Let's talk performance: How to choose an appraisal system

Ratings, discussions and feedback; Jerene Ang speaks to HR decision makers to uncover the thought processes behind choosing an appraisal system to hit all goals.

Managing the performance of employees is crucial to business success. But this doesn’t just stop at rewarding top talent, it also means maintaining and improving the performance of the average employee, and at times, having tough conversations with those underperforming.

In recent years, many trends have emerged in performance management. On one hand, organisations such as Maybank, SAP, Accenture and IBM are doing away with performance ratings in favour of more ongoing feedback. On the other hand, research has shown that employee performance drops 10% when ratings are absent from the review process, largely due to the inability of managers to eff effectively manage talent without ratings.

In this series of bite-sized case studies, as we spoke to a range of HR decision makers, we sought to better understand how organisations throughout the APAC region manage performance and the thought processes behind choosing an appraisal system.

Amcor Flexibles: Well-defined and measurable goals

Cristina Istria, director of talent and development at Amcor Flexibles Asia Pacific, says having well-defined and measurable goals across the board is crucial for managing performance.

Taking pride in ensuring staff understand how they contribute to the organisation’s success, the multinational packaging company has a process to cascade goals from the top.

She further reveals the company recently updated its winning aspirations in a way that allows all goals to be connected to it.

“All goals are set at the beginning of the fiscal year and checked regularly and at least twice a year,” she says, further noting that employees’ goals need to be well-defined and measurable and linked to their manager’s goals.

- Cristina Istria, director of talent and development at Amcor Flexibles Asia Pacific

She adds that reaching the goals, and the extent to which goals are reached, influences employees’ yearly bonus outcomes.

Reflecting on the reason behind this goal-oriented approach, she says: “First, being a decentralised organisation that grows via acquisitions, having a solid methodology to deploy and monitor goals allows us to be effective in integrating new businesses and ensuring performance goals are quickly understood.

“Second, in line with our value, ‘results and outperformance’, which is defined as consistently delivering results and striving to surpass expectations, having measurable goals allows employees to clearly see when goals are reached and exceeded.”

When it comes to the common challenge of having tough conversations with under-performers, Istria says that clear and measurable goals allow difficult conversations to be very fact-based.

Apart from that, all managers are trained and provided with guidelines on how to handle these conversations, while HR provides support as needed.

Carlsberg Group: Ratings plus feedback

Carlsberg believes that people are its greatest asset in fulfilling the ambition of its global SAIL’22 strategy of being the most successful, professional and attractive brewer in its countries of operation.

Hence, Laurent Low, VP of HR at Carlsberg Group Asia, notes that part of the first step towards achieving its SAIL’22 ambition involves constantly reviewing its talent inventory via a robust performance management system.

“It starts with the individual performance rating assessment focused on ‘what is achieved’, ‘how it is achieved’ and ‘potential’; this forms the foundation of what we expect in our employees,” Low reveals.

For leaders, the goal is for them to achieve through team collaboration - thinking of the company holistically instead of staying in functional silos.

Hence, Carlsberg measures its leaders through the global 3As (alignment, accountability and actions), as well as its potential inventory checklist which identifies those with the potential to rise one to two levels.

“Our performance rating is conducted annually through our people board session which is an intensive, evidence-driven and candid discussion on the talent pool within markets and across functions,” Low says.

“During our people board sessions, we also apply rating distributions across our five-scale ratings and collaborate the ratings within the regional management team. As a talent pulse-check, we also conduct a mid-year ‘lite’ talent session every July.”

This integrated performance management system gives Carlsberg timely insights into its talent pool and inventory to pinpoint areas where strengths can be built upon and where support and attention are needed.

- Laurent Low, VP of HR at Carlsberg Group Asia

Apart from a formal system, Low says timely feedback is crucial. At Carlsberg, managers are expected to share timely feedback to employees - from under-performers to super-performers - to recognise good performance or rectify inappropriate behaviour.

“We educate our leaders through our regular ‘feedback for performance’ sessions to embed a good practice of feedback to help our employees do better, grow and get support on the areas they need.”

Dentsu Aegis Network: Open, meaningful discussions

For Dentsu Aegis Network, delivering on its commitment of “innovating the way brands are built” for clients requires a high performing culture where each employee’s work contributes to the business’ strategic ambitions.

Gan Mei Lian, talent management director for Dentsu Aegis Network Malaysia, says: “Having regular, open and meaningful discussions around their performance and development is key to helping them reach their full potential as well as feel engaged with our business.”

To keep employees at the top of their game, the global media group empowers them to own their performance and development throughout the year with the right coaching and guidance from people managers.

“Each talent will have an annual plan that combines business objectives, personal goals as well as identifies stakeholders whom they can go to for support,” Gan shares.

“The annual plan is a living and breathing document, like a journal, that documents their achievements regularly through the year to enable better discussions and feedback.”

Since discussions around performance are addressed early on, the firm has moved out of the annual performance cycle.

