We have seen that for many employers, performance appraisal is just part of he firm’s overall performance management process. In a sense, performance management starts at the end and works back. Top management says what is our strategy and what are our goals? Each manager in the chain of command then asks, what does this mean for the goals we set for our employees, for the competencies that they must exhibit and for how we train, appraise, promote, and reward them?
Perhaps the best way to illustrate how to create a total performance management process is to look at how on company, TRW did so.
Improving Productivity through HRIS: TRW’s New Performance Management System
With over 100,000 employees in 36 countries on five continents, administering employee appraisals and managing performance is a complicated process in a company like TRW. Several years ago, the firm was deeply in debt. TRW’s top management knew it had to take steps to make the firm more competitive and performance driven. T the time most of the firm’s far flung departments used their own paper based appraisal systems. Top management decided that a company wide performance management system was a top priority.
Top management identified a special team and charged it with creating a one company one system performance management system. The team consisted of several information technology experts, and key HR representatives from the business units. Because team members were scattered around the world, the team and its team meetings were entirely Web based and virtual. Their aim was to quickly develop a performance management system that was consistent in that employees in all of TRW’s far flung organization could use the same system. It also has to be comprehensive in that it consolidated the various components of performance management into a single common system. For TRW these components included goal setting, performance appraisal, professional development and succession planning.
The team created an online system, one in which most TRW employees and supervisors worldwide could input and review their data electronically. (The team subsequently created an equivalent paper based system, for used by certain employees abroad, who did not have easy access to the Web). The Web based performance management system included the information.
To facilitate filling in the online form’s pages, the team created a wizard that leads the user firm step to step. The system also includes embedded prompts, and pull-down menus. For example in the demonstrated strengths area the pull-down menus allow the user to select specific competencies such as financial acumen.
In practice, either the employee or the manager can trigger the performance management process by completing the appraisal and sending it to the other, (although it’s usually the employee that begins the process). Once the employee finishes the online form, a system generated e-mail notifies the manager that the form is ready for review. Then the two fine-tune the appraisal be meeting in person, and by interacting online.
The new performance management system has produced many benefits. It focuses everyone’s attention on goal oriented performance, specifically on what that employee needs to do to contribute to achieving TRW’s strategic goals. It identifies development needs that are both relevant to TRW’s needs, and to the employee. It gives managers instant access to employee performance data. (For example, by clicking a “managing employees’ function” on the online system a manager can see an on screen overview of the assessment status of each of his or her subordinates). It gives all managers access to an employee database (so, for instance a search for an engineer with Chinese language skills takes just a few minutes) and, the system lets the manager quickly review the development needs of all his or her employees. The result is an integrated, goal oriented employee development and appraisal Performance Management Process.