Performance appraisal in an NHS Hospital

Tom Redman, School of Business Management, University of Teesside

Ed Snape, University of Bradford Management Centre
David Thompson, Health Services Management Centre, University of Birmingham
Fanny Ka-ching Yan, Department of Management, The Hong Kong Polytechnic University

T
he spread of performance appraisal in the UK public sector from the mid-1980s
onwards was greeted with predictions that such schemes would invariably prove to be
costly, short-lived and do little to improve performance (George, 1986). Despite such
pessimism, it appears that the use of performance appraisal in the public sector is increasing
as more employee groups are subjected to it (IRS, 1995). However, it is less clear that
performance appraisal has been effective in the public sector. Guest and Peccei’s (1992) study
of the personnel function in the National Health Service (NHS) identi® ed 17 items of practice
and asked respondents to rank the effectiveness of personnel in these areas; performance
appraisal was ranked 14 out of 17 items. Fletcher and Williams’ (1996) study raised concerns
about the ® t between collaborative organisational cultures in local government and increased
peer competition arising out of the introduction of performance management. A survey of
school teachers found only 11 per cent of respondents reported that the introduction of
appraisals had led to improved performance (Healy, 1997).
Given that millions of public sector employees are now subject to performance appraisal,
it seems timely to review its contribution to effective HRM from the perspective of
appraisees. Much of the recent empirical work on performance appraisal in the UK has
concentrated on the private sector (eg Bowles and Coates, 1993) and on the experiences of
appraisers (Barlow, 1989). We thus know rather less about its nature in the public sector and
about the views of those who are appraised. Hence this study.
We report the ® ndings from a case study of performance appraisal practice in a Trust
Hospital. Drawing on interview, survey and documentary evidence, we seek to examine the
effectiveness of performance appraisal in a public sector context. The article is structured
into three main sections. The ® rst section reviews the development of performance appraisal
in the NHS. Secondly, we describe the case study organisation and the rese arch
methodology, before reporting our findings. Thirdly, we conclude by considering the
implications of our ® ndings for appraisal practice in the NHS.
In the NHS, there have been several attempts to introduce performance appraisal systems,
not all of them successful (George, 1986). The autonomy of local health authorities may
account in part for both the piecemeal adoption and the short-term nature of previous
schemes. The complex and highly politicised nature of healthcare has also made it dif® cult to
sustain appraisal systems (Wilson and Cole, 1990). The use of performance appraisal in the
NHS has raised concerns about a possible undermining of the public service values of staff,
the medical autonomy of professional employees (Dent, 1993) and the traditional systems of
public accountability in the NHS. Furthermore, the lack of time, resources and the ambiguous
nature of `results’ in healthcare all add to the dif® culties in assessing performance.
The growth of performance appraisal in public services is generally linked to the Thatcher
government’ s restructuring of the sector. The early phases concentrated on changes to
management practice in a bid to enhance ef® ciency and to pave the way for a more radical
marketisation of services (Bach and Winchester, 1994). A key element of the early reforms was

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the development of performance targets and related pay that necessitated the wider adoption
of performance appraisal. Thus appraisal is now a key constituent of the `new public
management’ which emphasises economy and ef® ciency in public organisations (Rocha, 1998)
and reflects an increasingly `commercial’ NHS (Bach, 1994). Emphasis on performance
management has been underpinned by the introduction of league tables, the patients charter
and the audit commission, all facilitated by new techniques for performance evaluation from
advances in health economics and information technology (Winstanley et al, 1995).
The origins of the current appraisal system in the NHS, the Individual Performance
Review (IPR), can be traced back to the Grif® ths Inquiry into the management of the NHS
(Department of Health and Social Security, 1983; NHTSA, 1986), which saw a need for
fundamental culture change, moving from an administrative to a managerial culture.
Increasingly performance appraisal and staff development have been seen as the key tools
to deliver the desired organisational and managerial culture changes in the NHS (Fullerton
and Price, 1991). However, there have been a number of criticisms of IPR in practice
(Winstanley, 1995) for being too time consuming and not being taken seriously enough by
those involved (Sheldon, 1992). Speci® c criticisms have focused on the dif® culties encountered
in setting meaningful objectives and the problem of performance related pay undermining the
development al focus. Some have even argued that IPR brings the concept of general
management into disrepute (Best and Hargardon, 1986), in that it emphasises top-down
in¯ uence on the strategic direction of the NHS at the expense of greater consumer awareness
and orientation. In addition, research by Alimo-Metcalfe (1991) has raised serious concerns
about gender bias under IPR. Since its introduction there have been a number of innovative
pilot schemes, for example competency-based approaches and 360Ê appraisal, but so far these
have made little impact and IPR remains the key appraisal system in the NHS.

