Performance appraisal of senior executives in private sektor Experience from practice Astana May 2014 Prof.h.c. Mag. Stefan Hlawacek Austria

Why this intervention?  To share experience of consulting in SMEs  To present a design of an appraisal that has proved to be fit for senior executives  To stimulate a discussion with you Prof. Mag. Stefan Hlawacek2

The structure  Introduction My background in profession and academics  Basics My understanding and comments towards appraisal systems  Just to remember why appraisals  My Way  Some management considerations Prof. Mag. Stefan Hlawacek3

My background in profession and academics  25 years in the institute of Economic Promotion Consultant – head of consultancy service - Director of head quarter of WiFi Austria  Wifi is part of the Economic Chamber Organization  Training different courses  participants every year  consultancy cases per year  Has organized 120 participations of Austrian Companies in international fairs.  Lecturer Institute Small Business Management and Entrepreneurship at the Vienna University of Economics and Business Institute for controlling at the Alpe Adria University in Klagenfurt  Academic interest: strategy and organization in SMEs  Director business promotion programs in CEE countries at UEAPME Prof. Mag. Stefan Hlawacek4

Basics  Senior experts perform most uncertain, unstructured, but most important jobs  SEs need qualified feed back but the higher the rank the more infrequently an haphazardly it is done  In business strategy a vision has to be developed and communicated, goals implemented …..  Motivation of all levels of the staff has to be raised Prof. Mag. Stefan Hlawacek5

Basics  To keep strategy alive Recurrent systematic dealing  Many tools  early warning system  Special appraisal systems Prof. Mag. Stefan Hlawacek6

How to select who is suitable  Mainly medium and large organizations  Investor owned enterprises do it more likely  Family owned do it only in middle and lower ranks  Culture has the most influence Patriarchal and authoritarian system will just use scalar ratings Prof. Mag. Stefan Hlawacek7

Why appraisals  Pinpointing and enforce or discontinue specific behavior Job performance  Employee development and coaching tool  Readiness for promotion  Basis awarding or merit pay  Communicate vision and strategy  ….. Prof. Mag. Stefan Hlawacek8

My way  To keep strategy alive One time effort permanent process Early warning system appraisal system  Scalar system,  Management appraisal Prof. Mag. Stefan Hlawacek9

Risks of traditional scalar ratings  Halo effect  Leniency / stringency  Contrast effect  Central tendency error  First impression  Reputation of the department  Nobody can be good or better than the boss  Don’t hurt anybody Prof. Mag. Stefan Hlawacek10

Start  Information to CEOs / board of directors  What it can and what should not be expected Keep strategy alive At the beginning not employee comparison / layoff selection and pay determination  Selection what hierarchical level will be included  What training is necessary Prof. Mag. Stefan Hlawacek11

The dialog  Early fixing time and date (1 -2 hours)  Personal discussion  Environment  Personal situation  Personal strengths - outcome, needed support Prof. Mag. Stefan Hlawacek12

Future of the organization  View of the interview partner  Overview re the global vision and strategies  Break down to the very field of work of the employee Prof. Mag. Stefan Hlawacek13

Expectations and obstacles  Personal goals Private Career  Facts that are in favor – how to use?  Obstacles hindering the implementation of the given strategies – how to overcome? Role of the superior Prof. Mag. Stefan Hlawacek14

Fix the targets  Contributions to reach the goal – concrete targets  The employees part – the part of the supervisor  What can be measured? Personal development Financial Organization Leadership Market Technology ect. Prof. Mag. Stefan Hlawacek15

Contract  Documentation of the whole conversation by the ratee  Signature of ratee and rater  Document is kept confidential  Basis for the next appraisal conversation  Only the part with measurements or scalar information may go to the personal department. Prof. Mag. Stefan Hlawacek16

Conclusion  Clear instructions and training for the raters  Raters familiarity with Nature and importance of job duties of the ratee The actual performance of the ratee  Job related and understandable appraisal system  Precautions against improper bias  Supervision  statistics Prof. Mag. Stefan Hlawacek17

Practical considerations  Appraisals to be done regular and in time  Ensure that the written contract matches any numerical appraisal  Avoid arbitrary decisions Prof. Mag. Stefan Hlawacek18

My management considerations  Appraisal system should help to support the strategy implementation If selection for promotion is the the main issue scalar systems will be favored by managers (easy, no discussion can be done even without the ratee)  Emphasis on communication, matching expectations and mutual goal setting  System of traditional and collaborative approach desirable  Motivation triggered Prof. Mag. Stefan Hlawacek19

Prof. Mag. Stefan Hlawacek