Let’s Scrap Performance Appraisals!

Second only to making an employee’s position redundant, managers say performance appraisal is the task they dislike the most. This is understandable given that the traditional process is fundamentally flawed. It does not fit with the values-based, vision-driven, participative work environments which power today’s responsive companies. It smacks of old fashioned, paternalistic, autocratic management which treats employees as possessions.

In its worst form, an annual appraisal has a manager judging in retrospect the performance of an employee, grading it in word and number. Often unmeasured and unevidenced, poorly recollected, imprecisely written and lacking input from colleagues, the rating is no more than one person’s opinion at one point in time. Of greater concern is that bureaucratic organizations may adjust them to a bell curve, and base decisions on pay, promotion, transfer and termination upon these unreliable assessments. These outcomes appear to be the dominant reasons for traditional Performance Appraisal – ideas of performance enhancement and skills development in a learning organization seem to be less sought.

The process is painful for all – manager, employee and organization. The manager often prepares badly, lacks skill in feedback, fails to back opinion with example, and under pressure adopts an accusatory tone. The employee becomes defensive, argumentative and resentful. Failed meeting! Damaged relationship!

In enforcing a flawed Performance Management system, the organization through its despised HR Department does itself great harm. It causes employees to become cynical, disengaged and restive. In a market competing for talent, how dumb is that?

There is plenty of new thinking on motivation, engagement, teamwork and reward – e.g. below. Most seems to suggest scrapping performance appraisals per se, replaced by a more mature and respectful approach.

Elements of a better way may include: –

  • Depend on crystal clear Vision, Purpose and Values to integrate the efforts of people.
  • Develop a culture where feedback is frequent, participative and honest. People are inspired by positive feedback.
  • Focus forward more than backward. More Goalsetting; less Review.
  • Separate discussions about performance from those about future skills development and career plans.
  • Talk about performance regularly, linking with team and departmental objectives.
  • Empower people to take responsibility for handling problems, and remove the fear of reprimand if a properly thought-out solution misfires.
  • Let employees create their own goals, aligned to department goals and KPIs. Set and reset goals frequently.
  • Since employees work into and with several teams and matrices, involve a number of co-managers in the feedbacks.
  • Train managers in leadership and coaching; value their coaching contributions, enabling them to have the time to coach.
  • Beware of Performance Incentive Pay schemes. Outside of field salespeople, few work alone. Individual contribution is hard to measure and Incentive Pay seldom changes behaviours. Soon, At Risk pay becomes expected and if not forthcoming produces dispute and disgruntlement. Footnote: This discussion excludes the obligation in New Zealand employment law, where dismissal for other than misconduct must generally be preceded by an arduous and meticulous Competency process, involving Appraisal and Coaching in a rules-based evidential progression. This too is one of management’s most disliked tasks. For further reading, you might visit: – http://www.forbes.com/sites/joshbersin/2013/05/06/time-to-scrap-performance-appraisals/ http://www.trainingmag.com/content/does-traditional-performance-management-work http://www.krauthammer.com/articles/performance-management-does-not-work-so-why-bother