CASE STUDY

The North Trust case study is presented in three main sections. This section outlines our
research methodology, describes the organisational background and traces the development
of IPR at North Trust. A second section reports the ® ndings on the processes of appraisal,
while a third evaluates the outcomes of IPR at the Trust.
The case study draws on four sources of data. In addition to interviewing senior managers
and HR specialists we undertook a set of in-depth, semi-structured interviews with 23 line
managers and professionals drawn from a wide variety of backgrounds. In all 30 interviews
were conducted. The aim was to obtain an understanding of the operation of IPR and to
evaluate its contribution to effective HRM. Interviews explored the participant’s experience of
IPR, both as an appraiser and an appraisee. All interviews were tape recorded and transcribed.
Standard practices for qualitative data analysis were employed with inductive code categories
being built by reading the interviews and clustered themes developed. The study involved an
analysis of internal documents (such as annual reports from the personnel department on the
conduct of IPR, training plans and strategies etc) and procedure manuals (eg IPR, training and
development) and, fourthly, the observation of three training workshops on IPR and two
senior management meetings reviewing IPR practice at the trust.
A fully structured postal questionnaire was administered to a sample of 270 senior and
middle managers and professionals. Medical staff, such as consultants and doctors who are
formally outside the IPR scheme, were excluded. The questionnaire focused on the
experience of being appraised and general attitudes towards appraisal. One hundred and
nineteen usable responses were received representing a response rate of 44 per cent.

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Performance appraisal in an NHS hospital

North Trust is a whole district trust in the north-east of England serving a community of
a quarter of a million people. It provides 32 major health care services, including the full
range of in-patient, day case and outpatient services alongside a comprehensive primary
care service including health visiting and district nursing services. It employs 2,130 whole
time equivalent (wte) staff. The largest staff groupings are nursing and midwives (1,063
wtes), management, administrative and clerical staff (425 wtes), ancillary employees (201
wtes) and professions allied to medicine (146 wtes). The trust has been relatively successful,
meeting all its ® nancial targets thus far. However, at the time of the research (1996/7) it was,
in common with many other trusts, experiencing increasing dif® culties in meeting demand
due to resource constraints.

The development of IPR at North Trust

IPR was ® rst implemented for senior managers in 1988. Until 1994 it was largely restricted to
managerial and senior professional groups. In 1994 a review revealed uneven implementation
of IPR and a half-hearted commitment to it. A decision was then taken to re-launch IPR to a
wider group of staff, initially down to ® rst-line managers. A new chief executive with a strong
belief in performance management, and a decision to pursue the Investors in People award
resulted in a decision to commit more time and effort to IPR. The next 18 months thus saw the
revising of policy and the committing of major training resources to IPR.
The training for IPR consisted of two main courses; a half-day awareness course for all
participating staff, and a two-day skill workshop for those conducting reviews. The insistence
that all appraisers be trained slowed down the use of IPR initially, but this was felt to be an
effective way of gradually cascading it down the organisation and providing time to
consolidate experience. The training concentrated on building commitment to the scheme and
developing interpersonal skills. Most of our interviewees reported reasonable satisfaction with
their IPR training. The revised policy and procedure documents were put out for consultation
with unions and managers. Staff were concerned whether the development focus of IPR
would be delivered in practice. Unions were also concerned that IPR would be followed by
the wider use of performance related pay. Managers were chie¯ y concerned about the amount
of time and effort IPR would consume and that staff would be extremely cynical about the
process. However, a ® nal written agreement was signed in June 1995.
The IPR process at North Trust has four key constituent parts. These are an appraisee-
driven objective setting element to cover the next 12 months, managerial feedback on the past
year’s performance, the production of a personal development plan and, where appropriate,
rating for Performance Related Pay (PRP). The first stage of IPR is completion of a pre-
interv iew self-assessm ent form requi ring the appraisee to resp ond to a series of
questions/prompts (eg which aspects of the post give you most satisfaction, which of your
objectives have you achieved most (least) successfully, what training and development have
your undertaken etc). The appraisee is not obliged to share the completed form with the
appraiser but is encouraged to do so. Next is the face-to-face interview and, following this, a
report form is completed by the appraiser recording the outcome of the interview with such
headings as performance against objectives, responsiveness to service demands, reliability,
teamwork, career aspirations and a personal development plan. The form is signed by both
parties if they both agree; if not, it is referred to a senior review facility (normally the
appraiser’s manager). The forms are kept by the appraisee and appraiser only, with copies of
objectives and personal development plan sections being forwarded to the departmental
manager. A follow-up meeting or mini review should be conducted some six months later.

