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.....
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?