Title: Appraising Auditor Performance: Strategies and Lessons Learned
1Appraising Auditor Performance Strategies and
Lessons Learned
- Susan Cohen, City Auditor
- City of Seattle
- May 12, 2004
2Agenda
- Reflecting on performance appraisal experiences
- Lessons learned about performance appraisals
- Dealing with performance appraisals and other
difficult conversations
3Credit
- Wilson, Thomas B. Innovative Reward Systems For
the Changing Workplace McGraw-Hill, New York 1994
4Definition
- A PERFORMANCE APPRAISAL IS
- One of those special human encounters where the
manager gets no sleep the night before, and the
employee gets no sleep the night after. - --Thomas B. Wilson
5Appraising vs. Managing Performance
- Appraising
- Limited (annual) feedback
- Artificial rewards
- Managing
- Continuous management review
- Active and appropriate reinforcement
6What Do We Want?
- Managers Ability to recognize and reward
superior performers. - Employees Honest and timely feedback, specific
development, and an opportunity to receive
effective coaching. - Compensation Managers To ensure that dollars
are allocated according to performance levels. - Human Resource Executives Ability to identify
top performers, plan for their development and
succession, and reward them adequately.
7What the Experts Say
- Quality management gurus (Deming, Juran) argue
that appraisals should be eliminated because
they - Inaccurately portray individual performance as a
major impact on results - Inadequately address system-based issues.
8Did You Know?
- At least two dozen studies over the last three
decades conclusively documented that people who
expect a reward for completing a task, or for
doing that task successfully, simply do not
perform as well as those who expect no reward at
all. - --Harry Levinson
9Rewards or Punishment?
- Pay is not a motivator
- Rewards have a punitive effect because they are
manipulative - Not receiving an expected reward is also
indistinguishable from being punished. - Rewards rupture relationships
- Rewards undermine interest because artificial
incentive cannot match intrinsic motivation
10Goals for Appraisal System 1
- Providing staff with information designed to
maximize their individual potential and
contributions to the agency - Providing management with information needed to
recognize and reward top performers - Providing information and documentation needed
to deal with poor performers
11Goals for Appraisal System 2
- Feedback to auditors
- How to improve skills and personal qualities
- Effective utilization of resources
12Goals for Appraisal System 3
- Provide employees with feedback to improve
performance - Provide basis for allocating pay
increases/incentive awards - Focus training and development activities
- Identify candidates for promotion
- Create an opportunity for employees to receive
recognition - Assure adequate documentation of performance
that satisfies the requirements of the 1964 Civil
Rights Act and EEO Commission guidelines - Improve communication between managers and
employees - Establish performance goals and standards for
the next performance period
13Goals for Appraisal System 4
- Reinforce collaboration, teamwork, and a focus
on the priorities of the business
14Overarching Goal
- To create and promote a workforce that can
achieve the organizations mission to provide the
most value to its stakeholders
15Evaluation Criteria 1
- Planning
- Data Gathering and Documentation
- Data Analysis
- Written Communication
- Oral Communication
- Working Relations
- Supervision
16Evaluation Criteria 2
- Achieving Results
- Maintaining Client and Customer Focus
- Developing People
- Thinking Critically
- Improving Professional Competence
- Collaborating with Others
- Presenting Information Orally and in Writing
- Facilitating and Implementing Change
- Representing the Organization
- Investing Resources
- Leading Others
17Evaluation Criteria 3
- Amount of Work
- Quality of Work
- Auditor Knowledge
- Problem-Solving Ability
- Communications Effectiveness
- Ability to Follow Instructions
- Planning Skills
- Relationships
18Remember Myers-Briggs
- Anyone who supervises someone else should
- --Look carefully at the assumptions made about
motivation. - --Assess the degree to which carrot-and-stick
assumptions influence own attitudes. - --Harry Levinson
19Various Scales
- Scale 1
- Meets Expectations
- Exceeds Expectations
- Role Model
- Below Expectations
- Scale 2
- Pass
- Fail
- Scale 3
- Unacceptable
- Needs Improvements
- Fully Successful
- Exceeds Fully Successful
- Outstanding
- Scale 4
- No scale--qualitative information only
20Typical vs. Ideal System
- Highly subjective process
- Unilateral from bosss perspective
- Little focus on future capacity
- Uncertain link to business success drivers
- Explicitly defined process
- Mutually understood
- Strong development focus
- Grounded in business success drivers
21New Practices
- Pass/fail systems rather than individual
performance ratings, or no ratings at all - Peer review systems rather than manager-driven
systems - Using review periods as a means to counsel
employees on career and promotional opportunities
- Minimizing the relationship between performance
and pay raises
22Why Appraisal Systems Fail
- Managers lack sufficient information to judge
performance accurately - The goals and standards are unclear and
subjective - Employees become defensive
- The process is not taken seriously
- Managers do not prepare adequately
23SMART
- Specific
- Meaningful
- Achievable
- Reliable
- Timely
24Legal Considerations
- Personnel laws and court cases have established
requirements for performance appraisals - --Performance measures must relate directly to
the job - --Evaluations must be based solely on job
criteria - --Results of evaluations must serve as the basis
for making decisions (e.g., salary, training,
promoting, layoffs, and terminations) - --Performance appraisals must be conducted at
least once a year - (Civil Rights Act, Bito v Zia Company, Griggs v
Duke Power, Wade v Miss.)