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The key aims of IPR at North Trust were articulated in the new policy document as
ensuring all staff understand the trust’s goals and strategic direction; are clear about their
objectives, how these ® t with the work of others and the organisation as a whole; are given
regular feedback and assessment; and are developed to improve their performance. The
revised policy document made an explicit commitment to implement IPR for all employees.
The content of reviews is not speci® ed in the documentation.
Subsequent to the main data gathering period of this study the chief executive had decreed
in late 1997 that every manager was to have three compulsory objectives ± reducing absence,
facilitating the gaining of Investors in People and staying within budget. There was also a
lobby to encourage staff to evaluate their performance against a general contribution to service
quality improvement. The personnel department was concerned about these developments, in
particular that it resulted in a standardisation of objectives and `objective overload’.
The 1995 IPR policy at North Trust placed greater emphasis on measurability as a key
aspect of the setting of individual objectives. According to the chief executive, when he ® rst
arrived, this aspect was very weak:
Most people didn’t know what an objective was if it sat up and bit them on the
backside. We don’t have a performance culture here. This place was just great for
talking about things. Only talking about things, not actually doing them.
Thus a key aim for the chief executive of® ce was to `toughen up’ IPR, in part through an
increased emphasis on the evaluation of measurable objectives. However, the chief
executive’s view of the direction that IPR should go in did not seem to be shared by the
personnel department. Here a softer, more developmental focus was envisioned:
What is important is the manager taking the time out to talk to the individual
about how they are progressing, how they feel things are going. And talk
about training and development. These things really help morale.
Subsequent to the main data gathering phase of the research such con¯ ict over the nature of
managing people resulted in the personnel director resigning and moving to another trust.

FINDINGS: THE IPR PROCESS

Mechanics IPR at North Trust is designed to cascade downwards through the organisation.
The business plan is formulated by December/January each year. Reviews are scheduled for
February/March for senior managers and April/May for most other staff. However, a
minority of managers, because of the large number of appraisals they conducted, scheduled
the appraisals over the full year, thus clearly undermining the link with business planning for
their staff. Furthermore, linkages with the business plan were dif® cult to discern from our
interviews, especially for lower levels of staff. Here managers’ descriptions of how they
appraised healthcare assistants, porters, domestics, catering staff, laundry workers and nurses
rarely mentioned anything other than the loosest of connections with the business plan.
The IPR policy speci® es a top-down process. While there is provision to involve another
manager with an interest in the objectives being measured, in practice no examples of this
were found. A particular problem reported by the interviewees was that of continuity of
appraisers between appraisal cycles. Due to high levels of turnover caused by resignations,
promotions and transfers, nearly a third of interviewees had different appraisers from one IPR
cycle to the next. This was felt to generally limit IPR’s potential. Interviewees described how
continuity was important because reviews were generally perceived as improving as both
parties got to know each other and the discussion became more useful, open and honest.

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Performance appraisal in an NHS hospital

Coverage There appeared to be a very uneven application, in spite of the avowed intention
of the new policy to roll out IPR over the trust. The personnel department estimated that in
1996 only around 25 to 30 per cent of staff received a performance review and that below
middle management large numbers were not involved. One of the tools to encourage its
greater uptake was that senior managers were now being given personal objectives in their
own appraisals to introduce IPR for all their staff. However, this strategy alone did not seem
sufficient in gaining their commitment to making IPR process effective. However, the
majority of managers interviewed claimed they spent considerable time and effort on
conducting IPRs, and resented the fact that some of their colleagues either did not conduct
appraisals or gave lip service to them.
Documentation The standard trust documentation was used for less than half of our
interviewees’ appraisals, since they were felt to be too cumbersome. Some professional
groups believed that the forms failed to capture the nature of their roles and customised
them to suit their needs. In severa l departments reviews were conducted without
standard forms, and in one case an appraiser admitted he had never got round to reading
them. This high level of customisation reflects the weak central control of personnel
departments in the NHS and the highly politicised nature of healthcare organisations
(Dent, 1993). The organisational culture of the NHS has been described as a `colleague
culture’ where the co-operation of professional groups to new initiatives has to be
carefully nurtured and won (Allen and Lupton, 1988). Thus, although the personnel
department was concerned about the proliferation of customised appraisal systems, this
was seen as `a price worth paying’ , according to the personnel director, to gain the
commitment of professional groups to the IPR process.
The IPR encounter The heart of the IPR process is the face-to-face meeting between
appraiser and appraisee. The majority of our survey respondents reported interviews of at
least 30 minutes, with 47 per cent having interviews of more than an hour. Judging from
Table 1, appraisers were not usually dominating the interviews.
Table 2 sets out the extent to which various issues were discussed during the appraisal.
The main emphasis is on the achievement and planning of work objectives and training
and development. Not surprisingly, given the absence of performance-related pay for
most staff, pay and benefits were only rarely discussed in any detail during the appraisal
interview. Overall, the approach seems to be one of performance management and
development rather than of judgement and reward allocation.
A strong theme in the accounts of those who were positive about the overall IPR process
was the notion that the interview represented `quality time’ between manager and managed.
For some it was an `employee’s right’ to have meaningful `one-on-one time’ with their
manager and `an opportunity to stand back and re¯ ect.’

