International: Thales signs Europe-wide agreement on staff appraisal interviews

Thales reached an agreement with trade unions in April 2010 on a European staff appraisal scheme, based on "annual activity discussions". The France-based technology multinational is pioneering the implementation of agreement-based Europe-wide HR practices.

On this page:
Second Europe-wide agreement
Principles of the agreement
Framework for annual activity discussions
Appeals procedure
Alert procedure
Job descriptions
Training for managers
Follow-up report
Agreement implementation
Reactions.

Thales, which has its headquarters in France, is a technology and electronic systems multinational operating in the aerospace, space, defence, security and transportation sectors. Out of 68,000 employees worldwide, it has a workforce of 57,000 in Europe, with operations in France, Austria, Belgium, Germany, Italy, the Netherlands, Portugal, Norway, Spain, Switzerland and the UK. Thales UK - which includes companies such as Racal, Shorts Missiles, Pilkington Optronics, Redifon MEL, Thomson Marconi Sonar, Thorn Missile Electronics, Avimo and Helio - is the country's second-largest defence electronics supplier, and employs around 8,500 people at more than 40 locations.

Second Europe-wide agreement

In June 2009, Thales management signed a Europe-wide agreement on "Improving professional Development through Effective Anticipation (IDEA)" with the European Metalworkers' Federation (EMF), representing trade unions recognised throughout the group's European operations.

The IDEA agreement seeks to give all Thales employees in Europe access to improved professional development, based on anticipation of future change, to improve their employability and meet the company's changing human resources needs. This is to be achieved through a series of actions, based largely on examples of existing good practice, in areas such as: forecasting trends; information for employees; individual professional development discussions; training; staff mobility; gender equality; promoting diversity; and welcoming new recruits.

The agreement also set up a "European anticipation commission", made up of management and union representatives, to oversee the accord's implementation and monitor progress, along with national anticipation commissions with a similar role in each country.

Building on the IDEA agreement's professional development provisions, on 14 April 2010, management and the EMF signed a second Europe-wide accord, dealing with a "Transparent annual Activity discussion for mutual Listening and developing professional Knowledge (TALK)".

The TALK agreement lays down principles and procedures to govern "annual activity discussions" (AADs), which are yearly interviews between each employee and their manager to review progress, identify any areas for improvement, and set objectives and the means to achieve them. These form part of a redesigned employee appraisal system introduced by Thales in 2009. According to the company, the new system means that "rather than evaluating employees on their individual performance, Thales now prefers to base assessments on the employee's overall level of job performance, with a greater focus on long-term results and professional development".

Principles of the agreement

The agreement sets out a Europe-wide framework for AADs in Thales group companies, while providing that the AAD process and its results are transparent to employees at all times. It seeks to "create a clear framework and comprehensive points of reference to facilitate a real and lasting improvement, both on an individual and collective level" and ensure that AADs are "realised in a socially responsible atmosphere of mutual respect and listening".

The AAD process applies to all Thales employees, including management. AADs must be conducted on a face-to-face basis and in the employee's own language. They must involve "mutual listening" and not just "two monologues". The manager and the employee should consider the AAD as "the focal point of an ongoing dialogue" and an opportunity to clearly spell out their respective points of view, even though these views might have already been expressed on a daily basis.

The AAD process may indicate areas where improvements or corrective actions are required. These measures have an individual dimension, such as training, tutoring or coaching for the employee, but the need for actions with a collective dimension will also be systematically examined. This may result in better work organisation, a better fit between objectives and resources, or more effective cooperation. For both the individual and collective dimensions, everyone involved will be encouraged to learn lessons from the past. For each employee, this should result in objectives for improvement which the manager will undertake to support and facilitate.

The aim of AADs is to improve the work of each employee and each team, in order to increase over time the contribution of each employee to their team and each team to Thales. The collective and individual approaches are of equal importance, with the former based on teamwork and the latter based on each employee "mastering" their job. It is the manager's responsibility to ensure consistency between those two approaches.

AADs should permit a balanced appraisal of each employee, based on a medium-term perspective and the employee's overall performance over time, and not just the achievement of the past year's objectives. The goal is to measure not only the employee's contribution in a particular year, but also their professional knowledge and "mastery" of their job. The process is oriented towards the achievement of sustainable results and the professional development of each employee.

Framework for annual activity discussions

The agreement states that AADs are an ongoing process and that they should be thoroughly prepared in order to create an open atmosphere and avoid one-way communication. They form part of an annual cycle with both collective and individual aspects.

The first stage of the annual process is to set the main collective objectives of each work team, and the role of each member of the team. The objectives may be adjusted during the year through dialogue within the team, with a collective evaluation of work organisation and objectives carried out at a team meeting.

Individual objectives are then set during the AAD (which also involves a re-examination of the responsibilities of the employee's job), as far as possible based on consensus between the employee and the manager. Employees are entitled to know what role they should play in achieving these objectives, what means they will have to do so, and which main criteria will be used to evaluate them.

Employees' objectives will be updated and evaluated on a regular basis. They should engage in a continuous process of self-evaluation, to establish areas where improvements, advice and guidance are required. The employee should report to their manager the results of this self-evaluation, which will form the basis for dialogue at the meeting, by the time of the AAD.

Employees will have access to managers' assessments of them, and managers to employees' self-evaluations, under conditions of "transparency and confidentiality".

If it seems likely that the AAD process will result in a negative appraisal of an employee, a "careful and structured" set of preventive actions will be put in place, in line with Thales group policies.

