self-control
Professional
independence
Social
collaboration
A
Autonomy/
self-control
Professional
independence
Social
collaboration
B

19. 19Prof. Dr. Armin Trost Performance Appraisal www.armintrost.de
Two extreme Worlds
Hierarchy Agility
Agility low high
Dynamic low high
Supervisor role Boss Partner/Coach
Autonomy/self-control low (top-down) high (bottom-up)
Social collaboration individual linked teams
Professional independence low high

20. 20Prof. Dr. Armin Trost Performance Appraisal www.armintrost.de
Traditional Performance Appraisal in both Worlds
Hierarchy Agility
Reward high-performers
Tread low-performers
Identify potential
Track suitability
Offer perspectives
Learn through feedback
Develop employees
Management by objectives
Motivate through objectives
Retain employees

21. 21Prof. Dr. Armin Trost Performance Appraisal www.armintrost.de
From hierarchical to agile Design
Hierarchy Agility
All at once Focused & separated
Individual Social
Manager/HR-driven Customer/employee driven
Long/annual cycles Short cycles
Focus on company‘s
requirements
Focus on company‘s and
employees‘ expectations
Quantiative & structured Qualitative & open
Owned by HR/executive board Owned by employees/teams

22. 22Prof. Dr. Armin Trost Performance Appraisal www.armintrost.de
Performance Distribution
Performance
C B AFrequency

23. 23Prof. Dr. Armin Trost Performance Appraisal www.armintrost.de
Learning
individual learning
from managers & trainers
off-the-Job
planned
formal
ordered
long cycles
requirements
learning transfer
social learning
from and with others
on-the-Job
on demand
informal
employee driven
short cycle
curiosity & uncertainty
work = learning
Hierarchy Agility

24. 24Prof. Dr. Armin Trost Performance Appraisal www.armintrost.de
Talent Identification
Employee
Target Position
Decider
Supervisor
Talent
Manager
Employee
Decider
Target Position

25. 25Prof. Dr. Armin Trost Performance Appraisal www.armintrost.de
Feedback in Hierarchies
...
Client

26. 26Prof. Dr. Armin Trost Performance Appraisal www.armintrost.de
Agile Feedback
Customer Teams Enabler

27. 27Prof. Dr. Armin Trost Performance Appraisal www.armintrost.de
Summary
 It‘s a system – not an one-time incident
 First, think about results – not about the tool
 Be clear about who the customer is
 Consider internal conditions – organization,
supervision and work
 Even under hierarchical conditions performance
appraisal does did not fully work
 In an agile environment traditional performance
appraisal does not work
 Agility requires focused, social, open approaches,
driven by employees and customers