STOP PRESS: Human Resources Consulting has just completed an exercise to assign appropriate competencies to each Job Description. These Competencies have then been rated for their relative importance to the job. The ratings have then been reduced to percentiles and the percentiles used a loadings to generate an overall performance score. In turn this performance score has influenced the annual bonuses received by co-workers.


Performance Appraisal and Review Systems: Case Study

For many, team leaders and co-workers alike, the annual Performance Review through the Performance Appraisal and Review System (PARS) is seen as an onerous, anxiety inducing, time consuming data collection exercise and a waste of time which produces no valuable outcome. Is this the case for you? It need not be this way …

More than eight years ago a client challenged Human Resources Consulting to produce a Performance Appraisal and Review System with the following preferred inclusions:

  • Clarity of systems instructions
  • Simplicity of format
  • Transparency of information (for both parties)
  • Usefulness of information
  • Brevity of system
  • Accuracy of measurement
  • Self-assessment
  • Objectivity
  • Feedback to staff
  • Key Performance Indicator (KPIs) link (or Action Goals)
  • Job description linked to real job appraisal
  •  Remuneration link
  •  Numbers of employees being assessed (by team leader) 6 to 8 pers.
  •  Personal development/training needs analysis
  •  Sensitive measurement to differentiate “significant” achievements
  • Goal setting
  •  Reflect two systems (PARS and Bonus determination) in one format at end of year review
  •  Use of electronic storage/format

In addition the Performance Appraisal and Review System needed to:

  •   Focus the employee on Corporate Objectives and Strategic Goals       
  •  Provide a measure of comparative performance
  •  Facilitate the determination of the business
  •  Be interactive between manager and employee
  •  Be fair and transparent
  •  Be relatively easy to understand and use
  •  Assess performance over the whole year
  •  Enable the manager to “go in to bat” for the employee to the GM
  •  Enable the GM to “go in to bat” for the employee to the Board

And there were a number of other parameters, all of which needed to be met.

 We did it. We delivered. We created a stable, reliable and valid system on which a client could confidently assess and manage performance, and allocate Board determined Annual Bonuses. As well, we provided training to all the users and explained the rationale behind the operations. We backed this up with a user manual.


The System has since been critically reviewed and ‘tweaked’ where necessary, to provide superior performance.  Essentially, the system has operated effectively with minimum review and author input. The client is very satisfied because the system does what it was required to do and delivers and delivers well, on all the criteria.

 The outcome was a system with the following features:

  •  Web based, alert activated and interactive
  • Designed for a facility operating 24 hours/7 days
  • Developed such that the rating scale was structured to realistically represent a reasonably stable employed population (~4% employee turnover)
  • Access controlled by a hierarchy of privacy restrictions
  • Accessible by individuals allowing input to their personal file, with their input becoming ‘read only’ after 24 hours; and input from their team leader’ and HR becoming ‘read only’ immediately.
  • Gives individuals 24/7 ‘read only’ access to their Job Description, Job Competencies and Work Action Goals (kpi’s) enabling them to ‘be informed’.
  • Requires Team Leaders to review the file of each co-worker at least monthly and respond.
  • Measurement is provided by assessing critical competencies for each worker
  •  Groups of workers with the same or essentially similar Job Descriptions are grouped
  • Competencies are allocated and prioritized by HR, consultants and worker groups sharing the same or similar JD’s to provide a weighting.
  • Assessments are made by the team leader reviewing all system information and personal notes and rating the worker on the competencies and achievement of the Work Action Goals set at the previous Annual Review.
  • A Performance Score is delivered
  • The Annual Bonus, the dollar value of which is determined by the Board, is distributed to the individual based on the Performance Score.
  • Work Action Goals are identified at each annual review and updated on the individuals file after HR review.

The system has the following benefits:

  •  It is remarkably stable…no bracket creep has been observed even after 8 years of operation.
  • Workers, even with limited computer knowledge, are able to access their personal file by user ID and password and navigate user friendly information.
  • A training course on the background and features of the System is provided as part of the package.
  • Initial competencies will be mapped to the JD’s and weighted.
  • Competencies are applied to identify Work Action Goals.
  • If Performance Score is used for Bonus allocation, the Bonus Allocation can be applied separately to separate groups as determined by the Board.
  • The spread of bonuses and the resulting dollar amount difference between average and excellent performer is modest and unlikely to result in personal dissatisfaction and envy/jealousy.
  • Allows shift workers to communicate on line with mentor/leader
  • The score distribution can be modified to reflect the turnover vs stability of the employees thus providing long term stability of the Performance Appraisal measures.
  • An Operational eManual accompanies the System.