Online Case Study: Conducting Performance Appraisals at National Office Supplies

You have recently been appointed as HR advisor for National Office Supplies, a provider of stationery and office furniture for businesses throughout the UK. Whilst based at their headquarters in Hertfordshire, part of your role is to visit the regional sales offices and to audit their HR processes and practices. The company has experienced sound levels of growth in recent years and has experienced growth in turnover of one-third in the last three years. Prior to your appointment, the HR manager worked alone, aside from an administrative assistant, involved primarily in advising regional managers on recruitment and selection, conducting induction and ensuring that the company’s policies (such as health and safety and equal opportunities) comply with legislation. Typically, she would only visit regional offices to attend disciplinary or grievance meetings. Whilst the company has broad guidelines on how each department is managed, the general attitude among senior management at HQ has been that as long as each office is performing adequately, they are happy not to intervene or get too involved at regional level unless directly asked to do so. However, following the recent growth of the firm from a relatively small, tight-knit organisation to a larger, more bureaucratic company, the senior managers are keen to introduce a ‘performance culture’ into the firm and to formalise and standardise its key HR processes.

You have been asked to visit all the regional offices to observe their performance appraisals (PAs) being conducted as the basis for writing a set of guidelines that can be circulated to all regional sales managers as ‘best practice’. The current guidelines simply state that performance appraisals should be conducted at least annually. Regional managers are provided with a pro forma which they are advised to use to prepare for and record the appraisal. This is downloaded from the Internet by the HR administrator. Each year, regional managers are given a sum of money to distribute to their teams in recognition of performance but how managers do this is left to their discretion. Given the sound financial performance of the firm in the previous year, managers have been given £3000 this year to pay as bonuses, although this can rise or fall depending on how well the company as a whole has done over the previous year.

The South West Regional Office

Alex Scally is the regional sales manager for the south west, running from the foot of Cornwall in the west to Bournemouth in the east and Gloucester in the north. She is a gregarious, extrovert character who is very hard to dislike. She runs her office in a very informal manner and is well liked by her team. A chat with one of her team suggests that she is very good at ‘putting an arm around your shoulder if things aren’t going so well’ and for being fulsome with her praise when things do go well. Like her management style, her appraisals are best described as an informal chat. She encourages her team members to do much of the talking, outlining things they think they’ve done well and that they excel at and ways they could improve their sales. The mood is typically relaxed, upbeat and positive. Alex doesn’t write anything down and appears to have no paperwork to refer to during the appraisal. Alex takes the view that appraisals are ‘no big deal’, downplaying their significance partly because she doesn’t want them turned into a focus for criticism or praise. She views appraisals simply as an opportunity to reinforce things that were done well and to ‘gee up’ the team. Although there are no formal plans for future action agreed at the meeting, she takes the view that all other things being equal, if people do better than the previous year then they are performing well. Alex tells you that she makes decisions about bonuses based on gut instinct, not by referring to ‘facts and figures which don’t show the full picture’. Matt Berninger, who the manager refers to as the most natural salesman she has ever come across (partly because, in Alex’s words, he can ‘talk the talk’), has scooped the lion’s share. Examining the way that the region is divided up between the team, this salesman also happens to have the ‘patch’ that includes Bristol. She says of her decision-making process that ‘usually most of the team are happy with their share, some are just pleased to get anything. Anyway, even if they don’t like it, then it’ll just make them work harder next time’.

The Southern Regional Office

Daniel Rossen is the regional sales manager in the southern area, stretching between Bournemouth, Brighton and Reading. Daniel is an altogether different character to Alex. He is reserved and fastidious in his work and well respected among his colleagues, although one team member comments that ‘he keeps himself to himself’. Daniel views the appraisal process as the focal point on the HR calendar and plans meticulously for each appraisal, collecting and collating performance data that he has recorded and reviewing the year’s performance against the agreed objectives set in the previous appraisal. Having sat in on Daniel’s appraisals (a process he was none too happy about), you note that they largely represent a series of questions fired by Daniel at the appraisee, many of which require simply a one-word answer which the manager records by ticking a box on a pro forma that he has prepared himself. The questions asked of the team members focus on areas for improvement, typically by asking appraisees about why, for example, they failed to obtain or have lost a particular contract. Daniel takes the view that performance can only be improved if previously made mistakes are avoided in future. Reflective of the significance attached to appraisals by Daniel, appraisees seem to be nervous, uptight and defensive, frequently having to justify their activities over the year. Daniel makes his decision over the allocation of bonuses partly on the basis of the number of ticks in the ‘right’ box, along with a consideration of volume of sales generated, although he is keen to stress that he seeks to reward his team not only on the basis of total sales but also on the context and way that those sales have been achieved. This year, the highest bonus was paid to the salesman who in the week running up to his appraisal secured a large order for office furniture. The lowest bonus was paid to Kim Gordon who was on maternity leave for the last three months and who was unable to attend an appraisal. Daniel is keen to stress to you, however, that he makes a point of clearly communicating his decision to employees so that they know he is being fair, but admits to ensuring that everyone gets something, just to keep morale up.

Task

Before you visit the remaining regional offices, you have decided to set out some guidelines based on what you have witnessed at the Southern and South West offices, on the basis of which to assess the way that appraisals are conducted. The intention is to develop these guidelines so that they can be circulated to managers to help them conduct more effective appraisals. You decide to start this process by identifying areas of good and bad practice in the two offices.