G.5.5: Xerox Revamps Performance Appraisal Systom S6 In the mid-1990s Xerion corporation was faced with of peoblem-is performance apratsal system wes not wosking. Rathet than motivating the employes, their appraisal preen was leaving them dicocaraged and diumentied. X e ? fouk recogniand this protlem and developed a newe system in ofder to chiminate it: The Old Syatem main priticiples: 1. The ampratal occured ance a year 2. It required employees to doctument their accompilah. trients. 3. The manaper would aseen these accortaplahinients in writing and asign nutserical catines. 4. The aproisal included a mumary writtien appraeal and a rating from one (uniatufuctory) to five (exceptional). 8. The pating wete on a forced distributiont, controlled at the thres of below level. 6. Merit increave were tied to the sammary ratine level. 7. Merif increase information and performance appradsab occurred in one scssion. This system sesulted in inequitable tutings and wis cited to emplopecs as a major soutce of drearifiction. In fact. in 1983, the Reptougraphic Resinesi Oroup (RBO), Xeros' main copier division, teported that 95 percent of its efaplopes received either a thee ef four on their appeasal. Merie rases for people in these two sroops only varied by one to two percent. Eisentially, actovethe-foand resies were being given to all employees, regandles of performance. The New System Rathet than attemptine to fix the old apprainal mseren, Xetox formed a bik force to create a new wasen from scratch. The tank force iself wis made op of setuing personel executiven, homever, mankers of the takk force also convilted with council of employees and a council of middle managen. Tonether they cteated a new swatan, which differed troen the old one in many key repects: 1. The absence of a nimencal meine watem. 2. The presence of a half-year feedtock aranon. 3. The provision for devwlopment planning. 4. Prokibition in the appratal grideline of the use of mabjective assestenchts of perfortaance. The new sitem has thice stakes, a orposed to the out over the course of the year. the msnaect meets with each etrployer. Fopreliet, ther work ous a writuen agrecenent on the emplopoc's aonk. abjectives plans, and eats for the pere seredint of sutafactor perfortance are explicitly speliled cat in mesmurable, attanable, and specific terms. and wenkneses ate discussod, as well an pooible meats for itsprovine furformance in the latter half of the prar. Boch the manoet and the rmpiover sien an "elfiectived shoet" indicuting that the meetinet tootk place. The thitd stape in the sppraisal proctos a the formal performunce review, which takes place at yeir' end. Both the maraect ind the ermployes pecpare a verimen docueient. targets. They then toett and discum the petfomance of perceptions of the munager and the englopec. Thin maeeforsaree an well ar the nepative. This soger also includes cation of developenent experienses that can hele the e= ploper are discrised. The merit increase discusaion tales place in a segerme meetine from the petformance appesicul, wually a moceth or two latet. The discusion waully centes on the specife reasone for the merit taise amount, wach in peformance, ullows the emptover to better see the feasons betind the salary incicase amount, at opponed to the manary cank, which tell the enployee very little. A follow-up survey was condreted the pere if ert the impletacntation of the new appraial manem. Resolo were as follows 81 percent better indetitood work eroep otipectives 84 petcens considered the new apprisal fair 72 percene said they underavod haw thrie mans ane wis determined 70 percent met their personal and wock objectives 77 percent considered the sosem a step in the ristin dirsction. In conclusinen, it gan be dearly seen that the ners wstefn is a vast improwement over the previoes one. we of self-asgraials, nun coonter to conventional management practices, the reiults rpeak for theravelves. 468 Chapter thirteen / Strategies for Effective Performa QUESTIONS 1. What "type" of performance appraisal is central to the new system at Xerox? Which, if any, of the criteria for a successful appraisal system does this new system have? 2. Given the emphasis on employee development, what implications does this have for hiring and promotions? 3. How do you think management feels about the new performance appraisal system? Why? 4. Are there any potential negative aspects of the new performance appraisal system