How appraisal systems influence company culture

by HRD25 Oct 2016
The appraisal meeting has been the cornerstone of best-practice performance management but may be coming under some question with companies considering replacing appraisals with different forms of feedback. 

These include 360-degree reviews and coaching as discussed by a panel at the recently concluded HR Leaders Asia conference. 

“However, it should be kept in mind that appraisals and rewards have a significant impact on the expectations of people in an organisation,” said Michael Gourley, director of Asia/Pacific, Human Synergistics International (HSI). 

“They go far beyond the specific behaviours these systems are designed to reinforce to influence the culture of an organisation.”

According to a research by Dr Robert Cooke, CEO and director of HSI, on organisational culture, there’s a disparity between ‘constructive’ cultural styles and cultures that are ‘aggressive/defensive’ and ‘passive/defensive’ regarding the fairness of employee appraisals.

They found that for ‘constructive’ cultures that are high on achievement and humanistic values, appraisals and rewards were a major factor in reinforcing the culture. 

The focus is not just on what gets done, but how it is done, they added. 
In ‘passive/defensive’ and ‘aggressive/defensive’ cultures, appraisals were not used effectively.
 
Instead they found that what did register as statistically significant was the high use of criticism and punishment to drive performance. 

“The appraisal meeting should be a coaching session,” said Gourley. 

He said there are three ways of conducting such a session: 
•    Tell and sell; 
•    Tell and listen; 
•    Joint problem-solving

“Only the last one works,” he added. 

“This is coaching-oriented and there should be a clear line of sight between performance, assessment and rewards.”   

He further added that the first step in reviewing appraisal systems should be assessing the management style in the organisation with 360-degree feedback. If it is not ‘constructive’, then work has to be done. 

It would also pay to gain an appreciation of what shapes a constructive culture, he noted.

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How a cultural shift can transform SOEs

Should CEOs be ‘culture conformists’?

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