TABLE 1 During the appraisal approximately what proportion of the time did you talk?

Percentages
Mainly me (more than 75%) 13
Approximately 60% me 26
Approximately equal 48
Approximately 60% appraiser 12
Mainly the appraiser (more than 75%) 1

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TABLE 2 To what extent were the following issues covered in your appraisal?

Percentages
Thoroughly Brie¯ y Not discussed
discussed discussed at all
Your achievement of work objectives 63 32 5
Your future work objectives 65 31 4
Your personality or behaviour 17 42 42
Your skills or competencies 35 52 13
Your training and development needs 45 43 12
Your career aspirations and plans 30 43 27
Your pay or bene® ts 31 28 5
Your job dif® culties 24 57 19
How you might improve your performance 16 40 44
How your supervisor might help you to
improve your performance 15 45 40
Your personal or domestic circumstances 4 20 76

Generally, our survey respondents felt their managers were good at giving performance
feedback but fewer felt they received regular feedback on their progress towards objectives
(Table 3). The need for appraisal to be an ongoing, year round exercise was emphasised in the
IPR system (see below), but it seems that a signi® cant minority of appraisers were neglecting to
do the expected follow up. Judging from our interviews, constructive feedback was welcomed
by appraisees in providing direction and helping to boost con® dence. Critical feedback was
also valued but not often received by the interviewees, who in part blamed appraisal training
that overly emphasised the positive nature of IPR. Around a third of interviewees said they
often tempered their feedback to ensure a positive IPR event and harmony within their work-
teams. Appraisees, especially female managers, emphasised the value of constructive criticism
and `meaningful’ appraisals; cosy chats were seen as being a waste of their time.
Sound personal relationships between appraiser and appraised were emphasised by our
interviewees as being a necessary but not suf® cient condition for the review to be effective.
The large majority of survey respondents felt that their managers did not reward favourites,
were con® dent that appraisers were objective, felt they could talk freely, were con® dent
enough to challenge their appraisal, and that keeping on good terms with their manager was
not a requirement in order to obtain a good appraisal (Table 3). However, this still leaves a
minority of appraisers whose behaviour was less positively rated by respondents. Thus, some
interviewees reported a poor relationship with their manager, describing IPR reviews in terms
of conflict, verbal confrontation, point scoring, and `edging about the real issues’ . A few
appraisers, particularly those in nursing posts, described the problems of achieving an
appropriate environment for conducting appraisal in a busy, emergency-led hospital.

Mini reviews The annual reviews are supported by `mini reviews’. The policy document sees
these as a `crucial element’ of IPR, providing such review and monitoring that the annual
review becomes `mainly a con® rmation of agreements made during the year’. However, these
appear to be rather sporadic in practice and, as we see in Table 3, only 41 per cent of
respondents said that they received regular feedback from their supervisor.

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Performance appraisal in an NHS hospital

A few departmental heads formally sche duled thre e-monthly rev iews for all
employees. The norm for the mini reviews was a six-monthly, informal discussion,
w it h a mi no rity o f int erv iew ee s receiv ing o nl y the an nual ap p rais al. B elo w
management and professional levels, the impression gained was that mini reviews
were extremely rare or very ad hoc and rushed at best ± `corridor and canteen chats’ ±
with managers struggling to find the time to conduct even the annual appraisal for
some groups. However, the interviewees themselves often stressed the value of mini
reviews, not only in providing a measure of progress and attainment, but also in a
general updating of performance objectives. Several interviewees reported requesting,
and receiving additional mini reviews. Here mini reviews were especially useful to
fine tune and often to replace personal objectives that had been rendered obsolete by a
rapidly changing organisational environment. Interviewees reported how objectives
set in April of one year were often irrelevant and obsolete by the following year. Mini
reviews allowed for individual objectives to be kept in line with changes in business
strategy and national policy.

