Designing a reward points based appraisal system for my subordinates [closed]

Question

I am in a managerial position in an organization where the system of performance appraisal is an annual form submitted by the employees which are then reviewed by the superiors to award them grading as Good, Very Good, Excellent and Outstanding. This complete appraisal process lies at the hand of superiors without any involvement of HR until the last stage where appraisal report is submitted to them for record keeping and utilization for further promotions and increments.

I find this system faulty to a large extent. Consider these scenarios- (1) My subordinate works hard enough throughout the year but due to some unavoidable reasons, just a few days before his appraisal form reaches me, he goes for a verbal fight with me. Then there is a huge possibility that I will screw his appraisal. (2) My subordinate gives sub standard results throughout the year, but one month before the times of appraisal he starts giving extra ordinary results. Then I am susceptible to give him much better rating than what he actually deserves based on his annual performance.

Moreover, my organization is a labor intensive workplace. For example, I have to manage more than 500 people daily. Obviously, I achieve this only through my immediate subordinates who are 11 in number.

I want to create a system where each and every task I assign to each of my subordinates should give them a clear indication as of how it will affect their appraisal report. It should appear to them that each and every action they are committing is directly associated with their appraisal. Moreover, I want to make the system much more transparent, positive and trustworthy.

My Ultimate Goal- To create a system which motivates people to work.

For this purpose, I have come up with an idea of monthly points based reward system. Its salient features will be -

1. For each task that I will assign to each subordinate, I will get a target date from them in a fixed format.
2. If the task gets completed on the target date, +5 marks else -1 for each passing working day after that.
3. For genuine reasons, target dates will be shifted without any point loss. Excuses and that too just 1 or 2 days before target date will not be tolerated.
4. There will be some bonus points like +50 for innovating and successfully executing an idea. No negative points for this.
5. At the end of each month, I will send a report to all the subordinates containing total marks obtained by them out of maximum marks for that month along with their aggregate marks for all the months of the current financial year.
6. The final appraisal grading will depend on the final percentage received by him like Outstanding for >=95%, Excellent for >=85%, Very Good for >=70% and so on.

Now I want to ask two questions -

• In case I gave 3 tasks to one person and 15 tasks to the other, the chances of getting a good score or potentially bad score is more for the first one. How should I change my scoring system to neutralize it from the number of tasks that I assign to a person?
• Any loopholes or logical faults that I may be missing which will lead to the failure of this system? Can I remove those loopholes or further improvise this system to achieve my ultimate goal? I am looking for practical actionable advice rather than plain bookish ideas.

PS-

1. Most of the people with whom I am working are grossly demotivated. It's not that I have not tried public appreciation before resorting to this idea. I have a system of giving instant appreciation note to someone doing a great job. But here I am trying to find out the solution for giving results on time. The reason why I am going for such a system is to fight the huge inertia inside them without going for scolding or charge sheets or major punishments.
2. Apart from occasional prizes, I have no power to give any kind of monetary benefit to any employee.
3. The work is mostly managerial for my subordinates too. It's all about getting work done on time with quality.
4. The scoring system I have explained above is not exhaustive. In real time application, I will add some more levels as suitable for my organization.

Answer 1

I don't need to repeat what people said about systems like these being demotivating and easily gamed. I did notice an interesting concern of yours, though:

Consider these scenarios- (1) My subordinate works hard enough throughout the year but due to some unavoidable reasons, just a few days before his appraisal form reaches me, he goes for a verbal fight with me. Then there is a huge possibility that I will screw his appraisal. (2) My subordinate gives sub standard results throughout the year, but one month before the times of appraisal he starts giving extra ordinary results. Then I am susceptible to give him much better rating than what he actually deserves based on his annual performance.

If you are worried about evaluating people based on how you feel at the time of evaluation and not based on their performance over the year, just keep track of how you'd evaluate them at each month or so and keep (private) notes on this. I think all good managers who are tracking the development of their employees should do this as it helps give some insight into what external factors influenced the employees' behavior when you look back and think "what was the company doing at this time when they were behaving such-and-such way?"

(By the way, if you have a subordinate that gets into a fight [verbal or otherwise] with you or any coworker, that's probably against your company code of conduct and should be subject to disciplinary actions. I wouldn't rate any employee who got into a fight as "good" let alone "outstanding." But that's beside the point.)

I have to manage more than 500 people daily. Obviously, I achieve this only through my immediate subordinates who are 11 in number.

Ok, I would suggest you get to know and trust these 11 very well. Once you do that, ask them what they would like to see changed about their workplace, their responsibilities, etc. Ask them for feedback on your performance as manager as well. I firmly believe that "management is not your friend" but managers and employees have a symbiotic relationship and should be motivated to help each other out. Earning your subordinates' trust will help you reach that goal.

Once you are doing that with your immediate subordinates, you'll probably be able to get them to do that with theirs, and so on down the chain of command. It'll take time, but it's your absolute best bet for addressing the problem of demotivation over time. Hell, just feeling like management cares about you is a motivator for lots of people.

Answer 2

Please don't do this!

As JoeStrazzare points out in his comments this system (and pretty much everyone I've ever seen that was similar) can be gamed and that will allow bad workers to get really good appraisals while the geunine "good" employees will suffer, and ultimately they will be forced to pad their estimates as well just to avoid the negatives. So your productivity will actually drop from this alone and that's before you take into account the extra overhead from actually administering the system! Even worse your employees will probably feel that you are dehumanizing them - treating them and their work as just + and - numbers on a spreadsheet and not as colleagues.

There will be ambiguity in what constitutes a "genuine" reason for a deadline changing, which will cause arguments, resentments, accusations of bias and so on.

I could go on but (and I'm sorry) this really is just a terrible, terrible idea!

If you look at the scenarios you say lead you to this "solution"

(1) My subordinate works hard enough throughout the year but due to some unavoidable reasons, just a few days before his appraisal form reaches me, he goes for a verbal fight with me. Then there is a huge possibility that I will screw his appraisal. (2) My subordinate gives sub standard results throughout the year, but one month before the times of appraisal he starts giving extra ordinary results.

Both of these can be solved by having 1-1s or mini-appraisals more frequently than annually - quarterly or six-monthly depending on numbers of direct reports. This amortizes the "they pissed me off/impressed me just before the review" effect over the entire year which reduces any skewing of the results, and it also gives you the opportunity to work on any areas where they need to improve while there is still time in the year to make a difference... they can get a better review and you can "fix" problems months sooner. Yes there is extra time spent on the reviews but it's going to be much less time and effort than the system you propose and will give better results and happier employees (and remember a happy employee is generally much more motivated and productive than an unhappy one).

Answer 3

The problem with creating any system is that people WILL game it.

The best way to motivate people is to praise in public, correct in private, show appreciation for work and give them a clear path to advancement and growth.

Point systems can be gamed and what will end up happening is that your employees will work to the system and not the actual betterment of themselves, their coworkers or the company. You cannot break a human being down to points.

If you want a fool-proof system of rating your employees, get to know them.