IT Human Resource Management Strategies - Effective Appraisal Can Lead to Improved Utilization

Management spends a great deal of its time monitoring investments in buildings, equipment and services. However, our own research studies suggest that appraisal of the IT human resource investments (managers, specialists and end-users), in terms of performance against results, is not carried out with the same objectivity.

Even in those companies where appraisal procedures are in operation, there is no guarantee the performance of IT human resources is subject to effective review. In our sample, one-third of the organizations confirmed that IT personnel are appraised, one-third stated the IT human resources are not taken into account, and one-third admitted no form of performance appraisal being used in their companies. Although other research studies4 suggest that there is a growing attention to performance appraisal procedures within organizations and an increasing number are introducing appraisal at all organizational levels, the approach appears to be having minimum impact within the IT environment.

The need for effective performance appraisal
People in an organization need to know what is expected of them, how they are going to be measured, and most importantly how they are progressing. Otherwise they become frustrated and perform poorly.

But given the results of our own research surveys, why are so many IT managers and their colleagues negative in their response to performance appraisal? There is much misunderstanding. Many executives do not know how to go about setting up standards of performance for IT personnel. There is confusion about what job elements are or are not within an individual's control. Those responsible for the appraisals frequently dislike being part of the feedback process. Ineffective handling of appraisal procedures can lead to a build-up of suspicion amongst IT workers. Inappropriate subjective measurements can destroy motivation, and people fear being appraised on personality traits rather than results.

Performance appraisal can be negative
Much damage has been done to the concept of performance appraisal by formalized schemes which suggest everyone should be appraised once a year. The time for appraisal is greeted with as much enthusiasm as the yearly dose of influenza! The principal reasons given for carrying out appraisals of this type are the needs to evaluate each individual in terms of salary, promotion or career development. These schemes tend to concentrate on evaluating personal characteristics instead of focusing on the value added by each individual during the process of carrying out their work. Managers and supervisors are faced with completing multi-page documents which purport to assist in the appraisal of each individual reporting to them. Long lists of ambiguous terms are provided to describe aspects of personality - most of which can only be judged subjectively! The person being appraised sees the whole process as a personal attack and moves into a defensive stance. Instead of appraisal being a means of giving positive guidance, it becomes reduced to a pat on the head or pull your finger out session. Appraisal becomes the yearly 'spring clean', a time for everyone to fear, a time for making bookings on the redundancy bus or seriously looking at the job advertisements. Reward and punishment schemes not only undermine the value-added activities of those being appraised, but they can generate negative pressure on the managers and supervisors carrying out the appraisals.

The benefits of a positive approach to performance appraisal
The objectives of an appraisal should be to improve the abilities of the individual for increasing value-added performance, identify any obstacles which restrict this improvement, and agree a plan for achieving the projected improvement. It is imperative that this is done through the joint setting of objectives.

It is important to realize that the effectiveness of appraisal is totally dependent upon the skills of the appraiser. The procedures can help or hinder in the process, but the primary factor is the professional ability of the managers and supervisors carrying out the appraisal.

There are many benefits for the appraising manager/supervisor and the person being appraised: improved performance of individuals and departments, better communication, more effective relationships, identification of strengths and weaknesses, discovery of existing and potential problems, identification of training and development needs, clarification of jobs and roles, and increased opportunities to express views. The organization receives a wide range of benefits including improved value-added performance of individuals and departments, improved quality, and better understanding of labor turnover, all of which lead to improved profitability.

Successful appraisal requires realistic performance standards
Effective performance appraisal, especially for the information technology environment, requires a common understanding of the performance standard required from each person. This is a complex task, which most managers would prefer to avoid. Some IT functions resist any attempt to define standards of performance because they may impose restrictions on flexibility of working methods. We agree a level of controlled flexibility is essential, but unmanaged flexibility will lead to ineffective utilization of the human resources. It is no good complaining about skill shortages if no attempt is made to improve the utilization of existing IT personnel, and this will be dependent on the existence of realistic performance standards.

But recognizing the needs for effective performance standards is one thing, knowing how to go about setting them up is another. Each job has to be looked at in its totality. Some parts of a job are vital to the process of creating value-added IT, and it is these which must have appropriate performance standards. A common response from managers, when faced with identifying the crucial value-added elements in each job, is to say they will not have any time to manage! But the essence of management is about identifying the value-added aspects and facilitating ever higher performance.

Setting effective performance standards
The keys to successful standards are the identification of appropriate criteria and the availability of information describing the performance. Management must give careful thought to how information about performance is to be collected. Many a good intention has collapsed into confusion because of the data collection problems. For example, we know of one FT function where a large proportion of the staff were spending the whole of every Friday afternoon each week filling in complex documents which collected data about their performance in the previous four and a half days - ten per cent of each working week was given over to collecting data, all at a time when there were severe skill shortages leading to problems with projects, and extensive requirements for overtime working! We are pleased to say a more acceptable way of monitoring performance has since been introduced.

The rules for setting standards are quite simple. The detailed activities are more complex, but the essence of successful implementation is contained in the four words validity, agreement, realism, and objectivity:

- Validity: the standard must be valid in terms of the value-added component. For example, in some situations dress is very important. Many end-users of central computing facilities may believe untidy dressing habits of analysts and programmers suggest a 'slap happy' attitude to the quality of the product(s) and services. In other situations, standard of dress could be an irrelevant element, because there is no link with value-added.
- Agreement: standards should not be imposed, they should be mutually agreed. If a standard is imposed, then everyone runs to look for reasons why the standard cannot be achieved. When a standard is agreed, everyone attempts to overcome difficulties should they arise.
- Realism: a standard must be realistic. There is little point in striving for perfection if this cannot be achieved. It is not realistic to tell a project manager he or she must implement an FT application in half the time requested during a period of high labor turnover of team members. The balance has to be between too low standards, which do not extend, and too high standards which result in demotivating the individual.
- Objectivity: there must be objective measures to assess or appraise performance. The absence of objective measures means that performance can only be judged subjectively - which will lead to much conflict and a reduction in the value-added component.

Will performance appraisal be effective in any corporate culture?
Performance appraisal should not be seen as an approach which can be imported into any organization to overcome all the performance challenges associated with human resources working in the FT environment of the 1990s. It makes demands on the corporate culture. There are problems if the approach is brought into companies which are 'tone deaf to effective human resource management. The nature of an organization's culture is a key factor. Corporate cultures are made up of sub-cultures where a wide variety of tribal rites and languages may exist. Participative goal setting may be acceptable to the IT function, but the financial or production areas - which may be the end-users of computing facilities - might be highly autocratic and hierarchical sub-cultures. It may be the reverse, with IT wearing the hard-nosed hat and end-user functions demonstrating flexibility.

Appraisers and appraisees should be trained in the appraisal process, the techniques and the difficulties. Whilst training of appraisers is accepted, training of appraisees raises some eyebrows. Appraisees should not be left to experience the process, something which is done to them. They should be part of the development and implementation of the 'life style'.

We believe that performance appraisal has a major role to play in any attempt to establish an effective human resource management strategy for the evolving information technology environment. But we emphasize that appraisal should not be seen as an HRM plaything, another technique brought in and handled by specialists. Appraisal must be part of the day-to-day interactions within a business, not a yearly event which expects everyone to do penance as part of the performance stocktaking.