TABLE 3 Perceived supervisor behaviour

Percentages Strongly Agree Neither Disagree Strongly

agree agree nor disagree
disagree
POSITIVE ASPECTS:
My supervisor is good at giving me 7 51 19 19 41
feedback on my performance
I receive regular informal feedback from 4 37 19 30 9
my supervisor regarding my progress
towards agreed targets and objectives
My supervisor takes my appraisals 21 50 15 12 2
very seriously
My supervisor takes my career 5 50 24 17 3
aspirations very seriously
I am con® dent that my superviser is 10 60 20 8 1
as objective as possible when
conducting appraisals

NEGATIVE ASPECTS:
I have to keep on good terms with my 2 10 21 52 14
supervisor in order to get a good
appraisal rating
Supervisors use appraisals to reward 2 6 16 54 23
their favourites
I am not entirely happy about challenging 3 18 17 52 11
my supervisor’s appraisal of my performance
I found it dif® cult during my performance 4 14 9 52 21
appraisal to talk freely with my supervisor
about what I wanted to discuss

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 Tom Redman, Ed Snape, David Thompson and Fanny Ka-ching Yan

Objective setting According to Wright (1991) a paradox of performance management

systems is that the meaningful is rarely measurable and the measurable is rarely meaningful.
As we have seen, the increased emphasis on work objectives and measurability desired by the
chief executive of® ce is re¯ ected in the issues covered in the appraisal process, with survey
respondents reporting that the achievement and planning of work objectives were the most
thoroughly discussed issues in the appraisal process. Generally, respondents found the
emphasis on objectives a useful part of the IPR process. A picture that emerges from the
survey ® ndings is that objectives clear, cover the most important parts of the job, and that
appraisees are actively involved in the objective-setting process (Table 4).

TABLE 4 Objectives and feedback

Percentages Strongly Agree Neither Disagree Strongly

agree agree nor disagree
disagree
The goals that I am to achieve are clear 8 61 13 15 2
The most important parts of my job are 3 58 24 13 2
emphasised in my performance appraisal
The performance appraisal system helps 5 48 19 26 3
me understand my personal weaknesses
My supervisor allows me to help choose 13 65 10 10 1
the goals that I am to achieve
The performance appraisal system helps 3 37 27 31 1
me to understand my job better
The performance appraisal system gives 6 55 23 14 2
me a good idea of how I am doing in my job

Interviewees reported how they often tended to `push’ and `challenge’ themselves to
make `progress’ , attain `personal development’ and `growth’ via the objective setting
process. The general view was that in this respect the objectives they set for themselves were
more challenging (and interesting) than those produced by their managers.
I always put a new really challenging one in each time, like reducing sickness
absence. I tend to challenge myself.
However for some interviewees their accumulated experience of objective setting had
taught them not to challenge themselves `too much’ and to restrict both the scope and the
number of the objectives they set for themselves.
What I’ve learnt, as time goes by, is you’ve got to be careful, right at the outset,
how you set your objectives because you can be over optimistic, unrealistic. So I
think quite a few of us have learnt there is a skill in setting objectives.
Some appraisees felt that objectives were `imposed’ on them but most accepted that this
was `just part of the job’. However, occasionally this caused some considerable irritation
and anger, particularly in the clash with IPR’s espoused developmental focus. One
manager described `ending up with nothing you really wanted to do’ from his IPR and
another described how, when she pushed her appraiser to include a particular objective
that she perceived as being a key issue for the department and which fitted well with her
personal development needs, she was told `... either forget it or fit it into your own time’ .

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Performance appraisal in an NHS hospital

The danger with imposing objectives on staff was that all it achieved was lip service
and half-hearted commitment, accompanied by subsequent `fudge’ in the appraisal
review on achievement.
Measuring achievement The use of data in measuring and evaluating individual
performance was reported by interviewees as being very reactive. If the appraisee did
not produce data, there tended to be a bias towards informed opinion in assessing
whether objectives had actually been achieved. An effect of this was that, although a
majority of survey respondents felt that IPRs represented an accurate measure of their
performance, a substantial number were unclear on the standards used to evaluate
performance (Table 5).

TABLE 5 Measuring performance

Percentages Strongly Agree Neither Disagree Strongly

agree agree nor disagree
disagree
My performance appraisal for this year 7 78 11 13 1
represents a fair and accurate picture of
my job performance
My supervisor and I agree on what equals 6 67 14 12 1
good performance in my job
I know the standards used to evaluate my 2 40 26 29 4
performance

Some appraisees were proli® c in their use of data in the IPR process. Interviewees who had
undertaken NVQ management programmes described their use of reports and memoranda to
measure their achievement of objectives. It seems that the NVQ requirement to produce a
portfolio leads managers to start to document their work, at least until they attain the award
(Grugulis 1997: 20). Such documentation and preparation on the part of the appraisee enabled
them to achieve greater to control over the content and outcomes of the IPR process.
The effective use of documentation by those involved in NVQ courses raises the issue of
`impression management’ in the performance measurement process, as they attempted to
create and sustain desired perceptions of themselves in the eyes of their appraisers. The
performance appraisal process is a particularly important arena for the creation of
favourable impressions at work (Coates, 1994). A number of appraisers appeared to be
aware of this, reporting how they supplemented data from the IPR interview with views
from an appraisee’s peers and the grapevine. Some declared that they were very wary of the
accuracy of views offered by `mouthy’ and `gobby’ staff. For example:
A nurse who’s an extrovert, who does a lot of mouthing off, may give the
impression that they are doing a really wonderful job and the lass who is quiet
could be doing an even better job. But because she’s not there selling herself,
telling you how wonderful she is, she often loses out here
It appears the key for managers in measuring individual performance under IPR was
distinguishing between `real’ and `created’ performance achievements, the danger being that
managers may actually measure an employee’s `ability to perform in theatrical rather task-
orientated sense’ (Randle and Rainnie, 1997).

