Lousy Review, Less Pay

Once upon a time, employees would be assessed only by their managers. This was the traditional performance appraisal, an often worthless exercise if, as happened to me on one occasion, it was conducted over a lunch at which the boss, a couple of pre-lunch G&Ts on board followed by a whole bottle of wine to himself, forgot why we were having lunch.

Other systems of appraisal were introduced. There was the upward feedback. Staff could assess the manager, a process which had inherent risks. If Employee A didn't like Manager B, then Manager B could well get a bum assessment. But the purveyors of appraisal systems would insist that these systems would filter out such subjectivity without ever truly convincing everyone that they did, and this was also the case when so-called 360-degree feedback became popular. Anyone could have his or her say. Customers, suppliers, colleagues: they could all have a pop.

These systems weren't of course a free-for-all. Bias was ironed out as much as possible. They wouldn't have been effective or have become as widespread as they did had they just been means of expressing dislike. But they were something of a culture shock for employees or managers who were to discover that there were a number of "stakeholders" whose assessment of performance fell some way short of how the employee or manager would have assessed his or her own performance.

These broader systems of appraisal were all part of a wider culture shock, that of changes to organisations' culture and their ways of doing things. By subjecting personnel to closer scrutiny by these different stakeholders, performance would improve and do so in line with new cultures that were more open to the needs of customers and others.

Into this appraisal mix came technology, and now there is the technology of social media. Customers can have their say like never before, and certain businesses are embracing this customer voice in their assessment of individuals' performance. Comments on Trip Advisor and similar websites are now being used to determine just how much people get paid.

Since the explosion of social media and review and comments' sites in particular, a whole industry of online reputation management has grown up. ReviewPro is one of the leading examples of this monitoring, and its Spanish division works with a whole host of hotel chains. Look at its clients and very familiar names appear: Meliá, Iberostar, Viva and so on.

Meliá is said to be one of the pioneers of using customer comments as part of a quality system through which performance can be measured and remuneration adjusted. Variable pay is partially determined on the basis of these comments; variable pay meaning performance pay, i.e. meeting and exceeding personal and company performance targets. At Meliá, this pay can apparently equate to as much as 20% of overall remuneration, so there is a strong incentive for management to ensure that customer satisfaction is high and also to respond in a thoughtful fashion to any negative comments.

The underlying philosophy is or should be obvious. Customers are at the heart of everything Meliá does, as is the case with any hotel chain. But how well this philosophy is understood by other chains or within Mallorca's tourism industry as a whole is open to some debate. Even among the clients that ReviewPro has, there are individual hotels which are part of certain chains that receive numerous negative comments and little or no response from management.

From surveys that Trip Advisor has done, it has been shown that responding to comments, both negative and positive, is as powerful as the comment itself. Yet, too often there are no responses and when there are they are standard ones issued not by, say, the hotel's director but by someone with a vague public relations job title. 

As with any system of appraisal, using online comments is probably not foolproof. There is greater scope through social media for biased or malicious assessments than there ever was with more traditional appraisal methods. There is also the potential, once it becomes widely known that pay is directly being influenced, for online blackmail, something which does already occur. But then this is something for devisers of systems to take account of.  

In principle, using customer comments is a very good tool for chains to not just monitor management and hotel performance but also to improve it as part of ongoing quality management systems. It should, therefore, be far more widely adopted by the Mallorcan tourism industry which, despite criticisms of standards, is using other methods to improve quality, the SICTED system of quality being one of them.

But there are limits to how useful such a tool is. Many negative comments stem not from poor management at specific hotels but from a lack of investment by chains which leave hotels open to such negativity.