- Gan Mei Lian, talent management director for Dentsu Aegis Network Malaysia

At the same time, Dentsu Aegis Network has left the one-to-five performance rating scale behind, as a reflection of the notion that all its employees are talented and contribute strongly towards the overall business performance.

On top of the ongoing dialogue, the media group has adopted a 360° perspective to get a more holistic view of its talent’s contribution.

“The impact a person has often touches upon different teams, sister agencies within the group and different areas of our business,” Gan says.

“Therefore, we encourage our talent to get feedback from a broad range of stakeholders, including colleagues from different functions and disciplines, their direct reports if they’re a team manager, and even from clients.”

In terms of tough conversations, Dentsu Aegis Network runs leadership workshops to equip managers with the soft skills needed to manage them.

Additionally, managers are given access to guidebooks and frameworks they can tap on to have more comprehensive and structured conversations during assessments.

Green Packet: A variety of feedback platforms

Syahrul M. Azmi, manager of talent development at Green Packet (GP), says that the integrated telecommunications solutions provider is trying to create as many feedback platforms as possible.

Both formal and informal, these range from earning GP points via Green Packet’s gamification app and instilling feedback processes as part of its standup meeting agenda, to leaders engaging their direct reports in coaching conversations and having team evaluations at the end of a project milestone.

“We believe that frequent feedback is key to performance improvement,” he says.

He notes that as the business environment becomes more dynamic, a good balance of structure and flexibility is needed.

- Syahrul M. Azmi, manager of talent development at Green Packet (GP)

When it comes to having tough conversations with under-performers, he says managers are advised to fall back on the firm’s core values:

• Feel empathy - understand what is going on with the under-performer and listen to reasons why the person may have derailed.
• Be courageous - say things as it is and have conversations about the facts, not the person.
• Let’s collaborate - make the session about the team, instead of the individual, and highlight how the behaviour is impacting the team.
• Believe in grit - understand the individual’s motivation and employ different strategies at agreed periods to help them shine again.
• Innovate to make a difference - seek new ways to lift performance standards. Perhaps the job needs to be redesigned, or the team needs to be restructured. It may even just be an issue of needing new tools and resources.

Marina Bay Sands: Organisational nuances included

Chan Yit Foon, senior vice-president of human resources at Marina Bay Sands, says at the hotel, employees’ performances are continuously planned, managed, reviewed and recognised over a three-part performance appraisal exercise held throughout the year.

“This exercise allows managers to continuously measure and provide constant feedback to employees along various stages of their career,” she says.

The three parts involve goal-setting which enables both managers and employees to have a clear understanding of job expectations; mid-year review - two-way feedback to address challenges and improvise existing goals as the business evolves; and a year-end appraisal where a rating is accorded via quantitative and qualitative assessments based on the employee’s role and responsibilities.

“This targeted approach not only allows for a structured performance appraisal, it also allows the management to better plan annual increment exercises, promotion reviews and coaching needs,” Chan says.

- Chan Yit Foon, senior vice-president of human resources at Marina Bay Sands

She added that in 2016, Marina Bay Sands updated its performance appraisal framework to reflect its service values and culture, titled OneMBS.

“Nuances of our organisation’s key values of respect, integrity, passion, teamwork and creativity have been incorporated into the performance appraisal as one of the key grading criteria. This reinforces and aligns our employees with the company’s agenda, in guiding them along through their day to day work.”

When it comes to overcoming the challenge of having tough conversations with under-performers, Chan says the key is to set clear and defined goals from the outset and to constantly provide employees with timely and objective feedback in a transparent and accountable manner.

“At Marina Bay Sands, we have in place a structured ‘performance improvement plan’, where managers and employees discuss and commit to defined tasks and objectives to guide those lagging behind a push in the right direction.”

Uflex: Linking ratings to the business

Chandan Chattaraj, president – human resources (India and global) at Uflex, reveals that in terms of performance management systems (PMS), the global packaging films manufacturer is currently at a stage wherein a platform for fair, factual and objective assessment of individual performance has been created.

This process helps Uflex’s employees achieve superior standards through SMART key result areas (KRAs) and work performance.

“We last revised our PMS in the year 2012-13 and are now all set for its further evolution in the next performance cycle, that is, 2018-19,” he says.

He further reveals that while the company will retain performance as the core factor, this new evolution will see weightage given for competencies – tightly stitching competency frameworks to the performance scoresheet.

“What we will specifically focus on is the smartness of KRAs and quality of performance discussions,” he says.

While Uflex has mid-year reviews, employees are not rated at that stage. However, the final year review cycle involves ratings to show a clear linkage of PMS ratings with rewards, development and recognition.

- Chandan Chattaraj, president – human resources (India and global) at Uflex

“As it has evolved in recent years, we are now sure that our PMS is a live document which contributes directly to our business growth.”

When it comes to the discussion of to rate or not to rate, at Uflex, the verdict is very clear.

Chattaraj notes that while ratings have a role to play and are an essential part of the PMS, their distribution needs to be tightly linked to business realities of that particular year.

“We are very sure we cannot go with a rigid distribution curve and will have to link it to the business closely,” he says.

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