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Appraising Team Performance
The primary dilemma with performance appraisals and teams is that appraisal forms and processes were built with individuals in mind. Using an individually based instrument to measure the performance of a team is difficult. Where does the work of the individual stop and the team begin?

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The appraisal job gets even tougher when the teams are cross-functional, not homogeneous. If a group of customer service representatives used to work solely as individual contributors, each reporting to the same supervisor and each basically doing what all the others are doing, firing the supervisor and empowering the reps to act as a self-managed team doesn't change the nature of their activities much. But creating a cross-functional team that includes representatives from sales and finance and engineering as well as a customer service representative can play havoc with the attempt to find a valid basis for appraising team performance.

The obvious remedy for team appraisal maladies is to measure both individual and team performance. Team members need a clear understanding of their responsibilities as individual contributors along with the team member burdens they are responsible for. In fact, an excellent team development activity is to have team members, as part of their process of building group decision-making skills, identify all of their team member roles and determine the appropriate weights or values that might be assigned to these roles for appraisal purposes.

A more sophisticated approach to measuring team performance is to start by focusing on the team's customers and explore the work processes the team uses to satisfy its needs. Swiping a tool from the reengineering kit, Jack Zigon recommends creating a "process map": a matrix that lists all of the members of the team down the side and all of the tasks to be achieved across the top. It then becomes a relatively simple process to fill in the individual cells, identifying the responsibility of each team member for each task to be accomplished. For certain tasks, some team members will have a whole catalog of contributions they will be expected to make; others will find their cell for a given task empty. In addition to providing a highly valid mechanism for appraisal, this process map can highlight team members who are carrying a disproportionate share of the load.

The most appropriate approach to team appraisal may also be the most obvious: Train team members to create their own performance expectations and measures of how well those standards or expectations are being met. The more that the team is involved in determining what will be appraised and how it will be measured, the more likely the team will be to accept the legitimacy of the appraisal process and, more important, the more the team will behave in the ways that its members have determined to be ideal.

The performance factors portion of any existing performance appraisal form should be examined by any company using or planning to use teams. At a minimum, "Teamwork" must be one of the competencies listed. There should also be behavioral indicators of effective teamwork, in a way that describes to team members what the organization expects of them in their service on a team. Better yet is to put the task to the team itself. Their writing of the behavioral indicators will also create the behavioral norms for the team.

Making Team-Based Performance Appraisal Work
In 1992 Clark Material Handling Company of Lexington, Kentucky, pilot-tested on its management staff, and then implemented throughout its organization, a team-based, peer performance appraisal process. The new system consisted of two parts: review and feedback. During the review phase, members of the team, minus the member under review, discuss the individual's performance, agree on a rating, and produce a written review. In a subsequent session, team members discuss the rating with the review subject and encourage him or her to respond.

In creating the performance appraisal, team members start with the company's ten "standards of excellence":

1. Quality of Work
2. Job Knowledge and Skills
3. Work Performance
4. Adaptability and Flexibility
5. Customer Relations
6. Safety and Housekeeping
7. Dependability and Reliability
8. Initiative
9. Stewardship
10. Interpersonal Relations and Teamwork

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To begin, team members discuss the team's expectations of the member being reviewed, as well as the team's expectations of itself. Team members may discover that they are not as familiar as they should be with each other's jobs. The facilitator, who is always present, instructs any team member who is unsure about a review subject's job to give an average rating at first and then adjust the rating based on observations and documentation provided by other team members.

Facilitators help guard team members against falling into rating errors, particularly recency effect and halo. In addition, they stress that ratings should be based on behavior that is the norm, not the exception—whether good or bad. Team members are required to provide actual behavioral examples of a team member's successes and derelictions. "He lets us down a lot," may be true but is hardly specific. "He's been absent twelve days this year," qualifies easily.

Team members often find that managers, active participants in the team appraisal discussions, have more specific input than do other members. Managers may have greater access to data and may also be more skilled at making accurate behavioral observations.

The facilitator helps the team reach consensus and emphasizes that there should be no surprises during a review. It's inappropriate, the facilitator advises, for teams to gunnysack their complaints about a fellow member all year and then dump them on the unsuspecting pigeon at review time. Instead, team members have a responsibility to help each other succeed once they know the performance expectations.

Team Reviews in Action
Clark's review process begins with the employee being reviewed chronicling his own performance over the past year to remind the team of his strengths and accomplishments. He either discusses his assessment of his own contributions with his teammates in a face-to-face session or hands over the documentation and lets the record speak for itself.

The team compares the employee's own documentation with the company's standards of excellence, then discusses and agrees on a team rating for each standard. One member records salient comments; the process can take from ninety minutes to four hours.

The recorder's notes are transcribed to form a written review. Team members review it, make corrections, and sign the original. They then schedule a face-to-face session with the teammate being reviewed.

In as informal a setting as can be arranged, a designated team member reads the team's comments for each standard. Team members encourage the reviewee to seek clarification and interject their personal views on how the decisions made were determined. Feedback sessions are difficult; rarely is the information all peaches and cream. But clarifying the team's perceptions and expectations leads to greater commitment and understanding from team members.

Members are trained before being turned loose to dissect each other. Using a highly creative training twist, regular Clark employees practice giving feedback by using a temporary employee as the recipient. Clark makes extensive use of temporaries so the performance of any given one is known; each volunteers for the guinea pig role. Participants have the benefit of practicing and fine-tuning a tough skill on a live subject whom they actually know.

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Enhancing the Team Review Process
Clark's procedure is one of the most sophisticated for providing team members with the opportunity for performance appraisal. But this advanced approach could be made even more productive.

While the Clark process encourages team members to define behavior-ally the company's ten standards of excellence and the ways that they show up in team performance, an additional way of ensuring rater accuracy, competence, and commitment would be to spend some time working with the team in defining what constitutes a competent rater. In the Clark example, a rater with little direct information about a teammate's performance of a specific fragment of his job is urged to give the individual an average rating and then adjust that rating based on the "observations and documentation" provided by other team members. That might be a reasonable approach, yet team members might prefer that those lacking data simply refrain from providing any assessment at all and not be swayed, for better or worse, by the opinions of others. Employees may have strong feelings about how they want their performance to be evaluated by teammates. Enabling the facilitator to allow the team to come to consensus on issues of how rater competence will be determined will increase their commitment to the process.

Rater bias can be a central concern for reviewees, particularly when, as in the Clark situation, peer performance appraisals will influence compensation decisions and promotional opportunities. Peer appraisals may seem fairer than supervisory appraisals, yet peers are likely to have an interpersonal relationship with the ratee and are more likely to be in direct competition for organizational rewards. Besides merely monitoring for bias and rater error, formal training in these areas can mitigate human dynamics problems.

Finally, ratees may not automatically accord peers the same degree of perceived knowledge or competence that is often automatically accorded to supervisors. Because peer raters may be less educated and less sophisticated than supervisory raters, they may be viewed by ratees as less competent. Again, training for raters, particularly peer raters, can optimize a process that is already strong.

Dick Grote, The Complete Guide to Performance Appraisal, Amacom Publishing. You can find this excellent book