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Objectives and teamwork The emphasis on the con® dential nature of the appraisal and its
individual nature was seen as discouraging the formal communication of personal objectives
with others. Many of our interviewees felt greater sharing of objectives would be valuable, not
least in creating a better understanding of performance priorities within and between
departments. Respondents reported that that much of their work was now conducted in
teams, and many felt that more team-based appraisals and the setting of team objectives
would helpfully supplement the individualistic nature of IPR. A number also suggested that
wider collaboration on the setting of objectives with other managers, project leaders, working
parties, etc would be bene® cial in encompassing the full range of their activities. Interviewees
also suggested that they found it easier to prepare their own objectives when their appraising
manager provided copies of his or her own objectives in advance of the review process.
The individualistic nature of IPR thus fitted rather uneasily with the emphasis on
teamwork across the trust. The chief executive was attempting to introduce change by leading
by example. After setting objectives for his executive directors, all objectives for each director,
including his own were circulated to the senior management team and sent out to the clinical
divisions. However, in general, there was not much formal sharing of objectives among other
managers and professionals, although on informal levels some staff were actively doing so.

IPR OUTPUTS

In this section we report our ® ndings on what the IPR process actually achieves. Here we
structure our discussion under four main headings: management control, employee
motivation, training and development and rewards.
Management control Clearly, the setting and measuring of work objectives facilitates a direct
form of managerial control over the labour process. Despite the rhetoric and policy of
development, appraisers seemed to use IPR to exert their managerial authority. Occasionally,
this was done in a very crude way. For example, a number of interviewees reported problems
with managers waiting for the IPR to `settle scores’ for past con¯ icts. There is also evidence
that IPR acts in a more indirect way, encouraging `self-discipline’ and ’responsibility’ among
staff and so promoting the reshaping of staff attitudes to ® t new managerial values and beliefs.
Even some of the sternest critics of IPR noted its subtle effects:
I achieve nothing from it. I suppose the main bene® t is I actually discipline
myself more with my time management. I think, oh, I have got to do, so and so,
and I chart out my work better so that I’ll take all that in. I give myself deadlines
for my work saying I’ll achieve that by March.
The direction of control in the IPR process, however, is far from one way. Some managers
described how their staff turned the IPR `tables’ on them:
The cooks use IPR to say `this is why I cannot do my job. This is why I cannot
achieve this objective’. And then they trot out a great list of problems with the job.
One manager described why he hated doing appraisals with lower level staff, because it
reduced to a `managerial witch-hunt and a general gripe and groan session about what I had
or hadn’t done over the year’. The manager became so fed up with being on the receiving end
of this, he had written to all staff reminding them of the nature of the IPR process and asking
for a more positive attitude and less moaning about perceived managerial inadequacies.
However, the memorandum had only served to highlight his discomfort with the process and
to increase the level of complaining behaviour from appraisees, such that he now admitted to
merely `... going through the motions with IPR to get it over with as quickly as possible’.

