Appraising the Appraisal System

 For most of the modern-day labor force, employee performance appraisals are a necessary feature of employment. Whether they occupy an entry-level or management position, usually at least once per year, the performance of employees is evaluated by someone in a position of a varying degree of authority. Usually, these employee performance appraisals are tied to compensation increases and promotions. But when paperwork began to grind their annual employee performance appraisal process to a halt, a healthcare system in New Jersey found it difficult to honor these rewards. With the time consuming nature of the paper-based appraisal process, other programs such as training and professional development would often have to be put on hold. Human Resources (HR) managers realized that to continue to provide the quality patient care the provider was known for, a solution was needed to increase the efficiency of their employee performance appraisal process.

 Within close proximity to Princeton University and the cities of Philadelphia, Newark and New York, lies the town of Freehold, New Jersey—home to more than 40,000 suburban residents and the four facilities of the CentraState Healthcare System. Centrastate Medical Center is an integral part of the healthcare system that has been serving the residents of this community for more than 35 years. As an acute-care medical facility licensed for 271 beds, the medical center also serves those seeking high-quality care from all over central New Jersey. In addition to providing its patients with first-class healthcare, CentraState also provides opportunities for professional growth and collaborative career development to its team of 2,300 staff, managers and physicians.

  The employee performance appraisal process administrated each year by the healthcare system’s HR department provides the impetus for these growth and development opportunities. CentraState benefits immensely from the lengthening tenures of its seasoned veterans and the addition of new talent that powers an ongoing expansion trend. Unfortunately, with benefit comes cost, and with regard to their employee performance appraisals the cost to HR was time, because CentraState had outgrown the paper-based employee performance appraisal system that had served them adequately for a long time.

How the Process Worked

  Debbie Whalen, manager of organizational development with CentraState HR, says their employee performance management protocols had become inefficient to the point of being counterproductive. “Supervisors were wasting too much time photocopying hundreds of different appraisal forms for each employee they evaluated,” says Whalen.

  March 31, the deadline for performance appraisals to be in HR, often came and went leaving many to be turned in late or sometimes not at all. An annual report to the CentraState board of directors historically showed a completion rate of 90 percent, which would increase toward 100 percent by June, the month the report got updated. According to Whalen, a solution to the cumbersome, time-wasting paper-based system was long overdue.

  There are approximately 100 departments, supervised by 75 managers and department heads throughout CentraState Healthcare System. Each year, frontline managers completed performance appraisals for more than 2,300 employees. The appraisals included 600 unique job descriptions and averaged 10 pages in length. In addition, managers had to photocopy the job descriptions for each individual employee’s appraisal.

  Explaining the avalanche of paperwork that the annual performance appraisals brought down upon them, Whalen describes how the normal workflow of the HR department got buried at this time every year. “Within the last two weeks of March, we would get flooded with all of that paper,” says Whalen. “So, suddenly we’re bombarded and we have to stop what we’re doing and start keying everything in, because the report has to be sent to the board in April.”

Under the paper-based system, procrastination was a factor in some reviews not being completed by deadline. Now, each individual step is assigned a due date compelling managers to complete their appraisals on time.

  CentraState needed a solution that could offer its managers enhanced capability for employee performance tracking and skill reporting, while at the same time, providing HR the resources they needed to keep the process moving. “The solution also needed to provide functionality for automating HR e-mail reminders to managers for completing the appraisals, and a quick way to see the percentage of appraisals completed at any given moment,” says Whalen. However, Whalen says, the main objective for finding an electronic solution was “to reduce the burden of paper and administrative tasks, so that our managers and HR staff could focus on strategic goals.” The search for the solution began in the summer of 2005 with the formation of a solution selection committee.

Evaluating the Solutions

  Assembled by the HR vice president, the selection committee consisted of Whalen and the HR director, as well as the heads of six departments that would be first to utilize the new employee performance appraisal solution.

  HR developed a list of 10 online appraisal vendors that the committee then screened to five. These five prospective vendors then delivered a product demonstration to the committee. The committee wanted a tool that was easy to manage, easy for employees to use and that had the capacity for self-appraisals. Automatic appraisal score calculation also was a priority feature.

  Over a period of two months, these vendors presented their products via conference calls and Web site demos. In the final phase of the selection process, the committee narrowed their options to three vendors, and they continued to revisit those three using the vendors’ demonstration Web sites. According to Whalen, after evaluating features they liked most, the selection committee’s decision was unanimous.

  The selection committee chose the Halogen solution for its healthcare specific competencies and ease of use. “The managers felt they were the most comfortable using the Halogen system,” says Whalen. “It was specifically built for healthcare while many other vendor solutions were not.”

  Once they had made their decision, the CentraState selection committee implemented a pilot phase that would begin with those six departments participating on the committee.

Launching the Pilot

  At the outset of the pilot, Halogen sent a representative out to Freehold to work directly with CentraState’s HR department. For three days, she worked with a handful of staff members helping to coordinate their efforts to determine how best to configure the system. Whalen says the guidance the Halogen representative provided them with taught them how CentraState would set up their own appraisal form. “The rep pointed out the different options and gave us things to consider for setting up our appraisal tools,” Whalen says.

