In its November edition the British magazine “Human Resources” (www.hrmagazine.co.uk) published the article “Must try harder”, which indicates that appraisals are still considered a waste of time by far too many employees.

At iProCon HCM we have found a very cynical attitude towards appraisal or performance management systems in general. While the article mentioned above names a lack of integration into reward and career management, we believe the problem is of a much broader nature: the appraisee can rarely see the links between their performance and the performance of the core business, and the process is all too often owned by HR rather than line management. It is therefore often considered an HR-admin nuisance, while it should be one of the most important tools for line managers on all levels to manage their people. This topic was addressed during the HR2009 conference in Prague by iProCon Partner Sven Ringling in his session “Proven techniques to optimize your global performance management strategy”. If you would like to learn more, please contact us.

The Cranfield Network on International Human Resource Management (CRANET) has launched its 2008/2009 survey to benchmark the UK against the rest of the world and to examine trends in HRM.

To take part and to receive a copy of the final report, follow this link: http://www.cranfieldsom.info/apollo/showarticle.asp?link=264

A female employee of GEMA (The Society for Performance Rights) in Germany recently set a precedence in German labour law. Shortly after the new EEO (Equal Employment Opportunity) legislation was introduced in 2007, she took her employer to court: she felt she was discriminated against whilst pursuing a promotion for one of the organisation’s top 16 positions.

She argued that she was as well qualified as her male colleague who got the job. She convinced the judge that this was a case of discrimination using statistical evidence based on an expert’s report. The reasoning was straightforward: the report showed that with 85% of the organisation’s workforce being female the probability that all 16 top managers are male was far below 1%. The judge agreed that this was just too unlikely to happen without active discrimination against women. He therefore ruled that the woman should receive a payment to make up for the difference in salary plus 20,000 Euros in damages.

While executive pay has always been a controversial topic, the financial crisis brought it into the very centre of discussion.

How can CEO's justify salaries in the millions, if they don't seem to lead their companies the right way?
If the high salaries are justified by higher risk, why can they still get golden handshakes, when they have to leave due to disappointing performance?

These are questions the public is asking. Politicians found they can please voters by limiting salaries for board members of banks bailed out by governments.

But, what's actually fair?

Manfred Schmitt, Professor for Psychology at Landau University in Germany, talked about fair pay in a recent interview with "Sueddeutsche Zeitung". There is no objective measure, but most people feel very strongly about fairness. A CEO's salary is generally perceived as unfair, if it's more then 10 to 15 times the average salary. This is between 400,000 and 600,000 Euros meaning that many politicians demanding limits for executive pay got the sum about right - if we take perceived fairness as the right measure.

Schmitt says, fairness is not just an abstract concept nice to have, but can have tremendous effects on workforce performance. Experiments show that employees feeling treated extremely unfair on average have 20 absence days more than employees perceiving their employers and bosses to be fair.

So, keep in mind that it's not just about the number on someone's payslip. It's about the numbers on everybody else's payslips, too and it's about understanding where these numbers come from. The relevance of these insights in the current economic situation is obvious: if you have to cut down salaries, transparency, good communication and a larger cut in executive pay will make the change much easier to manage.