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Motivation and morale IPR was often perceived by appraisers and appraised as a good
opportunity to talk meaningfully and engage in `quality time’ together. IPR could visibly
and symbolically demonstrate to staff their value and importance to the organisation and
also give the impression that the manager personally cared about their well being.
Interviewees often reported appraisals discussing broader personal issues and referred to
this as `getting to know your staff’.
It’s your time that you devote to them. And some of them have aspirations that
you wouldn’t know about until you sit down and talk to them. You show that
you are genuinely interested in them as people as well as nurses.
The language used to describe these encounters was often heavily redolent of the unitary
ideology of human relations. Appraisees’ and appraisers’ stories were littered with
references to `progress’ , `going forward together ’, `participation’ , `empowering the
appraisee’, `boosting morale’ , `becoming a proactive team’ and `harnessing our collective
energies’ via IPR. Those in management jobs in particular emphasised the importance of
good communication, listening and being listened to:
You often feel a lot of professional isolation at this level. Being a manager can be
a very lonely job at the top. I often wonder if I am doing a decent job or not. IPR
is a welcome opportunity when I can talk about how I feel.
Thus some two thirds of interviewees felt that IPR contributed positively to their personal
motivation and job satisfaction. In contrast other managers, again especially in relation to
lower level staff, were not convinced that IPR delivered much other than a lot of `hot air’
and wasted time that could have been more pro® tably employed doing other things.
Training and development Despite the emphasis of IPR on training and development by the
personnel department, as we can see from Table 2, the discussion of an appraisee’s training
needs takes second place to work objectives and 12 per cent of survey respondents reported
that training and development issues were not discussed at all. All our interviewees claimed
to have discussed their own Personal Development Plan (PDP) during the interview.
However, this was often a vague discussion. Indeed few interviewees, when probed, could
actually give details of what was in their PDP. Many described a rather mechanical process
whereby training and development was discussed as a distinct issue and the appraiser was
perceived as running through a check list of items to be covered, rather than the identi® cation
of training needs emerging from a grounded discussion of performance. The large majority of
interviewees felt that much of the training and development that was taking place would still
have occurred without the use of IPR but possibly less systematically and at a slower pace.
Thus, despite much of the prescriptive HR literature on training needs analysis emphasising
the role of performance appraisal data, our ® ndings would question its utility in this respect.
Managers reported problems with the IPR process, especially coupled with the decision to
pursue the Investors in People award, giving rise to appraisees producing training and
development `wish lists’. It was hard to ® nd the training resources to fund costly external
courses in the face of increasingly tight budgets. The demand for degree and diploma courses,
particularly among nursing staff, was causing managers problems in maintaining
commitment to the appraisal process given that few employees could be supported in this
way. Managers described a strategy of encouraging employees to consider alternative and less
costl, development activities such as secondments, work shadowing and job exchanges.
Interviewees were also critical of the personnel department pushing the current training
¯ avour of the month via the IPR process. At the time of our study this was reported as being
the managerial NVQ programme running in-house in conjunction with a local university.

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 Tom Redman, Ed Snape, David Thompson, Fanny Ka-ching Yan

Rewards The PRP element of IPR was not particularly popular. Whereas the general view
of IPR was that a majority of both survey respondents and interviewees considered it to be
an overall positive experience, at least for managers and professionals, the views expressed
in relation to performance related pay was largely negative. Most of those considered PRP to
be a lot of `hassle’ for little reward; more in¯ uenced by quotas than real performance; was
unfair; highly subjective and detrimental to professionalism; and undermined the
developmental focus of IPR. At best some respondents felt PRP might work with better and
more stringent guidelines, where performance targets were clear and easily measurable
rather than subject to an assessment based on ratings (Dowling and Richardson, 1997).
Many of these issues are familiar from the growing PRP literature (Lewis, 1998; Randle,
1997; Marsden and Richardson, 1994). A particular problem identi® ed at North Trust was
that performance was highly dependent on team effort and work increasingly reorganised
along teamwork lines, yet PRP was individually based. The team/individual con¯ ict in PRP
may be at least partially resolved by including teamwork objectives in the appraisal process
(Cannel and Wood, 1992), but this was rarely done at North Trust.
Those who did not receive PRP were generally not keen to be subject to it. Only one of the
non-PRP managers was concerned that he was not receiving PRP. In essence this stemmed
from his belief that it was unfair for some managers to receive PRP while others (such as
himself) did not, rather than any great desire to be subject to it himself.

CONCLUSIONS

The NHS, with over one million employees (five per cent of the nation’ s workforce), is
Europe’s biggest employer. Performance appraisal is now more widespread in the NHS than
at any time in its history, consuming considerable resources. At the same time critics grow
both in number and in the ferocity of their attacks on performance appraisal, calling it a
`deadly management disease’ and `organisational virus’. However, the danger is that such
views are often based on anecdote rather than on empirical research. In contrast, our
® ndings of managers’ and professionals’ actual experience of appraisal ® nds it of overall
value, with very few suggesting it should be discarded altogether.
The future for IPR in the NHS, we would suggest, depends in part on resolving some of
the problems we have identified. In particular issues of patchy application, uneven
manageria l commitment, continuity between appraisals, the links with PRP and
teamwork, and the appropriate nature of IPR for lower-graded staff merit further
attention. Some of these concerns are deep-seated and dif® cult to resolve. For example,
continuity in IPRs will be particularly problematical while the NHS continues to
experience both high levels of organisational change and considerable staff retention
problems. However, an effective and more widespread performance appraisal process
providing a basis for sound career planning and personal counselling intervention may
help decrease turnover rates.
The link between IPR and pay is a key cause for concern. A priority of current HR
strategy in the NHS is to develop new pay and reward practices that facilitate the
achievement of business objectives (Department of Health, 1998a). This study’ s ® ndings
would suggest that careful thought should be given before widening the coverage of the
existing PRP scheme, given the generally negative perception of its effects. Indeed, according
to the NHS own pay research unit, there is some evidence that there has been a signi® cant
move away from PRP within the sector (Pay & Workforce Research, 1996).

