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How to Take the Pain out of Performance Appraisals There are a lot of performance management systems out there - many software packages, 360 Degree evaluation programs, many philosophies and many approaches. But every manager or executive with whom I’ve worked has secretly (maybe not so secretly) hated the performance appraisal process. They invariably find whatever process they have to be a bit cumbersome and inefficient, and so they ask me how they can make the process less painful. Here is what I tell them: Performance appraisal systems are a necessary evil: No matter how good a system is for measuring productivity and performance, it is impossible to collect perfect data and there will always be a degree of subjectivity in the process. Right now, I’m reading a popular book called “Moneyball” by Michael Lewis, and it shows how an established industry can be woefully inept at measuring performance because it measures the wrong things, leading to perverse outcomes and inefficiencies (the industry, oddly enough, is professional baseball, where you would think that all those statistics would make evaluation easy). I highly recommend the book as a case study, even if you’re not a baseball fan. The truth is, for all of our software and technology enabled systems, our performance appraisal processes are often not much better - especially in non-manufacturing industries. Pick a system that does the least damage: I begin with the point of view that, since there is no perfect system, executives must pick a system that will lead to a minimum of perverse, unintended outcomes. Remember, just because you can measure something, that measure is not automatically most relevant. For example, I once consulted to an organization that placed too much weight on the total sales of its distribution field agents, without regard to the composition of their account bases. Some of those field agents lived in areas where they could ride a few large, corporate accounts to high sales, but did nothing to grow their territories or to service those accounts with store visits, while some more rural agents had smaller revenue numbers but were growing their territories at higher rates by getting out and hustling. This organization wanted to grow its sales, but it was not measuring and rewarding growth in its evaluations to any significant degree. Its performance measurement system was, classically, measuring the wrong things. If you think this is uncommon, you’re wrong! Neither am I big fan of 360 Degree systems: they punish would-be whistle blowers and innovators, who both tend to rock the boat. So picking a performance appraisal process is a matter of selecting among the fewest evils. Be very careful about what you choose - your sole goal is not merely to stay out of court, but to support your organization’s strategic goals. Workers respond to “motivators” and to “satisfiers:” Here’s a simple rule of thumb: “satisfiers” are typically the basic parts of a job that make an individual feel secure: base salary or compensation, benefits, the working environment (office space, windows, safety), perhaps flexible working hours or work-from-home arrangements, etc. For the most part, keeping these things in place for your work force will meet people’s minimum expectations. For this, they will give you about sixty percent of their time, energy and talent. The other forty percent is theirs to give at their discretion, based on how well you attend to their “motivators.” What are these “motivators?” These are softer factors, like the quality of a relationship with a direct supervisor or manager, the challenging and interesting nature of work (to a given individual), special incentives and rewards (including monetary and non-monetary ones), simple verbal praise and recognition, the quality of relationships in the team environment and perceived opportunities to learn and grow. The danger of a cumbersome or badly managed performance appraisal process is that it can really sabotage these soft factors - these motivators - so that workers will give just the sixty percent of their talent and commitment that come in exchange for their “satisfiers,” assuming your organization has provided those well enough. On the other hand, the best and most successful organizations are the ones that get as much of that remaining forty percent of time, energy and talent as they can. The “game theory” of performance appraisals: Here’s the typical mental game: workers want to maximize their evaluations so as to earn more money or gain promotions. Managers tend to want to get through the evaluation process without being sued, without angering anyone unduly and in such a way that they can justify their less than stellar evaluations without creating a lot of organizational drama or destabilization. Managers tend to spend an inordinate amount of time preparing for appraisal meetings with their weakest performers so as to get through them without too much pain, and spend proportionally much less time preparing mentally for their meetings with star performers. Both parties see the process as something to get through with the minimum of pain. All of this is largely preventable. This situation depends on a common circumstance, namely, that feedback and “evaluation” have been scarce through the course of the evaluation period, forcing an annual appraisal meeting to take on added (too much) importance If that is the case, then it is already clear that management has not done a good enough job providing the “motivators” listed in the previous section, and as a result, the organization is only getting a bare minimum of its work force’s productive energy. No software system can do “performance management:” Management is what humans do - management requires judgment, wisdom and discretion. Software packages and systems can assemble data, and they can assist managers in the process of making judgments, but they do not perform “performance management,” in my opinion. But there is a tendency among managers to relegate performance management and appraisal to an annual event, with the assistance of the system, because this is the path of least resistance, and because the actual daily task of coaching and guiding performance - and noticing when to give praise and positive feedback - is hard to do. I tell clients that they must not mistake any non-human system for “performance management,” but they must instead insist that their managers and supervisors are trained and supported in the process of making spot corrections, and offering warranted feedback and praise, all through the year - especially to reward their star performers, those gooses that lay the golden eggs. So, to take the pain out of performance appraisal, do a better job of daily performance management: By now you understand that my notion of a genuine performance management system is a human system that uses the tools of technology as an aid in making decisions, but which does not substitute an annual process for daily coaching and feedback. Many managers and supervisors can learn how better to act as teachers and coaches to employees, and many organizations do provide an occasional seminar on giving feedback in their training programs, but these seminars tend not to be integrated into a whole philosophy and practice of performance management. Instead, they are added like parsley to the edge of the plate at a restaurant - a nice garnish, but not to be confused with the meal. By Some clients point out to me that some of their managers and supervisors are just not able to give effective feedback by nature of their personalities, which suggests to me that they should not have been placed in these positions in the first place (often they get there because they are technical or process experts, with the notion they might develop people skills later - this virtually never works). By doing performance management right, you can support your organization in going from “good to great:” If you can build a meaningful organization process that gives positive feedback and makes necessary coaching corrections to performance on a daily basis, your organization will get much more of that discretionary forty percent of time, energy and talent described above, and enjoy the power of a much more highly motivated and productive work force. You’ll also beat the pants off your competition. To do this, you have to provide meaningful and consistent support to your managers and supervisors to help them to incorporate necessary coaching behaviors into their daily routines, and you have to reward them during their own performance appraisals for their coaching abilities (how many of you, for example, notice and reward those managers who produce and mentor those who later become effective managers themselves - who in your organization gets rewarded for successful coaching?). Selecting the right performance appraisal and data collection system is important, but it’s not the end of the process, and there is perhaps some relief that comes with recognizing that you won’t find a perfect appraisal system anyway. This is not cause for despair, but it is cause to deflate the importance of the annual appraisal process by taking strategic steps to institutionalize continuous performance management and feedback through other measures and organizational commitments. Your reward for doing so will not only be decreased pain in performing annual evaluations: your reward will be that you may just be able to jolt your organization to a new level of performance entirely. Copyright (c) 2003 A. J. Schuler, Psy. D. Dr. A. J. Schuler is an expert in leadership and organizational change. To find out more about his programs and services, visit www.SchulerSolutions.com or call (703) 370-6545. Be sure to use the search box on the left side of the page for more leadership resources and readings on this site, and subscribe to Dr. Schuler’s FREE monthly e-Newsletter, “What’s Up, Doc?” To jump to another FREE article related to employee evaluations, click here. |
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