Finally! A Real Solution for the Performance Appraisal System

When is nothing better than something? Could it be the Performance Appraisal?

I just read another article suggesting another tweak to the Performance Management System. How many do you think have been written? Thousands, I am sure.

In working with hundreds of organizations over the last 40 years, I have never been in one where the performance appraisal system, or should I use the more politically correct performance management system, was not a problem. Never have I seen one that was used as intended, effective or liked by management and other employees.

One response to that information is to move to a quarterly rather than an annual event as though doing the wrong thing more often will make it better. Another more common response is to tweak it. However, after over 50 years of tweaking, these systems are no more effective today than they were the first time they were used. How many more years of negative feedback will it take for people responsible for them to come to the realization that it is simply a bad process that not only doesn’t add value to the organization but actually takes away from it. Time spent on “the Performance Management System” could be better spent on helping employees make products or services better, faster and cheaper or creating new products and services.

My solution to the Performance Appraisal fiasco is to burn, shred, or hide it in the files. Don’t tweak it. Blow it up! If you do, there will be shouts of joy from the front line to the executive suites. Organizations that are not ready to do anything so drastic will have to continue to suffer through the trauma until they do. The obstacles for dramatic changes are usually found in the HR departments and executive ranks. It is not that these people like the system but don’t know any other way to do it. My facetious answer is, don’t do it. Nothing is better. As I wrote in OOPs, all the reasons people give for why they need them to be done don’t hold up in the cold light of day.

I can tell you that no one likes to be appraised. Those that get the top rating or score don’t mind them but don’t look forward to them either. We can’t expect employees to be excited about a system that pits one against another and appraises them in the abstract. There is no piece of paper that can adequately determine a person’s value or worth to the organization.

So what should we do?

First take all responsibility for the “system” away from HR. They don’t like the job any better than anyone else. Besides, they are too far removed from employee behavior to make effective decisions about individual performers.

Secondly, assign the responsibility of helping a performer improve to a person who works directly with such person, where they can see the person’s behavior in all its accomplishments and failures, unfiltered by paper, rumor and sampling errors. If you ask any supervisor who their best performer is, s/he will not hesitate to give you a name. They know who that person is without looking up their history of performance appraisal ratings. If you ask them who the best person is for another job as in a promotion or transfer, supervisors will tell you.

Third, change the title of supervisor to Coach. The biggest need for all performers is to have someone who has the primary responsibility for helping them improve or to help them maintain high and steady performance.

Fourth, hold supervisors accountable for the success of the people they recommend for promotion or reassignment. If you do, these supervisors will work with the person and their new bosses to identify behaviors that need to change and to positively reinforce good behavior or improvements. If a supervisor recommends people that don’t succeed or who struggle in a new position, there is a clear accountability on the old supervisor. This can function as a feedback loop for improving the supervisor’s skills in assessing employee’s strengths and weaknesses.

Fifth, all supervisors will not automatically become coaches. Being a good coach requires, in my opinion, an ability to see small changes, the ability to apply effective reinforcement and the ability to see behaviors that are interfering with improvement and those that produce improved performance. The technical term for that is shaping. A background for that skill is behavior analysis.

Since all supervisors won’t qualify, Coach will be a higher pay grade as the benefit to the company will be much greater. A good coach will take data on performance as a tool to determine the strategy and activities that need improvement. The data will also be used to show the performer the kind of improvement s/he has made (a reinforcer to most people). This will be a working document and not a static piece of paper that is filed and seen only once by the performer. Coaching records will be the only documents needed to replace the dreaded appraisal.

I predict that by the end of this decade, the performance appraisal system as we know it will no longer exist. Beat the competition to the punch. Change yours now.

For an example of one such company, hear how M&T Bank has changed their approach.