25Employee Considerations
- Clear sense of direction
- Opportunity to participate in goal-setting
- Timely, honest, and meaningful feedback
- Immediate, meaningful, and sincere reinforcement
of efforts - Coaching and assistance to improve job
performance - Fair and respectful treatment
- Opportunity to understand and influence decisions
26Susans Favorite Quote
- If people do not participate in and own the
solution to the problems or agree to the
decision, implementation will be halfhearted at
best, probably misunderstood, and more likely
than not fail. - --Michael Doyle in forward to Kaner, Sam
Facilitators Guide to Participatory Decision
Making New Society Publishers, Gabriola Island,
BC 1996
27- Performance Management
- Instead of
- Performance Appraisals
28Performance Management
- Communicate the organizations mission,
strategies, and performance goals - Establish performance measures to reflect both
quantitative and qualitative elements. - Identify goals that balance short-term results
with longer-term success indicators - Ensure that employees throughout the audit
function understand the organization's goals
29Performance Management (cont.)
- Foster employee involvement in goal-setting
process - Provide training to managers and employees on
giving and receiving feedback - Designate manager to serve as mentor and assist
employees in using feedback for performance
improvements - Provide training for employees to strengthen
performance and advance career
30Feedback
- Feedback should be related to meaningful
consequence - Quantitative assessments valued more than
narrative or subjective assessments - Public displays for group results and private
meetings for individual feedback - Daily, weekly or biweekly feedback is valued more
than annual feedback - Self-assessments have little value as an
objective and meaningful source
31Five Stages of Difficult Conversations
- Prepare
- Imagine resolution
- Initiate conversation
- Explore their story, then yours
- Collaborate on resolution
32Stage 1 Prepare
- Consider your objectives and approach
- Coach yourself to accept multiple outcomes
- Focus on your purpose in initiating the
conversation - Adopt a positive mindset (see next slide)
33Choose a Positive Context
- When a conflict is framed in a negative context,
the focus is on power, and will likely result in
a winner and a loser. - If a hammer is the only tool you have,
everything looks like a nail.
34Stage 2 Imagine Resolution
- Relationship will improve as a result of
conversation - Remain open-minded rather than advocate for a
specific solution - Believe that a mutually acceptable solution can
be achieved
35Stage 3 Initiate Conversation
- Invite conversation and share your purpose
- Key practice describe the issue/problem as a
difference in perspective - Avoid problem solving during initial stage of
conversation - Acknowledge feelings that are frequently core
issues, before attempting to solve stated problems
36Stage 4 Explore Their Story-- Then Yours
- Start with their story
- Dont assume that you know their story
- Dont push backListening does not imply
agreement - Express your views and feelings after their story
is finished
37Your Story
- Start with the most important points
- State what you mean clearly to avoid assumptions
- Share how you formed conclusions
- Avoid words like never or always or fault
- Present your story as your truth not the truth
38Stage 5 Collaborate on Resolution
- Invite the other person to help identify
solutions - Invite the other person to come back if attempted
resolution is not successful - Remain hopeful that mutually acceptable solution
is possible