International PersonnelManagement Association

Making 360 Degree Evaluations Work

October 17, 2000

Jim FoxCharles Klein

Why do performance appraisals?

• To provide specific feedback on employee performance

• To foster communication between the employee and supervisor

• To provide a record of performance for future employment decisions

• To identify special talents and skills• To assist in employee development• To link performance to pay

Steps in the Process

• Employee drafts goals/standards

for the coming year.

• Employee and supervisor agree

to standards and goals for the

year.• Goals are reassessed and

modified at mid-year.

Steps in the Process

• Supervisor obtains input on performance from multiple sources)

• Supervisor summarizes performance and provides comments on form.

Steps in the Process

• Supervisor and employee meet to discuss performance and to set new goals for the coming year.

• Supervisor and employee sign and date the form.

• Supervisor determines pay adjustments and/or performance

bonus

Employee and Supervisor

agreeon

performance goals.

Employee and Supervisor

meet to assess progress

toward goals.

Supervisors complete the rating form based on feedback received.

Employee and Supervisor

meet to discuss

evaluation.

Employee and Supervisor

meet to establish

goals for the next year.

Performance Appraisal Process

Performance Goals Should Be:

S pecific

M easurable

A ttainable

R ealistic

T ime-Oriented

Categories of Goals

• Individual Goals

• Work Unit Goals

• Organizational Goals

Individual Goals

• Focus on achievements of the individual employee

• Are meaningful to achievement of organizational success

• Relate to work being performed

Work Unit Goals

• Focus on employee contribution to achievement of the work units defined goals and objectives

• Treat all employees within the work unit equally

• Achievement makes contribution toward organizational goals

Organizational Goals

• Relate to achievement of organizational goals, objectives, and mission

• All employees within the organization are affected

• Focus on the organization and the employees role in achieving the organizational mission

The Employees’ Role

• Actively look for ways to measure their own performance on the job

• Propose ideas to their supervisor when requested

• Keep an open mind when discussing their goals with their supervisor

• Provide realistic and accurate input at the end of the rating period

The Supervisor’s Role

• Set attainable and realistic goals with employees

• Challenge employees to increase effort or performance through challenging goals

• Clarify their expectations for employee performance

• Monitor employee performance and provide feedback to aid in staff development

Developing a Successful Program

• Clarify policy maker’s goals and objectives

• Assess current organizational climate• Conduct position analysis• Create design team(s) and establish job

standards• Determine data collection requirements• Train managers, supervisors and

employees

Clarify Policy Maker Goals

• To Identify Policy Maker Issues and Concerns– Assess commitment to pay for

performance– Verify sponsorship of initiative– Define expectations

Assess Organizational Climate

• Assess Employee Perceptions– Identify concerns– Discuss individual vs. group

performance issues– Discuss 360 degree evaluation– Identify barriers to effective

implementation

Conduct Position Analysis

• Distribute Position Description Questionnaires

• Verify position allocation to existing job classification or recommend reallocation to different job classification

Design Teams

• Experts in each occupational group provide direction regarding performance criteria and standards– Determine performance criteria– Determine performance standards– Determine sources of data– Determine training needs

• Employee driven, not manager driven

Develop Forms and Procedures

• Prepare Draft Forms and Procedures• Review and Comment• Finalize Forms and Procedures

Determine Data Requirements

• Define data needed to measure performance

• Determine what data is available through existing systems

• Identify potential data sources• Assess and evaluate available software

packages

Conduct Training

• Manager and Supervisor Training• Employee Training• Additional Training

– Continually and as necessary

The Bottom Line

• Strategically focused• Job related• Consistent with organizational needs• Consistent with employee needs

The City of Bismarck, ND

• Capitol of North Dakota• Approximately 55,000 population• A center for energy production, medical service

and agriculture• Low crime rate• Outstanding educational system• Commission form of government

Why We Did This

• Old system had fallen into disuse• Poor communications between supervisors

and employees• The employees were asking for something

different• Move to a more objective approach with

goals and outcomes• Change the culture from entitlement to

participation• Influence salary adjustments

Goals for New System

• Tailor evaluations to each individual’s level of responsibility by linking performance appraisal to the employee’s job description

• Weight evaluations to level of difficulty of the work• Give impetus for employees to learn and develop

new skills• Give stakeholders more input into performance

management• Encourage more participation in delivery of city

services• Shift limited resources to more productive

employees

Our Process

• Conducted classification and compensation study

• Began the development of a performance based pay system

• Did not have a particular model in mind• Engaged Fox Lawson & Associates to assist

Our Process

• Updated and clarified all job descriptions• Updated compensation plan and set target

to achieve the average of the market– Originally City pay levels averaged about 15%

below the market– 8 years later, we are at the market

• Implemented new salary ranges and pay program

Our Process

• Met with employee groups to understand their issues and concerns– Pay and performance linkage– Skill based– Feedback from other besides the supervisor

• Designed process and procedures– Skill based– Feedback from other employees and supervisor– Input on self

Our Process

• Skill Based– Each task was weighted by the level of difficulty on a

scale of 1 to 3– Supervisor did the weighting

• 360 Feedback Weighting– Self input weighted 25%– Peers input weighted 25%– Supervisor weighted 50%

• Each task on the job description was evaluated on a 5 point scale

Our Scales

• 1 = unacceptable

• 2 = sometimes meeting expectations

• 3 = expected performance

• 4 = sometimes exceeding expectations

• 5 = exceeds expectations-mentors others

Our Process

• The formula for arriving at the performance score– Skill weighting (1,2 or 3) times the performance

score (1,2,3,4 or 5) equals the performance score– The supervisor ‘s evaluation score was multiplied by

.5– The employee’s evaluation score was multiplied

by .25– The peers’ evaluation score was multiplied by .25

• Total scores were added to arrive at a total evaluation score

Our Process

• Total scores were divided by the total possible performance score to arrive at a percentage of maximum performance

• Performance percentage tied to pay matrix

Example

Task D-Score

S I P

MaintainsGIS system

3 5 5 4

Provides Training 1 3 2 2

Developsstandards andprocedures

2 4 3 3

Total 26 23 20

Final Evaluations 23.25 12.5 5.75 5

Example

• Final Score = 23.25• Total maximum score = 30• Performance score = 77.5%• Performance is slightly above average

Our Process

• Set up an automated system for evaluation form, calculations, etc.

• Trained every employee• Supervisors - 1 day• Staff - 1/2 day

• Retrain, retrain, and retrain as needed• All evaluations due on 10/1• Use software to set individual salary considering

position in range and evaluation score• Evaluate process and start over

Our Results

• Well received• System is more objective and gives employees an

opportunity to do better• Peer evaluations tend to be the most generous with

supervisor’s evaluations falling towards the middle• Evaluations take less time than originally anticipated• Job descriptions are updated as necessary• More participation on the part of all employees in

the delivery of services• Employees are seeing the results of good

performance

Our Results

• Now moving to peer group evaluations• Peers meet to discuss employees

performance and what is needed to improve performance

• Focus is on improvements and skill enhancements

• Employees are now being mentored• Positive mentoring and cultural change• Reduction in entitlement behavior-

participation

Our Results

• The word is out about the City’s improved work environment

• We are receiving better applicants• Dead weight don’t last long• Our pay is now competitive with the market• Our managers are asking for more “bite” in the

pay matrix• Fewer complaints among employees

Lessons Learned

• Go slow, but be deliberative• Get full board/commission support• Train, retrain, and retrain again• Show the staff that this is their system, not

HR’s• Be prepared to be challenged• Computerize wherever you can• Always be fair in the application of the system