Scrap Performance Appraisals - Part 2

Through the years, I have had several conversations with managers and leaders and HR folks who have said: The performance appraisal system CAN work. It worked in _________ situation or with ________manager.

Here’s the thing. Excellence or luck can make any system, program, or process, look like it is working. Some people who smoke 2 packs a day live to be 100.

A great manager or leader might actually find that their performance appraisals are not a drudgery and their people do not dread them. But here is the point - that’s not because of the system, it is because the leader or manager has created an environment where open and trusting conversations happen as a matter of course. In this case, having to go through the appraisal may not feel much different than most other conversations (it likely will be different if pay is linked into the process).

• We don’t build cars for the highway that only the best racecar drivers can maneuver.
• We don’t write novels for the general public that only Nobel Prize winners can understand.
• We don’t create training classes that only 1 student in 20 can apply.

And we should not employ performance appraisal systems that only the BEST managers and leader can make worthwhile.

I have heard another argument for appraisals. Big companies like Intel and GE have very regimented processes. I worked for Intel, so I will speak to their system. Some managers have told me they think the “focal” process (their name for the review system) works and improves performance. But let’s look a little deeper. Intel has what I would call a very results oriented culture. From the time you enter new employee orientation, you are taught their language of how goals and requests are tracked. Everyone is held accountable. At every meeting, they assign ARs (Action Required). People own ARs and are expected to deliver. Intel also uses regular one-on-one meetings between managers and team members to ensure that goals are clear and they agree to action and development plans. The focal process takes a lot of time and further cements the accountability and goal oriented-ness of the culture (but it also has many other, less constructive affects). And that’s where I think the answer lies. The entire Intel culture is set up to communicate and reinforce goals and actions - the performance appraisal system, for the amount of effort it takes, does not make the difference. There is some ranking going on with their process and this does not improve performance (and it causes lots of anxiety, I can assure you).

Sometimes the culture of the organization is really more impactful than the costly and dreaded appraisal system.

For the vast majority of companies (I say vast majority because I was taught not to write in absolutes, but I want to say for all companies), the appraisal process causes damage.

I worked for one company that was not very diligent about the frequency of their appraisals. They had a 6 month review cycle, which means that, in theory, everyone should have had a review every 6 months. Some people did not get reviews for 18 months, some every 6 months. Whether you had a review or not did not affect performance. Personally, I was thrilled when I got away with not getting or giving a review for a while.

All that said, I do think there is a hierarchy of how damaging a system can be. Some systems are far worse than others. Here are some of the warning signs of the worst systems:

• It’s a program hated by all - managers, employees, HR
• People feel fear and anxiety associated with their review
• Evaluations are often not accurate (so common!)
• Money or job security is tied to the appraisal
• If money is tied to the appraisal, top performers get little more than mediocre performers (the merit component is a joke, in other words)
• The system is complex and requires a lot of time to complete
• The system drives people to set lower goals and underchallenge each other
• People are measured on things over which they have no control
• The appraisal is the only time managers and employees talk in detail about goals and performance
• The review focuses only on individual versus team performance
• Drives short term thinking and actions
• The system reinforces the values and prejudices of those in power
• The appraisal conversation feels parental
• The fact that the review goes in a person's personnel file drives managers to not give poor reviews when deserved

I know, I know - I have just described bits and pieces of MOST every system out there.

What to do, what to do.....

Download catalytic_coaching_book_intro.PDF

Here’s an intro chapter to a book called Catalytic Coaching: The End of the Performance Review. It’s a pricey book (about $100) by Garold Markle that I admit I don’t own. I just found it while searching around the net. I would like a copy and wonder why it is so pricey - what’s in it? Perhaps Gary will drop us a comment and share his approach. I wrote him an email asking for an article or excerpt and he kindly sent me this excerpt to share with you. I like the way the section opens, with his company embracing 13 of Deming‘s 14 points, deleting the one comment about abolishing appraisals. Isn’t that just SO corporate America? I can think back to many occasions when a company would pick and choose the points that supported their current way of thinking. I guess it is not just America either....