  The initial response from the managers was positive, though there were some reservations about the electronic signature feature that requires the manager or the employee to sign-on and sign-off before the other can proceed. “We received some negative feedback about the electronic signature feature because our managers weren’t accustomed to the process, but if you weigh all of the benefits of the system against that one issue for some managers, the product was still very well received,” says CentraState Healthcare HR training and development specialist Stephanie Nietupski.

  Upon completion of the pilot, June through December of 2006 was spent building the rest of the appraisal system for the remaining 90 departments. Challenges prior to the go-live included issues with the employee data import and electronically matching appraisal forms to the employee names. This included the time-intensive process of uploading nearly 600 unique job descriptions that were required as part of the appraisals.

The Upload and Go-Live

  Since the job descriptions were already in Microsoft Word format, much of the time-consuming upload work was mitigated by the use of a simple cut-and-paste method, however, moving that much data into Halogen’s Web-based system from Word was still quite a task. “The process for us was very time consuming,” says Whalen. “Fortunately, it only had to be done once.”

  CentraState initially experienced some unique challenges uploading their employee data into the Halogen system, however, the issues were resolved and the upload was successful, which made for a generally smooth transition from the paper-based to the Web-based system.

The System in Action

  The new employee performance appraisal system went live enterprisewide the first week of January 2007. With the go-live completed, department managers began to familiarize themselves with the new tools. Since then, overall completion rates have increased, partly because the new system emphasizes the linear nature of the process and the importance of completing each step on time. “Under the paper-based system, procrastination was a factor in some reviews not being completed by deadline,” says Whalen. “Now, each individual step is assigned a due date compelling managers to complete their appraisals on time.”

CentraState needed a solution that could offer its managers enhanced capability for employee performance tracking and skill reporting, while at the same time, providing HR the resources they needed to keep the process moving.

  According to Whalen, this is one of many benefits the Halogen solution provides CentraState. Usage of the system has considerably reduced the time consumption values for the appraisals, largely due to the fact that managers no longer have to manually perform the tedious arithmetic required to generate an overall score for the appraisals.

  Typically, appraisals proceed through the system in organized protocols that HR helped to establish. First, an employee writes a self-appraisal of his or her performance and perceived achievements. Then, the manager writes an employee appraisal, assigning a point value to evaluative criteria fields, and the system automatically calculates a final score. Lastly, the manager meets with the employee to review the appraisal, after which the employee writes final comments and signs off. Then, the manager signs-off, as well.

  CentraState HR found that they could combine steps within the performance appraisal process in order to streamline it to their protocols, which increased efficiency and reduced delays in the appraisal process. This means, for the many CentraState Healthcare System employees who receive satisfactory ratings on their appraisals, annual compensation increases also are not delayed.

Achieved Solution Objectives

  According to Whalen, since going live with Halogen only a few months ago, CentraState’s employee performance appraisal completion total has improved considerably. The 2007 report to the board of directors listing the percentage of completed employee performance appraisals reported a 93 percent completion total for the appraisals. “Which is fantastic,” says Whalen, “for the first go-around with the Web-based system.”

  Initial evaluation from CentraState management, and their subsequent feedback to HR, reveals a substantial reduction in lost time. “Because of the automated scoring, every employee performance appraisal now requires less time to complete,” says Whalen. “Some of our department heads have said that the online appraisal tool saves approximately 15 minutes per employee. That’s 575 hours of time our managers saved on annual performance appraisals,” she says.

  Nietupski identifies time saved waiting on employee appraisals to arrive in the mail as another value of the Web-based system. “With the paper-based system, managers had to meet with the employee so that the employee could sign the appraisal. If the employee was away,” she says, “the manager would have to mail the appraisal to the employee and then wait for it to come back.”

  With the Web-based solution, Nietupski says the employee can go online, review the performance appraisal and sign it using the electronic signature function. “We want managers to meet one-on-one with the employees, but when circumstances don’t allow it, they can still look at the appraisal together,” says Nietupski. Using the Halogen system, CentraState HR eliminated the need for a temporary employee to scan the organization’s 2,300 yearly appraisals. It also eliminated the need to manually key appraisal scores into the HR system, resulting in a savings of approximately $2000.

Equipped To Grow

  Since go-live, CentraState also has implemented probationary appraisals and re-evaluations based on performance improvement plans. They plan to continue to improve steps in the annual employee performance appraisal process by addressing how the self-appraisal step is executed and also by combining the written comments feature with the sign-off function.

  HR also plans to implement Comment Helper, an additional Halogen feature that enables managers to select prewritten comments from a template library. They expect to implement this feature in time for the 2008 annual appraisal process cycle.

  Later this year, CentraState plans to open a new 171,000 square foot ambulatory campus that will assume many of CentraState’s outpatient services, and which will include a 40,000 square foot fitness and wellness center. Whalen says this exciting expansion will redefine their role as a community hospital, where the emphasis on promoting wellness will be as important as treating illness.

 CentraState Healthcare System continues to look towards the future of healthcare. Whether through the expansion of healthcare services they offer to the community or by automating their own internal processes, the organization is visionary in its mission. “Implementing the eAppraisal system with Halogen was another successful step towards that goal,” says Whalen. “I’m extremely proud that I was part of this particular implementation because it increased the efficiency of our entire organization.”

SEPTEMBER 2007