Updated June 29, 2012
For years, employee performance evaluations were a low priority at the Zoological Society of San Diego, with no uniform metrics and no consequences for ignoring appraisal paperwork sent by the human resources department.
By summer 2012, San Diego Zoo Global saw what its chief human resources officers characterized as a culture change in which employees felt that their peers and their managers were being held more accountable. The driver of this shift: a performance management system introduced six years earlier. "It's been a game changer in terms of creating a culture of high performance, high engagement and high productivity," chief human resources officer Tim Mulligan says.
By late 2011, performance evaluations for all nonunion employees at San Diego Zoo Global were conducted using the Web-based appraisal system. Branded internally as "Z-Max," the software has bolstered a pay-for-performance strategy rolled out simultaneously at San Diego Zoo Global, which operates the 100-acre zoo, the 1,800-acre safari park and the Institute for Conservation Research.
"Everyone is now focused on success and having the organization meets it targeted objectives," Mulligan says. "It also helps boost engagement, productivity and morale because you know what you're doing makes a difference and how it's tied into the success of the company."
San Diego Zoo Global, the name adopted in 2011 for what had been known as the Zoological Society of San Diego, has added "more bells and whistles" through vendor Halogen Software. An online directory, somewhat like an internal LinkedIn, now provides detailed profiles: pictures, work history, professional certifications and contact information. The easily accessible information helps in selecting committees and with succession planning, Mulligan says.
Employees particularly like the online journals where they track accomplishments and share it electronically with their managers before midyear and end-of-year reviews, Mulligan says. "It's taken feedback and communication between manager and direct report to a much higher level," he says.
In this 2006 story, Workforce talked to San Diego Zoo Global a few months after the organization began using the appraisal system for its first group, a core section of about 250 managers.
Different versions of the one-page form were used. Managers didn't judge subordinates on goals, but on a nebulous sense of how they were doing. Some employees hadn't been reviewed in years—a few of them had waited decades.
"It wasn't taken seriously, and it didn't hold any credence because there was not a pay-for-performance system here," says Tim Mulligan, director of human resources for the not-for-profit Zoological Society, which operates the San Diego Zoo, the San Diego Zoo's Wild Animal Park and the Conservation and Research for Endangered Species scientific center. Managers received annual raises, which were essentially cost-of-living increases not linked to their performance, Mulligan says. "HR would send out a form, say, 'This review is due,' but then would never follow up to see that it was turned in."
That is changing. The Zoological Society, which employs 2,600 people, this year introduced an employee performance management system whose ratings will determine managers' pay raises. It's part of an emphasis on employee accountability outlined in the organization's strategic plan, which was being finalized when the nonprofit organization hired Mulligan two years ago.
Like an increasing number of organizations, the Zoological Society, whose revenues in 2005 reached $176 million, wanted a Web-based employee-appraisal system that helps guide managers through the process and reduces rote work.
The demand for software that accomplishes this is growing. Fueled by the performance and succession management segments, the talent management software market will increase by 20 percent this year, surpassing $2.3 billion in revenue, according to an estimate by technology consultancy Yankee Group. Of 244 large and midsize organizations surveyed by consulting firm Towers Perrin, 34 percent said their spending on human resource technology increased in 2005 compared with 2004. Only 15 percent said spending decreased; the rest of the respondents said spending was flat.
This year, the Zoological Society's management team, which consists of 225 employees classified as assistant managers or higher, falls under the Web-based employee appraisal system. Next year, the practice will be expanded to include all exempt employees.
With built-in prompts for completing reviews, performance management applications standardize the format of performance reviews and free human resource professionals from the administrative tasks of reminding managers that appraisals are due. They also tend to be affordable ways to update appraisal processes, have multiple raters and enable timely feedback on performance.
Mulligan identified the primary objectives for the Zoological Society's new system: establish impartial employee goals directly linked to the organization's goals; include a midyear review to ensure an ongoing dialogue and to prevent end-of-the-year surprises; and require year-end reviews whose ratings will be used to determine merit increases.
Mulligan also realized his diverse workforce, which includes everyone from world-renowned scientists to teenage food-service workers, needed metrics to measure performance, as well as easy-to-use software. He created two teams—one looking at vendors, the other at skills that characterized a successful leader within the organization, regardless of their department.
"We didn't want to throw this down our managers' throats," he says of involving employees in the planning. "We wanted to have them work on and approve of it."
The process led to performance appraisals based on two categories: goals and leadership competencies. At the beginning of the year, each manager chooses five goals, at least three of which must be linked to organizational objectives. Those goals are based on everything from guest satisfaction to revenue.
The other two goals are what Mulligan calls "wild cards"—targets pertinent to their specific area. Together, the performance goals make up 50 percent of the overall employee appraisal.
