Major international companies are reported to be increasingly changing their executive and staff performance appraisal systems away from the traditional, formal annual evaluations. The trend is to adopt more frequent, continuous, and less formal appraisals. However, doubts have been expressed as to whether local companies, including the subsidiaries of multinational companies, are effectively geared up to handle a more continuous, interactive appraisal system, with feedback and sometimes negative comment on staff performance.
Current management thinking is that the performance appraisal based on annual targets or goals, with numerical or alphabetic grading on performance, is not the best way to approach the evaluation and improvement of personnel effectiveness. This is the case even when there may be periodic evaluations during the year to complement the annual evaluation.
The modern management approach, it is suggested, is more geared to continuous interaction between supervisors and those that report to them, regularly appraising their performance, solving any challenges that arise, and coaching on ways to improve. It is often said that recruited staff join because of organisations, but tend to quit because of managers. They may like the image and corporate ethic, but cannot get along with their immediate bosses.
The biggest challenges of the continuous appraisal and evaluation system relate to Asian traditions and perceptions. Heaping praise may result in staff arrogance, while criticism, even if justified, may result in loss of face. Instead of stimulating a resolve to perform better, constructive criticism may result in demoralisation, resignation, or even sometimes violence.
Many managers, even with the best intentions, do not really know how to evaluate, still less to provide mentoring guidance to staffers. This issue is becoming an increasingly important shortcoming, because the younger generation of corporate entrants, often with better education, ambitions and career aspirations than their predecessors, fully expect to receive continuous guidance for self-improvement. The young intake are often much better qualified than the earlier generation of senior managers, especially in technical competence and information technology but they are inexperienced in the softer skills of implementation.
Management mentoring can be a challenge under systems of matrix management, where there is, in effect, no localised line management. Many multinational companies now operate their local offices effectively under a facilities manager, with functional staff reporting internationally to a regional office, with periodic local visits of the direct supervisor. Management by mobile phone or Skype dialogue is hardly a substitute for direct face-to-face communication, especially when different nationalities, cultures or languages are involved.
In such circumstances, recourse may be had to multi-sourced evaluations, including from customers or peer group colleagues. However the more the evaluation is at arm's length, the less likely is the feedback to be objective. This is especially the case if there are negative comments needing to be conveyed, where in-depth counselling may be required.
If formal appraisals in this part of the world are conducted, as contrasted with western countries, these will tend to be very precise and detailed. They may be based on very specific KPI or budgetary targets established at the outset, and very detailed assessments at the end of the period.
There are both advantages and disadvantages in these approaches. The precise targets and results will be more objective and less subjective. The staffer either made the target or didn't, with hopefully some room for evaluation of why the target was missed. This does, at least, introduce an element of objectivity into the assessment process. It has been known for some multinational organisations, when confronted with original targets and massive over-achievement, to chastise staffers for originally developing too low targets in the first place. Furthermore, when a high target is achieved, or over-achieved, staffers will find that the next year's target will be even more demanding. Such are the perils of success!
Assessment time is a fearful stage in the annual calendar. In cases where senior managers are required to assess those reporting to them, while there are also reciprocal reporting requirements to be carried out by subordinates in respect of their managers, year-end appraisal time can become a sensitive period for everyone. The more objective, precise and unemotional the assessment process, the better it is likely to be. Ultimately, the assessment process should be geared to incentivise, to encourage better performance, rather than to reproach or to blame. Appraisals should enhance team spirit and aim to achieve even better results next time around.
Christopher F. Bruton, 45 years in Thailand, is Executive Director of Dataconsult Ltd, a local consultancy. He can be reached at chris@dataconsult.co.th. Dataconsult's Thailand Regional Forum provides meetings, seminars and extensive documentation to update business on present and future trends.