The chapter is good, check it out. I also like the way he refers to himself as a “pusher” in HR. I know a lot of my HR colleagues feel like corporate pushers and pimps on occasion - some more than others! I felt like that sometimes, too.

This whole performance appraisal thing is a sad farce (and hellaciously damaging). HR managers feel like pushers, managers can get so scared or passive aggressive they become tyrannical or wimpy (I have actually seen one person be both), employees tune out most of the conversation and do and say whatever it takes to GET THE CONVERSATION DONE AND OVER WITH. Let me sign the damn form!

Why, why, why do we persist?

What’s your theory about why more companies have not stopped using performance appraisals?

More tomorrow......

Comments

[Rosa Say]

Oh Lisa, you are so right about this! I'm dragging my soapbox over and putting it next to yours so we can broadcast this louder and in all directions.

The beginning of your article says it all for me: "we should not employ performance appraisal systems that only the BEST managers and leader can make worthwhile."

Like you I have worked with numerous companies using performance appraisals, and the cons so overwhelmingly outweigh any pros. I have yet to uncover a reason they are done which doesn't point directly to the need to reinvent the connecting process or system the appraisal is tied to. The classic justification: "That's how we figure out our annual compensation raises on scale." I'd hate to see the assumptions in the rest of your financials...

Save your money, save your time, and respect the dignity of your staff: Stop the anguish for everyone concerned both on the giving and receiving ends of it. Down with performance appraisals once and for all! Manage with aloha instead.
Rosa

[Adrian Savage]

I had a friend who was a superb manager. He developed his staff with single-minded zeal and worked himself silly making sure they had everything they needed to perform to the best of their potential. The result was what you would expect: a magnificent team of highly-motivated top performers.

Come the dreaded appraisal time, he gave each of them the top rating they deserved. Then found his ratings were thrown out by the local HR Gauleiter because "they don't conform to the proper distribution." He was told he had to mark some of them "average" and some "below average."

Of course, he refused, so the statistically-challenged HR folk did it for him. How's that for motivating staff?

By the way, in a piece of serendipity, my local paper had a Dilbert cartoon about appraisals yesterday on exactly this topic.

The pointy-haired boss was appraising Wally against the "corporate policy" that 20% of staff must get poor ratings. Since he only had 4 subordinates, the boss worked out that .8 of a person had to be marked down, so he told Wally "your ankles and shins have performed well, but the rest of you is monkey hurlage."

Just one more aside. Have you seen the latest edition of "Fast Company" has a cover article on "Why We Hate HR?" These people are fast becoming as loathed as accountants!

[Lisa Haneberg]

Adrian: Thanks for the Dilbert interpretation. I know managers like your friend who were forced to put people into lowers ranks - the twisted logic! Why would it EVER be a good decision to take a steller performer and tell them they are mediocre???? I heard about the Fast Compnay article but have not seen it. Many HR folks are very sharp and know that appraisials are a waste of time but have been unable to influence senior management.

Rosa - Yes! You go, girl! Aloha, yes!

[Walter]

Markle's book can be ordered thru your local Borders for $65. Also, if you or your company has a subscription to Books 7X24 it is on-line there as well. You can't print but one page at a time, but you can read thru it or look it over.

[Lisa Haneberg]

Thanks for the tip on the book, Walter, it sounds like a good one!

[Lesley]

Please, can we start a worldwide signed petition to get rid of the appraisal system. In the hands of a good manager they are a wonderful tool when implemented effectively but when steered by the uneducated power-happy so called managers where I work it's an horrific nightmare. They are the ruination of many a happy well-balanced employee leading to frustration, alcolohism and any other 'ism' one can think of. Where I work - quite a rather large UK corporation - they are used as a power mechanism rather than a confidence builder. "Keep them down and oppressed" is the motto of my office - come on over and join us folks, we have six vacancies in the last six months and we're about to have a few more so many openings are guaranteed. If there's any truth in the saying "What goes around comes around" look out folks, there's going to be a lot of bodies flying around.