The other half comes from ratings on leadership competencies. Those were identified by 220 managers and then whittled to a list of six, each with five sub-factors. For example, the competency of "professionalism" includes scores on teamwork, communication, interpersonal relations, Zoological Society mission and customer focus.
Halogen Software of Ottawa was chosen as the vendor. Halogen has gained a reputation as an appropriate choice for midsize companies. Business-information provider Hoover's Inc. estimates that Halogen's sales reached $4.2 million in 2004. Halogen declined to disclose its current revenue but says it is profitable and has added 400 customers during the past two years. The company also says a nondisclosure agreement prevents it from divulging the value of its contract with the San Diego Zoo and the length of the agreement.
In a market report last year, research firm Gartner rated Halogen and competitors Softscape of Massachusetts and SuccessFactors of California each as "strong positives" based on criteria that included product capability, affordability, scalability, viability, market momentum and vision.
Halogen's eAppraisal performance management solution lets employees record accomplishments in an online journal that they may share with their manager. Mulligan says the tool helps to craft an accurate year-end review. "Many of our people are very involved with organizations in conservation and in the animal world," he says. "We don't want those things to be forgotten by management at the end of the year when they do their review."
The performance management solution's other tools include a "comment helper" that offers feedback templates that automatically insert pronouns using the correct gender and a "language sensitivity checker" that flags offensive words and suggests alternatives. The company's product tour shows the language checker suggesting "overqualified" to replace "old," for example.
Many human resource professionals feel an increasing demand to build business cases for HR investments and to calculate their return on investment. Last year, even the publisher of the Myers-Briggs Type Indicator introduced a guide for measuring the ROI of the venerable personality-type test.
As a not-for-profit organization, the Zoological Society is more concerned about the "return on mission" than its ROI for the technology, Mulligan says. But Halogen's president, Paul Loucks, points to studies by research firm IDC as proof that his clients can expect a healthy return on their investment.
IDC determined that Amcor Sunclipse North America, a division of Australian packaging manufacturing company Amcor, saved more than $300,000 a year since introducing Halogen's eAppraisal. In a separate analysis, IDC estimated that Halogen client Howard Regional Health System of Indiana might see a 164 percent return on its investment, in terms of cost savings.
Flexibility of the web
The Zoological Society's adoption of a Web-based solution also reflects another trend. One of the notable changes in the past five years has been the shift to Internet-based appraisal systems from client-server platforms, in which programs are kept on a central computer connected through a network to PCs. "As long as they have a Web connection, managers can write appraisals at home," Loucks says.
Loucks expects that organizations will expand from using Web-based appraisal systems to adding compensation and succession planning processes. In fact, Mulligan lists such a flexible system among the reasons he liked Halogen.
"Those types of processes will be adopted by more companies over the next few years," Loucks says. "It's not clear whether the new customers will do it in steps or whether they'll go for more of the big bang."
Not everyone sees Web-based employee appraisals as all good news. Anthony Chelte, dean of Dillard College of Business Administration at Midwestern State University in Wichita Falls, Texas, says the key benefits of online employee appraisals are the timeliness of feedback and the efficiency of eliminating paperwork.
"When you look at the ratio of individuals to HR people in terms of the number of reviews that have to be looked at for completeness, accuracy and legal concerns, it's probably far more efficient," he says.
Chelte cautions against relying on online appraisals to deliver feedback, saying one-on-one discussions are as important. "I do not think the online appraisal system is a good proxy for delivering feedback," he says. "The whole social context is gone. It takes the entire human element out of the mix."
Halogen executives say their system is not intended to replace one-on-one appraisal meetings, but rather to simplify preparation for it.
Mulligan says he ensured the "human element" remains intact for zoo staffers. The appraisal must be delivered in person, with the supervisor printing and reviewing it with the subordinate or the two discussing results as they go over it on the computer screen. "It has to be done with two people together," he says. "You can't just pull it up and read your review."
The supervisor then must certify that the in-person meeting occurred. "I don't want us to go back to where we were before, with employees and managers not having this face-to-face dialogue on performance," Mulligan says.
Michele Stancer began working at the zoo 28 years ago, starting in food service while in high school and working her way up to animal-care manager. She describes her experience with the new appraisal system as positive because of discussions with her boss about setting goals and basing raises on performance.
"If you perform well, you'll get more," Stancer says. "I think people should be held accountable. I've been here a long time. You see people who are 'working in retirement,' and that's not good for anyone."
Mulligan says the Web-based appraisal process has helped the zoo attract talent. "What I found is that it's a recruiting tool," he says. "A manager who starts here sees that we have a program like this where you have goals and objectives and are given timely feedback and paid for the work that you do. As we come into the modern world here in HR, we have to provide programs like this."
Todd Henneman is a writer based in Los Angeles. Comment below or email email@example.com.