Open to assessment

While some employees get a little nervous around performance review time, those doing their jobs well generally look forward to the career development opportunities that can arise from the process.

However, when an employer decides to gather independent feedback on an employee from customers, the performance review stakes are suddenly raised. Now, it isn't just manager or peer feedback contributing to the review, but the opinions of a diverse range of customers.

Even the most confident employees are likely to start obsessing about their last contact with their most difficult customer and hope that customer is not among those canvassed.

"It is still a positive process, but not the part of the year I most look forward to," says one bank executive.

Banks, with their emphasis on customer service and investor relationships, sometimes take a "360 degree" approach to performance reviews - gathering performance feedback from sources including staff, managers, and the employee, as well as customers. The 360 degree approach is favoured for CEO evaluation and for performance reviews for individuals who have a high level of customer contact.

Leanne Markus, an organisation psychologist and managing director for Wellington-based performance management company Performance Group, says while it is relatively uncommon for New Zealand organisations to survey customers for the purpose of an individual performance review, research shows that such feedback may be beneficial to employer and employee the first time around.

"However, this depends on the processes used and the perceived fairness and validity [on the part of the employee]," she says.

Which raises one crucial question: is surveying customers for the purposes of a performance review fair to the employee? How far should input from a customer be weighed against the performance objectives of an individual when the customer has no real idea what those objectives are?

What if the customer is carrying a grudge against the organisation - a refused bank loan for example? Can employees object to the employer seeking customer feedback, and would they want to?

Markus says employers need to remember customer feedback can be fraught with issues of bias and lack of objectivity.

"It is well established that people who rate well on 'citizenship' behaviours like teamwork and interpersonal skills will rate better [with customers] on overall performance - whether or not this is supported by objective performance measures," she says.

One organisation that knows to tread carefully when it gathers customer feedback for performance reviews is Westpac Bank. With 6000 employees undergoing half-yearly formal performance reviews, the bank is well versed in kosher review practices.

Gina Dellabarca, head of remuneration and performance management for Westpac Bank, says Westpac employs a small number of independent research firms to gather customer feedback on the performance of relationship banking employees like mortgage managers. Customer feedback is not gathered on tellers and other staff with relatively random customer contact.

"In the interests of customer satisfaction we need to get customer feedback and to act on it. Some people may not feel happy about that, but in the long term it is better for everyone. Customers and [Westpac] staff are usually very receptive to it," says Dellabarca.

When Westpac gets customer feedback on an individual it can provide specific customer comments to the staff member having the review. The customer elects whether or not to be identified in this way during the survey process.

Dellabarca says when employees take the process in the spirit it is intended, employees have an opportunity to improve customer service and the customer has the opportunity to provide feedback - which may include a glowing endorsement.

"Most customers are happy with the process because it shows them we take customer service seriously," says Dellabarca. But if customers are happy, employees may be less so - Dellabarca concedes some fear having their performance rated by customers.

"Human dynamics are so complicated. Very high performers who always go the extra mile can immediately think they are being [criticised]. It can be an art to get them to move on and they sometimes need a few days to realise they are happy with the review," she says.

If there is a common misconception around performance reviews, and particularly those that involve customer feedback, Dellabarca says it's the perception they exist to highlight where an employee is going wrong.

"Nobody ever comes to work to do a bad job. So there is no value at all in trying to beat someone up about something a customer said.

"The review process should have open-ended questions and the focus should be: how can we improve this customer relationship; or make this job better for you and the outcome better for our customers?" she says.

If this approach doesn't reassure, preparing for a performance review might. Dellabarca says employees who are nervous about performance reviews can prepare for them by reflecting on job performance and soliciting feedback from team members and other internal peers. "They can also bring along any documented customer or internal feedback received over the period."

But can an employee actually object to a performance review process that includes customer feedback? Markus says while in practice this is difficult, an employee is always free to object to any feedback on the grounds that it may not be objective.

Dellabarca says if personality clashes occur, the employee always has the option to elevate the review to a higher management level.

"They can also touch base with HR and together review how the performance reviews took place. The outcomes of Westpac performance reviews have to be agreed upon and signed off by both manager and employee."

Interestingly, Dellabarca says some people love performance reviews, bringing along cards they have received from customers and treating the process as a chance to talk about themselves and where they want to go in the future. And this, say performance management experts, is where the performance review process really comes into its own.

"Performance reviews can help organisations to retain people because the process is actually about personal career development. It's a place for a manager to say: 'Is there anything you would like to feed back to me or anything I can help you with in your job?"'.

Perhaps the most important realisation for all parties is that a formal annual or twice-yearly performance review process, with or without customer feedback, forms only part of the performance management picture - people managers should have regular informal communications with staff and mete out regular feedback and recognition throughout the year.

"There is something powerful about people coming back to their managers to say 'I turned that feedback into this great outcome' or 'I am going to try a bit harder on that and see how I go'," says Dellabarca. 

Performance review tips

FOR EMPLOYERS

* Ensure job objectives are understood and agreed upon at the time of employment.
* Put performance review process information on an intranet or office system.
* Regularly update employees about performance management and review processes.
* Provide ongoing performance management training for people leaders.
* Budget for quality performance management. Costs include independent research, staff time used to prepare for and to take part in reviews.
* Demonstrate specific examples of desired performance during the review process. For example, describe an incident where the employee displayed the desired qualities.

FOR EMPLOYEES

* Prepare for performance reviews by collecting feedback and brainstorming your own views of your performance.
* Be honest about how you want to work. Realise your employer uses the review process to develop your career and retain you as an employee.
* Remain open to feedback.
* If you feel there is a personality clash, or if you feel customer or peer feedback is not objective, point these problems out to a higher manager.
* If your review is with the managing director, state your objections calmly. Don't be vague or defensive; don't get emotional.