Performance appraisal: Hero or Villain?. The context – Part 2

As I promised in the first post of the series, today I will give more context for why I really believe that performance appraisals, as we know them today, are not working at all.

All that you will read here are my thoughts based on my 15+ years of experience and books I read during those years. You may or may not agree. However, I am expecting some people to disagree with me, so if that is the case, please let me know why, and what your thoughts are. If you agree with me, and you want to add something or want to provide more info/comment/feedback, please do it. It will help to keep this subject alive and motivate me to continue writing about it. Let’s start…

[…]This employee is really not so much of a ‘has-been’, but more of a definite ‘won’t be.[…] – From a real performance appraisal in a large US Corporation

The Context – Part II – Why?

If we take a look into our past, we will see that performance appraisal is very, very old. I was able to find this (the idea is older than we thought):

“The Imperial Rater of Nine Grade seldom rates men according to their merits, but always according to his likes and dislikes. ~ Chinese philosopher Sin Yu, 3rd century”

However, the books I’ve read indicate that people generally began talking about performance appraisals around 1900, during the Industrial Revolution. In 1911, the pioneer Frederick Winslow Taylor published two books: The Principles of Scientific Management and Shop Management. He would die a few years later, but these twin tomes stand as testament to his pioneering work in the areas of identifying, improving and, most crucially, modifying the flow of employee tasks and expectations.

Taylor was a big believer in the idea that if an employee was struggling with one set of duties, it could often serve the company better to re-assign that employee rather than simply fire him. He also helped cement the concept of work efficiency in the post-Victorian, industrialized factories of the world. Some of the companies where he bore the greatest influence were Bethlehem Steel, Cramp’s Shipbuilding, and Midvale Steel.

Building upon Taylor’s groundbreaking science of the workplace, many others have since put their stamp on the performance appraisal process. Too many to name, really. But one good example is Silicon Valley consultant Harold Fethe. Like a number of other performance appraisal scientists, he can point to one or more contributions that have been patented.

In Fethe’s case, he came up with something called Visual 360, a computer-driven graphical interface that allows for information to constantly be input and updated by all those connected to a particular employee, creating an ongoing and a fully panoramic view of that employee’s performance.

Not bad; over 100 years of history in few lines. Let’s start with the focus of this post, why performance appraisals don’t work anymore today:

• The process is focused on individuals. In the last big improvement of the performance appraisal (the 360 performance review), at the end the focus is the individual. Today, we need to evaluate and improve the ecosystem.
• Normally, performance appraisals run once or twice a year. So if we are lucky, we meet people during 30/60 min to evaluate goals we set up for them 6 months ago. Often, those goals come from upper management.
• It is a “mandatory” process. Oops, should I explain what happens with people when we impose things? (Principally when almost 70% of people think the process is not useful for him/her.)
• SMART goals. Great words, but are we able to set always a SMART goal? We are re-adjusting the organization’s next step based on yesterday’s experiences. We are often unable to define a SMART goal for the organizations, but we need one for the performance appraisal. This doesn’t make sense to me.
• Organizations are using performance appraisals as a silver bullet for:
  • Termination and legal documentation
  • Staffing decisions and personnel development
  • Improvement
  • Compensation
  • Feedback and communications
  • Coaching and guidance
  • I hope I didn’t miss anything else here…
• Performance appraisals do not reinforce values such as transparency and honesty. Many people hide their names behind an anonymous comment in your 360 evaluation.
• Performance appraisals are not efficiently running in today’s organizations.
• What about saving a few bucks $$$? Check these pictures with real cases:

• Today’s organizations are becoming more and more complex. Human connections are more in demand. Performance appraisals are not helping with this. In many cases, the process blocks those interactions. Sometimes I didn’t know if I should cry or laugh when I saw completely opposite goals between department employees. Did you see this? (Or I was the only lucky guy seeing this?)

I think I’ve listed the most important problems. I don’t want to list that many managers don’t know how to run a performance appraisal. I saw this behavior, but it is not the direct fault of the performance appraisal process. When that happens, I should note that the owner of the process forgot to train them.

If you are not convinced that you need to do a full makeover or full re-think of your performance appraisal (PA) process, read this helpful post with the 50 top problems of PA. Please don’t try to fix your PA process. This will only make it worse. People have been trying to fix the process for the past 100 years (check the history at the beginning of this post). So far, we are paying off the last big modification, the 360 degree evaluation.

To close this post, I will like to share with you a picture that represents a lot what I have tried to say, and a reflection [1].

If less than 10% of your customers judged a product effective and seven out of ten aid they were more confused than enlightened by it, you would drop it, right? So, why don’t more companies drop their annual job-performance reviews? – Timothy D. Schellhardt, the Wall Street Journal

Thank you for the time you took to read this. I will appreciate it you invest few minutes more to share your thoughts/comments/feedback here. It will contribute to my motivations to continue writing about this subject. In the next post I will introduce a framework based on my experience, and after that I will share with you how to play and learn with the framework. Stay tuned!

Thank you,
Omar

READ: Extreme Makeover – Performance Appraisal Edition – full post series

[References]
[1] Abolishing Performance Appraisals