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Performance appraisal in an NHS hospital

The problems of patchy application re¯ ect the professional and highly politicised nature
of the NHS and inconsistent managerial commitment to its use. In order to attempt to
implement IPR under such conditions, some groups were allowed to customise the system
to suit their needs. However, those groups lacking either political or professional in¯ uence,
in particular lower graded employees, were subjected to the trust’s standardised system
with all the problems of inappropriateness we describe above. Clearly a variant of IPR needs
to be customised to more appropriately fit the needs of lower graded staff. Given the
growing use of cross-grade and multi-occupational teamwork in the NHS, an individualised
IPR system is increasingly problematical, particularly when PRP is also involved. At North
Trust, teams often informally share their personal objectives in an attempt to overcome some
of the problems deriving from a confidential and individualised performance appraisal
system. Such sharing could be encouraged as part of the formal IPR system.
IPR also needs to build on its strengths. For employees, particular strengths of IPR are the
individual objective setting process, the personal development planning and the mini review.
It was these aspects which were especially valued by staff as providing some direction and
sense of purpose in an increasingly complex and fast-moving context. For senior managers,
the drive to improve service quality is a key imperative (Department of Health, 1998b). The
achievement of higher levels of service requires that employees are more autonomous and use
their discretion to a far greater extent than in the past. Exercising managerial control over the
autonomous `quality’ employee is thus problematical. Traditional bureaucratic controls of
direct monitoring are both more costly to implement and also undermine employee discretion.
Thus, for Townley (1989) the growth of performance appraisal can partly be explained by the
need to reconstitute `social relations’ at work to accommodate changing work requirements.
At North Trust, IPR can be viewed as an attempt to directly tie employee behaviour to the new
mission and goals of the organisation, for example, via the cascade objective-setting process,
and to encourage staff to internalise the values and goals of senior managers, what Newton
and Findlay (1996) have termed the `managerialising’ of worker subjectivity.
According to the management development of® cer:
The IPR system at North Trust has in many respects failed. It was implemented in
the late eighties and since then we have tinkered with it, revised it, tagged docu-
mentation on to it, and re-launched it. But it hasn’t been embedded in the way we
manage on a day-to-day basis. We must question whether our strategy was right.
The ® ndings reported above would suggest that such views and those of commentators
such as George (1986) are rather too pessimistic in their assessment of performance appraisal’s
failure in the public sector. Despite some real problems with the practice of IPR, evidence
suggests it is inaccurate to write it off as a failure. As Pfeffer (1994) argues, one should be
careful to compare HR programmes not to some ideal but to the situation that would exist in
their absence. For Pfeffer, a programme fails when it produces either no sustained change or
else change that is dysfunctional and ineffective (1994). In essence, solving some problems is
far better than solving none at all. Set against a more pragmatic standard for success, IPR at
North Trust has delivered a number of real bene® ts for both appraisers and appraised.
Further, performance appraisal’s critics are usually silent on what should replace it. The
question of how to assesses individual performance, determine promotion, provide
feedback, decide training and career needs, encourage employee involvement and link
business and individual goals without a performance appraisal system, however, cannot be
easily shrugged off. Performance appraisal emerged in the ® rst place to meet such needs,
and employees still need guidance in focusing their skills and efforts on important

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 Tom Redman, Ed Snape, David Thompson, Fanny Ka-ching Yan

organisational goals and values, especially so in fast changing and deeply politicised
organisational environments. Hence it is suggested that IPR should continue to have an
important role in HR practice in the NHS.
This is not to argue that practice of IPR is unproblematic. Certainly some of the evidence
also presented above would suggest that there are many concerns with its application.
However, although some of these are persistent problems, they are certainly not
insurmountable or terminal ones and trusts should think very carefully before abandoning
IPR altogether. Many of the problems of performance appraisal can be ironed out over time
as experience with its practice accumulates. Indeed there is some evidence to suggest that
employers who have utilised performance appraisal for longer report fewer problems
(Bowles and Coates, 1993), and we found both appraisers and appraisees reporting that IPR
had improved with practice and familiarity. Rather, it is suggested that the key challenge
facing performance appraisal in many organisations is its upgrading, renewa l and
reinvention, such that it is more compatible with the new business environment, in this case
the `new, modern and dependable NHS’ (Department of Health, 1997).
Lastly, addressing some of the practical concerns with IPR raised in this study would go
some way to achieving one of the key aims of the NHS’s recently revised HRM strategy: that
of making the NHS a better place to work (Department of Health, 1998c).

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