The Sunday Times, April 22 1990

LETTER - Job appraisal

Get company culture right first before adopting an open system

YOUR writer, Lee Siew Hua, certainly asked the $64,000 question in her article, Bosses Shun Open Job Appraisal (The Sunday Times, April 8).

My view is that to go from a closed- to an open-appraisal system, the employees and the organisational “culture” must first undergo certain changes.

Culture here refers to how the various groups within the company behave and make decisions, much like we refer to the culture of a community as being dependent and yet distinct from the various groups and individuals who make up the community.

Companies know this but most of them, in my experience, under-estimate the changes required and end up implementing it rather “prematurely”.

Open appraisal is fine in theory but in practice it is extremely difficult to implement successfully, and the “goodies” that are supposed to come with it certainly do not come easily. The difficulties are immediate but the goodies are pretty much long-term.

I first realised this in 1978 when, as Chief Executive Officer of a publicly-listed company employing some 500 people, I tried to introduce the open-appraisal system  for all the good reasons listed in the article.

After trying for more than six months with all kinds of training and small group sessions, I found that both managers and employees were far from ready.

Specifically, the level of trust and the quality of the working relationships had to be improved first, and that was going to take a much longer time than I had planned for.

And over the last 10 years as a human resource consultant, I have seen and experienced this same problem in many local and multinational companies with whom I have consulted. One cannot go from an autocratic system to a totally democratic one overnight.

People are not only imperfect but seldom realistic in their perceptions or expectations. Also, in most organisations, the level of trust and the relationships between bosses and subordinates leave a lot to be desired.

To make things worse, job and performance expectations are usually implicit rather than explicit. In other words, people are expected to know how well they are supposed to perform but they rarely know for sure. Or if they do, they do not fully agree with the standards set.

Information about performance is difficult to come by under the best of times. So when the boss tries to discuss his perception and rating of the subordinate's performance, especially in the less positive areas, chances are the subordinate will disagree or keep quiet.

Either way the latter's ego and self-esteem will be hurt. Unless there is a lot of mutual trust and respect it is very difficult for both of them to feel good about discussing and resolving the less positive areas.

Once they decide to go the open-appraisal route, most companies often try to do it the quick way. This is when the managers and supervisors discover that they have to do the near impossible in a very short space of time.

No wonder most bosses shun it.

Even in the United States where it is most prevalent, the track record of the system is far from satisfactory.

General Electric, which has been researching the subject for over 25 years, is still searching for the "right" system.

Japanese companies, on the other hand, have a far better track record in this area. For them the question is not open or closed appraisal – they believe that, by and large, if the relationships are looked after, the numbers will come up right eventually.

Just as the saying goes, "you have to cultivate before you can harvest", companies have to cultivate the trust and relationships before the "numbers" can come up right.

While many would agree that open appraisal is desirable, the challenge for top management and consultants working with them is to ascertain how big a step and how fast a transition the organisation can comfortably handle.

Where it comes to "hard" changes like technology it is possible to leapfrog, but "soft" cultural changes usually require a process of incremental steps and take years rather than months to implement successfully.

Hence, organisations should go slow and not rush in and risk denting their credibility and resources.

If necessary they should go first for a "semi-open" approach – in other words, "open" for the planning stage at the beginning of the year but "closed" for the appraisal stage at year-end.

And the training should be concentrated on monitoring and counselling which should be carried out throughout the year.

Peter Lee & Associates