The AAD also acts as a preparation for, and a complement to, the employee's annual "professional development discussion" with their line manager. The 2009 IDEA agreement gave all Thales employees an entitlement to these discussions, which aim to reach an agreement on the employee's career direction, taking into account his or her wishes and the company's needs, and on a customised learning path to make this possible.

Part of the assessment of Thales managers' performance will be based on their handling of the AAD scheme, and especially the quality of the process.

Existing national or local collective agreements on pay will be respected. The TALK accord will not replace such agreements or call into question general pay increases based on agreements or custom and practice.

Appeals procedure

While stating that the creation of an atmosphere of trust is a necessary part of the AAD process, the agreement accepts that disagreements may arise about an employee's appraisal or about the process itself. Such disagreements will be resolved by an appeals procedure, as follows:

• the employee and manager will seek to settle the disagreement by meeting a second time;
• if this does not resolve the matter, a third meeting can be held, at which both the employee and the manager may be accompanied by a person of their choice; and
• any remaining disagreement may be reported by the employee to the HR department to be recorded.

This procedure does not amend or replace existing appeals procedures in particular countries. The agreement notes that these procedures exist in countries such as Germany, the Netherlands and the UK, and states that their details will be entered in a European database of good practices.

Alert procedure

The signatories accept that any "significant" deviations in practice from the AAD process, as laid down in the European agreement, may create concern among employees. Therefore, an "alert procedure" will be put in place at national level - based on discussions between management and employee representatives - so that any deviations can be reported. The procedure, which will be evaluated regularly, will not replace existing procedures. The procedures introduced in each country will be collected in a European database of good practices, and the EMF and group management will follow up developments on an annual basis. Where necessary, an audit of AADs in a particular country may be carried out and discussed at the national anticipation commission.

Job descriptions

The agreement states that all employees have the right to know what their work tasks are and to have a clear description of what they have to do to "master" their job. In order to clarify each employee's role:

• generic job descriptions will be defined and discussed with the national anticipation commission and made available in Thales' internal documentation system; and
• within this framework, the "permanent responsibilities" of each employee's job will, where necessary, be established clearly during the AAD and made available to the whole work team.

Training for managers

Managers will undergo obligatory training to enable them to carry out their role in the AAD process. Further, all employees are entitled to training in order to prepare them for their AAD. Thales University, the group's staff development and training centre, will organise relevant training provided in person by HR managers, along with "e-learning" sessions.

Follow-up report

Each year, a report on implementation of the AAD scheme in each country will be drawn up for consideration by the national anticipation commission. The report will include data on the number of AADs held and their quality, the amount of training provided, and the number of appeals made following AADs. On the basis of this information, the national commissions will discuss any improvements or adjustments required.

Good practices relating to AADs identified at national level will be exchanged at European level.

Agreement implementation

The TALK agreement covers all Thales operations in the countries represented on the group's European Works Council (11 countries are currently represented). The accord's provisions do not supersede national laws, collective agreements or practices that are more favourable to employees.

The European agreement will be implemented by management and employee representatives in each country, with a view to ensuring its effective application while respecting local rules and commitments. The application of some specific points in the agreement, such as those on training, job descriptions and appeals procedures, may require a country-specific addendum to the agreement. The agreement notes that its implementation will require coordination and good communication between national and European levels.

Any disagreement over the TALK agreement's interpretation or implementation will be referred to the European anticipation commission. The EMF and group management will attempt to reach an amicable resolution of disagreements within a reasonable period of time and in a spirit of cooperation.

Reactions

Thales states that the AAD scheme represents an opportunity for dialogue as part of a constructive effort to encourage and facilitate professional development. It also aims to promote a broader and more collective approach to improvement by reframing individual job performance within a context of teamwork. "The notion of individual performance places too much emphasis on short-term achievement and does not reflect the real foundations of long-term professional success - knowledge, skills and teamwork," commented Yves Barou, the senior vice-president in charge of HR at Thales.

According to Barou, the AAD has until now been "a practice where management ruled supreme". However, this annual discussion is vitally important in the lives of employees. Therefore, "there was no reason to exclude it from the scope of dialogue with unions, particularly since the discussion can lead to anxiety and even stress for some employees. We therefore need to ensure that the AAD is not only an opportunity for genuine dialogue, but is also subject to a process of continuous improvement. In this way, Thales has again demonstrated its continuing commitment to the human dimension of its management approach."

Bart Samyn, the deputy general secretary of the EMF, welcomed the agreement: "For the first time, trade unions have obtained strong commitments from management, such as the right of recourse, in an area that has until now been exclusively controlled by senior executives and management. The EMF thus intends to pursue European social dialogue on the issues that concern the day-to-day lives of employees and meet the social challenges of the 21st century."

Thales is one of a relatively small but growing group of multinational companies that have signed Europe-wide agreements on aspects of HR policy with their EWC or European-level trade union organisations. Other examples in recent months include GDF Suez (France, energy and utilities), ArcelorMittal (Luxembourg, steel) and UniCredit (Italy, banking). While such agreements lay down relatively broad and general frameworks, the Thales IDEA and TALK agreements are notable for addressing very specific and concrete HR issues, with a direct impact on practice in the workplace. The TALK accord is the first known European-level agreement to deal specifically with employee appraisal.

This article was written by Mark Carley, European editor.

European employment policy, practice and law, May 2010