While we have been running the Trust performance appraisal system for only a year, I believe that the issues to which it is already giving rise are reasons to re-consider it. The problems are a mix of cause and effect and range from inconsistent application of the appraisal process, a sense among staff of inequity of ranking and reward, through to the financial impact of the final outcome on the organisation.
Our current situation is one in which we seek to: motivate and reward staff appropriately for their individual contribution, recognising and celebrating exceptional performers; encourage a strong team culture; achieve among staff a sense of cross-Trust equity in terms of their assessment; and live within our means. Underlying these are: staff retention, morale, results-focus and organisational sustainability. Arguably these are mutually incompatible aims, or at the very least it is unreasonable to expect an appraisal process to deliver them all. As well as this, the Trust is far from being in steady-state, either in terms of size or as an embedded cohesive working culture. Systems, however well- developed, have not had time to achieve consistency in practice. We are in a competitive labour market, so there is constant pressure to attract and retain quality people. We are also facing a rising cost of living which affects staff’s sense of their general financial health, and which puts additional psychological pressure on any system that might improve their financial position. So the appraisal process, both systemically and contextually, is attempting to do a very difficult job in very difficult circumstances.
It is common and apprently logical to link appraisal to reward, but it is anything but consequence-free, as we are finding. It seems likely that tactical responses to our current situation will focus on two main areas:
- Refining and improving the current appraisal/reward process, which would probably include greater specificity to rating criteria, more training for managers, more detailed review of ratings awarded;
- Limiting the extent and unpredictability of our financial exposure, perhaps through a vehicle such as a fixed pay pot, which would be split between cost-of-living and bonus. The function of any such device would be to set the limit of any pay award within known and affordable limits, which can form part of the organisation’s longer-term financial planning.
I have just suggested to HR that we also implement a more radical re-think. In other words, rather than seeking to fix what we now have, we should re-examine its fundamental fitness for purpose, while it still remains practical to do so. But I very much doubt if anyone will agree.